25th November 2019
CFIUS ANNUAL REPORT SHOWS INCREASE IN INVESTIGATIONS
On22nd November, Law.com reported that the latest annual report by the Committee on Foreign Investment in the United States (CFIUS), which that reviews transactions for potential national security risks, shows that the number of investigations rose 237%.
US PLANNED SANCTIONS ON COMPANIES INVOLVED IN NORD STREAM 2
UNIAN in Ukraine on 24th November reported that potential sanctions on companies involved in the Nord Stream 2 pipeline have been added to the draft 2020 National Defense Authorization Act in the US, although Congress has yet to agree the final Bill.
US LIFTS SANCTIONS ON DERIPASKA-LINKED RUSAL ETC
Stock Dish Daily on 24th November reported that the Trump administration had lifted sanctions on aluminium giant and other firms linked to oligarch Oleg Deripaska – Rusal, its parent, En+ Group, and power firm JSC EuroSibEnergo – despite a Democratic-led push in the US Congress to maintain the restrictions. The US Treasury said that the 3 companies had reduced Deripaska‘s direct and indirect shareholding stake and severed his control.
UK ACADEMIA’S LINKS TO CHINESE DEFENCE FIRMS ‘HARMFUL FOR NATIONAL SECURITY’
The Guardian on 25th November carried an article saying that extensive links between British universities and Chinese defence companies, including missile manufacturers, could threaten UK national security interests, the author of a report from the Australian Strategic Policy Institute (ASPI) on China’s research activity overseas has said. The report analyses collaborations with scientists from China’s hypersonic missile programme and on research topics ranging from smart materials to robotics. Of 16 university labs identified as being run jointly by Chinese defence companies, or have major investments from them, 10 are based in the UK.
CHINESE-CANADIAN MOGUL EDWARD GONG USED AUCKLAND FINANCE FIRM TO HIDE $53 MILLION
The New Zealand Herald on 25th November reported that an Auckland finance firm and its mother and son owners can now be revealed as the company and pair who failed to report $53.4 million of suspicious transactions from a Chinese-Canadian mogul accused of running a $200 million pyramid scheme.
THAILAND: SON OF FORMER PM THAKSIN SHINAWATRA NOT GUILTY OF MONEY LAUNDERING CHARGES
On 25th November, Khaosod in Thailand reported that Panthongtae “Oak” Shinawatra was acquitted by the Central Criminal Court for Corruption and Misconduct Cases, where the majority judges said there was no sufficient evidence to implicate him in the charges. He had been accused in connection with a loan scandal at a local bank.
MULTINATIONAL ENERGY COMPANY PETROFAC ACCUSED OF KEEPING FAKE ACCOUNTS TO DISGUISE BRIBES
On 25th November, KYC 360 reported that the Guardian had identified the company as the one accused by prosecutors of maintaining a fake set of accounts to disguise the payment of bribes to foreign government officials. The allegations came about as a result of the Unaoil investigation, with Petrofac under investigation itself for suspected bribery and money laundering.
LEADING ONECOIN BACKERS LINKED TO IRISH CRYPTOCURRENCY MINGOCOIN
On 25th November, KYC 360 reported that 2 senior members of the discredited OneCoin cryptocurrency sales network – Peter Shaw and Pehr Karlsson, who are shareholders in Funlz, which is seeking to develop MingoCoin – are listed as shareholders of the fledgling Irish cryptocurrency.
SOUTHERN SPAIN: THE EUROPEAN DRUGS GATEWAY
On 22nd November, Deutsche Welle published an article saying that European seaports in Spain, the Netherlands and Germany are the destinations of choice for drug dealers importing cocaine, hashish and methamphetamine. It is the first of 3 articles looking in more detail at the problems and vulnerabilities of ports in Spain, the Netherlands and Germany, and looks at the threats in Spain. For example, Spain is the world number one place for impounding hashish and confiscates almost 50% of all the hashish seized worldwide. A Europol report says that the ports of Algeciras, along with the ports of Valencia, Barcelona (both Spain), Rotterdam (Netherlands) and Antwerp (Belgium) are the most important entry points for cocaine into Europe.
RETHINKING OFAC’S EXPANDED SANCTIONS POWERS
An article on KYC 360 on 25th November reflects on US secondary sanctions. It says that while secondary sanctions appear to be an effective tool of statecraft, as evidenced by the number of European businesses that have cut or rejected financial ties to Iran in order to avoid the wrath of the US, the article asks are these wise policy tools to implement, and are they being used prudently? It explains that secondary sanctions impose penalties on persons and organisations not subject to the sanctioning country’s legal jurisdiction and they are applied against entities engaged in the same dealings prohibited under primary sanctions. The article suggests finding a better model that maximizes international co-operation and, when that is not possible, aims to preserve alliances and relationships necessary for the successful marshalling of resources and willpower when the times demand them.
ALL EYES ON IRELAND’S EXPANDED ANTI-CORRUPTION REGIME
A briefing from Irish law firm, McCann Fitzgerald, on 13th November provides an overview of the Criminal Justice (Corruption Offences) Act 2018, which came into force in July 2018 and which reflected the need to meet Ireland’s international commitments, particularly those under the OECD Convention on Bribery of Foreign Public Officials. It also incorporated recommendations made by the Irish Tribunal of Investigation into Certain Planning Matters and Payments, which was established to investigate corruption in Dublin, particularly with regard to city planning. The Garda Síochána, the Irish national police force, established in 2017 an Anti-Corruption Unit, which sits in the Garda National Economic Crime Bureau (GNECB), and in 2018, the Anti-Corruption Unit launched the Bribery and Corruption Confidential Reporting Line. The briefing points out that the Act has extraterritorial effect, and that a person may be tried in Ireland for an offence under the Act if any one or more of the acts alleged to constitute the offence were committed in Ireland, on board an Irish ship or on an aircraft registered in Ireland, notwithstanding that the other acts alleged to constitute the offence were committed outside Ireland. This is more liberal than the traditional Irish common law position. It also deals with corporate liability. The briefing mentions other relevant Irish laws, and then says that the Irish Government and the Law Reform Commission’s publications in 2017 and 2018 confirmed Ireland’s commitment to the roll out of further white-collar crime law reform.
CANADA: FINTRAC’S UPDATED GUIDANCE ON METHODS TO VERIFY IDENTITY – A NEW SPIN ON “AUTHENTIC”
On 20th November, Blake Cassels and Graydon LLP published an article on Canada’s updated guidance that follows recent amendments to the regulations (Regulations) to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) in respect of identity verification. The briefing highlights that the amendments to the Regulations replaced the “original, valid and current” requirement with a requirement that the ID be “authentic, valid and current”. However, it notes that the Guidance hinders progress by prohibiting the use of Skype and similar telephony technology as a standalone method for identity verification where the parties are not physically together.
EU WARNED ON SPYING RISK FROM VIP JET LEASING
On 25th November, EU Observer reported that flying EU and Nato VIPs on jets from a part-Chinese firm could be a security risk, a Belgian aviation company has said – but the article says that the Belgian aviation company which raised the China alarm has its own security questions to answer on Russia.
COLOMBIA: THE FUTURE OF THE EX-FARC MAFIA
On 11th November, Insight Crime published a special report saying that Colombia is at a crossroads and that there are 3 possible future paths for Colombia and the rebel dissidents. It concludes that, hamstrung by a lack of funds, battered by the Venezuela crisis and unable to get major new funding from the US, the options open to the Duque administration in Colombia are limited, and that the ex-FARC mafia is going to grow over the next couple of years. However, the FARC is not being reborn, it says, and there will not be a new unified insurgent movement – with the future of the ex-FARC mafia firmly in the hands of the Duque administration.
UK: SPECIAL WARNINGS – ARE THEY STILL BEING USED?
An article on the PNLD website poses this question, saying that the voluntary attendance procedure has become an increasingly used tool in police investigations as a method of dealing with suspects without arrest. It provides convenience and flexibility for both suspects and interviewers. However, at this year’s PNLD conference, Anthony Edwards (who, if you never met or heard him, is an excellent, entertaining and insightful speaker – and a really nice man as well), highlighted that this increased use of the voluntary interview has led to a significant reduction in the use of special warnings and that he very rarely sees any cases at trial where adverse inferences are drawn. Consequently, the article sets out to detail the legislative provisions that allow for adverse inferences to be drawn at court and the requirement for the special warning to be given by the police to enable this; and discuss whether officers can take into consideration the benefit / need to issue a special warning in interview, when deciding whether to offer the voluntary attendance procedure and determining the necessity to arrest.
OPERATION PANGEA – SHINING A LIGHT ON PHARMACEUTICAL CRIME
On 21st November, a news release from Interpol dealt with Operation Pangea, a well-established international effort to disrupt the online sale of counterfeit and illicit health products. Just as importantly, Pangea works to raise awareness of the risks associated with buying medicines from unregulated websites. Co-ordinated by Interpol and launched in 2008, the Operation has removed more than 105 million units (pills, ampoules, sachets, bottles and so on) from circulation and made more than 3,000 arrests. Analysis of the results of Pangea over the past decade reveals that at least 11% of medical products sold online are counterfeit and all regions of the world are affected; and that organised criminal groups are taking increasingly complex measures to avoid detection, such as developing complicated shipping routes and dispatching medicines in smaller parcels.
DOING BUSINESS IN AZERBAIJAN GUIDE
On 25th November, the Institute of Export in the UK published a free guide which says that while oil and gas still dominate the economy, the Azerbaijani Government is trying to diversify, with consolidation of the banking sector now in progress following a recession in 2016. It is located on the southern edge of the Caucasus Mountains in Transcaucasia, and borders Iran to the south, Armenia to the west, Georgia to the northwest, Russia to the north and the Caspian Sea to the east. It also has a small exclave, Nakhichevan, to the southwest bordering Iran, Armenia and Turkey. It is designed to provide basic knowledge about Azerbaijan; an overview of its economy, business culture, potential opportunities and to identify the main issues associated with initial research, market entry, risk management and cultural and language issues.
THE PRIVACY, DATA PROTECTION AND CYBERSECURITY LAW REVIEW
The Law Reviews has published the latest edition of this publication, which includes update chapters on a number of countries, and a general overview. It also includes a chapter on the current status of the law in the EU.
HOW JIHADISTS STRUCK GOLD IN AFRICA’S SAHEL
On 22nd November, Reuters published a Special Report saying that, as al-Qaeda and Islamic State expand in Africa, hundreds of gold mines are bringing a billion-dollar trade within their reach. It says that gold has long been an ideal commodity for insurgents: It retains its value; it is widely accepted as a proxy for currency in parts of Africa, the Middle East and Asia; and once refined, it can easily be smelted and smuggled. Informal mines in Burkina Faso, Mali and Niger produce between them some 50 tonnes of gold, worth $2 billion, a year, according to estimates by the OECD, with small-scale miners in Burkina Faso producing around 15-20 tonnes of gold a year, worth between $720 million and $960 million – though in 2018, Burkina Faso only recorded official exports of only around 300 kg of gold from small-scale mines – around 1.5% to 2% of the country’s estimated production – indicating the scale of smuggling.
A MARIJUANA STRAIN NICKNAMED ‘CREEPY’ IS HELPING TO FUEL COLOMBIA’S DRUGS WAR
On 24th November, the Daily Beast reported that a monster strain of hybrid marijuana and cocaine have made Colombia Latin America’s heart of darkness in the so-called “Golden Triangle” of south-west Colombia. The article discusses the violence and crime, including the effect on locals, including indigenous people. It says that the genetically modified Creepy species of cannabis now fetches farmers as much as 20 times more per pound than cocaine, making this “super weed” the crop of choice in the Triangle. It can sell for up to $1,800 per pound on the US market.
US: FORMER TRANSPORTATION EXECUTIVE CONVICTED IN NUCLEAR-ENERGY BRIBERY CASE
On 22nd November, the Wall Street Journal reported that Mark Lambert, 56, the former president of a Maryland transportation company was found guilty of participating in a scheme to bribe a unit of a Russian nuclear energy company. He was accused of participating in a scheme to bribe Vadim Mikerin, a Russian official at a subsidiary of Russia’s State Atomic Energy Corporation — the sole supplier and exporter of uranium — to secure business contracts. Mikerin pleaded guilty in 2015 to conspiracy to commit money laundering charges and was sentenced to 4 years in US federal prison.
SPATE OF FIRES HAS SHIPPING INDUSTRY LOOKING AT HOW DANGEROUS GOODS ARE HANDLED
The Wall Street Journal on 24th November reported that a study has found that a large share of the dangerous-goods shipments on international cargo ships were mislabelled, improperly handled and carried other safety risks. It says that vessel owners believe many of the fires are caused by potentially dangerous shipments being loaded without notice, and the investigation suggests there are significant gaps in how the goods are handled, from paperwork to onboard stowage. It is said that cargo that could potentially ignite include charcoal, fertilizer, fish food, chlorine products and other chemicals, car batteries and electronic components. In addition, cargo that is not properly secured can shift at sea, creating heat from friction that can cause a fire. Some shipping executives believe the rapid growth of e-commerce, which has led to more fragmented supply chains with more suppliers, and retailers with little experience in shipping regulations, contributes to the problem.
THE 2019 EU DRUG MARKETS REPORT
On 25th November, the EU, European Monitoring Centre for Drugs and Drug Addiction (EMCDDA) and Europol launched this report. The report is said to highlight the increasing importance of Europe both as market and a drug-producing region and trends along the drug supply chain from production and trafficking to distribution and sales. It describes how the drug market has wide-ranging impacts on both the health and the security of EU citizens and underlines the need for a holistic approach to effective drug control policies.
INVESTIGATION INTO CORRUPTION IN KYRGYZ CUSTOMS SERVICE SPURS PROTESTS
On 25th November, OCCRP reported that nearly a thousand people marched peacefully in the Kyrgyz capital of Bishkek on Monday in a protest response to publication of the outcome of an investigation that revealed that a secretive Uighur family had for years been smuggling goods from China into Kyrgyzstan and onward to other countries. The profits they made with the help of corrupt customs officials were then channelled out of the country. Rferl reported that the protesters demanded the arrest of a powerful customs official who is alleged to have provided cover for the activities.
RUSSIA INVESTIGATES SPACE CENTRE CORRUPTION
On 25th November, OCCRP reported that Russian authorities have launched 2 criminal cases, after discovering the theft of at least $172 million of the $1.4 billion invested in the country’s new space centre – Cosmodrome Vostochny. The cases are said to target management of a company that helped build the centre in Russia’s far east that is the country’s first civilian site for commercial space launches.
ESTONIAN COURT’S RED TAPE HINDERS GRAFT CASE
On 25th November, OCCRP reported that 6 Estonian businessmen were freed from charges of money laundry, tax fraud and involvement of criminal organisation gang after 91 cancelled court hearings in a case begun by the tax department in 2011. The 6 key suspects were arrested simultaneously in 2012. It says that 91 court hearings out of 104 got cancelled – some due to suspects, for example, because of family vacations or health reasons – but mostly because of the court. Sometimes the court could find judges, sometimes the prosecutor had health problems or the witness didn’t show up. In dismissing the case, the court stated in the decision that the pre-litigation procedure lasted 5 years and 9 months and that the proceedings lasted 2 years and 8 months – a total of 7 years and 2 months, which was clearly too much.
2 SWISS BANKERS FINED OVER 1MDB DEALINGS
On 25th November, Swissinfo reported that 2 bankers who worked at Coutts private bank in Zurich have been fined by the Swiss authorities for failing to report suspicious transactions linked to the sovereign wealth fund 1MDB scandal.
NEW ZEALAND TO REMOVE LOW-VALUE CONSIGNMENT RELIEF ON IMPORTS
On 25th November, Tax News reported that New Zealand is to introduce GST on low-value goods sold by overseas retailers from 1st December. New Zealand GST (a version of VAT) will apply to those offshore businesses who supply at least NZ$60,000 of low-value goods (i.e. those worth up to NZ$1,000) per year. Customs will continue to collect duty and tax on imports by consumers valued at over $1,000.
INDIA: 100 TORTOISES SEIZED FROM 2 PASSENGERS AT AIRPORT
On 25th November, the Times of India reported that customs officials seized around 100 tortoises from the suitcases of 2 passengers on a Sri Lankan Airlines flight.
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