27th November 2019
MALTA CARUANA MURDER: RESIGNATIONS SPARK GOVERNMENT CRISIS
Various (or all) media carry reports on the political crisis in Malta after the prime minister’s chief aide, Keith Schembri, quit amid reports he was being questioned by police, and the Tourism Minister Konrad Mizzi also resigned. Economy Minister, Chris Cardona, took the decision to suspend himself.
NORTH KOREA FREELY EXPORTING DRIED SEA CUCUMBERS TO CHINA DESPITE SANCTIONS
Radio Free Asia on 26th November reported that, despite sanctions prohibiting North Korea from exporting certain marine products, its dried sea cucumbers are plentiful in Chinese marketplaces.
IRISH CRIMINALS EXPORTING DRUGS AS FAR AS AUSTRALIA, SAYS EUROPOL
In reporting the report on links between drugs and terrorism, the Irish Times on 27th November highlighted claims that Irish paramilitaries and other criminals were involved in the worldwide illegal drugs trade. It says that countries such as Australia, Russia and Turkey have become new markets for groups such as the Kinahan gang as western European countries find themselves flooded with cocaine, amid a huge increase in supply from South America.
ZIMBABWE: 102 CARS SEIZED IN CRACKDOWN ON SMUGGLING
It is reported that authorities in Zimbabwe have impounded 102 cars in a week, as they targeted suspected smuggled cars mostly being sold at car sales.
IS IT POSSIBLE TO STOP ILLEGAL EXTRACTION OF AMBER IN UKRAINE?
112 UA posed this question in an article on 26th November, saying that a Bill is set to be approved that would legislate for the amber business in the country, introducing criminal liability for “illegal extraction, sale, acquisition, storage, transfer, transportation, processing of minerals, the legality of which is not confirmed by relevant documents, and for evasion from land reclamation”. A licensing system would be introduced, with a special permit for amber production. Ukraine is said to have substantial amber reserves formed about 40 million years ago during the Eocene, with deposits at only a shallow depth, only 2 to 8 metres, which makes them easy prey for so-called “black” miners.
ANZ BANK REVEALS IT IS REVIEWING ITS MONEY-LAUNDERING SYSTEMS AMID WESTPAC SCANDAL
The Guardian on 27th November reported that the New Zealand-based bank had revealed it was reviewing its AML/CFT systems in the light of problems at Westpac and CBA in Australia. In 2009, ANZ suffered a $5.75 million fine from the US for stripping identifying information from 31 transactions with Sudan and Cuba.
BitBay DROPS MONERO OUT OF ITS LISTINGS DUE TO AML COMPLIANCE WITH USERS ADVISED TO WITHDRAW XML BY MARCH 2020
On 27th November, The News Asia and others reported that another crypto exchange is dropping Monero (XML) out of its listings due to AML concerns. Poland-based BitBay said the decision is rooted in the privacy features that are present in monero, which uses a digital signature called a ring signature that hides the identity of users and transaction value, a feature that can be utilised by illicit actors to move funds anonymously.
SOUTH KOREA PROGRESSES BILL TO PROVIDE LEGAL FOUNDATION FOR CRYPTOCURRENCIES
Coin Telegraph on 26th November reported that the Bill which categorises virtual currencies as digital assets and is intended to bring regulatory clarity and transparency to crypto markets in South Korea, and require all crypto-related businesses in South Korea to register with FIU.
WESTPAC AND PROBLEMS WITH ITS LITEPAY REMITTANCE SERVICE
On 27th November, the Australian Financial Review published an article about problems at Litepay, its remittance service which it used in preference to other third-party services. Launched in 2016, it allowed customers to send payments of less than $3,000 to various overseas countries, and Westpac boasted that the platform met “all AML and identification requirements about knowing the end customer, and is only available to Westpac customers”. However, the FIU service AUSTRAC has alleged that “repeated patterns of frequent low-value transactions on accounts held by 12 customers” on LitePay “were indicative of child exploitation risks” and that Westpac had been specifically told about these types of risks before the launch of the service.
ST LUCIA: STATEMENT BY PRIME MINISTER ON CORRESPONDENT BANKING
On 26th November, the St Lucia News reported a statement made on the subject of a recent CARICOM meeting concerned with correspondent banking and de-risking (a matter which has adversely affected a number of Caribbean states). He said it was vital to engage the US government and key industry players, on actions to address decisively, the actual and potential challenges posed to our economies by the de-risking actions that have been taken by US banks – as correspondent banks have imposed increasingly stringent measures on domestic banks and, in several cases, have withdrawn correspondent banking services completely. It is said that between 25% and 75% of the 50 banks operating across CARICOM Member States had reported either termination of or restrictions on correspondent banking services. He said St Lucia was improving its compliance controls, and that Bank of America and Wells Fargo had both reaffirmed their commitment to remain in the region. This is particularly important, he said, because apart from facilitating transactions, banks like Wells Fargo also provide other services to regional banks, such as wealth management and loans.
WHAT WILL THE VATICAN TELL MONEYVAL?
On 26th November, the National Catholic Register said that the Holy See is due to send a report to Moneyval in December providing an update on its progress implementing its recommendations to improve Vatican financial standards. It says that the report is likely to make for bleak reading in Strasbourg, but even more grim writing in the Vatican. In 2012, the Vatican agreed to comply with a set of “recommendations” from Moneyval, incorporating them into internal policies. The article says that, in the last month, there have been a series of allegations concerning 2 major Vatican investments arranged by the Secretariat of State. After reviewing recent events, the article concludes that, if the Holy See is to avoid returning to international financial “blacklists”, it will need to show it means business, and not business as usual.
NEW ZEALAND: COMANCHEROS BOSS ADMITS MONEY LAUNDERING
On 27th November, Newstalk ZB reported that the vice-president of the Comancheros motorcycle gang (think Hell’s Angels) and an Auckland lawyer have both admitted laundering millions of dollars for the gang.
UK AND JERSEY ASSET FORFEITURE PROCESSES COMPARED
On 21st November, an article from Bright Line Law included an interesting comparison of the processes for the forfeiture of suspected illegal proceeds, under POCA 2002 in the UK and the equivalent in Jersey. The article says that the Jersey provisions are markedly tougher on the respondent. Whereas, in the UK, the authorities must be satisfied that the money is from unlawful conduct or intended for use in such conduct before forfeiture can be sought, in Jersey, forfeiture is sought where a lower standard is met, namely where there are ‘reasonable grounds to believe’ that money is tainted. The legislation in Jersey shifts the onus on to the respondent to satisfy the court that the funds are clean as soon as a forfeiture notice is issued – Part 5 of POCA 2002 does not contain a reverse onus.
HOW US INVESTIGATORS BUSTED A HUGE ONLINE CHILD PORN SITE BY FOLLOWING THE BITCOIN
On 27th November, KYC 360 reported that the story behind the takedown of the website Welcome to Video involved getting a lucky break with the right-click of a mouse, stumbling upon a selfie of someone holding a passport, and following electronic breadcrumbs left by bitcoin transactions.
THE VALIDITY OF ELECTRONIC SIGNATURES – SCOTTISH AND ENGLISH PERSPECTIVES
On 26th November, Scottish law firm Morton Fraser published a short article which focuses on the validity of contracts signed electronically in a business context considering the Scots law and English law perspectives. It says that there remain few, if any, legal restrictions to the use of electronic documents, signatures and delivery in Scotland and England – though, in practice, the use of electronic signatures to execute documents is only common for documents where witnesses are not desired. It concludes that Scots law in theory provides a clearer framework in terms of the validity of electronic signatures, but in practice that framework is less user-friendly in many practical situations.
DIRECTOR OF TOP LONDON LAWTECH COMPANY FACES US EXTRADITION OVER FRAUD ALLEGATIONS
The Legal Cheek site on 27th November reported that a billionaire investor in a legal AI company is facing extradition to the US on fraud charges. Mike Lynch is on the board of London-based Luminance.
TRANSPARENCY INTERNATIONAL SRI LANKA HAS LAUNCHED AN ONLINE DATABASE ON POLITICALLY EXPOSED PERSONS (PEP)
The Colombo Page on 27th November reported on the database which it says can be accessed at www.peps.lk
The database, which will be updated periodically, is intended to serve as an important tool in mapping out the network of political power in the country.
UKRAINE: ZELENSKY OFFERS AWARD FOR SMUGGLERS’ “GODFATHER”
On 27th November, UNIAN reported that President Zelensky has acknowledged that an Odesa businessman and reputed trafficker managed to evade capture during a police roundup of 10 suspects related to a corruption case in the State Customs Service, and described Vadym Alperin “one of the godfathers of smuggling in Ukraine”. The National Anticorruption Bureau (NABU) arrested 7 customs officials, one of whom is Serhiy Tupalskiy, deputy head of the Kyiv City Customs Service. 3 other suspects were arrested, including an associate of Alperin.
UKRAINE: US EMBASSY WELCOMES SIGNING OF BILL ON UNJUST ENRICHMENT
On 27th November, Ukrinform reported that the US Embassy has welcomed the signing on 25th November by President Zelensky of the draft law that provides for criminal liability for illicit enrichment.
UPDATE AND A PRIMER ON CARGO LIABILITY FOR INTERNATIONAL AIR FREIGHT
On 26th November, Benesch Attorneys at Law produced an article in the light of changes on 28th December to the limitation of liability for cargo lost or damaged during international air transportation between countries that are signatories to the Montreal Convention – with a new limitation of liability of approximately $30 per kilogram, up from approximately $26 per kilogram. This, it says, will potentially expose air transport providers to approximately 14% greater cargo claims exposure and correspondingly yield greater recovery for shippers. The article provides a brief outline of the history, and explains who has liability to prepare airwaybills, and what is the situation of they get it wrong. It explains exactly what are the limits of liability and why have they changed.
SEC CHARGES GEORGIA-BASED BIOTECH COMPANY MIMEDX GROUP INC AND 3 FORMER TOP EXECUTIVES WITH DEFRAUDING INVESTORS
A release on Mondo Visione on 26th November reported that those charged are accused of defrauding investors by misstating the company’s revenue and attempting to cover up their misconduct 2013-17. MiMedx has agreed to a settlement to resolve the claims. It is said that MiMedx prematurely recognised revenue from sales to MiMedx’s distributors and exaggerated MiMedx’s revenue growth. Former CEO Parker H Petit, former COO William C Taylor, and former CFO Michael J Senken were those charged by the SEC.
DANISH BANKS PRESENT JOINT RECOMMENDATIONS TO COMBAT MONEY LAUNDERING
On 25th November, a news release from Danske Bank says that the bank has participated in the development of 25 recommendations on how the financial sector and the authorities can improve their efforts to combat financial crime.
PUBLIC CONSULTATION ON FATF DRAFT GUIDANCE ON DIGITAL IDENTITY CLOSING
The closing date for responses to this consultation is 29th November. The consultation was intended to enable private sector stakeholders comment on draft guidance to clarify how digital identity (digital ID) systems can be used for CDD, and intended to help governments, financial institutions and other relevant entities apply a risk-based approach to the use of digital ID for CDD.
QUICK GUIDE TO FINANCIAL CRIME IN ILLEGAL WILDLIFE TRADE
On 26th November, the MD of the Basel Institute on Governance produced a short briefing intended to provide an insight into the Institute’s approach and how its various areas of expertise fit together to help address this area of financial crime.
OFAC: NEW AND AMEND IRAN SANCTIONS FAQ
On 27th November, OFAC announced that it had updated 2 FAQ – one dealing with insurance and reinsurance and exceptions to insuring, reinsuring, or underwriting sanctioned activities. The 3 new FAQ 805 to 807, which includes the effect of sanctions on Cosco Shipping and General License K.
US FEDERAL PROSECUTORS OPEN CRIMINAL PROBE OF OPIOID MAKERS AND DISTRIBUTORS
CNBC on 26th November reported that federal prosecutors in New York have opened a criminal probe into the role drug manufacturers and distributors played in fuelling the opioid crisis. From 1999 to 2017, nearly 218,000 people died in the US from overdoses related to prescription opioids, according to the CDC.
IRELAND: GARDAÍ HAVE RECOVERED €20 MILLION STOLEN FROM BUSINESSES THROUGH FRAUD OVER 5 YEARS
RTE on 27th November reported that Gardaí managed to recover over €20 million stolen from businesses through fraud over the past 5 years, according to the head of the Garda National Economic and Cyber Crime Bureaux. Addressing the A&L Goodbody Corporate Crime Conference in Dublin, he said that when he took over his current role 5 years ago, there was a huge reluctance among businesses to report economic crime, because companies feared the reputation damage.
UK: DUTCH YACHT OWNER JAILED FOR 16 YEARS FOR TRAFFICKING £133 MILLION OF COCAINE
A news release from the NCA on 27th November concerned the fallout from the seizure of a yacht off Cornwall in 2018. Maarten Peter Pieterse, 61, has been jailed for 16 years. A Border Force cutter intercepted the Dutch-registered SY Marcia approximately 120 miles south west of the Cornish coast and escorted the 60-feet yacht into Newlyn harbour. The yacht had left the Azores and NCA officers believe the haul was destined for Europe and the UK.
SWISS REVAMP “ANTIQUATED” MONEY LAUNDERING AND TERRORISM FINANCE REPORT SYSTEM
On 27th November, Reuters reported that Switzerland is overhauling its 21-year-old system after concluding the old system that relies on fax or mail, and time-consuming manual entry by Federal Police employees, has outlived its usefulness. From 2020, Reuters says, Switzerland plans to use an AML programme from the UN Office on Drugs and Crime called “goAML” which is currently being used by financial intelligence units in 49 other countries.
79 ARRESTED IN WORLDWIDE CRACKDOWN ON AIRLINE FRAUD
A news release from Europol on 27th November reported that, between 18th and 22nd November, 60 countries, 56 airlines and 12 online travel agencies were involved in the 12th of the Global Airline Action Days (GAAD), an international and multidisciplinary operation to fight fraudulent online purchases of flight tickets with compromised credit card data, which took place at more than 200 airports across the world. 165 suspicious transactions were reported. Investigations have been opened and 79 individuals suspected of traveling with airline tickets bought using stolen, compromised or fake credit card details have been arrested or detained.
UK: SOLICITORS WILL HAVE AN ‘INCREDIBLY SHORT’ TIME TO GET TO GRIPS WITH NEW AML RULES
The Law Society Gazette on 27th November reported that the Solicitors Regulation Authority has warned that solicitors will have an ‘incredibly short’ time to get to grips with new rules on money laundering before regulations implementing the latest AML regime implementing the 5th Money laundering Directive come into force in January. Because of the general election and other pressures on parliamentary time, regulations are not expected to be laid much before 10th January.
UK: FCA SECURES £290,000 CONFISCATION ORDER AGAINST INVESTMENT SCHEME FRAUDSTER
Financial Reporter on 27th November reported that the FCA has secured a confiscation order totalling £291,070 against convicted fraudster, Mark Barry Starling, who has been jailed for 5 years. The Court found that Starling had gained £3,010,982 from his criminal conduct, but that the total realisable assets for confiscation was £291,070 as he had spent the rest of the victims’ monies.
WARRANTIES GROUP DOMESTIC & GENERAL SUES ALLEGED “COPYCAT FRAUDSTERS”
On 27th November, the Evening Standard in London reported that the company, whose plans cover TV, washing machines and other appliances, has nearly 9 million UK customers. However, it is claimed that there could be up to 500 call centres cold-calling its customers and tricking them into sending them money. Most appear to be in Brighton and the South Coast. The article includes a selection of cases undertaken by the company against the alleged scammers.
UK: COMPANY BOSS CHEATED MoD OUT OF MORE THAN £800,000 BY SELLING EQUIPMENT INCLUDING UNDERWATER SCANNERS THAT WERE NOT FIT FOR PURPOSE
The Telegraph on 27th November reported on Carl Tiltman, 56, who admitted conning the MoD into buying equipment he knew was useless. He was CEO of Dorset-based Subsea Asset Location Technologies (Salt), which was to provide underwater scanning technology and consultancy services to the MoD. He used bogus results from scanning equipment to convince the Government to invest and provided false information to the MoD for products that were not fit for purpose and some that had not been manufactured.
NEW CARIBBEAN CUSTOMS ORGANISATION IN THE MAKING
On 26th November, the Daily Herald in St Maarten reported that the Dutch government is seeking approval of the treaty to establish the Caribbean Customs Organisation (CCO) under a treaty signed in Havana in May 2019, and which seeks to further strengthen the cooperation between Customs organisations operating in the Caribbean region. It would replace the Caribbean Customs Law Enforcement Council (CCLEC), established in the 1970s in an effort to combat the transport of illegal drugs, mostly cocaine, via the Caribbean to North America and Europe. With the ratification of the treaty, the Netherlands, as well as on behalf of Bonaire, Statia and Saba, Aruba, Curaçao and St. Maarten will become members of the CCO.
OLEG DERIPASKA REPORTEDLY STRIPPED OF CYPRIOT CITIZENSHIP
Rferl on 27th November reported that local media in Cyprus was claiming that Cyprus has stripped Russian tycoon Oleg Deripaska, a 51-year-old billionaire with close ties to the Kremlin, of his Cypriot citizenship, and that 2 other Russian citizens were deprived of their citizenship as well. Deripaska obtained Cypriot citizenship in 2017.
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