OTHER THINGS YOU MAY HAVE MISSED – NOVEMBER 29

29th November 2019

 UKRAINIAN POLICE SEIZE 100 TONS OF FAKE DETERGENT 

On 1st November, Petošević reported that Ukrainian police recently seized nearly 100 tons of counterfeit household detergent in the Zakarpattia region in south-western Ukraine while searching the warehouses, workshops and residences of the those who produced and sold fake detergent in Ukraine, Slovakia, Hungary and Romania.  Police also seized a significant amount of raw materials, production equipment and computers during the searches.

https://www.petosevic.com/resources/news/2019/11/4203

VENEZUELA “OFFERS SUPPLIERS PAYMENT IN CHINESE YUAN”

On 29th November, a report in Hellenic Shipping News said that sources claim that Venezuela’s government and its oil company PDVSA have offered to pay suppliers and contractors into accounts in China using the yuan currency due to the effects of US sanctions.  It is claimed that officials have made the proposal verbally to at least 4 companies that provide services to the public sector.  It is also reported that Venezuela’s central bank has at least $700 million in yuan in an account at China’s central bank, which it received earlier this year as compensation for an oil shipment.

https://www.hellenicshippingnews.com/facing-u-s-sanctions-venezuela-offers-suppliers-payment-in-chinese-yuan-sources/

OFAC: SANCTIONS COMPLIANCE PROVISIONS IN LEASE AGREEMENTS ALONE MAY BE INSUFFICIENT

On 27th November, Holland & Hart LLP published an article regarding an agreement with Apollo Aviation Group, LLC, a Florida-based commercial aviation investment and servicing company over 12 apparent violations of the Sudanese Sanctions Regulations.  It says that the announcement is an important reminder to lessors that contractual provisions in lease agreements relating to sanctions compliance may be insufficient to fully mitigate the risk of a US enforcement action.  However, it says that the case also provides key lessons for how companies can more readily satisfy their compliance obligations in the context of customer relationships where there is a risk that US-origin goods may be diverted to sanctioned persons or jurisdictions.  The mitigating factors include conducting appropriate due diligence to understand the business risks relating both to lessees and sublessees – something that arises in so many cases, that you need to know not just what (and why) you do, but what and why others involved (clients, customers, etc) as well.

https://www.internationalcomplianceblog.com/ofac-sanctions-compliance-provisions-in-lease-agreements-alone-may-be-insufficient/#page=1

20 TONNES OF SMUGGLED BEEF SEIZED IN SOUTH-WEST CHINA

On 29th November, Xinhua reported that border police had captured 5 suspects for smuggling 20 tonnes of frozen beef into China from Vietnam, saying that meat smuggling has been a frequent occurrence in the region in recent years, and local police have been stepping up efforts to crack down on such cases.

http://www.xinhuanet.com/english/2019-11/29/c_138592459.htm

INDIAN GOVERNMENT POLICIES HAVE TURNED COUNTRY INTO MAJOR GOLD SMUGGLING HUB

On 27th November, Illicit Trade reported that a Canadian NGO has said that India has become one of the world’s major hubs for gold smuggling.  The NGO says that that gold linked to human rights abuses and corruption in countries across Africa and South America is entering legal international markets via India.  The report from the NGO claims that India imports approximately 1,000 tons of gold every year, which is 25% more than official figures show, and that various policies and tax changes introduced by the Indian government have over time incentivised smuggling and the illicit trade of gold, with traders falsifying documentation to import gold from producing countries or smuggle it in from other trading centres.

https://www.illicit-trade.com/2019/11/indian-government-policies-have-turned-country-into-major-gold-smuggling-hub-ngo-warns/

NORWAY POLICE TO PROBE DNB BANK AFTER ICELAND LAUNDERING REPORT

Bloomberg reported on 28th November reported that police will investigate the country’s biggest bank after it was reportedly used by an Icelandic fishing company to launder money that came partly from operations in Namibia.  Icelandic media claimed that that fishing company Samherji paid bribes to officials in Namibia to operate there and used DNB to transfer over $70 million to the Marshall Islands between 2011 and 2018.  However, a release from Samherji denied ever owning or controlling the shell company involved.

https://www.bloomberg.com/news/articles/2019-11-28/norway-police-to-investigate-dnb-after-iceland-laundering-report-k3iy54fs

https://www.samherji.is/en/news/samherji-never-owned-or-controlled-cape-cod-fs

BRAZIL’S SUPREME COURT SAYS THAT POLICE AND PROSECUTORS CAN ACCESS CONFIDENTIAL TAX AND FINANCIAL INFORMATION WITHOUT A COURT ORDER

Reuters on 29th November said that the decision clears the way for an investigation into the president’s son, Flavio Bolsanaro.  Public prosecutors in financial crime investigations can have access to tax documents and data at the Federal Revenue Service and central bank’s FIU with no need for warrants.

https://www.reuters.com/article/us-brazil-corruption/brazils-top-court-eases-access-to-confidential-information-in-criminal-probes-idUSKBN1Y2281

IMF TO EXAMINE NORDIC EFFORTS TO STOP MONEY LAUNDERING IN THE BALTICS

Reuters on 29th November reported that work on framing the investigation was well underway and the IMF would start work in the first half of 2020.

https://www.reuters.com/article/us-sweden-cenbank-moneylaundering/imf-to-examine-nordic-efforts-to-stop-money-laundering-in-the-baltics-idUSKBN1Y20XB

CYPRUS: WOMAN ARRESTED OVER SALE OF NON-EXISTENT PASSPORTS

On 29th November, the Cyprus Mail reported that police have arrested a 38-year-old woman from Limassol, to facilitate investigations into a case of money laundering.  She allegedly received €38,200 from 2 people but they never received the passports.

https://cyprus-mail.com/2019/11/29/woman-arrested-over-sale-of-non-existent-passports/

FAKE AUSTRALIAN WINE IS SEIZED IN CAMBODIA

On 28th November, the Dail Mail reported that counterfeit bottles of Australian Penfolds wine have been seized by Cambodian authorities during a raid on a bootlegging operation that specialised in producing fake Australian wine.  It is said that several thousand bottles of booze, along with counterfeit packaging including labels and boxes were confiscated.

https://www.dailymail.co.uk/news/article-7736837/Fake-Australian-wine-seized-Cambodia-alcohol-operation-busted.html

BRITISH COLUMBIA’S BIGGEST CASINOS REVENUE GROWTH STALLS FOLLOWING CHANGES TO MONEY LAUNDERING REGULATIONS

On 29th November, Calvin Ayre reported that 2018’s total revenue was only 0.1% higher than the casinos recorded in 2017, well down on the annual 4.4% growth reported in 2014.

https://calvinayre.com/2019/11/29/casino/bc-casino-revenue-stalls-money-laundering-rules/

UK’S ONLINE GAMBLING MARKET SUFFERS ITS FIRST-EVER REVENUE DECLINE

On 29th November, Calvin Ayre reported that figures released by the UK Gambling Commission show the UK gambling market generated gross gambling yield (GGY) of £14.4billion in the 12 months ending March 31st, a 0.3% decline on 2017-18.  This is said to be the first recorded decline in online GGY, although online remains the biggest single area of the UK gambling market at 37.1% of the total.

https://calvinayre.com/2019/11/28/business/uk-online-gambling-negative-growth/

STRING OF TRACTOR SATNAV THEFTS BROUGHT TO AN END IN FRANCE

A news release from Europol on 29th November reported on a joint French-Lithuanian police operation that ended the theft of navigation systems from tractors.  The investigation led to the identification of 47 criminal cases associated with the same organised crime group and estimated damage worth more than €575 000.  4 individuals were arrested in Lithuania, where the network was based.  There were 675 cases in 2018 – which represents more than €6.5 million losses in the agricultural sector – as an increasing trend of GPS thefts in tractors has been seen in France.

https://www.europol.europa.eu/newsroom/news/string-of-tractor-satnav-thefts-brought-to-end-france-and-lithuania

RUSSIA: CORPORATE ANTI-CORRUPTION ENFORCEMENT RESEARCH

On 29th November, Baker McKenzie announced the release of a report on Russian corporate anti-corruption enforcement that it says will provide both international companies operating in Russia and Russian businesses with an international footprint with practical and informative guidance on evaluating their corporate compliance programmes.  It focuses on the risks of prosecution under Russian law.

https://f.datasrvr.com/fr1/319/36654/MOSDMS-55910777-v2-Russia__Corporate_anti-corruption_enforcement_research_report_ENG.pdf

CAMBRIDGE UNIVERSITY COLLEGE REPATRIATES BRONZE COCKEREL TO NIGERIA

On 29th November, the Art Law & More blog from Boodle Hatfield reported that Jesus College will return a looted sculpture to Nigeria in an unprecedented move that it says further fuels the growing repatriation movement across British institutions.  A former British Army officer unlawfully bequeathed the statue to the College in 1930.  It is said that the sculpture was stolen in 1897 as imperial troops decimated Benin City, in present-day Nigeria.  Cockerels were viewed as sacrificial animals in Benin and bronze statues of them often adorned ancestral altars.

https://artlawandmore.com/2019/11/29/cambridge-university-repatriate-bronze-cockerel-to-nigeria/

NATIONAL ANTI-CORRUPTION BUREAU OF UKRAINE PUTS EX-HEAD OF “VAB BANK” ON WANTED LIST

On 29th November, 112 UA reported that the ex-head of VAB Bank Denis Maltsev had been put on the wanted list, Oleh Bakhmatyuk, the former owner of VAB Bank, was already on the list.

https://112.international/society/national-anti-corruption-bureau-of-ukraine-put-on-wanted-list-ex-head-of-vab-bank-46055.html

THAI COURT FINES TOBACCO GIANT PHILIP MORRIS $39.7 MILLION FOR TAX EVASION ON IMPORTED CIGARETTES

The Financial Express in Thailand reported on 29th November that the Criminal Court found Philip Morris Thailand as a company guilty but acquitted 7 employees for lack of evidence.  The company was found guilty of evading taxes by under-declaring the value of cigarettes it imported from the Philippines.  The case began in 2006, was dropped by Thai prosecutors in 2011 but launched again in 2013.

https://www.financialexpress.com/industry/thai-court-fines-tobacco-giant-philip-morris-39-7-million-for-tax-evasion/1779748/

GE POWER SWEDEN DEBARRED BY EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT (EBRD) FOR 6 YEARS AFTER SFO ALSTOM BRIBERY PROBE

On 29th November, Global Construction Review reported that GE Power Sweden AB (formerly Alstom Power Sweden AB) is barred from bidding for any projects for 6 years after an investigation revealed that executives from two Alstom companies paid Lithuanian government officials bribes of more than €5 million to win projects at a power plant there.

http://www.globalconstructionreview.com/news/ge-power-sweden-debarred-six-years-after-sfos-alst/

PHILIPPINE FINANCE SECRETARY ISSUES WARNING TO PHILIPPINE OFFSHORE GAMING OPERATORS (POGO) OVER TAX EVASION

On 29th November, iGaming Business reported that the Finance Secretary has said his country’s government will continue to crack down on POGO and their providers for tax evasion.  It is said that a task force led by the Bureau of Internal Revenue (BIR) has already temporarily shut down the operations of at least 3 POGO and collected US$25 million in unpaid taxes from one of these operators.

https://www.igamingbusiness.com/news/philippine-finance-secretary-issues-warning-pogos

JERSEY: FORMER JSPCA CHARITY HEAD PLEADS GUILTY TO £300,000 FRAUD

On 29th November, the BBC reported that Stephen John Coleman, 62, the former chief officer of the JSPCA, who ran the charity for 10 years, pleaded guilty to defrauding the animal welfare charity of £300,000.

https://www.bbc.co.uk/news/world-europe-jersey-50601538

https://jerseyeveningpost.com/news/2019/11/29/breaking-former-jspca-chief-executive-pleads-guilty-to-fraud/

OVER $100 MILLION IN STATE FUNDS HAVING “EVAPORATED” FROM THE GABON OIL COMPANY

In reporting the arrest of 8 people in Gabon, OCCRP remarks on news circulating about losses at the Gabon Oil Company.  The new arrests appear to be part of an ongoing anti-corruption effort begun in 2017.

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/11231-gabon-nabs-8-in-anti-graft-effort-dubbed-operation-mamba

GIBRALTAR – GFSC PLANS UK-FACING LEVY TO COVER BREXIT COSTS

On 29th November, the Gibraltar Chronicle reported that Gibraltar-based financial services companies doing business in the UK face a 12% fee increase from March 2020, in a move designed to help the regulator recover the cost of preparing for business after Brexit.

https://www.chronicle.gi/gfsc-plans-uk-facing-levy-to-cover-cost-of-brexit-preparations/

INITIAL INSIGHTS INTO THE FORMAL AND INFORMAL GLOBAL MERCURY TRADE

On 19th November, an article from the National Committee of the Netherlands says that little information is available on the formal and especially informal pathways of mercury and how these drive the artisanal gold economies.  The organisation plans to present the results of its studies into informal mercury flows, trade hubs and key players (in Bolivia, Burkina Faso, Guyana, Kenya, Philippines, Suriname, Tanzania and Uganda) in Geneva on 29th November.  Mercury use is common practice in the artisanal and small-scale gold mining (ASGM) sector, it says, and more than 1,400 tons of mercury is released to the environment every year.  There is the Minamata Convention on regulating the formal trade and use of mercury.  The aim of research is to strengthen the Minamata Convention with information that is not available through official channels and presents an addition to the knowledge collected in UNEP global mercury assessment.

https://www.iucn.nl/node/666

An article in 2018 contained more information on an action plan to improve governance of the mercury trade.

https://www.iucn.nl/en/updates/global-action-to-improve-mercury-governance

EU GUIDANCE NOTE: WITHDRAWAL OF THE UK AND CUSTOMS-RELATED MATTERS IN CASE OF NO DEAL BREXIT

On 22nd November, the EU published an updated version of its March 2019 guidance.

https://ec.europa.eu/info/sites/info/files/guidance-customs-procedures_en.pdf

BELGIUM, DENMARK, FINLAND, NETHERLANDS, NORWAY, AND SWEDEN ARE TO BECOME SHAREHOLDERS IN THE INSTEX SPV ESTABLISHED TO FACILITATE LEGITIMATE TRADE BETWEEN IRAN AND EUROPE

A news release from the EU on 29th November announced that the above countries are now in the process of becoming shareholders of the Instrument in Support of Trade Exchanges (INSTEX) subject to completion of national procedures. INSTEX was established by France, Germany and the UK in January 2019.

https://um.fi/current-affairs/-/asset_publisher/gc654PySnjTX/content/vain-englanniksi

 

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TRADE IN COUNTERFEIT GOODS COSTS UK ECONOMY BILLIONS OF EUROS

A news release from OECD on 29th November said that the global trade in fake goods, from cosmetics to car parts, is costing the UK economy billions of dollars a year in forgone company sales, overpriced products and tax revenues, and was behind more than 86,000 lost jobs in 2016, according to a new OECD report.  A new report estimates the value of counterfeit and pirated British goods sold worldwide at £16.2 billion in 2016, up from £13.4 billion in 2013 and equivalent to 3.3% of UK manufacturing sales.  UK goods particularly targeted by counterfeiters include perfumes, cosmetics, clothing, footwear, leather goods, telecoms equipment, electronic goods, cars and motorbikes.  It is said that more than half of the counterfeit and pirated goods imported to the UK were bought by people who knew they were buying fakes, and that most fake imports to the UK come from China, Hong Kong, Turkey, India, Pakistan and Bangladesh.

http://www.oecd.org/newsroom/trade-in-counterfeit-goods-costs-uk-economy-billions-of-euros.htm

The report is at –

http://www.oecd.org/governance/risk/trade-in-counterfeit-products-and-the-uk-economy-2019.htm

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AFRICAN ILLICIT FINANCIAL FLOWS (IFF): DESIGNING AND PRIORITISING RESPONSES

An article in ENACT Africa (which I would argue is essential reading) on 26th November starts by saying that IFF are difficult to detect and prosecute when regulatory systems lack integrity, transparency, and accountability, and that Africa is estimated to lose billions of dollars annually to illicit financial flows – often driven by northern hemisphere countries (i.e. Europe, US and Canada).  The paper argues that international definitions, measures and regulatory frameworks are not always appropriate for the African context.  As such, a stronger understanding of how IFF are generated and moved and their impact is needed to better respond to African IFF and prioritise action against the flows and activities that are the most harmful.  As might be expected, it says that natural resource crimes are particularly immense and harmful.  The report points to the use of shell companies, trade-based money laundering (TBML), and the use of money value transfer systems (MVTS), arguing that there is a pressing need for greater political will and investment into responses which go beyond technical compliance with international standards.

africa2

The report contains an interesting chart comparing African nations’ ratings for technical compliance with FATF Recommendations, and the effectiveness ratings.  It also introduces one to the concept of “felqlan” or ‘flying money’.  This is an ancient Chinese MVTS which is thought to be enabling the multi-billion-dollar illicit environmental trade.  Similar to the hawala, it relies on a network of brokers which enables the trade of illicit commodities without money ever leaving China.  A study is said to have revealed that the system relies on the systematic under-invoicing of Chinese imports into Africa and a seamless chain-of-payments system in which accounts are settled through the transfer of high-end — and often illicit — goods such as abalone, rosewood, rhino horn and ivory.

https://enact-africa.s3.amazonaws.com/site/uploads/2019-11-26-african-illicit-financial-flows-012pdf.pdf

africa1

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

LEARNING FROM RESPONSES TO LARGE-SCALE ILLEGAL, UNREPORTED AND UNREGULATED (IUU) FISHING IN 5 COUNTRIES

On 29th November, RUSI published a report on a new study which sheds light on illegal, unreported and unregulated (IUU) fishing, showing how countries can tailor their specific strategies to combat this major security challenge.  It says that much IUU fishing takes place on a systematic and industrial scale for profit, with these large-scale operations increasingly recognised as a form of transnational organised crime.  However, there has been to date a collective failure, at a systemic level, to provide an adequate global response.  However, it says, little work has been done to assess the extent to which measures have effectively mitigated the role that transnational organised crime plays in the IUU fishing industry.  The report examines experiences in 5 countries: Indonesia; Thailand; Vietnam; Tanzania; and South Africa; and it outlines the key features of the multidimensional threat posed by organised, large-scale IUU fishing across these countries.  It points, in particular, to high levels of convergence between this and other crimes, adding further complexity to the nature of the challenge posed by IUU fishing.  It also considers the range of challenges encountered in bolstering legislative, regulatory and institutional frameworks, strengthening detection and interdiction capabilities, and enhancing investigation and prosecution.  Finally, it makes a number of recommendations offering specific guidance on tailoring existing approaches, based on the lessons derived from the study of these 5 countries.

https://rusi.org/sites/default/files/201911_whr_3-19_turning_the_tide_de_rivaz_web.pdf

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CARIBBEAN FINANCIAL ACTION TASK FORCE (CFATF) PUBLIC STATEMENT ON ST. MAARTEN

On 28th November, the Daily Observer in St Maarten reported that the FATF-style regional body CFATF has issued a public statement noting St Maarten’s failure to comply with FATF standards. However, no consequences were imposed against the country just yet, according to Justice Minister Egbert Doran.  If the island does not approve the Penal Procedures Code and correct other deficiencies in its AML/CFT regulations it faces consequences.  The article says that, in the last 6 years, a total of 11 major laws were introduced to strengthen St. Maarten’s compliance framework.

https://www.thedailyherald.sx/islands/92843-cfatf-issues-statement-against-st-maarten-no-consequences-yet

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SHIPPING IS BEING USED TO POLICE US SANCTIONS

On 28th November, Lloyds List reported on presentations at the International Maritime Industries Forum in London that said that Insurance companies, including P&I clubs and flag states face increased pressure from the US government to comply with unilateral sanctions.  It is said that US bans on Iranian shipping, oil and petrochemical exports in place throughout 2019 have placed global shipping at the forefront of geopolitical unrest as companies and owners grapple with the trading and commercial implications.  One body said that the US State Department in meetings had made very clear that “they have a willingness to use every tool at their disposal to enforce their policy”.  It was reported that the world’s top-3 cargo liner companies have collectively employed more than 150 people to stay on top of sanctions compliance.  The Forum was also warned that, in response to US restrictions, Iran has quietly acquired a hidden fleet of ships to establish a shipping logistics chain for Iran-China flows, with ship-to-ship transfers becoming commonplace off Fujairah, Malaysia and Singapore, amid vessel name, flag and ownership changes.

https://lloydslist.maritimeintelligence.informa.com/LL1130196/Shipping-used-to-police-sanctions-forum-hears

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