Day: November 29, 2019

A news release from OECD on 29^th 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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An article in ENACT Africa (which I would argue is essential reading) on 26^th 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.

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

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On 29^th 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

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

On 28^th 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

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

On 28^th 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