A news release from the Isle of Man on 20 December announced the application order applying this UK order in the Island, and making various changes to existing sanctions regimes under Isle of Man law. Among the changes, Eritrea is added to the list of destinations subject to transit controls for Category B goods (i.e. certain military goods subject to trade controls), anew offence for the breach of the prohibition in the EU South Sudan Regulation relating to the provision of services of armed mercenary personnel in South Sudan is also created; a new offence of failing to comply with a condition included in an authorisation granted under the Venezuelan Sanctions Regulation and to create a penalty for that offence; and new offences for, or in connection with, contravention of trade restrictions which have been added to the North Korea Regulation.
On 20 December, investigative site Bellingcat published an article claiming that Italy has supplied Iveco Light Multirole Vehicles (LMV) to the Russian Defense Ministry. They have been located on multiple occasions within the context of the war in Syria – not not only operated by Russian military personnel but in some cases also embedded with and/or diverted to local Syrian militia leaders who are under EU sanctions for their responsibility in human rights abuses. The article goes on to explain: what is the Italian Iveco LMV; how did they get to Syria from Russia[ where and when the Iveco LMV were being used in Syria; who are the EU-sanctioned Syrian militia leaders using the Iveco LMV; and why transactions for the sale of these “arms” appear to be anomalous.
On 20 December, The National Law Review published an article saying that recent action by the OAC serve as a warning to U.S. persons (including U.S. companies) with business interests in and around the Middle East. It is easy for the complacent to run afoul of OAC’s Antiboycott Regulations when evaluating and responding to otherwise routine documents such as a letters of credit, shipping certificates, or purchase orders. The Regulations prohibit U.S. persons, including “controlled in fact” foreign subsidiaries of U.S. companies, from complying with foreign boycott requests in regards to a business opportunity within “interstate or foreign commerce of the United States”. The most obvious boycott is that of Israel, but a case highlighted in the article involved compliance with the boycott by several Arab states of Qatar.
Still encountering disruption and wifi problems…hoping to catch up before too long…
20 December 2019
SETTING THE RECORD STRAIGHT ON US FRAUD FRAUD INVESTIGATIONS INVOLVING UNDERCOVER SCHOOLS
On 20 December, a news release from US Immigration and Customs Enforcement contained an announcement by its Acting Director about the “University of Farmington” undercover investigation. He said that an estimated 1.2 million non-immigrant students studied at more than 8,200 U.S. schools during 2018, promoting cultural exchange, providing billions of dollars to the U.S. economy, and contributing to research and development. Criminals and some students, however, exploit the student visa system, allowing foreign nationals to remain in the United States in violation of their nonimmigrant status. He said that the case is a clear example of a pay-to-stay scheme, which is against the law.
OFAC EXTENDS COSCO GENERAL LICENSE TO FEBRUARY
On 20 December, the EU Sanctions Blog reported that OFAC has extended the general licence related to Cosco Shipping Tanker (Dalian) Co Ltd until 4 February, and which authorises the maintenance or wind down of transactions. It also updated accordingly 3 related FAQ.
OFAC designates Guatemalan mayor, 4 other nationals and 5 entities
On 19 December, OFAC announced that it had designated Guatemalan mayor Erik Salvador Suñiga Rodriguez (aka “El Pocho”) and the Suñiga Rodriguez drug trafficking organisation, together with 4 other Guatemalan nationals and 5 Guatemalan businesses owned or controlled by these individuals.
UK and US add 5 individuals to Mali sanctions regime
On 20 December, a Notice from HM Treasury advised that 5 named individuals had been added to the UK Consolidated List of sanctions targets, these having been added to the relevant UN sanctions list on 19 December.
The same 5 persons had been added to US sanctions lists by OFAC on 20 December.
Goldman Sachs Talking With US authorities over Nearly $2 Billion Fine in 1MDB Scandal
On 20 December, the Wall Street Journal and others reported that the DoJ and Goldman Sachs had all but settled the case against the latter for involvement in the 1MDB scandal. This would reportedly involve a Goldman subsidiary in Asia — not the parent company — would plead guilty to violating US bribery laws.
SEC proposes watering down of rule mandating the disclosure of payments by oil, gas and mining companies to foreign governments
On 19 December, the Wall Street Journal reported on the the third attempt by the SEC to implement a controversial section of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Designed to counter criticism of the original proposals, the SEC now faces stiff opposition from NGO and anti-corruption groups that lobbied to have the requirement added to Dodd-Frank.
Hong Kong: mysterious bags of cash, money laundering allegations and crackdown on funds for protests and protestors
On 20 December, KYC 360 carried an interesting article about allegations by local police of money laundering etc involving funds raised to bail protestors by an organisation called the Spark Alliance. Police have arrested 4 people, and frozen HK$70 million in banks and HK$130,000 in cash. It is said that the crackdown deals a major blow to demonstrators as they face ever-mounting legal bills, with more than 6,000 people arrested since June. Funds bankrolling the protests have collectively raised at least HK$254 million ($33 million) since June. More complications have been caused by HSBC closing the Spark Alliance account.
Italy: Police, lawyers and former MPs seized in raids on ‘Ndrangheta mafia
On 20 December, KYC 360 reported on another series of raids by police in Italy, with 334 mob suspects including police chiefs, lawyers and former MPs in an “unprecedented” crackdown on the ‘Ndrangheta mafia. The action included arrests in Germany, Switzerland and Bulgaria as well as in Italy.
Canada: RCMP charges in $15 million online cannabis money laundering scheme
On 20 December, KYC 360 reported that 5 men are facing multiple charges after an investigation into a company alleged to be laundering money for unlicensed illegal online cannabis dispensaries. An investigation revealed that dispensaries not federally licensed to produce or sell cannabis in Canada used Moxipay Corporation to transfer and receive funds, with between January and December 2018 more than 84,000 transactions where nearly $15 million.
Iran sanctions force Brazil beef exporters to re-route shipments
On 19 December, Reuters reported that US sanctions against Iran have forced Brazilian beef exporters to re-route shipments through nearby countries, adding to costs but largely maintaining trade flows. They are sending beef to other ports in the Middle East, where it can be shipped onward by road. It is also said that Iranian importers have resorted to an intricate network of small European banks to pay for the shipments.
UK: Court of Appeal confirms documents protected by legal advice privilege remain protected even after the dissolution of the company to whom the privilege belongs
An article from Allen & Overy on 17 December reported that legal advice privilege exists unless overridden by statute or waived. This comes after Lee Victor Addlesee v Dentons Europe LLP, in which proceedings stemmed from a failed investment scheme.
Australia proposes robust new foreign bribery laws
On 17 December, an article from Allen & Overy reported on recent proposals from the federal government which proposes to fundamentally shift the criminal liability landscape for corporations with respect to foreign bribery. A previous corporate crime Act had been allowed to lapse at the end of the previous Parliamentary session, ahead of the 2019 Australian federal election. The article explains the contents of the new Bill, and explains that there will be new principles-based guidance in respect of what it may constitute “adequate procedures” for the Failure to Prevent Bribery Offence.
Proposed Counterfeit Goods Seizure Act of 2019 Would Provide Design Patent Protection at the US Border
On 18 December, a blog post from Hunton Andrews Kurth reported on a proposed Bill which would expand the authority of US Customs and Border Protection (CBP) to seize counterfeit goods that infringe intellectual property rights, specifically design patents, at the border and, if passed, help stem the tide of counterfeits (with a global trade value estimated at over $1 trillion) by preventing their importation into the US. It explains that CBP can presently seize counterfeit products covered by trademarks and copyrights registered with CBP, but not patents, and that the Bill seeks to add design patents to the criteria for action.
UK corrects 1 entry on Venezuelan sanctions list
On 19 December, HM Treasury advised that details of Tibisay LUCENA RAMIREZ had been amended (corrected), following notification of such a correction by the EU on 19 December.
OFAC adds 2 individuals to Iran sanctions lists
On 19 December, OFAC advised that 2 Judges of the Tehran Revolutionary Court had been added to the US sanctions lists.
EASTERN COASTAL REGION OF GUATEMALA USED IN THE TRAFFICKING OF JADE
On 19 December, KYC 360 reported that authorities have uncovered that an eastern coastal region of Guatemala, known to be a cocaine corridor, has been used in the trafficking of jade. Local authorities and politicians are suspected of facilitating the illegal mining and smuggling operation. In October, police seized 10 tons of unprocessed jade.
NEW US SANCTIONS ACT TARGETS NORD STREAM 2, SECONDARY SANCTIONS AND OTHER MEASURES ON NORTH KOREA
On 20 December, the EU Sanctions Blog reported on a new Act passed by the Senate and sent to the President for signature. As well as targeting those involved in the Nord Stream 2 project, secondary sanctions on those providing significant financial services to those subject to N Korea sanctions; foreign entities engaged in the export/import of “significant” quantities of coal, textiles, seafood, iron, or iron ore; and those who export/employ North Korean workers.