Still struggling with laptop, wifi (and now the approaching holidays…) while far from home – so the blog is somewhat less comprehensive than usual (and less than I would like)…

23 December 2019

Tesco Christmas card “packed by Chinese forced labour”

On 23 December, Yahoo News and others reported that the supermarket chain had withdrawn charity Christmas cards from sale after claims they were packed using forced labour in a Chinese prison.  It is said that a note was found in one saying it had been packed by foreign prisoners through forced labour and urging the reader to contact a human rights organisation.

Crew assaulted as 5 ships attacked in Singapore Strait

On 23 December, Seatrade Maritime News reported that 5 vessels were attacked by pirates in the Eastbound lane of the Singapore Strait with the crew on one assaulted, and tied on up on 2 of them, adding to a string of incidents in the busy shipping lane.

19 seafarers kidnapped by pirates from ship off Nigeria have been released

On 23 December, Seatrade Maritime News reported that the 19 crew (18 Indian nationals and a Turkish national) were kidnapped on 3 December.

Baltic states’ AML crackdown extends from banks to payment service providers

On 23 December, KYC 360 reported that the target are payment-service providers, which as well as facilitating e-commerce often help people send money around the world at low costs – as the risk is that criminals use them to conceal illicit transactions while scrutiny is focused on traditional banks.  It is also reported that, in Estonia, 3 employees of GFC Good Finance Company AS over money laundering and embezzlement and had its license withdrawn in May. The authorities said it had “seriously breached” rules including KYC procedures. Also, in April, AS Talveaed — which had serviced higher-risk non-resident clients since 2011 — was also stripped of its licence following “several years” of it violating legal obligations.

Swiss commodity trader pays SF94 million for lack of organisational corruption prevention

On 23 December, an article from CMS Law reported that the Office of the Attorney General convicted a Swiss commodity trader under the Criminal Code of failing to take all due organisational measures to prevent corruption by its employees and agents.  It is also said that the case gives guidance as to the organisational measures which are deemed reasonable and necessary by the Office of the Attorney General to prevent acts of corruption by employees and agents of the corporation in light of the relevant part of the Criminal Code.  In August 2018 the Swiss Federal Criminal Court found a former employee of the company guilty of bribing officials in the Congo and the Côte d’Ivoire between 2008 and 2011, and the former employee had acted together with employees and the trading company’s agents to gain access to the petroleum market in these countries.

New legislation in Luxembourg will enhance the freezing and confiscation of proceeds of crime 

An article from Linklaters on 16 December about a draft Bill that would transpose the EU 4th Money Laundering Directive and would also addresses deficiencies in the Luxembourg Criminal Code to improve its effectiveness, by enabling better detection and tracing of property to be frozen and confiscated.  The various amendments include the creation of a centralised office of management and recovery of assets; the right of access to a lawyer for any person claiming to have a right to an asset subject to a criminal seizure proceeding (even if not a defendant or victim) and enabling the detection and tracing of property to be frozen and confiscated, even after a final conviction for a criminal offence.

UN extends North Korea sanctions exemption for NGO

On 23 December, NK Pro reported that US  aid organisation LNKM complained that the US Treasury to blame for for the passing of the original 6-month exemption window.

Wolfsberg Group Urges ‘Effectiveness’ Emphasis in AML/CTF Programmes

On 23 December, Regulation Asia reported that the Wolfsberg Group has published a statement on “Effectiveness” as it relates to AML/CTF programmes.  Despite FATF adding “effectiveness” ratings to technical compliance assessments in 2013, the Wolfsberg Group of banks believes that, in practice, there is still not enough consideration of effectiveness in achieving the overall goals of the AML/CTF regime, beyond technical compliance.  It also says that financial institutions should be encouraged to identify – and discontinue – current practices that are not required by law or regulation, do not lead to the production of highly useful information to relevant government agencies, and are of little financial crime risk management value to the institution.

The statement from the Wolfsberg Group is at –

Bermuda: man cleared of money laundering charges allowed to fight for more than $300,000 of seized cash to be returned to him

On 23 December, the Royal Gazette reported that Kenith Bulford told the Supreme Court the money was forfeited by another defendant before he could make any applications to resist the move.  He had been arrested at the airport in March 2013 on suspicion of money laundering offences. 2 others also arrested were found to have $314,950 in US currency hidden in sneakers packed in their suitcase.  Bulford’s DNA was found on the money seized and he was found to have $10,040 in cash on him. He was cleared by a jury in 2015 and had the smaller sum returned to him.

New Zealand: more than $17 million transferred from Bahamas following corruption, money laundering scandal in Venezuela oil company 

On 23 December, the New Zealand Herald reported that more than $17 million of alleged bribes in a South American corruption scandal were shifted from the Bahamas into a New Zealand bank account earlier this year, said to be part of $24 million that a corrupt lawyer living in Spain allegedly took in bribes to arrange lucrative contracts with Venezuela’s state-owned oil company. Luis Carlos de Leon Perez, 43, a lawyer for Petroleos de Venezuela S.A, was arrested in his holiday home in Spain in October 2017 and extradited to the US.

Spain launches online gambling anti-match fixing commission

On 23 December, e-Gaming Review reported that Spain has launched its first national commission aimed at combating so-called match-fixing and betting fraud in the Spanish licensed online sports betting market.

FCA £170,000 confiscation order against convicted fraudster

On 23 December, Financial Reporter reported that a confiscation order of £171,913.60 was made against Manraj Singh Virdee, which follows an FCA prosecution in which Virdee was sentenced to a 2-year prison sentence suspended for 2 years for defrauding investors of over £600,000 and the illegal operation of an unauthorised investment scheme.

SFO criticised for deferred prosecution despite ‘not guilty’ verdicts

On 23 December, the Law Society Gazette reported that the decision to publish a deferred prosecution agreement reached with a business despite the acquittal of 3 individuals charged with alleged wrongdoing has been strongly criticised by a defence lawyer.  The SFO released details of a DPA reached with Güralp Systems Ltd in October, where it accepted charges of conspiracy to make corrupt payments and a failure to prevent bribery between 2002 and 2015 and agreed to pay a total of £2,069,861 to the SFO.

The first Israeli binary fraudster to fall

On 23 December, Globes in Israel reported on the sentencing of Lee Elbaz, the CEO of Yukom Communications, to 22 years in prison in the US.  It also notes that 15 other Yukom employees had been indicted and 5 had signed witness agreements with US authorities. Sources are said to claim that the US authorities are investigating at least 2 other Israeli concerns.  It is said that the heyday of the industry in Israel lasted for 4 years to 2017, when a new law was passed, with thousands of people employed, with hundreds of websites.

Cambodia’s online gambling ban will take effect on January 1

On 22 December, Calvin Ayre reported that the country’s prime minister had dashed hopes of any last minute reprieve.

Firearms trafficking: patterns and smuggling routes across West Africa

A news release from Interpol on 23 December advises that a regional law enforcement operation against firearms trafficking in West Africa has seen arrests and seizures in Burkina Faso, Côte d’Ivoire and Mali.  Operation “KAFO”, jointly coordinated by INTERPOL and UN Office on Drugs and Crime (UNODC), was a cross-border operation targeted the people and networks behind firearms trafficking in the region and beyond. It says that initial results include the identification of a trafficking network operating regionally from Côte d’Ivoire, the seizure in Burkina Faso of illicit goods clearly linked to serious organised crime, and the confiscation in Mali of tampered visas smuggled from Burkina Faso by bus, also suggesting an organised crime connection.

Russia Mandates Pre-installation of Russian Software on Electronic Devices

On 18 December, Baker McKenzie reported that, from 1 July certain types of electronic goods could only be sold in Russia with pre-installed Russian software.  The new rule is expected to apply primarily to smartphones, computers and televisions with a Smart-TV function.  Russia is also working on its Russia-only online system, to sever links with the worldwide web.

Guidelines on Territorial Scope of GDPR

On 19 December, Baker McKenzie reported that the European Data Protection Board has published the adopted version of its guidelines on the territorial scope of the General Data Protection Regulation. The guidelines were first published in November 2018 for public consultation. After completion of the public consultation process, the guidelines had been updated and thereafter adopted as final guidelines by the EDPB in November 2019.  It says that EDPB makes clear that Art. 3 of the GDPR is aimed at determining whether a particular processing activity, rather than an entity or person, is within the scope of the GDPR. Therefore, for controllers and processors located outside of the EU, some of the controller’s or processor’s processing activities may be within the scope of the GDPR, whilst others are not.

Isle of Man FSA releases response to consultation on legislation amendments

On 20 December, the FSA published a response to a public consultation on an amendment Bill.  The main topics on which responses were sought were details of to whom the proposed civil penalty regime for individuals may apply;  the possible implications of proposed changes to certain definitions; and the effect on regulated entities of having to satisfy the FSA that persons seeking appointment in Controlled Functions are fit and proper.  There are no significant changes to the proposals at this stage and the FSA is to proceed to drafting of the Bill.

On the Cliff Edge of a New Stage of the Libyan Conflict

On 20 December, Lawfare published an article saying that a possible new phase of the conflict puts 1 million people at imminent risk.  After weeks of stalemate, the conflict has started to move inside the capital, with bombings intensifying in the core of the city. Tripoli could soon experience even more deadly urban warfare. With the international community still in a state of deadlock, it says that the US must push harder for a ceasefire.

UN ban on North Korean overseas workers comes into effect

On 22 December, NK News reported that the 22 December deadline has finally arrived for all North Korean overseas labourers working in UN member states to return to their home country, as UN sanctions intended to limit funding to Pyongyang’s nuclear and weapons programmes came into effect under UN SCR 2397.

DoJ Revises and Re-Issues Export Control and Sanctions Enforcement Policy for Business Organisations

On 23 December, Wilmer Hale published an Alert saying that, on December 13 the National Security Division (NSD) of the DoJ issued a revised policy regarding voluntary disclosure of export control and sanctions violations by business organisations. It encourages business organisations to voluntarily self-disclose to NSD “all potentially wilful violations of the statutes implementing the US government’s primary export control and sanctions regimes”.

US Customs arrests and removes Argentinian national on attempted weapons trafficking

A news release from US Immigration & Customs Enforcement on 23 December advised that it had removed Sergio Leonardo Ruchtein to his home country of Argentina where local authorities took him into custody.  He had entered the US in March and purchased a Pulsar Trail XP 50 LRF Thermal Rifle Scope online and attempted to smuggle the device (which required an export licence) back to his native Argentina.

The Virtues, Vices, and Limits of Embargoes and Sanctions

In the latest edition of Strategika from the Hoover Institution in the US on 20 December says that economic embargoes and targeted sanctions have a long but mixed legacy as tools of statecraft.  The first major American attempt to employ sanctions dates back as far as the Embargo Act of 1807, which intended to punish Great Britain and France for interfering with American shipping during the Napoleonic phase of the wars of the French Revolution.  It also says that economic sanctions have become increasingly popular as a way of achieving a variety of goals — deterrence, coercion, the protection of human rights, raising the cost of aggression, bolstering allies, virtue-signalling or choosing the least bad means for addressing an international threat when the alternatives of doing nothing or resorting to force appear worse.  It argues that what works is largely case specific, defying easy generalisation, but that the US experience yields several provisional lessons that ought to inform whether, when, and how it employs sanctions. The article says that sanctions can supplement but not serve as a substitute for a comprehensive strategy to defeat, deter, or incentiviSe an adversary to change its behaviour; the effectiveness of sanctions not only depends on the economic and military leverage, but also the will and capability to impose third party sanctions on countries that could undermine their impact; even effective sanctions can have the unintended consequence of precipitating aggression it intended to deter; even effective embargoes reach a point of diminishing returns; sanctions work best by enlisting the broadest coalition of the willing to impose them consistent with the mission; artificially high measures of success or virtue-signalling without regard to consequences of sanctions should be avoided; and in deciding whether to impose sanctions, therefore, decision-makers should assess rigorously the relationship between ends and means, and the anticipated versus unanticipated consequences of alternative courses of actions.

UK Parliamentary briefing: tax avoidance and tax evasion

On 23 December, the House of Commons Library published a briefing paper saying that the UK Government has continued to introduce provisions to tackle both tax avoidance and tax evasion, including measures in both the Spring & Autumn Budgets in 2017, and the 2018 Budget.  This briefing provides an introduction to the issue of tax avoidance, looking in detail at the development of follower notices and accelerated payments, before discussing the current Government’s approach, including the introduction of the 2019 Loan Charge. It notes that although there is no statutory definition of what tax avoidance consists of, tax avoidance is to be distinguished from tax evasion, where someone acts against the law; and aggressive or abusive avoidance, as opposed to simple tax planning, will seek to comply with the letter of the law, but to subvert its purpose.

Guatemalan men charged in Australia with being part of an international money laundering ring after more than $1.3 million in cash is seized

In its 24 December edition, the Daily Mail reported that 2 Guatemalan men have been charged during ongoing investigations into an alleged international money laundering syndicate.  More than $1.3 million dollars combined was allegedly seized from the men, 51 and 28, who were arrested separately, one on Sunday at Sydney airport and one on Monday at a Bondi hotel.

Police arrest man in connection with plot to smuggle 16 tonnes of loose-leaf tobacco and 20 million cigarettes into Australia

On 23 December, Illicit Trade reported that an anti-tobacco smuggling police unit in Australia has detained a man in connection with a plot to illegally import tobacco products that cost the country some A$24 million in lost taxes. The man was detained at Melbourne Airport before he was later charged with 5 offences. Prosecutors claim the man was involved in a plot to smuggle almost 16 tonnes of loose-leaf tobacco and over 20 million cigarettes into Australia over the course of the past 2 years.


Tycoon At Centre Of Kyrgyz Corruption Scandal Poured Millions Into EU and US Real Estate

On 23 December, Rferl claimed that a Central Asian cargo tycoon at the centre of controversy in Kyrgyzstan over massive sums spirited out of the country has invested tens of millions of dollars in European and U.S. real estate. Khabibula Abdukadyr is described as a powerful but secretive Uyghur businessman with a Kazakh passport, and said to have received funds via Aierken Saimaiti, a self-confessed money launderer killed in Istanbul last month.


Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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