30 January 2020
POLICE ARE INVESTIGATING “SEVERAL” LATVIAN NON-RESIDENT BANKS
On 29 January, LSM in Latvia reported that local media had reported that the banks involved were Rietumu Bank, Industra Bank (which until last week was known as Meridian Trade Bank), BlueOrange Bank and Regional Investment Bank, and that the investigations were being conducted in cooperation with police in Germany. It is said that the actions could be linked to the major Deutsche Bank “Cum-Ex” money laundering scandal.
MARITIME INSURANCE MUTUALS FREE SAFETY GUIDE ON SEA CONTAINER STORAGE
On 27 January, The Exporter reported that the guide, developed by TT Club and UK P&I, comes after 1 January saw changes to the International Maritime Dangerous Goods (IMDG) Code. The amendment involves a number of changes designed to reduce the risk to cargo carriage by sea, particularly from ship fires. The guide is intended to support shippers, forwarders, shipping line booking staff and those who pack dangerous goods into cargo transport units for carriage by sea in the technical aspects of the IMDG Code.
The guide can be downloaded at –
REFERENCES TO “EU” AND “EEA” ETC AFTER BREXIT
On 28 January, Travers Smith produced a short brief explaining the need for care when drafting agreements during the Brexit transition period to 31 December, and explaining how a court would interpret references to the EU, EEA etc in agreements entered into during the period. The article says that, during the period, a court is likely to start from an assumption that the parties intended to include the UK.
REAL-TIME PAYMENTS PLATFORMS HAVE INCREASED FRAUD LOSSES FOR 4 OUT OF 5 ASIA-PACIFIC BANKS
Research and advisory company FICO published a survey on 22 January which says that 4 out of 5 Asia-Pacific banks (78%) say the introduction of real-time payments platforms in their country has resulted in increased fraud losses. It says that additional identity and authentication technologies are needed with social engineering named by 2 in 5 banks as the number 1 form of attack by fraudsters. 91% of respondents believe that convergence between fraud and compliance will improve the ability to stop criminal behaviour for real-time payments. The proliferation of real-time payments platforms, including person-to-person (P2P) transfers and mobile payment platforms across Asia-Pacific, has increased fraud losses for the majority of banks. 22% of respondents say that fraud will rise significantly in the next 12 months, with an additional 58% saying they expect a moderate rise in fraud.
US CUSTOMS OPERATION SEIZES RECORD-BREAKING $123 MILLION OF FAKE SPORTS MERCHANDISE
On 30 January, a news release from US Immigration and Customs Enforcement announced the seizure of more than 176,000 counterfeit sports-related items, worth an estimated $123 million manufacturer’s suggested retail price (MSRP), through a collaborative enforcement operation targeting international shipments of counterfeit merchandise into the US. Special agents from HSI teamed with industry, CBP, Miami-Dade police officers and other partner agencies to identify flea markets, retail outlets and street vendors selling counterfeit goods during the week leading up to Super Bowl LIV.
FCPA: 2019 DEVELOPMENTS AND PREDICTIONS FOR 2020
On 30 January, Wilmer Hale published a briefing providing 5 key takeaways regarding FCPA enforcement in 2019. The report said that enforcement activity reached new heights in 2019, with the 2 largest corporate resolutions in the history of the FCPA, corporate penalties paid to US enforcement agencies topping the previous year’s record levels, and individuals charged at a pace matching last year’s near-record level. The enforcement agencies also issued a number of policy announcements that may significantly impact prospective enforcement activity.
NUCLEAR SCIENCE REVEALS SOBERING TRUTH ABOUT FAKED SCOTCH WHISKY
On 28 January, the Bulletin of Atomic Scientists published an article saying that researchers from the Radiocarbon Lab at the Scottish Universities Environmental Research Centre in Glasgow found that half the bottles of expensive aged Scotch whisky they tested weren’t as old and valuable as purported.
The article refers to a research paper from Cambridge University – Using Carbon Isotopes to Fight the Rise in Fraudulent Whisky – which says that a major threat to the Scotch whisky industry is the sale of counterfeit single malt whiskies with purported distillation years in the 19th and early- to mid-20th Centuries.
NEW US PROGRAMME AIMS TO EASE HUMANITARIAN TRADE TO IRAN
On 30 January, the Wall Street Journal reported that the Trump administration has announced the completion of the first transactions under a new programme meant to allow humanitarian trade to Iran, while leaving in place broader sanctions on the country’s economy. The transactions for the benefit of Iranian medical patients used a payment mechanism through Switzerland that bypasses the Iranian government.
VENEZUELA’S PROBLEM ISN’T SOCIALISM – THE MADURO REGIME AMOUNTS TO A LOOSE CONFEDERATION OF FOREIGN AND DOMESTIC CRIMINAL ENTERPRISES
An article in Foreign Affairs on 27 January examines the situation in Venezuela, saying that the problem is not that it purports to be a socialist state, but rather that it has become a “den of thieves” – with the collapse of the Venezuelan state and the takeover of its resources by a confederation of ruthless criminals from both inside and outside the country.
EMERGING TECHNOLOGIES AND THE NEED FOR NEW APPROACHES TO EXPORT CONTROL
The latest edition of the Strategic Trade Research Journal includes 2 papers about the problems with controls of new and emerging technologies.
The first says that the US government in August 2018 announced the Export Control Reform Act (ECRA) tailored to so-called emerging technologies which, it says, caused uncertainty amongst governments worldwide as well as within the current Multilateral Export Control Regimes, in particular the Wassenaar Arrangement for the control of dual-use goods. The new Act Export Control Regulation Act lists 14 technology categories that the US government may subject to export control regulations in the future. The paper posits that innovative approaches to export control are needed to deal with new challenges posed by today’s emerging technologies. It also argues that the rise of new security concerns and ethical considerations – including related to human rights – is blurring the lines between economic and national security when it comes to export controls. Traditional export control mechanisms – customs controls and licensing – are increasingly unfit tools to regulate fast-changing digital technologies.
The second paper addresses the challenge of controlling emerging technologies in the absence of an objective mechanism that can provide for meaningful parameters to put them under a control list, looking at emerging technologies and the challenges of controlling intangible technology exports.
GERMAN OPERATION AGAINST AZERBAIJANI LAUNDROMAT SUSPECTS IN BELGIUM AND GERMANY
On 30 January, OCCRP reported that police raided homes and offices of money laundering suspects across Germany and Belgium in an attempt to track a money trail flowing from an Azerbaijani laundromat operation to shell companies in the Baltic. It is claimed that 1 current and 1 former member of the Bundestag, accused of bribing public officials, were targeted in the raids, while a third suspect is Belgian citizen.
ARRESTS IN BELFAST AND LONDON OVER €13 MILLION CYBER-HEIST ON BANK OF VALLETTA
On 30 January, the Times of Malta reported that 3 men, one who is just 17-years-old, have been arrested in the UK over the cyber-heist which robbed Bank of Valletta of €13 million.
GERMAN FAR-RIGHT AFD PARTY LEADER LOSES POLITICAL IMMUNITY IN TAX EVASION CASE
On 30 January, Deutsche Welle reported that German lawmakers have stripped AfD party leader Alexander Gauland of parliamentary immunity, allowing tax evasion investigations against him to proceed, as prosecutors raided the politician’s addresses.
UK: DAC6 REPORTING REGIME LOOMS DESPITE BREXIT – AND LACK OF GUIDANCE
On 30 January, the Law Society Gazette reported that the EU Directive aka DAC6 imposes mandatory reporting of cross-border deals bearing the hallmarks of aggressive tax planning. However, the Gazette says, many questions remain about what transactions will have to be reported, the timetable of reporting and who will be liable for penalties. Solicitors are also said to have raised concern that compliance could put them in breach of legal professional privilege.
see also Eversheds Sutherland DAC 6 update –
CONTAINER SHIPPING TRACK AND TRACE STANDARDS
On 30 January, Lloyds Loading List reported that the standard covers around 60 different events that have been agreed by the 9 carrier members that make up the digital Container Shipping Association (DCSA). The standards can be implemented by carriers, shippers and third parties to enable cross-carrier shipment tracking using a common terminology for data and events. It is said that it will enable customers working across different carriers to use one application programming interface to get information from all of them.
ELDERLY ART THIEF ARRESTED SMUGGLING €50,000 HELMET INTO BELGIUM
On 29 January, the Brussels Times reported that German police have caught an 77-year-old art smuggler in the act of transporting a valuable Corinthian helmet from the 4th century BC. It is said that the man has long been suspected of illegally smuggling art into Belgium to offer on the international art market.
ITALY AND INTERPOL LAUNCH GLOBAL PROJECT TO COMBAT ‘NDRANGHETA
On 30 January, an Interpol news release announced that the focus of the INTERPOL Cooperation Against ‘Ndrangheta (I-CAN) project will be enhancing the ability of law enforcement to identify its activities and dismantle one of the most extensive and powerful criminal organisations in the world. Present in 32 Countries, 17 of which are European, the ‘Ndrangheta is supported by its enormous financial power built mainly on drug trafficking, corruption and the diversion of public funds through fraud and rigged contracts.
UK: INTERIM INJUNCTION REQUIRING A BITCOIN EXCHANGE TO HELP AN INSURANCE COMPANY RECOVER FUNDS IT PAID TO HACKERS
On 30 January, an article from Out-Law says that details of the case from late last year have only just been made public. In the case an injunction required the Bitfinex exchange to disclose information that could help the insurer identify those responsible for carrying out a ransomware attack on one of its customers, and to prevent bitcoin traced from the ransom payment from being moved from a Bitfinex account. It is said that the case demonstrates that businesses and individuals who have become a victim of fraud and malware attacks, and have paid ransom monies – whether in fiat currency or cryptocurrency – can seek to trace the payment of those monies even where the fraudsters are unknown, using various civil fraud and High Court remedies available.
LOOT BOXES: GAMING OR GAMBLING?
On 30 January, Dentons published an article saying that one of the hottest and most debated topics in the gaming sector is related to so-called “Loot Boxes”. Loot Boxes have become a major source of income in the videogame industry but many countries are currently setting up specific committees to establish whether, for instance, certain kinds of Loot Boxes should be qualified as gambling and need to be regulated appropriately. The article looks at what Loot Boxes are and what are the main related legal issues? It examines European and international initiatives addressing Loot Boxes (and in Italy, the Dentons office that produced the article).
UK GAMBLING COMMISSION’S BAN ON CREDIT CARDS
An article from Dentons on 30 January said that the Commission has been persuaded that there were risks of harm associated with using credit cards for online gambling and it resolved to take action to protect consumers. In January 2020 it announced that a ban on using credit cards for all online and offline gambling (save for lotteries) will come into effect on 14 April. It is said that the Commission claims to be prepared to alter or reverse its intervention if the evaluation concludes that it has contributed to adverse and disproportionate unintended consequences.
LAST DEFENDANT CONVICTED IN STANFORD BANK $7 BILLION INVESTMENT FRAUD SCHEME
A release on Mondo Visione on 30 January advised that the DoJ had announced that Leroy King, the former chief of Antigua’s Financial Services Regulatory Commission (FSRC) has pleaded guilty for his role in connection with the Stanford International Bank (SIB) Ponzi scheme.
PAKISTAN: FEDERAL BOARD OF REVENUE HAS APPREHENDED LARGE ALLEGED CASE OF MONEY LAUNDERING/TERROR FINANCING
The News International in its 31 January edition reported that the FBR has apprehended one of the largest alleged case of money laundering/terror financing in which one accused possessed over Rs6.2 billion into bank accounts but he used to pay only Rs84 tax for declaring income of just Rs400,000.
WHY MONEY LAUNDERING THRIVES ON CANADA’S WEST COAST
An article in The Conversation poses this question, saying that Vancouver has become a haven for illicit capital flight and money laundering, drawing a host of criminal organisations with links to China, Mexico and Iran, with buyers from high-risk laundering jurisdictions continue to pour tens of millions of dollars into Vancouver real estate.
ST KITTS AND NEVIS PASSES VIRTUAL ASSETS BILL
On 30 January, the FATF-style regional body, CFATF, published a notice saying that St Kitts & Nevis passed the Bill on 23 January. The Bill requires an application process for the registration of virtual asset businesses, with due diligence and information requirements.
DRUG SMUGGLING INCREASES ON THE HIGH SEAS
A Commentary from American Shipper on 30 January, in the light of recent cases in a number of countries (including the US), says that the odds are in the favour of the drug smugglers. At some locations, such as the Belgian port of Zeebrugge, only 1 in 100 containers is X-rayed. Though this represents one of the least obstructive ports of entry, only 1 container of 10 is checked in most places. It is also claimed that drug cartels would have formerly sent their illicit goods by truck from Mexico into the US are turning to the shipping industry – the new transport plan shining a light on a disconcerting lack of inspection at ports around the world.