OTHER THINGS YOU MAY HAVE MISSED – FEBRUARY 28

28 February 2020

STEVEN SEAGAL SETTLES SEC CRYPTOCURRENCY CHARGES

On 27 February, the Wall Street Journal reported that martial-arts actor Steven Seagal has settled charges brought by US securities regulators that allege he didn’t disclose payments he received for promoting an investment in an initial coin offering (ICO) for the cryptocurrency Bitcoiin2Gen, also known as B2G.

https://www.wsj.com/articles/actor-steven-seagal-settles-sec-cryptocurrency-charges-11582825714

https://www.findknowdo.com/news/02/27/2020/hollywood-action-star-settles-sec-charges-failing-disclose-ico-promotion-payments

 

MANY MINERS DIE AND IT NEVER SHOWS UP IN SAFETY DATA

On 27 February, the Wall Street Journal reported that around 90% of the world’s miners, according to the World Bank, work in small-scale operations or illegally by trespassing on land controlled by others, including bigger mining companies.   When tragedies occur, few of the deaths are recorded as mining-related and, if they were, they could add thousands to the industry’s death toll, according to some estimates.

https://www.wsj.com/articles/many-miners-die-and-it-never-shows-up-in-safety-data-11582815186

 

SWISS WATCHDOG TO PROBE JULIUS BAER EMPLOYEES ON MONEY LAUNDERING OVERSIGHT

On 27 February, Reuters reported that FINMA will probe the actions of individuals at Julius Baer after it reprimanded the bank for ignoring money laundering risks in payments linked to corruption in Venezuela and world soccer body FIFA; and would look at the behaviour of individuals at the Swiss private bank, with employment bans among the possible punishments for those found to have breached regulations.

https://www.reuters.com/article/julius-baer-finma/swiss-watchdog-to-probe-julius-baer-employees-on-money-laundering-oversight-idUSL5N2AQ376

 

EU WALKS TURKEY TIGHTROPE WITH LIMITED SANCTIONS ON DRILLING

On 28 February, KYC 360 reported on the recent listing of 2 officials of the Turkish Petroleum Corporation (TPAO) by the EU.  This is described as a move that has more political symbolism than an economic punch.  The article says that the decision by the EU stops short of targeting any Turkish companies. This reflects a desire to avoid antagonising a key ally in the fight to prevent Middle East migration, particularly from war-torn Syria.

https://www.riskscreen.com/kyc360/news/eu-walks-turkey-tightrope-with-limited-sanctions-on-drilling/

 

AFRICA: ORGANISED CRIME INDEX

Available from ENACT Africa (which is funded by the EU and is implemented by the Institute for Security Studies and INTERPOL, in affiliation with the Global Initiative against Transnational Organised Crime) is the Organised Crime Index 2019, a 130-page report, which is said to provide a multi-dimensional measure of organised crime and its impact, allowing key actors to develop effective strategies.  It examines where there is high levels of criminality and the resistance, or resilience, to it.  Data showed that the greatest overall organised crime threat was from human trafficking, with the illegal wildlife trade and IIU fishing in second place, both ahead of arms trafficking and the drugs trade.  Interestingly, the report found that the 2 high-value drug markets, cocaine and heroin, have the lowest market scores of all 10 criminal markets examined in the Index  This, it says, is explained by the relatively concentrated flows of these commodities – heroin down the east African coast, and cocaine along the west African littoral to North Africa   However, where the scores were markedly higher, countries were seen to be grappling with considerable damage created by growing user populations for low-grade heroin

https://enact-africa.s3.amazonaws.com/site/uploads/2019-09-24-oc-index-2019.pdf

 

US GOVERNMENT AUTHORITIES FAIL TO TRAIN EMPLOYEES ON RANSOMWARE DETECTION, PREVENTION

On 27 February, ZD Net reported that the majority of state and local government agencies in the US are failing to prepare their employees to spot cyberattacks or teach them how to handle ransomware incidents in the workplace, new research suggests, and based on responses from close to 700 US local and state employees in IT, education, emergency services, and security departments.

https://www.zdnet.com/article/government-authorities-fail-to-train-employees-on-ransomware-detection-prevention/

 

US UNIVERSITY RESEARCHER ARRESTED FOR WIRE FRAUD AND MAKING FALSE STATEMENTS ABOUT AFFILIATION WITH CHINESE UNIVERSITY

On 28 February, MENA-FN reported that Anming Hu, an associate professor in the department of mechanical, aerospace and biomedical engineering at the University of Tennessee, Knoxville (UTK) was arrested and charged with 3 counts of wire fraud and 3 counts of making false statements.  He is alleged to have committed fraud by hiding his relationship with a Chinese university while receiving funding from NASA.  It is said to be the latest case involving professors or researchers concealing their affiliations with China from their American employers and the US government.

https://menafn.com/1099772142/University-researcher-arrested-for-wire-fraud-making-false-statements-about-affiliation-with-Chinese-University

 

MALAWI LEGALISES THE GROWING, SELLING AND EXPORT OF CANNABIS

Africa Feeds on 27 February reported that the country still restricts the legalisation of cannabis for personal use, unlike in South Africa where the courts allowed for cannabis for personal use.  It is said that the cannabis will be used to make medicines and hemp fibres. Southern African countries, including Zambia, Lesotho and Zimbabwe, have all relaxed their rules on growing cannabis.

https://africafeeds.com/2020/02/27/malawi-legalises-the-growing-selling-and-export-of-cannabis/

 

INDIA: BULLION MERCHANT ARRESTED IN GOLD SMUGGLING PROBE
On 28 February, the Mumbai Mirror reported that he Directorate of Revenue Intelligence (DRI) had arrested bullion merchant Ketan Shroff for allegedly smuggling 400 kg of gold.  Shroff is the founder and managing director of Penta Gold Ltd.

https://mumbaimirror.indiatimes.com/mumbai/crime/bullion-merchant-arrested-in-gold-smuggling-probe/articleshow/74352447.cms
CONTRABAND CHEESE FROM VENEZUELA ON COLOMBIA’S CRIMINAL MENU

Insight Crime on 28 February carried a report saying that cheese has increasingly joined oil and other commodities smuggled along the border between Colombia and Venezuela, and criminal groups are milking the profits, as the dairy product more than doubles in value after crossing the Arauca river and reaching Bogotá.

https://www.insightcrime.org/news/analysis/venezuela-cheese-colombia-menu/

 

NEW LAW TO HELP TACKLE TRADE-BASED MONEY LAUNDERING IN KENYA

On 28 February, Ventures Africa published an article saying the Kenya is looking to curb illegal transactions while promoting transparency in the shipping industry with a new Bill, which is reportedly being drafted by more than 19 government agencies and is expected to be tabled before parliament before year-end.  Under the Bill, importers and exporters would be compelled to identify individuals or companies sending or receiving packages from around the world.  Banks and other financial institutions also have to identify senders and receivers of funds as well as assess the risk that the transaction might be used for illegal purpose.  The article points out that Kenya is the economic and transport hub of East Africa as well with the country’s Mombasa Port being the major trade gateway for much of the region; and this is said to make the region susceptible to the illegal movement of goods.

http://venturesafrica.com/new-law-to-help-tackle-illegal-trade-money-laundering-in-kenya/undefined

 

AUSTRALIA: PRE-INSOLVENCY ADVISER IMPRISONED FOR MONEY LAUNDERING

On 28 February, Mirage News reported that former pre-insolvency adviser Stephen O’Neill has been sentenced at Brisbane District Court to 5 years in prison after pleading guilty to one charge of dealing in the proceeds of crime.  He and a fellow conspirator engaged in activity that would involve the illegal removal of company assets to prevent creditors from accessing these assets.  The transactions were made to defeat creditor interests and to undermine the liquidator, with the prosecution resulting from an unfunded supplementary report by the liquidator.

https://www.miragenews.com/pre-insolvency-adviser-imprisoned-for-money-laundering/

 

BIG INCREASE IN NUMBER OF LATVIAN MONEY LAUNDERING CASES IN 2019

On 27 February, LSM in Latvia reported that 59 criminal cases involving 102 persons charged for laundering of the proceeds from crime were brought to court last year.  In 2018, there were only 23 similar criminal cases involving 54 persons.

https://eng.lsm.lv/article/society/crime/big-increase-in-number-of-latvian-money-laundering-cases-in-2019.a349938/

 

ISLE OF MAN: POST-BREXIT IMMIGRATION RULES – LIKE THE UK, BUT DIFFERENT

An article in Isle of Man Today on 28 February says that, despite an agreement for the Island to maintain its immigration law in line with that of the UK (as it does its customs and VAT laws), and UK primary immigration legislation being extended to cover the Isle of Man, there is some flexibility, and that the island is at liberty to tailor the rules to meet the needs and profile of its own economy. While assuring that the Island won’t be a “back door” for entry into the UK, when or if the planned tightened UK immigration rules, and its points-based system, takes effect, the Chief Minister has said that the Island is under no obligation to introduce the same system.  He said the that the visa issued to the migrant to work in the Island is not valid to work in the UK.

http://www.iomtoday.co.im/article.cfm?id=54095&headline=The%20Isle%20of%20Man%20%27won%27t%20be%20back%20door%20to%20Britain%27&sectionIs=news&searchyear=2020

 

US INVESTIGATION INTO BRITISH AMERICAN TOBACCO OVER POTENTIAL SANCTIONS VIOLATIONS

On 28 February, the EU Sanctions Blog reported that the annual report from BAT has said that OFAC and DoJ are currently investigating “suspicions of breach of sanctions”, with BAT saying that it is cooperating.

https://www.europeansanctions.com/2020/02/us-treasury-doj-sanctions-investigation-into-british-american-tobacco/

 

MEXICO RETURNS A BRONZE SCULPTURE TO NIGERIA

A Mexican Government news release has advised that the sculpture was discovered by customs officials at the Mexico City International Airport when the buyer tried to get it into the country.  No details have yet been released relating to the identification and capture of the smugglers.

https://www.gob.mx/sre/prensa/the-government-of-mexico-returns-a-bronze-sculpture-to-nigeria

 

CRIMINAL CASES REVIEW COMMISSION’S PROCESS FOR REVIEW OF CONVICTIONS RELATING TO THE POST OFFICE AND HORIZON ACCOUNTING SYSTEM

On 28 February, the House of Commons published a briefing paper in preparation for a debate in Westminster Hall and concerned with one of the scandal of sub-postmasters running sub-post offices in the UK being accused (or even jailed) for fraud and theft that appears to have actually involved defects in the IT system employed.

https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CDP-2020-0040

 

EX-ROMANIAN HEALTH MINISTER ALLEGEDLY CAUGHT ‘RED-HANDED TAKING BRIBE’

A report by Universul on 28 February claimed that Romanian anti-corruption prosecutors have allegedly caught former Health Minister Sorina Pintea red-handed taking a bribe exchange for an acquisition of medical equipment.

https://universul.net/https-universul-net-media-ex-romanian-health-minister-caught-red-handed-taking-bribe

 

SPANISH COURT REFUSES US EXTRADITION REQUEST FOR EX-VENEZUELAN MINISTER

On 28 February, Reuters reported that Spain had refused a request from the US to extradite former Venezuelan minister Javier Alvarado Ochoa in connection with an investigation into money laundering – because the allegations were based on alleged crimes also under investigation in Spain, and because Alvarado Ochoa also holds Spanish citizenship.

https://www.reuters.com/article/us-spain-venezuela-extradition/spanish-court-refuses-u-s-extradition-request-for-ex-venezuelan-minister-idUSKCN20M2NZ

 

NORTH KOREA’S ILLICIT CYBER OPERATIONS: WHAT CAN BE DONE?

An article from 38 North on 28 February considers the background to the problem, some options to counter it.  It concludes that containing and constraining North Korea’s cyber activities will require a wholescale rethinking of how to integrate cyber defence, starting with the financial services sector, into both measures the international community needs to take in its own defence as well as into a broader strategy for dealing with North Korea.  However, it questions whether the international community will be resilient, agile and cohesive enough to finally deal with this challenge.

http://bit.ly/2Pzgujk

 

ALBANIA: WELL-KNOWN PUBLICIST AMONG THE 28 DETAINED IN THE WIDE-RANGING OPERATION ON CRIMINAL NETWORK

On 28 February, Top Channel reported that the majority of the detainees face charges of manufacturing and selling narcotics, but others are also charged with other offences.  Among those arrested is publisher and analyst Henri Cili.

http://top-channel.tv/english/well-known-publicist-among-the-28-detained-in-the-wide-ranging-operation-on-criminal-network

 

MEXICO AND EUROPOL IN TALKS TO STRENGTHEN MUTUAL COOPERATION

A news release from Europol on 28 February advised that the Mexican Ministry of Security and Citizen Protection (SSPC), the Mexican Ministry of Foreign Affairs and Europol are in talks to expand and deepen collaboration on security matters – Mexico having been identified by the EU as a “priority partner” for security concerns, in particular, to curb the illicit flow of arms, their components, ammunition, and explosives.

https://www.europol.europa.eu/newsroom/news/mexico-and-europol-begin-consultations-to-strengthen-cooperation-security-and-illicit-flow-of-arms-ammunition-and-explosives

 

US: STAKEHOLDERS’ VIEWS ON POSSIBLE CHANGES TO INBOUND MAIL REGARDING CUSTOMS FEES AND OPIOID DETECTION EFFORTS

A news release from US watchdog agency, the Government Accountability Office, on 27 February mentioned the new $1 per item fee which helps fund inspection of that mail for illicit opioids and other prohibited goods.  It then asks should there be more fees on other types of inbound mail?  US Customs and Border Protection has said such fees could help fund its mail inspection, but are unlikely to deter people from mailing illicit opioids. The US Postal Service said more fees could make it too expensive to mail some goods and cut mail volume.  The STOP Act of 2018, which introduced the $1 fee, also included a provision for GAO to examine issues related to the possible assessment of an additional customs fee on other inbound international mail. The GAO undertook an inquiry and now has published a 15-page report.

https://www.gao.gov/products/GAO-20-340R

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UK: DIRECTORS’ DUTIES SURVIVE COMPANY INSOLVENCY, RULES HIGH COURT

An article from Out-Law on 28 February said that the High Court has ruled that a director’s fiduciary duties survive a company’s entry into administration or voluntary liquidation.  In the case in question, a liquidator was successful in his application in respect of company property sold at undervalue and payments made after the company entered administration.  The decision confirms that, while a director’s powers cease on insolvency, their fiduciary duties remain – even when not exercising those powers themselves.

https://www.pinsentmasons.com/out-law/legal-updates/directors-duties-survive-company-insolvency

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US DESIGNATES FORMER MEXICAN STATE GOVERNOR ON CORRUPTION GROUNDS

On 28 February, a news release from the US State Department announced that the former governor of the Mexican state of Nayarit, Roberto Sandoval Castañeda, had been designated by the US due to his involvement in significant corruption.  It is said that he misappropriated state assets and received bribes from narcotics trafficking organisations, including the Jalisco New Generation Cartel (CJNG), in exchange for information and protection.  In addition, he is said to have accepted bribes from the Beltran Leyva Organisation.  He and his immediate family members are ineligible for visas to the US.  In addition to Sandoval, the State Department is publicly designating his spouse, Ana Lilia Lopez Torres; his daughter, Lidy Alejandra Sandoval Lopez; and his son, Pablo Roberto Sandoval Lopez.

https://www.state.gov/public-designation-of-the-former-governor-of-the-mexican-state-of-nayarit-roberto-sandoval-castaneda-due-to-involvement-in-significant-corruption

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PROLIFERATION FINANCE SURVEY

This survey was undertaken by ACAMS and RUSI and is based on 366 unique survey responses received between 7 November and 6 January by respondents throughout the world.  Involved in various sectors, the majority of survey respondents work in sanctions and compliance, in a variety of roles.  The key findings include –

  • respondents overwhelmingly (wrongly) stated that proliferation finance is primarily about the procurement and financing of nuclear, chemical and biological weapons, rather than primarily about the proliferation efforts of specific state actors or non-state groups;
  • institutions headquartered in Africa, Middle East and Asia are most likely to have a compliance function that incorporates proliferation finance, but only 50-60% of those based in Europe or the US;
  • respondents from international banks report they are most likely to be familiar with proliferation finance risk;
  • respondents indicated they are most concerned about detecting payments related to goods that can be used in a WMD programme), and least concerned with implementing targeted financial sanctions on Iran and North Korea;
  • respondents in the US indicated they are less concerned by all the listed proliferation finance risks;
  • only a fifth of respondents say that governments provide adequate guidance on dual-use and sensitive items. Two-fifths of respondents say they would find it useful if governments shared lists of high-priority items that they should be particularly aware of;
  • over three-fifths agree it is challenging to incorporate lists of dual-use goods into transaction monitoring programmes, and a majority of respondents also agreed that the industry should prioritise strict end-user checks rather than identifying specific goods in transactions;
  • the country perceived as most exposed to Iranian proliferation finance risk is the US, and China as being the most exposed to proliferation finance risk from North Korea;
  • efforts to combat proliferation finance are hindered by an inability for industry to share data on proliferation finance with other private sector actors and with government. Respondents also agreed that sanctions evasion by proliferators is almost impossible to detect, unless the industry has access to intelligence leads; and
  • only one-fifth of respondents say they receive sufficient guidance from their government to support understanding and identification of proliferation finance risk.

http://files.acams.org/pdfs/2020/ADT175_ACAMS_RUSI-Survey-Report-Documentation.pdf

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CROWDFUNDING AND MONEY LAUNDERING

On 27 February, a report published by ACFCS by a Scotiabank AML analyst, and well worth a read, tackles financial crime compliance and crowdfunding.  The funding platforms in the nascent but burgeoning sector, in some cases it says, can be abused by money launderers, fraudsters and even terror groups, and in many jurisdictions it is not subject to formal AML rules – seemingly leaving the duty to craft programmes to counter criminals as optional.  The report looks at the varieties of crowdfunding and potential red flags.  It suggests that equity crowdfunding might be the “smart choice” for launderers, and explains how this might be done, in ways that sometimes resembles the equally little-known “transaction laundering”.  The report considers when crowdfunding is, in fact, a pyramid scheme.  Finally, it looks at the potential use of crowdfunding by terrorists.

https://www.acfcs.org/acfcs-special-contributor-report-crowdfunding-an-unorthodox-way-of-money-laundering-definitelymaybe/

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INDIAN OIL COMPANIES TO WIND DOWN BUSINESS IN VENEZUELA FEARING US SANCTIONS

Business Times in India on 28 February reported that Indian refiners Reliance Industries and Nayara Energy are reportedly planning to wind down purchases of Venezuelan oil in April fearing future US sanctions could choke off all avenues to trade with state-run oil firm PDVSA.  Reliance operates the world’s biggest refining complex.  Nayara is part-owned by Russian oil major Rosneft.  India is one of Venezuela’s last big export destinations and accounted for about a third of Venezuela’s oil shipments in January.

https://www.businesstoday.in/sectors/energy/indian-oil-firms-to-wind-down-business-in-venezuala-fearing-us-sanctions/story/397156.html

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ISLE OF MAN AND UK CONFIRM EU TURKISH SANCTIONS LISTINGS

On 28 February, a news release from the Isle of Man advised that the recently adopted EU sanctions listing of 2 officials of the Turkish Petroleum Corporation (TPAO) has effect in the Island.

A Notice from HM Treasury was also published on 28 February.

https://www.gov.im/news/2020/feb/28/financial-sanctions-turkey/

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/869298/Notice_Turkey_2020_274.pdf

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