OTHER THINGS YOU MAY HAVE MISSED – FEBRUARY 7

7 February 2020

US NUCLEAR WASTE STORAGE CONTAINERS COULD CORRODE, NEW STUDY WARNS

Fox News on 4 February reported that containers being used by the US government to store dangerous nuclear waste far underground could be vulnerable to damage.  There are over 90,000 metric tons of nuclear waste that require disposal; most of the waste is stored where it was generated, at 80 different sites in 35 states.  The government wants to put the radioactive waste into stainless steel containers after mixing it with glass or ceramic material, and then bury it very deep underground.  However, researchers report that when nuclear waste is exposed to groundwater, the chemical interactions between the stainless steel container and its glass or ceramic contents could cause the materials to corrode a bit faster than expected.

https://www.foxnews.com/science/us-nuclear-waste-storage-containers-corrode-study

 

OUTRAGE AFTER MALIAN KORA PLAYER’S HANDMADE INSTRUMENT ‘DESTROYED BY US CUSTOMS’

On 6 February, the Daily telegraph reported that a kora player said his handmade instrument was destroyed by US custom officials as he flew back from a concert.  The man was flying back to Paris when he found his handmade instrument in pieces.  Inside the case, a note in Spanish from US customs read: “intelligent security saves time”.  A kora is a 21-string harp played by the Mandinka people of West Africa.  The musician asked whether US customs would have dismantled a Stradivarius violin.

https://www.telegraph.co.uk/news/2020/02/06/outrage-malian-kora-players-handmade-instrument-destroyed-us

 

90% OF UK DATA BREACHES DUE TO HUMAN ERROR IN 2019

Infosecurity reports that analysis of data from the UK Information Commissioner’s Office shows that 90% of cyber data breaches in 2019 resulted from human error.  Phishing as the primary cause of breaches in 2019, accounting for 45% of all reports to the ICO.

https://www.infosecurity-magazine.com/news/90-data-breaches-human-error/

 

US BANK SUPERVISOR SEES WEAKNESSES IN COMPLIANCE WITH DUE DILIGENCE RULE

On 6 February, the Wall Street Journal reported that a report from the Office of the Comptroller of the Currency has said that some banks have failed to put in place adequate policies to comply with a rule that requires them to identify the owners of corporate accounts.  The relevant CDD rule took effect in May 2018 and targets anonymous shell companies or LLC with no significant assets or operations that can be used as a vehicle to launder money.

https://www.wsj.com/articles/u-s-bank-supervisor-sees-weaknesses-in-compliance-with-due-diligence-rule-11581030326

 

US TREASURY IDENTIFIES TOP VULNERABILITIES IN US FINANCIAL SYSTEM

On 6 February, the Wall Street Journal carried an article saying that a report from the Office of Terrorist Financing and Financial Crimes has identified several emerging threats and systemic vulnerabilities in the US financial system that are being exploited by illicit actors, and laid out some ongoing efforts to address these issues.  The vulnerabilities mentioned include a lack of requirements to disclose a company’s beneficial ownership information, and the growing misuse of digital assets and the failure of foreign jurisdictions to effectively supervise digital assets activity.  Another major gap is the lack of comprehensive AML requirements on some financial institutions and gatekeeper professions, such as professionals like lawyers.

https://www.wsj.com/articles/treasury-identifies-top-vulnerabilities-in-u-s-financial-system-11581038647

 

VENEZUELA MOVES US OIL EXECUTIVES FROM HOUSE ARREST TO PRISON

On6 February, the Wall Street Journal reported that the 6 employees of Houston-based Citgo Petroleum Corp were reportedly removed from their homes following a White House meeting between President Trump and Venezuela’s opposition leader, Juan Guaidó.  The executives stand accused of corruption in Venezuela in connection to a planned $4 billion financing deal with US and Dubai investment funds.

https://www.wsj.com/articles/venezuela-moves-u-s-oil-executives-to-caracas-prison-11581040033

 

US PLANS TO RENEW SANCTIONS WAIVER ON IRAQ’S IMPORTS OF IRANIAN POWER

On 6 February, the Wall Street Journal reported that the US plans to renew a waiver allowing Iraq to import natural gas and electricity from Iran without risking sanctions.  Iraq relies heavily on Iranian natural gas for power generation.  This is seen as a move to ease tensions after diplomatic ties nearly unravelled last month after the drone attack on a senior Iranian commander and the attack on a US base in Iraq.

https://www.wsj.com/articles/u-s-plans-to-renew-sanctions-waiver-on-iraqs-imports-of-iranian-power-11581010758

 

HOW DOES EU LAW APPLY IN THE UK AFTER BREXIT?

Gowling WLG has published a White Paper which looks at the background, the situation during the transition period and afterwards.  It also looks at implementation of other aspects of the withdrawal agreement, and notable points such as the effect on (or of) devolution in the UK, and the position of the courts.

https://gowlingprodblobstorage.blob.core.windows.net/gowlingprodblobstoragecontainer/gwlg/media/gowlingwlg/gwlg/insights-resources/articles/2020/02/how-does-eu-law-apply-in-the-uk-after-brexit.pdf

 

HOW QUINCECARE LAPSES CAN COST UK BANKS MILLIONS

On 7 February, KYC 360 reported that in 2019 a court in London held that an investment bank was liable for the loss of $204 million from a corporate account after the institution complied with authorised payment instructions from the company’s director, but which in fact represented a misappropriation by the director and left the company unable to pay its other creditors.  The decision followed a lawsuit in which it was alleged that the bank provided dishonest assistance to the director in his breach of his financial duty to act in the company’s best interests; and that it had breached the so-called Quincecare duty of care by executing his payment instructions.  The first charge was rejected, but the latter upheld.  The High Court had said that any reasonable banker would have realised that there were many obvious, even glaring, signs that he was committing a fraud on what was, in effect, his own company.  The article explains that another Quincecare case is pending, involving the Nigerian government and JP Morgan.

https://www.riskscreen.com/kyc360/article/how-quincecare-lapses-can-cost-banks-millions/

 

AUSTRALIA: MAN CHARGED OVER AN $11 MILLION CYBER FRAUD – ALLEGEDLY OBTAINED THE FINANCIAL PROFILES AND IDENTITIES OF MORE THAN 80 PEOPLE TO CREATE FRAUDULENT BANK ACCOUNTS AND STEAL FROM THEIR SAVINGS AND SUPERANNUATION ACCOUNTS

On 7 February, KYC 360 reported that Adam Jones, 31, has been charged with 24 offences, including knowingly dealing with proceeds of crime, and dealing with identification information to commit an indictable offence.  He is alleged to have obtained personal details of several unrelated individuals across Australia – such as their date of birth, credit card numbers and bank account details – using them to modify payroll data, superannuation details and credit card records.

https://www.riskscreen.com/kyc360/news/sydney-man-allegedly-stole-identities-to-net-11m-from-life-savings-superannuation/

 

US ASSISTANT ATTORNEY GENERAL URGES DATA-SHARING IN CROSS-BORDER INVESTIGATIONS

On 6 February, Cadwalader Cabinet published a commentary saying that the US Assistant Attorney General for the Criminal Division has advocated policies that facilitate the cross-border transfer of critical information among law enforcement agencies investigating multinational criminal cyber networks.  The remarks were delivered at the “Justice in Cyberspace” Symposium in Washington. He said that the most serious cybersecurity threats were from sophisticated multinational groups of cybercriminals.  To disrupt these networks he advocated policies that facilitate the cross-border transfer of critical information among law enforcement.  He referred to the CLOUD Act agreement with the UK, which, if approved, would enable US or UK law enforcement to serve communication services in the other country with court orders for electronic evidence, and building partnerships by coordinating with Eurojust and Europol.

https://www.findknowdo.com/news/02/06/2020/doj-assistant-attorney-general-urges-data-sharing-cross-border-investigations

 

MORE THAN $460,000 SHARED BETWEEN FEDERAL AND LOCAL LAW ENFORCEMENT FOR LATTER’S ROLE IN THE INVESTIGATION OF A NORTH TEXAS-BASED INTERNATIONAL ILLEGAL ONLINE GAMBLING ORGANISATION

On 7 February, a news release from US Immigration and Customs Enforcement advised that ICE has presented the Dallas County DA Office a check for over $460,000 for assisting in a successful investigation into an international illegal online gambling organisation.  It was part of nearly $9 million seized by ICE and the IRS during the investigation of a criminal organisation led by Frank Cacopardo, based in the Dallas-Fort Worth area, and which Cacopardo of North Texas had been operating since January 2006.  He was using offshore internet sports book websites based in Costa Rica to accept wagers on sports games from bettors throughout Texas and other US cities.

https://www.ice.gov/news/releases/ice-hsi-dallas-shares-more-460000-dallas-das-office-its-role-investigation-north-texas

 

WHY DON’T THE VICTIMS OF BRIBERY SHARE IN THE RECORD-BREAKING AIRBUS SETTLEMENT?

On 6 February, Transparency International posed this question in an article saying that the case shows that, once again, bribery of foreign officials in the public and private sectors was part of a major multinational corporation’s business model.  It also says that notably absent in the Airbus agreements are any plans to share the penalty payment with the countries where the company was paying bribes, including Colombia, Ghana, Indonesia and Sri Lanka.  It says that authorities should involve ‘demand-side’ countries in settlements of foreign bribery cases, share information and assist other countries in their investigations, including with financial resources, and give victims the opportunity to present impact statements during proceedings.

https://www.transparency.org/news/feature/why_dont_the_victims_of_bribery_share_in_the_record_breaking_airbus_settlem

 

NEW EU PUBLIC PROSECUTOR HAS 4 STAFF FOR 3,000 CASES

On 7 February, EU Observer reported that the European Public Prosecutors Office (EPPO), the Luxembourg-based institution will carry out criminal investigations into suspected fraud, which affects the  EU budget, and set to launch later this year, has just 4 staff to tackle 3,000 cases in an effort to claw-back stolen funds.  It is tasked to tackle fraud linked to VAT, money laundering, and corruption across the EU, but the head warned that she is dangerously understaffed and underfunded.

https://euobserver.com/justice/147386

 

FCA INVESTIGATES FRAUD IN COLLAPSE OF 2 LISTED COMPANIES

BNN Bloomberg on 7 February reported that the FCA is investigating fraud in the demise of a listed company and whether 2 directors in another listed company falsified revenue and profits.

https://www.bnnbloomberg.ca/fca-investigates-fraud-in-collapse-of-two-listed-companies-1.1386743

 

BELGIAN PRINCE INVESTIGATED IN ALLEGED GLOBAL TAX EVASION NETWORK PROBE

On 7 February, the Brussels Times reported that Belgian Prince Henry De Croÿ’s is accused of using to help funnel millions in funds into tax havens.  The Special Tax Inspectorate (ISI) is reported to be building up files on taxpayers whose names appeared on leaked data on the prince’s network.  It is said that accounts were opened in the name of shell companies with addresses in Cyprus, Hong Kong, the Marshall Islands or the UAE.

https://www.brusselstimes.com/all-news/belgium-all-news/94101/storm-ciara-on-sunday-how-to-protect-yourself-and-your-property/

 

IRELAND: MAN SQUATTING AT ASYLUM CENTRE HAD €500,000 IN HIS ACCOUNT

On 7 February, the Irish Times reported that John Sankeni, 40, who was “squatting” at an asylum centre while he allegedly had access to €500,000 has been refused bail on charges related to a money laundering investigation.  He faced 2 charges of theft from a Greek Shipping company at a bank in west Dublin in 2016.  He was arrested as he attended the offices of the Garda National Immigration Bureau in Dublin city-centre in relation to immigration matters.

https://www.irishtimes.com/news/crime-and-law/courts/district-court/man-squatting-at-asylum-centre-had-500-000-in-his-account-court-told-1.4165488

 

CYPRUS: PRESIDENT ANNOUNCES MEASURES TO COUNTER MATCH-FIXING IN LOCAL FOOTBALL

On 7 February, the Cyprus Mail reported that the President has announced that he wanted to create a new deputy sports ministry, as part of a wider effort to tackle corruption in Cypriot football.  The president also announced an independent sports authority, which will try cases of corruption and match fixing, while enforcing the code of ethics.

https://cyprus-mail.com/2020/02/07/president-announces-measures-to-counter-match-fixing

 

SWITZERLAND: REGULATOR INTRODUCES REGULATIONS ACKNOWLEDGING INCREASING CRYPTO-MONEY LAUNDERING CASES

On 7 February, AMB Crypto reported that the Financial Market Supervisory Authority [FINMA] had announced a new, streamlined ordinance, amending current ordinances and circulars, while abolishing 3 circulars. It is aimed at passing new rules that would impact the regulation of crypto-transactions in the country.

https://eng.ambcrypto.com/switzerlands-finma-introduces-regulations-acknowledging-increasing-crypto-money-laundering-cases

 

2 MORE BANKERS ARRESTED IN GERMANY OVER TAX SCANDAL INVESTIGATION

On 7 February, BNN Bloomberg reported that 2 former managers of a German bank were arrested in a money laundering probe linked to Denmark’s $2 billion “Cum-Ex” tax scandal.  The 2 North Channel Bank managers were taken into custody in Koblenz.  North Channel Bank in September was fined a $16 million in Denmark as part of the country’s probe into the vast dividend tax scandal.

https://www.bnnbloomberg.ca/two-more-bankers-arrested-in-germany-over-tax-scandal-investigation-1.1386530

 

UK: INTERNATIONAL CRICKET MATCH FIXERS AND EX-PLAYER JAILED

On 7 February, a news release from NCA announced that an ex-professional Pakistani cricketer and 2 others have been jailed for bribing cricketers to fix elements of international matches, following a covert investigation by the National Crime Agency.

https://www.nationalcrimeagency.gov.uk/news/international-cricket-match-fixers-and-ex-player-jailed

 

SEAFOOD SALESMAN CONVICTED OF ILLEGALLY SMUGGLING £53 MILLION WORTH OF EUROPEAN EELS THROUGH THE UK

On 7 February, a news release from the NCA advised that Gilbert Khoo, a seafood salesman, has been convicted of smuggling an estimated 5.3 million critically endangered baby eels from Spain to East Asia via the UK over a 2-year period, in what is thought to be the first prosecution of its kind in the UK.  Khoo was arrested in 2017 when he disembarked a flight from Singapore at Heathrow.

https://www.nationalcrimeagency.gov.uk/news/seafood-salesman-convicted-of-eelegally-smuggling-53million-worth-of-european-eels-through-the-uk

 

DETROIT AIRPORT OFFICIAL SENTENCED FOR TAKING $6 MILLION IN BRIBES

On 7 February, OCCRP reported that a former Detroit Metropolitan Airport official was sentenced to 10 years in prison because he fixed contracts for infrastructure projects and pocketed $6 million in kickbacks.  James Warner, 51, directed more than $43 million in airport infrastructure projects to 3 co-conspirators.

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/11580-detroit-official-sentenced-for-taking-6-million-in-bribes

 

NEW YORK JUDGE HAS RULED THAT INTERACTIVE FANTASY SPORTS CONTESTS CONSTITUTE ILLEGAL GAMBLING

On 7 February, Jurist reported that the decision rejects a provision in state law that provides that fantasy sports contests are not games of chance but rather games of skill and thus do not constitute illegal gambling in the state of New York.

https://www.jurist.org/news/2020/02/new-york-court-rules-fantasy-sports-contests-constitute-illegal-gambling/

 

76 COUNTRIES AGREE TO DIGITALISE CROSS-BORDER CUSTOMS UNDER UN TIR CONVENTION

On 7 February, Indian Transport & Logistics News reported that the TIR Convention claims that it provides a framework for 1 to 3.5 million truck trips every year to cross borders as quickly and efficiently as possible.  It is a multilateral customs treaty that aims to simplify and harmonise the governmental procedures of international road transport.  Since 2017, a series of eTIR pilot projects, such as between Iran and Turkey, and Georgia and Turkey, have been evaluated systems.

https://www.itln.in/76-countries-agree-to-digitalise-cross-border-customs-under-united-nations-tir-convention-supply-chain

 

42 ARRESTED FOR TRAFFICKING STOLEN WASTE FROM SPAIN TO ASIA

A news release from Europol on 7 February advised that a criminal group was stealing waste and trafficking it to SE Asia and is believed to have generated about €16 million loss for the municipality of Madrid.  Since 2015, the company was organising illegal collection of paper and paperboard in the city. This waste was then mixed with legally collected waste, in breach of the regulative framework, before being shipped to SE Asia, mainly to China, India, Indonesia and South Korea.  The investigation uncovered 9,300 tonnes of paper worth €2.3 million.  In addition, 278 illegal shipments with 67,000 tonnes of waste worth €10 million were discovered.

https://www.europol.europa.eu/newsroom/news/42-arrested-for-trafficking-stolen-waste-spain-to-asia

 

EL SALVADOR’S PROSECUTIONS OF OFFICIALS WHO NEGOTIATED WITH GANGS EXPLAINED

Insight Crime on 7 February carried an article saying that prosecutors in El Salvador have charged high-ranking politicians with electoral fraud in connection to their controversial negotiations with gang leaders.  It says that while politicians etc have usually claimed to have a hard line attitude to the gangs, there were often back door deals.  The article goes on to provide a primer on the cases involving secret deals with gangs: from the trials of officials seen since the truce’s undoing to the new charges against prominent politicians.

https://www.insightcrime.org/news/analysis/el-salvador-officials-deals-gangs/

 

ISLE OF MAN LEGISLATION TO IMPLEMENT BREXIT, WITHDRAWAL AND TRANSITION

The February Order Paper for the Island’s parliament includes regulations to give effect to the UK withdrawal from the EU – which effects the Island due to its customs and indirect tax union with the UK, and despite the Island not being, technically and legally, part of the EU (though it was and is part of the customs, excise and VAT territories, again due to its links to the UK).

http://www.tynwald.org.im/business/opqp/opqp/2020-PP-0016.pdf

 

UK: JOINT STATEMENT FROM THE FCA, ICO AND THE FINANCIAL SERVICES COMPENSATION SCHEME (FSCS), WARNING INSOLVENCY PRACTITIONERS AND FCA-AUTHORISED FIRMS TO BE RESPONSIBLE WHEN DEALING WITH PERSONAL DATA

A release on Mondo Visione on 7 February replicated the statement that said that the authorities were aware that some insolvency practitioners and FCA-authorised firms have attempted to sell clients’ personal data to claims management companies (CMC) unlawfully.  It is said that this can happen either before or after a firm has gone into administration and where it is likely claims for compensation will be made to FSCS.  The terms, conditions and clauses within a standard contract are highly unlikely to constitute sufficient legal consent for personal data to be shared with CMC to market their services, and may not be lawful.  It also warns that actions of the CMC making use of the data may also be illegal.

https://mondovisione.com/media-and-resources/news/uk-financial-conduct-authority-uk-information-commissioners-office-and-uk-fina/

 

HOW MUCH DID THE SFO SPEND INVESTIGATING AIRBUS?

A post on the FCPA Blog on 7 February posed this question, noting that the company agreed to reimburse costs the SFO incurred during its investigation – an amount the agency set at €7 million.  The post estimates that, wth a total UK settlement of over $1 billion, the SFO had a return of 14,185% of the money it spent during the investigation.  The post also includes a link to the DPA entered into by Airbus.

https://fcpablog.com/2020/02/07/how-much-did-the-sfo-spend-investigating-airbus/

 

 

 

 

US PREPARES FOR TRADE SANCTIONS ON MALI

On 7 February, American Shipper carried an article reporting that OFAC has said it is preparing to implement a presidential Executive Order that will set the stage for trade sanctions on Mali.  It has become a flashpoint of terrorist activity on the continent and in July, President Trump issued an Executive Order calling for blocking property of persons contributing to the destabilisation of Mali – also citing concerns with increased drug trafficking and human rights abuses.

https://www.freightwaves.com/news/us-sets-in-motion-trade-sanctions-on-mali

SON OF CONGO PRESIDENT REPORTEDLY CHARGED IN FRANCE FOR MONEY LAUNDERING

News 24 in South Africa reported on 7 February that sources have said that a son of Republic of Congo President Denis Sassou Nguesso has been indicted in France on money laundering charges in a probe into the family’s foreign assets.  It is said that Denis Christel Sassou Nguesso, 45, was charged by the French investigating magistrate in December 2019.  His father has ruled the Republic of Congo (aka Congo-Brazzaville) for the last 36 years and plans to run again in 2021 elections.

https://www.news24.com/Africa/News/son-of-congo-president-charged-in-france-for-money-laundering-source-20200207

ISLE OF MAN: ANNUAL REPORT FOR THE TERRORISM AND OTHER CRIME (FINANCIAL RESTRICTIONS) ACT 2014

The February Order Paper for the Island’s parliament included the annual report required by section 65 of the 2014 Act detailing the exercise of relevant functions by the Isle of Man Treasury under the Act during the preceding year.  In notes that in 2019 the Council of Ministers reaffirmed a modified version of the Island’s policy on sanctions, saying that “It is the policy of the Isle of Man Government to maintain the implementation of international sanctions measures in the Isle of Man in line with such measures as have effect in the United Kingdom from time to time”.  This was done to take account of the situation created by Brexit – specifically linking Isle of Man sanctions listing and other measures and policies to those of the UK (the Island had traditionally adopted all UN, EU and UK sanctions measures).  No Directions or Freezing Orders under the 2014 Act were issued in 2019, and there are currently no funds notified to the Treasury as being blocked or frozen for the purposes of the sanctions measures concerned with terrorism or proliferation.  However, during 2019, the Island issued 76 news releases concerned with the various sanctions regimes – of which 7 involved changes to the lists of those individuals, organisations and entities designated for reasons connected to terrorism, and 17 connected to ISIL/Al-Qaida.

http://www.tynwald.org.im/business/opqp/sittings/20182021/2020-GD-0002.pdf