24 February 2020
FATF: LITTLE-NOTICED CLAUSE THAT GIVES THE US AND ITS ALLIES THE ABILITY TO BLOCK REMOVAL OF THE SANCTIONS ON IRAN
On 21 February, the Wall Street Journal reported that during the recent Plenary action against Iran was made more permanent by a little-noticed clause that gives the US and its allies the ability to block removal of the sanctions even if Tehran adopts new anti-terror and money laundering regulations. Even if Iran were to adopt the required international AML/CFT standards, the country isn’t going to be automatically removed from the blacklist. This makes it nearly impossible for FATF sanctions to be lifted unless the US and its allies are satisfied Iran has sufficiently overhauled its financial system.
BRITAIN PREPARES TO REIMPOSE SANCTIONS ON GRACE MUGABE AFTER BREXIT
On 24 February, KYC 360 reported that the threat to reinstate restrictions on Ms Mugabe’s financial dealings is the clearest indication yet that the UK could change its approach to dealing with human rights abuses by overseas individuals when the Brexit transition period ends, as the UK said that it did not agree with the EU’s decision to suspend these sanctions on Grace Mugabe.
COMPLIANCE LESSONS FROM JULIUS BAER’S ‘SERIOUS AML FAILINGS’
On 21 February, Compliance Week listed some shortcomings highlighted by the Julius Baer case. Swiss regulator, FINMA’s in its now-concluded proceedings found Julius Baer breached its obligations to combat money laundering and failed to put in place appropriate risk management controls, “representing a serious infringement of financial market law”.
BULGARIA PUBLISHES FIRST ASSESSMENT ON RISKS OF MONEY LAUNDERING AND TERRORIST FINANCING
On 21 February, CMS Law published an article saying that on 9 January, the Bulgarian State Agency for National Security (SANS) issued the National Risk Assessment of Money Laundering and Terrorist Financing, which analyses the internal and external risks of money laundering and terrorist financing facing in the country. The National Risk Assessment provides a strategy and useful measures for limiting and monitoring the risks for money laundering and terrorist financing in Bulgaria from a number of potential sources, which the article briefly mentions.
CAN FREE PORTS OPERATE UNDER EU STATE AID AND WTO SUBSIDIES RULES?
On 21 February, TLT Solicitors in the UK published an article posing this question. It points out that even if EU state aid rules do not remain in place, the UK will not have free reign to provide state subsidies to free ports because WTO rules will continue to apply. While WTO rules do not contain any specific prohibition on free ports, any specific circumstances and incentives being offered must be scrutinised to make sure these do not fall foul of WTO rules, exposing the UK to a potential claim.
7 SRI LANKANS ARRESTED IN NIGERIA FOR OIL SMUGGLING
News First in Sri Lanka on 24 February reported that the ri Lankan Ministry of Foreign Relations noted that 7 Sri Lankan crew members are currently in custody in Lagos. The Sri Lankans are said to have denied knowledge of any smuggling.
REPRISALS AIMED AT NICARAGUAN PROTESTERS OVER CONTROVERSIAL GOLD MINE PROJECT
In January, the Center for International Environmental Law carried an article about the intimidation, retaliation, and criminalisation targeting Nicaraguan environmental defenders and community leaders who have publicly opposed plans for a controversial gold mining project in Santa Cruz de la India, Nicaragua. The project includes involvement of the World Bank’s International Finance Corporation (IFC) and a UK-based company called Condor Gold.
UN SECURITY COUNCIL BRIEFED ON CLIMATE-RELATED SECURITY RISKS IN SOMALIA
On 24 February, the Stockholm International Peace Research Institute reported that the Security Council was told that floods and droughts in Somalia exacerbate conflict and displacement; thereby UN efforts and the work of the Federal Government of Somalia (FSG) in building peace risk being undermined. The pressure of weather events is part of what challenges the current power-sharing agreement, providing recruitment opportunities for the al-Shabab terrorist organisation among others. Extreme weather events create water and food insecurity that give al-Shabab the opportunity to act as service providers. This allows their political narrative to gain support and decreases trust in the peacebuilding efforts of the FSG and the UN.
ACTION AGAINST HUMAN TRAFFICKING AND PIMPING IN ROMANIA AND SPAIN
A news release from Eurojust on 24 February advised that authorities in Romania and Spain have taken action against an Organised Criminal Group suspected of human trafficking, pimping and money laundering. In parallel coordinated operations, four suspects have been arrested and 6 locations searched. 7 victims of Romanian origin were brought to safety, among them 2 minors. The gang allegedly collected, transported and housed their victims and forced them into prostitution in Romania and Spain.
EU COMMISSION STUDY SHOWS THE NEED FOR EU-LEVEL LEGISLATION ON DUE DILIGENCE THROUGHOUT THE SUPPLY CHAIN ON HUMAN RIGHTS AND ENVIRONMENTAL IMPACTS
On 24 February, the EU reported that a new study on due diligence requirements through the supply chain shows that only 1 in 3 businesses in the EU are currently undertaking due diligence on human rights and environmental impacts. Due diligence, in this context, means that for example a company checks their suppliers and operations to be sure it “does no harm”. It could imply that a company needs to check if their suppliers are not using child labour, or that they do not pour waste products into the rivers.
9 JAPANESE MEN DETAINED IN MANILA OVER PHONE SCAM DEPORTED TO JAPAN
On 24 February, Japan Today reported that 9 of 36 Japanese men detained in Manila over alleged phone scams were transferred to Japan and arrested by Tokyo police. Police suspect that the gang operated a phone scam out of an abandoned hotel in Manila and other locations in the Philippines, targeting mainly elderly people in Japan.
JAMAICA: BAHAMIAN MAN ON MONEY LAUNDERING CHARGES FINED $1.3 MILLION
The Gleaner reported on 24 February that Bahamian Samuel Cummings has been fined $1,3 million or face 6 months imprisonment for breaching the Proceeds of Crime Act. He was arrested on arrival from the Bahamas earlier this month. During checks of his luggage, officers found US$30,000 concealed in a false compartment of his bags, and he had another US$4,771 on his person.
GOLDMAN SACHS PLEADS NOT GUILTY IN MALAYSIA 1MDB CASE
The Straits Times on 24 February carried a report saying that 3 units of Goldman Sachs pleaded not guilty in Malaysia over the investment bank’s alleged role in scandal at the country’s sovereign wealth fund 1MDB. Goldman’s role has been under scrutiny as it helped arrange a series of bond issues worth $6.5 billion for the investment vehicle.
CZECH REPUBLIC: POLICE RAID LABOUR MINISTRY AND ACCUSE OFFICIALS OF CORRUPTION OVER IT TENDER
On 24 February, Radio Prague reported that police have accused 2 officials at the Ministry of Labour and Social Affairs in connection with a public tender to provide IT services.
UK: PAIR WHO MADE MILLIONS FROM RESELLING CONCERT TICKETS ARE JAILED IN LANDMARK CASE
The Yorkshire Evening Post on 24 February reported that 2 internet touts who re-sold tickets worth millions of pounds to high profile events like Ed Sheeran and Taylor Swift concerts have been jailed. Peter Hunter and David Smith – who traded as Ticket Wiz and BZZ – were found guilty of fraudulent trading.
IRELAND EXPECTS INTERNATIONAL BUSINESS TAX REFORMS WILL COST IT €2 BILLION A YEAR
On 24 February, the STEP Journal reported that Ireland’s Minister for Finance and Public Expenditure and Reform has said that he expects the OECD’s base erosion and profit shifting (BEPS) initiative to reduce the country’s annual corporation tax receipts by €2 billion a year by 2025, equivalent to 2.6% of Ireland’s total annual tax revenues.
THAI INTERIOR MINISTRY HAS NOW BANNED CLAW CRANES FOUND IN GAMING ARCADES
On 24 February, Calvin Ayre reported that the Thai authorities have banned the type of game as being a form of “gambling”. Any machine that allows customers to pay money or tokens to use a claw to win a prize or play games on screens is now prohibited.
BULGARIA: MAJOR LOCAL RETAILER TO CLOSE ITS OPERATIONS DUE TO ITS LOSS OF PRIVATE LOTTERY REVENUE
Calvin Ayre on 24 February reported that a kiosk chain operator has announced that it was shutting down its operations, around 1,100 retail locations across the country. It said it generated revenue of $133.2 million in 2018 but much of this revenue was generated through sales of products issued by the privately-run National Lottery and Lottery Bulgaria, both of which were controlled by the now fugitive Vasil Bozhov. New gambling laws restrict sales of lotteries to those run by the Bulgarian Sports Totalizator.
IRELAND: COMPLAINTS TO DATA PROTECTION REGULATOR UP 75% LAS YEAR AND THE NUMBER OF DATA BREACH NOTIFICATIONS NEARLY DOUBLED
On 24 February, Out-Law reported that there were 7,215 complaints in 2019, up 75% from the 4,113 complaints it received the year before. The watchdog was also notified of 6,069 valid personal data breaches last year, up from 3,542 in 2018. It is also said that there is a trend showing an increasing number of complaints being made by individuals about data breaches, with 207 such complaints submitted to its office last year. Many of the complaints concerned breaches caused by human error.
NEW LAW ON PREVENTION OF AND COUNTERACTION TO LAUNDERING OF PROCEEDS IN UKRAINE
On 24 February, Dentons published a briefing on this new law, saying that it updates, inter alia, the requirements of the disclosure of information regarding beneficial owners of legal entities, trusts and other similar legal structures. The briefing provides details of the changes.
PESTICIDE COMPANIES MAKING BILLIONS FROM BEE-HARMING AND HAZARDOUS CHEMICALS
On 21 February, an article on Ekklesia says that the world’s 5 largest agrochemical companies – Bayer, BASF, Syngenta, FMC and Corteva – are making billions by selling toxic pesticides posing serious threats to human health or wildlife, a joint investigation by Unearthed and the Swiss NGO Public Eye has revealed. What is described as the first major analysis of the global trade in highly hazardous pesticides also reveals that chemical giants are selling disproportionately more highly-hazardous products to low- and middle-income countries, where regulations are weaker.
THEFT AND EXTORTION COMMON EXPERIENCES, SAY SEAFARERS
On 24 February, Hellenic Shipping News carried a news item about a report from Cardiff University on pressures on seafarers caused by corrupt practices when they arrive at some ports. Interviews revealed demands for cash and provisions when their vessels enter ports. One seafarer spoke of his crew being forced to resort to food rationing between ports, while another described seeing a supervisor hand over money from his own pocket, fearing a delay to their schedule might cause him to lose his job. Researchers have also been told of incidents where vital safety equipment on board is compromised by thefts of brass fittings. The first-hand testimonies are a continuation of research led by Professor Helen Sampson of the Seafarers International Research Centre (SIRC) and are included in a film to raise awareness of their plight.
WHY ARE THE NUMBER OF ACCOUNT FREEZING ORDERS SKYROCKETING IN THE UK?
A post on the FCPA Blog on 24 February seeks to answer this question, and saying that in the 3 years since the Criminal Finances Act 2018, Unexplained Wealth Orders are probably the best known – but while UWO have had far greater media coverage, it is another measure, the Account Freezing Order (AFO), which has arguably made the greater impact. 15 UWO were issued in the 2 years to April 2019, compared to a total of 670 AFO. The post briefly explains what an AFO is and its effects, saying that it freezes a named UK-based bank or building society account for up to 2 years, preventing any money in it from being withdrawn. They can be applied for by a wide range of bodies, not just the most obvious law enforcement ones, and they are applied for through the lower magistrates’ courts and not the more senior courts, making them probably quicker and more cost-effective to obtain.
3-WAY FIGHT IN THE SOUTH CHINA SEAS
On 21 February, the Asia Maritime Transparency Initiative from CSIS in the US carried an article about a little-reported stand-off in the South China Sea between China, Malaysia and Vietnam. This involves a months-long stand-off over oil and gas operations between Malaysian, Chinese, and a small number of Vietnamese vessels – though all 3 governments are keeping the episode out of the public eye. At issue are 2 oil and gas fields that Malaysia’s state-owned Petronas is exploring on the extended continental shelf claimed by both Malaysia and Vietnam. China has responded with a campaign of intimidation. AMTI says it has tracked the standoff using the vessels’ automatic identification system (AIS) broadcasts along with commercial satellite imagery. This data reveals a dangerous, ongoing game of chicken involving law enforcement, militia, and civilian vessels.
If you’d like to help me buy that (badly needed) new laptop or, even, better a new desktop to replace the one now 5,000 miles away – https://www.buymeacoffee.com/KoIvM842y