3 March 2020
HERBALIFE SETS ASIDE $40 MILLION FOR BRIBERY SETTLEMENT
On 2 March, the Wall Street Journal reported that the Los Angeles-based multilevel-marketing company is in negotiations with the US DoJ and SEC and to resolve investigations into alleged $40 million FCPA violations involving its business in China. Last year, 2 former executives were indicted on FCPA charges.
https://www.wsj.com/articles/herbalife-sets-aside-40-million-for-bribery-settlement-11583171523
HUAWEI “HELPED IRANIAN FIRMS SKIRT US SANCTIONS”
On 2 March, the National Review carried a report claimed to have found evidence that Huawei shipped equipment made by California-based Hewlett-Packard to Iran’s largest mobile phone carrier, according to Huawei packing lists from December 2010.
https://www.nationalreview.com/news/huawei-helped-iranian-firms-skirt-u-s-technology-sanctions-documents-show/
BANK OF ENGLAND WARNS DEUTSCHE BANK ABOUT REPEATED COMPLIANCE AND AML FAILURES
On 2 March, the Financial Times reported that supervisors have told executives at the Bank that they now require monthly updates, instead of the normal quarterly meetings, and the Bank of England is said to be concerned that issues have not been fixed 4 years after the German bank was first placed under special supervision by the FCA.
https://www.ft.com/content/97ffaffe-5983-11ea-a528-dd0f971febbc
UN FORMS PANEL TO HELP BATTLE TAX EVASION AND MONEY LAUNDERING
On 3 March, KYC 360 reported on the establishment of the UN High-Level Panel on International Financial Accountability, Transparency and Integrity for Achieving the 2030 Agenda (FACTI Panel). It consists of 15 members drawn from policymakers, academia, civil society and the private sector. It is said that the panel will explore what further action is needed by governments and financial institutions in areas of financial and beneficial ownership transparency, tax matters, bribery and corruption, confiscation and disposal of the proceeds of crime, money laundering and the recovery and return of stolen assets.
https://www.riskscreen.com/kyc360/news/un-forms-panel-to-help-battle-tax-evasion-money-laundering/
ENGLISH JURISDICTION CLAUSES DO NOT MEAN CHOICE OF ENGLISH LAW
On 3 March, an article from RPC said that a recent High Court case in England has highlighted the fact that where parties have agreed in a contract that the English courts will have jurisdiction in the event of a dispute, it does not automatically follow that English law will be the governing law. The case involved a US LLC set up by a Canadian to act as exclusive agent in Canada, the US and the Caribbean for a Canadian company. The article warns that those entering into contractual agreements should carefully consider a choice of law clause in order to designate the laws of a country that suits them.
https://www.internationallawoffice.com/Newsletters/Litigation/United-Kingdom/RPC/Beware-English-jurisdiction-clauses-do-not-mean-choice-of-English-law
PODCAST: A PRIMER ON THE EU NORTH KOREAN SANCTIONS REGIME
On 3 March, NK News, which does produce some fascinating podcasts about North Korea in general, published a interview with the spokesperson for Foreign Affairs and Security Policy from the EU European Commission, who discusses the role that sanctions are designed to play in denuclearising the North, how those sanctions are formulated, and what opportunities exist for Pyongyang to get sanctions relief.
https://www.nknews.org/2020/03/a-primer-on-the-european-unions-north-korea-sanctions-nknews-podcast-ep-117/
THE EURASIAN ECONOMIC UNION
On 17 February, Russian Analytical Digest #247 from ETH Zurich was concerned with the Eurasian Economic Union. The EAEU Treaty was signed in 2014, building on an existing customs union arrangement. However, one thing the report points out is that non-tariff barriers (NTB) remain one of the major obstacles for market integration in the EAEU. Intended as a sort of Eurasian parallel to the trade aspects of the EU, Eurasian countries implemented the first advanced common market envisioned by the Treaty — the common market for medical products — in 2016. However, the report says that this was also the first to demonstrate a real problem that EAEU integration faces – in order to (roughly) comply with the time schedule set in the Treaty, the EAEU countries occasionally agree to weaken the specific requirements of the new regulatory framework, so that the actual level of integration remains lower than originally envisioned. The report also says that the integration of the financial markets is a difficult goal for the EAEU, and here the progress so far has been limited, with the main steps to be undertaken in the years to come. The report concludes that there are 3 main problems with deeper integration in the EAEU –
- the issue of the willingness of the member states to cede control over additional policies to the EAEU bodies;
- here are differences in the economic systems of the EAEU member countries (e.g. it is difficult to reconcile the centralised economy of Belarus, where about 70% of the GDP is produced by state-owned companies, with market-oriented Kazakhstan); and
- how much political interest member countries have in pushing the EAEU project forward?
A separate article examines the collateral damage for the EAEU of Russia’s counter-sanctions to western restrictions following the annexation of Ukraine territory.
The Eurasian Economic Union consists of Russia, Belarus, Armenia, Kazakhstan and Kyrgyzstan.
https://css.ethz.ch/content/dam/ethz/special-interest/gess/cis/center-for-securities-studies/pdfs/RAD247.pdf
WHERE DO SAHEL TERRORISTS GET THEIR HEAVY WEAPONS?
An article from ETH Zurich on 28 February posed this question in the light of terror attacks on military outposts in the Liptako-Gourma area where Mali, Burkina Faso and Niger meet. It says that new research from the Institute for Security Studies (ISS) on the links between violent extremism, organised crime and local conflicts in the Liptako-Gourma reveals that terrorist groups in the Sahel region – of which Liptako-Gourma forms part – are using weapons from the military barracks they’re looting in Libya. The article says that while Libya had been the main source of weaponry in the region, including as a policy measure by Gadafi, since 2013 supplies had decreased, reasons including that the Libyan civil war increased the internal demand for arms, which means there are less weapons to export – although trafficking continued to some extent. Weaponry also comes into the territory in other ways – and some West African ports, identified by the Small Arms Survey as illicit trafficking routes are also allegedly used for the transport of arms. The report says that looting of armouries in countries in and around the region has become the favoured modus operandi, has enabled terrorist groups to accumulate large stockpiles of ammunition and weapons, and is becoming the main source of supply, offsetting the decline in flows from Libya and other former conflict zones.
https://isnblog.ethz.ch/terrorism-technology/where-do-sahel-terrorists-get-their-heavy-weapons
US SANCTIONS THWART CUBANA PLANS TO SECURE ATR 72 AIRLINERS
On 3 March, CH Aviation reported that a Cuban minister has said that plans to acquire the Franco-Italian ATR 72 turboprops has been thwarted by US sanctions, chiefly due its engines – produced by US-owned Pratt & Whitney of Canada.
https://www.ch-aviation.com/portal/news/86939-us-sanctions-thwart-cubana-plans-to-secure-atr72s-minister
EXPERTS CLAIM SEIZED ARTEFACT RETURNED TO NIGERIA FROM MEXICO IS FAKE
The Ancient Origins website on 2 March reported that a bronze sculpture seized at a Mexican airport, and hastily returned to Nigeria, is now claimed to be fake.
https://www.ancient-origins.net/news-history-archaeology/nigerian-artifact-0013365
US DoJ CHARGES UNPRECEDENTED NUMBER OF ELDER FRAUD DEFENDANTS NATIONWIDE AND LAUNCHES HOTLINE
A news release from the DoJ on 3 March announced the largest coordinated sweep of elder fraud cases in history. This year, prosecutors charged more than 400 defendants, compared to the 260 defendants charged in cases as part of last year’s sweep. In each case, offenders allegedly engaged in financial schemes that targeted or largely affected seniors. In total, the charged elder fraud schemes caused alleged losses of over a billion dollars. Prevention and Disruption of Transnational Elder Fraud has been made on the DoJ’s top 4 priorities. Attorney General Barr has also announced the launch of a National Elder Fraud Hotline, which will provide services to seniors who may be victims of financial fraud.
https://www.justice.gov/opa/pr/department-justice-charges-unprecedented-number-elder-fraud-defendants-nationwide-and
IRELAND: RADIO PRESENTER NEIL PRENDEVILLE NAMED ON LATEST TAX DEFAULTERS’ LIST FROM REVENUE COMMISSIONERS
On 3 March, The Journal reported that Cork’s RedFM, Neil Prendeville, has been listed on Revenue’s latest list of tax defaulters for 2019, and is listed as owing €541,636 in a combination of taxes, interest and penalties.
https://www.thejournal.ie/tax-defaulters-5031296-Mar2020/
UK: LAW FIRM ORDERED TO DISCLOSE DOCUMENTS RELATING TO EX-CLIENT’S ALLEGED FRAUD
On 3 March, the Law Society Gazette reported that the international firm Dentons has been ordered to disclose documents about a client accused of running a fraudulent investment scheme after the High Court in London found that letters sent by the law firm fell outside the normal lawyer/client relationship and the scheme itself bore ‘classic hallmarks’ of fraud. The documents would otherwise have been legally privileged.
https://www.lawgazette.co.uk/news/dentons-ordered-to-disclose-documents-relating-to-ex-clients-alleged-fraud/5103308.article
MERSEYSIDE DRUG TRAFFICKING SUSPECT ARRESTED IN SPAIN AFTER 6 YEARS ON THE RUN
On 3 March, a news release from the NCA announced that Dominic McInally, 29, the alleged ringleader of a cocaine trafficking group that expected to bank more than £1 million every month has been arrested in Spain after more than 6 years on the run. He was arrested when officers from the Spanish National Police raided the Casa Masa strip club, near Marbella.
https://www.nationalcrimeagency.gov.uk/news/merseyside-drug-trafficking-suspect-arrested-after-six-years-on-the-run
CALIFORNIA ARMS BROKER WHO OPERATED FROM BULGARIA NOT YET SENTENCED, A YEAR AFTER GUILTY PLEA
On 3 March, Kenneth Rijock in his blog reported on the case of Ara Dolarian, who is said to have formerly sold Soviet-era arms and ammunition to US Government clients, including special operations units and CIA clients, for Afghanistan and Iraq, but was later charged with selling arms to foreign buyers, as Arthur Ave Consulting.
http://rijock.blogspot.com/2020/03/sentencing-still-pending-for-california.html
SWEDISH GOVERNMENT CALLS FOR INTERNATIONAL RESPONSE TO ONLINE SCAMS IN THE WAKE OF A MEDIA INVESTIGATION INTO A FRAUDULENT UKRAINIAN INVESTMENT COMPANY
On 3 March, OCCRP carried an article linked to an expose of the Ukraine-based Milton Group, in which it is alleged that staff defrauded up to a thousand people worldwide with sham promises of get-rich-quick investment schemes.
https://www.occrp.org/en/daily/11737-sweden-s-foreign-minister-calls-for-action-on-milton-group-fraud
https://www.occrp.org/en/fraud-factory/trail-of-broken-lives-leads-to-kyiv-call-center
COLOMBIA: CONVICTED PROSECUTOR TO TESTIFY AGAINST COLLEAGUES IN CORRUPTION CASES
On 3 March, OCCRP reported that the Supreme Court has sentenced a former prosecutor to prison for bribery, a reduced sentence after she agreed to testify against several other justice officials. She is said to have been was a prominent and rapidly rising figure in Colombia’s justice system, and worked for the “Justice and Peace” Court, a reconciliation body dealing with former rebels. She accepted $70 000 and 2 cars in exchange for settling the cases of 2 drug traffickers. She had said that she would give testimony in nearly 50 cases of corruption involving the judicial apparatus – a figure subsequently reduced to 10 by the Attorney General’s Office.
https://www.occrp.org/en/daily/11736-colombia-convicted-prosecutor-to-testify-against-colleagues
CHILE STRUGGLES TO DEAL WITH COLOSSAL INFLUX OF SYNTHETIC DRUGS
Insight Crime on 3 March published an article saying that seizures of synthetic drugs in Chile have skyrocketed from 2,304 doses in 2010 to more than 1.5 million doses in 2019. Although the use of synthetic drugs is on the rise in other Latin American countries, the rate of growth in Chilean domestic demand in 3 years is far greater. The drugs are both imported – from Europe (via the Netherlands or Spain), through packages from Colombia, or hidden inside vehicles that enter Chile through mountain-passes from Argentina – and produced in Chile.
https://www.insightcrime.org/news/brief/chile-influx-synthetic-drugs/
COLORADO BUSINESSMAN 7-YEAR JAIL TERM FOR BIODIESEL TAX CREDIT SCAM
On 3 March, American Shipper reported that Matthew Taylor has been sentenced to 7 years in jail for his role in a biodiesel tax credit fraud scheme. Taylor and co-conspirators filed false claims for tax credits under a federal programme that encourages production and use of renewable fuels. This is not the first such case, in 2018 a federal grand jury indicted 2 executives for illicitly obtaining more than $511 million in biodiesel renewable tax credits from the IRS.
https://www.freightwaves.com/news/colorado-businessman-receives-7-year-jail-term-for-biodiesel-tax-credit-scam
US: CHINESE NATIONAL CONVICTED OF LAUNDERING DRUG MONEY FOR TRAFFICKERS IN MEXICO
On 3 March, US Immigration and Customs Enforcement issued a news release which advised that a federal jury in Chicago had convicted a Chinese national of laundering illegal narcotics proceeds on behalf of drug traffickers in Mexico. It is said that Xianbing Gan arranged to have narcotics proceeds of about $534,206 to be picked up in Chicago and transferred to various bank accounts in China, in order for the money to ultimately be remitted to drug traffickers in Mexico.
https://www.ice.gov/news/releases/chinese-national-convicted-laundering-drug-money-traffickers-mexico
THE ARMANI-DESIGNED NEW YORK CONDO WHERE CONNECTED RUSSIANS HAVE BOUGHT APARTMENTS
On 3 March, Rferl carried an article about 20 Pine Street, opened by Soviet-born diamond billionaire Lev Leviev as a luxury condominium in the late 2000s. This is described as a building overlooking Wall Street converted into 409 condos, with Armani/Casa design and amenities such as a swimming pool, sauna, and gym to draw buyers. The article says that this is the building where 3 Russian investors, at least one of them politically connected, have purchased 18 apartments for a sum totalling more than $18 million – Aleksandr Udodov, the brother-in-law of new Russian Prime Minister Mikhail Mishustin; Denis Katsyv, a businessman whose money intermingled with the massive alleged tax fraud exposed by whistle-blower Sergei Magnitsky; and Valentin Laskov, a Moscow homebuilder, who has links to the jailed Michael Cohen.
https://www.rferl.org/a/armani-designed-new-york-condo-where-connected-russians-have-bought-apartments/30467108.html
ASSETS OF RUSSIAN OPPOSITION LEADER NAVALNY, HIS FAMILY AND ASSOCIATE FROZEN – SUED BY OLEG DERIPASKA
On 3 March, Rferl reported that Aleksei Navalny says his finances, along those of his wife, children, parents, and the head of his Anti-Corruption Foundation (FBK) have been frozen without explanation. It is also reported that Navalny said that he had obtained information that billionaire Oleg Deripaska, who has strong links to Russia’s leadership, was suing him for unknown reasons.
https://www.rferl.org/a/accounts-of-navalny-associate-frozen-as-tycoon-deripaska-launches-lawsuit/30466408.html
https://www.rferl.org/a/britain-the-biggest-buyer-of-russian-gold/30466802.html
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