On 21 May, OFAC announced a number of changes to sanctions regimes. 3 Russian entities have been added to its non-SDN sanctions list, together with 11 vessels. At the same time 2 further Russian vessels have been added to SDN sanctions lists and the entry for LLC KOKSOKHIMTRANS (aka KOKSOKHIMTRANS LTD), designated under Ukraine sanctions, has been amended. OFAC has also released PEESA General License No.1 – Authorizing Certain Activities Involving Federal State Budgetary Institution Marine Rescue Service – and 2 related FAQ. The PEESA sanctions refer to the Protecting Europe’s Energy Security Act of 2019.
A study by Blockchain analytics firm Elliptic is reported by Rferl on 21 May. The study estimates that around 4.5% of global Bitcoin mining takes place in Iran, allowing the country to earn hundreds of millions of dollars in cryptocurrencies. The study claims that Iran has recognised that Bitcoin mining represents an attractive opportunity for a sanctions-hit economy suffering from a shortage of hard cash, but with a surplus of oil and natural gas, and uses crypto mining to pay for the import of authorised goods.
On 20 May, a briefing from Stewarts said that Account Freezing Orders (AFRO) and Unexplained Wealth Orders (UWO) were introduced by the Criminal Finances Act 2017. External Requests and Orders (ERO) are designed to provide other countries’ financial crime-linked court orders with powers similar to an AFRO. It is said that while ERO have yet to be tested in court, what has become clear during the past 12 months is that law enforcement agencies are increasingly willing to use the new domestic powers in the CFA to investigate and recover the proceeds of crime. The ERO framework broadly replicates the AFRO, Account Forfeiture Order (AFOO) and Account Forfeiture Notice (AFN) framework, but some notable differences exist and the briefing examines these. It is said that the new rules fill a void between the Civil Procedure Rules and the Criminal Procedure Rules, providing a procedure for foreign governments to apply to the UK courts to freeze and subsequent forfeit criminal assets.
On 20 May, an article in Insight Crime reported that the Brazilian government is facing its strongest accusations to date that it not only turned a blind eye to illegal deforestation in the Amazon but actively participated in its pillage. Police have raided properties and offices connected to the Environment Minister Ricardo Salles and Eduardo Bim, the head of the environment protection agency (Instituto Brasileiro do Meio Ambiente e dos Recursos Naturais Renováveis — Ibama). The government of President Jair Bolsonaro has been controversially linked to a number of destructive actions in the Amazon.
On 21 May, EU Observer reported that EU Member States risk missing new ‘e-waste’ targets as they face challenges to comply both with existing rules and to fight criminal activities such as illegal dumping, according to a new report of the European Court of Auditors. The report focuses on the EU’s role and actions to tackle the challenges to e-waste management. It highlights the challenges in implementing existing e-waste treatment requirements; dealing with mismanagement of e-waste, illegal shipments and other criminal activities; and further increasing e-waste collection, recycling and reuse.
On 21 May, HM Treasury issued updated guidance which sets out the licensing policy which applies to designated persons under the ISIL (Da’esh) and Al-Qaida (United Nations Sanctions) (EU Exit) regime, the Counter-Terrorism (International Sanctions) (EU Exit) regime and the Counter-Terrorism (Sanctions) (EU Exit) regime.
On 21 May, KYC 360 reported that BNP Paribas SA had been charged in France over accusations it laundered money stemming from corruption and embezzlement in a case over alleged ill-gotten assets linked to Gabon. This follows an investigation into the French wealth of the family of the late Gabonese president, Omar Bongo. It is said that BNP is suspected of having failed in its due diligence obligations because it didn’t report to authorities a suspicious bank account where tens of millions of euros were allegedly used by the Bongo family to acquire real estate in France.
On 20 May, Thomson Reuters reported on the recent FATF evaluation, saying that it has criticised the Reserve Bank of New Zealand (RBNZ) for failing to supervise the banking sector adequately, despite an overwhelmingly positive national review. The latest mutual evaluation report revealed the central bank has just 5 full-time staff dedicated to financial crime compliance supervision, and had failed to take any significant action against any of the country’s largest banks. Despite an overwhelmingly positive report, FATF singled out a number of areas for improvement, saying that New Zealand needed to improve the transparency around the ultimate beneficial owners of companies, such as shell companies and trusts, that are commonly used to launder illicit funds.
INSIGHTS INTO THE 2021 FATF MUTUAL EVALUATION OF NEW ZEALAND
On 20 May, the New Zealand law firm Minter Ellison Rudd Watts published a review of the report including the firms’ views on what will follow the Mutual Evaluation; the key findings of the Mutual Evaluation; and the background and process of the Mutual Evaluation.