THE PROBLEM OF TRACING DIRTY MONEY FROM RUSSIA: HOW “ILLEGAL” ARE “ILLICIT” FLOWS?

A post on the LSE Business School blog says that the invasion of Ukraine has prompted renewed calls to tackle the flow of ‘dirty money’ from Russia into other European states.  It argues that, However, before one can propose concrete advice on how to tackle these flows, one must confront some basic definitional questions.  What do we mean by ‘illicit’ finance?  How can we trace it?  Is illicit finance always against the law?  The post pinpoints 3 difficulties in conceptualising and, hence, tracing illicit financial flows, and suggest that, given these challenges a wider approach to studying the transnational reach of dirty money is needed.

https://blogs.lse.ac.uk/europpblog/2022/02/25/the-problem-of-tracing-dirty-money-from-russia-how-illegal-are-illicit-flows/

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EU BANS RUSSIAN AIR CARRIERS, RUSSIAN-REGISTERED AIRCRAFT AND RUSSIAN-OWNED, AIRCRAFT FROM THE EU AND PROHIBITS ANY TRANSACTIONS WITH THE CENTRAL BANK OF RUSSIA

EU Regulation 2022/334/EU has imposed further restrictive measures prohibiting Russian air carriers, any Russian-registered aircraft, and any non-Russian-registered aircraft which is owned or chartered, or otherwise controlled by any Russian natural or legal person, entity or body from landing in, taking off from, or overflying, the territory of the EU.  It also prohibits any transactions with the Central Bank of Russia.

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv%3AOJ.L_.2022.057.01.0001.01.ENG&toc=OJ%3AL%3A2022%3A057%3ATOC

https://eur-lex.europa.eu/legal-content/EN/AUTO/?uri=uriserv:OJ.L_.2022.057.01.0004.01.ENG&toc=OJ:L:2022:057:TOC

Any modest contributions for my time and ongoing expenses are welcomed!  I have a page where you can do so, and where one-off contributions start as low as $3, at https://www.buymea3coffee.com/KoIvM842y

OFAC ADDS 6 ENTITIES AND 1 INDIVIDUALS TO SANCTIONS LISTS, A NEW DIRECTIVE AND GENERAL LICENSE

On 28 February, OFAC announced that it had added 1 individual and 6 entities (including the Russian Central Bank, the Ministry of Finance and the National Wealth Fund) to its Russia sanctions lists.  It also issued General License 8A which authorised certain transactions relating to energy supplies, and Directive 4 under EO 14024 concerning the prohibitions related to transactions involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation.

https://home.treasury.gov/system/files/126/eo14024_directive_4_02282022.pdf

https://home.treasury.gov/system/files/126/russia_gl8a_1.pdf

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220228

https://home.treasury.gov/news/press-releases/jy0612

OTHER THINGS YOU MAY HAVE MISSED – FEBRUARY 27

Panama Covid-19 update – on a holiday weekend, for the carnival that has been cancelled, 6 new fatalities and 357 new cases reported, with active cases dropping by 738 to 6,370; with 27 patients in ICU and 161 in other wards.

27 FEBRUARY 2022

RUSSIA RETALIATES AS ONLINE GIANTS TAKE STEPS TO STEM DISINFORMATION

On 26 February, Defense One reported that, as several US tech giants have taken steps to stem Russian-government disinformation and funding, Russia’s telecommunications agency announced that it had begun restricting access by Russian users to Facebook, whose officials said they had refused to stop labelling false information posts by 4 government-affiliated sites.

https://www.defenseone.com/technology/2022/02/moscow-retaliates-online-giants-take-steps-stem-disinformation/362490/

WESTERN LEADERS AGREE NEW RUSSIA SANCTIONS, INCLUDING SWIFT CURBS

In its 27 February edition, Politico reported that leaders of the US, the European Commission, France, Germany, Italy, UK and Canada had pledged to hold Putin and Russia to account for the invasion of Ukraine.  This is said to include ensuring that selected Russian banks are removed from the SWIFT messaging system, so that they are disconnected from the international financial system.

https://www.politico.eu/article/commission-proposes-new-financial-sanctions-on-russia

EU OPTS OUT OF INTERNATIONAL INVESTIGATION OF SHIPPING LINE ANTI-COMPETITIVE BEHAVIOUR AND ABUSE OF THEIR DOMINANT POSITION

On 22 February, The Loadstar reported that freight forwarders in the EU have increased the pressure on the EU Commission to investigate some of the latest practices of shipping lines, which they believe are anti-competitive and an abuse of their dominant position.  Regulators in the US, UK, Australia, New Zealand and Canada have launched a global investigation into a liner industry which made historically high profits last year and is on course to rake in similar amounts this year, apparently taking advantage of the pandemic.

https://theloadstar.com/european-forwarder-fury-at-ec-failure-to-join-five-eyes-liner-probe/

10 FLORIDA RESIDENTS INDICTED FOR $67 MILLION HEALTHCARE FRAUD AND MONEY LAUNDERING

On 26 February, KTTN in Florida reported that 10 people had been charged over a scheme involving the submission of false and fraudulent claims to Medicare for medically unnecessary genetic tests and durable medical equipment.  The owners and managers of independent clinical laboratories and marketing companies, were each charged.  It is alleged that, between January 2020 and July 2021, the defendants referred Medicare beneficiaries for medically unnecessary genetic tests and durable medical equipment. In exchange for doctors’ orders for such tests and equipment, and allegedly paid kickbacks and bribes to telemedicine companies.  The indictment further alleges that the defendants falsified Medicare enrolment forms to conceal the true owners and managers of certain laboratories, and submitted false and fraudulent claims to Medicare. 

https://www.kttn.com/ten-florida-residents-indicted-for-67-million-healthcare-fraud-wire-fraud-kickback-and-money-laundering-scheme/

WINE CRIME IS SOARING BUT A NEW GENERATION OF TECH SAVVY DETECTIVES IS ON THE CASE

On 27 February, The Observer reported that, as wine has become more valuable, wine-related crime has been on the rise.  Wine tends to be less well guarded than jewellery, yet it can be just as tempting a target for theft. It also says that merchants, châteaux, restaurants and customers are engaged in a constant battle against theft and mis-selling, with fraud as the more pernicious problem. 

https://www.theguardian.com/food/2022/feb/27/wine-crime-is-soaring-but-a-new-generation-of-tech-savvy-detectives-is-on-the-case

EL SALVADOR’S FORMER PRESIDENT CHARGED OVER 1989 MASSACRE OF 6 JESUIT PRIESTS

On 26 February, the Guardian reported that prosecutors have charged the former president Alfredo Cristiani over the 1989 massacre of 6 Jesuit priests that sparked international outrage.  They also announced charges against a dozen other people, including former military officers, over the massacre.  The list of charges will apparently include murder, terrorism and conspiracy.  The former president, who served from 1989 to 1994, has denied any involvement or knowledge of the plan to kill the priests.

https://www.theguardian.com/world/2022/feb/26/el-salvadors-former-president-charged-over-1989-massacre-of-six-jesuit-priests

COULD SANCTIONS LEAVE OLIGARCHS’ SUPER YACHTS HIGH AND DRY IN SPAIN?

On 26 February, the Guardian reported on the position of the superyachts in Barcelona, including 3 owned by Russians.

https://www.theguardian.com/world/2022/feb/26/could-sanctions-leave-oligarchs-super-yachts-high-and-dry-in-spain

BUSINESS DEMAND FOR SURVEILLANCE SOFTWARE IS INCREASING

On 17 February, an article from Herbert Smith Freehills says that a new report shows that a majority of employers expect an increase in employee monitoring to develop in the post-COVID-19 world of working from home and hybrid working; and asks what is the reason for this?  It also says that, when developing their technologies, tech companies will need to carefully consider the complex web of regulations that employers must navigate when using the technology.  It concludes that both technology developers and their employer customers need to ensure that they remain within the boundaries of a myriad of regulatory regimes when implementing any such monitoring.  In addition, the fundamental employment relationship of trust should be maintained, something that no law can regulate for.

https://www.herbertsmithfreehills.com/latest-thinking/demand-for-surveillance-software-is-increasing

THE WEST AND RUSSIAN GAS: WHAT YOU NEED TO KNOW

On 27 February, Rferl published an explanation, saying that Russia has long been the EU’s primary supplier of natural gas.  During the first quarter of 2021, it was responsible for almost half of all the natural gas imported by the EU.

https://www.rferl.org/a/russia-natural-gas-european-union-ukraine-nord-stream/31723456.html

UKRAINIAN & RUSSIAN HOSTILITIES AND SHIPPING – CHARTERPARTY AND COVER ISSUES

On 26 February, Insurance Marine News said that owners whose vessels are ordered, or charterer members who order vessels, to proceed to load or discharge at Ukrainian and/or Russian Black Sea ports should consider the English law charterparty and cover issues outlined in the article as the situation in the area develops.  The matters discussed included war risks insurance, frustration of contract, safe ports, force majeure and sanctions; as well as P+I cover issues.

https://www.hellenicshippingnews.com/ukrainian-russian-hostilities-charterparty-and-cover-issues/

HAS PUTIN TORN UP YOUR CONTRACTS? – HFW

On 25 February, HFW published an article on the legal implications of the Russian invasion of Ukraine.  These include war risks insurance and the effect on charterparties.

https://insurancemarinenews.com/insurance-marine-news/has-putin-torn-up-your-contracts-hfw/

CHINA’S SUPREME COURT ADDS DIGITAL CURRENCY TO LIST OF ILLEGAL FUNDRAISING METHODS

On 24 February, Coin Telegraph reported that it is claimed that the new policy change aims to mitigate risks arising from digital currency fundraising and the absorption of funds from the public.

https://cointelegraph.com/news/china-s-supreme-court-adds-digital-currency-to-list-of-illegal-fundraising-methods

IRANIAN GOVERNMENT-SPONSORED ACTORS CONDUCT CYBER OPERATIONS AGAINST GLOBAL GOVERNMENT AND COMMERCIAL NETWORKS

An Alert from the US Cybersecurity and Infrastructure Security Agency (CISA) on 24 February said that CISA, together with the FBI, US Cyber Command Cyber National Mission Force (CNMF), and the UK National Cyber Security Centre (NCSC-UK) have observed a group of Iranian government-sponsored advanced persistent threat (APT) actors, known as MuddyWater, conducting cyber espionage and other malicious cyber operations targeting a range of government and private-sector organizations across sectors—including telecommunications, defence, local government, and oil and natural gas — in Asia, Africa, Europe, and North America.   It also notes that MuddyWater is also known as Earth Vetala, MERCURY, Static Kitten, Seedworm, and TEMP.Zagros.  The advisory provides observed tactics, techniques, and procedures (TTP); malware; and indicators of compromise (IOC) associated with this Iranian government-sponsored APT activity to aid organisations in the identification of malicious activity against sensitive networks. 

https://www.cisa.gov/uscert/ncas/alerts/aa22-055a

SECRET DOCUMENTS SHOW HOW SANCTIONED BANK MOVED OLIGARCHS’ MILLIONS

On 24 February, Buzz Feed published an article about Promsvyazbank , saying that it was a conduit in some of the biggest money laundering operations in history, including the so-called Russian Laundromat and a scheme to move stolen money into high-end Manhattan real estate.  It says that among the most prominent were the Rotenberg family.

https://www.buzzfeednews.com/article/anthonycormier/russian-promsvyazbank-us-blocked-oligarch-laundering

US BANS IMPORT OF AFGHAN ART AND ANTIQUITIES OVER LOOTING FEARS

On 24 February, OCCRP reported that the Department of State had determined that circumstances in Afghanistan warrant unilateral emergency import restrictions.  The ban covers a wide range of material spanning several thousands of years.

https://www.occrp.org/en/daily/16017-us-bans-import-of-afghan-art-and-antiquities-over-looting-fears

ATTACK ON UKRAINIAN GOVERNMENT WEBSITES LINKED TO GRU HACKERS

On 23 February, Bellingcat reported that on 23 February most key Ukrainian government institutions had their websites attacked in a presumed DDoS campaign.

https://www.bellingcat.com/news/2022/02/23/attack-on-ukrainian-government-websites-linked-to-russian-gru-hackers/

EU, UK, US, CANADA: JOINT STATEMENT ON FYRTHER RESTRICTIVE ECONOMIC MEASURES ON RUSSIA

On 27 February, the EU released a statement saying that the leaders of the European Commission, France, Germany, Italy, UK, Canada, and the US have committed to further sanctions.  These include ensuring that selected Russian banks are removed from the SWIFT messaging system; imposing restrictive measures that will prevent the Russian Central Bank from deploying its international reserves in ways that undermine the impact of sanctions; acting against the people and entities who facilitate the war in Ukraine and the harmful activities of the Russian government; and commit to launching a transatlantic task force that will ensure the effective implementation of financial sanctions by identifying and freezing the assets of sanctioned individuals and companies that exist within the jurisdictions. 

https://ec.europa.eu/commission/presscorner/detail/en/STATEMENT_22_1423

NIGERIA: MALABU OIL SCANDAL – NIGERIAN GOVERNMENT HAS ACCUSED 2 FORMER ATTORNEY GENERALS OF TAKING MILLIONS OF DOLLARS IN BRIBES 

On 27 February, Sahara Reporters reported on court hearings in London in which lawyers representing the Nigerian Government have accused 2 former Attorney Generals of the Federation of working against the country and taking millions of dollars in bribes as part of a fraudulent scheme to monetise the corrupt award of the OPL 245 oil field to Malabu Oil & Gas in 1998.   This has occurred in a new case instituted against JP Morgan Chase for $1.7 billion alleging gross negligence by the bank in its handling of accounts associated with the sale of OPL 245 to oil giants, Eni and Shell.  Both companies were charged in Italy with international corruption but acquitted in March 2021 by the Court of First Instance in Milan, but the acquittal is currently being appealed.

http://saharareporters.com/2022/02/27/malabu-oil-scandal-former-attorney-generals-adoke-bayo-ojo-worked-against-nigeria-make

GIBRALTAR: GAMBLING COMMISSIONER AGREES £850,000 REGULATORY SETTLEMENT WITH ONISAC LTD (PART OF THE MANSION GROUP)

A news release on 27 February advised that the settlement is in respect of AML deficiencies in relation to non-EU/non-UK customers where significant control failings were identified.

https://www.gbc.gi/news/gambling-commissioner-agrees-850000-regulatory-settlement-onisac-ltd-part-mansion-group

WEAPONS RECOVERED FROM ARMED FORMATIONS OF THE SELF-DECLARED DONETSK AND LUHANSK ‘PEOPLE’S REPUBLICS’ IN EASTERN UKRAINE

A new report from Conflict Arms Research says that, since 2018, its field investigation teams have carried out forensic documentation of the military equipment that has been recovered from armed formations of the self-declared Donetsk and Luhansk ‘People’s Republics’.  It examines the supply sources of weapons, ammunition, vehicles, armour, and artillery used in the conflict.

https://www.conflictarm.com/download-file/?report_id=3558&file_id=3575

WHAT IS SWIFT AND WHAT HAPPENS IF RUSSIA IS CUT OFF FROM IT?

On 9 December, Rferl had published this article saying that SWIFT is a secure communications platform used by banks, brokerages, and other financial institutions to send and receive information, such as instructions for transferring money overseas or settling securities trades.

https://www.rferl.org/a/russia-swift-nuclear-option/31601868.html

Any modest contributions for my time and ongoing expenses are welcomed!  I have a page where you can do so, and where one-off contributions start as low as $3, at https://www.buymea3coffee.com/KoIvM842y