On 19 May, STEP reported that the FATF mutual evaluation report on France says that it urges the country to take firmer action in supervising notaries and real estate agents, especially in relation to beneficial ownership, politically exposed persons (PEP) and suspicious transactions reporting.
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On 19 May, the Wall Street Journal reported that an internal Communist Party directive bars senior officials from owning property abroad or stakes in overseas entities, whether directly or through spouses and children. It is said that the Party will block promotions for senior cadres whose spouses or children hold significant assets abroad, as China seeks to insulate its top officials from the types of sanctions now being directed at Russia.
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On 19 May, Notice to Exporters from the Export Control Joint Unit says that changes to enhance the UK’s military end-use controls to allow them to apply to a wider array of end-use scenarios come into operation with effect from 19 May. At the same time, China, Hong Kong and Macau being included in the destinations subject to an arms embargo. This will not change the extent of the partial arms embargo on China but will mean that the updated military end-use controls will apply.
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On 19 May, OFAC announced new sanctions targeting Ahmad Jalal Reda Abdallah, in an action which it says illuminates Hizballah’s modus operandi of using the cover of seemingly legitimate businesses to generate revenue and leverage commercial investments across a multitude of sectors to secretly fund Hizballah and its terrorist activities.
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On 18 May, Al Jazeera reported that a French appeals court has confirmed a charge of complicity in crimes against humanity for cement group Lafarge over alleged pay-offs to ISIL (ISIS) and other armed groups during Syria’s war. It is said that Lafarge has acknowledged that it paid nearly €13 million to middlemen to keep its Syrian cement factory running in 2013 and 2014.
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An NGO, the Wildlife Justice Commission has published this report which presents a set of 12 case studies that illustrate the range of converging crime types and typologies from around the world.
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On 17 May, the Council of Europe advised that Expert Council on NGO Law of the Conference of INGO has published a Study on Non-Governmental Organisations and the Implementation of Measures Against Money Laundering and Terrorist Financing. It says that the Study shows that the way in which the relevant requirements are being applied by states is leading, or will lead, to significant burdens for NGO that are not at risk of being implicated in money laundering or terrorist financing and thus doing so without making any useful contribution to tackling such activities. It concludes that it is unlikely that the difficulties encountered in the implementation of the various requirements will be overcome without a much more serious and ongoing engagement by the oversight bodies with NGO.
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On 19 May, a Notice from HM Treasury advised that these 3 Russian airlines had been added to the sanctions lists, while the entries for GARANTEX EUROPE OU and KAMAZ had been corrected.
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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
Panama Covid-19 update – positivitiy in tests remains above 20%, with 1 new fatality and another 3,506 new cases reported today. The number of active cases, and those in ICU, other hospital wards and the hospital-hotels all increasing. There are now another 1,713 active cases at 27,343, with 39 nationwide in ICU, 203 in other wards and 76 in hospital-hotel quarantine.
On 18 May, iGB reported that the Gambling Commission did not disclose the specific details of these activities that led to the suspension of Goldchip’s licence, but it did state that suspected social responsibility and AML failings were key considerations in the suspension decision.
HONG KONG: NEW MANDATORY REFERENCE CHECKING SCHEME FOR THE BANKING INDUSTRY TO PREVENT INDIVIDUALS INVOLVED IN MISCONDUCT FROM MOVING FROM ONE AUTHORISED INSTITUTION TO ANOTHER
On 10 May, an article from King & Wood Mallesons said that on 5 May the Hong Kong Monetary Authority had announced the launch of the Mandatory Reference Checking Scheme (MRC Scheme), including the implementing guidelines issued by the Hong Kong Association of Banks and the DTC Association. The MRC Scheme is to be rolled out in 2 phases, the first phase, required to be implemented by 2 May 2023, will run to mid-2025, and a review will then be conducted before implementation of phase 2. The article summarises the key features of the MRC Scheme, as well as the matters that have been of particular interest to authorised institutions.
On 16 May, an article from Stevens & Bolton LLP was concerned with the TRS, which acts as both a register of beneficial ownership of trusts, as well as a mechanism to register trusts for UK self-assessment. It points out that recent amendments to the relevant regulations have increased the scope of the TRS to encompass all express trusts (breaking the tax nexus) with trustees required to register by 1 September and thereafter report any changes in beneficial ownership or the creation of any future express trusts within 90 days.
US: RUSSIA SANCTIONS LICENCE FOR IP MAINTENANCE AND RENEWAL PAYMENTS
On 12 May, Cozen O’Connor reported that, on 5 May, had issued a new General License and that, as a result, firms are permitted to make IP maintenance and renewal payments on behalf of their clients.
On 18 May, the Wall Street Journal carried an article saying that Russian businesses are scrambling to find new suppliers and changing products and processes. Shippers are rewriting routes, and importers are struggling with delays. It also says that for companies that can buy supplies, actually getting them is another challenge. For example, instead of using trucks that can’t cross the Russian border, cargo is now loaded onto ships in Italy or other South European ports, taken to Turkey, reloaded onto Turkish ships that deliver it through the Bosporus to the port of Novorossiysk, and picked up there.
US VENEZUELA SANCTIONS: LICENCE EXTENSION FOR CHEVRON
On 17 May, the Wall Street Journal reported that OFAC had extended a limited license held by Chevron that allows the oil company to maintain its operations in Venezuela and negotiate future business. This is said to be an attempt to encourage talks between the government of Venezuelan President Nicolás Maduro and the US-backed opposition to open a path to free and fair elections. However, the US did not expand the license to allow Chevron to drill for and market Venezuelan crude, as the company had hoped.
US FEDERAL COURT OPINION ON CRYPTOCURRENCIES AND SANCTIONS
On 18 May, the EU Sanctions blog reported on an opinion from the US District Court for the District of Columbia about a government case which alleges that an unnamed US citizen violated US sanctions by operating an online payment platform based in a sanctioned jurisdiction using virtual currency, and that the defendant used accounts at cryptocurrency exchanges. The opinion says that the defendant’s transmission of virtual currency to the sanctioned jurisdiction violated US sanctions.
ITALY: RESCUE CREW FACE 20 YEARS JAIL FOR SAVING MIGRANTS
On 17 May, EU Observer reported that 4 defendants who saved several hundred people from drowning in 3 different rescues in the Mediterranean Sea now risk lengthy jail time in Italy. They will soon be facing a judge in Sicily for having worked on the impounded civil rescue boat Iuventa. They and 17 other people have been charged with facilitating unauthorised entry, a criminal act outlined in Italian immigration law.
BREXIT: UK RETAIL BUSINESSES LOST £414 MILLION LAST YEAR BECAUSE OF CROSS-BORDER TAX COMPLEXITIES
On 18 May, the Direct Commerce website reported on the findings of new research which found that the stresses of navigating complex regulations post-Brexit continues to hold back growth for UK retailers and is causing significant anxiety for business leaders.
SOUTH AFRICA EXPORTED OVER $188 MILLION WORTH OF MILITARY HARDWARE IN 2021
On 13 May, Defence Web reported that the South African defence industry exported R3.3 billion worth of weapons, ammunition and military equipment to 67 countries around the world last year. This included 4 unspecified vessels worth R208 million to Djibouti, plus R100 million worth of unspecified ‘weapons’. Ammunition, bombs and rockets accounted for a significant portion of South African defence exports in 2021.
SPANISH RULING ON THE VAT TREATMENT OF THE SALE OF NFT
On 17 May, an article from Hogan Lovells reported on the first Spanish Tax Authority ruling on the sale of NFT that grant the buyer a right to use an underlying digital artwork. It concluded that the sale of NFT should be considered as a supply of “electronically supplied services” and, if the place of supply is deemed to be the Spanish territory, these sales are subject to Spanish VAT.
On 18 May, Sandler Travis Rosenberg reported that a new US federal advisory warns of attempts by North Korean information technology workers to obtain employment, including in the field of business, while posing as non-North Korean nationals.
On 18 May, OCCRP reported that, about 2 weeks before Russia’s invasion of Ukraine, Portugal thwarted Roman Abramovich’s intention to sell a lavish mansion in the Algarve worth nearly $10.5 million. So far the mansion is the only property of the Russian oligarch spotted by Portuguese authorities.
BRIDES ARE CAMBODIA’S LATEST ILLICIT EXPORT TO CHINA
On 18 May, OCCRP said that a new report that claimed that the latest commodity being trafficked out of SE Asia and on to lucrative markets in China is neither wildlife nor drugs or arms, but rather brides. It is said that the number of women and girls traveling from Cambodia to China for forced or arranged marriages has surged since 2016, and experienced a further spike since the beginning of the COVID-19 pandemic in the first quarter of 2020.
On 17 May, Jurist reported that the DoJ had charged a 55-year-old Venezuelan cardiologist with attempted computer intrusions and conspiracy to commit computer intrusions. He allegedly taught himself programming and designed ransomware tools.
BELGIAN COURT REFUSES TO EXTRADITE SPANISH RAPPER FOR INSULTING THE SPANISH ROYAL FAMILY AND PRAISING ETA
On 17 May, Jurist reported that the court refused the application to extradite José Miguel Arenas Beltrán to Spain. Known by his stage name Valtònyc, he was due to serve a 3½-year prison sentence for insulting the Spanish Royal Family and praising the Basque terrorist group Euskadi Ta Askatasuna (ETA). The ruling comes after a 4-year legal battle between Arenas and Belgian prosecutors. However, Belgian prosecutors said that the court’s ruling can still be appealed to the Court of Cassation.
UK: NATIONAL ACTION – MAN GUILTY OF FASCIST GROUP MEMBERSHIP
On 17 May, the BBC reported that a man has been found guilty of being a member of National Action (NA), after it was banned in December 2016. The court heard NA had not disbanded after its ban, but morphed into regional factions.
PLIGHT OF AFGHAN JUDGES IN SPOTLIGHT AS COURT HEARS UK ASYLUM CHALLENGE
On 17 May, an article in the Guardian reported on a High Court in which alleged inconsistencies in the way the Home Office and Foreign Office process asylum applications from vulnerable judges in hiding in Afghanistan are being challenged. Lawyers have been representing 28 Afghan judges applying for asylum. They are just a small proportion of 800 or so judges who worked in Afghanistan before the Taliban takeover last year, more than a quarter of whom are female. They say inconsistencies on the part of the UK’s approach are unreasonable, incoherent and arbitrary. Of the 28 Afghan judges whose cases are being handled by the network of lawyers, only 1 of has made it to the UK. Nineteen are still in Afghanistan, and the rest are in third countries, such as Sweden and Pakistan. It notes that, of the 20,000 applications under the Afghan Relocation and Assistance Programme, just 7,000 have been processed in the past 6 months.
JAPANESE MAN BLOWS TOWN’S COVID RELIEF FUND AFTER IT APPEARED IN HIS ACCOUNT
On 18 May, the Guardian reported that a 24-year-old Japanese man who was mistakenly sent $358,000 in Covid-19 relief funds has admitted he gambled away the entire amount in the space of a fortnight. The town government of Abu, in western Japan, accidentally wired money intended for all 463 low-income households to his bank account.
RUSSIA PROPOSES NEW LAW TO SEIZE CONTROL OVER THE ASSETS OF FOREIGN COMPANIES
On 17 May, an article from Out-Law reported that the Russian parliament is currently in the process of considering a draft law that, if enacted, would allow the state to take control of the assets of foreign companies which since 24 February have suspended business in the country.
RUSSIA’S WAR ON UKRAINE: SANCTIONS TARGETING BELARUS
On 18 May, a briefing from the EU Parliament Research Service says that Belarus’s involvement in Russia’s invasion of Ukraine has triggered EU sanctions targeting over 700 individuals and 50 entities, as well as critical economic sectors and products in the country. The new measures, namely the trade bans on potassium chloride, have affected both the Belarusian economy and EU and global food supplies.
127 PEOPLE IN MALTA ARE FACING MONEY LAUNDERING CHARGES
On 17 May, Lovin Malta reported the answer to a parliamentary question – 127 people across 97 different cases have been charged with money laundering. However, the article says that conviction rates remain low, and that between 2018 and June 2021 the police charged 127 people with money laundering, managing to secure a conviction in 13 of those cases – all of which were secured in 2018.
MONEYVAL: ALBANIA FAILS TO IMPROVE IN FIGHT AGAINST MONEY LAUNDERING
On 18 May, Exit News referred to the 2021 annual report from MONEYVAL, saying that Albania has failed to make any improvement in regards to the prevention of money laundering, meaning the country remains on the grey list for yet another year. It is said that this finding echoed similar reports from the US State Department, Basel AML Index and EU Commission. Yet, it says, prosecutions and convictions for money laundering remain few and far between, particularly including any high-level individuals.
A cleverer person than me has produced the above mapping o the ownership of the $ 90 million yacht Tango seized by the FBI and the Spanish police on Mallorca in April. It is said that the US investigation established that the vessel is ultimately owned by the sanctioned oligarch Viktor Vekselberg who allegedly committed money laundering, fraud and sanctions circumvention by obfuscating its ownership and wiring money to shell companies which maintained his nexus to the yacht. The diagram is based on the affidavit provided by the DoJ.
CYPRUS LAUNCHES ONLINE BENEFICIAL OWNERSHIP REGISTER TO COMBAT MONEY LAUNDERING
On 16 May, International Investment reported that the Cyprus Securities and Exchange Commission has unveiled its new online platform for the Cyprus Beneficial Ownership Register of Express Trusts and Similar Legal Arrangements (CyTBOR) which will be accessible to trustees from 17 May and all involved parties from 17 June.
UK: THE SERIOUS ORGANISED CRIME & ANTI-CORRUPTION EVIDENCE (SOC ACE) RESEARCH PROGRAMME
The University of Birmingham SOC ACE research programme aims to help unlock the black box of political will for tackling organised crime, transnational corruption, kleptocracy and illicit finance through research that informs politically feasible, technically sound interventions and strategies. Funded by the Foreign, Commonwealth & Development Office, it is a new component in the Anti-Corruption Evidence (ACE) research programme, and initial funding is for an urgent scoping phase from 1 June 2021 to 31 March 2022. It has already produced a large number of review papers.
On 16 May, a report from Coindesk relayed claims that at Japan’s Liquid exchange, recently acquired by FTX, warnings were ignored, breaches unreported and employees berated and cursed at. FTX recently acquired it for an undisclosed price estimated to be somewhere between $140 million and $200 million. However, it is reported that former Liquid employees describe a chaotic workplace (even by crypto standards) with questionable security and compliance.
EU CONSIDERS BLACKLISTING UAE AFTER ‘DUBAI UNCOVERED’ LEAKS
On 17 May, OCCRP reported that, following revelations of how criminals, sanctioned Russian oligarchs, and corrupt officials are big property investors in Dubai, European Parliament members have suggested that the UAE should be blacklisted in the same manner as North Korea, Burkina Faso and Iran.
SOUTH KOREA: 5 PEOPLE INDICTED AFTER 10-YEAR INVESTIGATION INTO NORTH KOREAN BANK HACK
On 18 May, NK News reported that prosecutors have brought charges against 5 additional people they say colluded with North Korean spies and cyber criminals to hack the computer network of Nonghyup, South Korea’s one of the biggest financial and banking firms. 3 others were indicted and arrested between November and December last year, while one other person was indicted in June 2021.
IMPLICATIONS FOR THE US OF PROPOSED AND APPROVED CHANGES TO MEXICO’S ENERGY AND LITHIUM LAWS
On 18 May, Torres Trade Advisory published an article saying that an amendment of the Mining Law in Mexico establishes that lithium is of “public utility” and, therefore, it is forbidden to grant to private companies concessions, licences, or permits for the production of lithium. This reform also proposes that lithium will be “exploited” by a sort of state-owned company. The article considers the possible effects on the US of this and proposed changes to Mexico’s electricity industry law.
BEST PRACTICES FOR DETECTING AND PREVENTING EVASION OF THE NEW RUSSIA AND BELARUS SANCTIONS PROGRAMS
On 18 May, Torres Trade Advisory said that with new and evolving export controls due to the invasion of Ukraine, manufacturers, distributors, and exporters should be alert to potentially illicit export schemes and attempts to divert US-origin goods and technologies to unauthorised end-users. Compliance personnel must be vigilant in their reviews and provide client-facing staff and order-preparation workers the ability to identify suspicious shipments. It provides some best practices companies could adopt.
On 17 May, Windward carried an article saying that the lucrative black market for endangered and highly-regulated species incentivises distant-water fleets to follow aquatic animals into foreign exclusive economic zones (EEZ). It takes a closer look at a fishing vessel sailing under the Chinese flag. It has an extensive history of operating near the EEZ of Argentina and Uruguay.
In the latest TRACE podcast, Matt Sarnecki, a senior producer with the OCCRP and the director of a new documentary about the murders in Slovakia of Jan Kuciak and Martina Kušnírová. “The Killing of a Journalist” explores the public outrage, the criminal investigation that was based in part on leaked phone records, and the political fall-out from this tragedy.
US: ICE REMOVES BOSNIAN-HERZEGOVINIAN CONVICTED OF PROVIDING MATERIAL SUPPORT TO A TERRORIST
A news release from US Immigration & Customs Enforcement dated 19 April advised that ICE had removed a non-citizen to Bosnia-Herzegovina who was convicted for the offences of conspiracy to provide material support to a terrorist and providing material support to a terrorist. Ramiz Zijad Hodzic, 47, was flown from Chicago to Sarajevo. Having entered the US in 1998, he was arrested by the FBI in February 2015 for a weapons offence, and in November 2019 was convicted of conspiracy to provide material support to a terrorist and providing material support to a terrorist.
LIBYA GOES THROUGH A NEW EPISODE OF INTENSE STRUGGLE FOR POWER
On 18 May, TeleSUR carried an article saying that Abdulhamid Dbeiba’s Government of National Unity (GNU) has assessed that the recent serious clashes between militias, caused by the entry of parallel Prime Minister Fathi Bashaga in Tripoli, represent the greatest power struggle since Khalifa Haftar’s offensive in 2019.
ALGERIA MAKES FOR A RISKY PARTNER TO HELP SOLVE EUROPE’S ENERGY CRISIS
On 11 May, World Politics Review carried an article which started by saying that the war in Ukraine has exacerbated Europe’s energy crisis, leaving the EU desperately seeking alternative sources of supply to reduce its dependence on Russian fossil fuels. It says that Italy, Spain and Greece have separately turned to Algeria. The article considers potential problems in such arrangements, including the need for additional investments in capacity and export infrastructure, in which Algeria has not invested much in recent years due to soaring domestic consumption. There is also its ongoing tensions with neighbouring Morocco over Western Sahara, which Morocco occupies. Algeria has also had a long and close partnership with Russia, particularly with regard to big-ticket weapons purchases.
On 18 May, the Bank for International Settlements published a Working Paper saying that the market capitalisations of cryptocurrencies and related economic activities have grown phenomenally in recent years. While the role of retail investors has received much attention, it says that we know less about the role of financial intermediaries in this sector. How significant is the presence of traditional intermediaries such as banks and investment funds in crypto markets, and what motivates them to take on cryptocurrency exposures? And how important are novel intermediaries such as crypto exchanges? It found that the exposures of major banks to cryptocurrency exposures are currently still very modest, amounting to less than $200 million in 2020. It argues that an uneven regulatory treatment across banks and crypto exchanges and significant data gaps suggest that a proactive, holistic and forward-looking approach to regulating and overseeing cryptocurrency markets is needed.
US: TOP MONEY LAUNDERER FOR GHANA-BASED CRIMINAL ENTERPRISE SENTENCED TO 9 YEARS
A news release from US DoJ on 18 May announced that Fred Asante, 37, was sentenced to 108 months for his role as the top US-based money launderer for a criminal enterprise based in Ghana that engaged in fraud schemes that stole tens of millions of dollars from victims across the US. These fraud schemes included business email compromises, romance scams targeting elderly victims, and fraud schemes related to the COVID-19 pandemic. He was also sentenced to 3 years of supervised release and ordered to pay forfeiture in the amount of $647,488 and restitution in the amount of $2,292,486.71. His co-defendant, Lord Aning, was previously sentenced to 2 years in prison on 28 February.
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