OTHER THINGS YOU MAY HAVE MISSED – AUGUST 3

3 AUGUST 2022

UK: GAMBLING COMMISSION FINES LeoVegas £1.3 MILLION FOR FAILINGS INCLUDING IN AML

On 3 August, iGB reported that the Gambling Commission has ordered LeoVegas to pay a fine of £1.3 million after identifying a series of failings, many related to setting triggers too high between October 2019 and October 2020.  AML failures included setting financial triggers for AML reviews too high.

https://igamingbusiness.com/legal-compliance/gambling-commission-fines-leovegas

US: ALIEN TORT STATUTE – RECENT SUPREME COURT DECISIONS HAVE ERODED THE EFFECTIVENESS OF THE STATUTE IN ADDRESSING HUMAN RIGHTS VIOLATIONS, ESPECIALLY FOR HARM INFLICTED ABROAD

A post on the Transnational Law Blog on 1 August explains that the Statute gives federal courts jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the US, and dates from 1798.  It says that as the law was used against US and foreign officials as well as corporations’ opposition to it by powerful interests grew, with the latest decision in 2021 that underlined the presumption against extraterritoriality.  Historically, the most commonly alleged international law violations brought under the statute are torture, deprivation of liberty, and cruel, inhumane and degrading treatment.  Despite decisions limiting its use, the post says that the statute is still part of the toolbox to address human rights violations against non-US nationals, but that barring legislative amendment its usefulness in transnational litigation has been severely undercut by the restrictive reading of the statute’s territorial reach.

https://tlblog.org/has-the-alien-tort-statute-made-a-difference

US: FEDERAL COURT REJECTS SERVICE BY EMAIL ON CHINESE COMPANIES

On 2 August, a post on the Transnational Law Blog reported that a court in New York had rejected service by email on Chinese companies in a trademark and copyright infringement case.  China and the US are parties to the Hague Service Convention, but the court reasoned that the Convention precludes service by email, particularly given China’s objection to service by “postal channels”.

https://tlblog.org/sdny-rejects-service-by-email-on-chinese-companies

HALTING THE KLEPTOCRATIC CAPTURE OF LOCAL GOVERNMENT IN NIGERIA

On 18 July, a paper from the Carnegie Endowment for International Peace argues that, despite their hard-hitting rhetoric, Nigeria’s political leaders have done little to rein in local government corruption and the governance failures it causes.  It explains that the country’s government consists of 3 layers: the federal government in Abuja, 36 state governments, and 774 local governments.  It says that its local governments are disproportionately important; if they functioned well, they would be best positioned to meet people’s basic needs and to build their resilience to cope with everyday challenges – but local government corruption is quietly hobbling Nigeria, Africa’s largest economy and most populous nation.  It argues that local government in Nigeria is fundamentally corrupt, flawed by design, and not fit for purpose.  While is not the only reason for local government dysfunction, but it is the root cause.  Corruption takes various forms: contract fraud, bribery and kickbacks, ghost workers, “security vote” slush funds, favouritism, embezzlement, and even some ostensibly legal activities and kleptocratic kleptocratic capture of local government is orchestrated by governors, tolerated by state legislators, and perpetuated by its local beneficiaries.

https://carnegieendowment.org/files/Page_Wando_NigeriaCorruption_final.pdf

ISLE OF MAN: RUSSIA GENERAL TRADE LICENCE – AMENDMENT

On 3 August, the Isle of Man advised of an amendment which enables the provision of insurance and reinsurance to a person connected with Russia in relation to the matters covered by the Licence, subject to the wider restrictions and conditions of the licence.

https://www.gov.im/news/2022/aug/03/financial-sanctions-russia-general-trade-licence-amendment/

PHILIPPINES: PROLIFERATION OF FAKE FERTILISER

On 3 August, the Manila Times reported that the Department of Agriculture is investigating the proliferation of fake fertiliser in the country.  Farmers were advised to check every detail, including the marking or label of fertilisers they buy from suppliers.

https://www.manilatimes.net/2022/08/03/news/national/da-probes-proliferation-of-fake-fertilizer/1853199

US ADDS 25 AIRBUS AIRCRAFT OPERATED BY RUSSIAN AIRLINES TO EXPORT VIOLATION LIST

On 2 August, Reuters reported that the Commerce will add 25 Airbus airplanes operated by Russian airlines believed to violate US export controls which rules cover US-made aircraft as well as foreign-made ones that have least 25% US-origin content.  These 25 the first foreign aircraft added to the export control list.  The Airbuses are operated by Ural Airlines, S7 Airlines, Red Wings, Yamal Airlines, Nordwind, and I-Fly, and the controls aim to deny the airlines access to refuelling, spare parts and maintenance services.

https://www.reuters.com/business/aerospace-defense/us-adds-25-airbus-planes-operated-by-russian-airlines-export-violation-list-2022-08-02/

PHILIPPINE POLICE LAUNCH MANHUNT FOR BREN eSPORTS OWNER AFTER BUSTING MAJOR METH SMUGGLING OPERATION

On 3 August, PC Gamer and others reported that Bernard Chong maintains his innocence, but authorities urge him to turn himself in.  He is currently wanted due to his ties to Fortuneyield Cargo Services Corporation (FCS), which is accused of trying to smuggle about 276 kg of meth through Manila International Container Port 3 years ago, and is alleged to be one of the owners of Fortuneyield Cargo Services.

https://www.pcgamer.com/philippine-police-launch-manhunt-for-bren-esports-owner-after-busting-major-meth-smuggling-operation/

INDIA: ARRESTED BROTHERS ‘SMUGGLED GUNS FROM EUROPE FOR OVER 10 YEARS’

On 3 August, The Print reported that one of the brothers and his wife were intercepted with consignment of 45 guns at Delhi airport in July, while the elder brother Manjit Singh was arrested a week later. They had allegedly been smuggling guns into the country for over a decade through air, sea, and postal routes

https://theprint.in/india/sea-air-postal-routes-arrested-gurugram-brothers-smuggled-guns-from-europe-for-over-10-yrs/1065577/

AUSTRALIA: PASSENGER FINED NEARLY $2,000 AFTER DETECTOR DOG FINDS SMUGGLED McMUFFINS IN LUGGAGE

On 2 August, CBS in Iowa reported that the Australian Government announced in a news release that an unidentified man flying into the Darwin Airport from Indonesia failed to disclose he was bringing some food items with him – the contraband includes 2 sausage, egg, and cheese McMuffins, 2 McDonald’s pancakes, and a ham croissant.

https://cbs2iowa.com/news/offbeat/passenger-fined-nearly-2k-after-dog-finds-smuggled-mcmuffins-in-luggage-mcdonalds-australia-darwin-airport-flight-airplane-zinta-foot-mouth-disease-fmd

https://minister.agriculture.gov.au/watt/media-releases/darwin-detector-dog-zinta-mcmuffins

MEXICO TO INVESTIGATE FORMER PRESIDENT PENA NIETO’S FINANCES

On 3 August, Deutsche Welle reported that Enrique Pena Nieto, who was in power from 2012 to 2018, has been accused of several alleged crimes including money laundering.

https://www.dw.com/en/mexico-to-investigate-former-president-pena-nietos-finances/a-62690017

UK IS ‘CARD FRAUD CAPITAL OF EUROPE’, WARNS TOP THINK TANK

On 3 August, City AM reported that the UK suffers on average 134 frauds per 1,000 people with scammers making off with £8,833 per 1,000 people, the Social Market Foundation (SMF) found in analysis of European central bank data.  Britons are almost 9 times more likely to be a victim of fraud than Germans.

https://www.cityam.com/uk-is-card-fraud-capital-of-europe-warns-top-think-tank/

UK: PUBLIC SECTOR FRAUD AUTHORITY HAS BEEN LAUNCHED

On 3 August, the Cabinet Office announced that a new team at the heart of government has been told to hunt down fraud committed against the public purse, with a £180 million target set for the first 12 months.  The Public Sector Fraud Authority will be made up of counter fraud and data experts, using best-in-class tools and advanced analytics to help departments and public bodies protect public money. 

https://www.gov.uk/government/news/government-launches-fraud-squad

OLIGARCH’S CASE AGAINST SWISS ART DEALER CONTINUES IN GENEVA

On 2 August, OCCRP reported that a Swiss court has decided to continue investigating the case Russian oligarch Dmitry Rybolovlev has been pursuing against a Swiss art dealer, Yves Bouvier, who charged him obscene mark-ups on 38 works of art and this way allegedly defrauded him of $1.1billion over a period of 11 years.  Rybolovlev has pursued legal action against Bouvier in 9 cases at courts in Singapore, New York, Monaco, and Hong Kong – all of which were closed or concluded in Bouvier’s favour.

https://www.occrp.org/en/daily/16636-oligarch-s-case-against-swiss-art-dealer-continues-in-geneva

FIFA AND UNODC WRAP UP YEAR-LONG GLOBAL PROGRAMME TO TACKLE MATCH MANIPULATION IN FOOTBALL

On 3 August, a news release from the UN Information Service said that FIFA and the UN Office on Drugs and Crime (UNODC) concluded its first-ever international integrity education programme, designed to support all 211 member associations in their efforts to tackle match manipulation in football. Since its launch in March 2021, some 400-plus representatives from governments and football associations across the globe took part in 29 workshops which covered several key topics, including establishing an integrity initiative, reporting mechanisms, competition protection, cooperation between and among member associations and law enforcement.

https://unis.unvienna.org/unis/en/pressrels/2022/uniscp1149.html

UK: NITROUS OXIDE – LAUGHING GAS DEALER CAUGHT WITH 25,000 CYLINDERS JAILED

On 2 August, the BBC reported that a man has been jailed for more than 2 years after he was caught with more than 25,000 cannisters of laughing gas.  The drug, also known as nos, comes in small metal vials often seen littering the streets.  The police explained that it is illegal, in England and Wales, for anyone to sell nitrous oxide to people under-18, if they think they are likely to be inhaling it.

https://www.bbc.com/news/uk-wales-62398337

LATIN AMERICA TO BE A KEY PLAYER AS GLOBAL DEMAND FOR LITHIUM SKYROCKETS

An analysis from Control Risks on 2 August says that, as de-carbonisation initiatives gain momentum worldwide, lithium has become a new mining frontier, even called “white gold”.  It is the main component in electrical vehicles batteries and is also used in many other electronic devices.  According to data by the US Geological Survey, Australia is the largest producer.  However, Latin America holds a significant share of the world’s lithium reserves, and this makes the region a potential mining hub for the next several years.  The analysis warns that, from a risk management perspective, successful investors in the region will likely be those who implement comprehensive pre-investment risk (including ESG) assessments and continuous monitoring strategies based on solid local knowledge.

https://www.controlrisks.com/our-thinking/insights/latin-america-to-be-a-key-player-as-global-demand-for-lithium-skyrockets

CHINESE GIANTS COMMITTING FRAUD IN INDIA? WHY XIAOMI, VIVO, OPPO, HUAWEI ARE UNDER FIRE

An article in The Print on 1 August set out to explain why smartphone leaders like Xiaomi, Vivo, Oppo, and Huawei, besides smaller fintech players, are under the scanner of various central agencies in India for a laundry list of alleged offences.  After banning more than 200 Chinese apps since June 2020, the Modi government is targeting several Chinese companies, from Xiaomi, Vivo, Oppo, and Huawei to smaller fintech firms.

https://theprint.in/india/chinese-giants-committing-fraud-in-india-why-xiaomi-vivo-oppo-huawei-are-under-fire/1054046/

FRANCE: FIU AML/CFT REPORT

On 27 July, the French FIU TRACFIN published its 2021 report.

https://www.economie.gouv.fr/tracfin/tracfin-2021-activite-et-analyse

UPDATE TO UKCA MARKING TRANSITION

On 2 August, a post from Baker McKenzie provided an update on the transition to the new UK Conformity Assessed (UKCA) regime that will replace the EU CE marking regime for the Great Britain market.

https://www.internationaltradecomplianceupdate.com/2022/08/02/update-to-ukca-marking-transition/

US REPORT: CORRUPTION AND WEAK JUDICIAL SYSTEM WEIGH ON PANAMA’S INVESTMENT CLIMATE

On 3 August, La Estrella de Panama reported that a US State Department in a report on Panama’s investment climate for 2022, while praising the country for having one of the best growth rates in the region, warned that Panama’s structural deficiencies weigh on its investment climate.  The report also highlights Panama’s presence on the FATF grey list since June 2019.

https://www.laestrella.com.pa/economia/220803/corrupcion-sistema-judicial-debil-lastran

CHINA SUSPENDS FOOD IMPORTS FROM TAIWAN AND THE EXPORT OF NATURAL SAND

On 3 August, EU Sanctions blog reported that, in the wake of US House of Representatives Speaker Nancy Pelosi’s visit to the country, China had blocked imports of 2,066 food products from Taiwan, as well as imports of sand.

https://www.europeansanctions.com/2022/08/china-suspends-food-imports-from-taiwan-export-of-natural-sand/

RUSSIA WANTS VIKTOR BOUT BACK, BADLY – THE QUESTION IS: WHY?

On 30 July, the Washington Post posed this question about a man who is serving a 25-year term after building a gun-smuggling empire that spanned the globe.  There is little doubt that Bout would be the top prize for Russian officials in any prisoner swap, who have protested his treatment since his 2008 arrest in Thailand after a DEA sting.  It is said that Bout could never have operated such a large smuggling business without government protection, but that he never spoke about it, and “The Russian government is eager to retrieve him so that it stays that way”.

https://www.washingtonpost.com/world/2022/07/29/victor-bout-gru-sechin/

US: AMENDMENT OF RUSSIA SANCTIONS RUSSIA-RELATED GENERAL LICENSES WHICH WERE ISSUED ON 2 AUGUST

On 3 August, OFAC announced that the amendment to Russia-related General Licenses 40A, 47, and 48 is merely to clarify that the licenses apply to Joint Stock Company State Transportation Leasing Company.   Licenses as issued did not include the term ‘Leasing’ in the company’s name.  They are otherwise unchanged.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220803

PODCAST: “BLOOD AND OIL: MOHAMMED BIN SALMAN’S RUTHLESS QUEST FOR GLOBAL POWER”

In the latest TRACE podcast, Bradley Hope discusses his book about the rise of Crown Prince Mohammed Bin Salman and key milestones like the “Ritz Carlton Prison”, the kidnapping of Prime Minister Hariri of Lebanon and the murder of Jamal Khashoggi.  He also discusses some of MBS’s modernisation efforts and what the Kingdom might look like if he hadn’t risen to a position of power.

https://www.traceinternational.org/resources-podcast

SWITZERLAND HAS BANNED BUYING, IMPORTING OR TRANSPORTING GOLD AND GOLD PRODUCTS FROM RUSSIA

On 3 August, the EU Sanctions blog reported that the Swiss had fallen in line with the EU 7th sanctions package.  A post also mentions that there are 2 new exceptions from Russia sanctions with respect to agricultural products and oil supplies to third countries, an asset freeze has been imposed on Sberbank, and that, as of 28 July, the EU and Swiss sanctions lists are aligned.

https://www.europeansanctions.com/2022/08/switzerland-adopts-eus-russian-gold-ban/

REPORT TO US CONGRESS ON IRAN AND NUCLEAR WEAPONS

On 3 August, USNI News reported that, on 25 July, a Congressional Research Service In Focus report was concerned with Iran and Nuclear Weapons Production.

https://news.usni.org/2022/08/03/report-to-congress-on-iran-and-nuclear-weapons

THE NEW FACE OF CORPORATE ESPIONAGE AND WHAT CAN BE DONE ABOUT IT

On 3 August, this article from US law firm Troutman Pepper starts by saying that the word espionage brings to mind secret agents stealing classified information from tightly-guarded buildings, barely escaping with huge explosions in the background.  While that’s one type of espionage, there’s another, much more common type happening at nearly every company in the world.  Modern-day corporate espionage is the infiltration or exfiltration of data, documents, and information belonging to one company, individual, or state actor for use by another company, individual, or state actor.  It explains the internal threats from insiders etc, and then outlines 3 key steps companies should take to prevent both exfiltration and infiltration of confidential company materials.

https://www.jdsupra.com/legalnews/the-new-face-of-corporate-espionage-and-8424742/

LEBANON PROSECUTOR ALLOWS DEPARTURE OF SHIP CARRYING ALLEGEDLY STOLEN UKRAINIAN GRAIN

On 3 August, Insurance Marine News reported that Lebanon’s top prosecutor has lifted a seizure order on Syrian-flag cargo ship Laodicea, which is accused of carrying flour and barley stolen from Ukraine by Russia, but the ship remained unable to sail due to another seizure order issued by a judge in Tripoli, where the ship is docked.  The vessel had docked in Tripoli, apparently having been diverted from Syria because it could get a higher price for its cargo in Lebanon, where there is a serious bread shortage.

https://insurancemarinenews.com/insurance-marine-news/lebanon-prosecutor-allows-departure-of-laodicea-but-a-second-seizure-order-still-in-place/

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US: FRAUD CASES ARE BECOMING MORE COMPLEX

On 3 August, an article from the Society of Corporate Compliance and Ethics in the US says that the Association of Certified Fraud Examiners (ACFE) has been publishing a study on fraud every 2 years since 1996. This year’s edition is said to be filled with plenty of interesting data culled from 2,110 fraud cases submitted by fraud examiners from investigations conducted between January 2020 and September 2021 – and is useful for compliance professionals, particularly in identifying trends that should be considered in conducting compliance risk assessments.  The article comments on the increasing complexity of fraud cases over the years.  The 2022 report indicates 86% of cases involve asset misappropriation, 50% involve corruption, and 9% financial statement fraud; with the big jump in corruption, but without any decrease in asset misappropriation.  The article also notes that, in 2022, single-perpetrator schemes are down to 42%, meaning that schemes involving collusion are now more common than those involving one person — and by a pretty large margin.

https://compliancecosmos.org/fraud-cases-are-becoming-more-complex?authkey=4438d1ecce88639a5ee2d6cb1cfea2a13291a876211a0fe7053c93e995e60f08

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SWITZERLAND HAS BANNED BUYING, IMPORTING OR TRANSPORTING GOLD AND GOLD PRODUCTS FROM RUSSIA

On 3 August, the EU Sanctions blog reported that the Swiss had fallen in line with the EU 7th sanctions package.  A post also mentions that there are 2 new exceptions from Russia sanctions with respect to agricultural products and oil supplies to third countries, an asset freeze has been imposed on Sberbank, and that, as of 28 July, the EU and Swiss sanctions lists are aligned.

https://www.europeansanctions.com/2022/08/switzerland-adopts-eus-russian-gold-ban/

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AMERICAN GAMING ASSOCIATION UPDATED AML BEST PRACTICES

A news release from the AGA on 28 July advised that the AGA had released the third edition of its best practices guidance, last updated in 2019. 

https://www.americangaming.org/new/aga-releases-updated-anti-money-laundering-best-practices/

https://www.americangaming.org/wp-content/uploads/2022/07/AGA-AML-Best-Practices-Guide-2022.pdf

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BAIN & CO BARRED FROM UK GOVERNMENT CONTRACTS OVER ‘GRAVE MISCONDUCT’ IN SOUTH AFRICA

On 3 August, the Guardian reported that global management consultancy Bain & Company has been barred from tendering for UK government contracts for 3 years after its “grave professional misconduct” in state corruption in South Africa.

https://www.theguardian.com/business/2022/aug/03/bain-and-co-barred-from-uk-government-contracts-over-grave-misconduct-in-south-africa

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US ASKS ARGENTINA TO SEIZE VENEZUELAN JUMBO JET LINKED TO IRAN

On 3 August, the Jerusalem Post reported that the unannounced arrival of the plane in Argentina in June has sparked weeks of intrigue as well as concern within the Argentine government over its ties to Iran and Venezuela.  The confiscation request followed the unsealing of a July 19 warrant for the aircraft’s seizure in a US federal court, which alleged that the aircraft could be confiscated because it violated export control laws, The DoJ argues that the US-origin Boeing 747-300 aircraft is subject to sanctions as its sale from Iran’s Mahan Air to Emtrasur last year, part of the Venezuelan Consortium of Aeronautical Industries and Air Services (Conviasa), violates US export laws.  Both companies are sanctioned by the US for alleged collaboration with terrorist organisations.

https://www.jpost.com/international/article-713784

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