25 AUGUST 2022
TEXAS: LAW ENFORCEMENT ARREST 5 MORE INDIVIDUALS TIED TO ALLEGED CATALYTIC CONVERTER THEFT RING
On 25 August, a news release from US Immigration & Customs Enforcement advised the arrest of 5 individuals for their alleged roles in a large-scale catalytic converter theft ring that is suspected of fencing stolen catalytic converters for the 3 individuals charged with murdering a Sheriff’s Office Deputy. It says that organised theft groups frequently target catalytic converters for the precious metals that they contain such as palladium, platinum, and rhodium. The precious metals are extremely valuable, and a worldwide supply shortage has created an increased demand for them further driving up the value.
JAPAN: MITSUBISHI WILL PARTICIPATE IN NEW SAKHALIN-2 GAS PROJECT WITH RUSSIA
On 25 August, Nikkei Asia reported that the Mitsubishi Corporation is set to issue a notice that it will participate in the new operating company for the Sakhalin-2 project in the Russian Far East. Russia had transferred the operation to a new company, thus forcing Japanese partners to decide if they would continue to participate. The other partner, Mitsui, had already announced continued involvement, despite the Ukraine situation.
EQUATORIAL GUINEA DETAINS A VLCC ACCUSED OF OIL THEFT BY NIGERIA
On 18 August, Dryad Global reported that the 30,000 tonne VLCC was detained by the navy of Equatorial Guinea while the dispute is being investigated. The tanker was also accused of 2 offences; entering Equatorial Guinea waters without prior authorisation and navigating without an identifying flag. It is said that the Marshall Islands’ flag vessel, according to Nigerian authorities, was not believed to have permits from the Nigerian National Petroleum Corporation (NNPC), nor other valid documents to be at the Nigerian offshore field but, despite that, was believed to be loading oil.
GHANA HAS DEVELOPED A MARITIME POLICY – DESTINED TO FAIL?
On 20 August, an article from Dryad Global explained that a recent paper examined the National Integrated Maritime Strategy published by Ghana – with a warning that it is destined for failure without adequate political will from the highest echelons of government and without the necessary resources (financial, human resource, equipment and technology) to support strategies and actions plans. That said, the vision of the strategy is said to be to ensure that by 2040, Ghana’s maritime space will be safe and secure with a thriving blue economy that benefits every Ghanaian.
REPORT: NFT AND FINANCIAL CRIME
This report from Elliptic says that data-driven analysis into the prevalence of money laundering, terrorist financing, scams and sanctioned entities finds that these financial crimes represent a small portion of overall NFT- related trading activity. It says that although crime represents a small proportion of overall NFT trading, it has a disproportionate impact on the industry’s reputation and undermines the quality of experience of legitimate users. It provides red flag indicators and recommendations to improve the safety, security and enjoyment of partaking in this rapidly growing industry.
NFT ARE INCREASINGLY TARGETED BY CRIMINALS
On 24 August, the Wall Street Journal reported that a new report from Elliptic said that NFT are increasingly sought by criminals looking to either steal them or use them to launder illicit gains. Since 2017, over $8 million in proceeds from illicit activities has been laundered through platforms that facilitate the creation, buying and selling of NFT, the report said.
SEC WHISTLEBLOWER AWARDS PROGRAM PROBLEM
On 25 August, the Wall Street Journal reported that, over the past several years, the SEC whistleblower awards program has been championed by lawyers and politicians for offering powerful incentives to tipsters to come to the regulator with evidence of wrongdoing. A new study, however, finds that almost a quarter of the SEC’s whistleblower awards have gone to law firms with attorneys who have close connections to the regulator, potentially deterring other whistleblowers from coming forward. The paper from a law professor at the University of Kansas School of Law argues that a disproportionate share of awards is going to a concentrated group of “well-connected, repeat players” who may be using their connections to help their clients’ claims. That could ultimately deter potential whistleblowers from coming forward, according to the paper.
US FINALISES BAN ON RARE METAL FROM NORTH KOREA, RUSSIA AND CHINA
On 25 August, NK Pro reported that the US has finalised a ban on imports of the rare element tantalum from North Korea, China, Russia and Iran in a bid to reduce the US dependence on foreign suppliers. The decision is effective immediately and finalises a previous, temporary rule restricting tantalum imports enacted in 2020. The US argues that restricting imports of the rare chemical element is necessary for national security reasons, as it is used in a range of sensitive, defence-related technology such high-quality capacitors and jet engines.
US SMUGGLER CAUGHT WITH 60 SNAKES, LIZARDS, AND REPTILES IN HIS PANTS
On 25 August, CNBC reported that, as part of a $750,000 reptile smuggling scheme, a man tried to sneak snakes and lizards into the US by hiding them in his trousers. In February 2022, Jose Manuel Perez was arrested at a Port of Entry from Mexico with 60 reptiles on his person and hidden in his clothing.
PAKISTAN’S TECHNICAL COMPLIANCE AML/CFT RATING HAS BEEN UPGRADED
On 25 August, MM News reported that the FATF-style regional body APG has found that Pakistan has made good progress in addressing the technical compliance deficiencies identified in its mutual evaluation report and has been re-rated on Compliant with FATF Recommendation R.33, Largely Compliant with R.28 and R.37 and Partially Compliant with R.38.
PAPUA NEW GUINEA FIU PROBES 5,000 MONEY-LAUNDERING CASES – BUT NO PROSECUTIONS
On 25 August, the Asia Pacific Report said that the Bank of Papua New Guinea’s Financial Analysis and Supervision Unit has reported more than 5,000 cases as a result of AML/CFT investigations still awaiting prosecution. It was said that said the unit had identified persons of interest and companies and referred them to the Police Fraud Unit for further investigation and prosecution, but that none have yet been prosecuted.
OPIUM POPPY CULTIVATION IN AFGHANISTAN APPEARS TO BE DECLINING — AT A COST
On 23 August, an article from the Wilson Center said that Afghanistan is the world’s largest producer of opium. Its production grew during the years when US and coalition forces were present, despite the US spending more than $8 billion to eradicate the crop. In April, the Taliban issued a decree that banned poppy cultivation in Afghanistan and the Taliban campaign to eradicate poppy cultivation poses significant challenges for millions of impoverished farmers and day laborers that rely on their earnings from the profitable crop.
CHINA: CUSTOMS SHOULD BE ON ALERT TO IMPORTED WASTE
On 25 August, China Daily reported that customs authorities recently returned 20 tons of solid waste that was illegally being shipped into the country. China strengthened its regulation on solid waste imports in 2017, and continued to tighten it until introducing a total ban on 1 January 2021. However, the case shows that foreign rubbish continues to enter China illegally; lured by profits, some companies try to disguise the waste as “goods” or “resources”.
PORTUGAL FIGHTING BACK AGAINST RISING TIDE OF COCAINE
On 25 August, Insight Crime reported that Portugal has seized records amount of cocaine from South America in recent months, underscoring how the country is regaining its place as a significant drug entry point and transit hub. Recently, on 8 August, Portuguese police seized over 1.1 tonnes of cocaine near the Azores from a sailing boat that had crossed the Atlantic. It includes an interview with the head of Portugal’s National Unit for the Fight Against Drug Trafficking (Unidade Nacional de Combate ao Tráfico de Estupefacientes).
CAN NEW US REGULATIONS STEM FIREARMS FLOWING TO LATIN AMERICA?
On 24 August, Insight Crime asked this question, saying that new legislation in the US seeks to close several loopholes that have helped arms trafficking to proliferate. But can it really help reduce the number of illegal weapons flowing south to Mexico and the rest of Latin America and the Caribbean? The article explores 3 potential developments from these new laws and outlines what may be the most significant remaining challenges to stem arms trafficking to Latin America and the Caribbean.
EL SALVADOR EXTENDS STATE OF EMERGENCY TO FIGHT ORGANISED CRIME
On 23 August, OCCRP reported that El Salvador has detained more than 50,000 suspected members of organised crime groups since a state of emergency was declared 5 months ago, and has now extended it until 20 September 20. The suspects are believed to belong to the 4 biggest gangs operating out of El Salvador.
OFFICIAL SAYS NEARLY 10,000 CRYPTOCURRENCY MINING DEVICES SEIZED IN IRAN
On 22 August, Rferl reported that authorities are said to have seized 9,404 illegal cryptocurrency mining devices in Iran since the end of March. It is said that the mining devices were discovered by inspectors in different districts of the Iranian capital. In recent years, Iranian authorities have regularly announced the discovery of illegal cryptocurrency mining devices in different parts of the country.
US: NEW RULE MODERNISES FIREARM DEFINITIONS AND ADDRESSES ‘GHOST GUN’ PROLIFERATION
A news release from US DoJ on 24 August advised that the “Frame or Receiver” Final Rule has gone into effect. The new rule modernises the definition of a firearm and makes clear that parts kits that are readily convertible to functional weapons, or functional “frames” or “receivers” of weapons, are subject to the same regulations as traditional firearms. This rule will help curb the proliferation of “ghost guns,” which are often assembled from kits, do not contain serial numbers, and are sold without background checks, making them difficult to trace and easy to acquire by criminals.
THE CHANGES IN CRUDE TANKER DEMAND PRIOR TO AND AFTER THE UKRAINE INVASION ON THE MOST-AFFECTED TRADE ROUTES AND ON THE GLOBAL SHIPPING STAGE
On 25 August, Vortexa published an insight seeking to understand whether the current volatility in the tanker market relies solely upon the developments revolving around the Russian-EU relationship or whether there are other key factors at play. It says that the Russian-Ukranian conflict managed to shift the crude tanker trade patterns, however Chinese purchasing activity is and will remain a barometer for tanker recovery.
HOW BIG IS EUROPE’S CRUDE OIL DEPENDENCY ON RUSSIA?
On 23 August, an article from Vortexa posed this question and suggests 8% to 24% being reasonable, depending on whether Russia-marketed seaborne crude is considered (sanctions approach) or whether all crude dependent on Russian infrastructure is included (real political/energy risk).
SOUTH AFRICA: ANTI-BRIBERY: WITHOUT PROPER DUE DILIGENCE, YOU CAN BE HELD LIABLE FOR THIRD-PARTY CORRUPTION
On 23 August, ENSafrica published an article saying that the business environment requires significant reliance on external partners. This, however, can expose you to corrupt activity by these third parties, for which your organisation could be held liable without a proper due diligence process in place. It stresses the importance of conducting due diligence on third parties – athird-party due diligence process (TPDD process).
EU COURT: SHIPS CARRYING OUT SEARCH AND RESCUE ACTIVITIES ARE NOT SUBJECT TO DETENTION BY PORT STATES SOLELY DUE TO OVERCROWDING
On 24 August, an article from Ganado Advocates in Malta was concerned with a decision of the Grand Chamber of the Court of Justice in 2 joined cases. These cases followed a request by the Regional Administrative Court for Sicily in relation to EU Directive 2009/16 on Port State Control and the rescue operations for migrants undertaken by Sea Watch.
USED COOKING OIL: THE JOURNEY FROM FRYERS TO FUEL
On 25 August, an article from Freightwaves says that the oil used to cook your favourite crinkle-cut fries or fried chicken could be on a path to later fuel vehicles. But, it asks, how does it get there? Used cooking oil is one of 14 different types of feedstocks the company covered which uses to produce biodiesel and renewable diesel. It comments that, as the demand for biofuels such as biodiesel have increased drastically, there’s much more demand for used cooking oil, and the cost of used cooking oil has also gone up – making it more expensive than new cooking oil.
OFAC: NEW IRAN GENERAL LICENSE RE EDUCATION SERVICES AND SOFTWARE
On 25 August, OFAC advised that General License M2 authorising the exportation of certain graduate level educational services and software. An updated related FAQ 853 was also issued on 25 August.
BROKER-DEALER SETTLES FINRA CHARGES FOR AML SUPERVISORY AND MARKET ACCESS FAILURES
On 24 August, Fried Frank reported that a broker-dealer, ViewTrade Securities Inc, had settled charges for failing to maintain written AML policies reasonably designed to detect suspicious transactions, as well as related supervisory failures. The settlement included a $250,000 civil monetary penalty and undertakings to retain a third-party consultant to ensure compliance with federal AML and securities laws, which it cannot terminate without FINRA’s permission.
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