On 27 October, a report from Global Financial Integrity says that China is unique in that the government itself engages in certain types of criminal activity — specifically forced labour and intellectual property rights violations. In addition, the country’s political, economic, and social policies have extensive repercussions on the presence and prevalence of these crimes, both domestically and internationally. Furthermore, it says, the country’s willingness to cooperate and act on these crimes within the global context has been relatively limited. The report scrutinises China’s role in 4 different transnational crimes — drug trafficking, counterfeiting and IP theft, human trafficking and wildlife trafficking — as well as the illicit financial flows (IFF) associated with these crimes.
On 27 October, an article from White & Case said that 2 legal cases in the US in the past month suggest that regulators and prosecutors are becoming more determined to take personal action against directors and senior executives who fail to deal adequately with cyber security breaches.Uber’s former chief security officer has been found guilty of criminal obstruction charges for failing to report a cyber breach to the authorities in what is believed to be the first time a US company executive has been criminally prosecuted over a cyber breach. Earlier, the Federal Trade Commission (FTC) announced that it had taken action against the CEO of an online drinks delivery business over the company’s security failures which led to a cyber breach that exposed the personal information of 2.5 million customers.
On 28 October, Regulation Asia reported that the guidance describes the most common TBML methodologies and provides indicators and behaviours to help financial service providers detect and report suspicious activity.
On 28 October, OFSI issued 2 new General Licences. Under one, persons may grant category 5 loans to Saving Energy For Europe GmBH, otherwise known as Gazprom Germania, and its subsidiaries, including SEFE Marketing & Trading Limited and SEFE Energy Limited. This licence lasts until 29 October 2023. The other is a 7-day wind-down licence, which will allow the granting of category 5 loans until 23:59 on 5 November.
On 27 October, the EU Commission advised that is proposing to update EU rules on the import, export and transit of firearms for civilian use. As many as 35 million illicit firearms are estimated to be in the hands of civilians in the EU, and around 630,000 firearms are listed as stolen or lost in the Schengen Information System. The revised rules are intended to enhance security and address firearms trafficking, and will enable coordinated controls and risk assessments to improve the traceability of firearms. It is now for the European Parliament and the Council to examine the proposal. Once adopted, the rules will be directly applicable across the EU.
On 27 October, ICIJ announced a widespread series of reports and an ICIJ investigation examines networks of companies, people and business practices that draw profit from cross-border labour trafficking and sex trafficking. It says that the UN estimates, nearly 28 million adults and children around the world are trapped in jobs that are so oppressive that they amount to modern slavery or human trafficking. The new investigation – “Trafficking Inc – by the International Consortium of Investigative Journalists and other media partners has begun examining human trafficking in Asia, Africa, the Middle East and the US.
On 27 October, the EU Sanctions blog reported on the release of this annual report and what it says about sanctions enforcement. It says that additional guidance is due from the SRA in November, and in the coming year, the SRA will increase its work on sanctions compliance.
On 20 October, a report from Global Financial Integrity says that international trade system has witnessed the rapid growth of various types of free trade zones (FTZ) in recent decades. While the major attraction for companies operating in FTZ is the reduced or omitted import taxes on goods, traders are also drawn to the speed provided by streamlined procedures and limited customs oversight in many of the zones. This report documents how some of these very attributes that attract companies to the zones – less regulatory oversight, reduced paperwork, streamlined procedures – also help facilitate illicit activity by smugglers, money launderers, and organised criminal networks. It argues that steps must be taken to improve customs oversight of the zones. To assist in this process, Global Financial Integrity (GFI) makes several recommendations directed at international organisations and national governments to improve the oversight of FTs and reduce the current degrees of opacity.
The NSW Crime Commission published this Report on 26 October. The Project was established to:
investigate the nature and extent of money laundering that may be occurring in licensed premises in New South Wales with particular reference to the use of gaming machines;
identify potential vulnerabilities within the regulations and legislation governing gaming machines which could be exploited for the purpose of laundering; and
furnish reports about matters relating to money laundering through electronic gaming machines to government.
It says that across the state, $95 billion was gambled (turned over) in electronic gaming machines (EGM) in pubs and clubs in the year ending 30 June 2021. There are almost 100,000 EGM licenced to be used in NSW, with 86,747 of these currently available in gaming rooms. From corner pubs in regional towns to large multi‐venue conglomerates of registered clubs, EGM are broadly accessible. The Inquiry found that a significant amount of money which is put through poker machines is the proceeds of crime, or ‘dirty money’, and assesses that billions of dollars gambled in NSW in the year to 30 June 2021 was dirty money.