Once again, apologies for any oversights, omissions,duplications etc.
30 NOVEMBER 2022
FTX BANKRUPTCY – WHAT NEXT FOR THE INDUSTRY
On 30 November, Wilmer Hale issued a Client Alert, saying that while the full impact of the FTX bankruptcy is not yet clear, various responses from the executive branch and federal and state regulators indicate that, in the short term, agencies will continue to use their existing authorities to seek information about the practices of crypto market participants and to enforce existing rules to protect customers and avoid further market contagion.
HOW DO TERRORISTS USE FINANCIAL TECHNOLOGIES?
On 9 November, the International Center for Counter Terrorism issued an article saying that, although FATF highlight several anecdotal case studies which demonstrate this, they note that the prevalence of such technologies is unclear. In essence, policymakers are highlighting a potential concern, yet there is little robust data to either support or challenge it. It refers to an article from the same author which seeks to explore how terrorists are using financial technologies in 3 ways – How are terrorists moving money? How are terrorists making purchases? Does the use of technology affect terrorists’ success?
IRAN’S CENTRIFUGES: MODELS AND STATUS
On 30 November, the Wisconsin Project published an article saying that Iran possesses thousands of gas centrifuges that are the mainstay of its nuclear program. Gas centrifuges spin uranium hexafluoride gas (UF6) to separate uranium isotopes suitable for nuclear fuel, a process known as uranium enrichment. In recent years, Iran has developed and deployed centrifuge models that can enrich greater amounts of uranium with fewer machines relative to its original IR-1 design. Iran’s increasing mastery of centrifuge design and manufacturing raises the risk of a “sneak out,” and it reflects an acquisition of knowledge that cannot be reversed. A table sets out the capacity and primary materials of each of Iran’s currently-deployed centrifuge models, as well as the number of each model known from publicly-available IAEA reports to be installed and/or enriching uranium at Iran’s 3 declared enrichment sites. In addition to the models listed in the table, Iran has developed several other centrifuge designs that are not currently installed at any of its declared sites.
OFAC ADDS 4 AFGHANS TO SANCTIONS LIST
On 30 November, OFAC added 4 individuals to its SDN List. They are said to be linked to Tehrik-e Taliban Pakistan or Al-Qaida in the Indian Subcontinent.
UK ADDS 22 MORE NAMES TO RUSSIA SANCTIONS LIST
On 30 November, HM Treasury issued a Notice
UK: GAMBLING COMMISSION FINES ASPIRE FOR WHITE-LABEL AML BREACHES
On 30 November, iGB reported that the Gambling Commission has fined Aspire Global £237,600 for AML failings, it having breached a licence condition which outlines prevention measures for money laundering and terrorist financing.
ENACT AFRICA ORGANISED CRIME INDEX
ENACT Africa advised the availability of this Index that provides the first-ever multidimensional measure of organised crime and its impact. It is is based on analysis and inputs from 120 experts across the continent and an extensive literature review. It reports on mafia-style groups, criminal networks, state-embedded actors and foreign criminals. A dedicated website allows for comparison between countries, enabling policymakers to compare data and identify local, national and regional trends.
US: BIS ISSUES FIRST FAQ FOR CHINESE SUPERCOMPUTERING AND SEMICONDUCTOR MANUFACTURING EXPORT CONTROLS
On 29 November, Squire Patton Boggs reported that the US Commerce Department’s Bureau of Industry and Security had issued its first FAQ which cover the following topics: the applicability of the new restrictions on exports and reexports to Hong Kong and Macau; the definition of fabrication “facility;” deemed export/reexports; US person definition and restrictions; licenses; and encryption.
A GLOBAL GUIDE FOR CITIZEN MONITORING OF CAMPAIGN FINANCE
This paper from the International Foundation for Electoral Systems sets out to be the definitive guide to citizen monitoring of campaign finance and is said to represent a decade of research and direct experience.
UK: CRYPTO FRAUD VICTIM WINS INFORMATION ORDER AGAINST OVERSEAS EXCHANGES
On 30 November, the Law Society Gazette reported that a victim of a $10.7 million cryptocurrency fraud can obtain information about the alleged perpetrators from exchanges located in at least 6 jurisdictions around the world, the High Court has ruled – from 6 businesses based abroad: Bitflyer, Binance, Payward, Luno PTE, Coinbase Global and Huobi Global.
ENHANCED CO-OPERATION AND DISCLOSURE OF ELECTRONIC EVIDENCE: NEW COUNTRIES JOIN ADDITIONAL PROTOCOL TO CYBERCRIME CONVENTION
On 30 November, the Council of Europe advised that the Budapest Convention has been signed by Croatia, the Republic of Moldova, Slovenia, Sri Lanka, Ukraine and UK. With this, 30 states are now signatories to this Protocol. In addition, Brazil also acceded to the Convention on Cybercrime. With Brazil, 68 states are now Parties to the Convention on Cybercrime. The Protocol provides tools for enhanced co-operation and disclosure of electronic evidence – such as direct co-operation with service providers and registrars, effective means to obtain subscriber information and traffic data, immediate co-operation in emergencies or joint investigations – that are subject to a system of human rights and rule of law, including data protection safeguards.
FATF: WEBINAR ON MONEY LAUNDERING THROUGH THE REAL ESTATE SECTOR
On 30 November, FATF advised that a webinar on 14 December will explore how criminals launder the proceeds of crime through the real estate sector and what authorities and the private sector can do to detect and disrupt these financial flows.
APPROVAL OF EU REGULATION ON FOREIGN SUBSIDIES DISTORTING THE INTERNAL MARKET
On 30 November, KPMG reported that the EU Council had approved the European Parliament’s position on the Regulation on foreign subsidies distorting the internal market. The approval marks the adoption of the Act, which will enter into force on the 20th day following its publication in the EU Official Journal. The EU Regulation gives the Commission powers to investigate financial contributions received in non-EU countries by groups operating in the EU internal market. Contributions that may be subject to investigation include tax exemptions granted to an undertaking where these are limited, in law or in fact, to one or more undertakings or industries.
UN WARNS OF NEW PIRACY DYNAMICS IN THE GULF OF GUINEA
On 29 November, OCCRP reported that the Gulf of Guinea is safer than it used to be, with a steady decline in piracy incidents and armed robbery at sea reported in the past year. However, it also says that a new report from the UN says that may be due to a shift in tactics by criminal networks to the theft of oil, known as “bunkering”.
BENEFICIAL OWNERSHIP DATA IS CRITICAL IN THE FIGHT AGAINST CORRUPTION
On 30 November, OCCRP published an article following a judgment from the European Court of Justice that struck down an EU requirement that Member States should provide this information to the public. It argues that the ECJ has just done more to help organised crime and dark money flows than the worst criminal could manage.
For a different perspective –
SPAIN MAKES 44 TONNE MARIJUANA BUST FROM HIDDEN CAMP IN THE PYRENEES
On 30 November, OCCRP reported that, in a remote and almost inaccessible area of the Aragonese Pyrenees along the border between France and Spain, police dismantled 9 marijuana plantations that together operated as one of the largest growing operations Spanish authorities have ever seen.
UK: BANKS STOPPING LAW FIRMS WITH LICENCES ACTING FOR SANCTIONED PEOPLE
On 30 November, Legal Futures reported that there have been “numerous scenarios” where banks have stopped solicitors working under government licences for those subject to UK sanctions by refusing to process transactions, according to the Solicitors Regulation Authority (SRA). Law firms can act for those designated under the UK sanctions regime, subject to certain limitations and conditions, under a ‘legal fees general licence’. However, the SRA said that having an OFSI licence “permits certain actions but does not compel third parties to take or facilitate” them.
GERMANY’S TAX REFORMS AND THE FIGHT AGAINST TAX FRAUD AND EVASION
On 30 November, a briefing from the EU Parliament Research Service says that a quarter of all tax revenue in the EU is collected in Germany alone. Given the country’s weight in the EU economy, the German tax system plays a key role in facilitating cross-border trade and company growth in the EU, and in strengthening the EU-wide fight against abusive tax practices. However, the publication of the ‘cum ex files’ in 2018 revealed that Germany had lost billions in tax revenue because of aggressive dividend arbitrage practices.
UK: FCA HAS FINED JULIUS BAER INTERNATIONAL LIMITED (JBI), AN INVESTMENT ADVISORY AND WEALTH MANAGEMENT FIRM, £18 MILLION
On 30 November, a release on Mondo Visione advised that the fine was for failing to conduct its business with integrity, failing to take reasonable care to organise and control its affairs and failing to be open and cooperative with the FCA. The FCA has also decided to ban Gustavo Raitzin, former Regional Head for Bank Julius Baer (BJB), Thomas Seiler, former BJB Sub-Regional (Market) Head for Russia and Eastern Europe and JBI non-executive director, and Louise Whitestone, former relationship manager on JBI’s Russian and Eastern European Desk.
RUSSIAN OIL SANCTIONS ARE APPROACHING: WHAT DOES IT MEAN FOR TANKERS AND LNG?
On 30 November, an article on Hellenic Shipping News asked this question, saying that as the latest EU sanctions on Russian oil are coming into force in early December, the article takes a look at how the nearing sanctions are impacting values and trade within the Tanker and LNG markets.
MYSTERY SHOPPERS SENT TO ONTARIO CASINOS MADE AWAY WITH OVER $35,000 DESPITE NO PROOF OF WINNINGS
On 30 November, CTV and others reported that mystery shoppers sent to 4 Ontario casinos to assess money laundering practices were able to make away with a number of cheques totalling over $35,000 despite limited play and no proof of winnings, an auditor general report finds.
US: 3 INDICTED FOR INVOLVEMENT IN VIOLENT CRISIS IN CAMEROON, INCLUDING RANSOM DEMANDS FROM US RELATIVES
On 28 November, a DoJ news release advised that their conspiracy Included kidnapping Cameroonians, demanding ransoms from US relatives to fund separatist militia groups in Cameroon.
IS LONG-AWAITED REFORM OF THE UK’S OUTDATED CORPORATE PROSECUTION RULES COMING ONE STEP CLOSER?
On 30 November, Spotlight on Corruption posed this question, saying that, in a highly positive development, the UK Government responded to a proposed amendment by saying it is taking this extremely seriously and looking at whether these reforms could be introduced in the Economic Crime and Corporate Transparency Bill.
AZERBAIJANI OFFICIALS ARRESTED IN $160 MILLION EMBEZZLEMENT CASE
On 28 November, OCCRP reported that Azerbaijan’s State Security Service had arrested 2 high-ranking officials on charges of embezzling more than $160 million. They are the current head of the Customs Tariff Regulation and Payments Department in Azerbaijan’s Autonomous Republic of Nakhchivan, and the republic’s finance minister.
LATVIAN CORRUPTION WATCHDOG REPORTS POSSIBLE BRIBERY ATTEMPT INVOLVING STATE OFFICIAL
On 28 November, the Baltic News Network reported that the Latvian Corruption Prevention and Combating Bureau (KNAB) informed of the decision to request the Prosecution Office for Investigation of Public Office Holders Misconduct Offences to commence criminal prosecution of a sworn advocate for possible attempt to bribe a state official.
RUSSIAN TYCOON TO FACE NEW PROBE OVER BILLIONAIRE RIVIERA VILLAS
On 29 November, Yahoo Finance reported that Russian billionaire Suleiman Kerimov, 56, and his family are set to face a fresh probe in France, with a new team of prosecutors examining how his daughter came to own several luxury villas on the Riviera, and who the ultimate beneficiary is. A Paris prosecution unit in charge of tackling organised crime known as Junalco is leading the investigation into the financial flows.
GERMAN CRIMINAL CASE AGAINST 6 BANKERS FOR MONEY LAUNDERING LINKED TO THE $2 BILLION CUM-EX TAX SCANDAL IN DENMARK THROWN OUT
On 28 November, Bloomberg Tax reported that judges in Koblenz ruled that the charges against the bankers, who worked at North Channel Bank, can’t proceed for legal reasons.
GAMBLING OPERATORS KEEP MILLIONS WHEN AUSTRALIANS STEAL TO FUND ADDICTION
On 28 November, an article in the Guardian said that when gambling addicts steal hundreds of thousands of dollars for losing bets, the victims of theft have little recourse, and advocates say that must change. It refers to a recent case where a former Sydney financial adviser pleaded guilty to multiple fraud-related offences, having lost more than $8 million to sports gambling, much of it belonging to his clients and friends, some of them elderly and vulnerable. The victims of his crimes never got their money back.