ILLICIT FINANCING IN AFGHANISTAN: METHODS, MECHANISMS, AND THREAT – AGNOSTIC DISRUPTION OPPORTUNITIES

A briefing paper from RUSI explores the financial profiles of actors such as drug traffickers, warlords, terrorist groups, and corrupt government officials in Afghanistan and identifies threat-agnostic capabilities that can be brought to bear against these actors and their financing.  After exploring the methods and mechanisms that these actors use to raise, manage, store, move, use, and obscure money, the report proposes actions by which the illicit financial flows might be disrupted.  Enhancing the monitoring of aid and donor funding entering the country, facilitating the adoption of foreign asset and beneficial ownership tracing, introducing reforms to the hawala and banking sectors, and addressing deficiencies in international sanctions regimes are described as potential policy options. These recommended actions would help combat illicit financing in Afghanistan, as well as strengthen the integrity of the global financial system writ large.

https://www.birmingham.ac.uk/documents/college-social-sciences/government-society/publications/illicit-financing-in-afghanistan-briefing.pdf

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OTHER THINGS YOU MAY HAVE MISSED – MAY 26

Panama Covid-19 update – the fifth wave shows no sign of slowing, with another 3,951 new cases reported today and the rate of positive test results at 24.4%. There are currently 30,857 active cases, with 40 patients in ICU and 205 in other wards. 3 new fatalities were reported today.

26 MAY 2022

IRAN USED SECRET UN RECORDS TO EVADE NUCLEAR PROBES

On 25 May, the Wall Street Journal reported that Iran secured access to secret UN atomic agency reports almost 2 decades ago and circulated the documents among top officials who prepared cover stories and falsified a record to conceal suspected past work on nuclear weapons.

https://www.wsj.com/articles/iran-used-secret-u-n-records-to-evade-nuclear-probes-11653473247?mod=hp_lead_pos10

UK: APP FRAUD – CLAIM IN UNJUST ENRICHMENT AGAINST BANK FAILS

On 25 May, an alert from CMS Cameron McKenna Nabarro Olswang LLP was concerned with a Highh Court case in which it was held that the defendant bank was not unjustly enriched at the expense of the claimant for losses suffered at the hands of fraudsters.  The claim was based on the Bank’s apparent unjust enrichment.  The article says that recent decisions from the English court have tended to be in favour of providing certainty for banks and to confine their boundaries of their legal liabilities, particularly in relation to the Quincecare duty, which is often used by claimants to pursue claims in APP Fraud situation. 

https://www.cms-lawnow.com/ealerts/2022/05/app-fraud-claim-in-unjust-enrichment-against-bank-fails?cc_lang=en

LAFARGE INDICTED FOR ‘COMPLICITY IN CRIMES AGAINST HUMANITY’ IN SYRIA

On 18 May, TRT World reported that a French appeals court had confirmed a charge of complicity in crimes against humanity against the cement group Lafarge over alleged payoffs to Daesh during Syria’s civil war.  Lafarge has acknowledged that it paid nearly $13.7 million to middlemen to keep its Syrian cement factory running in 2013 and 2014, long after other French companies had pulled out of the country.

https://www.trtworld.com/europe/lafarge-indicted-for-complicity-in-crimes-against-humanity-in-syria-57248

UK: REVISED ATTORNEY GENERAL GUIDELINES FOR INVESTIGATORS, PROSECUTORS AND DEFENCE PRACTITIONERS ON THE APPLICATION OF THE DISCLOSURE REGIME

On 25 May, the Attorney General’s Office published these revised guidelines under the Criminal Procedures and Investigations Act 1996.  They replace the existing Guidelines issued in 2020 and the Supplementary Guidelines on Digital Material issued in 2013.  The Guidelines are intended to operate alongside the Judicial Protocol on the Disclosure of Unused Material in Criminal Cases.  It is reported that the revised Guidelines are intended to stop invasive and disproportionate requests for complainants’ private information during criminal investigations.  They take effect from 25 July.

https://www.gov.uk/government/publications/attorney-generals-guidelines-on-disclosure

THE VULNERABLE MARITIME SUPPLY CHAIN

On 25 May, an article from Security Week published by Dryad Global says that, with around 90% to 95% of all shipped goods at some stage travel by sea, this makes the global maritime industry the world’s single largest and most important supply chain.  Successful cyberattacks against the maritime supply chain would have the potential to damage individual companies, national finances and even the global economy.  It says that the maritime sector includes the ports and the vessels that use them, and that while the port authorities are already under threat and attack by ransomware gangs, less attention has been paid to the threat of attacks against the vessels.

https://www.securityweek.com/vulnerable-maritime-supply-chain-threat-global-economy

A “PIRATE” ATTACK ON A VESSEL WHICH CARRIES OUT WORK IN THE GULF OF MEXICO

On 25 May, Dryad Global reported that a group of at least 5 heavily armed people illegally boarded the ship off the coast of Dos Bocas, Tabasco, obtaining loot consisting of tools, communication equipment and 35 autonomous breathing apparatus.

https://channel16.dryadglobal.com/vessel-robbery-offshore-dos-bocas

PRIVY COUNCIL CONFIRMS THAT QUINCECARE DUTY IS LIMITED TO PROTECTING CUSTOMERS AND DOES NOT EXTEND TO PROTECT THIRD PARTIES

On 24 May, an article from Herbert Smith Freehills concerned a case before the Privy Council in London involving a decision of the courts in the Isle of Man.  It says that, in the latest decision to consider the Quincecare duty, the Privy Council confirmed that the duty is limited to protecting the customers of a bank, and does not extend to protecting any third party beneficiaries of its customer’s accounts. 

https://www.mondaq.com/uk/fund-management-reits/1195284/privy-council-confirms-that-quincecare-duty-is-limited-to-protecting-customers-and-does-not-extend-to-protect-third-parties

IRELAND: ANTI-CORRUPTION & BRIBERY COMPARATIVE GUIDE

On 25 May, an article from law firm Arthur Cox provided a Q&A guide to anti-corruption and bribery laws in Ireland.

https://www.mondaq.com/ireland/criminal-law/864066/anti-corruption-bribery-comparative-guide

AUSTRALIA TO BLOCK ACCESS TO A FURTHER 9 OFFSHORE GAMBLING AND AFFILIATE WEBSITES 

On 26 May, iGB reported that the Australian Communications and Media Authority (ACMA) has requested that access to a further 9 offshore gambling and affiliate websites be blocked. They were said to be offering services to Australian players without a licence. If approved, this would mean that since the ACMA made its first blocking request in November 2019, a total of 481 illegal gambling websites have been blocked.

https://igamingbusiness.com/acma-issues-nine-blocking-orders-against-igaming-and-affiliate-sites

US TREASURY TO STUDY HOW RUSSIANS COULD USE HEDGE FUNDS AND PRIVATE EQUITY TO EVADE SANCTIONS

On 25 May, the Wall Street Journal reported that Russian oligarchs and elites might look to use investment advisers as a low-risk way to evade US sanctions because of the industry’s vulnerability to illicit finance.  Other media reports have suggested the use of informal channels, such as hawala.

https://www.wsj.com/articles/treasury-to-study-how-russians-could-use-hedge-funds-private-equity-to-evade-sanctions-11653518584

PRO POKER PLAYER ARRESTED ON FRAUD AND MONEY LAUNDERING CHARGES RE ALLEGED SPORTS BETTING SCHEME

On 25 May, Fox News reported that Cory Zeidman, 61, a professional poker player, had been arrested for his alleged involvement in a sports betting scam.

https://www.foxnews.com/sports/poker-player-arrested-fraud-money-laundering-charges-sports-betting

EUROJUST: EU COUNCIL ADOPTS NEW RULES ALLOWING THE AGENCY TO PRESERVE EVIDENCE OF WAR CRIMES

A news release on 25 May advised that, to help ensure accountability for crimes committed in Ukraine, the EU Council had adopted new rules allowing Eurojust to preserve, analyse and store evidence relating to core international crimes, including war crimes, crimes against humanity and genocide.  They will enter into force on the day following its publication in the Official Journal.

https://www.consilium.europa.eu/en/press/press-releases/2022/05/25/eurojust-le-conseil-adopte-de-nouvelles-regles-permettant-a-l-agence-de-conserver-des-preuves-de-crimes-de-guerre/

FINGERPRINTING TECHNIQUE DEVELOPED TO VERIFY THE GEOGRAPHICAL ORIGINS OF VIRGIN OLIVE OIL

On 26 May, Technology Networks reported on a new authentication tool to check the geographical origin of virgin olive oil as a control on the quality, tradition and product linked to a territory, for use to detect adulteration and commercial fraud.

https://www.technologynetworks.com/analysis/news/fingerprinting-technique-developed-to-verify-the-geographical-origins-of-virgin-olive-oil-361986

PRIVATE PROSECUTIONS AND ECONOMIC CRIME: A ROUTE TO JUSTICE FOR VICTIMS

On 26 May, a news release from law firm Mishcon de Reya says that economic crime is widely reported to be on the increase, but with the limited resources of the state’s agencies stretched widely across the full spectrum of criminal offending, victims of fraud and related crimes are too often denied justice and left without effective recourse.  It suggests that private prosecutions can nevertheless provide victims with a route to justice.

https://www.mishcon.com/news/private-prosecutions-and-economic-crime-a-route-to-justice-for-victims

ONE OF CHINA’S BIGGEST-EVER MILITARY CORRUPTION SCANDALS ALLEGEDLY FUNNELLED PROCEEDS INTO CANADIAN BANKS BEFORE INVESTING IN LUXURY VANCOUVER REAL ESTATE

On 26 May, a report from OCCRP said that the money involved allegedly came from a major Chinese military corruption case that landed a lieutenant general with a suspended death sentence.  It says that the Canadian federal government has been quietly analysing the source of a suspect’s wealth through documents dating back to before he arrived in Canada in 2006 through the now defunct Immigrant Investor Program.

https://www.occrp.org/en/investigations/following-a-trail-of-tainted-money-from-china-into-vancouver-real-estate

GREEN HYDROGEN – THE POTENTIAL FOR SUB-SAHARAN AFRICA TO EXPLOIT ITS EXTENSIVE RENEWABLE ENERGY CAPACITY TO EMERGE AS THE LARGEST EXPORTER OF THE FUEL OVER THE NEXT 2-TO-3 YEARS

An article from Control Risks on 26 May says that it expects oil and gas economies in the region will instead prioritise blue hydrogen production, particularly as this fuel type increasingly becomes regarded by importers as a bridge in the clean energy transition.  However, realising the region’s full potential as a global green hydrogen export hub is unlikely to materialise in the short term, amid high costs and limited installed renewable energy capacity to create green hydrogen.  South Africa will likely produce the region’s first exports, with feasibility studies on a first project well under way.

https://www.controlrisks.com/our-thinking/insights/can-africa-clean-up-with-green-hydrogen

EUROPEAN FISHING FLEETS ACCUSED OF ILLEGALLY NETTING TUNA IN INDIAN OCEAN

On 26 May, the Guardian reported that European fishing fleets have been illegally netting tuna from dwindling stocks in the Indian Ocean, according to data presented to EU authorities and analysed by expert groups.  The report is from the charity Blue Marine Foundation along with Kroll, the corporate investigation company.

https://www.theguardian.com/environment/2022/may/26/european-fishing-fleets-accused-illegally-netting-tuna-indian-ocean

PUTIN SIGNS DECREE ALLOWING RESIDENTS OF NEWLY OCCUPIED UKRAINIAN TERRITORIES TO GET RUSSIAN CITIZENSHIP

On 26 May, Jurist reported that President Vladimir Putin has signed a decree allowing residents of 2 Ukrainian regions, Kherson and Zaporizhzhya, parts of which have been occupied by Russian forces during Moscow’s unprovoked invasion of Ukraine, to obtain Russian citizenship.

https://www.eurasiareview.com/26052022-putin-signs-decree-allowing-residents-of-newly-occupied-ukrainian-territories-to-get-russian-citizenship/

IS THE JALISCO CARTEL ON THE BRINK?

An article from Insight Crime on 25 May said that the CJNG’s reign as Mexico’s most dominant and ruthless cartel may be showing the same signs of wear that foreshadowed the downfall of its many predecessors.

https://insightcrime.org/news/betrayals-infighting-mysteriously-vanished-leader-jalisco-cartel-brink/

REPORT: THE ROSEWOOD CRISIS IN MALI

On 25 May, the Environmental Investigation Agency published a report showing that the illegal and unsustainable trade in rosewood from Mali has fuelled corruption, driven pressure on communities and activists, and has been used as a conduit for ivory trafficking between West Africa and China. 

https://us.eia.org/wp-content/uploads/2022/05/EIA_US_Mali_Timber_report_0422_FINAL.pdf

INVESTORS FORCE HOME DEPOT TO REVIEW WOOD-SOURCING POLICY OVER LOGGING CONCERNS

On 23 May, Mongabay reported that some of Home Depot’s plywood is allegedly sourced from vulnerable forests in Ecuador’s Chocó region and the Brazilian Cerrado, and conservationists and investors have pressured the home improvement giant to clean up its supply chain; and pressure from investors and conservationists has forced Home Depot to re-evaluate how it does business.

https://news.mongabay.com/2022/05/investors-force-home-depot-to-review-wood-sourcing-policy-over-logging-concerns/

BULK CARRIER MASTER CHARGED WITH DRUG SMUGGLING INTO AUSTRALIA

On 25 May, Insurance Marine News reported that Australian Federal Police has charged the Montenegrin 51-year-old master of a bulk carrier for his alleged role in the plot to import 320 kg of cocaine into Australia.

https://insurancemarinenews.com/insurance-marine-news/bulk-carrier-master-charged-with-drug-smuggling-into-australia/

IRANIAN OIL TANKER ARRIVES IN VENEZUELAN WATERS TO DISCHARGE IRANIAN CRUDE

On 25 May, Insurance Marine News reported that a ship carrying about 1 million barrels of Iranian heavy crude, arrived recently in Venezuelan waters for delivery to the country’s largest refinery.  Iran and Venezuela recently expanded a swap agreement signed last year. 

https://insurancemarinenews.com/insurance-marine-news/oil-tanker-arrives-in-venezuelan-waters-to-discharge-iranian-crude/

NUCLEAR BRINKMANSHIP: US SANCTIONS AGAINST IRAN EXPLAINED

A post from Lawfare on 26 May follows the reported stalemate in the negotiations over Iran’s nuclear programme.  It is said that this the result of 2 reported Iranian demands: first, that the US withdraw the designation of Iran’s Islamic Revolutionary Guards Corps (IRGC) as a foreign terrorist organization (FTO); and second, that the Biden Administration guarantee that a future US administration will not withdraw from the revived JCPOA.  The post is intended to help explain the legal background behind the FTO designation in the context of the US sanctions regime and to highlight other possible obstacles — namely, the potential for the US Congress to limit the President’s ability to waive sanctions against Iran — that may arise if a new agreement is reached. 

https://www.lawfareblog.com/nuclear-brinkmanship-us-sanctions-against-iran-explained

PREVENTING CATASTROPHIC BIOTERRORISM: GUARDING AGAINST EXPLOITATION OF THE LIFE SCIENCES AND BIOTECHNOLOGY

The May edition of the CTC Sentinel carried this article which says that bioscience and biotechnology advances offer extraordinary promise, but they are also accompanied by emerging biological risks — specifically the potential for catastrophic accidents or deliberate misuse by malicious actors seeking to cause harm. Non-state actors could exploit the legitimate global bioscience research and development enterprise to gain the knowledge and materials to develop and disseminate a biological weapon.  The article outlines the actions that governments, the private sector, and civil society can take to prevent a catastrophic act of bioterrorism and how to guard against exploitation of the life sciences and biotechnology. 

https://ctc.westpoint.edu/preventing-catastrophic-bioterrorism-guarding-against-exploitation-of-the-life-sciences-and-biotechnology/

DESPITE SANCTIONS, RUSSIAN CRUDE EXPORTS REMAIN HIGH

On 26 May, an article from Vortexa reported that Russian crude oil exports remain very high and sanctions are unlikely to hinder Russian players from exporting oil over the coming months more than they already do.  Accordingly, further production losses appear to be off the table for now.

https://www.vortexa.com/insight/russian-crude-exports-remain-high

US RUSSIA SANCTIONS: ROSSIYA AIRLINES AND AN ABRAMOVICH JET

On 26 May, EU Sanctions blog reported that the US had denied the export privileges of Rossiya Airlines for 180 days from 20 May after it was found to operated multiple US-origin aircraft on flights into Russia without the necessary licence.  In addition, it had identified a second airliner, a Boeing 787 Dreamliner, as owned by US-listed Roman Abramovich as being in likely violation of US export controls.  Providing any service to this aircraft also requires authorisation.

https://www.europeansanctions.com/2022/05/us-rossiya-export-denial-order-says-abramovich-aircraft-may-be-violating-export-controls/

IRAN NUCLEAR MILESTONES: 1967-2022

On 26 May, the Wisconsin project on Nuclear Arms Control published a timeline, starting in 1967, of developments in Iran’s nuclear energy and weapons programmes.

https://www.iranwatch.org/our-publications/weapon-program-background-report/iran-nuclear-milestones-1967-2022

RUSSIAN MERCENARIES ACCUSED OVER USE OF MINES AND BOOBY TRAPS IN LIBYA

On 26 May, the Guardian claimed an exclusive in an article saying that UN investigators say Wagner Group fighters did not mark mines’ positions and may even have rigged bomb to teddy bear.  Investigators found that Russian mercenaries in Libya systematically broke international law by laying mines in civilian areas without any attempt to mark their location or remove the lethal devices.  It is said that booby traps were responsible for the death of two mine clearers working for an NGO.

https://www.theguardian.com/world/2022/may/25/russian-mercenaries-accused-over-use-of-mines-and-booby-traps-in-libya

WHAT BRITISH COLUMBIA’S MONEY LAUNDERING INQUIRY MISSED

An article from Pique News Magazine on 26 May said that the Commission of Inquiry into Money Laundering in BC will table its final report on 3 June.  However, there will be some questions left unexplored.  It says that the inquiry did not explore potential transnational organized criminal networks and foreign state actors behind the illicit movement of cash through BC casinos and other sectors of the province’s economy.  Nor did the inquiry explore money laundering in British Columbia’s securities industry.

https://www.piquenewsmagazine.com/bc-news/what-bcs-money-laundering-inquiry-missed-5378951

HONDURAS: AUTHORITIES DETAIN A COLOMBIAN SENATOR AT AIRPORT WITH UNDECLARED $68,000

On 26 May, La Estrella de Panama reported that Colombian Senator-elect Piedad Córdoba, 67, was detained with almost $68,000 that she did not declare at an airport.  The senator was carrying the money hidden in a suitcase and was required when she intended to take a commercial flight to Panama, according to local media.

https://www.laestrella.com.pa/internacional/america/220526/honduras-retiene-senadora-colombiana-piedad-cordoba-68-000-dolares

RUSSIA SANCTIONS AND CRYPTOCURRENCIES: POLICY ISSUES

On 26 May, a briefing from the Congressional Research Service says that, as the G7 and EU seek to sustain economic pressure on Russia, and Russia seeks ways to mitigate the impact of sanctions, some in Congress are asking whether cryptocurrencies offer Russia a way to evade sanctions.  This briefing discusses related policy issues and proposed legislation.

https://crsreports.congress.gov/product/pdf/IN/IN11939

THE EU, US, AND UK ANNOUNCE THE CREATION OF THE ATROCITY CRIMES ADVISORY GROUP (ACA)

On 25 May, a news release from the US Embassy in Ukraine says that the group will reinforce current EU, US and UK efforts to further accountability for atrocity crimes in the context of Russia’s ongoing war of aggression against Ukraine; and will support the War Crimes Units of the Office of the Prosecutor General of Ukraine (OPG) in its investigation and prosecution of conflict-related crimes. 

https://ua.usembassy.gov/the-european-union-the-united-states-and-the-united-kingdom-establish-the-atrocity-crimes-advisory-group-aca-for-ukraine

UKRAINIAN AUTHORITIES HAVE INFORMED CYPRUS ABOUT THE SEIZURE OF $420 MILLION WORTH OF SHARES AND SECURITIES LINKED TO A RUSSIAN BILLIONAIRE AND OTHER BUSINESSMEN

On 24 May, the Washington Post reported that a government spokesman had told the Associated Press that Ukraine raised the matter with “the relevant authorities of the Republic of Cyprus”.  The target has been named as Mikhail Fridman of Alfa Bank, a Russian lender with major operations in Ukraine.  The article notes that Russians received Cypriot passports under the country’s once lucrative citizenship-by-investment programme that was scrapped 2 years ago in the wake of an undercover TV report.

https://www.washingtonpost.com/business/official-ukraine-told-cyprus-of-420m-russian-asset-seizure/2022/05/24/91ecc274-db76-11ec-bc35-a91d0a94923b_story.html

JAPAN’S UNIVERSITIES TO SCREEN FOREIGNERS

On 23 May, Reuters reported that Japan is asking universities for greater scrutiny of foreign students and scholars to prevent technology leaks to places like China, partly for its own national security but also to safeguard exchanges with US and European universities.

https://www.reuters.com/world/asia-pacific/with-eye-china-us-ties-japans-universities-screen-foreigners-2022-05-23

7 YEARS OF CRYPTO ENFORCEMENT ACTIONS PRECEDED US DESIGNATION OF RUSSIAN CRYPTO MINE BITRIVER

On 26 May, an article from Kharon reported that the designation of Bitriver in April was the first US sanctions action targeting a crypto mining operation.  However, it also notes that US regulatory and law enforcement agencies have been addressing the exploitation of cryptocurrencies for years, with regulatory enforcement actions and criminal cases going back to 2015.

https://brief.kharon.com/updates/seven-years-of-crypto-enforcement-actions-preceded-designation-of-russian-crypto-mine

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NORTH KOREAN CRYPTOCURRENCY OPERATIONS: AN ALTERNATIVE REVENUE STREAM

On 24 May, the Belfer Center published a Policy Brief saying that, with a cyber arsenal capable of reaching cryptocurrency platforms and users, North Korea has increasingly targeted virtual assets as a source of revenue for its regime.   The UN Panel of Experts has estimated that North Korea stole approximately $316.4 million in virtual assets between January 2019 and November 2020.  The focuses on 3 ways North Korea obtains cryptocurrencies, specifically cryptomining, cryptojacking, and fraudulent initial coin offerings (ICO).  It warns that North Korea’s cryptocurrency operations offer an attractive and transferable model for other financially-isolated states and non-state actors.

https://www.belfercenter.org/sites/default/files/files/publication/North%20Korean%20Cryptocurrency%20Operations%20-%20An%20Alternative%20Revenue%20Stream.pdf

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MALTA: A FORMER SENIOR GAMING AUTHORITY OFFICIAL AND HIS WIFE APPEAR IN COURT CHARGED WITH MONEY LAUNDERING IN CONNECTION TO HIS WORK AT THE REGULATOR

On 26 May, the Times of Malta reported that Jason Farrugia, 34, and his wife, Christine, 26, pleaded not guilty to the charges.  They were jointly charged with money laundering while he was separately charged with a raft of other alleged offences, including extortion, accepting bribes, fraud exceeding €5,000, misappropriation, trading in influence, disclosing confidential information and computer misuse. 

https://timesofmalta.com/articles/view/ex-gaming-official-wife-charged-with-money-laundering.957604

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US: USE OF CRYPTOCURRENCY IN RANSOMWARE ATTACKS, AVAILABLE DATA, AND NATIONAL SECURITY CONCERNS

The Chairman of the US Senate Homeland Security and Governmental Affairs Committee has released this new report.  It contains the results of an investigation into the role cryptocurrencies continue to play in emboldening and incentivising cybercriminals to commit ransomware attacks that pose an increasing national security threat.  It found that the federal government lacks comprehensive data on ransomware attacks and use of cryptocurrency in ransom payments; reporting of ransomware attacks and ransom payments made in cryptocurrency is fragmented across multiple federal agencies; a lack of reliable and comprehensive data on ransomware attacks and cryptocurrency payments limits available tools to guard against national security threats; and available data on ransomware attacks and cryptocurrency payments limits both private sector and federal government efforts to assist cybercrime victims.

https://www.hsgac.senate.gov/media/majority-media/peters-releases-new-report-on-rise-of-ransomware-attacks-and-how-cryptocurrencies-facilitate-cybercrimes

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THE RISE IN RANSOMWARE AND GROWING GOVERNMENT CONCERN

UK Finance has published this report which says that the UK Government continues to grapple with the impact of ransomware attacks on critical national infrastructure and more broadly, across sectors within the UK, as well as the international implication of cyber threats on the UK economy.  UK Finance, on behalf of its members, calls on the UK authorities to focus on ransomware criminals. 

https://www.ukfinance.org.uk/system/files/2022-05/UK%20Finance%20Member%20Position%20on%20Ransomware.pdf

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FRANCE:  FORMER PRESIDENT OF THE LOUVRE MUSEUM ACCUSED OVER ALLEGED ANTIQUITIES TRAFFICKING AND MONEY LAUNDERING

On 26 May, Breaking News and others reported that police had charged Jean-Luc Martinez with “complicity in organised fraud” and money laundering.  He stepped down last year as the Louvre’s president, a post he had held since 2013.

https://www.breakingnews.ie/world/former-louvre-president-charged-with-money-laundering-1311295.html

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UK: RUSSIAN OLIGARCH’S MANSION SEARCHED AND CASH SEIZED AS PART OF AN INVESTIGATION INTO POSSIBLE SANCTIONS VIOLATIONS

On 26 May, Yahoo News reported that the NCA had raided a Russian oligarch’s mansion and seized £30,000 in cash, with the authorities said to be investigating possible sanctions violations by Petr Aven.

https://news.yahoo.com/british-law-enforcement-raided-russian-112538099.html

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OTHER THINGS YOU MAY HAVE MISSED – MAY 25

Panama Covid-19 update – no cases reported here, yet, but the health ministry has announced an alert over the risk of monkeypox…

Meanwhile, on the Covid front, the number of active cases up again, and positive results from tests remain above 20%. 3 new fatalities reported, together with 3,825 new cases; there now being 29,029 recorded active cases, with 39 in ICU and 211 in other wards.

25 MAY 2022

ISLE OF MAN: RUSSIA SANCTIONS GENERAL LICENCE RE RAIL AND FLIGHT TICKETS

On 24 May, the Isle of Man issued a General Licence allows payments and other permitted activities to take place in relation to the purchase of tickets from a designated person or any subsidiary for flights or rail journeys originating in, or within, Russia. The licence will expire on 23 May 2023.

https://www.gov.im/news/2022/may/24/financial-sanctions-russia-general-licence/

WHAT IS THE BACKGROUND TO THE REVIEW OF THE SERIOUS FRAUD OFFICE?

On 23 May, Reed Solicitors published an article seeking to answer this question and referring to the independent review which was ordered after the conclusion by 3 Court of Appeal judges that the SFO failed to disclose key information, which led to a businessman being jailed for bribery. The article sets out to look at the background of the SFO review requested by the Attorney General, what we can expect from the review and the potential impact on the SFO.

https://www.reeds.co.uk/insight/why-has-the-attorney-general-launched-an-urgent-review-of-the-serious-fraud-office-sfo/

HAGUE CONVENTION LETTERS OF REQUEST – THE RELEVANCE THRESHOLD

On 9 May, Collyer Bristow LLP published an article about Hague Convention letters of request used by parties in overseas disputes to obtain evidence from, or to compel the disclosure of documents by, parties located in the UK.  Litigants from Hague Convention countries can ask their home courts to seek assistance from the High Court of England and Wales by issuing a letter of request (LOR) to obtain the evidence or documents.  One (seemingly) important point made is that there is a burden on the applicant to establish that the documents sought in fact exist.  In this case, the evidence produced by the applicant made it clear that they did not know whether documents existed within the requested category and the applicant was merely ‘fishing’.

https://collyerbristow.com/shorter-reads/hague-convention-letters-of-request-the-relevance-threshold/

UPDATE ON US NUCLEAR INDUSTRY EXPORT RESTRICTIONS TO RUSSIA

On 23 May, Morgan Lewis & Brockius LLP pointed out in an article that a specific licence from the Nuclear Regulatory Commission (NRC) was needed for many exports of radioactive material to the Russian Federation even before the Russian invasion of Ukraine.  However, since 17 May, any radioactive materials that you previously could export from the US under a general licence now requires NRC prior approval through issuance of a specific licence.  The regulatory changes also apply to nuclear industry-related equipment, which may be subject to the Commerce Department EAR regime, which has also been tightened.

https://www.morganlewis.com/blogs/upandatom/2022/05/update-on-us-nuclear-industry-export-restrictions-to-russia#page=1

US LUMBER PRICES COULD BE AFFECTED BY SANCTIONS ON RUSSIA

On 23 May, a briefing from K+L Gates LLP pointed out that Russia is a major exporter of wood in the global market, particularly in China and the EU.  If these countries restrict wood products imports from Russia, or if Russia refuses to export to them, the strain on global supply could drive domestic prices to new heights as Russia-dependent markets look for new sources of wood, and that there is already significant upward pressure on domestic lumber prices in the US. 

https://www.klgates.com/Timber-Briefing-US-Lumber-Prices-Could-Be-Affected-By-Sanctions-on-Russia-5-23-2022

EU PLANS TO HELP MEMBER STATES CONFISCATE ASSETS FROZEN BY SANCTIONS

On 11 May, Politico reported that the European Commission had put forward a draft Directive which would make sanctions evasion an EU crime.  That step, in turn, would provide countries with the legal basis to confiscate frozen assets.  However, Politico now reports that reveal there is not yet agreement on the proposal of making sanctions evasion an EU crime — suggesting leaders may have to discuss the proposal at their meeting next week.

https://www.politico.eu/article/commission-to-make-sanctions-evasion-an-eu-crime

https://euobserver.com/ukraine/155040

https://ec.europa.eu/commission/presscorner/detail/en/IP_22_3264

https://ec.europa.eu/commission/presscorner/detail/en/QANDA_22_3265

FOREIGN VOLUNTEERS IN UKRAINE: SECURITY CONSIDERATIONS FOR EUROPE

On 6 May, an article from the International Centre for Counter-Terrorism says that around 20,000 people have travelled to Ukraine to join a force which was specifically created to offer foreign citizens the possibility of joining the resistance against the Russian invaders.  The ICCT says that past research and experience raise some points of consideration related to people travelling abroad to fight wars in other countries. The article outlines several of these considerations relevant to volunteers in Ukraine, which may have implications for European governments. It will assess the security risks posed by volunteers travelling to Ukraine. Will they, as some fear, create a blowback in the way foreign terrorist fighters have done in the past?  It also points to some other risks that might emerge, depending on how the war will be waged on the Ukrainian side.  It does point out that foreign volunteers travelling to Ukraine to fight in the war are very different from the foreign terrorist fighters who went to join ISIS in the Caliphate (and are being treated differently, without the threat of prosecution)

https://icct.nl/publication/foreign-volunteers-in-ukraine-security-considerations-for-europe

MILITIA VIOLENT EXTREMISTS IN THE US: UNDERSTANDING THE EVOLUTION OF THE THREAT

On 20 May, a briefing from the International Centre for Counter-Terrorism says that such militants pose a growing threat within the US, and typically organise in small local or regional militias, though many movement participants do not affiliate with a specific organisation. However, they have organised loose umbrella networks at the national level, most notably the Oath Keepers and Three Percenters, while others have coalesced around specific memes or ideas.

https://icct.nl/app/uploads/2022/05/Gartenstein-Ross-et-al.pdf

ALREADY SWAMPED US SEAPORTS ARE BRACING FOR AN EARLIER PEAK SHIPPING SEASON

On 24 May, the Wall Street Journal warned that the seaports are stretched to their limit just as retailers and manufacturers are set to begin their seasonal rush of importing ahead of the Fall and end-of-year holidays.  It says that this year’s peak shipping season is expected to start weeks earlier than usual, at the end of June, just as back-to-school and other seasonal products flood in.  It reports that already warehouses are full, trucking companies and railroads are short workers and equipment, and container yards at ports are jammed with hundreds of thousands of boxes.  Even a gradual increase in container volumes this peak season could present a challenge for ports. 

https://www.wsj.com/articles/swamped-u-s-seaports-are-bracing-for-an-earlier-peak-shipping-season-11653417720

BILLIONAIRE ROBERT BROCKMAN FOUND COMPETENT TO STAND TRIAL FOR TAX EVASION

On 24 May, the Wall Street Journal reported that a federal court has held that the Texas automotive-software mogul was exaggerating his symptoms of dementia in an effort to avoid prosecution and a potentially lengthy prison sentence.  He was indicted in October 2020 for charges relating to an alleged scheme to evade taxes on about $2 billion in income. Prosecutors have called it the biggest tax-fraud case ever brought against an individual in US history.

https://www.wsj.com/articles/billionaire-robert-brockman-found-competent-to-stand-trial-for-tax-evasion-11653404986

HONG KONG AND MACAU POLICE ARREST 22 OVER MONEY LAUNDERING SYNDICATE

On 25 May, the South China Morning Post reported that police arrested 4 alleged core syndicate members during joint operation codenamed ‘Deferscheme’ in a series of raids.  The money is said to be linked to 32 cases of deception, including 15 phone scams, 6 investment frauds and 5 internet love swindles. 

https://www.scmp.com/news/hong-kong/law-and-crime/article/3179119/hong-kong-macau-police-arrest-22-over-money-laundering

FRENCH POLICE SEARCH MCKINSEY’S PARIS OFFICE IN TAX FRAUD PROBE

On 25 May, Yahoo News reported that police searched the Paris office of US management consultancy McKinsey as part of an investigation into suspected tax fraud, after the French Senate in March alleged that the firm was not paying corporate taxes in France. The report for the Senate said that McKinsey, which has been present in France since 1964 had not paid corporate taxes in France over the last 10 years, and had used a system of “tax optimisation” through its Delaware-based parent company.

https://uk.news.yahoo.com/french-police-search-mckinseys-paris-112649978.html

BRIEFING: LOOT BOXES IN VIDEO GAMES

On 25 May, the House of Commons Library published a briefing paper saying that concerns have been raised about the structural and psychological similarities between loot boxes and gambling and that they can encourage children to gamble.

https://researchbriefings.files.parliament.uk/documents/CBP-8498/CBP-8498.pdf

THE FOOTBALL INDEX COLLAPSE – A TIMELINE

On 25 May, the House of Commons Library published a briefing paper explained that BetIndex Limited, trading as Football Index, was a sports betting platform that launched in 2015. It allowed customers to place bets on the performance of footballers.  In March 2021, BetIndex suspended operations and appointed administrators, and press reports suggested that its customers could lose more than £90 million.

https://commonslibrary.parliament.uk/research-briefings/cbp-9363/

SUSPECTED HEAD OF CYBERCRIME GANG ARRESTED IN NIGERIA

A news release from Interpol on 25 May advised that the cybercrime unit of the Nigeria Police Force arrested a 37-year-old Nigerian man in an international operation spanning 4 continents.  He is alleged to have run a transnational cybercrime syndicate that launched mass phishing campaigns and business email compromise schemes targeting companies and individual victims.

https://www.interpol.int/News-and-Events/News/2022/Suspected-head-of-cybercrime-gang-arrested-in-Nigeria

CHELSEA FC SALE COMPLETED AFTER ROMAN ABRAMOVICH AGREES TO GOVERNMENT TERMS

On 25 May, the Guardian reported that the £4.25 billion takeover of Chelsea football club has been completed after Roman Abramovich agreed to the UK government’s terms for the sale.  The Culture Secretary said that the UK Government issued a licence that permits the sale.

https://www.theguardian.com/football/2022/may/25/chelsea-sale-completed-after-roman-abramovich-agrees-to-government-terms

DOZENS OF PHANTOM COMPANIES CREATED IN THE UK

On 24 May, Byline Times reported that a number of companies have been incorporated in Companies House this year whose owners are oblivious to their existence and whose registered addresses are not authentic.  The goal, experts say, may be to set up bank accounts, use the overdraft facility and let the real owners foot the bill.

https://bylinetimes.com/2022/05/24/dozens-of-phantom-companies-created-in-the-uk-without-the-consent-of-their-owners/

FBI SEEKS ARREST OF SPANIARD CLAIMING TO BE NORTH KOREA CRYPTOCURRENCY ‘SPECIAL DELEGATE’

On 24 May, the Guardian reported that the FBI has issued an arrest warrant for a Spanish man – Alejandro Cao de Benós, 47 – who claims to be a “special delegate” working for the government of North Korea, accusing him of recruiting a cryptocurrency expert in an attempt to help DPRK circumvent US sanctions. The FBI alleges that he began organising a “Pyongyang blockchain and cryptocurrency conference” for the benefit of North Korea in early 2018.

https://www.theguardian.com/world/2022/may/24/fbi-seeks-arrest-of-man-claiming-to-be-north-korea-special-delegate

https://www.economist.com/graphic-detail/2022/05/25/guns-are-the-things-most-likely-to-kill-young-people-in-america

PODCAST: “INSIDE THE IRAQI KLEPTOCRACY”

In the latest TRACE podcast, Robert Worth, a journalist previously based in Baghdad with the New York Times and author of A Rage for Order: The Middle East in Turmoil from Tahrir Square to ISIS, describes the deadly and intractable problem of corruption in Iraq.  He discusses the role the US and its pallets of cash played in this, but also the enforced sectarian apportionment of power — the Muhasasa — that ensures each group protects its fiefdom rather than acting in the best interest of the whole country.

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

DANGEROUS COUNTERFEIT DRUGS ARE PUTTING MILLIONS OF US CONSUMERS AT RISK

An article in The Conversation on 25 May reported on a new study published in the Annals of Pharmacotherapy that says that the FDA took 130 enforcement actions against counterfeit medication rings from 2016 through 2021.  It says that these operations involved tens of millions of pills, more than 1,000 kg of active ingredient powder that could be turned into pills in the US and hundreds of millions of dollars in sales. Unfortunately, these actions barely scratch the surface of the internet-based threat.   China, India, Turkey, Pakistan and Russia were the most common countries supplying US consumers with counterfeit drugs.

https://theconversation.com/dangerous-counterfeit-drugs-are-putting-millions-of-us-consumers-at-risk-according-to-a-new-study-183585

THE COMMANDER OF US SPECIAL OPERATIONS COMMAND AFRICA LIKENS THE WAGNER GROUP TO A TERRORIST ORGANISATION

On 19 May, Breaking Defense reported that the rear-admiral described the Russian private military organisation as a “destabilising force” on the African continent similar to that of a terrorist group.  The Wagner Group is a paramilitary organisation that Western governments suspect is a proxy force for the Russian military, carrying out the Kremlin’s foreign policy goals while maintaining plausible deniability.  Its fighters have deployed to Syria, Yemen, Libya, Sudan, Mozambique, Madagascar, Central African Republic, and Mali.

https://breakingdefense.com/2022/05/head-of-us-special-ops-in-africa-likens-wagner-group-to-terrorist-organization

OFAC ISSUES RUSSIA GENERAL LICENSE 13A

On 25 May, OFAC announced a General License authorising certain administrative transactions prohibited by Directive 4 under Executive Order 14024 (Prohibitions related to transactions involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation).

https://home.treasury.gov/system/files/126/russia_gl13a.pdf

https://www.visualcapitalist.com/us-goods-exports-by-state/

THE $86 MILLION RISE AND FALL OF INIGO PHILBRICK

On 25 May, the Guardian carried an article about “the suave American dealer”, with a gallery at an exclusive London address, a Midas touch that brought soaring profits in art sales and a socialite girlfriend from reality TV show Made in Chelsea.  He had in fact been running a fraudulent business and has been sentenced to 7 years in a US jail, with 2 years of supervised release and an order “to pay a forfeiture of $86,672,790”.

https://www.theguardian.com/artanddesign/2022/may/25/inigo-philbrick-jailed-art-fraud

CHINA’S ROSEWOOD TRADE WITH MALI RIGGED WITH ILLEGALITIES

On 25 May, OCCRP reported on a new report from an NGO that says that China’s rosewood imports from Mali, one of its leading rosewood suppliers, have led to the devastation of Malian forests and served as a conduit for ivory smuggling.  Most of the demand for rosewood comes from China, where it is used to produce Ming dynasty-style furniture, popular among the country’s new rich.  West Africa quickly grew into China’s leading rosewood supplier, and in 2020, comprised over 70% of Chinese rosewood imports.

https://www.occrp.org/en/daily/16378-report-china-s-rosewood-trade-with-mali-rigged-with-illegalities

MEXICO TO FILE NEW LAWSUITS AGAINST US FOR ILLEGAL ARMS TRAFFICKING

On 19 May, Prensa Latina reported that Mexican Foreign Secretary Marcelo Ebrard has announced that his government will file lawsuits for illegal arms trafficking.  These new lawsuits would be added to that filed by Mexico in a Massachusetts court against 11 arms manufacturing companies in the US in August 2021, which it accuses of negligent trade that has killed thousands of people in Mexico.

https://www.plenglish.com/news/2022/05/19/mexico-to-file-new-lawsuits-against-us-for-illegal-arms-trafficking/

US: MASSIVE FRAUD SCHEME INVOLVING SPORTS BETTING

A news release from US DoJ on 25 May claimed that a New York man charged had led a group that made tens of millions of dollars misleading victims into believing the group had inside information on college and professional sporting events.  Cory Zeidman was charged with conspiracy to commit wire fraud, mail fraud and money laundering conspiracy in connection with a sports betting fraud scheme he operated from Long Island and Florida.

https://www.justice.gov/usao-edny/pr/former-long-island-resident-indicted-massive-fraud-scheme-involving-sports-betting

PANAMA: RESULTS OF FATF FACE-TO-FACE MEETING TO BE REVEALED IN JUNE

On 25 May, La Estrella de Panama reported that ‎the Deputy Minister of Economy and Finance had said that the results of Panama’s face-to-face with FATF over the progress that the country has made in the action plan to leave the grey list, will be announced during the presentation of the joint report at a meeting of the Global Forum in mid-June.  

https://www.laestrella.com.pa/economia/220525/resultado-cara-cara-panama-gafi-dara-conocer-junio

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UK: SFO CHARGES GLENCORE WITH 7 COUNTS OF BRIBERY

A news release from the SFO on 24 May announced that it has charged Glencore Energy (UK) Ltd with 7 counts of bribery in connection with its oil operations.  It is said that SFO investigators exposed profit-driven bribery and corruption across the company’s oil operations in Cameroon, Equatorial Guinea, Ivory Coast, Nigeria, and South Sudan.

https://www.sfo.gov.uk/2022/05/24/serious-fraud-office-charges-glencore-with-seven-counts-of-bribery/

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

https://www.buymeacoffee.com/KoIvM842y

NOTE THAT THE ABOVE LINK IS NOW CORRECTED AND WORKS!