THINGS YOU MAY HAVE MISSED – JANUARY 29

29th January 2018

JAPAN PUNISHES COINCHECK AFTER $530 MILLION CRYPTOCURRENCY THEFT

Reuters on 29th January reported that Japan’s financial regulator had ordered Tokyo-based Coincheck to improve processes after hackers stole $530 million worth of digital money from its exchange, jolting the nation’s cryptocurrency market in one of the biggest cyber heists.

https://www.reuters.com/article/us-japan-cryptocurrency/japan-punishes-coincheck-after-530-million-cryptocurrency-theft-idUSKBN1FI06S

Coincheck hack: World’s biggest-ever digital currency ‘theft’

https://kyc360.com/news/coincheck-hack-worlds-biggest-ever-digital-currency-theft/

SCOTS LAW GIANT, BURNESS PAULL, “LINK TO HUNDREDS OF SECRETIVE SHELL FIRMS”

The Herald in Scotland on 29th January carried an exclusive report linking hundreds of shell companies that had flouted AML laws to one of Scotland’s largest law firms.  The Scottish limited partnerships or SLP – all legitimate investment vehicles formally headquartered at the Edinburgh offices of law firm Burness Paull – have failed to meet key transparency rules on beneficial ownership.

www.heraldscotland.com/news/15903142.Scots_law_giant_link_to_hundreds_of_secretive_shell_firms/

GARDAÍ GET SOFTWARE TO SPEED UP FIGHT ON FRAUD

The Irish Independent reports on 29th January that Gardaí have installed new IT software to help them deal more speedily with thousands of reports of suspicious financial transactions.  The move is one of a series of measures taken in response to a review carried out by FATF into Ireland’s AML/CFT systems.  The article claims that it is already being hailed as a valuable asset by the FIU, which is based within the Garda’s National Economic Crime Bureau.

https://www.independent.ie/business/personal-finance/latest-news/garda-get-software-to-speed-up-fight-on-fraud-36540186.html

US ASKS SOUTH KOREA TO REPORT ON AML STATUS OF DIGITAL CURRENCY TRANSACTIONS IN BANKS

Business Korea on 29th January reports that the New York State Department of Financial Services (DFS) asked 6 South Korean banks and their New York branches to report on the current conditions of digital currency transactions in South Korea and their measures to prevent money laundering.   The reports says that it is very rare for the US to make a request for business in South Korean branches., but the US seems to be concerned that virtual currency can be a loophole in financial sanctions on North Korea.  The article claims that the US request involves banks including Woori Bank, Industrial Bank of Korea (IBK), Shinhan Bank, KB Kookmin Bank, NH Nonghyup Bank and Korea Development Bank (KDB), and reports on the current situation of cryptocurrency transactions in their main offices and the result of on-site inspections conducted by the Financial Supervisory Service (FSS) and the Financial Intelligence Unit (FIU) to check whether they have fulfilled their AML obligations.

http://www.businesskorea.co.kr/english/news/money/20397-part-financial-sanctions-n-korea-us-asks-s-korean-banks-investigate-cryptocurrency

SOUTH AFRICA: DENIALS THAT MINISTER AND GUPTAS TO BE CHARGED

Times Live in South Africa reports on 29th January that the National Prosecuting Authority has rubbished a report that Mineral Resources Minister Mosebenzi Zwane‚ 3 Gupta brothers and their associates are to be charged with money laundering‚ among other charges‚ in the next few weeks.  The Sunday Times reported that the case would become the first state capture to be prosecuted, with  Zwane for his alleged role in a sophisticated and elaborate scheme that allegedly siphoned off money meant to benefit poor farmers

https://www.timeslive.co.za/politics/2018-01-28-npa-denies-report-that-zwane-guptas-to-be-charged-within-next-few-weeks/

“CUCKOO SMURFING” AND CROOKED BANKERS – HOW HIGH-LEVEL CRIMINALS HIDE THEIR CASH

Following the recent convictions in Merseyside, the Liverpool runs a story detailing how the money was laundered; including “cuckoo smurfing”, also known as third-party payments, which relies on a crooked insider in the banking or money transfer system with access to the bank details of innocent businesses or individuals.  These details are then passed on to criminals with a need to pay for drugs or other services overseas.

https://www.liverpoolecho.co.uk/news/liverpool-news/cuckoo-smurfing-crooked-bankers-how-14212888

BITCOIN AND THE DARK WEB: THE NEW TERRORIST THREAT?

The Georgetown Security Studies Review at Georgetown University on 21st January reflects on the fact that there is a slow realisation by governments, banks, and the public that the cryptocurrency could be used for the purposes of terrorism. Indeed, is says, the links between terrorism and organised crime have been well-documented, and including the replacement of traditional hawala.  However, it says, the connection between terrorism and Bitcoin is contested and remains a relatively unknown area of both awareness and research.

http://georgetownsecuritystudiesreview.org/2018/01/21/bitcoin-and-the-dark-web-the-new-terrorist-threat/

INDONESIA’S WAR ON TERROR IS FAR FROM OVER

On 8th January the Georgetown Security Studies Review at Georgetown University reports that amid recent concerns about the terrorist attacks in 2016 and the spread of extremism, Indonesian President Joko Widodo ramped up security measures in Indonesia.  Yet, despite Indonesia’s success countering extremism and thwarting terrorist threats over the past 2 decades, the return of foreign jihadists and homegrown radicalisation pose a long term threat to stability in Indonesia and the region.  Over the past 20 years, Indonesia has experienced a series of terrorist attacks, with al-Qaeda affiliate Jemaah Islamiya (JI).  Since 2014 several militant groups in the region pledged allegiance to the Islamic State (IS), such as East Indonesia Mujahidin (MIT), and there has been a rise in the number of homegrown and radicalised individuals in Indonesia.  Since 2011, IS’s supporters who could not join the group in Iraq or Syria began to attack a wide range of targets in Indonesia.

http://georgetownsecuritystudiesreview.org/2018/01/08/indonesias-war-on-terror-is-far-from-over/

THE OTHERS: FOREIGN FIGHTERS IN LIBYA

In its Policy Notes #45, the Washington Institute claims to offer a deeper understanding of the foreign-fighter phenomenon, its evolution, and its potential trajectories.  It points out that over the past 7 years of revolution and civil war, Libya has experienced a massive influx of foreign fighters.  The study breaks down the components of the Libyan jihad, including country-by-country statistics on fighters, meticulously traces the routes taken by jihad aspirants from various African points of origin to Libya.  In thus offering a deeper understanding of the foreign-fighter phenomenon, its evolution, and its potential trajectories, this study is said to provide invaluable insights for mitigating related problems in Africa and Europe in the years ahead.

www.washingtoninstitute.org/policy-analysis/view/the-others-foreign-fighters-in-libya-and-the-islamic-state

REPORT – THE CRIME-TERROR NEXUS IN THE UK AND IRELAND

A new report from the Crime Terror Nexus project which has as its aim documenting links between crime and terrorism across the EU; and is a project of Panta Rhei Research Ltd.  It is funded by PMI IMPACT, a global grant initiative of Philip Morris International that supports projects against illegal trade.  The objective of this paper is to present an overview of links between crime and terrorism (the crime-terror nexus) in the UK and Ireland, highlight potential risks, and make a series of recommendations for how such risks can be mitigated.  It concludes that it seems clear that organised crime in Britain and Ireland has become a multi-faceted, entrenched and dynamic phenomenon, and that the threat from terrorism – be it jihadist, far-right, or Northern Ireland related – will preoccupy security agencies in both countries for years to come.  It says that, though illicit activities are notoriously difficult to measure, it says it has found evidence for links between crime and terrorism in 3 areas:

  • Among paramilitary groups in Northern Ireland, which have been deeply involved in organised crime in Northern Ireland and across the border;
  • In British prisons where criminal and terrorist milieus have connected and cross-fertilised; and
  • Among British jihadists whose criminal skills may be used for terrorist purposes.

Recommendations include action on prisons, terrorist financing, better data collection, information sharing and collaboration between security agencies as well as between government and non-government actors.  But, in the light of Brexit, the most urgent area of action is with regards to Northern Ireland, and the “harder” the border, the greater the pay-offs for organised crime.

https://crimeterrornexus.com/wp-content/uploads/2018/01/Crime-Terror-Nexus-UK-Ireland_20180119_web.pdf

BILLIONAIRE SINGH BROTHERS FROM INDIA ACCUSED BY NEW YORK INVESTOR OF SIPHONING CASH

On 29th January, Bloomberg reported that India’s billionaire Singh brothers, Malvinder and Shivinder, already embroiled in one international legal battle over alleged fraud, are being accused of “diversion, siphoning and digression of assets” by a New York-based investor in a lawsuit filed in the High Court of Delhi that alleges that the Singhs’ Religare Enterprises Ltd diverted the lender’s funds to aid them with a personal debt load of about $1.6 billion, which is forcing the sale of chunks of their empire.

https://www.bloomberg.com/news/articles/2018-01-28/billionaire-singh-brothers-accused-in-lawsuit-of-siphoning-money?src=ilaw

TERROR LAWS ‘DON’T ALWAYS PROVIDE THE RIGHT ANSWER’, UK WATCHDOG SAYS

The Law Society Gazette on 29th January reported that barrister Max Hill QC has said in his first annual report as the independent reviewer of terrorism legislation that some terrorist crimes are best described by common law offences rather than by bespoke legislation,. However, Hill, the head of Red Lion Chambers in London, declined to make ‘firm recommendations’ on what rarely-used terror laws should be scrapped.

https://www.lawgazette.co.uk/law/terror-laws-dont-always-provide-the-right-answer-watchdog-says-/5064555.article

See the report at –

https://terrorismlegislationreviewer.independent.gov.uk/wp-content/uploads/2018/01/Terrorism-Acts-in-2016.pdf

UK GOVERNMENT ACTS TO PROTECT ESSENTIAL SERVICES FROM CYBER ATTACK

On 28th January a news release advised that Britain’s most critical industries are being warned to boost cyber security or face hefty fines.  It says that following a consultation bosses of Britain’s most critical industries are being warned to boost cyber security or face hefty fines for leaving themselves vulnerable to attack.  Energy, transport, water and health firms could be fined up to £17 million if they fail to have the most robust safeguards in place against cyber attack, and new regulators will be able to assess critical industries to make sure plans are as robust as possible. What is described as a simple, straightforward reporting system will be set up to make it easy to report cyber breaches and IT failures so they can be quickly identified and acted upon.

https://www.gov.uk/government/news/government-acts-to-protect-essential-services-from-cyber-attack

See also response to consultation on the Security of Network and Information Systems Directive –

https://www.gov.uk/government/consultations/consultation-on-the-security-of-network-and-information-systems-directive

AUSTRALIA UNVEILS PLAN TO BECOME ONE OF WORLD’S TOP 10 ARMS EXPORTERS

On 29th January, Customs Today carried a piece arguing that Australia is set to become one of the world’s largest arms exporters under a controversial Turnbull government plan.  The prime minister has unveiled a new defence export strategy setting out the policy and strategy to make Australia one of the world’s top 10 weapons exporters within the next decade.  Hailed as a job-creating plan for local manufacturers, Australia only sells about $1.5 billion to $2.5 billion in “defence exports” a year and it wants the value of those exports to increase significantly.

www.customstoday.com.pk/australia-unveils-plan-to-become-one-of-worlds-top-10-arms-exporters/

ANNUAL INDEPENDENT FISCAL POLICY REVIEW PUBLISHED

On 26th January the States of Guernsey reported that the island continues to exhibit tight control of its budgets, according to the authors of the Annual Independent Fiscal Policy Review 2017.

https://www.gov.gg/article/163527/Annual-Independent-Fiscal-Policy-Review-published

UK HEMORRHAGING HIGH NET WORTH INDIVIDUALS

On 25th January International Adviser reported that 4 times as many high net worth individuals left the UK in 2017 than arrived, according to research from Johannesburg-based New World Wealth (NWW). The researchers estimated that although around 1,000 high net worth individuals (HNWIs) came into the UK during the year, this was more than cancelled out by the 5,000 who left, resulting in a net outflow of around 4,000 for the year.

https://international-adviser.com/uk-haemorrhaging-high-net-worths/

US POSTAL SERVICE MUST TAKE OPIOIDS AT LEAST AS SERIOUSLY AS COUNTERFEIT PURSES

WKSU in the US reported that a report released by the Senate Permanent Subcommittee on Investigations tracked online purchases of fentanyl and carfentanil by 300 buyers in 43 states – with Ohio, Pennsylvania and Florida making the most purchases.    Senator Bob Portman hammered on witnesses from the US Postal Service and State Department, who have been resisting his push to require electronic shipping information on international parcels, saying they seem to regard it as less important than tracking counterfeit purses, despite Fentanyl sellers in China operate openly on the Internet, their preferred method of shipping is the U.S. Postal Service.

http://wksu.org/post/portman-says-postal-service-must-take-opioids-least-seriously-counterfeit-purses#stream/0

MILITARY MOTORCYCLES

Something for motorbike nuts in the Isle of Man perhaps – on 29th January Think Defence carries an article asking that, where quad bikes are focused on load hauling, motorcycles tend to a focus on speed.  The military motorcycle has generally lost favour in most western forces but is it time to have another look?  This recent article from Sputnik News describes the value of motorcycles in the close urban terrain of Salma in Syria.  Interesting photos, videos and comments.

https://www.thinkdefence.co.uk/military-motorcycles/

And also –

MILITARY QUAD BIKES HISTORY ETC

https://www.thinkdefence.co.uk/military-quad-bikes/

ISLE OF MAN LIBYA SANCTIONS: DETAILS OF SHIP “CAPRICORN” UPDATED

On 29th January, the Isle of Man issued a news release notifying the recent updating of information on the vessel “Capricorn”, which is subject to the Libyan sanctions regime.

https://www.gov.im/news/2018/jan/29/financial-sanctions-libya/

PEPSICO CONCEDES RELATIONSHIP WITH INDONESIA FIRM ACCUSED OF RIGHTS ABUSES

On 26th January, Corporate Counsel carried this story, with the company saying in a statement it was “very concerned about the allegations that our policies and commitments on palm oil, forestry stewardship and human rights are not being met”.  PepsiCo’s statement acknowledged that IndoAgri, a company RAN and other human rights groups have accused of ongoing labor abuses and harmful deforestation in Indonesia, is a subsidiary of food manufacturer Indofood. PepsiCo has a joint venture with IndoFood to make snacks in Indonesia under the Lay’s brand.

https://www.law.com/corpcounsel/sites/corpcounsel/2018/01/26/pepsico-concedes-relationship-with-indonesia-firm-accused-of-rights-abuses/?kw=PepsiCo%20Concedes%20Relationship%20With%20Indonesia%20Firm%20Accused%20of%20Rights%20Abuses&et=editorial&bu=Corporate%20Counsel&cn=20180129&src=EMC-Email&pt=Daily%20Alert

ICELAND REMOVES EXCHANGE CONTROL CAP

Baker McKenzie reports that Iceland has removed the remaining exchange control cap that affected the ability of individuals in Iceland to acquire shares of US and other non-Icelandic companies.  Despite relaxation of the rules in November 2016, a cap of ISK 100 million (c. £705,000) remained but its Parliament recently eliminated the cap.
http://bakerxchange.com/rv/ff0036e5a1eabdeb7a69005fd44aa4a06f303ed3/p=1142729

MALTA: NEW VAT RULES FOR THE GAMING SECTOR

On 26th January, WH Partners reported on new VAT guidelines w.e.f. 1st January and gaming services which are not included in the list in the guidelines are considered as ‘taxable supplies’ and no longer ‘exempt without credit’ supplies.

http://whpartners.eu/news/new-vat-rules-gaming-sector/

THE UK AUTOMATIC LICENCE VERIFICATION SYSTEM (ALVS)

On 29th January HMRC issued updated guidance on how to import regulated horticultural, plants, live animals and animal products using the automatic, multi-agency approval system.

https://www.gov.uk/guidance/automatic-licence-verification-between-defra-rpa-and-hmrc

COUNCIL OF EUROPE REPORT ON HUMAN TRAFFICKING IN SERBIA

The Council of Europe’s Group of Experts on Action Against Trafficking in Human Beings (GRETA) has published a report on Serbia which assesses developments since the last assessment report in 2014.  It says that Serbia has evolved, but efforts should be stepped up to reduce children’s vulnerability to trafficking and improve the identification of and assistance to child victims.

https://www.coe.int/en/web/portal/-/greta-s-new-report-on-serbia

MAKING FAKE MEDICINES A CRIMINAL OFFENCE THROUGHOUT EU

On 29th January, EurActiv reported on the introduction by 21 EU countries of laws making falsifying medicines a criminal offence, carrying a potential jail sentence of up to 15 years, according.  Maximum prison sentences for the falsification of medicines range from 1 year in Sweden, Finland and Greece to 15 years in Austria, Slovenia and Slovakia. Meanwhile, maximum fines range from €4,300 in Lithuania to €1 million in Spain and ‘unlimited’ in the UK.

https://www.euractiv.com/section/health-consumers/news/fake-medicines-face-15-year-jail-term/

UK GUIDANCE ON BUSINESS RISKS IN NIGERIA

On the 29th January, the UK Department for International trade published updated information on key security and political risks which UK businesses may face when operating in Nigeria; it looks at the intellectual property, organised crime, human rights, bribery and corruption and terrorism risks that UK businesses may face when operating in Nigeria.

https://www.gov.uk/government/publications/overseas-business-risk-nigeria

It is part of a collection of such guides –

https://www.gov.uk/government/collections/overseas-business-risk

BAGHDAD LIFTS SANCTIONS ON KURDISTAN’S BANKS, SENDS PUBLIC EMPLOYEES SALARIES

Kurdistan 24 in Iraq reports that Iraq authorities said they would lift the punitive measures imposed on banks in the Kurdistan Region amid reports that Baghdad was sending a significant amount of money to cover employee salaries.  In October 2017, the Iraqi central bank, upon the request of the Parliament, imposed financial restrictions — including the suspension of dollar exchange —on 4 major Kurdish banks but allowed other financial institutions to continue their foreign currency transfers.

http://www.kurdistan24.net/en/news/eea48fde-96e2-4d81-a332-4027ce95a294?src=ilaw

PAYMENT FRAUD STILL ON THE RISE AND SME ARE MOST AT RISK, SAYS UK SURVEY

On 29th January Forbes reported that new research carried out by payment systems company VocaLink – published as The Small Business Fraud Report –  focuses on the fraud perceptions and experiences of UK SME.

https://www.forbes.com/sites/trevorclawson/2018/01/29/payment-fraud-still-on-the-rise-and-smes-are-most-at-risk-says-uk-survey/#6d72685231be

STRUCK-OFF IRISH SOLICITOR WANTS TIME SPENT IN BRAZILIAN PRISON TAKEN INTO ACCOUNT IN MORTGAGE FRAUD CASE

The Irish Independent on 29th January reported that fugitive struck-off solicitor Michael Lynn wants the Irish High Court to determine whether the DPP is entitled to guarantee that time he served in a Brazilian prison while fighting his extradition to Ireland will be taken into account should he be convicted of fraud charges.  He faces 33 charges relating to alleged mortgage fraud of some €80m and has been imprisoned since 2013 when Brazilian federal police, acting on behalf of Interpol, arrested him.

https://www.irishexaminer.com/breakingnews/ireland/–825397.html?src=ilaw

SCRAP METAL FIRM BOSS KEPT £200,000 IN VAT FRAUD SCHEME

STV reports that a scrap metal dealer who kept more than £200,000 worth of VAT charges instead of paying it to HMRC has been jailed.  Russell Goodenough, 48, set up T’ir Trading Ltd in Aberdeenshire, in December 2010.  The company bought and sold scrap metal and was registered for VAT, and he imported tonnes of scrap metal from Europe which he sold on to customers in the UK charging VAT.

https://stv.tv/news/north/1407171-scrap-metal-dealer-kept-more-than-200-000-in-vat-charges/?src=ilaw

US TEAM FOR COMBATING HEZBOLLAH FINANCED NARCOTICS FORMED

In an editorial the VoA reports that in January, the US Attorney General announced the creation of the Hezbollah Financing and Narcoterrorism Team (HFNT), a group of experienced international narcotics trafficking, terrorism, organised crime, and money laundering prosecutors.  It is tasked with investigating individuals and networks providing support to Hezbollah, and pursuing prosecutions in any appropriate cases.  The HFNT will begin by assessing the evidence in existing investigations, including cases stemming from Project Cassandra, a law enforcement initiative targeting Hezbollah’s drug trafficking and related operations.

https://editorials.voa.gov/a/combating-hezbollah-financed-narcotics/4227037.html?src=ilaw

UK NOTICE TO EXPORTERS 2018/02: GUIDANCE ON COMPLETING MOD FORM 680 APPLICATIONS

On 29th January the UK Export Control Joint Unit published a new Notice to Exporters about the the MOD Form 680, the process which the UK Government uses to enable UK Industry to apply for permission to release information about classified goods and services to foreign nations, while at the same time maintaining national security.  Applications are assessed by a community of advisors including specialists within the Ministry of Defence, Foreign and Commonwealth Office and other government departments.

https://www.gov.uk/government/publications/notice-to-exporters-201802-guidance-on-completing-mod-form-680-applications/notice-to-exporters-201802-guidance-on-completing-mod-form-680-applications

CHARITY COMMISSION INQUIRY INTO PEACETRAIL CHARITY

On 29th January the Charity Commission published the outcome of its inquiry into allegations of mismanagement etc into Peacetrail, a Charitable Incorporated Organisation which was removed from the register of charities in October 2017.  The charity’s work included operating in a high risk area (the Occupied Palestinian Territories).  The inquiry concluded that the trustees had been responsible for misconduct and/or mismanagement in the administration of the charity throughout their periods of trusteeship, primarily through their lack of oversight over the charity’s CEO and failure to fulfil their basic legal duties, including obtaining evidence of end use of charitable funds and failing to file the charity’s statutory returns within the statutory timeframe. The inquiry also found that the CEO was responsible for misconduct and/or mismanagement in the administration of the charity as he failed to ensure proper financial controls were in place and to address governance issues when the two trustees had attempted to resign.

https://www.gov.uk/government/publications/charity-inquiry-peacetrail/charity-inquiry-peacetrail

PUBLIC CAN CHALLENGE 9 MORE LENIENT TERROR SENTENCES IN UK

The MoJ has issued a news release announcing that from 29th January, 9 further terror-related offences will fall within the scheme which allows the public to challenge sentences handed out by the courts.

https://www.gov.uk/government/news/public-can-challenge-more-lenient-terror-sentences-from-today

UPDATE ON THE ITALIAN COMMERCIAL EXEMPTION FROM VAT

Superyacht News on 29th January reported that the Italian Taxation Authority has recently published an update that concerns yachts seeking commercial exemption from VAT.

http://www.superyachtnews.com/business/update-on-italian-vat-commercial-exemption

CHINA PLANNING GAMBLING CRACKDOWN

On 29th January, Calvin Ayre reported that China will welcome the Year of the Dog with a renewed assault on illegal gambling activity, as well as the support services that enable this activity to thrive.  The website reports that a Ministry of Public Security deputy minister told attendees at a national video conference that the country faced a new front in its ongoing war against illegal gambling activity, with rural areas of the country coming under fresh attack from illegal gambling operators, including from unauthorised online gambling sites.

https://calvinayre.com/2018/01/29/casino/china-plans-year-dog-gambling-crackdown/

THE CRIME-TERROR NEXUS IN THE UK AND IRELAND

A new report from the Crime Terror Nexus project which has as its aim documenting links between crime and terrorism across the EU; and is a project of Panta Rhei Research Ltd.  It is funded by PMI IMPACT, a global grant initiative of Philip Morris International that supports projects against illegal trade.  The objective of this paper is to present an overview of links between crime and terrorism (the crime-terror nexus) in the UK and Ireland, highlight potential risks, and make a series of recommendations for how such risks can be mitigated.  It concludes that it seems clear that organised crime in Britain and Ireland has become a multi-faceted, entrenched and dynamic phenomenon, and that the threat from terrorism – be it jihadist, far-right, or Northern Ireland related – will preoccupy security agencies in both countries for years to come.  It says that, though illicit activities are notoriously difficult to measure, it says it has found evidence for links between crime and terrorism in 3 areas:

  • Among paramilitary groups in Northern Ireland, which have been deeply involved in organised crime in Northern Ireland and across the border;
  • In British prisons where criminal and terrorist milieus have connected and cross-fertilised; and
  • Among British jihadists whose criminal skills may be used for terrorist purposes.

Recommendations include action on prisons, terrorist financing, better data collection, information sharing and collaboration between security agencies as well as between government and non-government actors.  But, in the light of Brexit, the most urgent area of action is with regards to Northern Ireland, and the “harder” the border, the greater the pay-offs for organised crime.

https://crimeterrornexus.com/wp-content/uploads/2018/01/Crime-Terror-Nexus-UK-Ireland_20180119_web.pdf

MILITARY MOTORCYCLES AND QUAD BIKES

MILITARY MOTORCYCLES

Something for motorbike nuts in the Isle of Man perhaps – on 29th January Think Defence carries an article asking that, where quad bikes are focused on load hauling, motorcycles tend to a focus on speed.  The military motorcycle has generally lost favour in most western forces but is it time to have another look?  This recent article from Sputnik News describes the value of motorcycles in the close urban terrain of Salma in Syria.  Interesting photos, videos and comments.

https://www.thinkdefence.co.uk/military-motorcycles/

And also –

MILITARY QUAD BIKES HISTORY ETC

https://www.thinkdefence.co.uk/military-quad-bikes/

THINGS YOU MAY HAVE MISSED – JANUARY 28

IMF, ACTIVIST, ASK FOR ACTION AFTER SRI LANKA PLACED UNDER MONEY LAUNDERING SCRUTINY

Economy Next on 28th January reported that Sri Lanka was placed under monitoring by the IMF due to ‘strategic deficiencies” in its AML/CFT controls, and was classed among high risk and non-compliant countries.  However the country is among those that have a ‘high level political commitment’ to fix shortcomings, the agency said.  Both the IMF and a leading activist in Sri Lanka have called for changes.

Sri Lanka’s cabinet has already approved changes to the Trust Law, which requires beneficiaries to be named to the FIU, issued sanctions on North Korea.  This month a series of rules on customer due diligence and Designated Non-Financial Businesses and Professions have issued by gazette by the FIU. Some of the controls and restrictions placed on citizens have been issued without gaining parliamentary approval or public debate.

http://economynext.com/IMF,_activist,_ask_for_action_after_Sri_Lanka_placed_under_money_laundering_scrutiny-3-9691.html

On 3rd November, FATF said about Sri Lanka –

In October 2017, Sri Lanka made a high-level political commitment to work with the FATF and APG to strengthen the effectiveness of its AML/CFT regime and address any related technical deficiencies. Sri Lanka will work to implement its action plan to accomplish these objectives, including by:

  • enacting amendments to the MACMA to ensure that mutual legal assistance may be provided on the basis of reciprocity;
  • issuing the CDD Rule for DNFBPs, issuing any necessary guidance, and ensuring implementation of this Rule has begun, by way of supervisory actions;
  • enhancing risk-based supervision and outreach to FIs, and high risk DNFBPs, including through prompt and dissuasive enforcement actions and sanctions, as appropriate;
  • providing case studies and statistics to demonstrate that competent authorities can obtain beneficial ownership information in relation to legal persons in a timely manner;
  • issuing a revised Trust Ordinance and demonstrating that implementation has begun; and
  • establishing a TFS regime to implement the relevant UNSCRs related to Iran, demonstrating that implementation has begun, and demonstrating that implementation has begun on the UN Regulation related to the DPRK.

www.fatf-gafi.org/publications/high-riskandnon-cooperativejurisdictions/documents/fatf-compliance-november-2017.html

See also the Sri Lanka Sunday Times –

http://www.sundaytimes.lk/180128/news/tough-new-rules-for-casinos-gambling-houses-and-lottery-businesses-279046.html

IRAN ACCELERATING REFORMS AHEAD OF FATF DEADLINE

On 28th January, the Financial Tribune, described as an Iranian English economic daily, reports that determined to permanently exit the blacklist of FATF, Iran has accelerated the pace of reforms to implement the action plan recommended by the FATF that monitors money laundering worldwide.  It reports that the January-end deadline is fast approaching for the country to report its progress in implementing its action plan to the International Cooperation Review Group (ICRG) — the FATF body that analyses high-risk jurisdictions and recommends specific action to address their money laundering/financing of terrorism risks, the government is hoping to pass some important legislation.   Iran had a meeting in Rome on 18th January with ICRG to discuss progress.  According to the Economy Ministry sources whose FIU handles the negotiations, both sides viewed the talks as constructive.  If Iran can make the same progress with FATF by 31st January, or at the FATF plenary meeting on 15th February, a new chapter could open for the country on the international scene.  Meanwhile, the article reports that Iran this week also saw its risk rating upgraded from 6 to 5 by the OECD.

https://financialtribune.com/articles/economy-business-and-markets/80907/iran-accelerating-reforms-ahead-of-fatf-deadline

SOUTH AFRICAN MINISTER EXPECTED TO BE CHARGED WITH MONEY-LAUNDERING

eNCA.com in South Africa reports that Mineral Resources Minister Mosebenzi Zwane will reportedly be accused number one in what is set to become the first state capture case that will head to court.  It says that The Sunday Times is reporting Zwane, Gupta brothers Atul, Rajesh and Ajay and their associates will be charged with money laundering.  Zwane is said to be implicated in the controversial 2013 Gupta-linked Estina Dairy farm project in Vrede in the Free State.

http://www.enca.com/south-africa/zwane-expected-to-be-charged-with-money-laundering-report?src=ilaw

UK GOVERNMENT TO RESEARCH WHETHER COMPANIES BUY BACK THEIR OWN SHARES TO INFLATE EXECUTIVE PAY

On 28th January, the UK Department for Business, Energy and Industrial Strategy announced that the Government is to research whether companies buy back their own shares to inflate executive pay.  This new research will help the Government to understand how companies use share buybacks and is intended to maintain the public’s trust in big business and corporate standards.  A share buyback is where a company buys back its own shares from the market, often to reduce the number of available shares in order to increase their value. While there are a number of valid reasons why a company would use these schemes, there are concerns that a minority of companies are using them to inflate executive pay and that they can crowd out investment.

https://www.gov.uk/government/news/government-to-research-whether-companies-buy-back-their-own-shares-to-inflate-executive-pay

DESPITE TRUMP’S THREATS, CHEMICAL ATTACKS CONTINUE IN SYRIA

On 23rd January, the website Bellingcat carried an article that says that the lack of press reports about chemical weapon attacks in Syria may lead the casual observer to assume chemical weapon use in Syria had ceased, until the January 22nd chlorine attack in Damascus.  However, it claims that many more attacks have been alleged throughout 2017 and into 2018, with many attacks reported after the US airstrikes on Shayrat Airbase (intended as a warning against such furtherattacks), and since the beginning of the year at least 4 attacks have been reported.

https://www.bellingcat.com/news/mena/2018/01/23/despite-trumps-threats-chemical-attacks-continue-syria/

SAUDIS SET UP SPECIAL COURTS TO HEAR CORRUPTION CASES

On 28th January the Saudi Gazette reported that the Supreme Judicial Council has established 2 criminal circuits in the criminal courts of Riyadh and Jeddah to look into corruption cases of suspects who refuse to make settlements by insisting on going to the court.   It says that, according to reliable sources, each circuit consists of 3 judges who will consider the charges against those who refuse to make settlement with the government.

http://saudigazette.com.sa/article/527152/SAUDI-ARABIA/Graft-cases-2-criminal-circuits-set-up?src=ilaw

AFRICAN COUNTRIES LOSING $100 BILLION ANNUALLY?

On 28th January the ANI news agency reported that African n countries could be losing $100 billion annually through corruption, according to a senior African development expert who was speaking on the sidelines of the 30th African Union Summit in Ethiopia.  Emmanuel Nnaozie, executive secretary of the African Capacity Building Foundation, the AU specialised agency for capacity development, said adding that, “the amount of money Africa is losing through corruption might have been seriously underestimated”.

https://www.aninews.in/news/world/others/african-countries-losing-100-billion-dollars-annually201801282013050001/?src=ilaw

ISRAELI REGULATOR MAKES ADVERT WARNING AGAINST FRAUD – STARRING EX-BINARY OPTIONS FIRM OWNER

On 28th January the Times of Israel reported that the Israel Securities Authority suffered public ridicule when it was revealed that a celebrity basketball coach it recruited to star in a publicity campaign warning the public against fraudulent investments had been the owner of a binary options company.

https://www.timesofisrael.com/regulator-makes-ad-warning-against-fraud-starring-ex-binary-options-firm-owner/?src=ilaw

FCA NEW WARNING TO PUBLIC OVER INVESTMENT FRAUD RISKS

City AM on 28th January reported that the UK FCA had issued a fresh warning to consumers over bitcoin and other cryptocurrencies that are luring people into scams online.  It fears that investors are now being targeted by fraudsters on Facebook, Instagram and Twitter, more than they are over the telephone, tempting people to put cash into cryptocurrencies and other financial products such as binary options, contracts for difference (CFD) and forex.

www.cityam.com/279571/fcas-issued-fresh-warning-bitcoin-crytocurrency-and-binary

NEW GEORGIAN LOTTERY CO-OWNER “HAS BULGARIAN CRIME LINKS”

On 14th December OCCRP had carried an article making claims about Bulgarian gaming czar Vasil Bozhkov, who has acquired a 25% share in the lottery, and who has successfully operated several gambling businesses in his home country, being one of its richest men.   It says that, according to US diplomats, he has allegedly been involved in a series of crimes including money laundering, privatisation fraud, extortion, and racketeering, and also has close ties to organised crime groups, and is nicknamed “The Skull”.  The other 75% shareholding went to a company owned by Georgian businessman Koba Ghurtskaia, whose holdings in telecommunications have ties with Bulgaria.  The sale is said to be necessary given problems that led to a over $90 million government loss on the lottery since August 2011.  Davit Kezerashvili, Georgia’s former Minister of Defense, who is named in the article in connection with the debacle, fled the country after being accused of stealing tens of millions in cash and properties, and after a stay in France, he is said to be now living in England despite attempts by Georgia to have him extradited.

https://www.occrp.org/en/28-ccwatch/cc-watch-indepth/7402-new-georgian-lottery-co-owner-has-bulgarian-crime-links

UAE REMOVED FROM EU BLACK LIST – WHAT ARE THE CONSEQUENCES?

On 25th January, law firm Loyens & Loeff published a briefing on transfer of the UAE from a EU blacklist to a grey list.  This entails that the UAE has committed to adhere to the minimum standards of the OECD’s Action Plan for the avoidance of Base Erosion and Profit Shifting (BEPS) by 31st December.  The briefing poses the questions – what does this actually mean? What are the BEPS minimum standards and how does it affect businesses established in the UAE?

https://www.loyensloeff.com/en-us/news-events/news/uae-removed-from-eu-black-list-what-are-the-consequences

NIGER – TERRORISM AND ARMS TRAFFIKCING IN AND THROUGH THE COUNTRY

The Small Arms Survey website informs one that a new Report from the Small Arms Survey’s Security: At the Crossroads of Sahelian Conflicts: Insecurity, Terrorism, and Arms Trafficking in Niger.  Assessment in North Africa (SANA) project examines insecurity, terrorism, and trafficking in Niger.  It points out that the Sahel region hosts multiple conflicts with myriad armed actors destabilizing the entire region. Positioned at the heart of this region, Niger sits at the crossroads of terrorism, trafficking, and conflict.   The Report includes examinations of arms and ammunition seized across the country, as well as dozens of interviews with national and international government and security officials, civil society representatives, gold diggers, former rebels, and other experts.  Until 2015 Niger was relatively spared by the threat of terrorism but with an increase in attacks in Niger since then, first by Boko Haram and then by AQIM-related groups or splinter cells.  The Report notes that Niger has served as a key transit route for weapons heading to conflict zones in the region, but the deterioration of the country’s security situation has resulted in an increase in the domestic demand for weapons, particularly for small arms and ammunition.  From an arms control perspective, it is notable that arms seized from terrorists, or en route to terrorist groups in Niger over the past 5 years include explosives, small arms and light weapons and ammunition, including MANPADS, machine guns, and mortar rounds, as well as vehicles.   Furthermore, terrorist groups operating in Niger, including those based in Mali and Nigeria, have been obtaining materiel from a variety of sources­ — including from national stockpiles in the region — either following the collapse of state control over arsenals, as in Libya or northern Mali, attacks against security positions, or diversion in countries like Niger or Nigeria.

http://www.smallarmssurvey.org/about-us/highlights/2017/highlight-sana-niger.html

US UPDATES EXPORT CONTROL “ENTITY LIST”

On 26th January, Baker McKenzie reported changes to the US “Entity List”.  The Bureau of Industry and Security (BIS) had published a final rule adding 21 persons who have been determined by the US Government to be acting contrary to the national security or foreign policy interests of the US. These 21 persons will be listed on the Entity List under the destinations of Bulgaria, China, Kazakhstan, Russia, Syria, and UAE.  In addition, the rule removes 3 entities from the Entity List – 1 listed under the destination of Taiwan and 2 entities listed under the destination of the UAE.

The Entity List is contained in the Export Administration Regulations (EAR), being  a list of names of certain foreign persons – including businesses, research institutions, government and private organizations, individuals, and other types of legal persons – that are subject to specific licence requirements for the export, re-export and/or transfer (in-country) of specified items.

For information on what the Entity List means, see –

https://www.bis.doc.gov/index.php/policy-guidance/lists-of-parties-of-concern/entity-list

http://www.internationaltradecomplianceupdate.com/?author_name=international-trade-compliance-blog

REPORT REPORT HIGHLIGHTS ONGOING CYBER CONCERNS FOR US DEFENCE

On 26th January, Janes.com reported that US Department of Defense (DoD) network defences contain exploitable problems that give adversaries opportunities to access its networks, according to the FY17 Annual Report from The Office of the Director, Operational Test and Evaluation (DOT&E).

www.janes.com/article/77392/dot-e-report-highlights-ongoing-cyber-concerns

NORTH KOREA MISSILE THREAT REVIVES TALK OF ‘STAR WARS’

VoA on 25th January carried an article saying that scientists and NASA officials who spearheaded development of a space-based missile defense system in the 1980s are urging its revival to counter emerging nuclear threats from North Korea and other rogue states.

https://www.voanews.com/a/north-korea-missiles-talk-to-star-wars/4224316.html

TEXAS MAN SENTENCED FOR CONSPIRING TO ILLEGALLY EXPORT RADIATION HARDENED INTEGRATED CIRCUITS TO RUSSIA AND CHINA

A US DoJ news release of 24th January reported that Peter Zuccarelli, 62, of Plano, Texas had been sentenced to 46 months in prison for conspiring to smuggle and illegally export from the US in violation of the International Emergency Economic Powers Act (IEEPA), radiation-hardened integrated circuits (RHIC) for use in the space programmes of China and Russia.  Zuccarelli was also sentenced to 3 years supervised release and a $50,000 fine.

https://www.justice.gov/usao-edtx/pr/texas-man-sentenced-conspiring-illegally-export-radiation-hardened-integrated-circuits

THINGS YOU MAY HAVE MISSED – JANUARY 27

27th January 2018

TECH COMPANIES LET RUSSIA PROBE SOFTWARE PROGRAMMES EXTENSIVELY

The Lockport Press and others reports that a Reuters investigation has found that major global technology providers SAP, Symantec and McAfee have allowed Russian authorities to hunt for vulnerabilities in software deeply embedded across the US government.  In order to sell in the Russian market, the tech companies let a Russian defence agency scour the inner workings, or source code, of some of their products.  Russian authorities say the reviews are necessary to detect flaws that could be exploited by hackers.  Tech companies wanting to access Russia‘s large market are often required to seek certification for their products from Russian agencies, including the FSB security service and Russia´s Federal Service for Technical and Export Control (FSTEC), a defence agency tasked with countering cyber espionage.

http://lockportpress.com/tech-companies-let-russia-probe-software-program-extensively-utilized-by/

LETHAL WEAPONS TO UKRAINE: A PRIMER

On 26th January, the Atlantic Council published an article outlining which countries supply what type of weaponry to Ukraine.  These include Lithuania and Bulgaria, as well as the US.

http://www.atlanticcouncil.org/blogs/ukrainealert/lethal-weapons-to-ukraine-a-primer

THE IMPORTANCE OF TRUSTEE MINUTES: A GUERNSEY VIEW

On 26th January, law firm Ogier published an article which begins by saying that, as a result of today’s climate, in which professional trustees are held to increasingly high standards by regulators, courts and clients alike, the importance of fiduciaries recording their decisions has never been greater.  These are divided in the article to fiduciary decisions and regulatory compliance (including for AML/CFT purposes).  It concludes that failing to record fiduciary and corporate governance decisions can result in a trust company being criticised and even penalised, but it seems that the degree and extent of record keeping expected is reasonable rather than excessive.

https://www.ogier.com/publications/not-just-a-minute

LAUNDERED CASH IN BRITISH COLUMBIA: REPORT DUE IN MARCH

CBC in Canada on 26th January reported that an investigation into the extent of money laundering in British Columbia will also pull back the curtain on whether dirty cash is linked to the province’s booming real estate market.  The report, expected early March 2018, was commissioned by the Attorney General following revelations of widespread money laundering in BC casinos.  “It’s important that our economy is based on integrity, and that we don’t have an international reputation as a scofflaw,” meaning a jurisdiction where the rules do not apply to white collar crime, fraud, tax evasion, and money laundering, according to the AG.  He launched the review after reading a report commissioned by the previous Liberal government about the River Rock Casino in Richmond accepting $13.5 million in $20 bills in July 2015, which police said could be proceeds of crime, where it transpired that the majority of the cash is being presented by people commonly referred to as “high roller Asian VIP clients” and that River Rock was known to have accepted single cash buy-ins in excess of $500,000.

www.cbc.ca/news/canada/british-columbia/how-does-laundered-cash-shape-b-c-s-economy-report-due-in-march-1.4506523

PROMINENT BUSINESSMEN REACH SETTLEMENTS IN SAUDI CORRUPTION PROBE

CNBC reports that several prominent businessmen have reached financial settlements with Saudi Arabian authorities in the kingdom’s sweeping crackdown on corruption, an official source told Reuters.  They include Waleed al-Ibrahim, owner of regional television network MBC; Fawaz Alhokair, a major shareholder in fashion retailer Fawaz Abdulaziz Alhokair Co; Khalid al-Tuwaijri, a former chief of the Royal Court; and Turki bin Nasser, a former head of the country’s meteorology and environmental protection agency, the source said.

https://www.cnbc.com/2018/01/26/prominent-businessmen-reach-settlements-in-saudi-corruption-probe.html

GANG JAILED FOR FORGING UK IMMIGRATION DOCUMENTS

Sky News on 26th January reported that members of an organised crime gang who conspired to manufacture and supply fake ID documents for illegal immigrants have been jailed for a total of more than 16 years.  The Home Office’s immigration enforcement division monitored the gang from late 2015 until June 2017, gathering evidence which ultimately led to the conviction of 7 conspirators from Coventry, Nottingham, Redditch and London responsible for the wide-scale distribution of British passports, British residence permits, degree certificates and Constructions Skills Certification Scheme (CSCS) cards, all of them fake.  Prices ranged from £200 for the CSCS card and degree certificates, to £900 for a passport

https://news.sky.com/story/criminal-gang-jailed-for-forging-immigration-documents-11222464

HOW THE US GOVERNMENT “LAUNDERS DRUG MONEY” FOR ITSELF

An article in the Westender in Australia by a US attorney claims that the US government is profiting handsomely by accepting marijuana cash in the payment of taxes while imposing huge penalties on banks for accepting it as deposits.  It points out that 30 states and the District of Columbia currently have laws broadly legalising marijuana in some form.  Under federal law, however, marijuana remains a Schedule I Controlled Substance.  Under the so-called 2013 Cole Memorandum, the DoJ said it would not prosecute individuals and companies complying with robust and well-enforced state legalisation programs – but on January 4th, the current Attorney General Jeff Sessions rescinded that memo.  The article claims that the IRS accepts “tainted” money from the businesses in the payment of taxes, turning it into “clean” money; and it is not an unwitting accomplice to the crime.  It says that estimates are that marijuana business owners across the US will owe $2.8 billion in taxes to the federal government in 2018.  The government makes a massive profit off the deal, snatching up to 70% of the proceeds of the reporting businesses, the article claims, as opposed to the more typical rate of 30%, by branding marijuana businesses “criminal enterprises” which are not entitled to deduct their costs when reporting their income.

http://westender.com.au/government-launders-drug-money-ellen-brown/

$16 MILLION SOUGHT FROM TEXAN GOLD INVESTOR INDICTED FOR FRAUD, MONEY LAUNDERING

The Austin Business Journal in Texas carried an article about Charles McAllister, the owner of Bullion Direct Inc, an Austin company investing in gold and silver who has been indicted in federal court after the precious metals he was supposed to be protecting on behalf of customers seemingly disappeared in 2015.  The indictment aims to recover more than $16 million from McAllister. However, in civil court, Bullion Direct customers claim they have lost $25 million.

https://www.bizjournals.com/austin/news/2018/01/26/feds-aim-to-recover-16m-from-austin-gold-investor.html

BARBADOS AG WARNS OF ESCAPING A BLACKLIST AT A COST

Caribbean Life on 25th January reported that, on the day that the EU released Barbados from its tax avoidance blacklist, the island’s Attorney General has warned of a need to put financial regulatory systems in order because playing ‘catch-up’ can be costly.  The article reports that Barbados was dropped from that list on reportedly “following commitments made at a high political level to remedy EU concerns”.  Speaking in the island’s parliament, the AG (a former corporate trust lawyer in the BVI) is quoted as saying, “we need to spend the money at this time [to] … strengthen the FSC. Strengthen the regulatory framework, because unless we do it we would continue to be playing catch-up.  And when you play catch-up you end up spending hundreds of thousands of dollars flying across to Europe reacting as opposed to having your systems in place”.

https://www.caribbeanlifenews.com/stories/2018/1/2018-01-26-ga-escaping-blacklist-cl.html

ITALIAN MAFIA BOSS PICTURED ON ISLE OF MAN

On 27th January, local media in the Isle of Man reported on a revelation in a BBC documentary that an Italian Mafioso, linked with the theft of 2 Van Gogh masterpieces worth $100 million, has been pictured on the Island.  It is said that this is the only known public photo of a Camorra crime boss, Raffaele Impieriale (though no date was given for when the photo was, secretly it seems, taken).  The claim featured in ‘Stealing Van Gogh’, a programme which traced the paintings’ journey after they were stolen from a museum in Amsterdam in 2002

http://www.manxradio.com/news/isle-of-man-news/italian-mafia-boss-pictured-on-island/

The BBC programme is at –

https://www.bbc.co.uk/iplayer/episode/b09pqx4r/stealing-van-gogh?suggid=b09pqx4r

FATF REPORT: FINANCING FOR RECRUITING FOR TERRORIST PURPOSES

In January 2018, FATF released a new report “Financing for Recruiting for Terrorist Purposes”.  In its article on the release, law firm Shearman & Sterling say that the Report examines the typical methods of recruitment to terrorist organisations and the costs associated with those methods, that recruitment methods vary from region to region, and that techniques include recruitment via religious groups in some regions and online recruitment via social media in others.  The Report also presents case study data on the sources of funds available to terrorist recruiters and the general expenditures involved in the recruitment process.  The Report recommends –

  • improved inter-agency and international co-operation to share information and analyze suspected recruiters and financial supporters of terrorist organizations;
  • that national operational and security agencies engage more with the private sector, non-profit organizations and social media and other Internet providers, by providing better contextual information and guidance to enable those providers to identify the financial flows associated with terrorist recruitment.

The Report says that, while terrorist organisations have different recruitment techniques, depending on whether they are large, small or a dispersed network of individuals, it has identified the most common methods of recruitment used by terrorist organisations and terrorist cells (and their related funding needs) as follows –

  • Personal needs of the recruiter and the maintenance of basic infrastructure for the recruitment/facilitation network;
  • Production and dissemination of recruitment materials (e.g. online or in print);
  • Paying for goods and services to facilitate the new recruits’ early participation in the terrorist organisation (e.g. travel, accommodation costs or payments); and
  • Financial incentives provided directly to recruits.

This Report also found that –

  • Recruitment activities on the Internet are often very closely linked to appeals for financial assistance to terrorists;
  • Recruitment and dissemination of terrorist ideology in prisons and correctional centres is increasing. In one case study, individuals in prison received funding for recruitment activities;
  • More information is required on the costs associated with producing high quality recruitment materials such as the online magazines and video games produced by ISIL. The production of these materials, and their continuous availability online, requires a certain level of expertise and equipment which is likely to have some financial implications and could generate a financial footprint; and
  • Some terrorist organisations may experience the need for specialists in civilian professions who cannot be recruited on ideological grounds (e.g. engineers, doctors, IT specialists, financiers, professional money managers.). The costs of obtaining and engaging the service of such specialists can easily exceed the salaries of ordinary members.

http://www.fatf-gafi.org/media/fatf/documents/reports/Financing-Recruitment-for-Terrorism.pdf

NEARLY A QUARTER OF UK ESTATE AGENCIES WOULD NOT PASS AML SPOT CHECKS, CLAIM

On 26th January, Property Industry Eye reported that a significant number of estate agency businesses would struggle to pass an AML spot check, while nearly a quarter could be breaking the law because they don’t have an AML officer in place.  That’s the warning from identity verification business Credas, which polled 100 estate agency businesses.  It found that 22% of those businesses didn’t have an AML officer and processes in place, despite risking potentially large penalties from HMRC for failing to comply with regulations.  Credas also claimed that of those surveyed, businesses spend an average of four days per month completing AML checks, with one of the main barriers to completion being cited as getting hold of clients.

www.propertyindustryeye.com/nearly-a-quarter-of-estate-agencies-dont-have-an-aml-officer-in-place-and-many-wouldnt-pass-anti-money-laundering-spot-checks-warning/

EU PILOT ONLINE DRUGS USE SURVEY REACHES 50,000 PARTICIPANT MILESTONE

The European Monitoring Centre for Drugs and Drug Addiction reported that, as of mid-January, more than 50,000 people had already participated in the European Web Survey on Drugs, a pilot project designed to improve understanding of patterns of drug use at European level; which collects information from different groups of drug-users, on topics currently not covered by routine data collection.  The project, which started with a first wave of 6 countries in 2016, entered its second phase in late 2017 with an additional 9 countries running the survey.  The web-based survey targets people aged over 18 who have used one or more drugs over the last 12 months.

http://www.emcdda.europa.eu/news/2018/web-survey-participation-milestone_en

HUGE HAUL OF ELEPHANT TUSKS AND PANGOLIN SCALES IN IVORY COAST

On 27th January, Defence Web reports that around 600 kg of elephant tusks and 600 kg of pangolin scales have been seized in Ivory Coast, ready to be sent to Vietnam and other Asian countries, authorities said.  In an operation lasting several days to dismantle a major trafficking network, 6 suspects were arrested.

http://www.defenceweb.co.za/index.php?option=com_content&view=article&id=50500:huge-haul-of-elephant-tusks-and-pangolin-scales-in-ivory-coast&catid=87:border-security&Itemid=188

US OBTAINS SWISS BANK RECORDS FOR GERTLER CONGO CORRUPTION PROBE

On 26th January, the ICIJ reported that a Swiss court has confirmed ongoing criminal investigations into the businesses of Dan Gertler, an Israeli diamond dealer suspected of large-scale corruption in the Democratic Republic of the Congo (DRC).  Switzerland’s Federal Criminal Court released a 13-page judgment that details how the US has sought information, including banking records, about Gertler’s business since 2012.  His companies appealed a Swiss decision to provide information to the US. The court rejected the appeal and published its decision.

https://www.icij.org/investigations/paradise-papers/u-s-obtains-swiss-bank-records-congo-corruption-probe/?src=ilaw

5 MEMBERS OF INTERNATIONAL CONSPIRACY INDICTED IN MORE THAN $9.5 MILLION COUNTERFEIT DOCUMENTS FRAUD SCHEME IN US

On 26th January the US DoJ issued a news release saying that 5 of 6 alleged members of an international criminal conspiracy were arrested and appeared before a court in Dallas on charges related to their alleged roles in an international fraud scheme that has used counterfeit driver’s licenses and counterfeit money orders to obtain monies from victim bank accounts around the US.  The indictment alleges that from about April 2013 to December 2017, the defendants conspired with each other and individuals in other countries including Nigeria to obtain money through various acts of fraud.   This included posting misleading advertisements of detailed descriptions of job opportunities, such as for mystery shopper positions that were not valid job opportunities.  The defendants are alleged to have conspired to pose as employers of these fraudulent job opportunities to lure victims, who resided throughout the US and Canada.

https://www.justice.gov/opa/pr/five-members-international-organized-criminal-enterprise-indicted-more-95-million-counterfeit?src=ilaw

LEADER OF FRAUDULENT MEDICAL DEVICE SCHEME IN US PLEADS GUILTY

In a news release on 26th January, the US DoJ reports that a South Dakota man, Robert “Larry” Lytle, 82, pleaded guilty today in connection with a scheme to defraud consumers by selling light-emitting devices known as the “QLaser System” as a treatment for more than 200 different diseases and disorders, after a 3-year effort by the DoJ and the US Postal Inspection Service to stop distribution of the fraudulent devices to consumers.

https://www.justice.gov/opa/pr/leader-fraudulent-medical-device-scheme-pleads-guilty?src=ilaw

US TREASURY SANCTIONS ADDITIONAL INDIVIDUALS AND ENTITIES IN CONNECTION WITH THE CONFLICT IN UKRAINE AND RUSSIA’S OCCUPATION OF CRIMEA

On 26th January, the US Treasury designated 21 individuals and 9 entities under 4 Executive Orders related to Russia and Ukraine, including 3 individuals and 2 entities related to Russia’s transfer of 4 turbines made by a Russian-German joint venture to Crimea.   It targets 11 Ukrainian separatists –

  • Ekaterina Matyushchenko
  • Natalya Nikonorova
  • Vladimir Pavlenko
  • Elena Radomskaya
  • Aleksandr Timofeev
  • Elena Kostenko
  • Svetlana Malakhova
  • Pavel Malgin
  • Dmitry Ovsyannikov

OFAC is also designating 3 individuals and 4 entities who have supported the illicit coal trade –

  • ZAO Vneshtorgservis
  • Vladimir Pashkov
  • Gaz-Alyans, OOO
  • Oleksandr Melnychuk
  • Doncoaltrade Sp. Z O O
  • Serhiy Melnychuk
  • Ugolnye Tekhnologii, OOO

The designations also involve 4 other Russian officials and two entities –

  • Andrey Cherezov
  • Evgeniy Grabchak
  • Aleksandr Pentya
  • Evro Polis Ltd.
  • Bogdan Kolosov
  • Instar Logistics

The sanctions also targets a construction entity and 2 associated individuals operating in Crimea –

  • VAD, AO
  • Valeri Abramov
  • Viktor Perevalov

OFAC is also designating 1 individual and 2 entities related to Russia’s transfer of 4 turbines made by a Russian-German joint venture to Crimea –

  • Limited Liability Company Foreign Economic Association Technopromexport (Technopromexport LLC)
  • Sergey Topor-Gilka
  • PJSC Power Machines

OFAC also identified 12 subsidiaries of Surgutneftegaz as being 50% or more owned by Surgutneftegaz, which was added to the Sectoral Sanctions Identification List (SSI List) in September 2014.  The subsidiaries identified were already subject to the same restrictions as their parent entity.

https://home.treasury.gov/news/press-releases/sm0266

See also –

https://en.radiofarda.com/a/russia-new-u-s-sanctions-ukraine/29000845.html?src=ilaw

NHS COUNTER FRAUD AUTHORITY AND SUPPLEMENTAL DIRECTIONS 2017

On 26th January the UK Department of Health and Social Care issued directions that set out the functions and reporting requirements of the NHS Counter Fraud Authority (NHSCFA).  NHSCFA was established on 1st November to carry out the Secretary of State’s counter-fraud functions in relation to the health service in England.  he directions to NHS Trusts and Special Health Authorities describe their role in the prevention, detection and investigation of fraud in the health service, following the establishment of the NHSCFA.

https://www.gov.uk/government/publications/nhs-counter-fraud-authority-and-supplemental-directions-2017

UK GOVERNMENT LAUNCHES “LANDMARK” REVIEW INTO PRESCRIPTION DRUG ADDICTION

On 26th January the UK Government blog reported that Public Health England is to undertake a review that will consider why:

  • Prescribing of addictive medicines has increased 3% over 5 years
  • 1 patient in 11 (8.9%) is prescribed one of these medicines
  • Anti-depressant prescriptions in England have more than doubled in the past 10 years
  • A recent survey also found that 7.6% of adults had taken a prescription-only painkiller not prescribed to them

PHE will assess the scale of the problem, the harms caused by dependence and withdrawal, how they may be prevented and the best way to respond.

https://healthmedia.blog.gov.uk/2018/01/26/government-launches-landmark-review-into-prescription-drug-addiction/

UK RENEWS DESIGNATION OF ETA

On 25th January, HM Treasury renewed the designation of Euzkadi Ta Askatasuna (ETA) under the Terrorist Asset-Freezing etc. Act 2010 with effect from 22nd January.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/676791/TAFA_Renewal_Notice_25-01-18_ETA.pdf

UK MAGNITSKY SANCTIONS

The European Sanctions Blog reports that the coming into force of certain provisions of the Criminal Finance Act 2017 means that the UK will be the 5th country with ‘Magnitsky-style’ sanctions in force; the others being the US, Canada, Lithuania and Estonia. Section 13 of the Act allows for the imposition of such sanctions on the grounds of gross human rights violations and abuses.

https://europeansanctions.com/

SWISS TAX DODGE GETS US MAN 6 MONTHS JAIL AND TO PAY $14 MILLION

Customs Today on 27th January reports that a US resident has been sentenced to 6 months in prison for failing to report to the US Treasury more than $28 million in funds he maintained in secret bank accounts in Switzerland.  According to federal investigators, Hyong Kwon Kim, a citizen of South Korea, lived in the US as a legal permanent resident while running family businesses.   He was also ordered to pay $14 million in penalties and restitution of $250,000.

http://www.customstoday.com.pk/swiss-tax-dodge-gets-greenwich-man-6-months-14m/

UNODC LAUNCHES HANDBOOK ON CHILDREN RECRUITED AND EXPLOITED BY TERRORIST GROUPS

On 26th January the UN Office for Drugs and Crime published the Handbook on Children Recruited and Exploited by Terrorist and Violent Extremist Groups: The Role of the Justice System, the first UN publication on the topic.  It aims at providing guidance to law- and policy-makers, as well as practitioners on the treatment of children.  The publication focuses on the prevention of child recruitment; justice for children; and rehabilitation and reintegration.

https://www.unodc.org/unodc/en/frontpage/2018/January/unodc-launches-handbook-on-children-recruited-and-exploited-by-terrorist-groups.html?ref=fs1

The handbook is at –

https://www.unodc.org/documents/justice-and-prison-reform/Child-Victims/Handbook_on_Children_Recruited_and_Exploited_by_Terrorist_and_Violent_Extremist_Groups_the_Role_of_the_Justice_System.E.pdf

QUESTIONS OVER NEW INTERIM PRESIDENT OF INTERNATIONAL BOXING BODY

Inside the Games website reports that Gofur Rakhimov, last month linked by the US Government to organised crime, has been named interim President of the International Boxing Federation (AIBA) after Franco Falcinelli stepped down from the position.  Rakhimov has been repeatedly been named as an Uzbek mafia boss in the media with strong links to organised crime, although he has never been prosecuted of anything.

https://www.insidethegames.biz/articles/1060690/uzbek-linked-to-organised-crime-takes-over-as-interim-aiba-president-after-falcinelli-steps-aside

See also –

https://www.occrp.org/en/investigations/1393-what-is-the-brothers-circle

CREDIT SUISSE PLEADS GUILTY TO FOREX PRICE-FIXING IN US

Monde Visione reports a US DoJ news release of 26th January that BNP Paribas USA Inc, a subsidiary of BNP Paribas SA, has pleaded guilty to participating in a price-fixing conspiracy in the foreign currency exchange (FX) market.  It is the 6th major bank to plead guilty in the ongoing investigation.  BNPP USA has agreed to pay a criminal fine of $90 million.  Both the government and BNPP USA have agreed to recommend no probation, in light of, among other factors, the bank’s substantial efforts relating to compliance and remediation.

http://www.mondovisione.com/media-and-resources/news/us-department-of-justice-bnp-paribas-usa-inc-pleads-guilty-to-antitrust-conspi/

MALTA ASKS ABOUT INCREASING NUMBER OF PASSPORTS FOR SALE

On 27th January, Politico reported that the Maltese government is asking its citizens via SurveyMonkey whether they’d be happy to lift the cap on the number of passports that can be sold to oligarchs from Russia and the Middle East. The scheme netted Malta €277 million last year, with Henley & Partner, the firm behind the scenes, making €13 million.

PONZI SCHEME IN KENYA AND ITS RUSSIAN CREATOR

On 27th January the Daily Nation carried an article on frauds in Kenya that have apparently ensnared thousands.  These schemes include the MMM Ponzi scheme run by Russian Sergey Mavrodi, and pyramid schemes like the best-known Decci and Clip Investment Sacco Ltd. – the offshore connections of which were uncovered by the Panama Papers.  Mavrodi is described as a former Duma deputy (MP) in Russia, and his first bogus scheme collapsed in 1994, after which he allegedly bribed his way into obtaining a Duma seat and accompanying immunity from prosecution, only to later becoming the first deputy to be stripped of his seat by fellow members.  He then went to the US, created a fake online gambling business called Stock Generation before being arrested in 2003.  He created MMM, in several forms, after being released – with versions in African and Eastern European states.

https://www.nation.co.ke/news/Russian-Ponzi-scheme-Mavron-still-doing-business/1056-4281256-7jgcmn/index.html?src=ilaw

CHINESE REGULATOR FINES 12 BANKS FOR ILLEGAL TRADING

Reuters reported on 27th January that China’s banking regulator had fined 12 Chinese lenders after uncovering illegal trading of $1.25 billion of bank bills that showed the lack of internal controls and poor compliance at the institutions involved.  The article explains that a bank can issue a bill to a payee and promise to pay up by a certain date, with the agreement based on trust.  Ahead of the due date, a bank may choose to sell it to another bank.

https://www.reuters.com/article/us-china-banking-fraud/china-fines-12-banks-over-illegal-bill-trading-fraud-idUSKBN1FG0Q1

IRAN OIL MINISTRY EMBEZZLEMENT CASE

Iran Daily on 27th January reported that Iran’s Oil Minister had said that he fired several managers at the Department of Oil Exploration following an embezzlement case valued at around $22.7 million.   It is said that the decision on the dismissals does not mean that the individuals were involved in the crime but because of their failure to properly fulfill their tasks. However, an official in the accounting department said to be involved had fled Iran and authorities are seeking Interpol assistance.

http://iran-daily.com/News/208901.html?src=ilaw

MONEY LAUNDERING AND THE FUSS OVER ATM WITHDRAWALS IN HONG KONG

The South China Morning Post carried an opinion piece on 27th January saying that Hong Kong banks have been hit by an unprecedented HK$20 billion per month surge in suspicious ATM withdrawals, exposing a loophole that could deal a blow to Beijing’s battle against illicit capital flight via its notorious underground banking system.

http://www.scmp.com/business/banking-finance/article/2130872/money-laundering-and-fuss-over-atm-withdrawals-hong-kong?src=ilaw

CHARITY SHIPMENTS TO NORTH KOREA STOPPED AT CHINESE PORT, AID GROUPS SAY

In a report dated 28th January, the South China Morning Post reported that 2 shipping containers full of hygiene kits languish for weeks in a Chinese port, unable to reach North Korea.  It says that they intended for people with tuberculosis or hepatitis, not to advance nuclear or missile programmes, but Chinese customs officers see something objectionable in the cargo: nail clippers.  After 2 weeks, Chinese customs gave special permission for the shipment to proceed.  A Quaker charity group claims that it cannot even send shovels, or anything made of steel.

http://www.scmp.com/news/china/diplomacy-defence/article/2130869/charity-shipments-north-korea-stopped-chinese-port-aid

UK NUCLEAR SAFEGUARDS BILL: IMPACT ASSESSMENT

The Department for Business, Energy and Industrial Strategy in the UK has released the Impact Assessment for nuclear safeguards under the Nuclear Safeguards Bill dated 8th December that explains that the civil nuclear sector is subject to robust international non-proliferation measures, which include nuclear safeguards.  Nuclear safeguards are reporting and verification processes by which states demonstrate to the international community that civil nuclear material is not diverted into military or weapons programmes.  These safeguards consist of processes including nuclear material accounting and inspections at civil nuclear sites. Nuclear safeguards arrangements are essential to enable the UK to engage in civil nuclear trade.  It explains that the options considered were to adopt domestic standards of nuclear safeguards of broad equivalence to those adopted by Euratom; or meet nuclear safeguards standards, without replicating Euratom’s standards.  It was the first option that was chosen.

https://www.gov.uk/government/publications/nuclear-safeguards-bill-impact-assessment

US TREASURY SANCTIONS ADDITIONAL INDIVIDUALS AND ENTITIES IN CONNECTION WITH THE CONFLICT IN UKRAINE AND RUSSIA’S OCCUPATION OF CRIMEA

On 26th January, the US Treasury designated 21 individuals and 9 entities under 4 Executive Orders related to Russia and Ukraine, including 3 individuals and 2 entities related to Russia’s transfer of 4 turbines made by a Russian-German joint venture to Crimea.   It targets 11 Ukrainian separatists –

  • Ekaterina Matyushchenko
  • Natalya Nikonorova
  • Vladimir Pavlenko
  • Elena Radomskaya
  • Aleksandr Timofeev
  • Elena Kostenko
  • Svetlana Malakhova
  • Pavel Malgin
  • Dmitry Ovsyannikov

OFAC is also designating 3 individuals and 4 entities who have supported the illicit coal trade –

  • ZAO Vneshtorgservis
  • Vladimir Pashkov
  • Gaz-Alyans, OOO
  • Oleksandr Melnychuk
  • Doncoaltrade Sp. Z O O
  • Serhiy Melnychuk
  • Ugolnye Tekhnologii, OOO

The designations also involve 4 other Russian officials and two entities –

  • Andrey Cherezov
  • Evgeniy Grabchak
  • Aleksandr Pentya
  • Evro Polis Ltd.
  • Bogdan Kolosov
  • Instar Logistics

The sanctions also targets a construction entity and 2 associated individuals operating in Crimea –

  • VAD, AO
  • Valeri Abramov
  • Viktor Perevalov

OFAC is also designating 1 individual and 2 entities related to Russia’s transfer of 4 turbines made by a Russian-German joint venture to Crimea –

  • Limited Liability Company Foreign Economic Association Technopromexport (Technopromexport LLC)
  • Sergey Topor-Gilka
  • PJSC Power Machines

OFAC also identified 12 subsidiaries of Surgutneftegaz as being 50% or more owned by Surgutneftegaz, which was added to the Sectoral Sanctions Identification List (SSI List) in September 2014.  The subsidiaries identified were already subject to the same restrictions as their parent entity.

https://home.treasury.gov/news/press-releases/sm0266

See also –

https://en.radiofarda.com/a/russia-new-u-s-sanctions-ukraine/29000845.html?src=ilaw

FATF REPORT: FINANCING FOR RECRUITING FOR TERRORIST PURPOSES

In January 2018, FATF released a new report “Financing for Recruiting for Terrorist Purposes”.  In its article on the release, law firm Shearman & Sterling say that the Report examines the typical methods of recruitment to terrorist organisations and the costs associated with those methods, that recruitment methods vary from region to region, and that techniques include recruitment via religious groups in some regions and online recruitment via social media in others.  The Report also presents case study data on the sources of funds available to terrorist recruiters and the general expenditures involved in the recruitment process.  The Report recommends –

  • Improved inter-agency and international co-operation to share information and analyze suspected recruiters and financial supporters of terrorist organisations; and
  • That national operational and security agencies engage more with the private sector, non-profit organisations and social media and other Internet providers, by providing better contextual information and guidance to enable those providers to identify the financial flows associated with terrorist recruitment.

The Report says that, while terrorist organisations have different recruitment techniques, depending on whether they are large, small or a dispersed network of individuals, it has identified the most common methods of recruitment used by terrorist organisations and terrorist cells (and their related funding needs) as follows –

  • Personal needs of the recruiter and the maintenance of basic infrastructure for the recruitment/facilitation network;
  • Production and dissemination of recruitment materials (e.g. online or in print);
  • Paying for goods and services to facilitate the new recruits’ early participation in the terrorist organisation (e.g. travel, accommodation costs or payments); and
  • Financial incentives provided directly to recruits.

This Report also found that –

  • Recruitment activities on the Internet are often very closely linked to appeals for financial assistance to terrorists;
  • Recruitment and dissemination of terrorist ideology in prisons and correctional centres is increasing. In one case study, individuals in prison received funding for recruitment activities;
  • More information is required on the costs associated with producing high quality recruitment materials such as the online magazines and video games produced by ISIL. The production of these materials, and their continuous availability online, requires a certain level of expertise and equipment which is likely to have some financial implications and could generate a financial footprint; and
  • Some terrorist organisations may experience the need for specialists in civilian professions who cannot be recruited on ideological grounds (e.g. engineers, doctors, IT specialists, financiers, professional money managers.). The costs of obtaining and engaging the service of such specialists can easily exceed the salaries of ordinary members.

http://www.fatf-gafi.org/media/fatf/documents/reports/Financing-Recruitment-for-Terrorism.pdf

ITALIAN MAFIA BOSS PICTURED ON ISLE OF MAN

ITALIAN MAFIA BOSS PICTURED ON ISLE OF MAN

On 27th January, local media in the Isle of Man reported on a revelation in a BBC documentary that an Italian Mafioso, linked with the theft of 2 Van Gogh masterpieces worth $100 million, has been pictured on the Island.  It is said that this is the only known public photo of a Camorra crime boss, Raffaele Impieriale (though no date was given for when the photo was, secretly it seems, taken).  The claim featured in ‘Stealing Van Gogh’, a programme which traced the paintings’ journey after they were stolen from a museum in Amsterdam in 2002

http://www.manxradio.com/news/isle-of-man-news/italian-mafia-boss-pictured-on-island/

The BBC programme is at –

https://www.bbc.co.uk/iplayer/episode/b09pqx4r/stealing-van-gogh?suggid=b09pqx4r

528838-1

THINGS YOU MAY HAVE MISSED – JANUARY 26

2 MEN ACCUSED OF SMUGGLING HANDGUNS HIDDEN IN CARS SHIPPED FROM US TO TURKEY

The Seattle Times reports on 25th January that 2 Seattle-area men have been arrested by federal agents for allegedly conspiring to violate the US Arms Export Control Act after officials in Turkey found handguns hidden in vehicles shipped from Seattle and apparently intended for Kurdish rebels fighting in Iraq.  Paul Stuart Brunt, of Bellevue, and Rawnd Khaleel Aldalawi, of Seattle, are suspected of purchasing 3 vehicles that they used to smuggle dozens of semiautomatic handguns to Turkey.

https://www.seattletimes.com/seattle-news/crime/2-seattle-area-men-accused-of-smuggling-handguns-hidden-in-cars-shipped-to-turkey/

CANADIAN PROFESSOR ACCUSED OF SPYING FOR CHINA AND ACQUIRING ‘VERY SENSITIVE INFORMATION’

The Journal of Ireland on 25th January reported that a researcher at McGill University in Montreal whose brother was charged in the US with stealing technology and sending it to China is now also suspected in the case.  Ishiang Shih reportedly used his research position at the school to obtain integrated circuits used in US military radar, jammers and scramblers. The computer chips are at the centre of FBI accusations against his brother Yi-Chi Shih, who was arrested by the FBI on charges of scheming “to illegally obtain technology and integrated circuits with military applications that were exported to a Chinese company without the required export license”.  The computer chips had allegedly been shipped to Chengdu GaStone Technology Company (CGTC) in Chengdu, which was blacklisted by the US in 2014.

http://www.thejournal.ie/canada-professor-china-3817466-Jan2018/

US CONGRESS CONTEMPLATES BROAD AML/BSA REFORM

On 26th January the National Law Review reports that the US Congress is considering a new draft Bill, the Counter Terrorism and Illicit Finance Act (“CTIFA”), in committee in the Senate.  The CTIFA proposes the most substantial overhaul to the Bank Secrecy Act (BSA) since the PATRIOT Act.  The article goes on to discuss the various proposed changes.

https://www.natlawreview.com/article/congress-contemplates-broad-amlbsa-reform

FORMER MANCHESTER CITY FOOTBALLER MONEY LAUNDERING RING

On 25th January the Manchester Evening News reported that a former Manchester City player channeled large amounts of cash through “professional” network of money launderers.  Ryan McDowell and his cronies delivered piles of drugs cash stuffed into suitcases and bin bags to other criminals – who used a technique known as ‘cuckoo smurfing’ to make it disappear.  McDowell was jailed for 5 years at Liverpool Crown Court after being observed channelling at least £550,000 through the ‘professional’ network of money launderers, and an additional £142,000 through his own bank accounts.

https://www.manchestereveningnews.co.uk/news/greater-manchester-news/former-manchester-city-player-channelled-14204351

VIP HOST AT CASINO DEREGISTERED AFTER BRITISH COLUMBIA GOVERNMENT PROBE

The Vancouver Sun reports that British Columbia’s gaming regulator has revoked the registration of River Rock Casino’s director of VIP gambler relations after an investigation into allegations of “third-party cash buy-ins” that violated AML regulations.  Lisa Gao, the employee deregistered by B.C.’s gaming policy and enforcement branch, has worked with VIP gamblers at Richmond’s River Rock Casino since 2012.  Peter German, the independent reviewer hired by Attorney-General David Eby, continues to probe the circumstances that allowed VIP gamblers from China to flood BC casinos with suspicious cash.

http://vancouversun.com/news/local-news/river-rock-vip-host-investigated-for-alleged-anti-money-laundering-violations

See also –

e-Know in Canada on 25th January reported that, in an effort to curb money laundering at casinos, from 10th January the British Columbia Lottery Corporation (BCLC) has implemented the first of Peter German’s interim recommendations, through new procedures requiring service providers to gather detailed information on the source of player funds for all transactions of $10,000 or more.

https://www.e-know.ca/regions/east-kootenay/bclc-seeks-curb-money-laundering-casinos/

ISRAEL’S BIG CRYPTO WINNERS HAVE A HARD TIME CASHING OUT

C-Tech by Calcalist reports on problems cryptocurrency users have depositing any gains.   Israel’s Prohibition on Money Laundering Law, which requires Israeli banks to automatically report suspicious deposits and all deposits exceeding around $14,700 to the Israeli Ministry of Justice.  In these cases, account-holders are required to turn in documents that verify the legitimacy of the deposit’s origin.  However, the anonymised nature of the cryptocurrency industry means Israeli banks refuse to accept such deposits, fearing they are illegally gained. Then there is taxation since no comprehensive guidelines have been formulated in Israel yet for how to tax crypto-derived income.

https://www.calcalistech.com/ctech/articles/0,7340,L-3730445,00.html

HOW TO FIX RUSSIA’S BROKEN BANKING SYSTEM

On 14th January, the Carnegie Moscow Center published an article by Andrey Movchan of the FT which begins by saying that Russia’s privately owned banks are collapsing one by one.  In 2017, Otkritie and B&N Bank failed within weeks of each other.  In the past 17 years, 2,600 of just over 3,000 registered banks have lost their licences.  Through years of mismanagement, the Bank of Russia, the country’s central bank, has created an unscrupulous and ineffective banking system. Now it must be rebuilt from the ground up.  The article proposes that needs a supervisory authority independent of the central bank; and retail banks should be prohibited from investing in non-liquid assets, while the liquid securities market should be saved for investors.  Terrifyingly, the article asserts that banks have issued loans with fake collateral, overstated the value of assets and inflated formal capital through structured transactions with affiliated companies, and that money laundering and cash conversion operations returned.  In the past 15 years, it is said that more than 80% of banks have exhausted their clients’ deposits through risky trades and offshore transfers to shareholders’ personal accounts.

http://carnegie.ru/2018/01/14/how-to-fix-russia-s-broken-banking-system-pub-75267?mkt_tok=eyJpIjoiWW1WaU1USmtaakl6T1RZMCIsInQiOiJcLzM2cWl3K3E0eGVcL1NnamtFeVBMOXBNMVBWemYwSXlOVzAzMFVJY0lERDNIclJWTjRLT0xDNUp5S0FWZnZzWFlJcHBtYThOOThpdkNuSWw3bmJkcSt2YzZlZ1dtdlpLVnZzOXdZcXdlR2FKMUpIZ3J2R0EzNDJ1dld6NUZWT0FuIn0%3D

NOW IN A MUSEUM IN THE ISLE OF MAN

Almaz

As well as this one, one more is currently on display at Castle Rushen High School in the Island, and Excalibur still has another green one as well as this – said to be at the International Space University (ISU) in Strasbourg – http://www.isunet.edu/blog/campus/facilities/facilities/122

The company had been based in the Isle of Man and planned to use the 4-seat capsules for “space tourism” trips (other possible uses were also mooted).  The Almaz capsules themselves come from a former Soviet military programme (almaz, or алмаз in Russian, means “diamond”), reputedly what was then an anti-satellite project (and hence probably illegal under treaties at the time).  It put the Isle of Man on the space map for a time (though, to be fair, the Island has other connections to satellite and other space projects) and at one time was incredibly said to be the 4th most likely country to mount a mission to the Moon!

See also http://www.bbc.co.uk/news/world-europe-isle-of-man-31813697

http://www.independent.co.uk/news/science/shooting-for-the-moon-time-called-on-isle-of-man-space-race-10101750.html

FIRST-EVER TRANSPARENCY ASSESSMENT OF RUSSIA’S 200 LARGEST COMPANIES 

On 25th January, Transparency International reported that Transparency International Russia had published a study that gives low scores on anti-corruption and financial transparency to most of the 200 top companies studied.  It assesses the financial disclosure practices of 200 companies in Russia with respect to their anti-corruption programmes as well as the availability of information on their subsidiaries and foreign branches and payments to government.  This is described as the first-ever full-scale assessment of Russian companies based on the Transparency in Corporate Reporting (TRAC) methodology developed by Transparency International.  Profits from these companies comprise more than 70% of Russia’s national income and their taxes are crucial to the Russian state budget.  41 companies scored zero on all three of the criteria assessed: the availability of information about their anti-corruption programmes, transparency on the company’s holdings, and the disclosure of key financial information on a country-by-country basis.

https://www.transparency.org/news/pressrelease/first_ever_transparency_assessment_of_russias_200_largest_companies1?utm_medium=email&utm_campaign=Global%20Newsletter%2026%20January%202018&utm_content=Global%20Newsletter%2026%20January%202018+CID_d0b01c8e8121bd01dc140cb4f5e87463&utm_source=Email%20marketing%20software&utm_term=First%20ever%20transparency%20assessment%20of%20Russias%20200%20largest%20companies

AFRICAN UNION ANTI-CORRUPTION DRIVE

On 26th January, Transparency International reported that the 30th Assembly of Heads of States and Governments of the African Union (AU) was to convene in Addis Ababa to launch a new campaign with a single, important goal: to fight corruption across the continent.  The session’s theme will focus on building a new, sustainable path to end corrupt practices and promote transparency throughout government, business, and civil society.  The article points out that many African candidates have been elected on the promise to fight corruption and govern differently- George Weah most recently in Liberia, Ghana before that, and the ANC in South Africa said to be losing ground because of the taint of corruption.  The AU Convention on Preventing and Combatting Corruption (AUCPCC) was adopted in 2003 and ratified by 38 countries – but its effects would seem to be limited.  There is also the African Union Advisory Board on Corruption (AUABC) which, since 2006, has had a mandate to promote and encourage the adoption of measures and actions by states to prevent, detect, punish and eradicate corruption.

https://voices.transparency.org/the-african-union-kicks-off-2018-with-an-anti-corruption-campaign-b4c233eab262

GUATEMALA SAYS ODEBRECHT AGREES TO PAY $17.9 MILLION OVER BRIBES

Reuters reported on 25th January that Brazilian construction company Odebrecht has agreed to pay Guatemala $17.9 million in compensation for bribes paid to an official for public works.  The UN-backed International Commission Against Impunity in Guatemala (CICIG) revealed this month that ex-infrastructure minister Alejandro Sinibaldi had agreed to take $19.5 million to arrange for Odebrecht to secure the $300 million contract (a fugitive now, he is said to have actually received $17.9 million).

https://www.reuters.com/article/us-guatemala-corruption/guatemala-says-odebrecht-agrees-to-pay-17-9-million-over-bribes-idUSKBN1FE09N

FALSIFICATION OF MEDICINES: EU COMMISSION CALLS FOR STRICT ENFORCEMENT OF THE RULES

On 26th January the European Commission referred to a report on the application of penalties for those involved in the production and circulation of falsified medicines published today shows a wide variation in penalties across the EU.  Maximum prison sentences for the falsification of medicines range from one year (Sweden, Finland and Greece) to 15 years (Austria, Slovenia and Slovakia); and maximum fines range from €4,300 (Lithuania) to €1 million (Spain) and ‘unlimited’ (UK).  The report comes following the requirement enshrined in the Falsified Medicines Directive (2011/62/EU) that all EU countries put in place proportionate, effective and dissuasive penalties for those involved in the production and circulation of falsified medicines.  Member States and stakeholders are working on a pan-EU authentication system for medicines scheduled to enter into force in February 2019. This means that the authenticity of prescription medicines will be checked before they are dispensed to patients.

https://ec.europa.eu/health/human-use/falsified_medicines_en

HM TREASURY NOTICE: CHANGES TO DETAILS OF VESSEL “CAPRICORN” UNDER LIBYAN SANCTIONS

On 26th January, HM Treasury issued a Notice confirming application in the UK of the changes to the details of the designation of the vessel “Capricorn” under the EU Libyan sanctions regime.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/677222/Notice_2018_126_Libya.pdf