On 23rd October, OFAC designated 9 individuals associated with the Taliban, including those facilitating Iranian support to bolster the terrorist group. They are also being designated by Saudi Arabia, Bahrain, Kuwait, Oman, Qatar, and UAE (i.e. the 7 member nations of the Terrorist Financing Targeting Center or TFTC) – the third such co-ordinated TFTC designation action since the Center was announced on May 21st 2017.
The UN Office for Disarmament Affairs has published an Occasional Paper which summarises the main findings and implications of the first empirical study investigating the scale and scope of arms trafficking on the dark web. It is claimed that the findings of this study shed light on the scale and scope of arms trafficking on the dark web, illustrating the range of weapons traded, their market price and most common transit routes. In addition, it discusses the implications of this growing phenomenon for law enforcement agencies and policy makers, highlighting the key role that firearms control measures continue to play in the presence of new forms of trafficking.
On 23rd October, Eversheds Sutherland published the latest edition of its booklet which summarises key financial crime related legal and regulatory changes expected over the next 18 months to 2 years, as well as providing electronic links to key resources.
The comprehensive subject matter includes –
- FCA is proposing to add a chapter on insider dealing and market manipulation to the Financial Crime Guide and also make a number of general changes as a result of recent regulatory changes to ensure the guide remains up to date;
- The Home Office is committed to publish an asset recovery action plan in response to a Public Accounts Committee. The asset recovery plan will set out how the UK is responding to the challenges involved in improving the recovery of the proceeds of crime;
- Criminal Fraud (Private Prosecutions) Bill 2017-19. A Private members’ Bill, it makes provision about private prosecutions in cases of suspected criminal fraud in certain circumstances; and for connected purposes. The Commons 2nd Reading scheduled for 26th October;
- The Law Commission consultation on AML closed on 5th October;
- The Law Commission public consultation on reforming the law of search warrants closed in September and the response from the Law Commission is awaited; and
- The consultation on the draft Registration of Overseas Entities Bill, which sets out provisions to establish a new beneficial ownership register of overseas entities that own UK property to be maintained by Companies House, closed on 17th
On 23rd October, The Lawyer published an article from Carey Olsen about the recently
introduced the Micro Business Companies Act (MBC Act) – bespoke and innovative legislation designed towards developing and supporting the ever-burgeoning micro/small business market – and typically characterised as being smaller style unsophisticated, non-financial sector corporate entities or structures usually having one owner and perhaps a handful of employees. The MBC are generally given a broad remit in terms of capacity and powers to carry on their business activities subject to certain restrictions. It is permitted to issue no more than 6 shares in total consisting of 1 “principal” share and a maximum of 5 “investor” or “participant” shares. Turnover should not exceed $2 million, and the gross value not exceed $2 million.
On 23rd October, Intergame published a video interview about the new rules from the UK Gambling Commission that come into force from October 31st. The changes to licence condition and codes of practice covers 5 main points –
- operators will be required to abide by UK advertising codes which are written by the committees of advertising practice and enforced by the Advertising Standards Authority;
- operators will be held fully accountable for the actions and behaviours of third parties, including affiliates;
- operators will be required to comply with consumer law, particularly in relation to online promotions and the withdrawal of customer funds;
- operators will be required to introduce better complaint handling processes and we’re introducing a new 8-week limit for the resolution of customer complaints; and
- operators will be required to ensure that they don’t spam UK consumers by electronic means.
On 23rd October, a news release from Jersey announced that the law just put forward –
- would preserve Jersey’s power to impose EU sanctions and would also allow Jersey to impose UK sanctions made under the UK Sanctions and Anti-Money Laundering Act after the UK leaves the EU: meaning Jersey would retain the ability to impose the same sanctions as the UK following Brexit; and
- would also bring together several other laws relating to the freezing of assets, including the Terrorist Asset-Freezing Law 2011 and the United Nations Financial Sanctions Law 2017.
Reuters on 23rd October reported that Australia has placed travel and financial sanctions on 5 top Myanmar military officers – Aung Kyaw Zaw, Aung Aung, Maung Maung Soe, Than Oo and Khin Maung Soe, following similar moves by the EU and US.
A news release from the European Monitoring Centre for Drugs and Drug Addiction (EMCDDA) on 22nd October reported that the latest edition in the EMCDDA Papers series is concerned with captagon and understanding the illegal market for the drug, and what is currently known about the captagon phenomenon in order to assist those working in the illicit drugs field who may need to respond to the issue. Captagon was originally the brand name for a medicinal product containing fenetylline (fenetylline was placed under international control in 1986) produced since the 1960s and serving licit markets in Europe and the Middle East. Sold in tablet form, it was prescribed as a treatment for conditions such as attention deficit disorder and narcolepsy, but it is no longer produced or used for therapeutic purposes. Traffickers started producing tablets containing other substances, especially amphetamine, which were then sold as ‘captagon’ on markets for stimulants in the Middle East – and it is reported to be a commonly used stimulant in the Middle East and seizures have been increasing in a number of Middle East countries (particularly Israel, Jordan and UAE). Production now seems to be largely in the Middle East.
The report is available at –
On 23rd October, Harneys published an article saying that BVI courts have again stepped in to ensure that proper thought and process is applied to requests made by foreign governmental bodies. This follows a key decision in 2017 on monitoring requests pursuant to tax information exchange agreements (TIEA). This time it involved requests made by Russia to gather evidence into alleged criminal conduct, the court issuing an injunction against the transfer of documents and ultimately required reconsideration of the decision.
22nd October 2018
THE SERIOUS IMPACTS OF FISHERIES CRIME
Global Financial Integrity on 22nd October published an article containing remarks that the author of the article made at the recent FishCrime conference in Copenhagen. Crimes – illegal fishing, drug trafficking, and human trafficking — that occur in the fisheries sector fall under the umbrella of fisheries crime. It considers their impacts, as well as discussing treating illegal fishing as a serious transnational organised crime. Illegal fishing is the most obvious fisheries crime. Next is drug trafficking, asking what will be the tipping point for fishermen facing depleted stocks to turn to drug smuggling? He also claims that companies and operators that engage in illegal fishing are often also guilty of human trafficking, specifically forced labour. The article then asks why isn’t illegal fishing treated as a serious crime, a transnational organised crime?
UKRAINIANS CARRY ABROAD THE “SUN STONES”: SMUGGLED AMBER
The Siver Telegram on 21st October said that the state border service continues to implement a systematic set of measures to combat illegal movement across the state border of Ukraine of smuggled stones of amber, saying that since the beginning of year the staff of state frontier service of Ukraine found nearly 300 lb of “sun stone”.
HIGH-PROFILE BRISBANE LAWYER FACES COURT ON FRAUD AND MONEY LAUNDERING CHARGES
ABC News on 22nd October reported that high-profile Brisbane lawyer Adam Magill, 47, has been granted bail after appearing in court charged with fraud and money laundering offences. He was charged as a result of an 18-month investigation into the Lawler-Magill law firm by the Crime and Corruption Commission (CCC). 3 other men, including 2 other solicitors, have also been charged as part of Operation Stockade.
MODERN SLAVERY VICTIMS LET DOWN BY GOVERNMENT, SAYS FORMER UK COMMISSIONER
Manx Radio on 21st October carried a Sky News story saying that the former independent slavery commissioner has criticised the Home Office for failing to implement proposals he says it agreed to a year ago. He is among critics who say the victims are not being properly looked after once they have escaped or been rescued.
END OF 17-YEAR LEGAL BATTLE OVER LIABILITY FOR IMPORT CHARGES IN KENYA
The Daily Nation in Kenya on 22nd October reported that the end of a 17-year battle involving the Kenya Revenue Authority (KRA), the Court of Appeal has said that importers to bear responsibility in the event of any tax fraud committed by their clearing and forwarding agents. In 2001 the KRA demanded unpaid duty for the import of cooking equipment in 1995. The importer said that its agent had paid all taxes for the burners, and sent KRA documents in support of its stand; KRA insisted that the documents were forgeries.
COSTA RICA: KIDNAPPED E-GAMBLING OPERATOR FOUND DEAD
On 20th October, Gambling 911 reported that the body of Sean “Tony” Creighton has been found by law enforcement in Costa Rica. He disappeared on September 24th after an alleged ambush by up to 5 men. The victim’s family in Costa Rica paid a $750,000 ransom, reportedly sent to Cuba and in the form of Bitcoin.
TAIWAN ADOPTS OECD TAX DATA-SHARING PROTOCOLS BUT STAYS NON-MEMBER
HKTDC on 22nd October reported that Taiwan has implemented the Common Reporting Standard (CRS) despite not being a member of OECD. Taiwan has announced plans to toughen up its tax evasion regime, and over the course of the last 12 months it has revised its AML legislation and has issued new due diligence guidelines to its financial institutions.
NUMBERS OF SFO ASSET FREEZING ORDERS HALVE IN A YEAR
London Loves Business on 22nd October reported that attempts by the SFO to freeze the assets of fraudsters – through restraint orders – have halved from 8 to 4 in the past year, says the Pinsent Masons law firm. It says that the SFO has not issued a restraint order within 2 months of opening and investigation in any of the past 3 years. Pinsent Masons says that the fall in these asset freezing orders may be linked to the SFO’s focus on high-profile so-called ‘blockbuster’ cases that have a public policy interest, rather than purely a large financial value.
CHINA’S INTERNET GATEKEEPER PLEADS GUILTY TO BRIBERY
OCCRP on 21st October reported that Lu Wei, once the gatekeeper of the internet for the entire population of China, has pleaded guilty to abuse of power and accepting what amounted to $4.6 million in bribes over the span of his 15-year career. Wei became the head of the Cyberspace Administration of China (CAC), in 2014.
PUSH PAYMENT FRAUD: UPDATE FOR AUTUMN 2018
On 17th October, Walker Morris published a report on the Payment Systems Regulator’s recent proposals for dealing with push payment fraud. It explains that a push payment fraud will involve the fraudster somehow persuading the consumer to organise a transfer from the consumer’s account to the fraudster’s account. It reviews past moves to combat the fraud and a steering group has now published a draft code which aims to ensure that the scheme is designed in the best way to minimise fraud and to protect victims. Consultation on the new code runs to 15th November.
HONG KONG: COURT OF FINAL APPEAL CLARIFIES INNOCENT PURPOSE DEFENCE TO INSIDER DEALING
Baker McKenzie on 18th October reported that, in Securities and Futures Commission v Yiu Hoi Ying Charles and Others, the Court of Final Appeal handed down a landmark decision on the innocent purpose defence under section 271(3) of the Securities and Futures Ordinance.
US POSTAL SERVICE AUDIT EXAMINES USE OF POSTAL SERVICE NETWORK TO FACILITATE ILLICIT DRUG DISTRIBUTION
Customs brokers’ trade body in the US, the NCBFAA, reported on 22nd October that the Postal Service Office of the Inspector General released the results of an audit that looked at the role of the US Postal Service network in facilitating illicit drug distribution. The report is said to highlight vulnerabilities, including – the inability to open and inspect packages suspected of including illicit drugs; federal sentencing guidelines do not include a distinct penalty for using the postal service network to facilitate illicit drug distribution; data analytics needs to be enriched to better target suspect mail; and there is a lack of a unified, organisation-wide strategy.
The report is at –
US SANCTIONS ON THE RUSSIAN OIL SECTOR
On 22nd October, Torres Law published an article that discusses US economic sanctions on Russia as enforced by OFAC. They impose, it says, a complex network of restrictions on U.S. parties seeking to do business with the Russian oil industry. It says that it is important that parties who want to engage in transactions with the Russian oil industry conduct their due diligence.
SOUTH KOREA ATTEMPT TO EASE NORTH KOREA SANCTIONS FALLS FLAT
The Wall Street Journal on 19th October reported that South Korea’s president’s attempt to rally European support for loosening sanctions on North Korea appeared to have fallen flat. He is said to have used a 9-day trip through Paris, Rome, Vatican City, Brussels and Copenhagen to urge greater engagement with North Korea.
SLAVERY AND HUMAN TRAFFICKING IN SUPPLY CHAINS: UK GUIDANCE FOR BUSINESSES
On 22nd October, the Home Office released an update of its 2015 guidance booklet for organisations on how to ensure that slavery and human trafficking is not taking place in their business or supply chains.
SWIFT INTRODUCES NEW SOLUTION TO ADDRESS PAYMENT FRAUD
Electronic Payments International on 22nd October reported that SWIFT Payment Controls is designed to identify and respond to fast-moving, suspect transactions.
UK REGULATOR SEIZES 10,000 FAKE TEST KITS FOR SEXUALLY TRANSMITTED INFECTIONS
The Pharmaceutical Journal on 22nd October reported that the MHRA has seized nearly 10,000 fake sexually transmitted infection (STI) test kits — including some that screen for HIV — and is warning the public to check packs for the CE quality mark and ensure they are sold by an approved supplier. The warning comes as MHRA research revealed that 25% of people aged 18–30 years have bought medical products online in the past 12 months, despite suspecting that they were counterfeit.
BELFAST-BORN FINANCE TYCOON ROGER ‘ROCKET’ KNOX CHARGED OVER £126 MILLION FRAUD
Belfast Live reported on 21st October that Roger Knox, 47, a UK citizen and former soldier who resides in France, was charged by criminal complaint in the US with securities fraud and conspiracy to commit securities fraud. The charges relate to a massive global securities fraud scheme worth around $164 million.
UK SANCTIONS BODY OFSI GIVES EVIDENCE TO PARLIAMENTARY COMMITTEE
On 22nd October, the European Sanctions Blog provided a summary of the oral evidence given by representatives of the Office of Financial Sanctions Implementation and the FCA to the House of Commons Treasury Select Committee. The transcript of the hearing is available at –
Amongst the information provided was that, in 2017, OFSI received 133 reports of suspected sanctions breaches, estimated value £1.4 billion, with 103 of the 133 reported breaches reported to OFSI since it gained its powers to impose civil monetary penalties (though the Committee criticised its apparent inadequate enforcement).
RUSSIA TO SEND MORE MILITARY TRAINERS AND EQUIPMENT TO CENTRAL AFRICAN REPUBLIC
Alternative Africa on 20th October reported that Russia plans to send additional military equipment to Central African Republic (CAR) and deploy 60 more instructors to train the country’s armed forces, escalating its most significant military foray in Africa in decades. It donated hundreds of weapons and sent 175 trainers to CAR earlier this year to bolster the government’s fight against militia groups after receiving an exemption from a UN arms embargo. Many of the Russians in CAR are said to be private security contractors and their remit has expanded into mediating negotiations among armed groups, securing mining projects and advising CAR’s president.
PODCAST: SPOTLIGHT ON BRAZIL
In the latest TRACE podcast, Rafael Gomes discusses Petrobas all that has been going on in Brazil recently on the anti-corruption front, the current outlook there and the upcoming run-off election.
EX-CROATIAN PM TO SERVE JAIL TERM FOR BRIBERY
The Anadolu Agency on 22nd October reported that Croatia’s former Prime Minister Ivo Sanader has been sentenced in Zagreb to 2½ years in prison for bribery and unjustified profits in the 90s wars.
DIRECTORS MUST PAY £2 MILLION IN LANDMARK WHISTLEBLOWING CASE
Personnel Today on 22nd October reported that 2 directors of International Petroleum (IPL), a company based in Australia but listed on the LSE, have been held liable for the unfair sacking of a whistleblower for the first time. Alexander Osipov had been CEO of the company who was sacked in 2014, primarily for making protected disclosures under whistleblowing legislation. This had followed disagreements over operations and the award of contracts in Niger. He told an employment tribunal that his concern was good corporate governance and the need to avoid suggestions of bribery and corruption, which had blighted businesses in Niger. He had also voiced concerns over the holding of data that may have breached Niger’s petroleum code.
MORE THAN 40 FOOTBALL CLUBS AND 170 PLAYERS FACING TAX INVESTIGATION IN UK
BT Sport on 22nd October reported that HMRC has confirmed it is currently looking into tax information concerning 44 league clubs, 171 players and 31 agents as it continues to crack down on the sport. HMRC established its specialist Football Compliance Project in 2017 to oversee all of its compliance activities within the football industry. HMRC is reportedly looking at “image rights” which enable players to exploit their image for commercial value through sponsorship and endorsements.
BULGARIAN MONEY COUNTERFEITERS BUSTED
The Mail Online on 22nd October reported that Bulgarian authorities say they have successfully taken down an illegal counterfeit operation that was printing high quality bogus euro and US dollar banknotes. The illegal printing press and bogus €500, €100 and $50 banknotes were found in the basement of a hotel in the Black Sea resort of Sunny Beach.
AUSTRALIA: REVISED PENALTIES COME DOWN HARD ON WHITE COLLAR CRIME
Baker McKenzie on 22nd October reported that the Australian Federal Government is to introduce legislation into parliament to increase the penalties for white collar crimes – criminal penalties were set to double in some cases, while civil penalties for corporations and individuals would “skyrocket”.
MALDIVES COURT FREES OPPOSITION LEADER CONVICTED OF BRIBERY
Baker McKenzie on 22nd October reported that Qasim Ibrahim, a political party leader and businessman owning a chain of tourist resorts, was sentenced to more than 3 years in prison last year after he joined forces with the opposition in trying to unseat President Yameen Abdul Gayoom. He was accused of offering to fund re-election campaigns of government lawmakers in return for voting for an opposition-sponsored no-faith motion against the parliamentary speaker.
LET THEM EAST CHEESE: RUSSIAN PLANT THRIVES AMID SANCTIONS
Rferl on 22nd October carried an article about the results of the food import ban imposed in retaliation for Western sanctions that followed the Kremlin’s 2014 annexation of Ukraine’s Crimean Peninsula. The import ban included dairy products, and that meant foreign cheese. Entrepreneurial Russians spotted an opportunity to fill the void with homegrown alternatives. Like others in Russia’s food industry, the cheese plant in Sernur – the subject of the article, accepted the challenge.