US BAR ASSOCIATION OPPOSES AML BILL REQUIRING SAR BY LAWYERS

On 2nd February, the ABA Journal reports that American Bar Association President Hilarie Bass is expressing concerns that an AML Bill would undermine the attorney-client privilege and impose “burdensome and intrusive regulations” on small businesses and their lawyers. The ABA opposes provisions that would regulate many lawyers and law firms as financial institutions under the Bank Secrecy Act when they help clients to establish small corporations and limited liability companies.

See also the ABA news release at –

https://www.americanbar.org/news/abanews/aba-news-archives/2018/02/aba_sends_letterto.html

and letter to Senate members at –

https://www.americanbar.org/content/dam/aba/uncategorized/GAO/1feb2018-abalettertosjcopposings1454.authcheckdam.pdf

www.abajournal.com/news/article/aba_opposes_anti_money_laundering_bill_requiring_suspicious_activity_report

US ARMS EXPORT RESTRICTIONS ON SOUTH SUDAN

On 2nd February the US State Department issued a news release that announces that it is implementing restrictions on the export of defence articles and defence services into South Sudan due to the continuing violence. The Department also encourage IGAD and the African Union to consider sanctions measures against those who undermine the peace process. The US is seeking support for a UN Security Council embargo on all arms flows into South Sudan and we urge all Security Council members to join the US in supporting this action. The message must be clear, it says – the US, the region, and the international community will not stand idly by as innocent South Sudanese civilians are murdered.

https://www.state.gov/r/pa/prs/ps/2018/02/277849.htm

EU AMENDS DETAILS OF LYNN S VESSEL UNDER LIBYAN SANCTIONS

On 3rd February, EU Regulation 2018/166/EU amended the details of the vessel, Lynn S.

http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2018.031.01.0082.01.ENG&toc=OJ:L:2018:031:TOC

See also EU Council decision 2018/167/CFSP –

http://eur-lex.europa.eu/legal-content/EN/AUTO/?uri=uriserv:OJ.L_.2018.031.01.0084.01.ENG&toc=OJ:L:2018:031:TOC

EU REGULATION CONFIRMS 3 NAMES ADDED TO SOUTH SUDAN SANCTIONS

On 3rd February, EU Regulation 2018/164/EU confirmed the below.

http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2018.031.01.0001.01.ENG&toc=OJ:L:2018:031:TOC

See also EU Council Decision 2018/168/CFSP –

http://eur-lex.europa.eu/legal-content/EN/AUTO/?uri=uriserv:OJ.L_.2018.031.01.0086.01.ENG&toc=OJ:L:2018:031:TOC

The European Council has added 3 persons involved in serious human rights violations to the list of those submitted to a travel ban and an asset freeze in view of the situation in South Sudan.  It is the first time that the EU decides to sanction persons in view of the situation in South Sudan in addition to those sanctioned by the UN. The decision brings the total number of persons under restrictive measures in view of the situation in South Sudan to 9, as 6 persons were already listed by the UN.  The 3 new names are – Paul Malong, Malek Reuben Riak and Michael Makuei Leuth

http://www.consilium.europa.eu/en/press/press-releases/2018/02/02/south-sudan-eu-adds-3-persons-involved-in-serious-human-rights-violation-to-sanctions-list/

https://www.gov.uk/government/news/minister-for-africa-welcomes-new-eu-sanctions-against-south-sudan

THINGS YOU MAY HAVE MISSED – FEBRUARY 2

1st February 2018

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NORTH KOREA’S SOLID-PROPELLANT ROCKET ENGINE PRODUCTION INFRASTRUCTURE: THE NO. 17 FACTORY IN HAMHUNG

For an example of the chiefly open source research being carried out on North Korea, and the analysis of its capabilities and activities, this article on the 38 North website is a good example.  It is concerned with the No. 17 Explosives Factory and its branch factories near Hamhung which have been identified as being the most probable site for the manufacture of the latest large solid-propellant rocket engines.

www.38north.org/2018/01/no17factory180130/?mkt_tok=eyJpIjoiTW1RMlpURTVZVFZrWkRNeCIsInQiOiJrVHdoV3ZHN295aG9rUFFUdkZNV1NOdFAzbTRIOHB3WFN2am8yeXZYcjFTVFhXcnNNbDM4T1BKQjNNT0Q5alc5QnhQbHpMN1lvaXRoTkxjenJ2aEg0QjRJNDB5V255TThqdUR1VFdjTzRcL2dBUFF2SlBjVyszK2ZcL2VlenNWUTZMIn0%3D

NEW PALESTINIAN AND EGYPTIAN DESIGNATIONS BY US HIGHLIGHT IRAN AND THE MUSLIM BROTHERHOOD

An article from the Washington Institute on 31st January follows the recent new OFAC counter-terrorism designations.  It points out that the US had emphasised links to Iran, and Secretary of State Rex Tillerson had emphasised that both Hamas and al-Sabirin (a Gaza-based organisation, which reportedly receives $10 million a year from Iran) are “sponsored and directed by Iran” and continue to attempt attacks at its behest. One person designated, Haniyeh, was said to have led efforts to improve ties with Iran during his tenure as Hamas leader in Gaza. Also, other designations are said to be of those linked or inspired by the Muslim Brotherhood of Egypt.  The article concludes the limited effect of seeking to freeze assets of those unlikely to have any assets within reach of the US authorities means that the actions are therefore more symbolic in nature, aimed at shoring up key regional allies who share Washington’s concerns about Iranian terror sponsorship and Brotherhood-inspired violence.

http://www.washingtoninstitute.org/policy-analysis/view/new-gaza-and-egypt-designations-highlight-iran-and-the-muslim-brotherhood

EU LAUNCHES BLOCKCHAIN OBSERVATORY AND FORUM

On 1st February Monde Visione reported that the European Commission launched the EU Blockchain Observatory and Forum with the support of the European Parliament.  The Blockchain Observatory and Forum will highlight key developments of the blockchain technology, promote European actors and reinforce European engagement with multiple stakeholders involved in blockchain activities.  The Commission wants to provide more visibility to blockchain actors and build on existing initiatives, consolidate expertise and address the challenges created by the new paradigms enabled by blockchain, such as supporting the European Industry, improve business processes and enable new business models. The Blockchain Observatory and Forum was created as a European Parliament pilot project and is intended to support the Commission’s work of FinTech.

http://www.mondovisione.com/media-and-resources/news/european-commission-launches-the-eu-blockchain-observatory-and-forum/

See also factsheet –

https://ec.europa.eu/digital-single-market/en/news/how-can-europe-benefit-blockchain-technologies

ISIS SMUGGLED $400 MILLION OUT OF IRAQ AND SYRIA DURING ITS RETREAT

In an article on 17th January, in which it was said that despite its defeat on the battlefield, ISIS is using Iraq’s black market to stockpile millions of dollars to fuel its coming insurgency, it was reported that ISIS had smuggled an estimated $400 million out of Iraq and Syria during its recent retreat, according to an Iraqi legislator who sits on a parliamentary committee to gather facts on Mosul’s fall and who is close to figures in the organization. With that cash, ISIS has both smuggled money out of Iraq and invested in local Iraqi markets.

https://www.chathamhouse.org/expert/comment/isis-still-business?utm_source=Chatham%20House&utm_medium=email&utm_campaign=9078003_CH%20Newsletter%20-%2019.01.2018&utm_content=Business-CTA&dm_i=1S3M,5EKMR,NUTAYR,KWWME,1

UKRAINE TESTS CRUISE MISSILE

The Missile Threat website on 1st February reported that, on January 30th, Ukraine flight-tested an indigenously-produced, ground-launched cruise missile.  One source has identified the missile as the Neptune, a Ukrainian advanced subsonic cruise missile based on the Kh-35, a Soviet-designed subsonic antiship missile put into service in Russia in 2003. The missile was developed by the Kiev-based Luch Design Bureau.

https://missilethreat.csis.org/ukraine-tests-indigenous-cruise-missile/

THE STORY OF ICTY: LEGAL SUCCESS EMERGING FROM TRAGEDY

A guest columnist on the Jurist website provided this article dated 16th January which deals with the International Criminal Tribunal for the former Yugoslavia (ICTY), established in response to a mandate from the UN Security Council.  The ICTY officially closed on 21st December, having originally been set up in response to atrocities committed in former Yugoslavia.  It operated for 10,800 days, examined more than 4,000 witnesses and convicted 90 individuals.

http://www.jurist.org/dateline/2018/01/Mohit-Gupta-ICTY.php

“BETTING KING” WITH ALLEGED LINKS TO MALTA ARRESTED IN RAIDS IN ITALY

Calvin Ayre on 1st February reported that Italian police have busted an illegal gambling operation with ties to Malta-licensed online betting sites.  It says that an operation saw over 200 police in the Palermo region descend upon dozens of betting shops in an anti-mafia operation dubbed Game Over. The raids resulted in the arrests of 23 individuals, including Benedetto Bacchi (pictured), the so-called ‘betting king’ who reportedly controlled a network of around 700 betting shops across Italy.  The betting agencies in question are known in Italy as data transmission centers (CTD), essentially internet cafés with terminals connected to internationally licensed online gambling sites.  It says that Italian prosecutors linked Bacchi and his B2875 gambling brand – the numbers correspond to Bacchi’s date of birth – to Phoenix International Ltd, a Malta-based company that holds a Class 2 online betting license issued in Malta.

https://calvinayre.com/2018/02/01/business/italy-betting-king-malta-linked-bust/

CALIFORNIA TAKES ANOTHER RUN AT REGULATING VIRTUAL CURRENCIES

On 1st February Thompson Coburn published an article on the Virtual Currency Act, which would require anyone involved in a “virtual currency business” in the state to first register with California’s Commissioner of Business Oversight.

https://www.jdsupra.com/legalnews/california-takes-another-run-at-69367/

HOW TO COMPLY WITH REACH CHEMICAL REGULATIONS

On 1st February, DEFRA issued an updated news release explaining how to comply with the EU’s REACH chemical regulations when you’re using, making, selling or importing chemicals in the EU.

https://www.gov.uk/guidance/how-to-comply-with-reach-chemical-regulations

ISLE OF MAN GAMBLING REGULATOR WELCOMES NEW AML/CFT POWERS

On 1st February, Tax News reported that the Isle of Man Gambling Supervision Commission has welcomed 2 new laws giving it enhanced AML/CTF powers.  The new Casino Amendment Act 2018 and Gambling (Anti-Money Laundering and Countering the Financing of Terrorism) Act 2018 both came into operation on 16th January.

https://www.lowtax.net/news/IoM-Gambling-Regulator-Welcomes-New-AMLCTF-Powers_76333.html

WOMAN JAILED FOR SETTING UP FAKE COMPANIES TO LAUNDER CASH FROM £10 MILLION VIAGRA SCAM

Metro in the UK on 1st February reported that a woman has been jailed for more than 2 years for using a fake embroidery firm to launder money from a £10 million counterfeit Viagra scam. Janice Sofoulakis’ role in the 4-person operation was to open bank accounts in the name of businesses to launder hundreds of thousands of pounds.  For 8 years, she was involved in the fraud with her daughter and 2 others.

http://metro.co.uk/2018/02/01/woman-jailed-setting-fake-companies-launder-cash-10-million-viagra-scam-7280437/?ito=cbshare

IRISH COURT REFUSES MAN’S EXTRADITION BECAUSE OF BREXIT

The Guardian on 1st February carries a story saying that Ireland’s Supreme Court has declined to extradite a company director wanted for fraud to London because by the time he finishes his prison sentence the UK will have left the EU.  Thomas Joseph O’Connor, 51, a construction company director, from Roscommon, had been convicted of tax fraud in London in 2007 but then absconded on bail and has now been arrested on an European Arrest Warrant.

https://www.theguardian.com/politics/2018/feb/01/irish-court-refuses-mans-extradition-because-of-brexit

FRAUDSTER FEE-EARNER BANNED AFTER ‘AUDACIOUS’ THEFT OF £569,000

On 29th January, the Law Society Gazette reported the case of a fee-earner who siphoned money from her firm’s client account to send to fellow fraudsters has been barred from working in the profession. Caprice Lindo, who worked in the conveyancing department of Cheshire practice O’Neill Patient Solicitors, arranged for up to £569,000 of client money to be sent in late 2013 from the firm’s accounts to her associates.

https://www.lawgazette.co.uk/news/fraudster-fee-earner-banned-after-audacious-theft-of-569000/5064564.article

SWISS BANK PKB BROKE MONEY-LAUNDERING RULES IN BRAZILIAN CASES: FINMA

On 1st February, Reuters reported that Swiss private bank PKB Privatbank SA Lugano committed serious breaches of money laundering regulations in business linked to Brazilian groups Petrobras and Odebrecht, the Swiss financial watchdog FINMA said.  Switzerland’s attorney general said it had launched criminal proceedings against the bank for failing to prevent possible crimes being committed.

https://www.reuters.com/article/us-swiss-pkb-petrobras/swiss-bank-pkb-broke-money-laundering-rules-in-brazilian-cases-finma-idUSKBN1FL6FN

2nd February 2018

AML GUIDANCE FOR THE ACCOUNTANCY SECTOR

CCH Daily on 31st January reports that HMRC has published revised draft money laundering guidance for the accountancy sector as produced by the Consultative Committee of Accountancy Bodies. This draft 2017 guidance replaces the 2008 guidance to reflect changes to Money Laundering legislation from 26th June 2017.  The guidance will be published as final once it has been approved by HM Treasury.

https://www.gov.uk/government/publications/anti-money-laundering-guidance-for-the-accountancy-sector

GROUP-WIDE AML/CTF COMPLIANCE: NEW OBLIGATIONS FOR FIRMS WITH OVERSEAS BRANCHES AND SUBSIDIARIES?

On 29th January, Herbert Smith Freehills published its latest Corporate Crime Briefing.  This is concerned with the measures that credit and financial institutions should take to manage money laundering risk in their non-EU overseas branches and subsidiaries, following the release in December 2017 of the European Supervisory Authorities’ Report on draft Joint Regulatory Technical Standards (RTS).Unlike the 3rd ML Directive, the 4th ML Directive requires group-wide policies and procedures. In its conclusions, the briefing mentions that the trend to encourage greater information sharing, co-operation between supervisors and law enforcement agencies, and transparency of beneficial ownership information is something that will have greater prominence under the 5th ML Laundering Directive in due course.

https://hsfnotes.com/fsrandcorpcrime/2018/01/29/group-wide-aml-ctf-compliance-new-obligations-for-firms-with-overseas-branches-and-subsidiaries/#page=1

TEHRAN’S SHIA FOREIGN LEGIONS

On 30th January, the Carnegie Centre published a comprehensive article that says that Iran has naturally sought to fill the numerous power vacuums that emerged in the region as a result of the US-led invasions of Afghanistan and Iraq, coupled with ongoing Arab upheavals.  Its “Shia foreign legions” has been a critical element of this strategy, helping it expand its influence in the Levant (Syria, Lebanon, and the Palestinian territories), Iraq, Afghanistan, and Yemen, and it has often expanded its footprint under the pretext of fighting (Sunni) radicalism.  The article notes that this “foreign legion” includes individuals from various other countries, including Pakistan, Afghanistan, Indian, Iraqi and Gulf States.  It says that chief and oldest among the Islamic Republic’s Shia foreign legions is Hezbollah in Lebanon. Another is the Afghan Fatemiyoun Division, which has suffered the second-largest number of losses of the “foreign legion” in Syria.  Little is known about the Shia Pakistani Zeinabiyoun Brigade.  The Islamic Republic’s support for Iraqi Shia militias dates back to the 1979 revolution and Tehran’s creation of a Revolutionary Guard corps, composed of Iraqi refugees and POW, and most of these armed groups are now formally organised under the umbrella of the Popular Mobilization Forces (al-Hashd al-Shaabi).

http://carnegieendowment.org/2018/01/30/tehran-s-shia-foreign-legions-pub-75387?mkt_tok=eyJpIjoiT0RsaU1EVTJPVGszWXpjMSIsInQiOiJKVEFYbnZ5UUo5em1oRm85bDdSNXpGSVBuUFR0RGVvY1JFRzBjOXVnUEdHMzE1TWllZEwwcXk4SmRQRmRTUm54NFB6VldBM3ZJalp4MjhPSzBWNlpXSnhWcjVVdThCZzdWeHNzVENEdXRXZTRsZ21jR2t2SVdSbngxYUhWU0N2SCJ9

WMD FINANCING ELUSIVE ON INTERNATIONAL PLAYING FIELD – NEW REPORT

Homeland 411, a US website, on 1st February published an article on the back of the publication on 24th January of a report from Dr Jonathan Brewer (who also produced the report on proliferation typologies for Project Alpha last year).  This latest report – The Financing of Nuclear and other Weapons of Mass Destruction Proliferation – which, it says, “explores funding and proliferation of WMD with insight and recommendations of how global leaders can better track sources of WMD financing. It’s not an easy undertaking. In fact, it’s a “needle in a haystack” scenario”. The report breaks down the proliferation financing into 3 phases – fundraising, disguising the funds within the financial system, and then procurement of “material, technology, and logistics” for a given WMD programme.  Dr Brewer is quoted as saying that ultimately it comes down to what regulators require. In the US, banks must follow specific regulations regarding suspect transactions, but overseas, Brewer said his impression is that there’s less expertise, limited resources, and limited use of relevant data. The report urges the international community to enhance its financial controls, otherwise countries such as North Korea and others will continue acquiring illicit capabilities, and calls for better implementation of existing controls.

http://homeland411.com/wmd-financing-elusive-international-playing-field/

The Report is at –

https://www.cnas.org/publications/reports/the-financing-of-nuclear-and-other-weapons-of-mass-destruction-proliferation

 report

SUPERVISION OF PILATUS BANK IN MALTA COMES UNDER SCRUTINY OF EU BANKING WATCHDOG

On 2nd February the Times of Malta reported that the EBA has opened a “preliminary inquiry” into the supervision of Pilatus Bank, to see whether the Malta Financial Services Authority was fully equipped and free from conflicts of interest to perform its supervisory duties, and to establish whether the MFSA had fulfilled its obligations as a national supervisory authority in view of the apparent lack of action against Pilatus Bank and Nexia BT.  A spokeswoman for the European Banking Authority said it had received a request by the European Commission some time ago and a report from the European Parliament.  The article says that a leaked report by the government’s AML agency said that failures to comply with money laundering laws had been noted during a March 2016 compliance visit to Pilatus Bank.  According to the report, Pilatus Bank did not have sound AML/CFT policies for clients who classified as being PEP, but that a lot of attention was given to ensuring that the bank’s high-net worth clients, including those PEP from high-risk jurisdictions, were given assurances that their banking operations were treated with utmost secrecy.

https://www.timesofmalta.com/articles/view/20180202/local/eu-banking-watchdog-probes-pilatus-bank-supervision.669535

CANADA ISSUES ALERT ON FENTANYL MONEY LAUNDERING

Global News in Canada on 1st February reported that traffickers are exploiting Canadian money service businesses to buy deadly fentanyl from overseas and then launder the proceeds through banks and credit unions, warns the national financial intelligence agency.  FINTRAC is issuing a detailed operational alert to help businesses detect and report suspicious dealings that may be linked to illicit fentanyl, an opioid that is wreaking havoc across Canada.  The article includes mention of the “red flags” in the alert, including –

  • cash deposits followed by movement via email money transfers, transfers between accounts, drafts or cheques, or withdrawals, often at multiple financial institutions;
  • significantly more email money transfers – generally for small amounts – than normal for a customer with his or her profile;
  • firms that advertise pharmaceuticals, supplements, weight-loss medications and related products;
  • multiple deposits with no apparent purpose that are inconsistent with the client’s occupation, employment or income; and
  • customers receiving welfare or employment insurance payments, yet also get regular infusions of funds via email money transfers, wire transfers or cash.

https://globalnews.ca/news/4001810/fentanyl-traffickers-money-laundering-fintrac/

The Fintrac alert is at –

https://www.canada.ca/en/financial-transactions-reports-analysis/news/2018/01/fintrac_publishesindicatorsofmoneylaunderinglinkedtofentanyltraf.html

‘COCAINE COWBOY’ ON THE RUN FOR 26 YEARS PLEADS GUILTY IN MIAMI TO DRUG TRAFFICKING

The Miami Herald on 1st February reported that Gustavo Falcon, a “Cocaine Cowboy” who hid from the federal authorities for 26 years, has finally pleaded guilty to drug trafficking in Miami federal court.  Falcon was indicted along with his older brother, Magluta and other associates back in 1991 on charges of smuggling tons of cocaine into the US, ending an era that was captured for better or worse on the slick TV drug drama, “Miami Vice.” But Falcon disappeared instead of standing trial

http://www.miamiherald.com/news/local/article197809819.html#storylink=cpy

COVERT SURVEILLANCE AND PRIVACY AT WORK

Scottish law firm, Morton Fraser, on 1st February provides a briefing saying that Tthe European Court of Human Rights has considered whether covert surveillance breaches the right to privacy.  It concludes how important it is for employers to ensure that employees are aware of the nature and extent of monitoring that is taking place in the workplace.  While there may be occasions where surveillance of this nature is found to be justified, appropriate, necessary and proportionate it is undoubtedly a difficult test for an employer to meet.  In the UK, the Information Commissioner’s Office has stated in its employment practices data protection code that covert monitoring should only be done in exceptional circumstances. The ICO goes on to give the example of covert monitoring as part of a specific investigation which ceases once the investigation has been completed.

https://www.morton-fraser.com/knowledge-hub/covert-surveillance-and-privacy-work

INDIA BOOSTS MARITIME REACH WITH SEYCHELLES PACT TO BUILD NAVAL FACILITIES

Defence Web on 31st January reports that India has signed a 20-year pact with the Seychelles to build an airstrip and a jetty for its navy in the island chain, the 2 countries said, as the South Asian nation steps up a contest with China for influence in the Indian Ocean.

www.defenceweb.co.za/index.php?option=com_content&view=article&id=50555:india-boosts-maritime-reach-with-seychelles-pact-to-build-naval-facilities&catid=108:maritime-security&Itemid=233

US PROPOSES TRUSTED TRADER PROGRAMME FOR SEAFOOD IMPORTS

HK TDC reports that the US Department of Commerce is proposing a Commerce Trusted Trader Program as part of a seafood traceability process designed to combat illegal, unreported and unregulated fishing and seafood fraud.  The DOC states that qualified importers that choose to participate in the CTTP would benefit from reduced reporting and recordkeeping requirements as well as streamlined entry of seafood imports subject to the Seafood Import Monitoring Program. Comments on this proposal are due no later than 19th March.

http://economists-pick-research.hktdc.com/business-news/freepdfdownloadservlet?articleID=1X0ACYSE&LANGUAGE=en

US GOVERNMENT WATCHDOG RECOMMENDS ACTION TO ENSURE PROPER LICENCING OF RADIOLOGICAL MATERIAL IMPORTS

HK TDC on 2nd February reports that US Customs should develop a monitoring system and take other steps to help ensure that imported radiological material, which is used for medical, industrial and research purposes, is being properly licensed, according to a recent report from the Government Accountability Office.  Possession of radiological material requires a licence from the Nuclear Regulatory Commission or one of the 37 states to which NRC has relinquished licensing authority. CBP monitors ports of entry to help ensure that only properly licenced shipments are permitted to enter the US.  CBP also deploys technology at and between ports of entry that can detect the presence of radiological material hidden in cargo or vehicles.

http://economists-pick-research.hktdc.com/business-news/freepdfdownloadservlet?articleID=1X0ACYHP&LANGUAGE=en

CANADA CREATES ADVISORY BODY ON RESPONSIBLE BUSINESS CONDUCT ABROAD

On 2nd February, HK TDC reports that the Canadian government has created an ombudsperson and a multi-stakeholder advisory body to promote responsible business conduct by Canadian businesses operating abroad. The ombudsperson will be authorised to investigate allegations of human rights abuses arising from Canadian corporate activity abroad, recommend solutions and monitor implementation of those recommendations. The ombudsperson’s mandate will be clearly articulated in an Order in Council and any evidence of possible criminal wrongdoing may be referred to the appropriate law enforcement authorities.

http://economists-pick-research.hktdc.com/business-news/freepdfdownloadservlet?articleID=1X0ACYCU&LANGUAGE=en

COURT IN MOSCOW SAYS FORMER CO-OWNER OF VNESHPROMBANK OWES THE BANK NEARLY $59 MILLION

RAPSI from Russia reported on 2nd February that the Moscow Commercial Court has granted a motion of the Vneshprombank seeking to put about $59 million on its creditors’ list as owed to it by a bank’s former co-owner Georgy Bedzhamov, charged with large-scale fraud.

www.rapsinews.com/judicial_news/20180202/281826845.html?src=ilaw

ATM ENGINEER CONVICTED OF STEALING £26,000

The Belfast Telegraph on 2nd February reported that an ATM engineer who bought himself a new sports car for Christmas days after emptying a cash dispenser of more than £26,000 has been convicted.

https://www.belfasttelegraph.co.uk/news/northern-ireland/engineer-darren-cooper-convicted-of-stealing-26k-from-atm-36558118.html?src=ilaw

AVANT GARDE (“FLOATING ARMOURY”) CASE IN SRI LANKA CONTINUES

The Sri Lankan Daily Mirror on 2nd February reported that the Colombo High Court has dismissed the petition filed by former defence secretary Gotabaya Rajapaksa asking that he and the 7 others be discharged.  The Bribery Commission had filed 19 charges against Mr. Rajapaksa and 7 others for causing a loss to the government by permitting Avant Garde Maritime Services (Pvt) Limited to operate a floating armoury.

http://www.dailymirror.lk/article/Avant-Garde-Case-Gota-s-petition-dismissed-145109.html?src=ilaw

US IMPOSES SANCTIONS ON AUSTRALIAN MAN WORKING FOR ‘SIN CITY’ CASINO IN LAOS

ABC News in Australia carries a report on the US imposing sanctions on an Australian man working for a wild casino nicknamed “Sin City” in the SE Asia Golden Triangle.  The Kings Romans Casino is in Laos but operates effectively as Chinese territory — offering gambling, prostitution, and the sale of endangered wildlife, such as tigers and bears.  Australian citizen Abbas Eberahim reportedly provided security services for the casino.

http://www.abc.net.au/news/2018-02-02/australian-sanctioned-for-bribery-at-laos-casino/9391374?src=ilaw

SRI LANKA NAMES EX-BANK CHIEF AS SUSPECT IN BOND SCAM

The Daily Mail on 2nd February reports that the former head of Sri Lanka’s central bank was named in court as a key suspect in a multi-million dollar bond scam.  Arjuna Mahendran, a Singapore national of Sri Lankan origin, was ordered to present himself to police before February 15th to respond to charges under the state property act. He and his bond-dealer son-in-law Arjun Aloysius are accused of manipulating of bond auctions in 2015 and 2016, causing losses of over $11 million to the state.  He was not present for the hearing and is believed to be in Singapore.

www.dailymail.co.uk/wires/afp/article-5343837/Sri-Lanka-names-ex-bank-chief-suspect-bond-scam.html

OLAF STARTS INVESTIGATION INTO EU-FUNDED METRO PROJECT IN BUCHAREST

BNE on 1st February reports that OLAF suspects inflated payments were made to the building consortium which won the contract.

www.intellinews.com/olaf-starts-investigation-into-eu-funded-metro-project-in-bucharest-136135/?source=romania

BRIGHT FUTURE FOR USED TRUCK EXPORTERS IN UK

Commercial Motor reports that used truck exporters in the UK can still flourish, as long as they provide a comprehensive and high-quality service, according to the boss of Volvo’s Trade & Export operation in Ely.

www.commercialmotor.com/news/dealer-news/bright-future-used-truck-exporters

WHEN CUSTOMERS PLAY TO WIN – TIPS FOR RUNNING PROMOTIONS

Irish law firm, Mathesons, provided on 1st February a guide to running prize-givings and promotions, based on a recent UK case on cheating and dishonesty, emphasising that anybody running a contest or promotion should ensure that its terms and conditions are airtight – for more than just regulatory compliance reasons.

https://www.matheson.com/news-and-insights/article/when-customers-play-to-win-tips-for-running-promotions

YEMEN’S TREASURES THREATENED BY ANTIQUE RAIDERS

Zawya on 1st February reported that several museums ad sites had already been looted.  Archaeology buffs have warned that Yemen’s antique treasures are at risk of plunderers and urged collectors to avoid buying anything that might have been looted amid the chaos of the country’s civil war, and the International Council of Museums (ICOM) has released a 13-page “Red List” report about it for traders and customs officers at The Metropolitan Museum of Art in Manhattan.

https://www.zawya.com/mena/en/story/Yemens_treasures_threatened_by_antique_raiders-SNG_108829657/

US CUSTOMS TO USE BLOCKCHAIN TO DETECT DRUG TRAFFICKERS’ DIGITAL CURRENCY TRANSACTIONS

The US Immigration and Customs Enforcement (ICE) Homeland Security Investigations will use blockchain technology to expose digital currency transactions made by illegal drug traffickers.  Coinsquare reported on 1st February that to combat the opioid crisis, ICE plans to leverage blockchain technology to track and analyse digital currency transactions, identify transactors and those who support Dark Web marketplaces. For long-term strategies to hold, ICE will train investigators from national and international agencies in digital currencies and peer-to-peer technology to deter and prevent illegal purchases of fentanyl, opioids or other illicit substances via digital currencies.

https://discover.coinsquare.io/government/us-government-blockchain-drug-smuggling/

UKRAINE CAN SELL RUSSIAN-SEIZED JACK-UP RIGS TO THIRD PARTIES FOR FURTHER RECOVERY THROUGH INTERNATIONAL COURTS

The Interfax news agency in Ukraine reported on 2nd February that the country’s Chief of Ukraine’s Prosecutor General’s Office has said that the National Agency of Ukraine for Finding, Tracing and Management of Assets Derived from Corruption and Other Crimes (Asset Recovery and Management Agency, ARMA) can sell jack-up rigs (2 self-elevating floating drilling rigs), seized by Russia in Crimea, to third parties for further recovery through international courts.

http://en.interfax.com.ua/news/general/482059.html?src=ilaw

BULGARIAN BORDER POLICE CORRUPTION ALLEGATIONS

Novinite on 2nd February reported that the specialised prosecutor’s office in Bulgaria accused 8 border police officers from Malko Tarnovo border checkpoint for participation in an organised criminal group.  The group was operating from December 2016 to December 2017, and the investigation found that police officers wanted small amounts of money to cross the border in order to close their eyes for violations.

http://www.novinite.com/articles/187579/Four+Border+Police+Officers+have+been+Charged+with+Corruption?src=ilaw

US TREASURY TARGETS HIZBALLAH FINANCIAL NETWORK IN AFRICA AND THE MIDDLE EAST

On 2nd February, OFAC added 6 persons and 7 entities said to have connection to Hizbollah to its SDN counter-terrorism lists, and the names include companies in Africa.

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20180202.aspx

https://home.treasury.gov/news/press-releases/sm0278?src=ilaw

WITH MORE AND MORE ONLINE, CLOUD AND INTERNET OF THINGS WILL CYBER ESPIONAGE DAMAGE EUROPE?

An ECIPE briefing paper for February 2018 poses a question, asking that as Cloud, IoT and 5G will change the strategic paradigm for protecting European commercial interests; will cyber espionage be allowed to hold Europe back in the global race for industrial competitiveness?  The risk of hacking is increasing exponentially as 26 billion personal devices, business and industrial equipment are about to become seamlessly connected in Industry 4.0. Within 5 years, an entire connected business can be copy-pasted, stolen and handed over to a competitor by a government-sponsored hacking group.  While all governments spy, ipso facto.  But only a few do so to hand over the information to their industry. Spying is highly lucrative, especially for emerging countries.  Yet it is practically risk-free as government entities cannot be sanctioned under international law, and cyber espionage is undetectable in most cases.

http://ecipe.org/publications/stealing-thunder/

EUROPE PONDERS THE US-IRAN NUCLEAR DEAL AND THREATS OVER ITS COMPANIES

EurActiv on 2nd February reports that Europe has to decide what to do in case the US makes good on its threat to withdraw from the Iran nuclear deal and re-impose sanctions on Iran.  The alternative is to agree to tighter terms proposed by Washington that could hit European companies.  EU has stated it will remain “fully committed” to implementing the JCPOA nuclear deal.  Brussels has stood by the International Atomic Energy Agency (IAEA), which has conducted numerous inspections in Iran and said that the country has complied with all its commitments.

https://www.euractiv.com/section/global-europe/news/europe-ponders-us-iran-nuclear-deal-threats/

EU TAKES OVER AS CHAIR OF KIMBERLEY PROCESS – MIGHT IT INTRODUCE HUMAN RIGHTS CONCERNS?

EurActiv on 2nd February reported that the fight against conflict diamonds has slowed down since the creation of the Kimberley process in 2002.  However, with the EU at its head in 2018, the subject of corporate responsibility could come up in talks.  The EU has taken over the chairmanship of the Kimberley process for the year.  The Kimberley process establishes strict guidelines obliging the 81 participating countries to control the import and export of rough diamonds.  Member states can therefore only import and export diamonds amongst each other.  The process also holds a certificate that enables the traceability of rough diamonds, from their mining to their commercialisation.  However, the definition of a “conflict diamond” is a narrow definition, and excludes a broad range of other violations of human rights such as child labour.  In practice, the Kimberley process has often failed to clean up the diamond trade, as was the case in Zimbabwe and in the Central African Republic.

https://www.euractiv.com/section/economy-jobs/news/eu-takes-over-in-fight-against-blood-diamonds/

EU ADDS 3 NAMES TO SOUTH SUDAN SANCTIONS

The European Council has added 3 persons involved in serious human rights violations to the list of those submitted to a travel ban and an asset freeze in view of the situation in South Sudan.  It is the first time that the EU decides to sanction persons in view of the situation in South Sudan in addition to those sanctioned by the UN. The decision brings the total number of persons under restrictive measures in view of the situation in South Sudan to 9, as 6 persons were already listed by the UN.  The 3 new names are – Paul Malong, Malek Reuben Riak and Michael Makuei Leuth

http://www.consilium.europa.eu/en/press/press-releases/2018/02/02/south-sudan-eu-adds-3-persons-involved-in-serious-human-rights-violation-to-sanctions-list/

https://www.gov.uk/government/news/minister-for-africa-welcomes-new-eu-sanctions-against-south-sudan

SOUTH AFRICA: TARGETING ORGANISED CRIME

Defence Web on 2nd February reported that South Africa’s law enforcement agencies have adopted an approach called the Organised Crime Threat Assessment (OCTA) – devised to target the actual kingpins who bankroll organised crime.  The aim of the OCTA is to analyse the MO of the so-called untouchables of the criminal underworld – the dark syndicates who are the actual root of serious crime.  The breakthrough relates to the arrest of 9 members of a syndicate suspected of operating a large scale VAT fraud scam.

http://www.defenceweb.co.za/index.php?option=com_content&view=article&id=50589:criminal-underworld-under-attack&catid=49:National%20Security&Itemid=115

SWISS CONFIRM ARREST OVER SUSPECTED CHARITY FRAUD

Swissinfo on 2nd February reported that Zurich judicial authorities have confirmed they are investigating an online fundraising company accused of stealing millions of dollars intended for charities, including the Geneva-based International Federation of Red Cross and Red Crescent Societies (IFRC).  The boss of the company is said to be called Peter Conlon, an Irishman resident in Zurich and the fundraising platform, Ammado.   Conlon is also under investigation in his homeland over his fundraising activities.

https://www.swissinfo.ch/eng/red-cross-affected_swiss-confirm-arrest-over-suspected-charity-fraud/43872058?src=ilaw

INSIGHT INTO ROMANIAN CORRUPTION NETWORKS

Euronews on 2nd February carried an article in which a Bucharest-based whistle-blower who accuses head of ruling PSD party, Liviu Dragnea, of corruption.

http://www.euronews.com/2018/02/02/insight-into-romanian-corruption-networks?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+euronews%2Fen%2Fnews+%28euronews+-+news+-+en%29&src=ilaw

USING ARTIFICIAL INTELLIGENCE TO FIGHT FINANCIAL CRIME – A LEGAL RISK PERSPECTIVE

On 2nd February, law firm Allen & Overy published an interesting briefing which highlights 4 potential risks that a firm’s legal advisers may want to consider before AI is incorporated into their institution’s financial crime or AML processes – whether the information can be interpreted; AI could reinforce human bias, or impose new ones; reliance on third party software providers; and data protection issues.

https://www.jdsupra.com/legalnews/using-artificial-intelligence-to-fight-47592/

HOUSE OF COMMONS COMMITTEE REPORT ON UK INVOLVEMENT IN EU SECURITY & DEFENCE POLICIES POST-BREXIT

The European Sanctions Blog on 2nd February reported that the House of Commons Foreign Affairs Committee has published a report: ‘The future of UK Diplomacy in Europe’, which outlines different models for the UK to participate (post-Brexit) in the EU’s Common Foreign and Security Policy (CFSP), and recommends that the Government should publish a position paper within 3 months outlining its aims for co-operation between the UK and EU on CFSP matters. It notes the absence of resources in the FCO to “manage the effects of Brexit” and makes a number of other recommendations.

https://europeansanctions.com/

The Report is at –

https://publications.parliament.uk/pa/cm201719/cmselect/cmfaff/514/51402.htm

UN AND UK ADDS 4 NAMES TO DRC SANCTIONS LISTS

On 1st February, the UN Security Council added 4 additional names to the sanctions lists relating to the Democratic Republic of the Congo.

HM Treasury in the UK issued a Notice on 2nd February confirming the implementation of the sanctions measures in the UK.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/678855/DRC_4_individuals_02022018.pdf

https://www.un.org/press/en/2018/sc13194.doc.htm

UK ONLINE GAMBLING FIRMS URGED TO RAISE STANDARDS ON TERMS AND CONDITIONS FOR BONUS PROMOTIONS

On 2nd February, law news site Out-Law published an article which says that, in light of the undertakings made by Ladbrokes, William Hill and PT Entertainment, the company behind the titanbet.co.uk and winner.co.uk websites, operators must review standards committed to by three gambling operators on the terms and conditions applied to “bonus promotions” set a benchmark that the rest of industry must also meet, the Competition and Markets Authority (CMA) and Gambling Commission have said.

https://www.out-law.com/en/articles/2018/february/online-gambling-firms-urged-to-raise-standards-on-terms-and-conditions-for-bonus-promotions/

The Telegraph on 1st February carries an article saying that gambling companies must end misleading online ‘free bet’ offers or face action, the competition watchdog has warned.  It follows an investigation into complaints that betting firms have been “trapping” players’ money and making them play for longer.  The new changes will mean that players will not need to play multiple times before they can withdraw their own money.

www.telegraph.co.uk/news/2018/02/01/gambling-companies-must-end-misleading-free-bet-offers-competition/

THE BELT & ROAD INITIATIVE – CAN CHINA BUILD ITS WAY BACK TO THE MIDDLE?

On 2nd February, Control Risks published an analysis of the massive undertaking by China.  It says that, in addition to large scale infrastructure projects, the BRI establishes cultural exchanges, city and university linkages, and tax advantageous zones to promote trade.  New, high quality infrastructure is needed and welcomed by governments in all regions for obvious reasons.  So what could go wrong?

https://www.controlrisks.com/our-thinking/insights/can-china-build-its-way-back-to-the-middle

HONG KONG’S INDEPENDENT COMMISSION AGAINST CORRUPTION

In the latest TRACE podcast, Commissioner Simon Peh of Hong Kong’s ICAC discusses its mandate, tools, successes and future challenges.

https://www.traceinternational.org/bribe_swindle_or_steal

ROLE OF MEXICO’S CRIME GROUPS IN US OPIOID CRISIS

On 2nd February, Insight Crime published articles about a US TV documentary series exploring the opioid epidemic ravaging cities across the US underscores the role of Mexican organized crime groups in the lucrative industry, and how growing demand is fuelling production, and violence, south of the border.

https://www.insightcrime.org/news/analysis/documentary-series-examines-mexico-crime-groups-opioid-crisis/

CIVIL-MILITARY CO-OPERATION TO COMBAT ILLEGAL, UNREPORTED, AND UNREGULATED FISHING

A Summary of the September 2017 National Maritime Interagency Advisory Group Meeting was published on 30th January by the Stimson Center.  This was a meeting of 100 experts on illegal, unreported, and unregulated (IUU) fishing. Attendees represented entities across the US government, several foreign governments and non-governmental organizations, as well as the private sector. The purpose of the meeting was to discuss current enforcement efforts against IUU fishing, with a focus on marine protected areas (MPA). The participants identified next steps to increase international, national, regional and sub-regional enforcement frameworks.

https://www.stimson.org/content/civil-military-cooperation-combat-illegal-unreported-and-unregulated-fishing-summary

MEXICAN CARTELS IN COLOMBIA: SETTING UP SHOP OR SEEKING NEW PARTNERS?

Insight Crime on 31st January published an article saying that Colombian authorities have claimed that Mexican cartels are attempting to establish themselves in the country. However, it says that the presence of suspected cartel members in Colombia is more likely an indication that Mexican organised crime groups are seeking new partners to fill the vacuum created by FARC’s demobilization and the Urabeños’ decline, 2 of their closest allies.

https://www.insightcrime.org/news/analysis/mexican-cartels-colombia-setting-up-shop-seeking-new-partners/

AIRPOWER KILLED ISIS”

An editorial in Air Force Magazine, which covers the USAF, claims that ISIS was effectively defeated by USAF-led airpower (though the article concedes it continues to present a terrorist threat).

http://www.airforcemag.com/MagazineArchive/Pages/2018/March%202018/In-Case-You-Missed-it-Airpower-Killed-ISIS.aspx

PARTNERS IN CRIME: WHY MAFIA GROUPS AND CYBERCRIMINALS ARE JOINING FORCES

An opinion piece in the Globe & Mail in Canada, by Misha Glenny (who wrote the original, factual McMafia book).  As always with Glenny, an interesting and readable article.

https://www.theglobeandmail.com/opinion/partners-in-crime-why-mafia-groups-and-cybercriminals-are-joining-forces/article37831032/

WITNESS PREPARATION IN SINGAPORE, HONG KONG AND THE US

An article from Eversheds Sutherland on 2nd February looks at the issue of evidence tainted by “witness coaching”.

https://www.eversheds-sutherland.com/global/en/what/articles/index.page?ArticleID=en/global/Hong-Kong/Truth_Be_Told_Witness_Preparation_in_Singapore_Hong_Kong_and_the_United_States

BEHIND CLOSED DOORS – OPEN JUSTICE AND CHALLENGING SEARCH WARRANTS

Law firm Corker Binning on 2nd February published a brief looking at the first judgment of the UK Supreme Court on 2018 – Haramlambous.  The article looks at the process and challenges surrounding search warrants, including how far a magistrate can rely on undisclosed (PII) evidence, and are subjects entitled to the ‘gist’ of the information relied upon against them?  The target of the warrant had required disclosure of the information used to obtain the warrant.  It seems the law firm considers that, to guard against potentially unlawful searches, claimants and their lawyers should be permitted to see as much as possible of the information upon which an application is based, save where actually in the public interest.

https://www.corkerbinning.com/behind-closed-doors-open-justice-and-challenging-search-warrants/

VICTIMS OF HBOS FRAUD WAIT FOR COMPENSATION

KYC 360 on 2nd February reported that victims of a banking fraud worth hundreds of millions of pounds have said they are yet to receive compensation, a year after 6 people were convicted.  A former HBOS banker and five other financiers were jailed for offences committed between 2002 and 2007.  Those affected said their lives have been “destroyed” by the delays.  Lloyds Banking Group, which took over HBOS, have said three quarters of victims had reached a settlement.  However, the articles cites one victim who was forced to sell her company at a fraction of its value after being caught up in the fraud.  Lloyds has set up a £100 million fund to compensate 61 victims of the crimes, but this victim claims she has received no compensation.

https://kyc360.com/news/uk-hbos-fraud-victims-destroyed-compensation-delays/

US TREASURY WARNS OF UPHEAVAL IF SANCTIONS TARGET RUSSIAN DEBT

On 2nd February Bloomberg reported that the US Treasury had warned that there could be upheaval in international financial markets, if the US targets Russian bonds and the sovereign market for sanctions.

https://www.bloomberg.com/news/articles/2018-02-02/treasury-warns-of-widespread-effects-of-russian-debt-sanctions

AML: TOWARDS A 2-WAY STREET?

Transparency International on 30th January published an article that began by saying that the global AML agenda is increasingly shifting from a debate about technical compliance towards whether the measures being taken by governments and businesses are effective.  Also since 2014, FATF has for the first time started assessing the practical effectiveness of countries’ AML frameworks, in addition as to whether legal, regulatory and institutional AML measures are in place. Looking at the 44 countries evaluated using the new FATF standards until January 2018, private sector implementation of AML measures (IO 4) is among the areas with lowest effectiveness rating out of the 11 outcomes assessed, with major improvements needed in virtually all countries.  At the same time, there is growing awareness of the value of sharing AML experiences, insights and recommendations across borders and between different groups from the private, public, and civil society sectors.  It is in this context that in January 2018 Transparency International organised a workshop with representatives from the accounting and real estate sectors, civil society organizations, law enforcement, and international organisations.  The article looks at the outcome of the meeting.

https://voices.transparency.org/anti-money-laundering-towards-a-two-way-street-f5f7f72c3a80

BLOCKCHAIN, BITCOIN AND THE FIGHT AGAINST CORRUPTION

On 31st January, Transparency International published an article saying that Bitcoin and the blockchain technology that drives it are among the most disruptive digital innovations to have emerged in recent years. Depending who you ask, these technologies are either potential catalysts for transnational crime, or potential tools in the fight against corruption.  The truth, however, lies somewhere in between.

https://www.transparency.org/news/feature/blockchain_bitcoin_and_the_fight_against_corruption?utm_medium=email&utm_campaign=Global%20Newsletter%202%20February%202018&utm_content=Global%20Newsletter%202%20February%202018+CID_cee5196aa3fdea105ebcc0b9bb250a7c&utm_source=Email%20marketing%20software&utm_term=Promise%20and%20peril%20blockchain%20Bitcoin%20and%20the%20fight%20against%20corruption

POTENTIAL CHINESE RAILGUN TESTING ILLUSTRATES THE US NAVY’S BIGGEST LONG-TERM CHALLENGE

On 1st February, RUSI commented on apparent sea trials of a weapon which can threaten all Western surface assets. One more thing for US Navy to worry over in the Far East.

https://rusi.org/publication/rusi-defence-systems/potential-chinese-railgun-testing-illustrates-us-navy’s-biggest

FROM LONE ACTORS TO DAESH: RETHINKING THE RESPONSE TO THE DIVERSE THREATS OF TERRORIST FINANCING

On 23rd January, an article by Tom Keatinge at RUSI concludes by arguing that rethinking CTF (as the article proposes) does not mean casting aside the current model; the use of international sanctions and asset freezes to target high-level terrorist financiers and their networks should remain a core part of the global response, as should the reporting responsibilities of financial institutions. Greater emphasis must however be placed on complementary strategies that use financial intelligence to understand terrorist networks, including greater cooperation between law enforcement and private sector actors.

https://rusi.org/publication/newsbrief/lone-actors-daesh-rethinking-response-diverse-threats-terrorist-financing

MONEY SERVICE BUSINESSES IN THE UK: IMPROVING THE CONDITIONS FOR EFFECTIVE FINANCIAL CRIME SUPERVISION AND INVESTIGATIONS

An 11th January paper from RUSI focuses on the measures that can be taken at the UK level to strengthen the money service business (MSB) sector’s AML oversight, and specifically to address the risk of criminally owned or complicit MSB or agents operating unhindered in the UK.

https://rusi.org/publication/occasional-papers/money-service-businesses-uk-improving-conditions-effective-financial

UN AND UK ADDS 4 NAMES TO DRC SANCTIONS LISTS

On 1st February, the UN Security Council added 4 additional names to the sanctions lists relating to the Democratic Republic of the Congo.

HM Treasury in the UK issued a Notice on 2nd February confirming the implementation of the sanctions measures in the UK.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/678855/DRC_4_individuals_02022018.pdf

https://www.un.org/press/en/2018/sc13194.doc.htm

EU ADDS 3 NAMES TO SOUTH SUDAN SANCTIONS

The European Council has added 3 persons involved in serious human rights violations to the list of those submitted to a travel ban and an asset freeze in view of the situation in South Sudan.  It is the first time that the EU decides to sanction persons in view of the situation in South Sudan in addition to those sanctioned by the UN. The decision brings the total number of persons under restrictive measures in view of the situation in South Sudan to 9, as 6 persons were already listed by the UN.  The 3 new names are – Paul Malong, Malek Reuben Riak and Michael Makuei Leuth

http://www.consilium.europa.eu/en/press/press-releases/2018/02/02/south-sudan-eu-adds-3-persons-involved-in-serious-human-rights-violation-to-sanctions-list/

https://www.gov.uk/government/news/minister-for-africa-welcomes-new-eu-sanctions-against-south-sudan

WMD FINANCING ELUSIVE ON INTERNATIONAL PLAYING FIELD – NEW REPORT

report

Homeland 411, a US website, on 1st February published an article on the back of the publication on 24th January of a report from Dr Jonathan Brewer (who also produced the report on proliferation typologies for Project Alpha last year).  This latest report – The Financing of Nuclear and other Weapons of Mass Destruction Proliferation – which, it says, “explores funding and proliferation of WMD with insight and recommendations of how global leaders can better track sources of WMD financing. It’s not an easy undertaking. In fact, it’s a “needle in a haystack” scenario”. The report breaks down the proliferation financing into 3 phases – fundraising, disguising the funds within the financial system, and then procurement of “material, technology, and logistics” for a given WMD programme.  Dr Brewer is quoted as saying that ultimately it comes down to what regulators require. In the US, banks must follow specific regulations regarding suspect transactions, but overseas, Brewer said his impression is that there’s less expertise, limited resources, and limited use of relevant data. The report urges the international community to enhance its financial controls, otherwise countries such as North Korea and others will continue acquiring illicit capabilities, and calls for better implementation of existing controls.

http://homeland411.com/wmd-financing-elusive-international-playing-field/

The Report is at –

https://www.cnas.org/publications/reports/the-financing-of-nuclear-and-other-weapons-of-mass-destruction-proliferation

THINGS YOU MAY HAVE MISSED – FEBRUARY 1

1st February 2018

IMF STAFF CONCLUDE VISIT TO THE KYRGYZ REPUBLIC

On 31st January, an IMF news release issued an Ed-of Mission statement of preliminary findings.  This included the statement that – the authorities remain committed to carry out reforms aimed at improving the business climate, including by improving governance and continuing to combat corruption. In that regard, efforts should be pursued to resubmit an AML/CFT law in line with international standards. Public finance management reforms should be accelerated to enhance the transparency and credibility of the fiscal framework.

www.imf.org/en/News/Articles/2018/01/31/pr1834-imf-staff-concludes-visit-to-the-kyrgyz-republic

AUSTRALIA “A MONEY LAUNDERING HAVEN”

Macrobusiness in Australia on 1st February related the litany of recent criticism of Australia and its property sector.  In 2015, FATF released its report which found Australian homes are a haven for laundered funds, particularly from China.  In March last year, Transparency International ranked Australia as having the weakest AML laws in English-speaking countries, failing all 10 priority areas.  In June 2017, FATF placed Australia on a watch list for failing to comply with AML/CFT reforms.  In December 2017, the OECD Working Group on Bribery in International Business Transactions urged Australia to implement the second tranche of AML legislation covering real estate, noting that the entire ecosystem for the buying and selling property using cross-border fund flows is beyond the reach of regulators.  Now, the Tax Justice Network has released its Financial Secrecy Index for 2018, shaming Australia for failing to police the international dirty money flooding into the housing market.

https://www.macrobusiness.com.au/2018/02/another-report-confirms-australia-property-money-laundering-safe-haven/

THE END OF BEARER SHARES IN SWITZERLAND?

On 31st January, Pastalozzi Attorneys at Law published an article in which it said that on 17th January, the Swiss Federal Council published a draft Bill which proposes the conversion of bearer shares into registered shares by operation of law and thereby would abolish bearer shares.  The draft legislation aims at implementing certain recommendations of the Global Forum on Transparency and Exchange of Information for Tax Purposes (Global Forum).  More specifically, the draft Bill addresses, amongst others, the concerns raised in Global Forum’s Peer Review relating to Switzerland regarding the transparency of ownership of bearer shares.  The wording of the contemplated legislation is currently subject to a legislative consultation process and expected to be discussed in Parliament in winter 2018.  Any respective changes in Swiss law are not to be expected before 2019.

https://pestalozzilaw.com/en/news/legal-insights/end-bearer-shares-switzerland/

REMINDER FOR COMPANY OWNERS IN ISLE OF MAN ON BENEFICIAL OWNERSHIP REGISTER

On 31st January, Isle of Man Today reported that “the clock is ticking” for all companies to submit details on to the Island’s new central database of beneficial ownership.  Details of principal owners and controllers must be submitted by June 30th this year at the latest.

http://www.iomtoday.co.im/article.cfm?id=38369&headline=Clock%20ticking%20on%20company%20owners&sectionIs=news&searchyear=2018

US PROSECUTORS ISSUE SUBPOENAS SEEKING INFORMATION FROM FIFA, IOC AND IAAF

On 31St January, the Guardian reported that US federal prosecutors are conducting an extensive investigation into global sports corruption, including at Fifa and the international and US Olympics organisations.  As part of the probe, the DoJ looking at possible racketeering, money laundering and fraud charges related to the world athletics championships and the business executives who have consulted on bids for various other elite competitions.  The investigation is being conducted by the US Attorney’s office for the eastern district of New York in Brooklyn.

https://www.theguardian.com/sport/2018/jan/31/us-prosecutors-issue-subpoenas-fifa-ioc-iaaf

BERMUDA LAUNCHES AML CAMPAIGN

The Royal Gazette in Bermuda on 31st January reported that The Premier launched a new campaign today to combat money laundering.  Mr Burt, also the Minister of Finance, said the campaign would recruit the entire island in a bid to fight financial crime.  The campaign, called “It’s just good business”, will highlight efforts to ensure Bermuda meets the highest AML standards.

www.royalgazette.com/news/article/20180131/anti-money-laundering-campaign-launched

NEW LAW ON MONEY LAUNDERING AND PREVENTION OF TERRORISM IN BELGIUM

On 12th December, Peeters Advocaten published a briefing saying that on 16th October a new law on money laundering and prevention of terrorism has entered into force.  As well as the introduction of the UBO register into Belgian law by the law of 18th September, law contains numerous essential modifications in comparison to the law of 19923 that it replaces. This article briefly presents those modifications.

https://www.peeters-law.be/En/news/New-law-on-the-money-laundering-and-the-prevention-of-terrorism/892

MORE SANCTIONS AHEAD AFTER US TREASURY’S REPORTS TO CONGRESS ON RUSSIAN OLIGARCHS?

On 30th January, law firm Steptoe & Johnson published an article that followed the publication on 29th January of list of potential additional sanctions targets and other reports.

https://www.steptoeinternationalcomplianceblog.com/2018/01/more-sanctions-ahead-after-treasurys-reports-to-congress-on-russian-oligarchs-defense-intel-sanctions/#page=1

KENYA “NATIONAL RESISTANCE MOVEMENT” DECLARED CRIMINAL

On 31st January, Defence Web reported that the Kenyan government had declared the opposition’s ‘National Resistance Movement’ – a loosely organised coalition of opposition lawmakers – a criminal group, paving the way for potential arrests.

http://www.defenceweb.co.za/index.php?option=com_content&view=article&id=50547:kenya-national-resistance-movement-declared-criminal&catid=54:Governance&Itemid=118

SOUTH AFRICAN TRIBUNAL TO EXAMINE ARMS DEALS

Also on 31st January, DefenceWeb reported another investigation into the multi-billion Rand Strategic Defence Procurement Packages that saw the SA National Defence Force (SANDF) acquire new, high-tech equipment for its airborne and maritime services in the late 90s.  The first hearings of the People’s Tribunal on Economic Crime in South Africa open on February 3rd to examine “the continuities between apartheid era economic crime, the post-apartheid arms deal and contemporary state capture”.  The first hearings will focus on the arms trade over the past 40 years.  These, it is said, contributed to the loss of thousands of lives during the apartheid era.

http://www.defenceweb.co.za/index.php?option=com_content&view=article&id=50544:peoples-tribunal-to-examine-the-arms-deal&catid=54:Governance&Itemid=118

ARMS PROCUREMENT OFFICIALS REFERRED TO PROSECUTION FOR CORRUPTION IN PRODUCTION OF SOUTH KOREAN MISSILE

On 1st February, the Yonhap News Agency in South Korea reported that the Board of Audit and Inspection said it has referred 3 former and incumbent officials of the state arms procurement agency for alleged corruption in the course of awarding contracts to produce the Cheongung medium-range surface-to-air missile.

http://english.yonhapnews.co.kr/news/2018/02/01/0200000000AEN20180201007700315.html?input=rss

FORMER STEINHOFF CEO REPORTED TO SOUTH AFRICAN POLICE BY COMPANY

The Nation in the UAE reports that Steinhoff International Holdings has reported former CEO Markus Jooste to South Africa’s anti-graft police, pinning the blame for an accounting scandal squarely on the man who built the retailer into a global force.  The owner of Mattress Firm in the US, Conforama in France and Liener in Austria, among many others, referred Mr Jooste to the unit known as the Hawks based on its investigation into financial irregularities.

https://www.thenational.ae/business/former-ceo-reported-to-police-by-world-s-second-biggest-furniture-firm-1.700775?src=ilaw

CAMEROONIAN TROOPS ENTER NIGERIA SEEKING SEPARATISTS

Defence Web on 31st January reported that Cameroonian troops had crossed into neighbouring Nigeria in pursuit of separatist rebels.  Cameroon has been fighting Anglophone separatists who have taken up arms over the past year in an attempt to create a nation which they call Ambazonia. The insurgency represents the gravest challenge yet to the 35-year rule of Cameroon’s President Paul Biya.  More than 43,000 Cameroonians are said to have fled as refugees to Nigeria

http://www.defenceweb.co.za/index.php?option=com_content&view=article&id=50554:cameroonian-troops-enter-nigeria-seeking-separatists-&catid=3:Civil%20Security&Itemid=113

Meanwhile, on 30th January Defence Web also reported that a key Cameroonian separatist leader arrested in Abuja was deported by Nigerian authorities to Cameroon.  Nigerian authorities deported Julius Ayuk Tabe, president of a self-declared breakaway state made up of the Anglophone regions of majority-Francophone Cameroon.

http://www.defenceweb.co.za/index.php?option=com_content&view=article&id=50541:cameroonian-separatist-leader-deported&catid=52:Human%20Security&Itemid=114

‘DEVIOUS’ £1.4 MILLION BOILER ROOM SCAMMER JAILED IN UK

iExpats on 1st February reports that £1.4 million boiler room scheme mastermind Samrat Bhandari has been jailed in the UK for 42 months. Between 2009 and 2014, Bhandari sold thousands of worthless shares in Symbiosis Healthcare for around £1.4 million by cold-calling elderly investors and pressurising them to buy a stake in the company.  Fellow gang member, Dr Aleem Mirza, had set up the company as a business operating healthcare services in Dubai, which was untrue.

http://www.iexpats.com/devious-1-4-million-boiler-room-scammer-jailed/?src=ilaw

SOUTH KOREAN GOLF EQUIPMENT IMPORTS INCREASE DESPITE ANTI-CORRUPTION LAW

On 1st February the Yonhap News Agency reported that imports of golf equipment into South Korea increased more than 10% last year, despite expectations that the popularity of the costly sport would be dampened by a new anti-corruption law.  Golf is considered a luxury sport in South Korea, and rounds are often paid for as gifts. An anti-corruption law that took effect in September 2016 heavily limits the monetary value of such gifts between people with personal interests at stake.

http://english.yonhapnews.co.kr/news/2018/02/01/0200000000AEN20180201001900320.html?input=rss

ISLE OF MAN FOR FAMILIES AND BUSINESS – IN SPANISH

Dixcart in the Isle of Man has issued an article in Spanish extolling the benefits for business and families of the Island.

https://dixcart.com/articles/in316-s-the-isle-of-man-the-benefits-for-business-and-family-spanish-version

HALF A MILLION US DOLLARS SEIZED LEAVING SOUTH AFRICA

On 29th January, Defence Web reported that the South African Revenue Service (SARS) has intercepted currency worth $568,480 from leaving the country.  It intercepted 2 passengers travelling to Dubai as they were about to board their flight, and upon inspection of their checked luggage, brown envelopes containing US Dollars in various denominations were found inside.

http://www.defenceweb.co.za/index.php?option=com_content&view=article&id=50504:currency-worth-r67m-intercepted-at-or-tambo&catid=87:border-security&Itemid=188

UK ONLINE GAMBLING FAIR TERMS GUIDANCE

On 31st January, the Competitions and Markets Agency in the UK issued advice for gambling customers around unfair terms in online gambling promotions.

https://www.gov.uk/government/publications/online-gambling-promotions-advice-for-gamblers

and a “60-second summary” for online gambling operators about using fair terms and practices.

https://www.gov.uk/government/publications/online-gambling-promotions-dos-and-donts

COINCHECK EXCHANGE LEAK EXPOSES CHINKS IN JAPAN’S REGULATORY ARMOUR

On 29th January, M Lex reports that the biggest cryptocurrency leak in Japanese history has underscored the difficulty regulators face in striking the precarious balance between overseeing an industry that thrives on innovation while also protecting consumers against fraud and security lapses.  Japan’s FSA issued a compliance order against Tokyo-based cryptocurrency exchange Coincheck, after the company announced that it had lost $534 million worth of NEM coins, a virtual currency.  It also mandated all existing crypto exchanges to review their security in advance of urgent FSA inspections.  Although the FSA’s swift action was made possible by Japan’s legalisation of cryptocurrencies, putting exchanges under the jurisdiction of Japan’s powerful financial watchdog, it has also called into question the effectiveness of the FSA’s vetting process.

https://mlexmarketinsight.com/insights-center/editors-picks/Data-Protection-Privacy-and-Security/asia/coincheck-exchange-leak-exposes-chinks-in-japans-regulatory-armor

US DOJ ISSUES MEMORANDUM PRECLUDING RELIANCE ON AGENCY GUIDANCE IN ENFORCEMENT CASES

On 31st January, Holland & Knight reported that on January 25th, the US Associate Attorney General issued a memorandum limiting use of agency guidance documents in affirmative civil enforcement cases brought by the DoJ.  In a move which could have wide-ranging impact, the “Department may not use its enforcement authority to effectively convert agency guidance documents into binding rules” and “may not use noncompliance with guidance documents as a basis for proving violations of applicable law.”  The Memorandum does permit the use of guidance for proper purposes to explain or paraphrase regulations or statutory legal requirements, but it may not be used to establish that a party violated the applicable statute or regulation.

https://www.jdsupra.com/legalnews/doj-issues-memorandum-precluding-55163/

UN SCR 2399 (2018) EXTENDS SANCTIONS REGIME AGAINST CENTRAL AFRICAN REPUBLIC

On 30th January, the UN announced that it had extended its sanctions regime against the Central African Republic, consisting of an arms embargo, travel ban and asset freeze on listed individuals and entities, until 31st January 2019, and the mandate of the Panel of Experts facilitating those measures until 28h February 2019.  The arms embargo would not apply to supplies intended solely for the support or use by the UN Multidimensional Integrated Stabilization Mission in the Central African Republic (MINUSCA), EU training missions, French forces and other State forces providing training.  Nor would it apply to supplies brought into the Central African by Chad or Sudan forces solely for their use in the tripartite force established on 23rd May 2011.

https://www.un.org/press/en/2018/sc13188.doc.htm

MALDIVES PRESIDENT DISMISSES CORRUPTION ACCUSATIONS

On 31st January OCCRP reports that Maldives President Abdulla Yameen has dismissed a petition from opposition leaders that called on the island nation’s Supreme Court to temporarily remove him from office and investigate allegations of corruption against him.

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/7570-maldives-president-dismisses-corruption-accusations

UNEXPLAINED WEALTH ORDERS – WHAT YOU NEED TO KNOW

With the introduction of UWO in the UK, Field Fisher has produced a briefing on them.

www.fieldfisher.com/publications/2018/01/unexplained-wealth-orders-what-you-need-to-know#sthash.GQ4l7U8T.dpbs

BREXIT & EXPORT CONTROLS: IMPLICATIONS FOR PROLIFERATION AND NATIONAL SECURITY

On 31st January, Project Alpha published an article on the risks, challenges and ramifications of Brexit for the maintenance and continued enforcement of strategic trade controls.

https://projectalpha.eu/brexit-and-export-controls-challenges-facing-the-uk-and-the-eu-in-controls-and-enforcement-and-the-implications-for-proliferation-and-national-security/

SPANISH POLICE ARREST MD OF CADIZ FC

The Local on 31st January reported that the managing director of Spanish second-tier side Cadiz was arrested in relation to a money-laundering investigation, sources close to the operation told AFP.  Police investigating player transfers arrested Quique Pina in the south-eastern region of Murcia, while raids were carried out in Andalusia, including at the offices of Cadiz. They also raided offices at Granada, the second-tier club Pina served as president between 2009 and 2016 before moving to Cadiz.  An entrepreneur and player agent, Pina also used to own Ciudad de Murcia, a club that rose to the second division before going out of business in 2007.

https://www.thelocal.es/20180131/cadiz-director-arrested-in-money-laundering-investigation

FIRST LOOK AT AUSTRALIA’S PROPOSED NEW ANTI-BRIBERY LAW

On 31st January, Control Risks published a briefing on a series of new laws covering foreign bribery and other economic offences that, if passed into law they will make it much easier to prosecute companies for bribery offenses committed either at home or abroad.

https://www.controlrisks.com/our-thinking/insights/australia-anti-bribery-laws

ACCOUNTANT, FRIEND AND FINANCIAL ADVISER ‘LAUNDERED THOUSANDS STOLEN FROM BERMUDA GOVERNMENT’

Baker McKenzie reports on 30th January about a Wales-based accountant who has admitted to laundering thousands of pounds stolen from the Government of Bermuda. Jeffrey Bevan, 50, was accused of transferring nearly $2.5 million from his employer into his own bank account and then spending it on properties in Swansea, gambling, and automobiles.  A friend of Bevan’s and a financial adviser are on trial for their alleged roles in the scheme. They deny converting criminal property.

http://www.riskandcompliancehub.com/wales-accountant-friend-and-financial-adviser-laundered-thousands-stolen-from-bermuda-government/

POLITICAL VIOLENCE AND CRIME INCIDENT REPORT, Q4 2017

Control Risks has published its Political Violence and Crime Incident Report Q3, which is based on our incident mapping and analysis service.  It is a quarterly report designed to help organisations gain a better understanding of incident trends throughout the year, using risk monitoring tool CORE.  The report analyses global incidents of war, terrorism, unrest and crime, with commercial relevance.

https://www.controlrisks.com/our-thinking/insights/reports/political-violence-and-crime-incident-report-q4

Control Risks also reports that political violence and crime rise across the world in 2017-

https://www.controlrisks.com/riskmap-2018/articles/political-violence-and-crime

SAUDI COALITION SAYS REMOTE-CONTROLLED  BOMB BOAT INTERCEPTED

On 31st January, Janes.com reported that another remotely-controlled boat carrying explosives was intercepted on 26th January, a spokesman for the Saudi-led coalition fighting in Yemen told journalists in a briefing.

http://www.janes.com/article/77486/saudi-coalition-says-rc-bomb-boat-intercepted

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RUSSIA’S UNTAPPED ARCTIC POTENTIAL

On 29th January, a Chatham House article explains that company turf wars and Western sanctions are preventing Russia from extracting oil and gas from the Arctic.

https://www.chathamhouse.org/expert/comment/russia-s-untapped-arctic-potential

HOW THE MAFIA INFILTRATED ITALY’S ASYLUM SYSTEM

On 1st February, a Guardian “long read” article is entitled: ‘Migrants are more profitable than drugs’: how the mafia infiltrated Italy’s asylum system.

https://www.theguardian.com/news/2018/feb/01/migrants-more-profitable-than-drugs-how-mafia-infiltrated-italy-asylum-system

FCPA CORPORATE ENFORCEMENT POLICY: CO-OPERATION AS A MITIGATING FACTOR

This issue of Baker McKenzie’s Ethics & Compliance in the Americas newsletter covers what the DoJ considers as co-operation, as updated by the new FCPA Corporate Enforcement Policy.  Under the FCPA Corporate Enforcement Policy, there will be a presumption of declination if a company self-discloses misconduct, fully co-operates and remediates, absent aggravating circumstances. If a criminal resolution is warranted, there will be a reduction of the fine. Even in situations where there has been no self-disclosure, the company may still have a reduction of the fine, as long as it fully co-operates and timely and appropriately remediates.

https://globalcompliancenews.com/fcpa-corporate-enforcement-cooperation-20180201/

UK: FIRMS TO BE LIABLE TO FINES UP TO £17 MILLION FOR LAX CYBER SECURITY

KYC 360 on 31st January reports that organisations in Britain’s most critical care industries face fines of up to £17 million if they fail to implement effective cyber security measures.  As part of the government’s strategy, new sector-specific regulators will be appointed and will assess critical industries – such as energy, transport and health – to ensure plans are as “robust” as possible.  The new rules will also cover other threats affecting IT such as power outages, hardware failures and environmental hazards.  Also included is ransomware, which makes data or systems unusable until the victim makes a payment.

https://kyc360.com/news/uk-fines-17m-firms-poor-cyber-security/

GIBRALTAR DEFENDS STANCE ON TOBACCO SMUGGLING

The Gibraltar Government has said it is determined to “stamp out the menace of smuggling” as it lashed out at suggestions the Rock was seeing a return to the ‘the Bad Old Days’.

http://chronicle.gi/2018/02/govt-defends-record-on-tackling-tobacco-crime/

UKRAINIAN KILLER ROBOTS”

Medium carries an article about Ukrainian soldiers using a remote-controlled turret on 6 wheels and with an attached camera to fire at Russian-led separatist fighters in a nearby house.  That was in May 2017, and it was said to have been developed with only $10,000 by a group of Donbas-native volunteers.  The article includes photos and video.

https://medium.com/dfrlab/minskmonitor-ukrainian-killer-robots-2970d49faa30

CYPRUS CITIZENSHIP THROUGH INVESTMENT – ADVANTAGES AND HOW IT WORKS

On 30th January AGP Law Firm published a briefing explaining that there are 4 legal ways of obtaining citizenship of Cyprus for non-EU citizens.

https://www.agplaw.com/cyprus-citizenship-investment-advantages/

RUSSIAN EX-GOVERNOR CONVICTED ON ‘ABSURD’ BRIBERY CHARGES

Rferl on 1st February reports that a Russian court has convicted former Kirov Oblast Governor Nikita Belykh of taking a bribe, delivering a widely expected guilty verdict after the high-profile trial of the prominent liberal politician.  He pleaded not guilty and has called the charges “absurd,” saying he was the victim of a “banal provocation” by law enforcement authorities. After his arrest, federal investigators published a photo of a man they said was Belykh sitting at a table covered with stacks of €100 notes.

https://www.rferl.org/a/russia-bribery-belykh-kirov-oblast-trial-verdict/29010887.html

UKRAINE TAX CHIEF NASIROV FIRED AMID EMBEZZLEMENT PROBE

Rferl on 31st January reported that the Ukrainian government has fired tax and customs service chief, Roman Nasirov, who was suspended from the post after his arrest on suspicion of embezzlement in March 2017.  Nasirov is being investigated on suspicion of defrauding the state of $70 million.  He is one of the highest officials to face prosecution in Ukraine.  He was arrested after the National Anticorruption Bureau accused him of signing off on grace periods for a number of taxpayers, including companies linked to a former lawmaker who fled the country in 2016 while facing a corruption investigation.

https://www.rferl.org/a/ukraine-tax-chief-fired-embezzlement-probe-nasirov/29009564.html

REVISITING THE EU’S SECURITY PARTNERSHIPS

On 30th January the European Institute for Security Studies published a new paper.  Common Security & Defence Policy (CSDP) partnerships have traditionally focused on 2 sets of issues: the role of third countries in CSDP operations and missions; and partnerships between the EU and international organisations, the UN, NATO, the African Union and the OSCE in particular.  More recently, the EU has started to reach out to third states on other security matters, such as terrorism and migration, but also hybrid threats, cyber, and resilience issues. The revised European Neighbourhood Policy (ENP) also features security (and CSDP) more prominently than had been the case initially.

https://www.iss.europa.eu/sites/default/files/EUISSFiles/Brief%201%20Security%20Partnerships.pdf

FRONTEX NAVAL OPERATION TO LOOK FOR ‘FOREIGN FIGHTERS’

EU Observer on 1st February reports that the EU border and coast guard agency Frontex is stepping up intelligence-gathering of migrants plucked from the sea following the launch of a new Central Mediterranean naval operation.  It launched its Themis mission, geared towards cracking down on alleged terrorist suspects and criminals. Vessels will still perform search and rescue, when required. But its redoubled security-centric mandate marks a departure from previous Frontex naval operations, and exposes a broader EU refocussing on people rescued at sea as potential threats.

https://euobserver.com/migration/140806

EUROPEAN ONLINE GAMBLING OPERATORS FILE DATA PROTECTION COMPLAINT AGAINST UNLAWFUL PAYMENT BLOCKING SCHEME IN NORWAY

On 18th January the European Gaming & Betting Association issued a news release saying that it has asked the Norwegian Data Protection Inspectorate (DPI) to urgently investigate a Norwegian payment blocking scheme for serious breaches of the privacy of Norwegian citizens when conducting online payments. The scheme established by the Norwegian Gaming Authority (NGA) is in contravention of Norwegian Data Protection laws and the European Convention on Human Rights according to the EGBA.

www.egba.eu/online-privacy-european-online-gambling-operators-file-data-protection-complaint-unlawful-payment-blocking-scheme-norway/

CRIMINAL FINANCES ACT 2017

On 1st February the Home Office issued a set of publications about the contents of the Criminal Finances Act 2017, including about Unexplained Wealth Orders, confiscation reconsideration, extending the SAR moratorium etc.

https://www.gov.uk/government/collections/criminal-finances-act-2017

CRIMINAL FINANCES ACT 2017: CONFISCATION, ENFORCEMENT, DEFENDANT’S MONEY HELD BY A THIRD PARTY

On 1st February, Home Office Circular 012/2018 which provides information on relevant amendments introduced by the Criminal Finances Act 2017.  It explains that amendments to the Proceeds of Crime Act 2002 provides for 2 sets of powers relating to the enforcement of a confiscation order in relation to defendant’s money which is held by another person; notably, by a bank in an account or by a law enforcement agency following its seizure.

https://www.gov.uk/government/publications/circular-0122018-criminal-finances-act-confiscation-enforcement-defendents-money-held-by-a-third-party/circular-0122018-criminal-finances-act-confiscation-enforcement-defendents-money-held-by-a-third-party

OTHER HOME OFFICE CIRCULARS PROVIDING INFORMATION ON CRIMINAL FINANCES ACT 2017 CHANGES

On 1st February, the Home Office issued a whole series of Home Office Circulars explaining new or changed procedures under proceeds of crime and anti-terrorism legislation –

·        Circular 011/2018: Criminal Finances Act: confiscation reconsideration

·        Circular 010/2018: Criminal Finances Act: further information orders

·        Circular 009/2018: Criminal Finances Act: extension of powers and new assault and obstruction offence

·        Circular 008/2018: Criminal Finances Act: extending the moratorium period for suspicious activity reports

·        Circular 007/2018: Criminal Finances Act: sharing information within the regulated sector

·        Circular 006/2018: Criminal Finances Act: disclosure orders

·        Circular 005/2018: Criminal Finances Act: forfeiture of money held in bank and building society accounts

·        Circular 004/2018: Criminal Finances Act: unlawful conduct, gross human rights abuses or violations

·        Circular 003/2018: Criminal Finances Act: unexplained wealth orders

https://www.gov.uk/government/collections/criminal-finances-act-2017

EXPORT CONTROL (VENEZUELA SANCTIONS) ORDER 2018

SI 2018/108 provides for the enforcement in the UK of trade restrictions against Venezuela specified in Regulation (EU) No. 2017/2063 concerning restrictive measures against Venezuela.

http://www.legislation.gov.uk/uksi/2018/108/note/made

PYRAMID SCHEMES CAUSE HUGE SOCIAL HARM IN CHINA

On 1st February, The Economist carried an article which begins by explaining that authorities call them “business cults”.  Tens of millions of people are ensnared in these pyramid schemes that use cult-like techniques to brainwash their targets and bilk them out of their money.  In July 2017 victims of one such fraud held a rally in central Beijing (pictured), an extremely unusual occurrence.  The police quickly dispersed it and the government, in panic, declared a 3-month campaign against the scams.  Hundreds of them were closed down and thousands of people arrested.  But the cults are adopting new guises. The problem may still be growing.

https://www.economist.com/news/china/21736182-ponzi-schemes-cause-huge-social-harm-china-crackdowns-may-not-be-working-pyramid-schemes-cause?src=ilaw

AER LINGUS WORKER ACCUSED OF MONEY LAUNDERING AND ORGANISING PEOPLE SMUGGLING AT DUBLIN AIRPORT SENT FORWARD FOR TRIAL

On 1st February the Irish Independent reported that Peter Kernan, 57, of Co Kildare.  He had been originally charged in January 2017 with unlawfully facilitating the entry of 2 non-nationals into the State on January 9th and January 22nd, 2017, with 20 further charges since being laid.

https://www.independent.ie/irish-news/news/aer-lingus-worker-accused-of-money-laundering-and-organising-people-smuggling-at-dublin-airport-sent-forward-for-trial-36556904.html?src=ilaw

SWISS REGULATOR SANCTIONS RUSSIA’S GAZPROMBANK AFTER PANAMA PAPERS LEAK

Breaking News reports that Switzerland’s market regulator has banned the national affiliate of Russia’s Gazprombank from taking new private clients over money laundering concerns during a 10-year period which emerged from the Panama Papers leak.  The move marks the first time that Swiss markets authority FINMA has specifically identified any company over wrongdoing following the leak that exposed international tax avoidance worldwide.

https://www.breakingnews.ie/business/swiss-regulator-sanctions-russias-gazprombank-after-panama-papers-leak-825935.html?src=ilaw

FRANCE TO FINANCE EXPORTS TO IRAN, AIMS TO SIDESTEP US SANCTIONS

Reuters on 1st February reported that France will start offering euro-denominated credits to Iranian buyers of its goods later this year, a move to bolster trade while keeping it outside the reach of US sanctions, the head of state-owned investment bank Bpifrance said.

https://uk.reuters.com/article/us-iran-france-usa/france-to-finance-exports-to-iran-aims-to-sidestep-u-s-sanctions-idUKKBN1FL48U

BLACK LISTING OF UKRAINE CREATED DISTRUST IN ESTONIA

The Post Times in Estonia reports that Ukraine’s decision to add Estonia to the list of countries it considers tax havens managed, in just a few weeks, to create a situation where Estonian companies were avoided by both banks and business partners.  The Ukrainian government added Estonia, Latvia, Iran, Cuba, Laos, Lebanon, Malta, Monaco, UAE, Singapore, Georgia, and Hungary to its list of tax havens in late 2017.

https://news.postimees.ee/4394811/black-list-created-distrust-in-estonia?src=ilaw

OFAC LISTS HEAD OF HAMAS POLITICAL BUREAU

On 1st February, the Middle East Monitor reports on the US listing the head of Hamas’ political bureau, Ismail Haniyeh, on the OFAC terrorism list.

https://www.middleeastmonitor.com/20180201-us-lists-ismail-haniyeh-on-terrorism-list/?src=ilaw

THE ILLEGAL CIGARETTE TRADE IN BULGARIA

The Bulgarian News Agency BTA reports on the size of the illegal cigarette market in Bulgaria on 1st February.  It mentions that in 2007, illegal cigarettes were 11.2% of the entire cigarette market in Bulgaria. By 2010, this share had risen to 30.7% and the cigarette market was virtually inundated by contraband cigarettes.  Despite the shrinking illegal market in the years that followed, criminal revenues remain too big to be neglected.  Its authors bring to attention the huge illegal market in loose tobacco for roll-your-own cigarettes. Contraband loose tobacco makes up as much as 75% of the total market. This quantity is equal to 861 million cigarettes (0.75 gr per cigarette). Some 86% of the contraband loose tobacco is locally produced.

http://www.bta.bg/en/c/DF/id/1737236?src=ilaw

EU’S COURT OF JUSTICE UPHOLDS FINES ON KUEHNE & NAGEL, DEUTSCHE BAHN AND OTHERS FOR FORMING CARTELS IN THE AIR FREIGHT SECTOR

On 1st February, New Europe reported that the ECJ said the Commission was right to fine a group of freight forwarding companies over cartel charges, dismissing an appeal brought by logistics groups Kuehne & Nagel, Panalpina, Schenker, Deutsche Bahn and others, 13 in all.  In March 2012, the Commission imposed fines amounting in total to €169 million on a number of companies by reason of their participation, in periods between 2002 and 2007, in various agreements and concerted practices on the market for international air freight forwarding services. Those services included the organisation of transportation of items, and could also include activities such as customs clearance, warehousing or ground services, on behalf of customers according to their needs.

https://www.neweurope.eu/article/eus-court-of-justice-upholds-fines-on-kuehne-nagel-deutsche-bahn-and-others-for-forming-cartels-in-the-air-freight-sector/

CANADA’S FINTRAC’S MONEY LAUNDERING PENALTIES IN LIMBO AFTER COURT RULING

CBC News in Canada reported on 1st February that Canada’s watchdog against terror financing and money laundering has been partially neutered after losing a landmark court case over the way it penalises offending businesses.  Since May 2016, the federal agency known as Fintrac has been unable to levy fines on firms that violate tough financing regulations — and will remain toothless until at least the summer when a review of its penalty programme is completed.

http://www.cbc.ca/news/politics/fintrac-money-laundering-fines-penalties-court-federal-appeal-manulife-bank-1.4510370?src=ilaw&cmp=rss

THIRD COUNTRIES ALIGN WITH EU OVER RUSSIA SANCTIONS

On 31st January the EU announced that Candidate Countries Montenegro and Albania, Norway, members of the EEA, as well as Ukraine align themselves with Council Decision 2017/2426/CFSP concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine.

http://www.consilium.europa.eu/en/press/press-releases/2018/01/31/declaration-by-the-high-representative-on-behalf-of-the-eu-on-the-alignment-of-certain-countries-concerning-restrictive-measures-in-view-of-russia-s-actions-destabilising-the-situation-in-ukraine/pdf

VENZUELA CRYPTOCURRENCY TO GO ON PRE-SALE IN FEBRUARY

The European Sanctions Blog reports that Venezuela’s President Maduro has announced that a ‘pre-sale’ of the country’s proposed ‘Petro’ cryptocurrency will commence on 20th February.

https://europeansanctions.com/

TAIWANESE ACCUSED OF SUPPLYING COAL TO NORTH KOREA

On 1st February, the European Sanctions Blog reports that a former High Court judge and his son, as well as 2 others have been accused of violating UN sanctions against North Korea (though Taiwan is not a UN member state). Specifically, for having chartered a vessel (using a Chinese intermediary) in order to transport North Korean coal to Vietnam in 2017.

https://europeansanctions.com/

GIBRALTAR GOVERNMENT DOES NOT TURN A BLIND EYE TO SMUGGLING

A news release from the Gibraltar Government on 1st February refutes allegations that it does not do enough to combat tobacco smugglers.

https://www.gibraltar.gov.gi/new/sites/default/files/press/2018/Press%20Releases/55-2018.pdf

PLANS FOR JERSEY AIRCRAFT REGISTER

Jersey Evening Post reports that new plans to transform Jersey’s struggling Aircraft Registry are due to be announced soon, the Economic Development Minister has said.  There is currently just 1 aircraft – a privately owned Cessna – on the list.
https://jerseyeveningpost.com/news/2018/02/01/new-plans-for-aircraft-registry/#lPheJyLSAzCrWhMF.99

ITALY ARRESTS CAMORRA MEMBER WHO HID IN MEXICO

OCCRP reports that Italian authorities detained a member of the Camorra crime syndicate who landed in Rome after having been expelled from Mexico where he lived for more than a decade under a false name.  A court in Verona sentenced Salvatore Longo in 2007 to more than 9 years in prison for extortion and usury.  However, Longo had already left Italy.  He acquired a new identity and lived in Mexico with a local woman and ran a pizza restaurant in Tijuana.

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/7580-italy-arrests-camorra-member-who-hid-in-mexico

HONG KONG BANS IVORY TRADE IN ‘HISTORIC’ VOTE

On 1st February the BBC reported that ivory sales will be phased out gradually in Hong Kong, stopping completely in 2021.

http://www.bbc.co.uk/news/world-asia-china-42891204

BENFICA CLUB PRESIDENT NAMED SUSPECT IN CORRUPTION PROBE

Baker McKenzie reports that Portugal’s prosecutors named the head of football club Benfica, Luis Filipe Vieira, as a formal suspect in an investigation into a corruption scheme, the second high-profile inquiry to involve the Lisbon club in less than a week.  The prosecutor general’s office said Benfica Vice President Fernando Tavares was also a suspect in the case, along with a high-ranking judge and 9 other people.

http://www.riskandcompliancehub.com/benfica-club-president-named-suspect-in-corruption-probe/

SUSPECTED BALKAN CRIME BOSS JAILED FOR 6 YEARS IN KOSOVO

Reuters reports that Suspected Balkan crime boss Naser Kelmendi was sentenced to 6 years in prison in Kosovo for trafficking drugs, but cleared of murder, organized crime and other charges.  the Kosovo-born ethnic Albanian with Bosnian citizenship was blacklisted in 2012 by U.S. authorities, who have accused him of heading a family network distributing heroin and other drugs through Afghanistan to Turkey and into Europe.

https://www.reuters.com/article/us-kosovo-trial-kelmendi/suspected-balkan-crime-boss-jailed-for-six-years-in-kosovo-idUSKBN1FL5SA?feedType=RSS&feedName=worldNews&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Reuters%2FworldNews+%28Reuters+World+News%29&&rpc=401

OVERSIGHT REGIME NEEDED TO IMPROVE SANCTIONS ENFORCEMENT

KYC 360 on 1st February carried an article that began by saying that in December 2017, the Institute for Science and International Security issued a report detailing the breadth of non-compliance with UN sanctions on the Democratic People’s Republic of Korea (DPRK).  In particular, it determined that the DPRK has either co-operated with or took advantage of apparent deficiencies in the regulatory regimes of 49 countries to conduct commerce despite the prohibitions imposed on the country. In addition, ISIS has also identified where another 13 countries have apparently unintentionally been involved in sanctions violations, but not as part of an ongoing pattern of abuse.  The 19 countries identified in providing financial services, facilitating the use of front companies, and other non-military transactions includes Germany, India and Poland.  The 18 countries which were implicated in imports of sanctioned goods include Barbados, France, and Ireland. The 20 countries who assisted in vessel reflagging or otherwise facilitating shipments included Greece and Japan.  The article suggests that what is needed to truly give sanctions more teeth – an oversight regime similar to FATF’s focused on export control standards and enforcement.

https://kyc360.com/article/sanctions-fault-dear-brutus/