raytodd.blog

20^th March 2018

 ISLE OF MAN AMENDS BELARUS EXPORT CONTROL SANCTIONS

A news release on 20^th March advised that Island law had been amended to apply, with modifications, EU Regulation 2018/275/EU which amends Articles 1a and 1b of Regulation 765/2006/EC to allow, subject to authorisation by the Treasury a limited number of specific-use sporting rifles and sporting pistols, and the provision of technical assistance or brokering services, financing or financial services related to such goods.

https://www.gov.im/news/2018/mar/20/european-union-belarus-sanctions-amendment-order-2018/

21^st March 2018

US TO RAMP UP DRONE EXPORTS DUE TO ISRAELI COMPETITION

Y Net in Israel reported on 20^th March that the Trump administration expected to lift restrictions on sale of lethal drones to countries other than close allies; the changes coming on a backdrop of US drone manufacturers lobbying for rule changes due to cutthroat competition from Chinese and Israeli rivals.

https://www.ynetnews.com/articles/0,7340,L-5183727,00.html

IRANIAN ARRESTED FOR SCHEME TO EVADE US ECONOMIC SANCTIONS IN $115 MILLION DEAL

Lawfuel in the US on 20^th March reported that an Iranian, Ali Sadr Hashemi Nejad had been arrested for his alleged involvement in a scheme to evade US economic sanctions against Iran, and to commit money laundering and bank fraud.  He was charged with participating in a scheme in which more than $115 million in payments for a Venezuelan housing complex were illegally funnelled through the US financial system for the benefit of Iranian individuals and entities.  It is said that for years, he allegedly funnelled more than $115 million of a nearly half-billion-dollar Venezuelan construction contract through the US banking system, using entities in Switzerland, Turkey, and the BVI to conceal Iran’s identity.

http://www.lawfuel.com/blog/iranian-arrested-for-scheme-to-evade-us-economic-sanctions-in-115-million-deal/

VIETNAM CRACKDOWN ON ILLEGAL ONLINE GAMBLING INDUSTRY AND MONEY LAUNDERING

The Tight Poker website on 21^st March reported that Vietnam’s Ministry of Public Security (MoPS) has announced that the authorities had launched a crackdown on the illegal online gambling industry in the country and also targeted money laundering schemes that were taking place in the gambling industry.  Officials revealed that they are currently going after the Rikvip Group, which has been running online gambling websites rikvip.com and rikvip.vn since 2015.  Online gambling is banned and locals are prohibited from setting up or operating online gambling websites, although foreign bookmakers licensed offshore are able to offer their services in Vietnam, the government has blocked many betting and gambling websites to prevent locals from accessing them.

https://www.tightpoker.com/news/vietnam-crackdowns-illegal-online-gambling-industry-and-money-laundering-12497/

MAN JAILED FOR 45 MONTHS OVER £500,000 PIRATE DVD SCAM ORDERED TO REPAY JUST £5,000

The Eastern Daily Press in the UK on 20^th March reported that a man who is serving a jail sentence for his part in a £500,000 pirate DVD scam has been ordered to repay £5,000 after a court heard he has no other available assets.  Frankie Ansell, 29, had made benefit from his criminal offending of £224,000 but as he only had available assets of £5,719.

http://www.edp24.co.uk/news/crime/dvd-scammer-ordered-to-repay-money-1-5442944

FEARS THE ‘BEAUTY’ OF BAHAMAS IBC WOULD BE LOST OVER EU BLACKLIST RESPONSE

Tribune 242 in the Bahamas on 20^th March reported that the Deputy Prime Minister had warned that “all” International Business Companies may have to submit annual accounts if the Bahamas is to escape Europe’s “blacklist”.  This is said to have raised immediate fears among financial services practitioners that the “beauty” of IBC may be lost, given that such reporting requirements would eliminate the advantages associated with using them.  One executive, speaking on condition of anonymity, said such a move risked a repeat of the post-2000 ‘blacklisting’ by FATF, when the Bahamas went further than other international financial centres (IFC) by eliminating “bearer shares”.  That resulted insignificant IBC-related business moving from the Bahamas to the BVI. Currently, Bahamas-domiciled IBCs only have to file registers of their officers and directors; give the name and address of their registered agent; and give notice of any mortgages and other charges over their assets. The financial accounting/reporting demanded by the EU will thus dramatically increase their regulatory burden.

http://www.tribune242.com/news/2018/mar/20/fears-ibc-beauty-lost-over-blacklist-response/

NEW EU MANDATORY DISCLOSURE RULES FOR INTERMEDIARIES APPLYING TO CROSS-BORDER TAX ADVICE AND CIRCUMVENTION OF REPORTING OBLIGATIONS

Loyens & Loeff published an article on 13^th March about political agreement having been reached on a EU Council Directive introducing mandatory disclosure rules for intermediaries such as lawyers, accountants and tax advisers. Intermediaries must report potentially aggressive tax planning arrangements with a cross-border dimension as well as arrangements designed to circumvent reporting requirements like CRS and beneficial ownership reporting.  Member States’ tax authorities will exchange the information automatically within the EU through a centralised database.  The reporting obligation applies to intermediaries with residency, incorporation, professional registration or a permanent establishment in a Member State and only related to cross-border arrangements concerning at least 1 other Member State.  Member States must implement the Directive in their domestic laws ultimately on 31^st December 2019 and apply it as from 1^st July 2020.

https://www.loyensloeff.com/en-us/news-events/news/new-eu-mandatory-disclosure-rules-for-intermediaries-applying-to-cross-border-tax-advice-and-circumvention-of-reporting-obligations

CORRUPTION AND BRIBERY OFFENCES IN FRANCE

On 27^th February, Reed Smith produced a structured guide.

https://www.lexology.com/library/detail.aspx?g=0c71067e-04b1-4a57-8731-fc141be57c2d

OFFSHORE TAX HAVENS WITH A GRIP ON MULTI-MILLION POUND ISLINGTON PROPERTIES

Islington Now on 20^th March carried a feature on offshore ownership of properties in Islington, London, including 83 owned by Isle of Man companies.  A study shows 1,672 properties owned by 506 different companies registered in countries recognised by the IMF as offshore financial centres, of which 334 have been acquired in the past year.

http://islingtonnow.co.uk/revealed-offshore-tax-havens-with-a-grip-on-multimillion-pound-islington-properties/

AUCTION STARTS FOR SEIZED WESTERN SAHARA PHOSPHATE CARGO

On 20^th March, Defence Web reported that a sealed bid auction has opened to buy 55,000 tonnes of phosphate aboard a ship seized by South African authorities last year over the Moroccan cargo from the disputed Western Sahara region.  The starting bid for the cargo was $1 million.  The Polisario Front, the political organisation representing Western Sahara, alleged the phosphate shipment en route to New Zealand was illegally taken from Western Sahara territory and went to court to have the cargo seized.  The Marshall Island-flagged ship, NM Cherry Blossom, has been in Port Elizabeth since May after a South African court ruled the vessel should remain until the case goes to trial or security is posted.  The court case is a test of Polisario’s new legal tactic in its long-running conflict with Morocco over Western Sahara, a disputed territory where the two sides fought a war until a 1991 ceasefire and where UN talks failed to reach an accord.  A Panama court last year dismissed a similar case by the Polisario to block a phosphate cargo in Panama, saying there was no evidence it belonged to the group and court was not the venue to judge political matters.

http://www.defenceweb.co.za/index.php?option=com_content&view=article&id=51106:auction-starts-for-seized-western-sahara-phosphate-cargo&catid=56:diplomacy-a-peace&Itemid=111

US ARRESTS PILATUS BANK CHAIRMAN OVER ALLEGED IRAN SANCTIONS EVASION SCHEME

The Cyprus Business Mail on 21^st March reported that Ali Sadr Hashemi Nejad, 38, an Iranian who chairs the Maltese bank has been arrested on US charges that he participated in a scheme to evade US sanctions and funnel more than $115 million paid under a Venezuelan construction contract through the US financial system.  It also reports that Pilatus Bank was in litigation with the Maltese journalist, Daphne Caruana Galizia, who was murdered in October, over several articles she wrote that accused the bank and Ali Sadr of facilitating corrupt political activities and money laundering.  The bank said the articles were false and defamatory. A former bank employee who was the main source for Caruana Galizia’s accusations has been arrested on a European arrest warrant issued by the Malta in response to a complaint of fraud by Pilatus Bank.

http://cyprusbusinessmail.com/?src=ilaw&p=61278

2 ISRAELI COMPANIES PROBED OVER AFRICA BRIBERY ALLEGATIONS

Haaretz on 21^st March reports on 3 senior Israel Shipyards officials are suspected of bribing African officials to advance defence contracts worth tens of millions of dollars.  It says that this follows the police raid of the offices of Housing & Construction and the arrest of several past and present senior executives on suspicion of paying bribes to government employees in Africa.  The new case involves strikingly similar allegations, it says.  Bribing a foreign official is a relatively new crime in Israel, added to the criminal code in 2008 as part of Israel’s accession to OECD and the UN Convention against Corruption.  The change made bribing a foreign official the equivalent of bribing an Israeli one, carrying a prison sentence of up to 7 years.

https://www.haaretz.com/israel-news/business/two-israeli-firms-probed-over-africa-bribery-allegations-1.5931967?src=ilaw

GARDAÍ INVESTIGATE POTENTIAL ISLAMIC EXTREMIST LINK TO INVOICE FRAUD AGAINST DUBLIN ZOO

The Journal in Ireland on 21^st March reported that Gardaí are investigating if a €500,000 invoice fraud carried out against Dublin Zoo was intended to benefit Islamic extremists in the UK.

http://www.thejournal.ie/dublin-zoo-islamic-terror-potential-link-3913949-Mar2018/?src=ilaw

IRELAND IS A LEADING MARKET FOR BRITISH RETAILERS, SAYS ROYAL MAIL

Postal technology on 20^th March reported that a new study commissioned by Royal Mail has found that 81% of shoppers in Ireland buy goods from UK-based online retailers.  The study, part of Royal Mail’s Delivery Matters series, asked over 1,500 online shoppers in Ireland about their shopping habits and preferences. On average, Irish online shoppers spend €85 (US$105) per month with 51% of purchases consisting of clothes, compared to 45% in the UK.

http://www.postalandparceltechnologyinternational.com/news.php?NewsID=90029

THE CHEMICAL WEAPONS CONVENTION

On 20^th March, the House of Commons issued a briefing that looks at the Chemical Weapons Convention in the context of the attack in Salisbury in March 2018.

https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-8258

COCAINE FOUND IN NOODLE-MAKING MACHINES AS SOUTH AMERICAN AND EUROPEAN ARRESTED IN HONG KONG

On 20^th March, Customs Today reported that customs officers in Hong Kong involved in raiding 3 flats discovered sachets of cocaine concealed in the metal shafts of noodle-making machines shipped from South America via mainland China. Similar discoveries had been made in previous raids in recent weeks.

http://www.customstoday.com.pk/cocaine-worth-hk14m-found-in-noodle-making-machines-as-south-american-and-european-arrested-in-hong-kong/

HELPING THE AUTHORITIES IN MALI GO AFTER THE TERRORISTS’ MONEY

The UN Office for Drugs and Crime on 20^th March reported that Mali is facing a unique combination of threats associated with various kinds of illicit trafficking and terrorism. Disrupting the flow of funding to terrorist groups through targeted financial sanctions is one way to reduce threats in the country, which will also benefit the region. To help law enforcement agencies better understand these threats and be able to work more effectively to reduce them, UNODC has developed a training course on advance financial disruption techniques. It also looks at how countries can better use Security Council sanctions on terrorist financing as set out in resolution 1267/1988 as part of a wider financial disruption plan.  This training course was delivered in Mali in February.  UNODC plans to deliver similar training courses to officials in Somalia, Afghanistan, the Middle East and North Africa region and Kazakhstan in the next 6 months.

https://www.unodc.org/unodc/en/frontpage/2018/March/helping-the-authorities-in-mali-go-after-the-terrorists-money.html?ref=fs1

WAR IN YEMEN: EUROPEAN DIVISIONS ON ARMS EXPORT CONTROLS

On 20^th March, the International Institute for Strategic Studies reported that, as arms exports to parties in the war in Yemen such as Saudi Arabia and the UAE come under increasing criticism, some European countries are set to fully or partially halt such sales.  This creates an increasing divergence in European arms export control policies, at a time when states are looking to deepen defence armament co-operation.  The report analyses who supplied what to whom.

https://www.iiss.org/en/militarybalanceblog/blogsections/2018-f256/march-af87/war-in-yemen-european-divisions-on-arms-export-controls-fed4

SPAIN TO BAN NARCO BOATS

On 21^st March, the Gibraltar Chronicle reported that Spain is to follow Gibraltar’s lead and introduce legislation banning so-called “narco launches”, the powerful rigid-hulled inflatable boats favoured by smugglers to ferry clandestine shipments of drugs across the Strait of Gibraltar.  In parallel, Spanish officials will work to strengthen cooperation mechanisms with Gibraltar and Morocco in order to make life harder for smugglers in the region.

http://chronicle.gi/2018/03/spain-moves-to-ban-narco-launches/

URUGUAY’S CANNABIS LAW: PIONEERING A NEW PARADIGM

The Brookings Institute on 21^st march published a study on the experience of Uruguay, the first country to legalise and regulate its domestic non-medical cannabis market.  In light of this pioneering role, the choices and experiences of Uruguayan authorities hold important lessons for other jurisdictions that may consider whether and how to regulate cannabis.  Uruguay’s breakthroughs and challenges related to banking, international treaties, access to the product, enforcement, medical cannabis, tourism, and research and evaluation in particular hold immense value to policymakers and analysts elsewhere.  To this end, the study examines the conditions that led Uruguay’s government to pass its cannabis law in 2013, studies its progress so far, and identifies areas that policymakers should consider addressing in order to maximise the law’s potential benefits.

https://www.brookings.edu/research/uruguays-cannabis-law-pioneering-a-new-paradigm/

AIRFREIGHT E-DANGEROUS GOODS DECLARATION TRIALS

Loadstar on 21^st March reported that the air freight industry has moved a step closer to digitalisation and data-sharing with the launch of the IATA-compliant e-Dangerous Goods Declaration (eDGD).  It uses supply chain community platforms to enable collaboration between partners, traceability and reduce errors and delays, and implementing requires co-operation between all stakeholders, including shippers, forwarders, carriers and ground handling agents.  The current “proof of concept” phase involves the 3 airlines behind the initiative, Lufthansa Cargo, Swiss World Cargo and AF-KLM.

https://theloadstar.co.uk/digital-revolution-step-closer-air-freight-e-dangerous-goods-declaration/?utm_source=The+Loadstar+daily+email&utm_campaign=94eaa2a066-EMAIL_CAMPAIGN_2018_03_21&utm_medium=email&utm_term=0_c4570e43d4-94eaa2a066-153488301

RUSSIAN WHISTLE-BLOWER LINKED TO SLAIN MALTESE JOURNALIST TURNS HERSELF IN

Rferl on 21^st March reported that Russian whistle-blower, Maria Yefimova. linked to slain Maltese journalist Daphne Caruana Galizia has handed herself in to the police in Greece, saying she feared for her life.  Yefimova reportedly told Caruana Galizia that she had seen documents suggesting that €1 million from Azerbaijani President Ilham Aliyev’s family had found its way into an account held by Michelle Muscat, the wife of Malta’s prime minister.  He and his wife have denied accusations that the money was transferred to Michelle Muscat from the Aliyev family through Egrant Inc, a secret offshore firm in Panama.  Yefimova fled Malta last year, saying she feared for her life and family. Authorities in Malta and Cyprus have issued arrest warrants for her, but for different reasons – the Maltese warrant is based on an accusation by Malta-registered Pilatus Bank that she stole from the bank; the Cypriot arrest warrant is based on a similar embezzlement claim by Cyprus-based Fragrance Distribution, where she worked before moving to Malta.

https://www.rferl.org/a/russian-whistle-blower-efimova-linked-slain-maltese-jouralist-caruana-galizia-turns-self-in-athens-greece-azerbaijan-aliyev-family-/29112519.html

 

DIGITAL TAXATION: COMMISSION PROPOSES NEW MEASURES TO ENSURE THAT ALL COMPANIES PAY FAIR TAX IN THE EU

On 21^st March, the EU published a news release containing new rules to ensure that digital business activities are taxed in a fair and growth-friendly way in the EU. The measures are intended to make the EU a global leader in designing tax laws fit for the modern economy and the digital age.

http://europa.eu/rapid/press-release_IP-18-2041_en.htm

Q&A on a Fair and Efficient Tax System in the EU for the Digital Single Market

http://europa.eu/rapid/press-release_MEMO-18-2141_en.htm

LATVIA TO BAN SHELL COMPANIES IN MONEY LAUNDERING CLAMPDOWN

On 21^st March, Reuters reported that Latvia is struggling to restore confidence in its financial institutions after US accusations that the euro zone state’s third biggest bank, ABLV, was serving as a conduit for illicit funds.  The use of shell companies has been widespread in Latvia, with the country’s financial watchdog putting their number at over 26,000.  It says that Latvia has more than 10 banks that deal primarily with non-resident deposits, many from customers in Russia and other ex-Soviet states who often use shell companies in their business dealings.

https://www.reuters.com/article/us-latvia-banking/latvia-to-ban-shell-companies-in-money-laundering-clampdown-idUSKBN1GX1Q0

INVOKING LEGAL PRIVILEGE IS NO BLOCK TO SECURING DEFERRED PROSECUTION AGREEMENT

M Lex on 12^th March reported on proceedings in London which mean that companies that invoke the right to keep certain documents out of the hands of UK bribery investigators can still reach deferred prosecution agreements (DPA).  In a probe involving a company referred to only as “XYZ,” the SFO had agreed to sign a deferred prosecution agreement in July 2016, even though it did not get access to notes of interviews with employees conducted during an internal corruption probe, said to be protected by legal privilege.  Several unnamed claimants are taking legal action against the SFO, in a bid to get hold of the documents that were kept out of the scope of the DPA.  The SFO concluded at the time that the company had cooperated enough and therefore deserved a DPA.  The court will hand down the judgment at a later date.  The article says that what documents are covered by legal privilege is also the subject of a Court of Appeal case involving the Eurasian Resources Group, which is under investigation by the SFO for suspected corruption.

https://mlexmarketinsight.com/insights-center/editors-picks/anti-bribery-and-corruption/europe/invoking-legal-privilege-is-no-block-to-securing-uk-bribery-settlement,-london-court-hears?src=ilaw

RUSSIAN CUSTOMS OFFICIAL IN FAR EAST ARRESTED ON SUSPICION OF CORRUPTION

RAPSI in Russia reported on 21^st March that the First Deputy Director of the Federal Customs Service’s Far Eastern Directorate, Sergey Fedorov, has been arrested on suspicion of taking bribes.

http://www.rapsinews.com/judicial_news/20180321/282268818.html?src=ilaw

EGYPT’S CRIMINAL COURT ANNULS ASSETS FREEZE OF MUBARAK-ERA MINISTER

Al-Ahram Online in Egypt reported on 21^st March that the Criminal Court has annulled a 2011 decision to freeze the assets of the Mubarak-era Minister of Agriculture of 1982-2004, Youssef Wali and his family, accepting an appeal presented by the former minister.  The former minister, who also served as deputy prime minister and deputy chairman of Hosni Mubarak’s now-dissolved National Democratic Party, has had several corruption cases against him dismissed, the latest being a case involving business tycoon and influential Mubarak regime figure, Hussien Salem, in 2017.  Wali was sentenced to 10 years in jail in a corruption case in 2012, but the conviction was overturned in 2013.

http://english.ahram.org.eg/NewsContent/1/64/293197/-.aspx?src=ilaw

7 CHARGED AFTER MELBOURNE MONEY-LAUNDERING RAIDS TARGETING COMANCHEROS MOTORCYCLE GANG

The News Daily in Australia on 21^st March reported police raids on more than 40 Victorian properties including brothels and tattoo parlours have led to 7 people being charged after a major operation against the Commancheros motorcycle gang, targeting businesses used in money laundering activities.  Men and women aged 22 to 76 face a range of charges including drug possession and weapons offences following 44 search warrants. Officers swooped on residential and commercial properties with alleged links to the gang, with gyms and accountancy businesses among those hit.

https://thenewdaily.com.au/news/state/vic/2018/03/21/victoria-police-raid-bikie-properties/?src=ilaw

SWISS LAUNCH PROBE AFTER ITALY SEEKS HELP IN TAX CASE

On 21^st March, Reuters reported that the Swiss attorney general’s office (OAG) has opened a criminal investigation in a tax case involving a former manager of luxury goods maker Kering after a request for help from Italian authorities.

https://uk.reuters.com/article/uk-kering-tax-swiss/swiss-launch-probe-after-italy-seeks-help-in-tax-case-idUKKBN1GX2B0?rpc=401&

EU LIFTS TRAVEL BANS FROM 1997 ON 3 PERSONS LINKED TO VIOLENCE IN MOSTAR

The European Sanctions Blog on 21^st March reported on EU Council Decision 2018/458/CFSP which, w.e.f. 20^th March, revoked the Common Position that had imposed EU-wide travel bans on 3 individuals – Ivan Hrkac, Zeljko Planinic, and Bozo Peric – who were identified as “persons having perpetrated violent acts during the incidents in Mostar on 10^th February 1997.

http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2018.077.01.0016.01.ENG&toc=OJ:L:2018:077:TOC#ntc1-L_2018077EN.01001601-E0001

GUATEMALAN GOVERNMENT REMOVES CORRUPTION INVESTIGATORS

OCCRP on 21^st March reported that the Guatemalan government has removed 11 police investigators from the country’s anti-corruption body, which interpreted the move as an attempt to impede investigations implicating high-ranking politicians and their relatives.  The International Commission Against Impunity for Corruption in Guatemala (CICIG) was formed in 2006 to investigate widespread high-level corruption that has implicated former president Otto Perez Molina, and is now investigating sitting president Jimmy Morales along with dozens of other ministers, politicians, and businessman.

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/7803-guatemalan-government-removes-corruption-investigators

LITHUANIA: IMPEACHMENT LAUNCHED AGAINST MP FOR CORRUPTION

OCCRP on 21^st March reported that Lithuania’s parliament is launching an impeachment procedure against Artuas Skardzius , a lawmaker who was found to have financially benefited from a business he protected as a legislator. The move comes after the same parliament shocked the public by failing to expel another lawmaker, Mindaugas Bastys.

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/7805-lithuania-impeachment-launched-against-mp-exposed-by-occrp-partners-2

PODCAST: OFFSETS: COMPLIANCE RISKS?

In the latest TRACE podcast, Bill Steinman of Steinman & Rodgers provides a primer on offsets and the compliance challenges they present.  Offsets, in this context, are involved in international defence equipment contracts, where the purchaser requires the seller to provide some compensation by buying, or arranging the buying, of goods or services.  So, for example, for a $1 billion deal, the seller (or seller country) might have to agree to offset $250 million, perhaps by sourcing some of the necessary components from the buying country.  One example in the past was where, to sell hawk jets to Finland, British Aerospace had to agree to take on and sell Finnish liquorice…  hence the offset can be indirect financial, industrial or economic support.

https://www.traceinternational.org/bribe_swindle_or_steal

ARRESTS OF SENIOR MILITARY OFFICERS INDICATE INCREASING LIKELIHOOD OF A COUP IN VENEZUELA

Janes.com on 21^st March reports the arrest of several top-rank officers in the past 3 weeks, including a former head of the army and the founder and former head of the Bolivarian National Intelligence Service (SEBIN).

http://www.janes.com/article/78749/arrests-of-senior-military-officers-indicate-increasing-likelihood-of-a-coup-in-venezuela-in-one-year-outlook

OFAC TAKES INITIAL STEPS TO DEAL WITH QUESTIONS ABOUT THE APPLICATION OF US SANCTIONS TO CRYPTOCURRENCY

A briefing from law firm, Brown Rudnick, on 21^st March says that OFAC has begun to pull back the covers on its views toward cryptocurrencies (also known as “virtual currencies”) within the existing regulatory landscape of US sanctions.  OFAC has published clarifications as part of its FAQ explaining its view that existing regulations will apply equally to all forms of digital currency, which includes sovereign cryptocurrency, virtual currency (non-fiat), and digital representations of fiat currency.  This at the same time as it applies prohibitions in respect of the Venezuelan “Petro”.  The briefing says that the US government’s goal is to deter attempts by malicious actors to circumscribe regulation of financial transactions through these semi-anonymous digital currencies.  It recommends that the risks raised in the OFAC guidance should be managed through enhanced screening – in particular, clients operating in this high-risk area should confirm that they are not engaging in transactions with persons or entities on the official sanctions list.  OFAC has indicated that it may publish the digital currency addresses corresponding to illicit transactions on the SDN and Blocked Persons List. A digital currency address is a unique identifier assigned to each potential destination of a currency transfer. The aim is to alert the public of specific digital currency identifiers associated with a blocked person.

http://www.brownrudnick.com/alert/ofac-takes-initial-steps-deal-questions-application-us-sanctions-cryptocurrency/

On 21^st March, the EU published a news release saying that the guidelines mark the first step in stopping the transit of EU funds through non-cooperative tax jurisdictions, and will ensure that EU funds do not inadvertently contribute to global tax avoidance.  They should guarantee in particular that EU external development and investment funds cannot be channelled or transited through entities in countries on the EU’s common list.  In order to safeguard the EU’s development policy, an exception is made for direct financing, where a project is physically implemented in a listed non-cooperative tax jurisdiction and is not linked to money-laundering, terrorism financing, tax fraud or tax evasion.

http://europa.eu/rapid/press-release_IP-18-2245_en.htm

The Guidelines are at –

https://ec.europa.eu/info/publications/eu-anti-tax-avoidance-requirements-financing-and-investment-operations_en

On 20^th March, Defence Web reported that a sealed bid auction has opened to buy 55,000 tonnes of phosphate aboard a ship seized by South African authorities last year over the Moroccan cargo from the disputed Western Sahara region.  The starting bid for the cargo was $1 million.  The Polisario Front, the political organisation representing Western Sahara, alleged the phosphate shipment en route to New Zealand was illegally taken from Western Sahara territory and went to court to have the cargo seized.  The Marshall Island-flagged ship, NM Cherry Blossom, has been in Port Elizabeth since May after a South African court ruled the vessel should remain until the case goes to trial or security is posted.  The court case is a test of Polisario’s new legal tactic in its long-running conflict with Morocco over Western Sahara, a disputed territory where the two sides fought a war until a 1991 ceasefire and where UN talks failed to reach an accord.  A Panama court last year dismissed a similar case by the Polisario to block a phosphate cargo in Panama, saying there was no evidence it belonged to the group and court was not the venue to judge political matters.

http://www.defenceweb.co.za/index.php?option=com_content&view=article&id=51106:auction-starts-for-seized-western-sahara-phosphate-cargo&catid=56:diplomacy-a-peace&Itemid=111

On 19^th March, Freshfields Bruckhaus Deringer published a briefing on the TRACE International 2017 Global Enforcement Report with the most up-to-date statistics on cross-border bribery investigations and enforcement actions involving government officials.  The report contains such details as authorities in the US and Europe (including the UK) together are conducting nearly 90% of the foreign bribery investigations, with investigations equally divided between them.  US authorities appear to be focusing most closely on US and European companies allegedly paying bribes in Asia-Pacific, and Europe was also home to a surprising proportion of alleged recipients of bribery by US companies.  Authorities in Brazil, India, China and Nigeria were by far the most active in investigating foreign bribery of their own domestic officials.

http://risk.freshfields.com/post/102esq9/the-latest-trace-report-anti-bribery-enforcement-is-back-to-normal-in-the-us-an

The TRACE report is at –

https://www.traceinternational.org/ger

Coinweek on 20^th March reported that US gold refinery Elemetal LLC, based in Dallas, Texas (t/a “Elemetal” and “NTR Metals”), had pleaded guilty to a single-count information charging Elemetal with failure to maintain an adequate AML programme.  According to filings, from August 2012 through November 2016, Elemetal purchased and refined billions of dollars of gold from countries around the world, including from Central America, South America, the Caribbean and Europe.  Because of the high risk of gold-based money laundering, federal law requires precious metals dealers to establish AML programmes.  However, the company failed to adhere to the requirements, ask sufficient questions or seek adequate or appropriate information and evidence.

https://coinweek.com/bullion-report/u-s-gold-refinery-pleads-guilty-to-anti-money-laundering-charge/

20^th March 2018

FRENCH EMBASSY WORKERS ARRESTED FOR SMUGGLING WEAPONS TO PALESTINIANS

The Jerusalem Post carried further information on the arrest of a French Consulate worker.  It said that 2 French Embassy workers along with 5 Palestinians have been indicted on charges of smuggling dozens of weapons from the Hamas-run Gaza Strip to the West Bank.  Shin Bet (the Israel Security Agency) said that 24-year-old French citizen Romain Franck, who worked as a driver in the French Consulate in east Jerusalem, was part of a cell that smuggled 70 pistols and 2 assault rifles through the Erez crossing on the Israel-Gaza border on 5 different occasions.

http://www.jpost.com/Arab-Israeli-Conflict/French-consulate-worker-arrested-for-smuggling-weapons-into-Gaza-545430

INDIA SUMMONS GUPTAS OVER TAX AND ‘MONEY LAUNDERING’

The Citizen in South Africa on 19^th March reported that Ajay Gupta has been named a fugitive from justice by South African authorities and has been red-flagged by Interpol.  The Gupta brothers are facing scrutiny for the role they played in the alleged looting of South African resources through state capture.  The Times of India reports that the brothers have until March 26^th to appear before the Indian income tax department, in connection with money laundering and “amassing properties in Uttarakhand, Uttar Pradesh and NCR”.  Gupta properties have been raided in Dehradun and Saharanpur.

https://citizen.co.za/news/south-africa/1861625/india-summons-guptas-over-tax-money-laundering/

ISLE OF MAN VAT AFFAIRS STILL UNDER EU SPOTLIGHT

Manx Radio on 19^th March reported that the Isle of Man’s VAT affairs haven’t escaped scrutiny by the European Commission according to a spokeswoman, who said that the Manx government is still under investigation by anti-fraud experts EUROFISC for its VAT arrangements on private jets.  She says ‘should it become necessary, the Commission will not hesitate to take further action’.  This comes as the EU is taking action on Malta, Cyprus, and Greece for failing to raise the ‘correct amount’ of VAT on the provision of yachts.

http://www.manxradio.com/news/isle-of-man-news/island-vat-affairs-still-under-eu-spotlight/

CALL FOR ACTION AS REPORT REVEALS LINK TO HOW FREE TRADE ZONES FOSTER COUNTERFEIT TRAFFICKING

The World Trademark Review on 15^th March reports on new research from the OECD and the EU Intellectual Property Office (EUIPO) that reveals that the growth in free trade zones – where economic activity is driven by reduced customs controls, light regulation and limited oversight – is in turn fostering growth in counterfeit goods trafficking.  The study notes that the global value of exports from export processing zones (EPZ) is $3,500 billion, which represent 29% of total exports of economies included in the World FTZ database.  Exporting more than $2,400 billion from EPZ, Asian economies lead the way, followed by the Middle East ($552 billion) and South American economies ($284 billion).

http://www.worldtrademarkreview.com/blog/detail.aspx?g=d7047bae-ef56-4171-bc63-b7d302f3aa85

The report is at –

http://www.oecd.org/publications/trade-in-counterfeit-goods-and-free-trade-zones-9789264289550-en.htm

ENGLISH COURT OF APPEAL CLARIFIES WHEN A PARENT COMPANY WILL BE LIABLE FOR THE ACTIONS OF ITS SUBSIDIARY

Mayer Brown on 19^th February reported on Okpabi and others v Royal Dutch Shell Plc and another.  The judgment considered the effect of the implementation of the parent company’s group policies by the subsidiary and whether or not that made it more likely that a parent would be held liable for the actions of its subsidiary.  The claimants had sought damages as a result of serious, and ongoing, pollution and environmental damage caused by leaks of oil from pipelines and associated infrastructure in and around the Niger Delta, for which they contended Shell and its Nigerian subsidiary were responsible.  Both the High Court and Court of Appeal held that no duty of care was owed by Shell to the claimants.

https://www.mayerbrown.com/English-Court-of-Appeal-clarifies-when-a-parent-company-will-be-liable-for-the-actions-of-its-subsidiary-02-28-2018/

UK’S FIRST CONTESTED FAILURE TO PREVENT BRIBERY CONVICTION – WHAT DOES NOT CONSTITUTE “ADEQUATE PROCEDURES”

Jenner & Block on 12^th March reported on the first contested case of its kind since the UK Bribery Act 2010 came into force in July 2011.  In January 2014, Skansen International Ltd appointed a new CEO who initiated its first anti-bribery and corruption (ABC) policy and ordered an internal investigation into payments made in 2013.  At trial, Skansen argued that it had had adequate procedures, relying on the fact that it was a small business, operating locally and out of a single, open-plan office, so as not to require a sophisticated ABC policy.

https://jenner.com/system/assets/publications/17830/original/UK’s%20First%20Contested%20Failure%20to%20Prevent%20Bribery%20Conviction.pdf?1521065185

US CUSTOMS EXTENDS IMPORT RESTRICTIONS FOR CERTAIN ARCHAEOLOGICAL MATERIAL FROM BELIZE

On 28^th February, Baker McKenzie reported that the US had renewed import restrictions designed to protect archaeological material from Belize.

http://www.internationaltradecomplianceupdate.com/2018/02/28/us-cbp-extends-import-restrictions-for-certain-archaeological-material-belize/#page=1

EU RENEWS SANCTIONS RESTRICTIONS RELATING TO BOSNIA-HERZOGOVINA

EU Council Decision 2018/459/CFSP renews EU restrictions under Council Decision 2011/173/CFSP to 31^st March 2019.  The sanctions relate to people and entities, and those associated with them, deemed to be undermining the sovereignty or territorial integrity of Bosnia, seriously threatening its security situation, or undermining the Dayton/Paris peace agreement.

http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2018.077.01.0017.01.ENG&toc=OJ:L:2018:077:TOC

ISRAELI ARMS EXPORTS TO AFRICA GROWING

Defence Web on 19^th March reported that Israeli arms sales to African countries are growing steadily, with defence exports increasing 70% between 2015 and 2016 to reach $275 million.  It says that 2017 numbers are not yet available, but Israeli ministry of defence sources say that last year the numbers were even higher.

http://www.defenceweb.co.za/index.php?option=com_content&view=article&id=51078:israeli-arms-exports-to-africa-growing&catid=7:Industry&Itemid=116

AFRICAN CENTRE TO FIGHT ILLEGAL FISHING TO BE SET UP

On 19^th March, Defence Web reported that South Africa will play a significant role in the establishment of the SADC regional Monitoring Control and Surveillance Coordination Centre (MCSCC) which will soon be established in Mozambique.  The SADC MCSCC is expected to enhance and co-ordinate compliance and enforcement efforts in the SADC region in order to combat illegal fishing.

http://www.defenceweb.co.za/index.php?option=com_content&view=article&id=51087:centre-to-fight-illegal-fishing-to-be-set-up&catid=108:maritime-security&Itemid=233

MALDIVES TO LIFT STATE OF EMERGENCY, AND CHARGE EX-PRESIDENT, CHIEF JUSTICE ETC WITH BRIBERY

On 20^th March, Reuters reported that the Maldives government will bring bribery charges against former leader Maumoon Abdul Gayoom and Chief Justice Abdulla Saeed and Supreme Court Judge Ali Hameed, and Supreme Court administrator Hassan Sayeed.  The state of emergency was imposed in February (and later extended for another 30 days with parliament approval) in order to annul a Supreme Court ruling that quashed convictions against 9 opposition leaders and ordered the government to free those held in prison.  The chief justice, another Supreme Court judge, and a Supreme Court administrator were arrested on allegations of attempting to overthrow the government.

https://www.reuters.com/article/us-maldives-politics/maldives-to-lift-state-of-emergency-charge-ex-president-chief-justice-with-bribery-idUSKBN1GW0PM?feedType=RSS&feedName=worldNews&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Reuters%2FworldNews+%28Reuters+World+News%29&src=ilaw

NIGERIA: SWISS ACCOUNTS BLOCKED OVER SUSPECTED NIGERIAN OIL BRIBERY CASE

Vanguard in Nigeria on 20^th March reported that the Office of the Attorney General of Switzerland (OAG) has blocked various bank accounts in Switzerland over an alleged oil bribery scheme linked to Nigeria at the request of the Milan public prosecutor and reportedly linked to the Shell and Eni bribery trials in Milan.

http://allafrica.com/stories/201803200156.html?src=ilaw&viewall=1

CANARA BANK IN INDIA: NEW FRAUD CASE

On 20^th March, Reuters reported that shares in India’s Canara Bank tumbled more than 5% after the country’s federal police filed charges against a former chairman of the state-run bank and others over allegations that the officials helped a company defraud the bank of about $10.5 million taken in loans over 4 years ago.

https://www.reuters.com/article/us-india-fraud-canara-bank/canara-bank-shares-tumble-after-police-file-charges-in-new-fraud-case-idUSKBN1GW0EY

UK EXPORT STRATEGY: TERMS OF REFERENCE

On 20^th March, the terms of reference for the Department for International Trade’s development of a new export strategy were published.  The Export Strategy will explore 5 important areas:

• segmenting the differing needs of UK businesses
• assessing different sector and market needs
• the Department for International Trade’s products and services
• working with other providers of export support, including the private sector
• DIT income generation strategy

https://www.gov.uk/government/publications/export-strategy-terms-of-reference

CANADA’S 2018 BUDGET HERALDS INTRODUCTION OF DEFERRED PROSECUTION AGREEMENTS FOR CORPORATE WRONGDOING

Dentons on 19^th March reported that the Canadian government has announced its intention to introduce legislation to establish Deferred Prosecution Agreements (DPA) as “an additional tool to hold corporate offenders to account”, following the results of the Government’s fall 2017 public consultation process, which revealed strong public support for the introduction of DPA in Canada.  The article goes on to explain how they might work.

https://www.jdsupra.com/legalnews/canada-s-2018-budget-heralds-60934/

THE DESPOT’S GUIDE TO WEALTH MANAGEMENT

In the latest TRACE podcast, Professor Jason Sharman at King’s College, Cambridge, discusses his book about how kleptocrats operate and advocates for a controversial “bounty hunter” model for asset recovery.

https://www.traceinternational.org/bribe_swindle_or_steal

OFAC LICENCES FOR ACCESS TO INTERNET FOR IRANIAN CITIZENS

A news release from OFAC on 20^th March was intended to highlight existing guidance to underscore the US Government’s ongoing commitment to ensure that the Iranian people can exercise their universal right to freedom of expression and can freely access information via the Internet.  OFAC’s guidance, authorisations, and licensing policies support the Administration’s continued commitment to promote the free flow of information to citizens of Iran.  OFAC has 2 Iran-related general licences that authorise the provision of certain hardware, software, and services incident to the exchange of personal communications over the Internet, such as instant messaging, chat and email, and social networking software and services, as well as certain apps for mobile operating systems, anti-censorship tools, anti-tracking software, mobile phones, and other devices.  OFAC has provided extensive guidance on its website on these general licences, and OFAC will consider applications to provide products and services outside the scope of these authorisations on a case-by-case basis based on US foreign policy and national security interests.

https://home.treasury.gov/news/press-releases/sm0322

POLITICALLY EXPOSED PERSONS (PEP) AND THE LEGAL RESTRICTIONS THEY FACE

In an article published on 15^th March, law firm Rahman Ravelli considers the Novartis scandal in Greece and the business restrictions on those holding high office.  It points out that 2 former Greek prime ministers and an EU Commissioner are among 10 officials being investigated over allegations that Swiss medical giant Novartis bribed officials and doctors, from 2006 to 2015, to fix drug prices and boost its sales to public hospitals.  The article goes on to consider the effect of the UK money laundering regulations on such PEP.  The 2007 Regulations require that enhanced customer due diligence measures are taken to manage and mitigate the risks posed by PEP, their families and known close associates.  It says that those in political positions must take careful and organised steps to ensure they can account for the sources of any wealth they are known to possess.  Whether they like it or not, their past or current position can be viewed as a vulnerability to corruption; which means they are liable for greater scrutiny than the more “normal” members of the population.

http://www.mondaq.com/article.asp?articleid=683418&email_access=on&chk=1644242&q=960824

CJEU CASE: ITALIAN CIVIL AND CRIMINAL DUAL LIABILITY

On 20^th March, a news release from the Court of Justice of the EU was concerned with several joined cases from Italy where persons were liable to both civil penalties and criminal prosecution for the same irregularities.  The release said that the ne bis in idem principle may be limited for the purpose of protecting the financial interests of the EU and the financial markets thereof; but such a limitation must not exceed what is strictly necessary to achieve those objectives.  The Italian legislation on market manipulation could infringe EU law.  Hence, Italy’s laws on financial market manipulation may be too far-reaching and in breach of EU legislation, but an individual’s right not to be prosecuted or punished twice for the same offence can be outweighed by the need to protect the financial interests of the EU.

https://curia.europa.eu/jcms/upload/docs/application/pdf/2018-03/cp180034en.pdf

EXPLAINED: WHAT WE KNOW ABOUT THE GADDAFI-SARKOZY FUNDING SCANDAL

Euronews on 20^th March says that former French President Nicolas Sarkozy is being held for questioning by police over alleged illegal funding of his 2007 presidential campaign by the Gaddafi government.  He allegedly received funds from the Libyan government to fund his 2007 presidential campaign, according to a 2012 report by French news website Mediapart.  The allegations were already made in 2011 by Gaddafi’s son, Saif al-Islam.

http://www.euronews.com/2018/03/20/sarkozy-in-libya-case-what-does-it-all-mean-?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+euronews%2Fen%2Fnews+%28euronews+-+news+-+en%29&src=ilaw

UK CONSULTATION: IMPROVING CORPORATE GOVERNANCE IN INSOLVENCY

The UK Department for Business, Energy and Industrial Strategy is undertaking a consultation until 11^th June on improvements to corporate governance within companies which are in or are approaching insolvency.  The consultation puts forward a number of measures to improve corporate governance in firms that are in or approaching insolvency.  It also seeks views on some other aspects of the wider corporate governance framework and whether these are working as they should.

https://www.gov.uk/government/consultations/insolvency-and-corporate-governance

ZAMBIA UNCOVERS $8 BILLION TAX SCAM AT PROMINENT MINING FIRM

Reuters on 20^th March reported that Zambia’s tax collection agency has said that it had uncovered an 5-year, $8 billion tax scam at an unspecified “prominent mining company” and had issued an assessment to the company for classifying imported spare parts and other consumables as mining machinery, which attract no custom duty – the import duty on items other than mining machinery ranges from 15% to 25%.

https://uk.reuters.com/article/us-zambia-tax/zambia-uncovers-8-billion-tax-scam-at-prominent-mining-firm-idUKKBN1GW2FD

SWEDEN TO REVIEW TRANSACTIONS WITH STATES ON EU’S TAX BLACK LIST

Tax News on 20^th March reported that the Swedish Government has directed the tax agency to review transactions with jurisdictions placed on the black list of non-cooperative territories in the area of taxation, to establish whether there are transactions taking place between Sweden and black-listed jurisdictions which are being conducted for the sole purposes of avoiding tax rather than for sound economic reasons.

https://www.tax-news.com/news/Sweden_To_Review_Transactions_With_States_On_EUs_Tax_Black_List____76583.html

FAILING’ JERSEY AIRCRAFT REGISTRY TO TRANSFER TO PORTS OF JERSEY
On 20^th March, the Jersey Evening Post reported that the Jersey Aircraft Registry is to be transferred to Ports of Jersey with a new business model in an effort to recoup some of the £800,000 invested in setting up the scheme.  It reports that, when the registry was launched in 2015, it was hoped it would generate thousands in registration fees and encourage wealthy aircraft owners to do business in Jersey.  However, last year the JEP revealed that despite more than £800,000 being spent on establishing the registry, just 2 aircraft were signed up – 1 of which has since left the register.  Plans to launch a joint Channel Islands Registry failed after Guernsey instead opted to progress the plan on their own.  Since it launched in 2013, more than 150 aircraft have joined Guernsey’s registry, while a similar scheme in the Isle of Man has more than 1,000 registered aircraft.
https://jerseyeveningpost.com/news/2018/03/20/failing-registry-to-go-to-ports-of-jersey/#O2beoYYmpCws4UIp.99

ALBANIA ARRESTS 39 PEOPLE-SMUGGLERS

OCCRP on 20^th March reported that Albanian police say that they arrested 39 suspected members of a smuggling network, including 4 policemen, that helped some 1,000 Albanian citizens illegally emigrate to North America and UK in exchange for $ 9,820 to $30,000 per person.

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/7796-albania-arrests-39-people-smugglers

NEW FIGURES REVEAL LOSS OF £236 MILLION THROUGH AUTHORISED PUSH PAYMENT FRAUDS

Out-Law on 20^th March reported that businesses and consumers lost £236 million last year through authorised push payment (APP) frauds, new data has shown.  Trade body UK Finance said there had been almost 44,000 reported cases of APP frauds in 2017. It is the first time annual figures on APP fraud have been collected.  The largest number of reported cases involved consumers, who accounted for 88% of reported cases and lost an average of £2,784. Businesses lost on average £24,355 per reported APP fraud case.  APP frauds take place where a victim is conned into authorising a transfer of money from their bank account into an account which they believe is controlled by a legitimate payee, but is actually controlled by a fraudster.

https://www.out-law.com/en/articles/2018/march/loss-236-million-authorised-push-payment-frauds/

THE END OF ARMS CONTROL?

On 26^th March, BBC Radio 4 will broadcast a documentary in its “Analysis” series.  Existing arms control treaties are under threat – at the same time that new types of weapon emerge, with nothing to regulate them.  There is a growing crisis in the arms control regimes inherited from the Cold War era, which threatens to undermine existing agreements. At the same time, new technologies are emerging like drones, cyberwar, biotech and hypersonic weapons, which are not covered by existing rules. BBC Defence and Diplomatic Correspondent Jonathan Marcus asks if a new era of chaos beckon or might the whole idea of arms control and disarmament be revived?

https://www.bbc.co.uk/programmes/b09wrxv9

JAPAN CUSTOMS SEIZED RECORD 6.2 TONNES OF SMUGGLED GOLD IN 2017

On 23^rd February, the Japan Times reported that customs authorities seized 6,236 kilograms of gold smuggled into Japan in 2017, a new one-year high, government data showed.  Smugglers try to evade the 8% consumption tax levied on imports of gold worth over ¥200,000 and resell it at a tax-inclusive price.  Gold smuggling has been on the rise since Japan raised the consumption tax from 5% in 2014.  The number of gold smuggling cases jumped 66% to 1,347 from 811 in 2016, and 94% of the cases involved air travellers, who collectively tried to smuggle 4,779 kg of gold into Japan. Most of the smuggled gold came from South Korea, Hong Kong and Taiwan.  The possession of gold is not illegal, which authorities believe helps lower the psychological barrier for smuggling.

https://www.japantimes.co.jp/news/2018/02/23/national/crime-legal/japans-customs-authorities-seized-record-high-6200-kg-smuggled-gold-2017/#.WrFZYkx2ucx

ARREST OF SYRIAN JIHAD VETERANS IN LIBYA REFLECTS AL-QAEDA’S EFFORT TO REDEPLOY FIGHTERS ACROSS NORTH AFRICA

Janes.com on 20^th March reported that the General Command of the eastern-based Libyan National Army (LNA) announced airstrikes targeting 2 large groups of jihadist militants in southern Libya, without providing further details.  The airstrikes came 2 days after the LNA counter-terrorism department arrested 16 jihadists in the southern area of Kufra oasis, and according to a statement, the 16 arrested militants had Sudanese and Syrian passports and had fought in Syria with Jabhat al-Nusra and other Al-Qaeda-affiliated entities.

http://www.janes.com/article/78711/arrest-of-syrian-jihad-veterans-in-libya-reflects-al-qaeda-s-effort-to-redeploy-fighters-across-north-africa

BULGARIAN POLICE BUST ORGANISED CRIME GROUP DEALING IN ARCHAEOLOGICAL TREASURES

The Sofia Globe on 20^th March reported that Bulgarian police said that they had carried out a special operation in which an organised crime group trafficking arkeological treasures had been bust.  In the course of the investigation, the crime group was found to be part of an international channel for the trafficking of archaeological valuables, acquired by treasure hunters on the territory of Bulgaria.

https://sofiaglobe.com/2018/03/20/bulgarian-police-bust-organised-crime-group-dealing-in-archaeological-treasures/

“NUCLEAR MATERIAL” SEIZED IN TURKEY

On 20^th March, Newsweek reported that Turkish authorities were said to have detained 4 men they claim are part of a criminal gang in possession of large quantities (3 lb) of a radioactive nuclear element, Californium, they had hoped to sell on the black market for over $70 million.  Neither the Turkish security services, nor the Turkish Atomic Energy Authority (TAEK) have stated the origin of the material.

Note that the article also refers at the end to an earlier seizure of “red mercury” in Georgia, this material does not exist and is a hoax element…

http://www.newsweek.com/nuclear-material-meant-70-million-sale-mystery-black-market-buyer-seized-851591

For information on Californium, see –

http://www.rsc.org/periodic-table/element/98/californium

WHAT IS THE FUTURE OF THE JIHADIST MOVEMENT?

On 20^th March, the Texas National Security Review published a feature in which it said, with ISIS having lost the bulk of its territory in Iraq and Syria, it asked a group of experts what comes next for the jihadist movement.  The contents consisted of –

Contents –

1. Introduction – Change or more of the same? The future of the jihadist movement
2. How foreign fighter returnees could shape the jihadist movement
3. “We squeezed the balloon” – as ISIL collapses, jihadism remains in a growth phase
4. ISIL, al-Qaeda and what goes viral next: why tomorrow’s jihadist movement might not look so different from today’s

https://tnsr.org/roundtable/policy-roundtable-future-jihadist-movement/

NUCLEAR NON-PROLIFERATION: 6 LESSONS NOT YET LEARNED

In an article for the Carnegie Center on 20^th March, the author highlights what he says are the 6 lessons to be learned from an analysis of Iran’s non-compliance with its IAEA safeguards agreement, North Korea’s withdrawal from the NPT, as well as the lessons not yet fully learned.  The 6 are –

1. In a case of noncompliance, the IAEA must refer it to the UN Security Council without undue delay
2. In case of noncompliance, the IAEA should temporarily receive expanded verification authority.
3. The UN Security Council should adopt a generic resolution preventively dealing with cases of noncompliance.
4. In case a nation withdraws from the NPT, the UN Security Council must act promptly and decisively to condemn the action and impose sanctions.
5. The Security Council needs to deter withdrawal from the NPT by making the use of the veto right less likely.
6. All nuclear fuel-cycle facilities should be subject to irreversible IAEA safeguards.

http://carnegieendowment.org/2018/03/20/nuclear-nonproliferation-six-lessons-not-yet-learned-pub-75844?mkt_tok=eyJpIjoiWW1FMlpUUTBNV0UxTTJOaiIsInQiOiJ4OHhvRlwvM3VIQWNYQWMxZVwvbjFra095WXNBOERKR0tZeFIwbVlMMzZpU0ZzUEp5SmZPU1g0N05QNnhieHVrUkxlS3JXYkoxR0N5K1wvREt5UnpLcVIzM2x2aHdIbWR3bHBVS2xqR1ZRbnN4TDU5Szk5N3BsNlpOQWM0TlZRTWhuWSJ9

 

The 5^th March report from the UN Panel of Experts on North Korea is now available.  The Panel investigated illicit ship-to-ship transfers of petroleum comprising a multi-million-dollar business that is driving an international network of brokers and ship charterers as well as unwitting global commodity trading companies and oil suppliers.  Meanwhile DPRK continued to export almost all the commodities prohibited in the resolutions, generating nearly $200 million in revenue between January and September 2017.  The Panel also investigated a wide array of prohibited military cooperation projects of the DPRK stretching from Africa to the Asia-Pacific region, including ongoing ballistic missile co-operation with the Syrian Arab Republic and Myanmar, widespread conventional arms deals and cyber operations to steal military secrets.  It says DPRK is accessing the global financial system through deceptive practices combined with critical deficiencies in the implementation of financial sanctions.  The report offers a series of recommendations for designation and other practical measures to assist Member States and the Security Council in addressing challenges and shortcomings, and names that could be usefully added to the sanctions lists.

http://www.un.org/ga/search/view_doc.asp?symbol=S/2018/171

Also on 20^th March, FATF published a report saying that, as a result of Norway’s progress in strengthening its AML/CFT framework since its 2014 mutual evaluation, the FATF has re-rated the country on 8 of the 40 Recommendations – 1 (Assessing risks & applying a risk-based approach); 2 (National co-operation and co-ordination); 4 (Confiscation and provisional measures); 5 (Terrorist financing offence); 7 (Targeted financial sanctions related to proliferation); 15 (Preventive Measures – new technologies); 26 (Regulation and supervision of financial institutions); and 28 (Regulation and supervision of designated non-financial businesses and professions).  FATF also welcomes the steps that Norway has taken to improve its technical compliance with Recommendation 33 on statistics; however, the progress was insufficient to justify a re-rating of this Recommendation.

http://www.fatf-gafi.org/publications/mutualevaluations/documents/fur-norway-2018.html

On 20^th March, FATF released a follow-up report on the evaluation of the AML/CFT system in Spain.  As a result of progress, the FATF has re-rated the country on 3 Recommendations – 5 (Terrorist financing offence); 16 (Wire transfers) and 39 (Extradition).  Spain is now rated “Compliant” on 28 of the 40 Recommendations.  Spain has been in a regular follow-up process following the adoption of its mutual evaluation report in 2014, which assessed the effectiveness of the country’s AML/CFT measures and their compliance with the FATF Recommendations.

http://www.fatf-gafi.org/publications/mutualevaluations/documents/fur-spain-2018.html

19^th March 2018

UK DEFENCE INDUSTRY URGES GOVERNMENT TO RELAX CONTROLS ON CRYPTO EXPORTS

On 16^th March, Computer Weekly reported that a trade body representing defence, aerospace and security companies calls on government to make it easier to export “non-contentious” cryptography to secure organisations against cyber crime.  Giving evidence to the Arms Export Controls Committee, Paul Everitt of ADS said that the current approval system for open individual export licences was “fraught with perceived problems and delays”.  He told MPs that companies needed easier access to what he called “non-contentious cryptography” to secure their businesses against hacking and cyber crime.

http://www.computerweekly.com/news/252436979/Defence-industry-urges-government-to-relax-controls-on-crypto-exports

RUSSIAN DESCRIBED AS GUN DEVELOPER FOR KALASHNIKOV CHARGED IN US

On 16^th March, the Washington Post reported that Evgeny Viktorovich Spiridonov, 39, a Russian citizen described as a gun developer for Kalashnikov, is expected to plead guilty to a federal charge of attempting to violate US export controls, after being arrested at Los Angeles International Airport in January after leaving a major gun show in Las Vegas and attempting to board a flight for Moscow.  He had ordered a $2,400 restricted advanced tactical rifle scope from a Pennsylvania gun dealer.

https://www.washingtonpost.com/local/public-safety/russian-described-as-gun-developer-for-kalashnikov-charged-in-las-vegas-sting/2018/03/15/705da78e-27ea-11e8-bc72-077aa4dab9ef_story.html?utm_term=.0b23885e7405

SANCTIONS AND KASPERSKY LABS

On 15^th March, Lawfare published a long article by a Fellow at Stanford’s Center for International Security and Co-operation about Moscow-based anti-virus company, Kaspersky Labs.  President Trump signed legislation in December 2017 banning Kaspersky products from use by Federal agencies and Kaspersky has lodged legal challenges in federal court.  In the article the author explains that the US has many tools in reserve for potentially addressing the broader national security risks of Kaspersky software, and details 6 of them.

https://lawfareblog.com/us-policy-toolkit-kaspersky-labs

FRENCH CONSULATE EMPLOYEE ARRESTED BY ISRAEL FOR ARMS SMUGGLING

I24 News in Israel reported on 18^th March that an employee at the French consulate in Jerusalem has been arrested by Israeli authorities and will appear in court for a “security” issue, sources close to the case said.  Israeli authorities suspect him of arms trafficking, one of the sources said.  France’s Le Figaro newspaper also reported that the man in question is suspected of smuggling weapons into Gaza on several occasions.  The man was arrested as he crossed the border between Israel and the Gaza Strip.

https://www.i24news.tv/en/news/israel/170223-180318-french-consulate-employee-arrested-by-israel-for-security-issue

SAUDIS CONTINUE TO DETAIN LARGEST INVESTOR IN ETHIOPIAN RENAISSANCE DAM

The Middle East Monitor in its 19^th March edition reports that Saudi authorities continue to detain Saudi billionaire, Mohammed al-Amoudi; the largest investor in Ethiopia’s Renaissance Dam, according to the New York Times. He was detained in November in the anti-corruption campaign.

https://www.middleeastmonitor.com/20180319-report-saudis-continue-to-detain-largest-investor-in-ethiopian-renaissance-dam/?src=ilaw

MAS FINES STANCHART SINGAPORE S$5.2 MILLION FOR AML/CFT BREACHES
Channel News Asia on 19^th March reported Standard Chartered Bank, Singapore Branch (SCBS) has been fined S$5.2 million and Standard Chartered Trust (Singapore) Limited (SCTS) has been fined S$1.2 million for breaches of the Monetary Authority of Singapore’s (MAS) AML/CFT requirements, which occurred when trust accounts of SCBS’ customers were transferred from Standard Chartered Trust (Guernsey) to SCTS from December 2015 to January 2016.  MAS found SCBS’ and SCTS’ risk management and controls in relation to the transfers to be unsatisfactory.

International Adviser on 19^th March reported that the fines related to Guernsey transfers.

https://www.channelnewsasia.com/news/singapore/mas-fines-stanchart-singapore-s-5-2m-for-anti-money-laundering-10056358

http://www.mondovisione.com/media-and-resources/news/monetary-authority-of-singapore-imposes-penalties-on-standard-chartered-bank-and-1/

THE CONFLICT IN YEMEN AND EU’S ARMS EXPORT CONTROLS: HIGHLIGHTING THE FLAWS IN THE CURRENT REGIME

The Stockholm International Peace Research Institute on 19^th March published an article which inter alia highlighted that the EU code of conduct on arms exports included a criterion that requires Member States to abide by certain standards when assessing licences for arms exports – this includes denying licences when there is a ‘clear risk’ that the arms ‘might’ be used to commit violations of human rights or international humanitarian law and taking into account the risk that they will be diverted to an unauthorised end-user or end-use.  It says that NGO, parliamentarians and academics have often questioned whether EU Member States are applying the criteria of the Common Position correctly and consistently.  The article asks how the requirements can be tightened and/or applied properly.

https://www.sipri.org/commentary/essay/2018/conflict-yemen-and-eus-arms-export-controls-highlighting-flaws-current-regime

 

 

TRUMP ORGANISATION REAL ESTATE PARTNER IN INDIA ACCUSED OF ‘LARGE-SCALE FRAUD’

The Hill on 19^th March reported that the Trump Organization’s real estate partner in India is being accused of at least $147 million in fraud.  2 global investment companies last month filed a criminal complaint with New Delhi police against IREO, accusing the company of engaging in “large-scale fraud,” alleging that the company was “illegally siphoning off” at least $147 million of investor money and alleging the figure could actually approach $200 million.

http://thehill.com/blogs/blog-briefing-room/news/379078-complaint-filed-against-trump-organizations-real-estate-partner?src=ilaw

EU SPEEDS UP CONFISCATION OF CRIMINAL ASSETS

The International Chamber of Commerce on 19^th March reported that it will soon be quicker and easier for EU Member States to request that criminal assets be seized and confiscated under recently-adopted new rules.  The text agreed by the European Parliament’s Civil Liberties Committee recently introduces tighter deadlines, as well as a standard certificate to speed up procedures, and broaden the scope of the type of assets that can be seized or confiscated.  MEP want states which receive a freezing or confiscation order to be bound to execute it within 20 days to reduce the time criminals have to move their assets.

https://icc-ccs.org/index.php/1243-eu-speeds-up-confiscation-of-criminal-assets

BRITAIN SAYS $500 MILLION FROM ALLEGED FRAUD CAN BE RETURNED TO ANGOLA

On 19^th March, Reuters reported that the NCA said $500 million frozen in the UK as part of an ongoing investigation into a potential fraud against Angola’s central bank can be returned.

https://af.reuters.com/article/investingNews/idAFKBN1GV1D1-OZABS?feedType=RSS&feedName=investingNews&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+reuters%2FAFRICAbusinessNews+%28News+%2F+AFRICA+%2F+Business+News%29&src=ilaw

SWISS SEIZE BANK ACCOUNTS AMID PROBE LINKED TO RIO TINTO MONGOLIA MINE

Reuters on 19^th March reported that Switzerland’s highest court has upheld the seizure of $1.85 million in Swiss bank accounts, part of a corruption probe linked to a former Mongolian finance minister, Bayartsogt Sangajav, who helped clear the way for a disputed Rio Tinto mining project.  The Swiss Office of the Attorney General (OAG) also confirmed it has an ongoing criminal investigation in which prosecutors contend one of the seized accounts was used to transfer $10 million to the ex-minister.

https://uk.reuters.com/article/uk-swiss-rio-tinto-plc-mongolia/swiss-seize-bank-accounts-amid-probe-linked-to-rio-tinto-mongolia-mine-idUKKBN1GV1C1

POST-IMPLEMENTATION REVIEW: EXPORT CONTROL (ERITREA AND MISCELLANEOUS AMENDMENTS) ORDER 2011

On 19^th March, the UK Department for International Trade set out the results of a review required by Article 9 of the 2011 Order which implements EU trade sanctions.  The Order will be revoked and replaced when an equivalent instrument is laid under the forthcoming Sanctions and Anti-Money Laundering Act.

https://www.gov.uk/government/publications/post-implementation-review-export-control-eritrea-and-miscellaneous-amendments-order-2011

FIRMS APPOINT AML CHIEFS AS UK QUANGO LOOMS

The Law Society Gazette on 19^th March reported that law firms have responded positively to requirements to appoint executives to oversee AML provisions, the Solicitors Regulation Authority has reported as the profession waits to learn how much a controversial new quango, Office for Professional Body Anti-Money Laundering Supervision (OPBAS), will hit solicitors’ pockets.  The SRA said that 96% of firms have now appointed an AML compliance officer (MLCO).  The compliance officer is a board level position in addition to the money laundering reporting officer (MLRO), responsible for day-to-day monitoring.

https://www.lawgazette.co.uk/law/firms-appoint-anti-money-laundering-chiefs-as-quango-looms/5065341.article

SPANISH COURT THROWS OUT €60 MILLION ONO VAT FRAUD CASE

On 19^th March, Broadband TV News reported that a court in Madrid has completely dismissed a lawsuit brought by Vodafone against the management of Spanish cablenet ONO for an alleged VAT fraud of €60 million.  It was alleged that inflated financial figures were based on the sale of international calling minutes, sold without the balance being subject to VAT.  The former president, CEO and CFO were all dismissed by Vodafone when it took control of the company in 2014.  But it has emerged that Vodafone was aware that an investigation was underway by the tax authorities during the acquisition process and had not raised any objection.

https://www.broadbandtvnews.com/2018/03/19/spanish-court-throws-out-e60m-ono-fraud-case/

VIETNAM ILLEGAL GAMBLING NETWORK RECEIVED MORE THAN $422 MILLION

Calvin Ayre on 19^th March reported that new information has emerged in Vietnam’s investigation of a major illegal sports betting operation, which has resulted in the arrest of a former top cybercrime police chief along with 2 tech businessmen.  A police raid led to the seizure of around $44 million in cash and other assets from the organisers.  There were 2 websites, rikvip.com and rikvip.vn, in 2015, offering a card game called Rikvip, later operated as mobile and computer application under the name Tip.club.  Before they could enter the games, the players had to buy virtual scores, also known as RIK, using prepaid telecom cards, game cards, or bank accounts, and they could also buy virtual scores at Rikvip agencies.  The investigation showed that the group received more than $422 million in payments via “legal and illegal payment gateways,”.

https://calvinayre.com/2018/03/19/business/vietnam-online-gambling-ring-nets-422m-via-legal-illegal-payment-gateways/

LITIGATION PRIVILEGE AND TAX INVESTIGATIONS

On 19^th March, law firm Berwin Leighton Paisner published a briefing saying that corporates facing an investigation by HMRC often undertake internal investigations in order to establish the facts.  However, case law has cast doubt over whether interview transcripts produced during an internal investigation are protected by litigation privilege.  The High Court’s decision in the recent case of Bilta v RBS now provides useful guidance on the scope of litigation privilege in the context of tax investigations.

http://www.blplaw.com/expert-legal-insights/articles/bilta-v-rbs-litigation-privilege-and-tax-investigations

IRISH MAN ARRESTED IN SPAIN FOR PLAN TO SELL OVER 1,100 FAKE FOOTBALL JERSEYS

Customs Today on 19^th March reported that Spanish police have arrested an Irishman they say was planning to sell more than 1,500 counterfeit football tops online for a profit of €75,000.  The 37-year-old was held in the Costa Blanca resort of Torrevieja after officers confiscated the Chinese-made sportswear at Alicante Airport.

http://www.customstoday.com.pk/irish-man-arrested-in-spain-for-plan-to-sell-over-1100-fake-football-jerseys/

ON THE TRAIL OF CASH COMING THROUGH DULLES AIRPORT

WCO Iris on 19^th March reports that large amounts of seized cash have been piling up at Dulles International Airport, Washington DC, and all with a connection to one country – Ghana.  Since July, there have been 10 seizures of large amounts of undeclared cash carried by people going to or coming from Ghana.  In September, one man was stopped with more than $150,000 on him.

https://wtop.com/local/2018/03/behind-invisible-wall-trail-cash-coming-dulles/

NEW INFORMATION SURFACES ON SRI LANKA’S TAINTED MIG 27 DEAL WITH UKRAINE
Alert 5 on 19^th March reported that Sri Lanka’s Sunday Times has uncovered new evidence in its 3-year investigation into alleged corruption on the purchase of MiG 27 jet fighter-bombers from Ukraine.  A document signed between Ukraine’s arms export company Ukrinmarsh and the Sri Lanka Air Force has turned out to be a fake, and the Ukranian Prosecutor General has told Sri Lanka that the deal is fraud.  It seems that in reality, the agreement with Ukrinmarsh has been with the Singapore based D.S. Alliance, which had supplied the MiG 27 fighter jets to the Air Force.  Sri Lanka paid $ 10 million for 4 MiG 27 in 2006.  2 of these fighter jets were grounded after being purchased and unserviceable during the warranty period.

http://alert5.com/2018/03/19/new-information-surfaces-on-sri-lankas-tainted-mig-27-deal-with-ukraine/#pYKoiCF37g5O6qBD.99

http://www.sundaytimes.lk/180318/news/mig-fraud-fcid-finds-startling-new-details-286582.html

WOLFSBERG GROUP FAQ ON HOW TO MANAGE COUNTRY RISK IN THE CONTEXT OF FINANCIAL CRIME COMPLIANCE

On 19^th March, the Wolfsberg Group published its FAQ on how to manage Country Risk in the context of Financial Crime Compliance.  Country risk is widely used as a factor in customer risk assessment and was first addressed by the Group in the 2006 Risk Based Approach to Managing Money Laundering Risks.  The Wolfsberg Group hopes that these FAQ will contribute to the promotion of a better understanding of country risk, and effective risk management more broadly, across the industry and further the goal of its members to prevent the use of their institutions for criminal purposes.

https://www.wolfsberg-principles.com/articles/publication-country-risk-faqs

INVESTIGATION BLAMES RUSSIAN FACILITY FOR LAST YEAR’S RUTHENIUM ISOTOPE LEAK

On 23^rd February, Chemistry World reported that in September/October 2017, the radionuclide ruethenium-106 was detected all over Europe – the first time it had been recorded on such a scale since the Chernobyl disaster.  A nuclear reprocessing facility in Russia became the focus of attention. In their final report, the French Institute for Radioprotection and Nuclear Safety (IRSN) has confirmed that a significant quantity of ruthenium was released from the South Ural region, probably from processing of spent nuclear fuel.  But the Russian authorities deny any leaks occurred at their facilities in this area and are seeking further data on weather effects.  IRSN says the release probably occurred either during a fuel processing operation or during refining of fission products, and that it favours the second suggestion.

https://www.chemistryworld.com/news/investigation-blames-russian-facility-for-last-years-ruthenium-isotope-leak/3008692.article

MALTESE SUPERYACHT COMMUNITY CHALLENGES EUROPEAN COMMISSION

Superyacht News on 19^th March reported that the Malta Maritime Law Association, the Malta Maritime Forum, the Yachting Services Trade Section with the Maltese Chamber of Commerce, Enterprise and Industry, the Institute of Financial Services Practitioners and the Super Yacht Industry Network Malta have joined to denounce the recent notice sent to Malta by the EU in connection with the Maltese VAT rules for pleasure yachts.

http://www.superyachtnews.com/business/maltese-superyacht-community-challenges-eu-commissioner

FINANCIAL STABILITY BOARD RELEASES UPDATED DATA REPORT ON CORRESPONDENT BANKING

On 19^th March, Shearman & Sterling published a briefing which says that the latest report updates the data report the FSB published in July 2017 alongside a report for the G20 on progress made on the 4-point action plan the FSB launched in November 2015 to address the decline in correspondent banking relationships.  The latest data report updates the July 2017 data report with additional information provided by SWIFT incorporating the period from January to June 2017.

https://www.jdsupra.com/legalnews/financial-stability-board-releases-35776/