VENEZUELA (EUROPEAN UNION FINANCIAL SANCTIONS) REGULATIONS 2017 COME INTO FORCE IN UK
These UK Regulations came into effect on 6th December. However, to date no names have been listed.
VENEZUELA (EUROPEAN UNION FINANCIAL SANCTIONS) REGULATIONS 2017 COME INTO FORCE IN UK
These UK Regulations came into effect on 6th December. However, to date no names have been listed.
NOTICE TO IMPORTERS 2896: UK BAN ON THE IMPORT OF BUMP STOCKS
On 4th December this Notice announced a UK import ban on so-called “bump stocks”. These are devices which, when fitted or added to a self-loading firearm, utilise the recoil forces to automate repeated pressure on the trigger, increasing the rate of fire of the firearm. This decision was taken on the grounds of public safety as there is a risk that such items can be used on legally-held rifles. The import ban will remain in force whilst tests take place on the ability of these devices to be used on legally-held firearms. Bump stocks came into the public consciousness following the recent Las Vegas shooting tragedy.
On 5th December the EU finally published its awaited list of “non-cooperative” jurisdictions.
See also accompanying Memo and Factsheet –
American Samoa, Bahrain, Barbados, Grenada, Guam, South Korea, Macao, Marshall Islands, Mongolia, Namibia, Palau, Panama, St Lucia, Samoa, Trinidad and Tobago, Tunisia, UAE
LATEST HM TREASURY ADVISORY NOTICE REGARDING THE RISKS POSED BY UNSATISFACTORY MONEY LAUNDERING AND TERRORIST FINANCING CONTROLS IN A NUMBER OF JURISDICTIONS
On 5th December, HM Treasury’s latest Advisory Notice was published. It refers to 2 statements issued by FATF in November 9these are annexed to the Advisory Notice).
This 2014 book is available in full as a pdf online
“Marking the 50th anniversary of UN sanctions, this work examines the evolution of sanctions from a primary instrument of economic warfare to a tool of prevention and protection against global conflicts and human rights abuses”
Freshfields Bruckhaus Deringer provides excellent coverage of developments concerned with the UN Guiding Principles (aka “Ruggie Principles”) and includes a 3-part recap of the UN Forum on Business and Human Rights 2017.
1st DECEMBER 2017
US FCPA ENFORCEMENT POLICY
The US DoJ on 29th November released its new policy on Foreign Corrupt Practices Act (FCPA) enforcement. The new Policy has 4 sections: Introduction; Policy concerning criminal investigations and prosecutions of the FCPA; FCPA corporate enforcement policy; Civil injunctive actions. It takes effect immediately and incorporates the Obama Administration pilot programme for FCPA enforcement that, from April 2016, allowed for reduced penalties for self-reporting.
5 YEAR SENTENCE FOR CANADIAN PONZI FRAUDSTER
Canadian law firm Borden Ladner Gervais reports that Lino Matteo, former CEO of Mount Real Corporation has been sentenced to 5 years imprisonment, as well as a C$4.91 million fine. He had been found guilty in September. Mount Real was based in Montreal and was closed down by the regulator in 2006. The Ponzi scheme had affected more than 1,200 investors with C$130 million outstanding.
FINANCE BILL 2017-18: LEGISLATION AND EXPLANATORY NOTES
On 1st December HM Treasury and HMRC released the Explanatory Notes to the Finance Bill 2017-18, the Bill itself is also available. The Bill includes enhanced customs powers to examine premises and vehicles or vessels – which would no doubt assist post-Brexit.
UK OVERSEAS TERRITORIES TALKS IN LONDON
The UK Minister of State for the Overseas Territories joined leaders and representatives of the Overseas Territories for talks on hurricane recovery, Brexit, climate change, and tax transparency at the end of November.
$31 MILLION REPORTED STOLEN FROM CRYPTOCURRENCY USDT
It has been reported that Tether, which operates USDT, a cryptocurrency backed by the US dollar, announced that almost $31 million of USDT was stolen from its core treasury wallet by an external attacker. Tether is tracking the tokens stolen, so that they cannot be sold or exchanged – meaning that the thief should not be able to profit from the theft.
UN HUMAN RIGHTS DUE DILIGENCE REFEREMDUM TO BE HELD IN SWITZERLAND
Hogan Lovells reports on proposals being considered to amend the Swiss constitution to require mandatory human rights due diligence for companies based in Switzerland, so as to meet the UN Guiding Principles (aka Ruggie Principles). This follows the Responsible Business Initiative launched in 2015 by civil society NGO. However, in September the Federal Council had proposed rejection, but a national referendum is to be held next year or 2019.
AUTHORISED PUSH PAYMENT (APP) SCAMS
Osborne Clarke reports on a BBC interview about authorised push payment (APP) scams, described as a growing problem. It reports that statistics recently released by UK Finance, just over £100 million was lost to transfer scams in first 6 months of 2017. There were 19,370 reported cases – with an average loss of £3,027 for consumers and £21,477 for businesses.
APP payments are those authorised but made as a result of fraud. Such as where someone is tricked into authorising a credit transfer to a fraudster, or they have paid a fake invoice, or paid money to a fake charity.
On 7th December the Payment Systems Regulator released a report on progress to tackle APP scams.
MONEY LAUNDERING CASE AGAINST FORMER ARGENTINE PRESIDENT
The Risk & Compliance Hub reports that courts have rejected an appeal filed by Cristina Kirchner to dismiss money laundering charges. She old faces charges including money laundering, bribery and criminal conspiracy in a case linked to a family hotel business in Patagonia. The appeal had also applied to 2 children.
EU REGULATION AMENDS RUSSIA SANCTIONS
EU Regulation 2017/2212 amends Regulation 833/2014 with effect from 2nd December, to permit certain operations (import/export) involving hydrazine (CAS 302-01-2) in concentrations of 70% or more, which is included in the Common Military List of the EU. Hydrazine has been used as fuel for many rockets and spacecraft, including the space shuttle. It is considered necessary for the flight of the ExoMars carrier module and tests and flight of the ExoMars descent module in the framework of the ExoMars 2020 mission.
Council Decision 2017/2214/CFSP makes equivalent changes.
EU REPORTS NEW INFORMATION ABOUT AL-AQSA MARTYR’S BRIGADE
On 1st December the European Council said it had been provided with new information relevant to the listing of the group. Having considered this new information, the Council has amended the statements of reasons accordingly.
SENIOR MILITARY OFFICERS APPOINTED TO CABINET IN ZIMBABWE
Defence Web reports that Emmerson Mnangagwa appointed senior military officials to top posts in his new cabinet and chose a veteran cabinet minister to head the finance ministry. Patrick Chinamasa is to be finance minister, Air Marshal Perrance Shiri land minister and Major General Sibusiso Moyo foreign minister. He also brought back faces from the Mugabe era.
US MILITARY TO DELAY BAN ON CLUSTER MUNITIONS
Defence Web on 1st December reported that the Pentagon is to delay a ban on the use of older types of cluster bombs which was due to take effect on January 1st, saying that safety improvements in munitions technology failed to advance enough to replace older stockpiles. The US military had hoped to transition to cluster munitions that explode at least 99% of time, greatly reducing the risks.
The 2008 Convention on Cluster Munitions (CCM) was ratified and came into force in August 2010, with states joining the convention committing to destroy their cluster munitions stocks within 10 years. Also in 2010, the then Secretary of Defense declared that the US military, led by the US Army, would replace its cluster munitions with more reliable warheads.
As the New York Times says, “US will keep older cluster munitions, a weapon banned by 102 nations”, which also mentions that most American cluster munitions held abroad appear to be positioned for a possible war with North Korea. Under a 2008 agreement, the Pentagon maintains a stockpile of more than 1.5 million cluster munitions, containing over 90 million bomblets, in South Korea –
RUSSIAN BILLIONAIRE SULEYMAN KERIMOV ACCUSED OF €400 MILLION TAX FRAUD IN FRANCE
Ukrainian media reports French media publishing details of the case of Russian billionaire and member of parliament, Suleyman Kerimov, whom the French authorities have accused of tax evasion and money laundering. France 3 reports that the Russian senator has been accused of hiding about €400 million owed due to undervaluing property sales.
SPAIN: EXTRADITION CASE OF UKRAINE MP BEGINS
Ukrainian media reports that Spain has begun the process of extraditing Ukrainian MP and billionaire Oleksandr Onyshchenko to Ukraine. He wanted there on charges of embezzlement, treason and corruption. A member of the People’s Will party, he is accused of involvement in embezzlement of $59 million from state-owned gas producer Ukrgazvybudovannya. He fled Ukraine in 2016.
GAMBLING “BLACK FRIDAY” FRAUD
Website Gambling Insider reports on data showing that European online gambling fraud during Black Friday and Cyber Monday in 2017 was 67% higher than the daily average for the rest of the year but that fraudulent activity decreased 4% from 2016. The figures were higher for online gambling than a range of other sectors (other leading sectors saw a 25% decrease).
INTERRELIGIOUS TENSION IN SOUTH AND SOUTH-EAST ASIA
ETH Zurich published on 1st December a briefing on tensions between Buddhist majorities and Muslim minorities in Myanmar, Sri Lanka and Thailand, which proposes greater engagement with Buddhist nationalism to understand its concerns and address its fears.
JERSEY TO ASSESS BENEFICIAL OWNERSHIP COMPLIANCE
Jersey FSC says it will be assessing compliance with the island’s beneficial ownership regime in the first half of 2018.
HOUSE OF LORDS BRIEFING: FUTURE OF UK TRADE AND CUSTOMS POLICY
A House of Lords Library Briefing has been written ahead of the debate in the House of Lords on 5th December to take note of the future of UK trade and customs policy in the light of 2 recent white papers.
PUBLIC–PRIVATE PARTNERSHIPS AND FINANCIAL CRIME: ADVANCING AN INCLUSIVE MODEL
On 1st December the Royal United Services Institute published a paper on the growth this year in forging public–private partnerships (PPP) between law enforcement and financial institutions as they seek to create a step-change in identifying and disrupting financial crime. It reports that, following the lead of the UK Joint Money Laundering Intelligence Taskforce (JMLIT), set up in February 2015, further models have emerged in Australia, Singapore, Hong Kong, Canada and Netherlands. It says that other countries with less well developed financial systems, such as Kenya, have also joined in. One point raised is that where the creation of partnerships is seemingly constrained by cultural or legal barriers, more work needs to be done.
BELGIAN PILOT JAILED IN UK AFTER DROPPING COCAINE FROM LIGHTPLANE
A NCA news release reports on a Belgian pilot who dropped cocaine worth around £2.5 million from a light aircraft into a field in Kent and has been jailed for 14 years.
RUSSIAN COURT REJECTS SIEMENS TURBINE CRIMEA ACTION
The Always-excellent European Sanctions Blog reports on 1st December that a Russian court has dismissed Siemens’ action against Technopromexport (a subsidiary of Russian state conglomerate Rostec) and has refused to order the seizure of 4 power turbines that had been transferred to Crimea. Siemens had filed the lawsuit in July after discovering the turbines had been diverted to Crimea, contrary to EU sanctions.
FRAMEWORK FOR THE LEGALISATION OF CANNABIS IN CANADA OPEN FOR COMEMNT
Gowling WLG has published a briefing reporting that the Canadian government recently published its proposed excise duty on cannabis products and proposed approach to regulation that will underpin its forthcoming Cannabis Act that will legalise and regulate non-medical cannabis.
CHINESE SMUGGLING CASE STATISTICS
Business Insider reports that Chinese customs authorities handled 2,773 cases of smuggling in the first 10 months of this year, as part of a nationwide crackdown. The 2017 “Sword Guarding the Country’s Gate” campaign is said to have netted 233 smuggling cases involving weapons and ammunition, 474 cases related to illegal drugs and 86 related to endangered species (and even 56 cases involving rice smuggling), according a spokesman with China’s General Administration of Customs.
RISKMAP PODCAST: THE CORPORATE SECURITY AGENDA FOR 2018
Control risks has released its latest podcast in which Jonny Gray, Senior Partner at Control Risks, provides an update from the recent Overseas Security Advisory Council (OSAC) meeting in Washington, and discusses what is front of mind for global security managers as they wrap up a chaotic year in the world of risk.
KIM JONG NAM “WAS CARRYING VX ANTIDOTE AT TIME OF DEATH”
NK News reported on 1st December that Kim Jong Nam, the late half-brother of North Korean leader Kim Jong Un, was carrying 12 bottles of Antropine (the antidote for treating VX gas) in his backpack when he was killed in Malaysia in February, the Malaysian High Court heard. This suggests that he was aware of the risk that he could be attacked with the substance.
2nd December 2017
EU REMOVES SANCTIONS FROM IRAQ REINSURANCE COMPANY
Commission Implementing Regulation (EU) 2017/2217, amending Council Regulation (EC) No 1210/2003 concerning certain specific restrictions on economic and financial relations with Iraq, removes Iraq Re-insurance Company from its sanctions lists with effect from 2nd December.
BULGARIAN ORGANISED CRIME GROUP BUSTED
News service BTA reported on 2nd December that an organized crime group has been busted for economic crimes involving re-export of medicinal products. Proceedings were launched in September following an alert received 6 months earlier. The operation in Sofia, Shoumen, Slivnitsa, and Plovdiv saw 20 people were arrested, over 60 addresses were searched, and tens of interrogations held. BTA reports that the crime group comprises 7 persons. The crime group is being investigated for tax crimes, money laundering, and export of medicinal products used by cancer patients and children, with much medicine seized. Some of them are being used for parallel exports to EU Member States, while others are illegally imported and then exported. http://www.bta.bg/en/c/DF/id/1702270?src=ilaw
ANOTHER “FAT LEONARD” CONVICTION
On 2nd December the Straits Times reported that a senior US Navy officer – Commander Bobby Pitts, 48, who was in charge of the Fleet Industrial Supply Command in Singapore – had been sentenced to 18 months in prison in the USA, in connection with the huge corruption scandal linked to a Singapore-based defence contractor known as “Fat Leonard” Francis.
The scandal, the biggest in the history of the US Navy, goes back to at least 2007 and cost the US government about $35 million. Leonard Glenn “Fat Leonard” Francis was arrested by federal agents in 2013 in a sting operation in San Diego and pleaded guilty to bribery. His Singapore-based company, Glenn Defence Marine Asia (GDMA), provided services to US Navy ships including fuel and tugboats at Asian ports.
MEP ALLEGATIONS AGAINST MINISTER IN MALTA
On 2nd December, Malta Today reported that Nationalist MEP David Casa says he has full Financial Intelligence Analysis Unit (FIAU) report calling for criminal investigations on minister Konrad Mizzi for alleged money laundering, but Mizzi denies the claims. Casa said that the report contains damning conclusions in relation to Konrad Mizzi, but also other damning conclusions on people, companies, financial intermediaries and a bank “known to be involved in the shady dealings of Joseph Muscat’s inner circle.” The FIAU categorically denied the allegations, insisting that there is no final report
SON OF RUSSIAN MP SENTENCED IN US
The Independent reported that Roman Seleznev, 33, has been sentenced to 14 years in US federal prison over his role in a massive $50 million scheme involving bank fraud, identity theft and racketeering. He is the son of prominent Russian parliament member Valery Seleznev — described as a close ally of President Putin. He is already serving 27 years for computer hacking and credit card fraud scheme targeting US businesses. The prison sentence is the most jail time given to an individual convicted of a cybercrime in the US. The prison sentence is the most jail time given to an individual convicted of a cybercrime in the US, but his latest sentence will be served concurrently, which means it will not add any additional time to his original sentence.
“NORTH KOREA’S BIG FRICKIN’ MISSILE”
If you want to understand the most recent North Korean missile launch, and be entertained at the same time despite the subject matter, why not listen to the latest Arms Control Wonk podcast?
and the collected images at
GANGSTERS IN JAPAN
Fascinating article from the Japan Times on organised crime there and the split in the largest crime gang, Yamaguchi-gumi, in 2015. The new breakaway Kobe Yamaguchi-gumi was allegedly spurred by the police creating suspicions and doubts in the original body, and even claims that police officers stood guard outside the new group’s headquarters when it announced its existence to the public!
But another observer of the scene is quoted as claiming that being a member of the Yamaguchi-gumi wasn’t “fun” anymore, but more like working for Toyota with what was once a criminal family was becoming a corporation.
THE “BIGGEST THREATS” FACING BALTIC STATES
The Baltic Times reported that at Baltic Sea Task Force on Organized Crime, the Deputy Chief of the Latvian State Police and the head of the Operation Planning and Co-ordination of the Task Force said that the greatest threats to the Baltic Sea states from the organized crime are drug trafficking, illegal migration and the transformation of air guns into real guns. The countries were urged to amend their lists of prohibited substances, including in them synthetic drugs and their precursors.
MORE TO COME ON MONEY LAUNDERING INVOLVING CANADIAN CASINOS
The Vancouver Sun quotes the Attorney General as saying that there are more revelations to come about the money laundering penetration by transnational organised crime in casinos in British Columbia.
UN REPORTS “SAYS YEMENI MISSILE IRANIAN IN ORIGIN”
The Missile Threat website carries claims that a confidential UN report leaked to Reuters says that fragments from 4 ballistic missiles fired into Saudi Arabia by Yemen’s Houthi rebels appear to be Iranian in origin – specifically like the Iranian designed and manufactured Qiam-1 missile – but without providing any clue to who or what may have supplied it to the Houthi. It goes on to explain that the Qiam-1 is a single-stage liquid-fueled missile that Iran itself only employed for first time in June 2017 (using it against targets in Syria), and with a range between 700 and 800 km.
THE FOLLY OF DEPLOYING US TACTICAL NUCLEAR WEAPONS TO SOUTH KOREA
An article by a former Director of the Office of Strategic Policy and Negotiations at the US State Department 1990-1997, and from 2005-2015 a member of the Secretary of State’s Office of Policy Planning for 38 North.
3rd December 2017
DAILY MIRROR FEATURE ON NORTH KOREAN ICBM
The article is headed, “How deadly is North Korea’s Hwasong-15 missile? All we know about Kim Jong-un’s new weapon ‘which could strike the US and Britain’”. The article itself did not answer the question it posed.
CROSS-BORDER INVESTIGATIONS UPDATE – NOVEMBER 2017
Skadden’s semi-annual Cross-Border Investigations Update takes a close look at recent cases, regulatory activity and other key developments, including new UK reporting obligations for sanctions violations, compliance challenges under China’s new globalization initiative and AML enforcement trends in the US and EU.
HEZBOLLAH EMERGES A WINNER FROM MIDEAST TURMOIL, ALARMING FOES
Defence Web carried an article dated 1st December. It remarks that Hezbollah “has emerged as a big winner in the turmoil that has swept the Arab world since the uprisings of 2011 that toppled governments in several countries. It has fought in Syria and Iraq, trained other groups in those countries and inspired other forces such as Iran-allied Houthis waging a war in Yemen”. It goes on to explain that Hezbollah was set up by the powerful Iranian Revolutionary Guards (IRGC) to fight Israeli forces that invaded Lebanon in 1982 and to export Iran’s Shi‘ite Islamist revolution, and that an Iranian-backed Iraqi Shi‘ite militia, the Popular Mobilisation Forces (PMF), was sent from Iran into Syria to help it in the civil war. It is also a part of the government in Lebanon. It is also said to be buying (conventional) advanced rocket and missile technology.
LEBANON CENTRAL BANK “NOT LAUNDERING HEZBOLLAH MONEY”
Lebanese news site, Naharnet, reports that the armed forces chief defended Lebanon’s banking system stressing that it can’t be passing funds for the US-sanctioned party Hizbullah. He was replying to remarks made by the Saudi Foreign Minister who accused “Iran of using its ally Hizbullah of laundering money” through Lebanon. The chief stressed that Lebanon’s Central Bank adheres to the international standards and the international banking systems, and he did not think there is money for Hizbullah passing through Lebanese banks.
3 INDICTED FOR FRAUD CARRIED OUT FROM PRISON
The Times of Israel carries a story saying that 3 men had been charged with fraud against dozens of victims, pretending to be officials of the vehicle licensing office able to help the victims get away with unpaid traffic fines. 2 of the defendants were already in prison while they took part in the fraud from behind bars.
TAX HAVENS LOBBY TO GET BACK THEIR LOOPHOLES IN THE US TAX BILL
IBT Times claims in an article that despite the recent controversial Republican tax Bill in then US includes some provisions to close loopholes that help corporations shift money to offshore tax havens, DoJ documents reviewed by the International Business Times show that lobbyists for the tax havens Bermuda and the Cayman Islands are pressing lawmakers to restore the loopholes that they have used in the past.
HONG KONG CONSULTANTS TO IRISH FUND EMBROILED IN ALLEGED US $26 MILLION FRAUD CASE
The Irish Independent reports that one of the world’s largest overseas investment brokers for Chinese nationals has been caught up in a $26 million fraud involving a US scheme. Delsk Group is self-described as a “channel between Asia and the world” and has raised some €60 million from Chinese investors to build nursing homes in Ireland. It was also hired to recruit Chinese investors for a US fund to build a cancer therapy centre in California. But those behind that scheme, Charles Liu and his wife Xin Wang, have now been accused of “corporate looting” by the SEC – which alleges they took some $20 million for their own benefit.
In Ireland, Delsk is adviser to the €100 million JWP ICAV Fund that targets wealthy overseas investors, which is authorised by the Irish Naturalisation and Immigration Service – the Department of Justice unit that operates the Immigrant Investor Programme (IIP).
HISTORY OF US AML LAWS
On its website FinCEN provides a potted history of US AML laws, starting with the Bank Secrecy Act 1970.
and also a timeline of events since 1970 affecting the Act –
THE CHEMICAL WEAPONS CONVENTION COALITION (CWCC)
The CWCC is an independent, international body whose mission is to support the aims of the Chemical Weapons Convention (CWC) and to supplement the efforts of the member states of the Organisation for the Prohibition of Chemical Weapons (OPCW), with focused civil society action aimed at achieving full membership of the CWC, the safe and timely elimination of all chemical weapons, preventing the misuse of chemicals for hostile purposes, and promoting their peaceful use. It was established in 2009. One of its stated aims is to “Promote synergies among non-governmental organizations in advocacy for WMD demilitarization, disarmament, non-proliferation and peaceful uses, through cooperation and interaction among stakeholders in the nuclear, chemical and biological regimes”.
TRADE-BASED MONEY LAUNDERING PAPER
In August, BAFT published “Combatting Trade Based Money Laundering: Rethinking the Approach”. This paper proposes alternative, collaborative approaches to solving the problem of trade-based money laundering by increasing the public and private sector partnership. Its objective is said to be to clarify bank-intermediated trade and banks’ ability to intercept illicit activity, and to explore ways that broader international trade stakeholders from both the private and public sectors can better align to help reduce trade based money laundering and terrorist financing without hindering international commerce and economic growth. BAFT describes itself as the leading international transaction banking association, providing advocacy, thought leadership, education and training, and a global forum for its members in the areas of trade finance, payments, compliance, and regulations, and was formed by the merger of the Bankers Association for Finance and Trade (BAFT) and the International Financial Services Association (IFSA). For more information see
For the paper itself see
USAF CYBER DEFENCES
Air Force Magazine has published an online article about the “cyber warriors” at the US Air Force’s 33rd Network Warfare Squadron. Their mission is to defend the full Air Force Network (AFNET) — which the USAF uses for daily business, like emails and file sharing. The article reports on the Air Force Cyber Defense (ACD) “weapon system”. This is a $543 million, custom-built suite of devices and programmes deployed throughout the AFNET system, and reacts to any suspicious activity it recognises.
EUROPEAN SECURITY AFTER THE INF TREATY
The latest edition (December 2017 – January 2018) of the free-to-download “Survival” journal from the International Institute for Strategic Studies (IISS) contains a number of interesting pieces, including this one asking about the potential consequences if the disagreements between Russia and the US over compliance with the 1987 Treaty on Intermediate-Range Nuclear Forces (INF Treaty) cannot be resolved. There is a risk that it will be abandoned. The article explains that the INF Treaty obliged Russia (and certain other successor states to the Soviet Union in which missiles subject to the treaty were located) and the US to eliminate their stockpiles of intermediate-range and shorter-range ground-launched ballistic and cruise missiles, and not to possess such systems in the future. It provides a precis of the current position and how we got there, and argues that it would be Europe that would face the most problems if the Treaty collapses.
IMPLICATIONS OF THE 2013 SYRIAN CHEMICAL WEAPONS CRISIS FOR DETERRENCE AND TRANSATLANTIC RELATIONS
Another article in the December/January of “Survival” from IISS. This one deals with the consequences of the 2013 chemical weapons attack by the Syrian government, using sarin nerve gas. It reports that were hints prior to the attack that Syria might opt to use the weapon. It refers to discussions between the US, UK and France in the aftermath. Despite criticisms of the reaction, including the Obama “red lines”, it says that former US administration officials are adamant that Obama made the correct decision and that the outcome was a good one. A more firm response by the US was problematic, not least after a 2013 poll appeared to show that 60% of US voters opposed military action (and only 9% were in favour). Whilst it could be argued that the West, or at least the US, had reverted to its previous policy of deterring use of such weapons, the article concludes that it remains to be seen if the April 2017 airstrike has restored deterrence. It argues that Britain, France and the US need to stick together, especially when other UN Security Council permanent members (China and Russia) are unlikely to be helpful.
CYBERSPACE TREATY ATTEMPT FAILS
Another article in the December/January of “Survival” from IISS. One might not have been aware that for nearly 7 years an attempt had been ongoing to draft the rules that should guide state activity in cyberspace. The article reports that since 2010, the US had persuaded others to agree to a set of increasingly prescriptive norms of what they could and could not do in cyberspace, but then broke down over the US intention to have signatories explicitly agree that the laws of war applied to cyber conflict – Russia, China, Cuba and others refused to do so. Therefore, the whole thing fell apart during Summer 2017. The article provides a handy briefing on the background to the intended agreement, and the norms involved.
WAR IN UKRAINE: IS THIS THE WAY IT ENDS?
The final article noted in the December/January of “Survival” from IISS asks if Russia, Ukraine and its western allies are moving towards a messy resolution of the effective civil war of the last 4 years. The article cites as factors the failure to reclaim historic Catherine the Great’s “Novorossiya” territory from Ukraine, the budget squeeze resulting from economic stagnation and Western sanctions on Russia, the implausibility of any Ukrainian military re-conquest of lost territory in the east and the old Ukrainian oligarchy once more establishing itself. It seems highly likely, inevitable, that Crimea will stay Russian (on a personal note, I would say my experience in Crimea was that it appeared overwhelmingly Russian, and there seemed no surprise in the referendum result, which I thought would have needed little or no manipulation to provide the “right” result).
BANGLADESH STARTS CONSTRUCTING ITS FIRST NUCLEAR POWER PLANT
On 30th November, Bangladesh started the construction of its first nuclear power plant at Rooppur. The pouring of the first nuclear safety-related concrete for the power plant made Bangladesh the third ‘newcomer’ country to start constructing its first nuclear power reactor in 3 decades – following the UAE in 2012 and Belarus in 2013. The 2 VVER type (AES-2006) pressurized water reactors are to be supplied by Atomstroyexport of Russia.
4th December 2017
BENEFICIAL OWNERSHIP AND MERCHANT PROCESSING IN THE USA FROM MAY 2018
Venables LLP has issued a briefing advising that from May 2018 FinCEN will require banks in the USA – and their processor, ISO, and payment facilitator partners – to capture the beneficial ownership information of merchants seeking access to merchant processing accounts. The article provides a background to the change, first advised in 2016, and what banks need to do to prepare for the change.
AUTONOMOUS VESSELS: HOW AN EMERGING DISRUPTIVE TECHNOLOGY IS POISED TO IMPACT THE MARITIME INDUSTRY MUCH SOONER THAN ANTICIPATED
This article from law firm Blank Rome, featured in the launch edition of the Journal of Robotics, Artificial Intelligence and Law, argues that autonomous vessels could be just around the corner. It refers to a 2016 agreement between partners in the UK, and to impact on several international control agreements that are based on human involvement or intervention – such as those aimed at controlling pollution – tests with a remote-controlled tug in Denmark, and the launch in 2017 of an approved autonomous control system. It seems Lloyds of London has already issued guidance on the use of autonomous control, specifying 6 levels of control. Given existing concerns about use of vessels by terrorists, such as “importing” WMD in containerised traffic, and with the expectation that the UK and US would expect to be in the forefront of autonomous vessel development, this is just one further complicating factor.
The Hostage Support Partnership (HSP) is a collaboration between well-known law firm HFW, John Steed of NGO Oceans Beyond Piracy and Les Edwards of the risk management company, Compass Risk. HFW reports that on 7th November the UN Security Council passed UN SCR 2383 commending the work of the HSP in securing release of 26 hostages from the vessel “Naham 3”, who had been held by Somali pirates for more than 4 years. These hostages are amongst some 1,800 that have been recovered over the past 12 years.
VENEZUELA LAUNCHES OIL-BACKED CRYPTOCURRENCY
Reuters reports that Venezuela’s President Maduro is to circumvent US-led financial sanctions by announcing the launch of the ”petro” backed by the country’s oil reserves.
MONEY LAUNDERING USING BITCOIN ATM?
Business Reporter and City AM report that criminals could be laundering their money through cryptocurrency cash machines, according to the Metropolitan Police. Scotland Yard has warned that illegal cash could be deposited into the machines – which converts the money into digital currency such as Bitcoin. A crackdown, by the extension of AML rules, is predicted.
LICENSING OF BETTING SHOPS IN THE UK AND FOBT
On 4th December the House Commons Library issued a briefing paper on the licensing of bookmaker premises in the UK.
and another on fixed-odds betting terminals (FOBT)
CITIZENSHIP BY INVESTMENT PROGRAMMES
The Low Tax (Tax News) website carries a feature which looks at the details of Malta’s Individual Investor Programme, and other similar citizenship-by-investment (CBI) schemes that exist elsewhere in the world. This follows the announcement on 17th November by Malta’s PM that Malta intends to renew its, sometimes controversial, programme.
SEC CHARGES RELATING TO CANADIAN ICO
Coindesk reports on 4th December that the US SEC had filed charges against 2 individuals, Dominic Lacroix and Sabrina Paradis-Royer, and a company called PlexCorp, and obtained an “emergency asset orders” for $15 million on charges of violating US securities laws and fraud linked to a Canadian initial coin offering (ICO).
IRAQ REINSURANCE COMPANY REMOVED FROM UK SANCTIONS LISTS
On 4th December, HM Treasury issued a Notice confirming that the Iraq Reinsurance Company was no longer subject to financial sanctions in the UK. This follows the publication of EU Regulation 2017/2217 on 2nd December.
ANDROMEDA BOTNET DISMANTLED
A news release from Europol on 4th December reported that the FBI, in close co-operation with the Luneburg Central Criminal Investigation Inspectorate in Germany, Europol’s European Cybercrime Centre (EC3), the Joint Cybercrime Action Task Force (J-CAT), Eurojust and private-sector partners, dismantled one of the longest running malware families in existence called Andromeda (also known as Gamarue). This widely distributed malware created a network of infected computers called the Andromeda botnet. The release says that, according to Microsoft, Andromeda’s main goal was to distribute other malware families. Andromeda was associated with 80 malware families and, in the last 6 months, it was detected on or blocked an average of over 1 million machines every month.
24th November 2017
IRAN WILL BOOST MISSILE CAPABILITY
In its Iran news update on 16th October, Herbert Smith Freehills reports that Iranian President Hassan Rouhani has stated that Iran would boost its missile capabilities, despite warnings from the US that it is ready to leave the JCPOA over the issue. He stated that Iran is going to strengthen its military capabilities because it is necessary for deterrence. Iran recently unveiled its latest ballistic missile, capable of reaching much of the Middle East, including Israel. The unveiling by the Revolutionary Guard came during a military parade in Tehran that commemorated the 1980s Iraq-Iran war.
BROAD BUSINESS SUPPORT IN AUSTRALIA FOR MODERN SLAVERY LEGISLATION, AND SOME IMPROVEMENTS SUGGESTED
In August 2017, the Australian Government issued a consultation, with responses due by 20th October:
An article from law firm Clayton Utz reports on the responses saying that feedback provided by the business community and civil society organisations is expected to inform the final content of the proposed legislation to combat modern slavery.
NIGERIAN MARITIME SECURITY – WHO’S IN CHARGE?
An article from Akabogu Associates of Nigeria seeks to explain which organisation is legally bound call for the preservation of maritime security to help you understand which agencies should be held accountable for protecting Nigeria’s waters. The Nigerian navy, police and Nigerian Maritime Safety and Administration Agency operate within particular maritime zones owing to a variety of factors. The article argues that there is a need for Nigeria’s legislature to revisit the relevant legislation that establishes these agencies and it to allow for a proper demarcation of the functions of these bodies with regard to the protection of Nigeria’s waters.
MISTRIAL IN BRIBERY CASE AGAINST US SENATOR ROBERT MENENDEZ HIGHLIGHTS THE CHALLENGES OF PROVING BRIBERY WITH CIRCUMSTANTIAL EVIDENCE
Dentons reports on the deadlocked trial, saying that the outcome is instructive for those who wish to challenge the US government’s use of the “stream-of-benefits” theory in bribery or corruption cases. The allegations were that Dr Salomon Melgen, a Florida ophthalmologist and campaign donor, had provided Sen. Menendez with free flights on his private jet, free stays and luxury golf at the doctor’s vacation villa, and hundreds of thousands of dollars in campaign contributions, in return for promised favours when elected.
BORDER FORCE SEIZE 20 KILOS OF COCAINE AT DOVER
Border Force news release on a seizure on 21st November when inward freight controls at Dover’s Eastern Docks stopped and searched a Lithuanian-registered lorry finding packages concealed within the floor of the vehicle.
EurActiv reported on 24th November that judging by the mixed reactions to the life sentence the International Criminal Tribunal for the former Yugoslavia (ICTY) has handed Ratko Mladić, the former Bosnian Serb Army commander, reconciliation in the region after the wars of the 1990s is still far away.
PANDEMIC FLU PLANNING INFORMATION FOR ENGLAND AND THE DEVOLVED ADMINISTRATIONS, INCLUDING GUIDANCE FOR ORGANISATIONS AND BUSINESSES.
The Home Office published revised guidance on 24th November.
COURT RAPS SFO FOR USE OF ‘INEXPERT’ EXPERT WITNESS
The BBC reported on 24th November that the SFO had has been criticised by the Appeal Court for appointing an expert witness who “lacked expertise”, one judge describing use of Saul Haydon Rowe as “a debacle”. He appeared in the trials of former traders for allegedly rigging Libor. The comments were made at an appeal hearing for Alex Pabon, convicted last year in Libor trials which saw traders accused of rigging the key interest rate, which is used to set interest rates charged between banks. One judge commented on when the Crown in a major prosecution calls a witness who is wholly out of his depth.
TRIAL OF CANADA’S “MUSLIM MADOFF” DELAYED
CBC News reports that the trial of a Toronto businessman charged with fraud for allegedly pocketing millions in “Shariah-compliant” mortgages has been delayed until next Autumn — just as it was beginning. The opening day of the trial for Omar Kalair, dubbed the “Muslim Madoff” by some of the homeowners who were allegedly left thousands in the hole after buying into the mortgages marketed to Muslims, got underway earlier this month.
BRITISH COLUMBIA GETS TOUGH ON MONEY LAUNDERING IN CASINOS
Gambling Insider reported on 24th November that British Columbia in Canada is giving its gambling regulator greater powers to monitor its the industry following high profile instances of alleged money laundering in its casinos. In September, the British Columbia Gaming Policy and Enforcement Branch released a 400-page report following an investigation which identified that large volumes of unsourced cash were being accepted in casinos in the province. The largest in July 2015 when almost $13.5 million in $20 bills were accepted by one casino said to be “unsourced cash from unknown persons or persons believed to be connected to or participating in illicit activity, was dropped off at the casino or ‘just-off’ casino property for patrons at unusual times, generally late at night”; predominantly came from so called ‘high roller’ VIP clients from Asia. A full review from the RCMP is due in March 2018. Meanwhile, all casinos operating are asked to sign new operational service agreements aimed at stopping further breaches, and those casinos which sign up will receive a 5% facility investment commission (based on a net win from gambling), with the regulator given the power to suspend payment of this commission to any casinos found to be not adhering to the new standards.
CONCERNS ON SHELL INVOLVEMENT IN BENIN AFTER BRAZIL CONVICTION
On 20th November, MLex reported that a subsidiary of oil company, Royal Dutch Shell, is under scrutiny for, at least, insufficient due diligence, after the recent conviction for bribery of a former manager at Brazilian state-controlled oil company Petróleo Brasileiro, or Petrobras. Pedro Augusto Cortes Xavier Bastos was jailed in Brazil for 11 years in October for accepting bribes in a deal between Petrobras and Companie Beninoise des Hydrocarbures (CBH), a company owned by Portuguese businessman, Idalécio Oliveira. CBH had no history of oil deals and had just one asset — the oilfield that it sold a 50% stake to Petrobras for $35 million in 2011. Shell Benin Upstream then bought a 35% share in 2012, but departed the joint venture in 2015 as no oil had been discovered. It appears Shell paid $20 million to Petrobas for 15% and $70 million to CBH for the 20% balance. Petrobras paid CBH $35 million for a 50 percent share in the rights to explore oil in the Benin field in May 2011. The following year, Shell’s unit Shell Benin Upstream purchased a 35 percent stake in the field, only to leave the joint venture in 2015 after no oil was found in the plot. The Anglo-Dutch company paid $20 million to Petrobras for a 15 percent stake, and paid $70 million to CBH for the other 20 percent. Bastos had received $4.165 million in bribes via a Swiss bank account for facilitating the sale of CBH’s 50% stake to Petrobras.
HOW TO IMPROVE HOW ECONOMIC SANCTIONS ARE ASSESSED
Article in ETH Zurich contends that economic sanctions can be considered ‘well-aligned’ when they inflict a specific amount of economic damage on a targeted individual or group within a limited time frame. The author acknowledges the difficulties in enacting such precise measures and makes 3 recommendations –
The article also points out that poorly aligned economic sanctions will not only be ineffective, at times they may be a “cure that is worse than the disease.” Economic sanctions that prove to possess limited powers of persuasion may be categorized as symbolic, but they still cause real and unnecessary losses on individuals, firms, and communities to no purposeful end
GLOBAL TERRORISM INDEX RESULTS
The 5th edition of the Global Terrorism Index highlights that for the second consecutive year, deaths from terrorism have decreased. There were 22% fewer deaths when compared to the peak of terror activity in 2014, with significant declines in terrorism in the epicentres of Syria, Pakistan, Afghanistan and Nigeria. Collectively these 4 countries, which are among the 5 most impacted by terrorism, recorded 33% cent fewer deaths.
BRIEFING ON THE ROHINGYA CRISIS IN BURMA/MYANMAR
A House of Commons Library Briefing on the crisis was prepared in advance of a planned debate in the Commons.
FIRST CHINESE INSURANCE COMPANY FOR GUERNSEY
Tax News on 24th November reported that Guernsey has trumpeted the recent formation of the island’s first Chinese insurance company, Brilliant Reinsurance (Guernsey) Limited, as further evidence of the growing ties between China’s business sector and the island’s insurance industry.
INSURERS SHOULD TAKE OUT MORE PRIVATE PROSECUTIONS
An article in Insurance Age reports that has been a recent uptake of private prosecutions by those in the insurance sector, covering situations as diverse as “cash-for-crash” scams to false work injury claims. The author, from law firm Ashfords, argues that brokers should encourage their insurers to bring private prosecutions when criminal proceedings don’t come to fruition and if the right evidence is there. The article goes on to explain private prosecutions, how they work, and what impacts might they have on the sector?
HM TREASURY QUARTERLY REPORTS TO PARLIAMENT ON OPERATION OF THE UK ASSET FREEZING REGIME.
FORMER BANKING SUPERINTENDENT OF BANKING IN PANAMA REPORTEDLY CHARGED IN EL SALVADOR
Kenneth Rijock blogs that he understands that Alberto Diamond Rodriguez, the fugitive former Superintendent of Banking in Panama, is facing criminal charges in El Salvador, where it is believed he fled to, after President Martinelli left office. Diamond is a relative if the former Panamanian President, and he was named for the post, notwithstanding that he was, according to Rijock, totally unqualified for the job.
FORMER POKERSTAR OWNER CALLS FOR INSIDER TRADING CASE TO BE DROPPED
Former Amaya Gaming CEO, David Baazov, wants a Quebec court to dismiss his insider trading charges due to the delays in bringing his case to trial, according to a report on calvinayre.com.
GUERNSEY POLITICIAN RESIGNS
According to a report in Guernsey Press, the Economic Development president Peter Ferbrache resigned after being questioned about a perceived conflict of interest over a case taken on by law firm Ferbrache & Farrell (for which he is listed as a consultant) which was paid £300,000 in public money. Ferbrache denies any allegations of a conflict of interest. https://guernseypress.com/news/2017/11/24/ferbrache-quit-after-being-quizzed-on-300000-payment-to-law-firm-ferbrache–farrell/#lSQkgFbu1OdwOFR5.99
EUROPOL CO-ORDINATES JOIT ACTION AGAINST ARMS TRAFFIKCING IN THE WESTERN BALKANS
On 24th November Europol reported on Operation Calibre, with over 135 firearms and 7,000 rounds of ammunition seized in a series of international actions in 10 EU Member States and 8 third parties, led and co-ordinated by the UK as the Activity’s Action leader and with the full support of Europol and Frontex. It was initiated in September 2017, culminating in a 2-day joint action on 17th/18th November during which physical checks were carried out, mainly in the Western Balkan region. The UK, Sweden, Croatia, Slovenia, Bulgaria, Greece, Romania, Spain, Hungary, as well as Switzerland, Albania, Bosnia, Macedonia, Serbia, Montenegro, Kosovo, US, Europol and Frontex all took part in this series of actions. 18 individuals were arrested in the Western Balkan states in relation to weapons and explosives offences and 153 individuals were prevented from entering the EU illegally. In addition, law enforcement identified a further 37 instances of overstay.
The operation formed a part of Operation Dragon, the 4th EU-wide set of Joint Action Days taking place within the EU Policy Cycle for organised and serious international crime and was planned under the EMPACT framework for firearms.
CHINA’S LARGEST INTERNET COMPANIES WILDLIFE CRIME ALLIANCE
Maritime Executive reports that China’s biggest internet companies have formed an alliance to combat wildlife cybercrime. The 3 lead companies, Baidu, Alibaba and Tencent, are supported by an additional 8 Chinese internet companies.
PODCAST: DAVID GREEN AND THE FUTURE OF THE SFO
Trace International has a podcast featuring David Green, the Director of the SFO, who talks about the SFO’s priorities, changes he has made as Director and what’s next for him.
BUSINESS AND HUMAN RIGHTS: ACCESS TO REMEDIES
Law firm Clifford Chance has published an article which states that improving access to remedy for business-related human rights impacts is a core component of operationalising both the State duty to protect and the corporate responsibility to respect as set out in the UN Guiding Principles on Business and Human Rights (UNGP, or the “Ruggie Principles”). The article provides a short summary of some key recent developments relating to the 3 categories of grievance mechanism mapped in the UNGP and identify emerging trends in efforts to improve access to remedy.
CANADA PLANS TO PREVENT ORGANISED CRIME INVOLVEMENT IN LEGALISED CANNABIS
The Canadian government on November 21st announced proposed regulations for the legal cannabis sector, requiring every Licensed Producer to implement an Organizational Security Plan to prevent infiltration by Organized Crime.
INFOGRAPHIC: ILLEGAL, UNREPORTED AND UNREGULATED (IUU) FISHING
Shows the 50 states with which the EU is negotiating.
UN ZERO TOLERANCE PLAN ON CORRUPTION
A new standard on zero tolerance to corruption in Public-Private Partnerships (PPP) developed by the UN Economic Commission for Europe (UNECE) will, it is claimed, help to catalyze countries’ efforts to strengthen transparency, accountability and effective governance of investment in public infrastructure and service delivery, which will be key to achieving the Sustainable Development Goals (SDG).
25th November 2017
POLICE TAKE 7 SHOTGUNS FROM PASSENGER IN PAKISTAN
Customs Today reports that the federal police recovered 7 shotguns from the luggage of a passenger at Lahore’s Allama Iqbal International Airport. Conducting a raid at Lahore airport they recovered the arms from the luggage of a British-Pakistani individual. The unidentified individual has been taken into custody and police have begun its investigation.
BUSINESSMANFACES CHARGES FOR TAKING S$12 MILLION INTO SINGAPORE
Customs Today reported that a Malaysian businessman “is facing 100 charges of moving currency totalling S$12 million (about £6 million) into Singapore without giving a full and accurate report of the money at the checkpoint”. Abdul Jalil Sulaiman, 47, was charged with moving into Singapore amounts ranging from S$30,300 to S$300,000 in 2013/14 using the Green Channel. Under Singaporean law physical currency exceeding S$20,000 in total value.
DENMARK, FRANCE AND BELGIUM MOST HEAVILY TAXED DEVELOPED STATES
Only 1 developed country in the world taxes its population more than France. A new survey from the OECD economic shows that, of all the developed countries in the world only Denmark pulls in more in taxes than France. When income taxes, social security contributions, taxes on property, goods and services are all added together they account for 45.3% of France’s overall earnings. That’s a slight rise of 0.1% on 2015, but still below the peak of 45.5% reached in 2014. In Denmark, all taxes combined were worth 45.9%. In third place came Belgium where the tax to GDP ratio was 44.2% in 2016.
US EXPORT RESTRICTIONS FOR CUBA IMPLEMENTED
A number of changes in US policy toward Cuba announced by President Trump this past June are being implemented as of 9th November under regulatory changes being made by the Bureau of Industry and Security, OFAC and the State Department.
FORMER ZIMBABWE FINANCE MINISTER CHARGED
Reuters reported that former Zimbabwe finance minister Ignatius Chombo, who was among those detained by the military when they seized power before Robert Mugabe resigned, was charged with 3 counts of corruption in offences that took place more than a decade ago.
FORMER FIU OFFICER CLAIMS ABOUT MALTA-AZERBAIJAN LINKS
The Malta Independent reports that during an interview in The Times with a former Financial Intelligence Analysis Unit official, Jonathan Ferris, and it also reports that Pilatus Bank whistleblower Maria Efimova fears for her life, should she return to Malta. In the interview, Ferris, who had been sacked from the FIAU after the last election, tells the newspaper that the government is trying to stop him from publishing more details linking it to Azerbaijan’s ruling family.
On 26th November, Malta Today reported that the former investigator said he left shortly after an incident in which a minister demanded information on a police investigation. He had already said he would produce documents alleging millions of euros were processed by the private bank Pilatus Bank for powerful Azerbaijanis.
AIRPORT WORKER AT HEATHROW DETAINED IN DRUGS BUST
BT News reports that a Heathrow security worker was arrested in an airport toilet after 7 kg of cocaine were seized by police. NCA said the man, a 30-year-old from Southall, was detained alongside a 37-year-old man had recently disembarked at Terminal 5 from a flight from Colombian capital Bogota.
BANK MELLAT DISCLOSURE DECISION
The European Sanctions Blog on 24th November provided an update on the situation involving Bank Mellat’s appeal against financial restriction orders made in 2011/12 under TAFA 2010. In October 2015 the Court of Appeal held that the principles relating to the disclosure of closed material in the context of control orders, as set out in the House of Lords judgment in AF (No. 3), also applied to disclosure in the context of applications to set aside a financial restrictions decision, remitting the case to the Administrative Court to consider whether there had been sufficient disclosure by HM Treasury in the attempt by Bank Mellat to have financial restrictions set aside.
Now the Administrative Court just decided, in a closed judgment, that some material may be withheld and other disclosed. The open judgment (Bank Mellat v HM Treasury  EWHC 2931 (Admin)) sets out the relevant principles applied in the closed judgment.
26th November 2017
NORTH KOREA BALLISTIC SUBMARINE GAMBLE
Deutsche Welle carried an article stating that North Korea is pushing ahead with the construction of its first domestically developed ballistic missile submarine, with the vessel expected to be technologically inferior to its rivals in the region and relatively easy to track and neutralize, analysts believe. The analysts also suggest the new vessel will be the first 3,000-ton Sinpo-C class ballistic missile submarine, which is designed to sortie into the Pacific Ocean and remain undetected. The article also says that North Korea has conducted a number of test launches of missiles from existing missile-capable boats – converted Soviet-era Golf-II vessels that were ostensibly purchased for scrap but have since been reconditioned and returned to service – or from a submersible barge. One analyst is quoted as saying that the project is a “monumental waste of money when the economic conditions in North Korea are so bad, but having a nuclear deterrent makes sense to the regime there because they believe it guarantees their survival”.
USMANOV IN UZBEKISTAN
Article from Carnegie Moscow Centre about Alisher Usmanov (owner of Arsenal and, according to the Paradise Papers, possibly the genuine owner of Everton) and his involvement in Uzbekistan, and the president’s struggles with the Uzbek National Security Service (SNB) and its boss.
PARTNERS OR ADVERSARIES? MANAGING US-CHINA RELATIONS IN THE ERA OF TRUMP
Fascinating talk at the LSE on 16th November by Michael Mastanduno, Nelson A Rockefeller Professor of Government, Dartmouth College and the inaugural Susan Strange Professor of International Relations at LSE. Considers the post-Cold War US-China “grand bargain” in economics and security is now unravelling, and faces new uncertainty in the era of Trump. Including what could go wrong in the relationship, and produce conflict in the near future, or the next 10 or 25 years…
THE THREE LITTLE OLIGARCHS: LATVIA’S CORRUPTION SCANDAL – ANALYSIS
Eurasia Review carries a report suspected corruption and abuse of power at the highest level of government, with released transcripts of tape-recorded conversations said to shed light on plans to restrict press freedom, interfere with democratic processes, and take advantage of state institutions. suspected corruption and abuse of power at the highest level of government. In 2009, KNAB (the Corruption Prevention and Combating Bureau) launched an investigation related to the so-called Latvian oligarchs: former Minister of Transportation Ainārs Šlesers, the Mayor of Ventspils Aivars Lembergs, and former Prime Minister Andris Šķēle, suspecting that the true owners of the Riga Commercial Port were Šlesers, Šķēle, and Lembergs. It seems that the published transcripts come from conversations secretly recorded by KNAB during this investigation. The investigation lasted for years and was finally closed in 2016, with no charges filed. The article says that the publication of the transcripts raised an obvious question: why did the investigation of the oligarchs end without any charges? Spurred on by the release of the transcripts, 2 protests have taken place in Riga, and numerous public figures have condemned the corruption that the transcripts reveal. A crowdfunding campaign has raised funds to send a hard copy of the transcripts to every public library in Latvia.
CHINA ACTS TO DISRUPT UNDERGROUND BANKS LINKED TO MACAU CASINOS
Calvin Ayre reports on 26th November that Chinese authorities have disrupted 2 major underground banking networks that helped transfer money from the mainland China to casinos in Macau. It states that Chinese state media reported that police had broken up 2 major underground banks in Shaoguan in northern Guangdong province in a series of raids on November 9th. They reportedly handled over $3.1 billion worth of transactions, helping over 10,000 clients across 20 provinces to transfer money on or off the mainland or to exchange yuan for foreign currency. The article also says that such underground banks are a popular method for well-heeled Chinese citizens to evade their country’s strict capital controls. These banks typically earn commissions of between 0.3-0.7% per transaction for taking the risk on behalf of their clients.
PRE-EMPTING DEFEAT: IN SEARCH OF NORTH KOREA’S NUCLEAR DOCTRINE
On 22nd November think tank ECFR (European Council on Foreign Relations) published a paper which, amongst its conclusions, says that the key term to summarise North Korean doctrinal thinking is “preempting decapitation” – threatening to use nuclear weapons first if it detects the preparation of a preventive attack, whether conventional or nuclear, to decapitate the regime. It also says that the EU should step up its efforts to combat sanctions evasion in countries where it has influence. From a sanctions perspective, the paper recommends that the EU backs sanctions to control proliferation, and that European countries and institutions should strengthen the sanctions regime against North Korea, but abandon the idea that sanctions alone will create the conditions for nuclear disarmament.
GLOBAL CORPORATE LIABILITY HANDBOOK 2017
Baker McKenzie has published its Global Corporate Liability Handbook 2017 that collates and describes in detail the corporate liability and corporate crime regimes of countries in Asia, EMEA and the Americas. It says that corporate liability can be established and sanctioned at various levels — criminal, quasi-criminal (administrative) and civil — and be associated with or derived from the liability of individuals who have acted in the name or on behalf of the company. Likewise it says, corporate liability can be established as an independent law violation or even as a crime, regardless of the commission of a separate crime by the individual. Corporate liability is a growing threat to the reputation, profit and business image of global corporations. The adoption of adequate measures to prevent corporate liability has progressively become a legal and ethical duty.
In this Handbook, Baker McKenzie says you will find detailed descriptions of the nature of liability in various jurisdictions, the consequences of breach by a company of the relevant legal provisions, and the remedies and measures that a company can adopt to limit or even exclude such liability. We have also addressed corporate liability in multinational groups and the basis for the extension of the liability to the ultimate parent company.
27th November 2017
DISPOSING OF FUNDS UNDER A FREEZING ORDER
Clyde & Co on 16th November reported on a case where payments to a PR firm did not breach a freezing order, as the judge held that it would not necessarily be improper to incur expense in defending or promoting the reputation of a director of the claimant. It had been disputed whether the claimant would be allowed to pay up to £30,000 per month to a firm of PR consultants as part of the “ordinary course of business”. Although strictly speaking not a freezing order, the wording of the undertaking in Koza v Akcil closely mirrored the wording used in the standard form freezing order
WHEN DOES DISHONESTY HAVE BE SHOWN AFTER THE IVEY DECISION?
Dentons have released an analysis examining the change in the definition of “dishonesty” following the landmark case of Ivey v. Genting Casinos (UK) Ltd t/a Crockfords, asking when and how dishonesty need to be shown
The Combating Terrorism Center is an independent, privately-funded, research and educational institution located in the Department of Social Sciences at the United States Military Academy, West Point. The CTC Sentinel harnesses the Center’s global network of scholars and practitioners to understand and confront contemporary threats posed by terrorism and other forms of political violence.
Available free online, the latest edition, published 27th November, includes –
THE CURSE OF CAIN: WHY FRATRICIDAL JIHADIS FAIL TO LEARN FROM THEIR MISTAKES
As IS becomes the latest, the article asks why jihadis keep shooting themselves in the foot. In the past 3 decades, radical salafis have managed to snatch defeat from the jaws of victory o3n three major fronts
INTERVIEW WITH CO-FOUNDER OF UK CONSULTANCY SEEKING TO REHABILITATE TERRORIST OFFENDERS
Dr. Angela Misra is the deputy chief executive and co-founder of The Unity Initiative (TUI), a specialist intervention consultancy based in the United Kingdom that focuses on rehabilitating individuals convicted of terrorist offenses; training prison, probation, and police staff; tackling absolutist mindsets in the wider community; and advising governments on countering-extremism strategies.
THE IMPLICATIONS OF IRAN’S EXPANDING SHI`A FOREIGN FIGHTER NETWORK
In the abstract to this article, the CTC Sentinel says that Shi`a Iran has been steadily recruiting, training, and equipping Shi`a foreign fighters from Lebanon, Iraq, Afghanistan, and Pakistan, and their capabilities are growing. Shi`a foreign fighters have participated in conflicts throughout the region, including in Yemen, Syria, and Iraq. There is evidence the Iranian Revolutionary Guard Corps is providing the training to transform these fighters into a professional transnational militia proxy force modeled after Lebanese Hezbollah. The formalization and expansion of these networks risks exacerbating geopolitical and sectarian tensions throughout the region.
ASSESSING THE RIVALRY BETWEEN AL-SHABAAB AND THE ISLAMIC STATE IN SOMALIA
US EXPORT CONTROL USERS HANDBOOK
Law firm Squire Patton Boggs produces a handbook, the ITAR Practitioner’s Handbook, now in its 2017 2nd edition. It seeks to help users through the seemingly impenetrable US arms export controls. Freely available on application to the firm.
UK NOTICE TO EXPORTERS: 9 OPEN LICENCES UPDATED
The Export Control Organisation has updated and amended 9 Open General Export Licences (OGEL) following changes to the EU’s list of controlled dual-use items. See Notice to Exporters 2017/27
On 29th November the ECO announced that implementation of the changes to OGEL had been delayed.
CANADA CONSULTATION ON REGULATION OF CANNABIS
On November 21st, Blake Graydon and Cassels reported that Health Canada launched a public consultation (until 20th January) on the much-anticipated regulatory approach for the proposed Cannabis Act, which will legalize and regulate the use of cannabis for recreational purposes. The firm earlier produced a guide on the proposals –
GUERNSEY COMMITTEE FOR HOME AFFAIRS ITS NEW CYBER SECURITY STRATEGY.
The accompanying news releases states that cyber security describes the technology, processes and safeguards that are used to protect networks, computers, programs and data from attack, damage or unauthorised access. The Strategy addresses the strategic, tactical and operational aspects.
IMPACT OF IRISH FINANCE BILL 2017 FOR THE STRUCTURED WEALTH OF RESIDENT NON-DOMICILED PERSONS
Section 13 of Finance Bill 2017 proposes significant changes to Irish tax anti-avoidance legislation for offshore structures. Irish law firm Matheson presents an analysis of its likely impact.
KEY TAKEAWAYS FROM THE 2017 SEC WHISTLEBLOWER REPORT
DLA Piper on 21st November published an article looking at 2017 Annual Report to Congress on the Whistleblower Program which referred to over 4,480 tips and approximately $50 million in payments for fiscal year 2017 (FY2017), and 700 matters under review or investigation as of September 30th 2017.
IRISH CENTRAL BANK FINES FOR INSURER OVER AML FAILINGS
The Risk & Compliance Hub and The Journal reports that Intesa Sanpaolo Life, the life assurance wing of one of Italy’s largest banks, has been fined €1 million by Ireland’s Central Bank for breaches of the country’s Money Laundering and Terrorist Financing Act. The Central Bank said the 4 continuous breaches occurred from the enactment of the Act in July 2010 and continued on average for 3 years and 11 months, and affected risk assessment, CDD, SAR reporting etc.
MORE CORRUPTION ARRESTS IN VENEZUELA
Risk & Compliance Hub reported on 24th November that all the top 6 executives at Citgo, the US unit of Venezuelan state oil company PDVSA, had been arrested on corruption charges.
LOCALLY-MADE FIREARMS IN WEST AFRICA
Rarely is the issue of locally manufactured weapons given appropriate attention in discussions of violence in West Africa. Defence Web has published a feature focussing on the issue. Amongst other things, it reveals that homemade weapons found in West Africa “are typically rudimentary, and are often duplicates of existing firearms. They include pistols, shotguns (including single-barrel and double-barrel), automatic rifles and ammunition. In countries such as Ghana, blacksmiths are even able to reproduce – at least in appearance – assault weapons, such as the AKM; a version of the AK-47”. The gunsmiths may also make other implements and tools, and the articles says that to limit the manufacture of firearms, several countries have offered job training and alternative livelihoods to local gunsmiths. But, it says, gunsmithing is lucrative, and such programmes have not been very successful. Tougher approaches are needed to decrease local firearm manufacturing. It concludes that if African leaders are serious about silencing the guns by 2020, they must take a closer look at locally manufactured weapons.
METHIOPROPAMINE (‘MPA’) IN THE UK
Home Office Circular 11/2017 details the changes to UK drugs law, with MPA becoming a Class B controlled drug.
IMF PODCAST: CO-FOUNDER OF BLOCKCHAIN ON THE PROMISE OF CRYPTOCURRENCIES
Peter Smith is co-founder and Executive Director of Blockchain, and in this podcast, he talks about the evolution of crypto currency financial systems and what it could mean for big data analytics. Smith was the keynote speaker at the IMF’s 5th Statistical forum on Measuring the Digital Economy.
BBC SMUGGLES GOODS INTO BRITAIN, SELLS ON EBAY AND AMAZON TO HIGHLIGHT A FRAUD COSTING THE COUNTRY A BILLION POUNDS A YEAR
BBC’s Panorama programme set up a fake company and used it to import goods from China. The first was a consignment of Bluetooth speakers from Shenzhen. A local shipping agent told an undercover reporter the company could avoid VAT by sending the goods to the UK through Holland, with the speakers hidden inside a bigger order. These were to be sold on through Amazon. Panorama also imported 270 mobile phone covers, again without paying VAT, and for sale through eBay.
FLORIDA FAKE CREDIT CARD “FACTORY”
The Kansas City Star reports on a fake credit card factory in a Florida condominium capable of cranking out 1,000 fake credit cards per day as the foundation of a nationwide scam, according to federal prosecutors.
BRITISH YOUNG “MONEY MULES”
Which reports on how young people in the UK are aiding and abetting bank account scams by becoming ‘money mules’ – receiving money into their account and transferring it onto a fraudster. Many may not realise the severity of their crimes. According to figures published by Cifas, the fraud prevention body, some 8,652 cases of ‘misuse of facility’ of facility fraud among 18 to 24 year olds were recorded between January and the end of September 2017 – representing a more than a third (35%) of all cases during that period. That figure has risen by 75% in the first 9 months of the year. Taking part in such a crime could lead to as much as 14 years in jail. https://www.which.co.uk/news/2017/11/young-people-fuelling-bank-account-fraud-as-money-mules/?src=ilaw
MORE QATAR WORLD CUP ALLEGATIONS
The National in Abu Dhabi reports that Qatar faces new allegations of corruption over its controversial 2022 World Cup bid as a French news website revealed on 26th November that US and Brazilian prosecutors were investigating a suspicious transfer of $22 million. Mediapart alleged that the multimillion dollar payment had been made from Qatari group Ghanim Bin Saad Al Saad & Sons Group (CSSG) to the bank account of the Brazilian Football Federation’s former chairman Ricardo Teixeira in January 2011, 1 month after Qatar was awarded the international tournament.
GREEK POLICE ARREST FAMILY AND RELATIVES FOR SELLING BOGUS OLIVE OIL
Fox News on 27th November carried an AP story that a Greek prosecutor had charged 7 people for fraudulently selling large quantities of adulterated sunflower oil as olive oil in Greece and abroad. They were arrested near the city of Larissa, in the Greek province of Thessaly, about 95 miles south of the northern Greek city of Thessaloniki. They are said to have been using a workshop where they added a dye to turn the yellow sunflower seed oil into a green hue resembling olive oil, then being sold to Greek consumers and exported mainly to Germany. Police also found a fleet of luxury cars, hence the charge of money laundering.
OLAF FUNDS STATE OF THE ART SCANNERS IN BELGIUM
New Europe reports that the European Anti-Fraud Office (OLAF) has partly funded the acquisition by the Brussels Airport of a state-of-the-art scanner van, able to X-ray airplanes. The scanner will be particularly used to detect trafficked cigarettes as well as narcotic products. It is the second such device used in Belgium. The first scanner, also funded by OLAF in 2014, is used at the Port of Antwerp to inspect containers and trucks.
OLDHAM FOOTBALL RAUIDED BY THE TAXMAN
The Daily Mail reported on 27th November that HMRC had raided Oldham FC, taking copies of computer hard drives, with the club saying it was co-operating.
BERMUDA CRYPTOCURRENCY AND ICO PLANS
Bermuda becomes the latest place to jump on the blockchain/cryptocurrency bandwagon. The PM announces an intention to make the island a destination for cryptocurrency activities, including initial coin offerings (ICO), and that a new blockchain regulatory framework will be created. Low Tax reported that a task force has been set up to design and implement the new regulatory framework, with a focus on ensuring cryptocurrencies and related tokens are well-regulated, and that a safe environment is created to allow cryptocurrency firms to grow, while also protecting consumers and the reputation of the jurisdiction.
UK DRUGS SEIZURES
A House of Commons Library Briefing of 27th November provides a summary of statistics on drug use, drug seizures and drug offences, showing that herbal cannabis far and way the most commonly seized illegal drug.
UPDATED HMRC GUIDANCE ON TRUST REGISTRATION
The Chartered Institute of Taxation reported on 27th November that, following representations from the CIOT/ATT and a number of other bodies, it was pleased to report that HMRC have revised their position on when trustees must report individual beneficiaries (together with a large amount of personal detail) on the trust register, and when trustees can simply report a class of beneficiaries. This is reported as being “very welcome”, and is said should reduce the volume of information trustees and their agents need to gather on reportable trusts. Fresh guidance issued by HMRC on the TRS can be found at –
MNANGAGWA STILL ON US SANCTIONS LISTS
The European Sanctions Blog gave a timely reminder on 27th November that the new Zimbabwe president remains subject to US sanctions, although the EU sanctions were lifted on 20th February 2016. Coincidentally, the author of that blog also appeared for Mnangagwa and others in their attempt to have EU measures against them lifted. See the OFAC Notice that includes the entry relating to Mnangagwa –
OVER 20,520 INTERNET DOMAIN NAMES SEIZED FOR SELLING COUNTERFEITS
Joint investigations by Europol’s Intellectual Property Crime Coordinated Coalition (IPC³), the US National Intellectual Property Rights Coordination Centre and law enforcement authorities from 27 EU Member States and third parties , facilitated by INTERPOL, have seized over 20,520 domain names that were offering counterfeit goods, for example luxury products, sportswear, electronics, pharmaceuticals and online piracy on e-commerce platforms and social networks.
CHEAP MEDICINES FLOODING NIGERIA, LIBYA AND EGYPT
In Nigeria, the New Telegraph reports on cheap Indian prescription drugs “flooding” Nigeria. It is claimed that some 61 million worth of fake Royal Tramadol Hydrochloride 225 milligrams (mg), double extra strong Tramadol 200mg and super power Tramadol Hydrochloride tablets, worth around $140 million, are currently in circulation. The newspaper says that the use of the drugs, only available on prescription, has reached crisis levels in Libya and Egypt, as well as in Nigeria.
WORLD ECONOMIC FORUM TABLE OF COUNTRIES’ EXPOSURE TO ORGANISED CRIME
Part of the WEF Global Competitiveness Report is a table showing which are the least (Finland) to the most (El Salvador) affected.
ALLEGATIONS ABOUT COSTA RICA INVOLVEMENT IN DRUGS TRADE
Insight Crime carries a report saying that an alleged co-ordinator of a drug trafficking network in Colombia claimed that transnational criminal groups operate in Costa Rica alongside local businesses and with the support of customs officials who sell information to criminal organizations. The trafficker explained how they are able to move shipments of up to 20 tons of cocaine in trucks that transport cement, in an interview given on the Caracol Television show “Direct Witness,” and reproduced online by Crhoy.com.
THE ABILITIES—AND LIMITS—OF NORTH KOREAN EARLY WARNING
The Bulletin of Atomic Scientists carries an interesting article assessing the capabilities against an unannounced US (or other?) attack. How effectively can they detect attacks? How much warning will they provide the North Korean leadership? How will the capabilities and condition of Pyongyang’s early warning systems affect the nation’s response to military action? For example, a limited ability to detect or interpret an attack may lead to anticipating an attempt to “decapitate” the ruling family, or overreaction for other reasons.
BBVA AND WAVE TEST BLOCKCHAIN-BASED INTERNATIONAL TRADE TRANSACTION
On 27th November Banking Technology website reported that Spanish bank BBVA (Banco Bilbao Vizcaya Argentaria), working in collaboration with Wave, performed the first blockchain-based international trade transaction between Europe and Latin America. Built on distributed ledger technology (DLT) and blockchain, BBVA says it used Wave’s solution to reduce the time required to send, verify and authorise an international trade transaction, which generally takes from 7 to 10 days, to under 3 hours. The pilot was run on a transaction between Mexico and Spain, in which a Spanish Company bought 25 tons of frozen tuna from México. The payment was made using a letter of credit. BBVA Spain issued the credit, and BBVA Bancomer processed the payment.
USE OF CASH BY HOUSEHOLDS IN EURO AREA
Banking Technology carries an article and associated infographics on a European Central Bank report on the use of cash by households in Europe.
The report can be found at –
EASTERN UKRAINE CONFLICT STALEMATE?
Janes.com reports that More than 3 years after the outbreak of the Ukraine-Russia conflict in 2014, the stalemate in Ukraine’s eastern Donbass region might be about to freeze over as both sides acknowledge that a military solution is out of reach and perpetual conflict is unsustainable.
JAPAN BOLSTERING MISSILE DEFENCES
Indo-Asia-Pacific Defence Forum reports that Japan is pushing to upgrade its missile defences and more closely co-ordinate with South Korea and the US to guard against possible North Korean missile strikes. It reports that Japan’s current missile-defence system uses land-based Patriot missile batteries and sea-based SM-3 interceptor missiles launched from destroyers. Both can shoot down incoming ballistic missiles, said Jeffery Hornung, a Japan specialist with the Rand Corp.
WHAT US CAN DO TO PREVENT ANOTHER ISIS IN IRAQ
Business Insider carries the transcript of an interview with Shelly Culbertson, senior policy researcher at the RAND Corporation, who explains the steps that the US can take in leading the stabilization effort in Iraq to prevent the rise of a new ISIS.
EVALUATING EXPORT MARKETS: HOW TO ASSESS COUNTRY AND CUSTOMER RISKS
Shipping Solutions provides a free downloadable guide, which includes 7 steps you should take to assess risk in dealing with customers and their countries. As the guide says, a high-risk customer in a low-risk country is not a much better risk than a low-risk customer in a high-risk country.
28th November 2017
US THREATENS SOUTH SUDAN ACTION, RUSSIA WARNS AGAINST UN MEASURES
Channel News Asia reports that the US on 28th November threatened to take further action against the South Sudan government if it does not end violence and allow UN peacekeepers to do their job, but UN sanctions are unlikely as Russia has warned against such a move.
WORK OF THE EXPERTS AT THE MIDDLEBURY INSTITUTE OF INTERNATIONAL STUDIES’ NONPROLIFERATION CENTER
The Washington Post carried on 21st November an article on the work of the experts at the Middlebury Institute of International Studies’ nonproliferation center and how they analysed and reported on the workings of the North Korean missile launches.
see the Institute’s excellent website at –
and NTI carries a story emanating from the James Martin Center at Middlebury –
NEW 3D VIDEO HIGHLIGHTS DEVELOPMENTS AT IRANIAN SPACE LAUNCH CENTER
This site was re-opened in July 2017. Recent developments at the launch center include renovations of the launch pads and construction of a new launch complex, which will allow Iran to test even larger space launch vehicles.
UNDERSTANDING THE RISING CORRUPTION, SANCTIONS AND MONEY LAUNDERING RISKS OF DOING BUSINESS WITH VENEZUELA
US law firm Kirkland & Ellis published a briefing with the view from the US in which it says that it is important for companies and financial institutions to understand the associated corruption, sanctions and money laundering risks, and that these risks are especially significant for financial institutions and those doing business in the energy industry.
NORTH KOREA LAUNCHES BALLISTIC MISSILE
See the Newsweek report –
See also –
LLICIT FINANCIAL FLOWS AND CORRUPTION IN ASIA
RUSI has published a paper which paper examines trends in illicit financial flows (IFF) across 8 countries in Asia: Kyrgyzstan; Tajikistan; Afghanistan; Pakistan; India; Nepal; Bangladesh; and Myanmar. It shows how IFF work from and between these countries, as well as how IFF link to financial centres elsewhere. The flows examined originate from narcotics, counterfeiting, jade and cross-border trade (and trade-based money laundering). It makes a number of recommendations to tackle IFF.
CLAIM THAT KPMG MISSED MAJOR RED FLAGS OF ALLEGED GUPTA MONEY LAUNDERING
On 27th November, South Africa-based Business Tech reported that the latest investigations of the Gupta leak emails have apparently revealed that auditing firm, KPMG, missed major red flags pointing to apparent money laundering at Gupta-owned companies. The allegations surround deals between the Guptas’ Oakbay Investments and 3 companies, where the family’s holding company was paid through seemingly fake deals, where shares were bought in worthless dormant shelf companies.
RUSSIAN CRIMINALS “USING AIRBNB TO LAUNDER STOLEN MONEY”
The Daily Beast reports that the method is pretty simple, with criminals working in hand with Airbnb hosts who are often found via online forms. A booking is made with an Airbnb listing and an accompanying payment is sent over, even though no-one actually ends up staying at the presumably rented out property. From there, a percentage of the payment is sent back to the criminal. Another twist on the scheme is that some criminals will set up their own Airbnb accounts or even purchase hacked accounts online. And in an effort to add even more legitimacy to what are in reality hollow transactions, fake reviews for visits that never happened are often left for the Airbnb host.
SAPIN II LAW IN FRANCE
Morgan Lewis has published a briefing on the French “Sapin II” law. It is said to be aimed at bringing French legislation in line with the most exacting European and international standards in the fight against corruption and at improving France’s image on the matter abroad. Indeed, until then, France was ranked only 23rd with a score of 69 out of 100, according to the Corruption Perceptions Index 2016 published on the website of Transparency International. The Sapin II Law is modelled, in particular, on the US FCPA and UK’s Bribery Act regimes. Most provisions of the Sapin II Law entered into force in June 2017. The briefing identifies 5 main features –
RESTRICTIONS ON CROSS-BORDER DATA FLOWS
An ECIPE report looks at 64 economies. It recommends establishing a system of classification of restrictions on data flows to assist in monitoring them and assessing their impact on trade. In addition to the 28 member states of the EU, the analysis covers the following countries: Argentina, Australia, Canada, Chile, China, Colombia, Costa Rica, Ecuador, Hong Kong, Iceland, India, Indonesia, Israel, Japan, Korea, Malaysia, Mexico, New Zealand, Nigeria, Norway, Pakistan, Panama, Paraguay, Peru, Philippines, Russian Federation, Singapore, South Africa, Switzerland, Taiwan, Thailand, Turkey, US and Vietnam.
European Centre for International Political Economy (ECIPE) is an independent and non-profit policy research think tank dedicated to trade policy and other international economic policy issues of importance to Europe. It was founded in 2006.
IRAN-QATAR ECONOMIC TIES BOOM AFTER SAUDI-LED BLOCKADE
Customs Today reported on 28th November that Iran is benefiting from the anti-Qatari blockade that was launched by Saudi Arabia in early June, when Saudi Arabia stopped access to all air, land and sea routes to Qatar, blaming it for supporting and harboring religious militants. In 7 months to late October exports of non-oil goods from Iran to Qatar reached $139 million, a 117.5% growth against $146.6 million in all of 2016, according to Iran’s customs administration and reported by Iran’s Financial Tribune. Bitumen, food and agricultural products accounted for the largest portion of the exports.
OXFAM ALTERNATIVE TAX HAVEN LIST
EU Observer reported on 28th November that Oxfam believes that Ireland, Luxembourg, Malta, and the Netherlands should be on the EU’s upcoming tax haven blacklist, but the 4 Member States will be excluded because the list will only cover non-EU jurisdictions. Oxfam has published its own alternative list, and an interactive map detailing why those listed should be included. Despite the recent Paradise papers, the Isle of Man is not on the map.
159 ARRESTS AND 766 MONEY MULES IDENTIFIED IN GLOBAL ACTION WEEK AGAINST MONEY MULING
Eurojust reported on 28th November that there were 159 arrested, 409 suspects interviewed by law enforcement, 766 money mules and 59 money mule organisers identified as a result of the European Money Mule Action ‘EMMA3’, a global law enforcement action week against money muling (20th to 24th November). With the support of 257 banks and private-sector partners, 1,719 money mule transactions were reported, with total losses amounting to almost €31 million.
TURKISH-IRANIAN GOLD TRADER TO SPILL BEANS ON TURKISH CORRUPTION
US news media, including the Orlando Sentinel, reported on 28th November that wealthy Turkish-Iranian gold trader Reza Zarrab had struck a plea deal to testify about a vast corruption scheme said to reach into the upper levels of the Turkish government. It is reported that he will take the witness stand to detail how he and Turkish banker Mehmet Hakan Atilla laundered Iranian oil money in violation of US economic sanctions against Iran, a conspiracy involving bribes and kickbacks to high-level officials, in a scheme was “so large that it was protected by government ministers in Turkey and Iran,”. Zarrab was arrested last year and entered a plea to bank fraud, money laundering and other charges in secret on October 26th.
On 2nd December, the Washington Post published a background article on the situation
and on the same day Euronews reported that Turkey had frozen the assets of Zarrab –
OFAC REPORTS IRAN SANCTIONS VIOLATION BY US SHIPPING COMPANY
On 28th November OFAC announced that Dominica Maritime Registry, Inc. (DMRI), headquartered in Fairhaven, Massachusetts, had breached the Iranian Transactions and Sanctions Regulations by, in 2015, dealing in the property or interests in property of the National Iranian Tanker Company (NITC), an entity identified by OFAC as meeting the definition of the Government of Iran and whose property and interests in property are blocked. DMRI executed a binding Memorandum of Understanding with NITC, which OFAC determined was a contingent contract and therefore property in which NITC, a blocked person, had an interest. OFAC determined that DMRI did not voluntarily disclose the violation and that the violation constitutes a non-egregious case.
UKRAINE: YANUKOVYCH-ERA CRIMINAL CASES STAND UNSOLVED
OCCRP reports that, 4 years following the EuroMaidan Revolution that resulted in former Ukrainian president Viktor Yanukovych’s fall from power, crimes left over from the Yanukovych presidency remain unsolved and their investigations stagnant, according to The Kyiv Post.
GUERNSEY RISK-BASED GUIDANCE
Guernsey FSC has released new guidance explaining its risk-based approach to regulating the island’s financial services sector – available on its website.
UK SANCTIONS BILL CONCERNS
The European Sanctions Blog reports that the House of Lords Select Committee on the Constitution has published its Report on the UK Sanctions and Anti-Money Laundering Bill in which it expresses its concerns.
DRUGS AND THE DARKNET: A GROWING THREAT TO HEALTH AND SECURITY
Illicit trade on darknet markets is one sign of the increasingly complex nature of transnational organised crime in the EU. In a new report — Drugs and the darknet: perspectives for enforcement, research and policy — the EU drugs agency (EMCDDA) and Europol present the latest understanding of how darknet markets function, the threats they pose to health and security and how Europe can respond.
LOOPHOLE LETS RUSSIAN OIL REFINERS DODGE EXPORT DUTIES
On 28th November Reuters carried a story marked exclusive claiming that 2 Russian refiners are avoiding export duty on fuel oil and vacuum gas oil by renaming them as an oil product that is exempt from the charge, according to a Reuters analysis of customs and refining data, and 4 industry sources. Novoshakhtinsky and Mariysky refineries shipped a total of 2 million tonnes of reclassified fuel in the first 9 months of this year, saving about $170 million in tax, according to the data and sources.
3D PRINTING AND EXPORT CONTROLS ON MISSILE TECHNOLOGY: CHALLENGES AND WAYS FORWARD – NEW SIPRI REPORT
The Stockholm International Peace Research Institute has published a new Background Paper ‘3D printing and missile technology controls’, originally part of a compendium of research papers compiled by the Missile Technology Control Regime on the occasion of their 30th anniversary. Additive manufacturing (AM), also referred to as ‘3D printing’, is widely characterized as a ‘disruptive technology’. It has been hailed for its potential to revolutionize the manufacturing industry by transforming existing modes of production, sales and transfers of goods and technologies in many industrial sectors. This new report critically examines the state of the technology and the extent to which AM poses a challenge to export controls, especially for missile technology.
SEA GUARD “CHENNAI SIX” RELEASED IN INDIA
On 28th November the BBC reported that 6 British former soldiers have been released from an Indian prison 4 years after being arrested and detained on weapons charges. The men were working on the anti-piracy ship MV Seaman Guard Ohio, owned by the US-based company AdvanFort, when they were arrested in 2013. They were held along with 3 Ukrainians, 14 Estonians and 12 Indians when customs officials and police found weapons and ammunition on board, which Indian authorities said had not been properly declared.
PRE-EMPTING DEFEAT: IN SEARCH OF NORTH KOREA’S NUCLEAR DOCTRINE
A paper from the European Council on Foreign Relations (ECFR) says that North Korea does not have an official nuclear doctrine, but that new research reveals how it envisages using nuclear weapons in a conflict; with the key term being “preempting decapitation” – i.e. threatening to use nuclear weapons first if it detects the preparation of a preventive attack, whether conventional or nuclear, to decapitate the regime.
It claims that North Korea seeks to instill doubts among those who think that it would not respond to strikes against its nuclear and missile sites out of a fear of escalation and, ultimately, regime collapse.
ARE UKRAINE SEPARATISTS TURNING ON ONE ANOTHER?
The European Council on Foreign Relations (ECFR) claims that the Donbas region of eastern Ukraine is seeing a coup within a coup, as two of the leading separatists turn on each other, with a power struggle between Igor Plotnitsky, the “President” of the “People’s Republic of Luhansk” (LNR), and Igor Kornet, the head of LNR’s security structures and “Minister of the Interior”. It says that it is now up to the Kremlin how this coup-in-a-coup will play out.
The Carnegie Moscow Center on 29th November issued an article on the situation in eastern Ukraine which, it maintains, demonstrates the degree to which Moscow cannot control the strategically important region. Despite the Kremlin’s best efforts, conflict between local authorities grew so out of hand that Moscow was forced to send armed reinforcements. But, it says, the “Luhansk coup” will not meaningfully alter the situation on the ground.
WCO PUBLISHES ITS SECOND CASE STUDY ON TRANSFER PRICING AND ITS IMPACT ON CUSTOMS VALUATION
On 21st November, Braumiller published a briefing reporting that the World Customs Organization has published its second case study on inter-company transfer pricing and its effect on customs valuation. It points out that The WTO Valuation Agreement provides a customs valuation system that primarily bases the customs value on the “transaction value” of the imported goods, which is defined as the price actually paid, or payable, for the goods when sold for export to the country of importation with certain adjustments. The Agreement has been adopted and codified into law by most, if not all, major trading nations. The Agreement provides predictability, stability, and transparency for trade, thus facilitating international trade while at the same time ensuring compliance with national laws and regulations.
A US Customs guide to valuation is contained in its US Customs and Border Protection Valuation Encyclopedia 1980-2015
CYBER AND SPACE WEAPONS ARE MAKING NUCLEAR DETERRENCE TRICKIER
Defence One on 26th November carried an article saying that advances in cyberweapons and counter-space capabilities are creating new pressures on concepts of nuclear deterrence. Threats from cyber and conventional weaponry risk undermining reliance on deterrence and counter-strike capabilities, making escalation of conflict more likely. With both sides possessing the means to disrupt or destroy the other’s military systems and critical infrastructure, the piece argues, both war-supporting infrastructure as well as purely civilian infrastructure – a small “cyber-spark” could prompt rapid escalation.
The Carnegie Endowment for International Peace says that the risk of a nuclear war is rising because of growing non-nuclear threats to nuclear weapons and their command-and-control systems. In a conventional war, such “entanglement” could lead to non-nuclear operations inadvertently threatening the opponent’s nuclear deterrent or being misinterpreted as preparations for nuclear use, potentially sparking catastrophic escalation
IRAN WARNS IT WOULD INCREASE MISSILE RANGE IF THREATENED BY EUROPE
Reuters reported on 28th November that the deputy head of Iran’s Revolutionary Guards warned Europe that if it threatens Tehran, the Guards will increase the range of missiles to above 2,000 km, the Fars news agency reported. It also says that France has called for an “uncompromising” dialogue with Iran about its ballistic missile programme and a possible negotiation over the issue separate from Tehran’s 2015 nuclear deal with world powers, but Iran has repeatedly said its missile program is defensive and not negotiable.
CHINA’S LATEST INTERCONTINENTAL BALLISTIC MISSILE EXPECTED TO BE DEPLOYED NEXT YEAR
The People’s Daily reports that China’s intercontinental ballistic missile DF-41 is expected to be deployed in early 2018. The DF-41 has a range of 12,000 km and a deviation of some 100 meters. It can carry 6 to 10 multiple manoeuvrable warheads, which makes it difficult to be intercepted. It is claimed that the missile can hit every corner of the earth, allowing China to counter a nuclear strike on the country.
29th November 2017
EU OPERATION SOPHIA COUNTERING MIGRANT SMUGGLING ANALYSED
The EU Institute for Strategic Studies (EU ISS) has issued a briefing on Operation EUNAVFOR Med Sophia, launched in May 2015 to respond to the surge of migrants crossing the Mediterranean Sea from Libya. It has, it maintains, become a de facto become a police – and also rescue – operation, while also generating added-value as a maritime security instrument.
CHINESE CUSTOMS IP CRACKDOWN
World Trademark review reports that, according to Xinhua news agency, a special IP enforcement campaign is being undertaken by customs authorities at a national level in China, with customs agents around the country seizing more than 1 million IP-infringing products in 46 shipments bound for export since September 1st. It contains the comment that 260,000 export-bound products infringed patents held by local companies, and that these could be seizures stemming from design patents, infringement of which would be more straightforward for customs officers to spot, illustrating the importance of design rights in the fight against counterfeit goods.
PRIVILEGE APPLIES TO DOCUMENTS FROM WHICH THE SUBSTANCE OF LEGAL ADVICE CAN BE INFERRED
On 27th November Herbert Smith Freehills reports on a recent decision of the High Court which dealt with the question of when a document will be privileged on the basis that it “evidences” a privileged communication and has taken a more liberal approach than previous case law suggested.
See In the matter of Edwardian Group Ltd, in which the Court declined to follow Financial Services Compensation Scheme Ltd v Abbey National Treasury Services PLC.
COMPLIANCE WITH CANADIAN, US AND GLOBAL ANTI-CORRUPTION LAWS
Bennett Jones LLP has published a briefing highlighting 10 key FCPA (US) and CFPOA (Canada) considerations to inspire issue-spotting in the workplace, including hints on compliance best practice.
THE USE OF SOFTWARE SYSTEMS AND TECHNOLOGY IN AML CONTROLS
Bright Line Law has published a briefing based on a talk given by Jonathan Fisher QC at the BAE Business Defence Forum: The Financial Crime Front Line. It notes inter alia that English Courts have been welcoming, yet cautious, of the role that technology and software can play in assisting decisions makers reach conclusions, and that any software systems and technology put in place must be regularly updated. Any AML compliance, with support from software systems, is a constantly evolving process and firms place themselves in peril if they do no more than the bare minimum which the regulations require.
BOSNIAN WAR CRIMINAL SLOBODAN PRALJAK DIES AFTER DOWNING VIAL OF POISON IN HAGUE COURT
MSN reports that the 72 year old took poison in the court after it confirmed a 20 year prison sentence handed down in 2013 for offences during the war in the 90s.
EU, UN AND AFRICAN UNION UNITE ON LIBYA
The EU along with the UN and the African Union have agreed to jointly create a task force for Libya, with the aim to “save and protect lives of migrants and refugees along the routes and in particular inside Libya”. It will also work with Libyan authorities to crack down on traffickers and criminal networks.
OLAF RAIDS EUROPEAN COURT OF AUDITORS PREMISES
The European Anti-Fraud Office, OLAF, on 29th November raided the premises of the European Court of Auditors, the watchdog of EU finances, according to reliable sources. EURACTIV reported that the raid is related to an ongoing OLAF investigation on a member of the ECA.
FORMER OREGON BANK CEO AND CFO CONVICTED OF CONSPIRACY
On 29th November Risk & Compliance Hub reported that 2 former executives of the Bank of Oswego have been convicted of orchestrating a long-term conspiracy to conceal the true state of the bank. The jury found Dan Heine, the bank’s co-founder and former CEO, and Diana Yates, the CFO, guilty.
ACLIFORNIA LAWYER ADMITS RUNING $50 MILLION VISA FRAUD SCAM
On 28th November Risk & Compliance Hub reported that a California attorney, Victoria Chan, 35, has pleaded guilty to defrauding more than $50 million from wealthy Chinese investors seeking US visa, in a programme which grants green cards to foreigners who invest at least $500,000 in a domestic business that creates at least 10 new US jobs. She has reportedly agreed to forfeit 8 properties valued at $25 million. Her father was also accused.
ZIMBABWE OPENS AMNESTY WINDOW FOR RETURN OF STOLEN FUNDS
Defence Web reported that Emmerson Mnangagwa has announced a 3-month amnesty window for the return of public funds illegally stashed abroad by individuals and companies. On expiry of the amnesty at end of February government will arrest and prosecute those who have failed to comply, he said in a statement.
US TREASURY TARGETS COLOMBIAN DRUGS CARTEL
The Washington Post reported that OFAC had named a Colombian, Tito Aldemar Ruano Yandun, indicted on cocaine charges as a designated narcotics trafficker, freezing any assets he may have in the US. Onofre Junior Aguiño Arboleda was also designated for allegedly helping co-ordinate maritime smuggling.
US EXPANDS LENIENCY FOR COMPANIES THAT DISCLOSE FOREIGN BRIBERY
On 29th November Reuters reported that the DoJ will announce extend greater leniency to companies that voluntarily alert authorities when they learn employees have paid bribes to foreign officials. The new guidelines will allow most companies to avoid prosecution altogether if they fully disclose foreign bribery, co-operate in the investigation and take steps to avoid future misconduct, senior Justice Department officials told reporters.
30th November 2017
KEY THEMES AT THIS YEAR’S UN FORUM ON BUSINESS AND HUMAN RIGHTS
Hogan Lovells reported on 29th November about the UN Forum on Business and Human Rights in Geneva which brought together representatives of business, government and civil society and reports on the 3 messages that “came across loud and clear”.
NEW SIPRI STUDY ON AUTONOMY IN WEAPON SYSTEMS: STATE OF PLAY AND OPTIONS FOR MOVING FORWARD
The study from the Stockholm International Peace Research Institute aims to shed light on the current developments in autonomy in weapon systems and thereby provide important insights for informed international discussions, and should they be regulated within the framework of the 1980 UN Convention on Certain Conventional Weapons (CCW). “Autonomy” has many definitions and interpretations, and the study says it is already a reality of weapon systems development. A key area examined by the study is the technology that enables weapon systems to acquire targets autonomously. The report aims to help diplomats and members of civil society interested in the issue of lethal autonomous weapons to improve their understanding of the technological foundations of autonomy, and obtain a sense of the speed and trajectory of progress of autonomy in weapon systems. It also provides concrete examples that could be used to start delineating the points at which the advance of autonomy in weapons may raise technical, legal, operational and ethical concerns.
ONLINE SALE OF COUNTERFEIT GOODS
In August 2017 the UK Intellectual Property Office published a report, “Share and Share Alike The Challenges from Social Media for Intellectual Property Rights”, which reported that that counterfeit goods accounted for 17.5% of online transactions.
For an article on the report from law firm, Mishcon de Reya see –
COMPARISON OF CAYMAN ISLANDS LIMITED LIABILITY COMPANIES AND DELAWARE LIMITED LIABILITY COMPANIES
Harneys has published an article and sets out the key similarities and differences between the two.
OECD GLOBAL FORUM ON TRANSPARENCY AND EXCHANGE OF INFORMATION FOR TAXPURPOSES: PEER REVIEW OF JERSEY 2017
On 17th November the OECD reported that the second round peer review on Jersey revealed the important progress made by Jersey in the implementation of the international standard, leading to the upgrade of its overall rating from “Largely Compliant” to “Compliant”, with all elements of the standards of international tax transparency determined to be in place and rated “Compliant”. Notably, the report says, Jersey took the necessary actions to fix deficiencies identified in its 2014 peer review report regarding effective use of information-gathering powers, protection of confidentiality and ensuring that requests for clarification do not create unduly delays to the exchange process.
UK CONSULTS ON AMENDMENT OF THE INVESTIGATORY POWERS ACT 2016
On 30th November the Home Office opened consultation to 18th January on amendments to the Investigatory Powers Act 2016. The CJEU handed down its judgment on 21st December 2016 specifying a number of requirements that need to be in place for a data retention regime to be compliant with EU law, and some aspects of the current UK regime for the retention of and access to communications data do not satisfy the requirements of the CJEU’s judgment. The government proposes amending the Act and invites comments from telecommunications operators and postal operators, public authorities that have powers under the Act, as well as professional bodies, interest groups and the wider public. The foreword to the consultation explains that “communications data” is the “who”, “where”, “when”, “how” and “with whom” of a communication, but not what was written or said, and includes information such as the subscriber to a telephone service. The Act provides that communications service providers may be required by the Secretary of State to retain communications data, and specified public authorities, including the police and the security and intelligence agencies, may acquire communications data from a telecommunications operator or postal operator where it is both necessary and proportionate to do so, for specified purposes.
Views are sought on the scope of the data covered by the CJEU judgment, including how the scope of such data interrelates with the definitions of “events data” (any data which identifies or describes an event – whether or not by reference to its location – on, in, or by means of a telecommunications system where the event consists of one or more entities engaging in a specific activity at a specific time) and “entity data” (data which is about an entity, or its association with a telecommunications service which consists of, or includes, data which identifies or describes the entity; but which is not events data) in the Act.
BANNING THIRD PARTY BETTING ON THE EUROMILLIONS LOTTERY
Taking into account the responses received as part of our consultation, the UK is taking action to prohibit betting on non-UK EuroMillions through a statutory licence condition. This will bring such draws into line with the existing prohibition on betting on UK National Lottery draws.
“RUSSIA, UK TRADE SHOWS GROWTH FOR FIRST TIME IN 3 YEARS”
On 30th November, Customs Today reported that the Russian trade representative in the UK told Sputnik in an interview that Russia-UK trade has grown this year for the first time since 2014, increasing by 25% year-over-year for the first 9 months of 2017 to $9.3 billion.
RUSSIAN CUSTOMS DETAINS FRENCH NATIONALS “SMUGGLING STRADIVARIUS VIOLIN”
Customs Today reported that Russian border guards have taken into custody some French citizens who tried to smuggle an antique violin with a Stradivarius label out of Russia, the press service of the Federal Security Service’s regional border department said on 28th November.
EU COMMISSION PROPOSES NEW TOOLS TO COMBAT VAT FRAUD
The European Commission has unveiled new tools designed to make the EU’s VAT system more fraud-proof and close loopholes which can lead to large-scale VAT fraud. Key measures in this legislation include:
These legislative proposals will now be submitted to the European Parliament for consultation and to the European Council for adoption. See a Q&A at –
THE EEL: “EUROPE’S OWN IVORY TRADE”
EurActiv reported on 30th November that the European Commission has proposed a ban on eel fishing in the Atlantic, in an attempt to recover the dwindling stock of the European eel, a critically endangered species that is traded illegally by an industry that is worth millions of euros.
WITNESS IN IRAN SANCTIONS CASE SAYS HE BRIBED TURKISH MINISTER
Turkish-Iranian businessman Reza Zarrab has testified that he paid over $50 million in bribes to Turkey’s economy minister, Mehmet Zafer Caglayan, in 2012 as part of a $1 billion scheme to help Iran evade US sanctions. The minister is charged with conspiracy to evade Iran sanctions and bribe public officials. Zarrab has spoken of using suitcases full of gold to launder Iran’s money.
EU PARLIAMENT RECOMMENDS VISA RESTRICTIONS ON RUSSIANS OVER MAGNITSKY CASE
On 30th November the European Parliament had published a Recommendation for common visa restrictions for Russian officials involved in the Sergei Magnitsky case.
DUTCH COMPANY SETTLES BRIBERY CASE WITH US DEPARTMENT OF JUSTICE
SBM Offshore, which specialises in the manufacture and design of offshore oil drilling equipment, and its US subsidiary have agreed to pay $238 million to settle criminal charges involving the bribery of foreign officials in Brazil, Angola, Equatorial Guinea, Kazakhstan and Iraq from 1996. The payments were in the form of commissions to intermediaries, knowing that some would be used to pay bribes in order to influence officials in exchange for obtaining or retaining business with state-owned oil companies in those countries.
See also SFO charging on 30th November of 2 former SBM officials in the Unaoil case.
US FOREIGN DEFENCE SALES CLIMB BY 25%
The US Defense Security Cooperation Agency, which implements foreign arms sales, announced sales of $41.93 billion for fiscal 2017, a 25% rise from a year earlier.
THE LEAP INTO QUANTUM TECHNOLOGY: A PRIMER FOR NATIONAL SECURITY PROFESSIONALS
ETH Zurich has published on 30th November this briefing following China’s recent announcement of the launch of its Jinan Project, a quantum information effort billed as “the world’s first unhackable computer network”, and China’s significant strides in quantum technology, a field with rapidly increasing relevance to national security. Its satellite has been hailed as a major step toward “unbreakable” encrypted communications. The introduction says that the full promise of quantum technology is unknown, in national security or any other field. While major claims on the subject sometimes reflect hype more than reality, it’s incontrovertible that governments and companies around the world are investing in it in a serious way. The article says that whilst many professionals can describe the basic ways in which Iran has enriched uranium, talk about the various kinds of cyberattacks, or wax eloquent about the possibilities of big data-enabled artificial intelligence, it’s time to add quantum technology to the intellectual toolkit of today’s national security policymakers and analysts.
By coincidence, on 30th November the Bulletin of Atomic Scientists also published an article entitled “Quantum Espionage”, referring to an interview that discussed quantum computing, the US-China tech race, and the ways emerging technologies are transforming intelligence. Helpfully the Bulletin says that while a quantum computer processes information differently than a normal computer, to understand the practical implications a major breakthrough would have, it helps to simply think of quantum computing as very, very powerful computing.
EARLY PROMISE OF UKRAINE’S WAR ON CORRUPTION FADES BY THE DAY
In an opinion piece, the Washington Post maintains that the promise of the various anti-corruption organisations has fallen victim to the old ways of the Soviet Union, and anti-corruption efforts in Ukraine are on the brink of collapse.
VENEZUELA ARRESTS EX-OIL MINISTER OVER CORRUPTION SCANDAL
TRT reported on 30th November that former oil minister Eulogio del Pino was arrested along with the ex-chief of state oil company PDVSA Nelson Martinez for “intentionally altering oil production figures.”
RUSSIAN CYBERCRIMINAL SENTENCED TO 14 YEARS IN USA
The US DoJ issued a news release on 30th November saying that a Russian was sentenced to 14 years in prison for his role in a $50 million cyberfraud ring and for defrauding banks of $9 million through a hacking scheme. Roman Valeryevich Seleznev aka “Track2”, “Bulba” and “Ncux”, 33, was sentenced in Georgia on charges of racketeering and conspiracy to commit bank fraud. He was also ordered restitution in the amount of $50,893,166.35 in one case and $2,178,349 in another. Seleznev had pleaded guilty to the charges on September 7th. He had admitted that he became associated with the Carder.su organization, an identity theft and credit card fraud ring, in January 2009 – an Internet-based, international criminal enterprise whose members trafficked in compromised credit card account data and counterfeit identifications and committed identity theft, bank fraud, and computer crimes. Members communicated through various secure and encrypted forums, such as chatrooms, private messaging systems, encrypted email, proxies and encrypted virtual private networks. Gaining membership in the group required the recommendation of 2 current members in good standing.
His automated website allowed members to log into and purchase stolen credit card account data. The defendant’s website had a simple interface that allowed members to search for the particular type of credit card information they wanted to buy, add the number of accounts they wished to purchase to their “shopping cart” and upon check out, download the purchased credit card information. Seleznev further admitted that he sold each account number for approximately $20.
SFO CHARGES 2 MORE IN UNAOIL CORRUPTION CASE
The SFO said on 30th November that it had filed charges against 2 more people in its ongoing investigation of Monaco-based Unaoil Group. Paul Bond, a former sales manager for Dutch company SBM, and Stephen Whiteley, a former SBM vice-president and Iraq, Kazakhstan and Angola territories manager for Unaoil, were both charged with conspiracy. SBM offshore recently settled with the US DoJ a case involving alleged bribery of foreign officials for $238 million.
170 CRYPTOCURRENCY LAUNDERING CASES SUSPECTED IN HALF YEAR FROM APRIL JN JAPAN
Nikkei Asian Review reported that Japanese police said 170 cases of suspected money laundering linked to cryptocurrency have been reported by currency exchange operators in the 6 months to October 1st. Since April the law has required cryptocurrency exchange operators to report transactions suspected of involving money laundering. The exchange operators are believed to have reported cases that involved frequent questionable transactions.
ST KITTS & NEVIS ECONOMIC CITIZENSHIP PROGRAMME AND HURRICANE RELIEF
Dixcart has issued a briefing explaining that on 23rd September, the St Kitts & Nevis Government announced that a payment could be made to the Hurricane Relief Fund to acquire a passport. This is part of a new initiative under the St Kitts & Nevis Economic Citizenship Programme for the reconstruction of the Country following Hurricanes Irma and Maria. This programme is currently running until March 2018; although it is anticipated that it will be extended.
INCREASE IN UK AML FINES
PYMNTS.com reported that Fortytwo Data, a Big Data company, had released new research that concludes the UK is ramping up its fines for AML breaches. It reported that HMRC had increased the average value of fines levied against businesses by 166%, while the total value of financial crime fines issued jumped 105%. Researchers said HMRC issued more than $1.5 million in AML fines this year.
COUNTERFEIT VODKA WORTH ALMOST HALF A MILLION SEIZED AT FARM IN LOUTH
The Journal reported on 30th November that around 12,000 litres of ‘vodka’ type spirits had been seized in a raid on a premises and farm buildings in Co Louth. Revenue officers and police seized 586 litres of finished ‘vodka’ type product that was bottled, sealed, labelled and boxed, along with 4,000 litres of the raw alcohol product at a large-scale plant. In total, there was in the region of 12,000 litres of ‘vodka’ type spirits, with an estimated retail value of €460,000.
OFAC FINDING AGAINST DOMINICA GOVERNMENT MARITIME REGISTRY
Kenneth Rijock’s blog reported that OFAC had issued a finding against the Dominican Maritime Registry, which is an international ship registry. Dominica Maritime Registry, Inc., (DMRI) is said to have breached Iran sanctions by entering into what OFAC described as a “binding Memorandum of Understanding with The National Iranian Tanker Company, a Specially Designated National (SDN), which is owned by the Government of Iran, and is therefore sanctioned. DMRI has offices in Massachusetts and US-based employees.
GLOBAL PROVIDENCE PRINCIPALS CHARGED WITH FRAUD
This is Guernsey website reports that the global principals behind the collapsed Providence Investment operation have been charged with multiple counts of fraud in the US. Antonio Buzaneli, 56, CEO, and COO Jose Ordonez Jr, 46, have been indicted for their roles in a “$150 million fraud scheme”. A third man, Julio Rivera, 61, has pleaded guilty to his role. The article states that total losses for investors have been estimated at more than $100 million. The operation collapsed in the summer of 2016, with liquidation of the Guernsey entities forced by the Guernsey FSC.
ARGENTINE OFFICIALS SENTENCED FOR “DIRTY WAR” OFFENCES
On 29th November 29 former officials were sentenced in Argentina to life in prison, and 19 to between 8 and 25 years for murder and torture during the junta’s 1976-1983 “Dirty War” against opponents. The sentencing concluded a 5-year trial and was Argentina’s largest case for crimes against humanity. Collectively, the 48 defendants were charged with the deaths of 789 victims. The prosecution called more than 800 witnesses to make their case. Additionally, the court acquitted 6 former officials.
SAUDI PRINCE RELEASED AFTER PAYING $1 BILLION SETTLEMENT
Jurist reported that Saudi Arabian authorities released Prince Miteb bin Abdullah from custody on 28th November after reaching an estimated $1 billion settlement agreement concerning corruption allegations.
WE MUST STRENGTHEN EFFORTS TO SAFEGUARD CULTURAL PROPERTY IN CONFLICT AREAS, UNODC CHIEF INFORMS SECURITY COUNCIL
Countries must be helped to detect stolen cultural property as part of the work to dismantle criminal networks, UN Office for Drugs and Crime Executive Director Yury Fedotov informed the UN Security Council at a meeting, under the Italian presidency, on “Maintenance of international peace and security: destruction and trafficking of cultural heritage by terrorist groups and in situations of armed conflict.”
CHINA MAKES ITS BIGGEST SEIZURE OF ENDANGERED PANGOLIN SCALES Mail Online reports that Chinese customs have seized 11.9 tonnes of scales of pangolins, the world’s most poached animal and under threat of extinction, in their biggest seizure of its kind, state media said. The scales, used in traditional remedies for ailments such as asthma, rheumatism and arthritis, are estimated to have come from at least 20,000 pangolins in Africa. They were seized on a ship in Shenzhen, bordering Hong Kong, in July.
A recent paper was discussed at International Atomic Energy Agency (IAEA) meeting in Vienna during the week of November 13th to share ideas on ways to strengthen the physical protection of nuclear material worldwide. The paper involved the value of security culture self-assessment as a tool to address insider threat is in its systemic and comprehensive nature. The IAEA defines an “insider” as one or more individuals with authorised access to nuclear facilities or nuclear material in transport who could attempt unauthorized removal or sabotage, or who could aid an external adversary to do so. Periodically held self-assessments should focus on a wide range of topics falling under the general heading of nuclear security. Self-assessment teams should be free to incorporate any culture characteristics and indicators of their choice, which would continuously keep under scrutiny potential root causes of malicious acts, as well as diagnose the identified weaknesses to prevent such actions from ever occurring.
In the latest TRACE podcast interview, Nicola Bonucci, Director for Legal Affairs at the OECD, reflects on 20 years of the OECD’s Anti-Bribery Convention.
US TREASURY’S LIKELY NEXT STEPS AGAINST NORTH KOREA
On 29th November the Trade Sanctions Blog published an article outlining what the author saw as possible next steps in the US – North Korea sanctions situation.
IRAN CLAIMS TO BE BUILDING REGION’S LARGEST WARSHIP
Janes.com reports that Iran is claiming to be building a vessel described as a training ship with a displacement of 6,500 tonnes, a maximum speed of 25 knots, a range of 14,816 km, armed with 4 anti-ship missiles and fitted with a helicopter deck.
EU PARLIAMENT REVIEW OF PROGRESS IN TUNISIA
On 30th November a EU Parliament research paper examined what social progress had been made in Tunisia 8 years after its “Jasmine Revolution”, a part of the so-called “Arab Spring”.
THE NEW NORTH KOREAN ICBM: A SIGNIFICANT IMPROVEMENT THAT MAY BE READY AS EARLY AS 2018
Specialist site, 38 North, on 30th November said that photographs and video released by North Korea reveal that the Hwasong-15 test fired on November 29th is not a modified version of the Hwasong-14, as it initially thought. Worryingly, the article suggests that initial calculations indicate the new missile “could deliver a moderately-sized nuclear weapon to any city on the US mainland”, and that it is large and powerful enough to carry simple decoys or other countermeasures designed to challenge the existing national missile defence (NMD) system of the US.
SUSPECTS RIGHTS IN DANGER FROM PACE AMENDMENTS
An article from law firm Corker Binning on 30th November about the recent consultation paper issued by the UK Home Office at the end of October, concerned with revisions to Codes of Practice C, E, F and H to the Police and Criminal Evidence Act 1984. The consultation proposes that a range of devices, including body worn video equipment, should be used to record the suspect’s interview. This is to allow police officers to interview suspects away from the police station and thereby “reduce unnecessary trips to and from police stations” but, the article suggests, the proposals will cause an increase in people being interviewed without legal advice.
On 1st December the Home Office published the new PACE Codes C, D and H to come into effect from 23rd February.