Episode 126

16th September – 22nd September 2024

Sanctions

This week’s sanctions news starts in the UK, where the Iran (Sanctions) (Amendment) Regulations 2024 No 944 have been set before parliament, with Notice published by the Export Control Joint Unit (‘ECJU’) and the Department for Business and Trade (‘DBT’). There is also a useful explanatory memorandum. ‘The instrument amends …[the 2023 Iran Regulations]… to expand trade sanctions against Iran, targeting additional goods and technology which are significant to Iran’s military development and its production of Unmanned Aerial Vehicles (UAVs) and missiles. These measures build on existing trade restrictions contained in the 2023 Regulations relating to UAV goods and technology, internal repression goods and technology, and interception and monitoring goods, technology and services.’ The ECJU and the DBT have also published changes to contacting ECJU to ‘modernise … processing practises’ and launched the ‘Apply for a SIEL’ service. SIEL is a standard individual export licence.

In the US, the Office of Foreign Assets Control (‘OFAC’) has sanctioned ’individuals who have undermined fundamental freedoms, including freedom of expression, in Georgia. Specifically,… two Georgian government officials associated with brutal crackdowns on peaceful protestors and political opponents, and two private Georgian citizens that are responsible for or complicit in, or have directly or indirectly engaged in violently suppressing the exercise of the freedom of peaceful assembly of Georgians engaged in the democratic process and peaceful expression.’ Additionally, OFAC has also sanctioned ‘five individuals and one entity associated with the Intellexa Consortium for their role in developing, operating, and distributing commercial spyware technology that presents a significant threat to the national security of the United States…. The Intellexa Consortium is a complex international web of decentralized companies that built and commercialized a comprehensive suite of highly invasive spyware products, primarily marketed under the brand-name “Predator”. The consortium was founded by Tal Jonathan Dilian …[an already-designated individual]…. Predator spyware can be used to gain access to data stored and transmitted from the target’s device, such as a [mobile or cellphone], through one-click and zero-click attacks that require no user interaction for the spyware to infect the device.’ Finally, OFAC has also sanctioned ‘12 individuals in connection with the Iranian regime’s ongoing, violent repression of the Iranian people, both within Iran’s borders and abroad. These designations target members of the Islamic Revolutionary Guard Corps (IRGC), officials of Iran’s Prisons Organization, and those responsible for … operations overseas.’ The action was coordinated with Canada and Australia.

And finally on sanctions this week, directions to some interesting reading. First, on the website of the Center for European Policy Analysis on the effectiveness of the tools aimed at deterrence in global geo-politics, questioning its effectiveness. On the website of global law firm Pinsent Masons, an article on the recent extension of banks’ UK trade sanctions reporting obligations. Finally, in the Byline Times, a report on the increased costs of sanctions’ management following the UK’s withdrawal from leaving the European Union.

Money Laundering

We’ll start the money laundering news this week in the Far East, specifically China, where the authorities are considering amendments to its anti-money laundering regime to tighten the regime in relation to the monitoring and analysis of money laundering conducted through emergent technologies, notably crypto. Staying on that side of the planet, the Singapore parliament has just passed new legislation to enhance the investigative powers of agencies to investigate illicit gains from environmental crimes. Even if crimes are not committed in Singapore, the financial system might well be used to launder the proceeds of any crime. This is an ideal opportunity to direct listeners back to Episode 122 of the podcast and the Policy Paper authored by Julia Yansura for the FACT Coalition on the subject of Environmental crimes, illicit finance, and the unique challenges which they pose. Worth reading if you have not done so already, and certainly worth reading again if you have done so in light of this new legislation out of Singapore.

In other money laundering news, the European Union has hosted a meeting of the Africa Joint Group of the Financial Action Task Force (‘FATF’). ‘The Africa Joint Group is one of the four divisions of the FATF International Cooperation and Review Group, in which progress of jurisdictions with strategic deficiencies regarding anti-money laundering and countering the financing of terrorism (AML/CFT) is examined.’ In not entirely unrelated news, the Delegation of the European Union to South Sudan has published opening remarks of the Deputy Head of Delegation of EU at the AML/CFT/CPF Assessors Training for South Sudan.

Fraud

On fraud news this week, the Insolvency Service in the UK has reported that two corporations which ‘fraudulently received more than £1 million in Covid support loans have been shut down by the courts following an investigation…. Ledbridge Consultants Limited and Montague Partners Ltd,… had never genuinely traded and were used as fronts for obtaining large amounts of money.’

In other news from the UK, the Financial Conduct Authority (‘FCA’) has published the speech by Andrea Bowe, director of the specialist directorate, which was delivered at the Westminster Legal Policy Forum. The speech focused on the framework for effective fraud prevention measures. The FCA believes that in shifting the dial on fraud, partnership will play a central role. ‘Collaboration and a collective effort are key to tackling fraud. Moreover, partnerships, where we share ideas, lessons learnt and exchange data and intelligence, are essential in reinforcing our defences and staying ahead of evolving threats.’

Other Financial Crime News

In other financial crime news this week, the US Department of State has published a Joint Statement with the UK government at the recent US-UK Strategic Dialogue hosted in London. As these events always tend to be, it was a broad-ranging discussion covering Ukraine and its membership of NATO, trade in ballistic missiles between Russia and Iran, the importance of addressing security and stability in Europe, foreign disinformation, malicious cyber actors, and organized crime.

On the subject of cooperation, INTERPOL has concluded the meeting of the Americas Regional Conference where the commitment to fighting organised crime was reinforced, though it would have been more surprising if this had not been an outcome. ‘The meeting concluded with recommendations for strengthened activity to: protect vulnerable communities from human trafficking, migrant smuggling and crimes against children; fight drug trafficking and organized crime; address the rise in all forms of environmental crime, such as illegal mining, fisheries, forestry and wildlife crime; and, tackle vehicle crime as it increasingly converges with other criminality including trafficking in all forms, money laundering and corruption.’ While on the subject, a direction to an article by the International Consortium of Investigative Journalists where experts share their methods, tools, and security protocols for ‘tracking organized crime’s finances and operations.’

Cyber Crime

We end this week’s financial crime news with a round-up of cyber crime news, starting in the UK, where Transport for London (‘TfL’) has announced that the cyber-attack which it suffered recently may have been worse than was originally thought with confirmation that customer data was stolen in the attack. Those customers affected will be informed of the data breach.

Staying in the UK, the government has convened a ‘global coalition to boost cyber skills and tackle growing threats.’ A range of countries and global organisations, such as the World Economic Forum and the Organisation for Economic Co-operation and Development will take part in the event to discuss ‘how global cyber security workforces can be strengthened, …[as well as]… ways to boost cyber skills [and] developing new professional standards. To help this effort, the UK will commission a new report, with attendees set to agree key areas it should focus on. The recommendations are expected to be published by the end of the year and will advance international collaboration to improve cyber skills and face down cyber-crime.’

Now to a story linked to an alleged State-sponsored attack from China. The US Department of Justice has said that a ‘court-authorized law enforcement operation … disrupted a botnet consisting of more than 200,000 consumer devices in the United States and worldwide.’ In relation to the same issue, the National Cyber Security Centre in the UK issued the joint advisory ‘urging individuals and organisations to take protective action.’