Episode 148

10th March – 16th March 2025

Sanctions

In the US, it seems that sanctions are being threatened against Russia in order to get it ‘to the table’. This threat comes from the US Republican Senator, Lindsey Graham, who has threatened Russia with sanctions on its banking and energy sectors. This is, once more, a measure of the inconsistency of policy coming out of the US on Russian sanctions since the change in administration. A clearer strategic approach might not only focus the minds of the parties, but also offer some sense of how the rest of the world might respond.

In more certain news from the US, the Office of Foreign Assets Control (‘OFAC’) has sanctioned ‘the Foxtrot Network, a transnational criminal organization primarily based in Sweden that has trafficked illicit drugs and that carried out attacks on Israelis and Jews in Europe, along with its fugitive leader Rawa Majid.’ The Department of State press release is here. Then, later in the week, OFAC sanctioned ‘Iran’s Minister of Petroleum, Mohsen Paknejad, [and] several entities in multiple jurisdictions, including the People’s Republic of China (PRC) and India, for their ownership or operation of vessels that have delivered Iranian oil to the PRC, or lifted Iranian oil from storage in Dalian, PRC.’

In the UK, the Office of Financial Sanctions Implementation (‘OFSI’) has released additional information and guidance for High Value Dealers (‘HVD’), and Art Market Participants (‘AMP’). It has provided a link to a recorded webinar on sanctions guidance for the sector, a factsheet summarising its guidance, FAQs 132 – 144 responding to industry questions, and published minor amendments to section 2.1 of OFSI’s HVD and AMP guidance. OFSI has also this week issued a disclosure notice against three non-governmental organisations for breach of ‘regulation 36(6) of the Counter Terrorism (International Sanctions) (EU Exit) 2019 [for failure] to respond to a request for information.’ Enforcement action has been taken against them for this failure. Finally from the UK, OFSI has published a licence (INT/2025/5886860) which allows ‘a UK national [to] purchase petrol from [a] DP (Designated Person) at any petrol station in Kyrgyzstan and Tajikistan that is either owned by the DP or sells the DP’s petrol, provided that the petrol is for that UK national’s personal vehicle.’

In worthwhile pieces to read this week, the Centre for Economic Policy Research (‘CEPR’) has published two blog posts. First, Charting the uncharted: The (un)intended consequences of oil sanctions and dark shipping, which is on the effectiveness of oil sanctions, offering ‘a novel ship clustering model to detect ‘dark shipping’ – where tankers disable their location signals to evade detection – linked to sanctioned oil transport.’ Secondly from the CEPR, On the effectiveness of the sanctions on Russia: New data and new evidence, which considers the fourth release of the Global Sanctions Database. ‘The authors find that the sanctions have decreased Russia’s trade with sanctioning states but with very heterogeneous effects, especially across the EU. More importantly, however, they find evidence of significant trade liberalisation between Russia and third countries that have mitigated and may even eliminate the negative primary trade effects of the sanctions.’ The other piece worth reading is from credit rating agency, Moody’s, which asks the question: ‘What has changed in the world of sanctions compliance and sanctions evasion?’

And finally on sanctions news this week, another designations challenge by a Russian oligarch has failed before the European Court of Justice. Alexander Ponomarenko, who was initially designated in 2022, had his application rejected in its entirety.

Money Laundering

This week’s money laundering news starts in the US, where the Department of Justice has announced the takedown of a cryptocurrency exchange – Garantex – which ‘allegedly facilitated money laundering by transnational criminal organizations — including terrorist organizations — and sanctions violations. Since April 2019, Garantex has processed at least $96 billion in cryptocurrency transactions.’ The action was taken in coordination with Germany and Finland. The unsealed indictment is here.

News now from Spotlight on Corruption, which has raised concerns about the state of anti-money laundering processes and procedures in law firms in England and Wales. In the report, it has found that ‘despite high rates of non-compliance there were low levels of supervisory enforcement in the sector, and that the body set up to drive consistency in supervision – the Office for Professional Body AML Supervision – had not been able to raise standards sufficiently across the board.’

And finally on money laundering news this week, two stories from the UK. First, HM Treasury has published its ‘Anti-money laundering and countering the financing of terrorism: Supervision Report 2023-24’ which ‘provides information about the activities of anti-money laundering (AML) and counter-terrorist financing (CTF) supervisors between 6 April 2023 – 5 April 2024 and fulfils HM Treasury’s obligation, under Regulation 51 of the Money Laundering Regulations (MLRs), to publish an annual report on supervision activity using information requested from supervisors.’ Secondly, HMRC has published its list of businesses not complying with the Money Laundering Regulations for 2024 – 2025.

Bribery and Corruption

On bribery and corruption news this week, the High Commission in Honiara, capital of the Solomon Islands, has announced the outcome of a three-day workshop ‘on enhancing use of financial intelligence tools in equipping prosecutors for combating corruption and money laundering.’ The ‘workshop aimed to address the specific, demand-driven needs of the Office of the Director of Public Prosecutions in Solomon Islands by providing a blend of theoretical knowledge and practical, hands-on mentoring.’

To the European Union (‘EU’) now, where it is being widely reported that a number of individuals, allied to the European Parliament, have been arrested in relation to a bribery investigation linked to technology company, Huawei. Not much more on this at the moment, but we should keep an eye on the Belgian police, who are leading the investigation. In further news from the EU, the Bulgarian representative at the European Prosecutor's Office, Teodora Georgieva, is to be subjected to an anti-corruption check after an anonymous tip-off which was recently received by some parts of the media.

And finally on bribery and corruption news this week, a direction to a bit of reading in the form of a blog post by Transparency International on ‘Corruption risks in UK Covid-19 procurement’.

Fraud

The fraud news this week starts in the US, where the ‘Office of Inspector General [has issued a] Special Fraud Alert to warn Medicare Advantage Organizations (‘MAO’s), health care professionals (‘HCP’s), agents and brokers, and others about certain fraud and abuse risks associated with: marketing arrangements between MAOs and HCPs; and, arrangements between HCPs and agents and brokers for Medicare Advantage plans.’ The alert is here. The US Federal Trade Commission (‘FTC’) has announced that there has been a significant increase in fraud losses in the US. The FTC data shows ‘that consumers reported losing more than $12.5 billion to fraud in 2024, which represents a 25% increase over the prior year.’ Interestingly, ‘this number is not driven by an increase in fraud reports, which remained stable. Instead, the percentage of people who reported losing money to a fraud or scam increased by double digits. In 2023, 27% of people who reported a fraud said they lost money, while in 2024, that figure jumped to 38%. Consumers reported losing more money to investment scams—$5.7 billion—than any other category in 2024. That amount represents a 24% increase over 2023. The second highest reported loss amount came from imposter scams, with $2.95 billion reported lost. In 2024, consumers reported losing more money to scams where they paid with bank transfers or cryptocurrency than all other payment methods combined.’

Other Financial Crime News

In other financial crime news this week, Europol has announced that its EU Serious and Organised Crime Threat Assessment 2025 will be published this coming Tuesday 18th March 2025, with a press conference at Europol’s HQ in The Hague at 13:00 CET. No need to register as it will be livestreamed on Europol’s website. The report has been trailed by Europol as ‘a unique, intelligence-driven report offering forward-looking insights into how organised crime is changing – and its impact on our societies. As the cornerstone of EU crime priority setting, this assessment will guide law enforcement strategies and EU policies in tackling Europe’s most pressing criminal threats.’

In other news, the Council of Europe has held a ‘specialized capacity-building workshop on improving law enforcement and judicial practices in Bosnia and Herzegovina concerning financial investigations and asset recovery.’

And finally in other financial news this week, another blog post from Transparency International (‘TI’) on ‘Why we need a legal duty to investigate whistleblowing’. The ‘we’, of course, is the UK and it needs them because of their ‘crucial role in exposing corruption, fraud, and safety issues’. Therefore, TI, with support from a number of other agencies, ‘has proposed a much-needed amendment to the Employment Rights Bill, which requires employers to take reasonable steps to investigate facts brought to them by a whistleblower.’

Cybercrime

The cybercrime news this week starts with a revisit to the ByBit cyberattack which we reported in episode 146 where North Korean cybercriminals had stolen £1.1bn in cryptocurrency from ByBit, the Dubai-based company. Well, it is reported that the attackers are understood to have successfully converted around £230m of the total sum stolen. It may be that the funds are being channelled into military spending in North Korea.

In the US, Rostislav Panev, a ‘dual Russian and Israeli national was extradited to the United States on charges that he was a developer of the LockBit ransomware group.’

And finally on cybercrime news this week, Twitter has been hit by a massive cyberattack. The attack affected reloading and tweets appearing. In a now deleted post on Telegram, Dark Storm Team claimed responsibility. Operating since 2023, Dark Storm Team tends to be driven by political motives in choosing its targets.