On August 6, 2019, the Swiss branch of HSBC agreed to pay €294.4 million (US$330 million) to end a Belgian criminal investigation into tax fraud, money laundering, and provisions of illegal financial services by assisting Belgian taxpayers to move money from Swiss accounts to holding companies in Panama and the British Virgin Islands.[1]  On August 7, 2019, the former HSBC head of private banking in Switzerland pleaded guilty to assisting clients’ hide assets worth at least $1.8 billion.

On August 6, 2019, United States District Judge Amy Berman of the District of Columbia dismissed one of two felony counts against Gregory Craig. In her 57-page memorandum opinion,[2] she found that an October 11, 2013 letter Craig sent to the Foreign Agents Registration Act (FARA) Unit was not part of any formal FARA filing. Hence, the prosecution could not charge him for making false submissions. Judge Jackson rejected Craig’s defense that pursuant to jurisprudence in United States v. Safavian, 528 F.3d 957 (D.C. Cir. 2008) that he was not under a legal duty to disclose and therefore there was no concealment offense in violation of 18 U.S.C. § 1001(a)(1).

The Deskbook, initially published in 2014, is designed to provide an introduction to the complex and dynamic law of money laundering, structuring, and forfeiture for lawyers whose practice does not primarily involve criminal prosecution or defense, and to help executives and managers of companies understand, identify, and avoid potential risks both inside and outside their organizations. The focus is on U.S. federal law.  As the author notes, individual states and foreign jurisdictions have their own anti-money laundering regimes.  The author is now in private practice. Previously she served as a prosecutor for the U.S. Department of Justice, in the Fraud Section, Criminal Division.

On July 31, 2019, the U.S. Attorney for Los Angeles unsealed a federal grand jury indictment[1], alleging a complex financial fraud scheme in which a Chinese company exported large amounts of aluminum disguised as “pallets” to the United States to avoid customs duties of up to 400 percent and “sold” the purported pallets to related entities to fraudulently inflate the company’s revenues and deceive investors worldwide.[2] According to the indictment, which was returned on May 7, 2019, China Zhongwang Holdings Limited, Asia’s largest aluminum extrusion company; Zhongtian Liu, the company’s former president and chairman; and several individual and corporate co-defendants lied to U.S. Customs and Border Protection to avoid paying the United States $1.8 billion in anti-dumping and countervailing duties (AD/CVD), that were imposed in 2011 on certain types of extruded aluminum imported into the United States and China.

On July 26, 2019, United States Trade Representative Robert Lighthizer directed the United States Customs and Border Protection (CBP) to block future timber imports from Inversiones WCA E.I.R.L. (WCA), a Peruvian exporter, based on illegally harvested timber in its supply chain.  Twice, the Trump administration has brought enforcement action under the United States – Peru Trade Promotion Agreement’s (PTPA) Annex on Forest Sector Governance (Forest Annex), showing its increased efforts to prevent illegal timber from entering the United States.[1]

On July 30, 2019, the United States Court of Appeals for the D.C. Circuit unanimously affirmed a contempt order against three Chinese banks that failed to comply with subpoenas from the U.S. Department of Justice (DOJ).[1] On April 30, 2019, the U.S. District Court for the D.C. Circuit unsealed an opinion issued on March 18, 2019, by Chief Judge Beryl A. Howell enforcing grand jury subpoenas and an administrative subpoena against three Chinese banks for records of transactions for a now-defunct Hong Kong-based front company for North Korea’s state-operated company

On July 23, 2019, a federal jury in Alexandria, VA convicted Bijan Rafiekian, 67, of San Juan Capistrano, CA of conspiring to act as an agent of a foreign government, making false statements to the Justice Department, and acting as a foreign agent.[1] Court records and evidence presented at the trial showed that Rafiekian, along with his co-conspirator, Kamil Ekim Alptekin, 42, of Istanbul, a Turkish national with close links to the highest levels of the Government of Turkey, participated in a conspiracy to covertly influence United States politicians and public opinion against a Turkish national, Fethullah Gulen, who is living in Pennsylvania.  The Turkish government filed two extradition requests for Gulen, and has tried to persuade the Department of Justice to extradite Gulen to Turkey since 2015.  The conspiracy involved using the Flynn Intel Group (FIG), a company Rafiekian and Michael T. Flynn founded.  It provided services based upon Flynn’s national security expertise.

On July 18, 2019, the Dutch Supreme Court delivered a judgment that confirmed the Netherlands was partly liable for the deaths in 1995 of 350 Muslim males who were expelled from a Dutch U.N. base after the surrounding area was overrun by Bosnian Serb troops. Contrarily, from the Court of Appeal, the Supreme Court reduced the state’s liability for the 1995 Srebrenica massacre during the Bosnian war, saying peacekeepers (also known as Dutchbat) only had a “slim” chance of preventing the deaths of hundreds of Muslim men. Judges reduced the Dutch state’s responsibility from 30 percent to 10 percent for compensation to the families of the 350 victims killed by Bosnian Serb forces who overran the safe haven.

On July 19, 2019, the IRS Large Business and International Division (LB&I) announced the approval of additional compliance campaigns, including ones on taxpayers who participated in the Offshore Voluntary Disclosure Program (OVDP) and United States taxpayers who expatriated. With respect to Post-OVDP Compliance, John Cardone, director of Withholding & International Individual Compliance, is in charge.  The campaign observes that U.S. persons are subject to tax on worldwide income. This campaign addresses tax noncompliance related to former OVDP taxpayers’ failure to remain compliant with their foreign income and asset reporting requirements. The Internal Revenue Service (IRS) has a list of all the participants in the OVDP.  The IRS will address tax noncompliance through soft letters and examinations. 

On July 24, 2019, the European Commission adopted a Communication and four reports to support European and national authorities in strengthening their responses to money laundering and terrorist financing risks.[1] The report by the Commission toward better implementation of the EU’s anti-money laundering and countering the financing of terrorism framework provides an overview of the four reports.  The supranational risk assessment report gives an update of sectoral risks associated with money laundering and terrorist financing.  The assessment of recent high-profile money laundering cases in the financial sector, the Financial Intelligence Units, and the interconnection of central bank account registries’ reports analyze the shortcomings in current anti-money laundering supervision and cooperation and identifies ways to address them.