Illegal trade in pangolins keeps growing as criminal networks expand

Pangolins have long provided meat and traditional medicine for people in Africa and Asia. Recently, though, demand for pangolin scales—used mainly in China and Vietnam for a variety of ailments—has grown to the point that geographic boundaries are blurring. Vast quantities of them are now being smuggled from Africa to Asia, despite an international trade ban on all eight pangolin species that went into effect in 2017. A new report confirms that this illegal trade is only growing—and that organized international criminal networks that previously dealt predominantly with African elephant ivory are increasingly turning to pangolins.

“The level at which pangolins are being trafficked is huge compared to what it has been in the past,” says Sarah Stoner, director of intelligence at the Wildlife Justice Commission, an international foundation that aims to disrupt and help dismantle the illegal wildlife trade, and lead author of the report. “It’s on a completely different level.”

Pangolins have grabbed news headlines in recent days after researchers at South China Agricultural University said that the pangolin could be an intermediary host for the novel coronavirus. They have not published their findings, and the pangolin has not been confirmed as the animal from which the virus jumped to humans. It is, however, a working theory, and it puts increasing scrutiny on China and Vietnam’s consumption of pangolins and the massive illegal trade in the species.

PANGOLINS: THE MOST TRAFFICKED MAMMAL YOU’VE NEVER HEARD OF.

What are pangolins? This shy, scaly creature is the world’s most trafficked mammal—with more than a million pangolins poached in the past decade. Learn more about the pangolin, why all eight pangolin species are at risk of extinction, and the conservation efforts needed to save them.

From 2016 to 2019, Stoner and her colleagues combed through open-source records, including media stories, for reports of pangolin scale seizures by authorities in seaports and airports. They limited their analysis to seizures weighing 500 kilograms (1,100 pounds) or more because shipments that large are most likely linked to organized crime. Over the four years, they documented 52 such cases representing more than 228 tons of pangolin scales. Pangolin species vary by weight and size, and most scale shipments were not identified by species, so the investigators were unable to estimate how many animals 228 tons represents. But they believe it’s likely at least in the tens of thousands. Nearly two-thirds of the seizures took place during the past two years, and their average weight increased from 2.4 tons in 2016 to 6.8 tons in 2019.

Stoner emphasizes that these data only capture what’s likely a fraction of the overall trade. “The way this information is gathered is very inconsistent,” she says. “We have to rely on a seizure happening, a country talking about the seizure, the seizure being publicly reported, and language barriers not getting in the way.”

Stoner’s team also found that shipments containing both ivory and pangolin scales doubled in number and tripled in volume between 2017 and 2018. After China banned its domestic ivory trade in 2018, the price of ivory plummeted, and Stoner suspects that wildlife criminals who formerly concentrated mainly on ivory are now exploiting pangolin scales to help maintain profit margins. “We used to see a higher proportion of ivory and a small number of pangolin scales, but that’s completely shifted,” Stoner says. “Now we see a small amount of ivory and large amounts of pangolin scales.”

The Wildlife Justice Commission identified 27 countries and territories involved as sources, transits, or destinations for pangolin scale shipments. Six places, in particular, were linked to 94 percent of the overall contraband: China, Hong Kong, Vietnam, Singapore, Nigeria, and Democratic Republic of Congo. This confirms previous findings showing that as populations of Asian pangolins have fallen because of poaching, the supply side of the trade has largely shifted to Africa.

The team found that Nigeria, in particular, has become a global pangolin scale export hub, accounting for 55 percent of seizures between 2016 and 2019. On the demand side, China was the primary destination until 2018, when Vietnam took the lead. Links between criminal networks in Nigeria and Vietnam also seem to be strengthening, with a direct trafficking route between the two countries first appearing in May 2018 and continuing since then.

“Wildlife trade is truly global, and it’s a dynamic process,” says Vincent Nijman, a wildlife trade researcher at Oxford Brookes University, in the United Kingdom, who was not involved with the new report. “Globalization now means that your trade partner can be living on the other side of the world.”

Until demand for pangolins and their parts is curtailed, he adds—and as long as there’s profit to be made—traffickers will continue to find ways to meet that demand.

‘Medicinal’ uses of pangolin scales

Pangolin scales and parts are ingredients in nearly 500 prescriptions in traditional Chinese medicine, many of which date back centuries. The scales’ uses vary widely, from helping with anorexia, sores, and skin infections to treating infertility in women and promoting lactation. Pangolin scales are composed primarily of keratin, the same substance that makes up hair and fingernails, and no credible scientific evidence exists supporting their efficacy. Many people continue to believe in their use, however, and may benefit from placebo effects.

A Vietnamese woman consults with a traditional medicine practitioner about the use of pangolin scales.

PHOTOGRAPH BY BRENT STIRTON, NAT GEO IMAGE COLLECTION

According to the Wildlife Justice Commission findings, Vietnam is now the biggest recipient of pangolin scales. Killing, trafficking, transporting, trading, storing, or selling pangolins, including for medicine, is illegal in Vietnam. Punishments vary, but violators may be subject to up to 15 years in prison or fined up to $645,000.

In China, where pangolins are strictly protected too, the government allows certain clinics and hospitals to sell pangolin scales for medicinal purposes. As of 2016, some 200 Chinese pharmaceutical companies were also allowed to manufacture more than 60 products containing pangolin scales, according to the China Food and Drug Administration’s online database. Officials say scales for medicinal use are distributed from a government stockpile, but China has never clarified how large the country’s stockpile is or where the scales came from. As the Wildlife Justice Commission reports, the medicinal system is likely being used to launder illegally obtained African pangolin scales into China’s legal domestic market.

decision announced last August by the Chinese government may reduce demand for pangolin scales. As of this January, China’s national insurance program is no longer covering medicines containing pangolin products. China has also taken steps recently to crack down on the illegal pangolin trade. Last December, concluding a year-long investigation, Chinese authorities seized a shipment in Wenzhou, in Zhejiang province, of more than 25 tons of pangolin scales from Nigeria. Eighteen suspects were detained.

“The way in which authorities did this long-term, resource-intensive investigation was a perfect example of how we should tackle this problem,” Stoner says. “China’s doing really well, but more needs to happen, especially in places like Nigeria, Vietnam, Hong Kong, and Singapore.”

And now, the idea that pangolins could be vectors for current coronavirus outbreak may further dampen demand. “It would be a very interesting twist to the whole story, but I’d like to see more data,” Nijman says. “And if it is true, then I’ll keep my fingers crossed that it’ll work out for the better for pangolins, rather than making things worse.”

https://www.nationalgeographic.com/animals/2020/02/pangolin-scale-trade-shipments-growing/#close

 

Trump’s 2021 Budget Proposal Seeks to Optimize Crypto Policing

U.S. President Donald Trump’s $4.8 trillion budget proposal for FY 2021, released Monday, seeks to expand the Treasury Department’s cryptocurrency oversight by returning the United States Secret Service, now a division of the Department of Homeland Security, to its jurisdiction.

The reshuffling would “create new efficiencies” in the Secret Service’s investigation of criminal acts involving cryptocurrencies and the financial marketplace, the executive report reads. It will also give Treasury more fire power to, as the budget reads, “disrupt terrorist financing, hold rogue states and human rights abusers accountable, and detect and deter financial crimes.”

The Secret Service is better known for protecting U.S. presidents and their families, but it is also responsible for investigating a wide range of financial crimes including fraud and counterfeiting, among others.

“Technological advancements in recent decades, such as cryptocurrencies and the increasing interconnectedness of the international financial marketplace, have resulted in more complex criminal organizations and revealed stronger links between financial and electronic crimes and the financing of terrorists and rogue state actors,” according to the document.

That may be why the people behind the budget think the Secret Service, the sole office charged with the protection of U.S. currency, could give a major boost to Treasury’s cyber crime-fighting efforts.

At Treasury, the Secret Service’s cryptocurrency investigations could dovetail with the Financial Crimes Enforcement Network (FinCEN), a money-laundering watchdog that monitors cryptocurrency-related violations of the Banking Secrecy Act.

DHS, the Secret Service and branches within the Treasury Department have already spent millions of dollars on blockchain analytics, tapping Chainalysis to provide software tools and services.

Trump’s budget is a long way from becoming law, though. Presidential budget proposals have little to no legal bearing on the budget process, which the Constitution stipulates must begin in the U.S. House of Representatives. Rather, it is a political document outlining Trump’s priorities.

https://www.coindesk.com/trumps-2021-budget-proposal-seeks-to-optimize-crypto-policing

Exclusive: Justice Department anti-human trafficking grants prompt whistleblower complaint

WASHINGTON (Reuters) – A U.S. Justice Department anti-human trafficking grant program is facing internal complaints after two nonprofits were denied funding in favor of two less established groups whose applications were not recommended by career DOJ officials.

Members of the Berkeley County Sheriff’s Office take part in a training session on human trafficking held by the Tri-County Human Trafficking Task Force, a project funded through the Lincoln Tubman Foundation at the Berkeley County Emergency Services Training Center in Moncks Corner, South Carolina, U.S. January 23, 2020. REUTERS/Randall Hill

The awarding of more than $1 million total to the two groups, Hookers for Jesus in Nevada and the Lincoln Tubman Foundation in South Carolina, has triggered a whistleblower complaint filed by the Justice Department’s employee union to the department’s Inspector General.

An internal department memo seen by Reuters shows that as of September 12, two long-established nonprofits – the Catholic Charities of the Diocese of Palm Beach and Chicanos Por La Causa of Phoenix – were originally on the list of recommended grant winners after receiving high marks from outside contractors hired to review applications. The annual grants help nonprofits and local governments aid human trafficking victims.

Later that month, those two organizations were replaced as recommended recipients by Hookers for Jesus and the Lincoln Tubman Foundation, which both received lower rankings from the outside reviewers. The reason, a September 23 memo says, was an effort to “distribute funding across as many states as possible.”

The change was ultimately approved by Katharine Sullivan, head of the Office of Justice Programs, OJP, which awards the grants. Sullivan defended the process as proper. “Our funding decisions are based on a merit-based review system,” she said.

In December, the American Federation of State, County, and Municipal Employees local 2830 filed a complaint in which it asked the inspector general to investigate whether politics factored in the two grant awards. An inspector general’s office spokeswoman declined to comment.

In a statement, union president Marilyn Moses said the grants call into question the department’s mission to serve the public. “Our employees take their … responsibility to the taxpayer very seriously,” she said.

This is the second time recently the union has challenged the grants review process.

Chicanos Por La Causa has opposed the Trump administration’s immigration policies. The head of Catholic Charities in Palm Beach has participated in past Democratic National Committees as a delegate or standing committee member. Both groups said they filed strong applications and intended to continue competing for grants.

Each, Reuters found, was ranked as a Tier 1 applicant, the highest level, after scrutiny by outside reviewers. Hookers for Jesus and the Lincoln Tubman Foundation were ranked in Tier 2, one level lower.

To help select grant recipients, the Justice Department contracts with outside experts called “peer reviewers” who evaluate and score applicants. The reviewers’ identities were not listed next to their comments, so Reuters couldn’t contact them.

Career department officials then receive a blind copy of the average weighted scores and divide them into tiers, with the top scores being closer to 100. They review the applications, scores and reviewers’ comments to help inform their recommendations, which get the final sign-off from OJP leadership. DOJ staffers recommended the two Tier 1 groups.

The subsequent decision to bypass two higher-scoring groups in favor of those with lower scores deviates from past practices, said several Department of Justice veterans.

“Tier 1 generally is your default. They all get funded unless there is some kind of legitimate reason not to fund them,” said Jean Bruggeman, a former DOJ Office for the Victims of Crime fellow who is now executive director of the Freedom Network USA, a coalition aiding trafficking victims.

Hookers for Jesus, which received $530,190 over three years, is run by a born-again Christian trafficking survivor who has lobbied against decriminalizing prostitution, a policy position aligning with many in the Republican Party.

Hookers for Jesus operates a safe house for female adult trafficking victims that, in 2010 and in 2018, maintained a policy of requiring guests to participate in religious activities, internal program manuals obtained by Reuters through public records requests show.

The safe house’s manuals had rules that included a ban on reading “secular magazines with articles, pictures, etc. that portray worldly views/advice on living, sex, clothing, makeup tips.” Other rules limited everything from who victims could call to banning them from bringing their purses with them on weekly shopping trips. Rule-breakers could be penalized by being assigned chores such as washing windows.

Hookers for Jesus founder Annie Lobert denied that her organization requires safe house residents to attend services at her church. “We are not going to discriminate toward anyone,” she said. “But,” she added, “we are Christian. And there is an understanding before they come in here that we are Christian.”

If the policies described in the 2018 manuals continue after the federal grant money is dispersed, they would likely violate anti-discrimination laws that prohibit using federal funding to engage in explicitly religious activities, some lawyers said.

“The fact the federal government is funding this is problematic,” said Dallas Hammer, an attorney specializing in discrimination law. “The decision-makers here could be walking the federal government right into a clear violation of the First Amendment,” which protects freedom of religion.

Sullivan, the OJP’s principal deputy assistant attorney general, said the policies described to her by Reuters from the manuals are “inappropriate.” She added: “This might be something that may be appropriate for our civil rights department to look at. Those are not facts or things that we would know ahead of time.”

In its grant application, Hookers for Jesus did not discuss its religious focus in detail, and the department did not have access to its program manuals before the award was announced.

But Sullivan disputed the notion that Tier 2 scores are significantly inferior and said the department was justified in awarding the two grants because there were no other Tier 1-scored applications in Nevada or South Carolina for that grant category.

Geography is among factors that can be considered, but experts said it typically comes into play when deciding between two groups rated at the same level.

In 2019, OJP offices collectively awarded more than $100 million in grants to help human trafficking victims, with much of the funding to be paid out over three years. Of that, $53 million went to 77 groups, including Hookers for Jesus and the Lincoln Tubman Foundation, that provide direct services to trafficking victims.

The Lincoln Tubman Foundation, awarded $549,345 over three years, was launched by the daughter of a prominent local Republican who supported President Donald Trump as a delegate at the 2016 convention and is close to South Carolina Republican Senator Tim Scott.

Its founder Brooke Burris told Reuters that services for adult trafficking victims in the Charleston area are severely lacking. She said the foundation will fund her Tri-County Human Trafficking Task Force project to offer more direct services and train law enforcement to better spot victims.

“We have almost no resources,” she said, noting that South Carolina’s state laws did not outlaw human trafficking until 2012.

The need for more awareness was apparent during a recent training session her task force hosted with law enforcement: Few officers raised their hands when a former FBI agent asked if they had ever dealt with human trafficking.

In September, South Carolina’s Sen. Scott wrote a letter calling on OJP to do a “prompt review” of the application. A Scott spokesman said such letters are standard for grant requests and that he “didn’t endorse” the project.

OJP’s Sullivan said the grant review process was the same for all recipients and a letter from a senator “would not influence a funding decision.”

Reviewers cited the Lincoln Tubman Foundation’s lack of experience. The task force is still in its “infancy” with “little to no experience,” they wrote.

“I knew those were some of our weakest points,” Burris said. Formed in 2018, the foundation is headquartered in a mansion owned by her parents, but she said she is looking for new office space. Meantime, she said she has been fielding calls at all hours to help adult trafficking victims find hotels.

EARLIER GRANT QUESTIONS

This is not the first time Hookers for Jesus has received federal grant money. In 2017, Nevada announced it was giving Lobert’s group nearly $300,000 through the federal Victims of Crime Act. In her grant application at the time, Lobert said church participation was voluntary.

The funding was not renewed in 2018 after the state obtained Hookers for Jesus program manuals saying it was “mandatory” for guests of the group’s shelter, Destiny House, to attend services and volunteer at a specific church. Its staff training manual said homosexuality is immoral and abusing drugs for pleasure is “witchcraft.” Reuters obtained the manuals through a public records request.

One Nevada grant reviewer in 2018 questioned whether Hookers for Jesus treated victims like “prisoners,” while another observed the program seemed too controlling and expressed concern it forced victims to attend Bible study, the grant review documents show.

“We felt their policies were not victim-focused or evidence-based,” said Kelsey McCann-Navarro, whose office in Nevada’s Division of Child and Family Services decided not to renew the funding.

Lobert denied having policies requiring religious participation. She declined to provide Reuters a copy of her updated manuals. She added that she did not recall that the 2018 versions denounced homosexuality. “That is probably something we don’t have anymore,” she said.

Reviewers evaluating its 2019 federal application said Hookers for Jesus staff had little experience handling forms of human trafficking involving minors, men and foreign nationals.

In an interview, Lobert questioned the expertise of the reviewers. “I really caution when someone says they are an expert,” she said. Unless they run a safe house or have survived trafficking themselves, “they don’t have true expertise.”

https://www.reuters.com/article/us-usa-justice-grants-exclusive/exclusive-justice-department-anti-human-trafficking-grants-prompt-whistleblower-complaint-idUSKBN20425G

A new money-laundering rule is forcing crypto exchanges to scramble

Global financial institutions use their own secure messaging system called SWIFT to exchange information about financial transactions and comply with money-laundering rules. Now cryptocurrency exchanges are under pressure from regulators to create a similar system, but it’s not at all clear how.

The Travel Rule: In June, the Financial Action Task Force (FATF), the influential money-laundering watchdog, sent shockwaves through the industry when it advised its 37 member jurisdictions around the world to impose a controversial new rule on what it called “virtual asset service providers.” The rule, which requires exchanges to share information about the identities of the sender and receiver of transfers over a certain threshold, resembles a US bank regulation called the “travel rule.”

SWIFT, but for crypto? Critics have argued that the new rule is onerous because it calls on the industry to build a completely new technical infrastructure for sharing information. Because of the pseudonymous nature of cryptocurrency, it’s not necessarily obvious to exchanges, for instance, when a customer is sending money to another exchange. All they can see is a string of letters and numbers, so the sender could just as well be transferring money to another wallet the same person controls. Now exchanges will somehow have to identify themselves. Others have argued that the rule will drive would-be money launderers to use services and tools that are harder to police. Nonetheless, the industry has been left with no choice but to come up with something like the SWIFT network, but for crypto. And they’ve got to come up with something fast; FATF plans to review its progress in June.

A complicated mess: According to a new, detailed look inside the process by CoinDesk, thorny questions remain about how exactly exchanges should transmit information to each other. Should that process use a blockchain, or rely on a more traditional, centralized design? Should it be a commercial product or based on open-source software? Should exchanges deploy multiple products or should they all try to agree on one? According to CoinDesk, there are more than 20 different products under development at the moment.

Legal headaches, too: The problem is not purely a technological one. If exchanges have to exchange information that identifies their customers, they will also need to navigate data privacy laws like the European Union’s GDPR.

https://www.technologyreview.com/f/615151/crypto-fatf-travel-rule/

Bitcoin Rises Above $9,700 to Reach Highest Point in 3 Months

Bitcoin (BTC) has continued its journey north to reach its highest point in over 3 months after defying expectations of a temporary pullback in its price.

Over the course of eight hours, starting at 10:00 UTC on Feb. 5, the price of BTC rose 5.9 percent from $9,250 to around $9,775 before a small sell-off ensued that brought prices back to current levels at around $9,559.

Oliver von Landsberg-Sadie, CEO of U.K. crypto firm BCB Group said the recent moves in BTC were likely due to shallow market depth amplifying buyer bids.

“Any meaningful size still rocks the boat while the background bullish drivers are the usual suspects with the upcoming halving,” Landsberg-Sadie said.

Source: Credit: Bitcoin Price Index

Still, the impact to BTC’s latest price rise could also be attributed to activity in the altcoin market.

Su Zhu, co-founder at Three Arrows Capital said that the price movements were being led by large-cap altcoins, especially ether (ETH).

“There were some statements from the CFTC that ether futures would be coming before the end of the year and some positive technological progress has been recently achieved on both the Ethereum base layer as well as the progress to ETH2.0,” Zhu said

The 7-day short-term change in ETH’s price is up 18.5 percent alongside XRP which is beginning to pull BTC higher while bitcoin cash (BCH) and bitcoin SV (BSV) are up 17.6 and 12.9 percent, respectively, over a 24-hour period, Messari data shows.

https://www.coindesk.com/bitcoin-rises-above-9700-to-reach-highest-point-in-3-months

Court convicts Belgian gold refinery Tony Goetz of money laundering

BRUSSELS/LONDON (Reuters) – Two brothers from a Belgian gold refinery have been found guilty by a court in Antwerp of money laundering and fraud and given 18-month suspended jail sentences, a court ruling showed.

The judgment comes as investigators and states increase pressure on refineries to make sure illegally mined or traded gold does not enter the market.

It also increases the focus on Alain Goetz, one of the brothers sentenced, who established a refinery in Uganda that officials there say they are investigating for accepting gold from Venezuela that may have been smuggled. The refinery denies wrongdoing.

The court ruling said Alain and Sylvain Goetz set up a fraudulent system in 2010 and 2011 for customers to sell gold anonymously to the Tony Goetz refinery in Antwerp for cash, creating the basis for black-market trade.

The refinery registered gold traders as private customers and split large purchases to circumvent limits on cash transactions, and accepted metal taken by armed robbers in the Antwerp gold quarter, it said.

Tony Goetz paid more than 1 billion euros ($1.1 billion) in cash for gold during 2010 and 2011 and created around 9.2 million euros in illegal capital gains, the ruling, issued on Jan. 30, said.

The court fined the refinery 99,000 euros.

Both the jail terms and the fine were suspended, meaning they will not take effect unless the refinery or brothers re-offend.

Sylvain Goetz runs the refinery and is the eldest son of its founder.

“Tony Goetz contests these facts and upholds that the company did not violate any law,” the refinery said in a statement, adding that it was considering whether to appeal.

Tony Goetz “does not cooperate in any way in the illegal trade of gold or other precious metals and conducts its activities in accordance with all applicable rules and regulations,” it said, adding that since 2012 it has not accepted any cash payments.

It also said Alain Goetz was no longer connected with the company and it does not accept gold from Venezuela or Uganda.

Alain Goetz said he had resigned as a director and sold his shares around 2014. He also said he had stepped down from management and sold his shares in the Ugandan refinery.

Alain Goetz said the ruling was “erroneous” and paying for gold in cash was common and legal during 2010 and 2011.

“Neither Alain Goetz nor Tony Goetz NV breached any anti-money laundering regulations or other legislation in force at that time,” he said in a statement to Reuters.

Around 25 customers of Tony Goetz were also found guilty by the court for participation in the system, with some given suspended jail sentences of up to nine months.

https://www.reuters.com/article/us-gold-refining-tony-goetz/court-convicts-belgian-gold-refinery-tony-goetz-of-money-laundering-idUSKBN1ZZ2JW

U.S. class actions pile up against Australia’s Westpac amid money-laundering scandal

(Reuters) – Australia’s No.2 lender Westpac Banking Corp was hit with another U.S. class-action lawsuit in less than a week on Monday, over issues with its financial crime monitoring amid a recent money-laundering scandal.

Westpac was sued by Australia’s financial crime watchdog AUSTRAC in November for 23 million alleged breaches of anti-money laundering laws, including payments between known child exploiters.

The latest suit, filed by investor rights law firm Bernstein Liebhard in a U.S. court, comes just days after six U.S.-based law firms announced similar class-action lawsuits against the lender.

Bernstein said in a statement the class action was filed on behalf of investors who bought Westpac’s securities between Nov. 11, 2015, and Nov. 19, 2019.

The law firm accused the lender of not carrying out appropriate due diligence on transactions in Southeast Asia and the Philippines and failing to monitor terrorist financing risks with movement of money into and out of Australia among others.

Last month, the lender appointed a former Barclays boss as its chairman to steer it through the money-laundering scandal.

Westpac media representatives did not immediately respond to an email and a call seeking comment

https://www.reuters.com/article/us-westpac-lawsuits/u-s-class-actions-pile-up-against-australias-westpac-amid-money-laundering-scandal-idUSKBN1ZX0G6

Human Trafficking Helps Terrorists Earn Money and Strategic Advantage

Twenty years ago, global leaders from nearly 120 countries joined forces through a new U.N. convention to agree on a universal definition of human trafficking and recommit themselves to ridding the world of it. That same year, the U.S. government enacted the Trafficking Victims Protection Act to close gaps in U.S. law. Yet, despite near-universal pledges to eradicate the crime, human trafficking, and modern slavery continue unabated, affecting more than 40 million people worldwide.

This failure poses a global threat: While human trafficking is rightfully condemned as a grave affront to human rights and dignity, it persists unchecked. As the United States renews its commitment to protecting freedom and ending slavery—with its annual observation of National Slavery and Human Trafficking Prevention this month, culminating on National Freedom Day on Feb. 1—it should address the many ways that human trafficking imperils global security. Indeed, this practice supports terrorist and armed groups, bankrolls criminal organizations, enables abusive regimes, and undermines stability, according to a recent Council on Foreign Relations report written with my colleague, Rachel Vogelstein.

Part of the problem is that armed and violent extremist groups use trafficking as a direct tactic of war, generating profits and advancing their strategic aims. Insurgent groups—from central Africa’s Lord’s Resistance Army to Libyan militias—have used captives to expand military capabilities and support operations, with victims, forced to serve as combatants, messengers, cooks, porters, and spies. Other terrorist organizations—including the Islamic State and Boko Haram—engage in sex trafficking. They use enslaved women to attract and mobilize male fighters and generate significant revenue as well. In 2014 alone, ransom payments extracted by the Islamic State amounted to between $35 million and $45 million. In other words, such groups use trafficking to expand their power and capabilities, thereby prolonging conflict.

Refugees and migrants are at a particularly high risk of both labor and sex trafficking, and their numbers are increasing.

The scale of the problem is only growing, exacerbated by global challenges including forced migration. Refugees and migrants are at particularly high risk of both labor and sex trafficking, and their numbers are increasing—by the end of 2018, more than 70 million people had been forcibly displaced by violence, conflict, and persecution, close to double the figure a decade ago. Their lack of legal status leaves refugees and migrants vulnerable to exploitation; traffickers deliberately deceive workers about their country of final destination and their living and working conditions.

Transnational criminal groups in Southeast Asia, for example, prey on Rohingya refugees fleeing persecution in Myanmar, promising them lucrative employment in Malaysia only to hold them captive at sea in fishing vessels or in trafficking camps along the Malaysia-Thailand border. Traffickers earn an estimated $60,000 per ship by selling victims into further exploitation or demanding ransom from captives’ families, generating between $50 million and $100 million annually. In Central America, smugglers, criminals, and traffickers—emboldened by restrictive and punitive U.S. immigration policies—capitalize on migrants’ desperation to reach safety in the United States: Smugglers charge migrants exorbitant fees, and some leverage debt into forced labor or sexual exploitation. In that way, human trafficking bankrolls operations for transnational crime syndicates and extremist groups; forced labor produces an estimated $150 billion annually for perpetrators, making it one of the world’s most profitable crimes.

Beyond emboldening terrorist groups and bankrolling criminal activity, human trafficking also supports abusive regimes. Some repressive governments traffic their own citizens and compel them to labor in harsh conditions in order to bolster the economy or suppress dissent. The U.S. State Department estimates that the North Korean government, for example, has close to 100,000 forced laborers working abroad, mainly in China and Russia, often in harsh conditions. By taxing those overseas workers, the regime has generated more than $500 million annually, thereby helping it mitigate the effects of economic sanctions.

Even peacekeeping missions and military installations have contributed to an increase in human trafficking from the Balkans to Haiti to South Korea.

Between 2001 and 2011, one study found that the presence of peacekeeping forces was positively correlated with forced prostitution, damaging public perceptions of the United Nations. Last year, U.S. government inspectors uncovered abuses by Defense Department contractors participating in labor trafficking. The contractors were allegedly hiring workers from third-party countries to work in a variety of support jobs—including food services—on U.S. bases in Kuwait (an issue previously documented on U.S. bases in Iraq); investigators found that the contractors had illegally charged recruitment fees to the victims, housed them in substandard conditions, and withheld their passports. Perpetrating sex and labor trafficking diminishes U.S. influence in tackling the very same crime.The human cost that trafficking exacts on communities is detrimental and long-lasting: the associated stigma—particularly in instances of sexual exploitation and children being used by armed groups—marginalizes survivors, creating a cycle of poverty that is difficult to break and impeding the recovery efforts in post-conflict societies

Despite the security implications of human trafficking, convictions for trafficking offenses are rare, programs focused on prevention and protection are underresourced, and most efforts to address human trafficking are detached from broader conflict prevention, security, and counterterrorism initiatives. The issue of trafficking has been seen as a concern primarily of human rights activists, not of the national security community. However, a growing body of research and evidence suggests that as security threats converge, human trafficking becomes a threat multiplier, since it finances other criminal activities and foments greater insecurity.

To prevent human trafficking and advance global security, governments should do more to disrupt the criminal networks and terrorist groups that exploit conflict-related human trafficking while prioritizing the prevention and prosecution of human trafficking in conflicts. They should apply travel bans and asset freezes on human traffickers; pursue trafficking and sexual slavery charges against Islamic State affiliates; collect intelligence on human trafficking in locations where they already track drug and arms trafficking and lead by example by ensuring that their own practices don’t lead to more victimization.

https://foreignpolicy.com/2020/01/31/human-trafficking-helps-terrorists-earn-money-and-strategic-advantage/

 

Are Google And Apple Trying To Kill Bitcoin?

Google, the internet search giant that owns video-sharing site YouTube and the Android mobile operating system, has a fraught relationship with bitcoin and crypto.

Bitcoin services, websites, and apps have regularly provoked Google’s ire in recent years, whether intentionally or not, causing some to cry censorship.

In its latest move against bitcoin-related products and services, Google suddenly removed bitcoin rewards game Bitcoin Blast from the Google Play app store, claiming it used “deceptive practices.”

Bitcoin Blast was made available on the Apple App Store on January 24, 2020 only to be removed less than a week later, with an Apple representative pointing to specific policies the app had violated and welcoming it back if it can be brought up to code.

“We were not removed for being involved with cryptocurrency,” Daniel Rice, co-founder, and chief technology officer at Bling, wrote in a Medium post on Monday, February 3rd explaining why Apple chose to boot Bitcoin Blast from the platform, adding the team will try to make the app available on iOS in the future but “it’s also possible that Bitcoin Blast will never return to an Apple platform.”

Last month, the developers of Bitcoin Blast, a match-three puzzle game that rewards users with bitcoin-redeemable loyalty points and boasts a 4.5 rating from some 20,000 ratings and 13,000 reviews, complained Google had suspended their app without giving them a clear reason why.

The app has now been reinstated but only after its developers, Bling, made a public plea for help, echoing a similar situation late last year when Google’s YouTube banned many of the most popular bitcoin-related creators on the platform only to, mostly, reverse the decision in the wake of the subsequent backlash.

Shortly after the YouTube crackdown, Google suspended the popular MetaMask crypto wallet and mobile browser app backed by ethereum incubator ConsenSys from the Play Store, only to eventually reinstate it.

The Bitcoin Blast ban caused Bling chief executive Amy Wan to question her company’s future relationship with Google and she warned other bitcoin and crypto businesses to avoid doing all their business on Google’s platforms.

“Google’s suspension cited their ‘deceptive behavior’ policy … but did not state exactly what behavior Google thought was deceptive,” Wan wrote in an opinion piece published on a crypto industry trade site.

“In their last reply, Google stated that they were ‘not able to provide any more information or a better answer to your question,'” Wan said, adding Google eventually allowed Bling to resubmit the app to the Play Store even though she still isn’t sure what Google thought was deceptive about the app in the first place.

Google has not responded to a request for comment.

Some in the bitcoin and cryptocurrency industry have previously threatened to boycott Google over its treatment of bitcoin-related news, services and products, while others have called for an alternative to the internet giant.

Meanwhile, Google, along with the likes of social media giant Facebookhas been increasingly looking to financial services to bolster advertisement revenue in recent years, with public opinion moving against ad-funded business models.

In November, Google, in partnership with U.S. banking giant Citigroup, said it’s planning to launch its own fully-fledged “smart checking” bank accounts via Google Paypiling pressure on bitcoin developers to improve user experience and adoption or face redundancy.

The bitcoin price has climbed over the last 12-monthslargely due to interest in bitcoin and crypto from the world’s biggest technology companies–with others, including the likes of iPhone-maker Apple and online retailer Amazon, branching out into traditional financial services.

The soaring bitcoin price has meant that the cryptocurrency space has become overrun with scams and “get rich quick schemes” that falsely promise immediate, massive returns on investment.

Google is keen to protect its users from such practices, but its twitchy trigger finger and the speed at which the ban hammer falls is, understandably, making people nervous.

https://www.forbes.com/sites/billybambrough/2020/02/01/update-are-google-and-apple-trying-to-kill-bitcoin/#3df9d60f3d93

Why money laundering thrives on Canada’s West Coast

People have long been drawn to Vancouver’s idyllic coastal mountain setting. The region’s strong civil liberties and stable economy convince many of them to stay, and Vancouver has thrived with its diverse set of residents.

But the city has also become a haven for illicit capital flight and money laundering, drawing a host of criminal organizations with links to China, Mexico and Iran.

Buyers from high-risk laundering jurisdictions continue to pour tens of millions of dollars into Vancouver real estate under laws that make it easy to conceal sources of cash and the identity of true owners.

Casinos and luxury car dealers still receive large amounts of cash in small denominations. And a host of other players, from money lenders to builders, abet laundering by dealing in large cash sums.

Money laundering poses real threats. It destabilizes the real estate market and helps to fuel the drug trade, gang warfare, gun violence, and car theft.

The 2018 B.C. money laundering reports were authored by laundering expert Peter German, a former RCMP deputy commissioner, and others. They offer a detailed picture of dirty money flowing through B.C. casinosreal estate, the luxury vehicle trade, and horse racing.

A report on developments in British Columbia’s money-laundering inquiries by the Vancouver Sun.

A public inquiry is currently underway in the province, headed by Superior Court justice Austin Cullen and aimed at probing the matter further.

The Cullen Commission will do important work, but will likely make similar recommendations to those set out in the 2018 reports — tighter reporting by casinos, car dealers and home buyers, more funding for police and prosecutors.

Yet as the reports make clear, B.C.’s problems with money laundering run so deep, they’ll be hard to resolve in the short term.

Many of the challenges involve areas of law that I watch closely as a lawyer and legal scholar.

Why B.C. is a magnet for money laundering

If you’re in the Pacific Rim and you’ve got a pile of money to launder, Vancouver is your destination. As German has noted, the city has a large international airport with flights from several Asian cities and a big international port for container shipping across the Pacific Rim.

Vancouver is also close to the Canada-U.S. border and has easy access to Mexico and a host of international banks. The city also has a bustling tech industry with expertise on encryption and cryptocurrency.

If you run into trouble along the way, Canada’s criminal justice system is more lenient, with strong constitutional protections. Our extensive pre-trial disclosure requirements tend to bring complex laundering cases to a grinding halt.

Who’s doing what

Money laundering in B.C. involves a complex interplay of money flowing among crime groups with links to China, Iran and Mexico, involving drugs, cars and real estate.

In what has become known among experts as the “Vancouver Model,” underground bankers, receiving funds in far-flung places, work with trusted contacts in B.C. who release funds locally without cash having to be transferred over borders. Players settle accounts here and abroad by exchanging drugs, cars, land or other favors for cash.

Criminal organizations don’t have to go to extremes to launder their money here. Many use private mortgages, builders’ liens or renovations to move cash through multiple hands and accounts. Construction suppliers, money lenders and some workers accept the cash willingly and without much oversight.

Fast cars and big houses

German’s reports note that the rate of auto theft in Canada had dropped for a period but began to rise again in 2016. Roughly 18 percent of vehicles stolen in 2017 were not recovered. A disproportionate number of these were luxury vehicles, suggesting that organized crime is exporting them.

Cash is then concealed through luxury car and home purchases in B.C., avoiding currency controls or potential corruption charges abroad.

Many high-end car dealers accept large cash sums, then deposit the funds in conventional banks without needing to identify the buyers.

British Columbia’s land title system and rules around lawyers’ trust accounts helped foreigners buy some $16 billion worth of property in recent years, often remaining anonymous. Cash from what are considered high-risk buyers — foreign companies and trusts — makes up for 20 to 60 percent of purchases. Some three percent of B.C. titles (roughly 33,000) list owners with occupations like student, homemaker or unemployed — with roughly a quarter of them holding a clear title.

The whack-a-mole problem

German expressed fears in his reports that as banks, casinos and other agencies tighten oversight of the flow of cash into B.C.’s economy, criminals will migrate to other industries.

Among the oldest tricks he said he doubts will disappear — and one prevalent in Vancouver — involves “paying debts of legitimate businesses and receiving a cheque or other negotiable instrument in return.” Other possible avenues include luxury boats, auction houses, private colleges, crypto-currencies and the cultivation of marijuana.

At present, German’s research indicates a “noticeable decline” in laundering investigations and prosecutions. The challenges involve more than money.

Money-laundering cases often involve millions of documents, overwhelming the time and staff that police and prosecutors can devote. The Supreme Court of Canada has recently imposed strict time limits on trials. And reporting requirements in casinos, the land title office, and luxury retail still have a long way to go to effectively track sources of cash.

British Columbia should therefore tighten rules around the flow of cash in many of these hot spots. But some things that make the Vancouver area ideal for laundering — geography, civil liberties, global connections — can’t easily change.

The Cullen Commission has a noble cause, but in the short term, money laundering in Vancouver is here to stay.

https://www.salon.com/2020/01/31/why-money-laundering-thrives-on-canadas-west-coast_partner/