Twitter Bitcoin Scam

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By Henry Hillman, Lecturer in Law at UWE Bristol.

On 15 July 2020, numerous high profile Twitter users’ accounts were hijacked to display messages promising to return double the Bitcoin sent to a published Bitcoin address. Compromised accounts included Barack Obama, Elon Musk, and Kim Kardashian,[1] as well as accounts linked to high profile cryptocurrency service providers such as Coindesk and Binance.[2] The nature of the compromised accounts meant that the incident very quickly became headline news, and Twitter acknowledged the issue publicly through its CEO[3] and support pages.[4] Needless to say, nobody who sent the Bitcoins to the scam address received any Bitcoins in return. Responsibility for the attack has been claimed by ‘Cryptoforhealth’ which was registered on Instagram at the same time as the scam tweets. The account posted a statement claiming the attack was for charity and that the “money will find its way to the right place.”[5]

As further details have emerged, Twitter has revealed that 130 accounts were targeted, 45 had their passwords reset, and the account information for 8 accounts was downloaded.[6] While the identities of the compromised accounts is clear from the accounts the scam address was tweeted from, it is not known whose data has been downloaded. Twitter has stated that no ‘verified’ accounts have had their data downloaded, meaning no account with the blue tick, assigned to high profile assure the account is genuine,[7] and, understandably, Twitter will not reveal any further details on who has had their data downloaded.

The claims purporting the charitable nature of the attack cannot be corroborated, and the real identity of the perpetrators is still not known. The ‘CryptoForHealth.com’ domain name was created on 15 July,[8] the same day of the scam tweets, using a fake address and phone number.[9]  The name ‘Anthony Elias’ was used to register the website, but no genuine identity can be traced.[10]

How?

The exact methods employed by the perpetrators of the scam will likely never be known, as it is not likely an organisation would want to provide the details of how to breach its security, for fear of similar attacks. Twitter has been relatively open in recognising the security breach so quickly, and providing a public update on 18 July 2020 stating that “attackers targeted certain Twitter employees through a social engineering scheme.”[11] Social engineering is a broad term, which refers to obtaining sensitive information from an individual or group of people in possession of the information, or with access to it.[12] This could be as simple as phishing, or more complex by duping an individual using other relevant information to gain trust. Twitter state that the “attackers successfully manipulated a small number of employees and used their credentials to access Twitter’s internal systems,”[13] in order to post tweets from high profile accounts. Given the number of affected accounts, and the complexity of two-factor authentication,[14] it is likely to have been a complex operation, but it cannot be ruled out that the perpetrators were the benefactors of a slice of good fortune in obtaining their ‘all access pass’ to twitter accounts.

Analysis

While such a scam has not made headline news before, the nature of it has many similarities to previous scams, both in Bitcoin and wider internet scams. There are issues with the term hacking, the simplicity of the scam proposition, and the behaviour of the Bitcoin address in the scam being similar to that of ransomware attacks, such as Wannacry.

While a technical point, it should be acknowledged that this is not a hack, Twitter’s security infrastructure was not breached due to a weakness exploited by the attackers. The reason the attackers were able to post tweets from compromised accounts was due to human error, if Twitter’s statements are to be believed.

The scam was a very simple one, which relied upon the fame of the account holders, and the influence they may have on their followers, to provide veracity to the address and encourage victims to send Bitcoins. If the aim was to make money then the tactics used once the attackers had access appear unsophisticated. The premise should not cause many to believe they will get their sent Bitcoins doubled, and only 12.8652 Bitcoins were sent to the address, equating to around £94,000 based on the value of Bitcoin around the time of the attack. The simplicity of the tweets may be why only 44 incoming transactions can be seen for the Bitcoin address published.[15] The second way in which the attack was crude was in the victim twitter accounts chosen, and the tweets being posted in short order. By selecting high profile victims, and tweeting from all of their accounts on the same day, the attackers were always going to be detected quickly. The attackers would have been naïve in the extreme not to realise their attack would be detected very quickly, this has led to the attack being described as a “smash and grab” exercise.[16] The crudeness of the tactics suggest acquiring Bitcoins could have been a secondary aim for the attack, with publicity being the main goal.

The behaviour of the Bitcoin address published in the tweets follows a predictable path. The Bitcoins received were not kept in the address for very long, quickly being moved to various addresses, which in turn moved the Bitcoins on again. With patience the Bitcoins can be traced, as distributed ledger technology means all transactions are published on the blockchain, but the owners of the addresses remain unknown. These practices are similar to those employed by ransomware attackers once the ransoms are paid to their respective addresses. The biggest weakness from publishing a criminal Bitcoin address is that investigators have a starting point from which to follow transactions. This issue can be addressed by using ‘mixer’ services. These services allow users to disguise which addresses Bitcoins are being sent to by completing the transaction as part of a group of transactions. Bitcoin transactions can have numerous input address and numerous output addresses, a mixer service will gather large numbers of inputs and send them all in one transaction to the outputs, but it will not be possible for investigators to know which senders correlate to which recipients.

Conclusions

This incident will fade out of the public consciousness very quickly, and it is unlikely the full details of how the attack was conducted will ever be made public. It is also unlikely that any Bitcoins sent to the scam address will be retrieved, and equally unlikely that the attack was a charitable one. For investigators, it provides an opportunity to view the behaviour of the attackers and it also serves as a very public lesson in basic financial intelligence; do not send your money to random locations on the internet, and if a deal sounds too good to be true, in invariably is.


[1] BBC News, ‘Major US Twitter accounts hacked in Bitcoin scam’ (16 July 2020) <https://www.bbc.co.uk/news/technology-53425822> accessed 20 July 2020.

[2] Cameron Winklevoss, ‘Twitter Status’ (Twitter, 21:18 BST 15 July 2020) <https://twitter.com/winklevoss/status/1283493640287989760?s=20> accessed 20 July 2020.

[3] Jack Dorsey, ‘Thread’ (Twitter, 02:18 BST 16 July 2020) <https://twitter.com/jack/status/1283571658339397632?s=20> accessed 20 July 2020.

[4] Twitter Support, ‘Thread’ (22:45 15 July 2020) <https://twitter.com/TwitterSupport/status/1283518038445223936?s=20> accessed 20 July 2020.

[5] BBC News, ‘Twitter hack: FBI investigates major Twitter attack’ (17 July 2020) <https://www.bbc.co.uk/news/technology-53439585> accessed 21 July 2020.

[6] Twitter, ‘An update on our security incident’ (18 July 2020) <https://blog.twitter.com/en_us/topics/company/2020/an-update-on-our-security-incident.html> accessed 20 July 2020.

[7] Twitter, ‘About verified accounts’ <https://help.twitter.com/en/managing-your-account/about-twitter-verified-accounts> accessed 20 July 2020.

[8] Whois Domain Tools, ‘Whois Record for CryptoForHealth.com’ (created 15 July 2020, last updated 21 July 2020) <https://whois.domaintools.com/cryptoforhealth.com> accessed 21 July 2020.

[9] Samuel Haig, ‘Who Owns the ‘CryptoForHealth’ Domain Behind the Twitter Hacks?’ (CoinTelegraph, 16 July 2020) <https://cointelegraph.com/news/who-owns-the-cryptoforhealth-domain-behind-the-twitter-hacks> accessed 21 July 2020

[10] BBC News, ‘Twitter hack: FBI investigates major Twitter attack’ (17 July 2020) <https://www.bbc.co.uk/news/technology-53439585> accessed 21 July 2020.

[11] Twitter, ‘An update on our security incident’ (18 July 2020) <https://blog.twitter.com/en_us/topics/company/2020/an-update-on-our-security-incident.html> accessed 20 July 2020.

[12] F. Mouton, L. Leenen, and H.S. Venter, ‘Social engineering attack examples, templates and scenarios’ (2016) 59 Computers & Security 186 at p187.

[13] Twitter, ‘An update on our security incident’ (18 July 2020) <https://blog.twitter.com/en_us/topics/company/2020/an-update-on-our-security-incident.html> accessed 20 July 2020.

[14] Twitter, ‘How to use two-factor authentication’ <https://help.twitter.com/en/managing-your-account/two-factor-authentication> accessed 20 July 2020.

[15] BitInfoCharts, ‘Bitcoin Address bc1qxy2kgdygjrsqtzq2n0yrf2493p83kkfjhx0wlh’  <https://bitinfocharts.com/bitcoin/address/bc1qxy2kgdygjrsqtzq2n0yrf2493p83kkfjhx0wlh> accessed 21 July 2020.

[16] Joe Tidy, ‘Major US Twitter accounts hacked in Bitcoin scam’ (BBC News, 16July 2020) <https://www.bbc.co.uk/news/technology-53425822> accessed 21 July 2020.

Surprised? You shouldn’t be.

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By Professor Nicholas Ryder, Head of Research, Global Crime, Justice and Security Research Group

In its 2018 Mutual Evaluation Report (MER) of the United Kingdom’s (UK) level of compliance with its Recommendations, the Financial Action Task Force (FATF) concluded that the UK’s anti-money laundering and counter-terrorism financing regimes were “effective”. In order to implement the FATF Recommendations and achieve this unprecedented endorsement, the UK has adopted an aggressive and, at times, holistic strategy towards tackling financial crime. For example, the UK Government has published two National Risk Assessments (NRA), one in 2015 and the second in 2017. These were followed by the publication of the Economic Crime Plan, which outlined seven strategic priorities and 52 action points. Collectively, these measures have gone some way to address the shortfalls identified in the FATF 2007-2008 MER and they have contributed towards the highest rating ever provided by the FATF. 

In particular, the MER praised the aggressive stance towards investigating and prosecuting money laundering cases, the adoption of Unexplained Wealth Orders, how the UK disrupts terrorism financing, preventing the misuse of companies and trusts and how it works with its international partners. John Glen, Economic Secretary to the Treasury and City Minister said, “I am incredibly proud that today’s report confirms that the UK has one of the strongest regimes in the world for deterring these criminals”. Ben Wallace, Minister for Security and Economic Crime said, “I’m delighted with today’s report which shows our efforts are being recognised, and sends a strong message to criminals that we will come for them, their assets and their money”. However, the Royal United Services Institute (RUSI) stated that “in PR terms at least, the government’s efforts [to tackle financial crime] seem to have paid off, with the UK receiving the highest aggregate scorings under the revised FATF evaluation methodology to date”.  RUSI added that “the UK has achieved top-of-the-class marks from the FATF – government officials will be both surprised and relieved.  However, the fact that the UK remains central to global money laundering schemes brings into question the relevance of this evaluation”. 

These sixth leaked published by the ICIJ since 2012/2013 (Offshore leaks; Luxembourg, Swiss, Panama Papers and the Paradise Papers), alleges that HSBC, JP Morgan, Barclays, Deutsche Bank and Standard Chartered were involved in a variety of related transactions. The FinCEN leaked reports suggest several of the world’s largest banks allowed criminals to move approximately $2tn via illegal financial transactions. The report also suggests that the UK is a ‘higher risk jurisdiction’ and compared to Cyprus. This is due to the number of UK registered companies (over 3,000 according to the BBC) that appears in the suspicious activity reports submitted to FinCEN. If the leaked reports are accurate, they represent a significant blow to the UK’s efforts to tackle financial crime, especially since the ‘glowing’ end of term report from the FATF. The leaked report tells us that despite the rhetoric from the UK government that very little has changed in how the global financial operates.

In the short-term, ‘profound apologies’ will follow, there will be condemnation, the accused financial institutions will receive the customary bad media coverage and share prices will be affected. Financial regulatory agencies will insist that the financial sector improves its levels of compliance, and fines could follow. Prosecutions? Unlikely if previous efforts are anything to go by. In the long term, nothing will change, it never changes.

Insights from the UK’s Implementation of Key Anti-Money Laundering Obligations

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Blog written by Samantha Bourton, Lecturer in Law at UWE Bristol.

Photo: Samantha Bourton

Money laundering refers to the process used by criminals to conceal or disguise the profits of their illegal activities and is known to have devastating effects on society, national security, the economy and the integrity of financial institutions. This is because money laundering potentially enables criminals, such as drug traffickers, terrorists, and tax evaders, to remain undetected and to channel their profits into further illegal activities. The United Nations Office on Drugs and Crime estimates that 2-5% of global GDP is laundered each year, while the National Crime Agency estimates that hundreds of billions of pounds are laundered annually in the UK alone. Accordingly, an international legal framework has been developed to combat this financial crime, with almost all countries globally committed to implementing the Financial Action Task Force (FATF) Recommendations on Combatting Money Laundering and the Financing of Terrorism.

The EU has implemented the Recommendations via a series of directives and has introduced its own measures to combat money laundering in the wake of the Panama Papers and recent terrorist attacks in Europe. One of the main innovations of the EU directives is the requirement for Member States to set up registers of the beneficial owners of legal entities and trusts. The fifth EU anti-money laundering Directive requires the information contained in the register of legal entities to be available to the public, while the register of trusts should be available to law enforcement authorities and those who can demonstrate a legitimate interest in the information. The aim of such registers is to reveal the identities of those who use companies to launder money and carry out illegal activities.

On Friday 29th November, I delivered a paper titled ‘Insights from the United Kingdom’s Implementation of Key Anti-Money Laundering Obligations’ at the CFE Tax Advisers 12th European Conference on the Tax Advisers’ Professional Affairs in Paris. The Conference aimed to examine the impact of the fifth European Union (EU) Anti-Money Laundering Directive, which Member States were required to transpose by the 10th January 2020. The speakers included representatives from the CFE, OECD, and the BASEL Institute on Governance, as well as legal practitioners and academics from several Member States.

My paper examined the UK’s implementation of some of the key obligations contained in the 4th and 5th EU Anti-Money Laundering Directives, including the inclusion of tax evasion as a predicate, or underlying, offence to money laundering and the introduction of beneficial ownership registers. The paper focused on the UK as a case study, as these measures were part of its legal framework long before they became an obligation within the EU; tax evasion has been a predicate offence to laundering in the UK since 1993 and the UK established the first publicly accessible beneficial ownership register in the G20, the People with Significant Control (PSC) Register.

The paper highlighted the benefits generated by these developments in the UK. Under the anti-money laundering legal framework, professionals in the regulated sector are required to submit reports, known as suspicious activity reports (SARs), to the National Crime Agency when they know or suspect that a client is engaged in money laundering. With the inclusion of tax evasion as a predicate offence to laundering, in the UK, professionals are required to submit SARs when they know or suspect that their clients are engaged in tax offences. This has led to a significant recovery of revenue, with the intelligence generated by the reports supporting the collection of over £40.2million in tax revenue from civil enquiries in 2018-19. The paper also highlighted research undertaken by the NGO Global Witness on the benefits of the UK’s PSC Register in detecting and preventing criminal activity. For example, Global Witness found that there has been an 80% reduction in the rate of incorporation of Scottish Limited Partnerships (SLPs) since SLPs have been subject to beneficial ownership requirements. SLPs are often associated with financial crime and were used in the Russian and Azerbaijani Laundromats.

However, the paper also cautioned against the implementation of these measures without appropriate resources devoted to their enforcement, or guidance provided on their operation. The information contained in the UK’s PSC register is not currently verified, leading to the inclusion of inaccurate and misleading information. This has caused some law enforcement authorities in the UK to refrain from using the register in investigations, effectively defeating its objective. In addition, the paper identified the difficulties professionals face in complying with the obligation to submit SARs for tax offences in the UK and stressed how these problems are likely to be exacerbated when these obligations are imposed at a European level.

I concluded the paper by recommending that the EU should define tax evasion for the purposes of the EU anti-money laundering directives and should provide further guidance on how Member States should verify the information contained in beneficial ownership registers.

Research into court reporting in criminal courts: Evidence submitted by UWE Bristol academics

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Written by Tom Smith and Marcus Keppel-Palmer.

In October 2019, the House of Commons Justice Committee published the report of its inquiry into Court and Tribunal reforms (see the full report here). The inquiry was prompted by “[s]erious concerns… about the effect on access to justice and its efficient despatch of the current court and tribunal modernisation programme, led by the Ministry of Justice and the senior judiciary of England and Wales” (p.3). As part of the inquiry, Tom Smith (UWE Law), Marcus Keppel-Palmer (UWE Law), Sally Reardon ( UWE Journalism) and Phil Chamberlain (Journalism, University of Bath), submitted evidence on their research into court reporting in criminal courts:

“In January 2018, we held a project at Bristol Magistrates Court, attending every case held in open court during one week. During this period of time, only one case was attended by a reporter from local media. We fear that important work shining a light on the work of the Courts will continue to diminish.

During the project, a number of cases were conducted using video link. The positioning of the video screens in court meant that it was often difficult and, in some instances, impossible to follow the evidence being presented. Actually being present in court, researchers were able to clarify details with the CPS, something that will not be possible if the hearing is online.”

They argued that:

“Open Justice is held up to be one of the great values of our legal system. At a time when economics dictate that many local media outlets are closing or cutting back on staff, it would be detrimental to that principle if the Courts Service enacted changes to hearings that impacted further on the ease of reporting the courts.”

The Committee’s report recognised this problem, and quoted the UWE team’s evidence as follows:

“The University of the West of England expressed concerns that the reform proposals would create further barriers preventing the reporting of the courts by the local media. They noted that: “[t]he number of dedicated Court Reporters on local newspapers is shrinking, and given the distances reporters would have to go to listen in on an online hearing at a booth at Court [this] can impose a further deterrent.” (p.54)

As mentioned above, the submitted evidence was based on an empirical study examining levels of court reporting, which was published by peer-reviewed journal, Journalism, in August 2019; and has attracted the attention of the Ministry of Justice, Department of Digital, Culture, Media and Sport, and journalism trade publication the Press Gazette.

The UWE Bristol team are currently undertaking a national survey of court reporting during one month in 2019 and preparing to bid for funding to expand the empirical study, underpinned by the concept of ‘Justice Reporting’ – the idea that reporting on courts should go beyond merely relaying facts and case details, but should examine the processes and issues that form part of criminal cases.

The team has also presented its findings at the SLSA 2018 Conference, the What’s The News Conference 2018 in Brussels, the MECCSA 2019 Conference in Stirling, and the Future of Journalism 2019 Conference in Cardiff, as well as presenting the research to visiting Chinese Judges.

UWE lecturer, Michael Woodiwiss, recognised as a distinguished scholar in organised crime research

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Dr Michael Woodiwiss, Senior History Lecturer at UWE Bristol, has been recognised as a distinguished scholar in organised crime research by the International Association for the Study of Organized Crime for his contributions over the course of his career. He will receive his award at a ceremony on Thursday, November 14 at the American Society of Criminology at their annual meeting in San Francisco where he will be awarded a plaque in his honour.  

Michael has been working at UWE Bristol since 1996 and is now a Senior Lecturer. His contributions include four acclaimed monographs, notably and most recently Double Crossed: The Failure of Organized Crime Control (Pluto and University of Chicago Press, 2017) and many more articles and chapters in books. Recent past winners of the award that demonstrates international esteem include Professor Michael Levi, University of Cardiff, Professor Jay Albanese, University of Virginia Commonwealth, and Professor James Jacobs, New York University, School of Law. 

Michael is currently working on an interdisciplinary project with Mary Young (Law) about the construction of the international anti-money laundering regime.  

Football Fans, Policing and Article 5

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In 2015, 10 Bristol City Football Club (BCFC) fans travelled independently to Birmingham to watch a game of football. On arrival, West Midlands Police (WMP) had identified them as ‘known hooligans.’ They were surrounded and escorted back to the train station where they were told to leave the city. The police relied on ‘dispersal powers’ vested to them under s 35 Anti-Social Behaviour, Crime and Policing Act 2014. This gives a constable in uniform the authority to direct a person to leave an area if s/he has reasonable grounds to suspect that the individuals behaviour ‘has contributed or is likely to contribute to members of the public being harassed, alarmed or distressed or, crime or disorder in the locality’. The 2014 introduction of this legislation replaced s 27 Violent Crime Reduction Act 2006, which in similar fashion also authorised a constable to ‘disperse’ provided disorder, or potential disorder, was alcohol related.

As the statement from the BCFC Supporters Club and Trust outlines, the 10 BCFC spectators always maintained that they had not, or had no intention, to partake in any disorder. They claimed they had been ‘falsely imprisoned’ on their ‘escort’ back to the station: arguably a breach of Article 5 of the European Convention on Human Rights (Right to Liberty). Indeed, a constable may inform the individual/s to leave via a route if s/he wishes, but the legislation mentions nothing with regards to an ‘escort.’ That being said, escorts/containment can be justified if it is to ‘prevent and imminent breach of the peace.’ What was also slightly unusual regarding this case is that a serving police officer with Avon and Somerset Constabulary had agreed to be a witness in court in support of the 10 BCFC spectators. Nevertheless, this day did not happen as 24 hours prior to the court date, WMP offered to ‘settle’ out of court.

Indeed, the use of ‘dispersals’ amongst football fans has been a cause of concern amongst some academics and the Football Supporters Association for some time. In 2008, a number of Stoke City supporters visiting Manchester were escorted out of a pub, placed on buses and driven ‘home’ under the old s 27 powers. In total, Greater Manchester Police agreed an out of court settlement totalling around £200,000. Regarding the newer powers under s 35, a mini-bus carrying Wrexham supporters was stopped by Humberside Constabulary whom ordered to bus to turn around and return to Wrexham. The issue here, was that the police had used the powers in a blanket manner in ordering the mini-bus and all its passengers to return, as opposed to carrying out individual assessments. This led to a successful challenge in court from the Wrexham spectators whom received compensation.

What this demonstrates, is that the legislation can, and has, been used in an indiscriminate and often overzealous manner towards to fans of football, often without any real evidence as to why it is believed they pose a risk to disorder and arguably, and without any consideration towards there Article 5 obligations. Indeed, there is arguably a culture of policing towards football that requires change. A 2018 article by Dr James Hoggett and then Chief Superintendent Owen West of West Yorkshire Police advocate the use of Police Liaison Teams (PLTs) within football policing, rather than the use of the traditional ‘command and control’ approach. Common in the use of protests, PLTs have the ability to better read situations and ensure there are no unnecessary interventions from officers who may perceive a situation to be disorderly. For the authors however, the biggest barrier in adopting this style of approach to football is reluctance from many police officers themselves.

Perhaps indicative of this is the planned operation for the game between Portsmouth and Southampton on Tuesday 24th September 2019. Whilst in no doubt that this is a game that will be full of high emotions due to its ‘derby’ nature, a statement from the Commander overseeing the event has outlined that to ‘keep people safe’ help will be drawn in from ‘the dog units, the mounted section, roads policing, public order teams, drones and the use of the National Police Air Service.’ Clearly, an expensive use of resources. It has been repeated several times that on the face of it, football is changing for the better. It is important to note for the balance of fairness and relating back to WMP, that, to quote Amanda Jacks at the Football Supporters Association, ‘WMP did not have the best of reputations but in recent years, they’ve worked extremely hard and in my view, are one of the most progressive forces in the country.’ Perhaps, and with many things in life, it is a case of learning from mistakes, albeit expensive mistakes. Nevertheless, it is the often over-zealous and outdated mind set of many in authority that holds back a degree of change that is needed.

Matthew Hall

On the Basis of the 17 December 2018 Request of Consultations by the EU with Korea Regarding the Implementation of the Sustainable Development Commitments under the EU-Korea Trade Agreement, Discuss how Labour Standards can Be Maintained via Free Trade Agreements

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This post (edited for publication) is published on our blog as part of a series of work produced by students for assessment within the module ‘Public International Law’. Following the blogging success over the last couple of years, we decided to publish our students’ excellent work in this area again in this way. The module is an option in the second year of Bristol Law School’s LLB programme. It continues to be led by Associate Professor Dr Noëlle Quénivet. Using innovative learning and teaching methods, Noëlle developed this module to include the use of online portfolios within a partly student led curriculum. The posts in this series show the outstanding research and analytical abilities of students on our programmes. Views expressed in this blog post are those of the author only who consents to the publication.

By Anita Dangova

Introduction

The social ambition of the European Union to enforce and maintain sustainable development commitments has led to a radical increase of the incorporation of the International Labour Organisation’s (ILO) labour standard conventions into European Union (EU) free trade agreements (FTAs) with third parties over the past two decades (at 265). In this blog post, I will show that labour standards can be effectively maintained via FTAs through a system of consultative measures. Although such a system can be criticised for being a ‘soft’ mechanism of dispute settlement it has proven successful to enforce labour standards agreed upon in FTAs between the EU and States.  Using the recent consultations request by the EU regarding the failure of implementation of sustainable development provisions by South Korea as a case-study, I will particularly highlight how this soft resolution mechanism works with developed and developing states.

The EU’s Approach to Resolving Disputes

The EU ensures that disputes related to maintaining the ILO’s labour standard conventions in its FTAs are resolved through a cooperative and soft dispute resolution mechanism (Postnikov & Bastiaens, ‘Does Dialogue Work? The Effectiveness of Labor Standards in EU Preferential Trade Agreements’ (2014) 21 JERR 923, 925). This stands in contrast to the direct sanctions system used by the US as, in case of a dispute between the EU and a non-member state regarding failure to apply an FTA’s labour standards provisions, consultations are usually a pre-condition (Postnikov & Bastiaens). The table below explains the EU’s idea of resolving a dispute in a fair, friendly and equal-party manner by consultations, and not sanctions. That is why, in my opinion, the FTAs’ consultations system can be effective in maintaining labour standards’ provisions.

Why consultations?
They are known as means of peaceful dispute settlement, as well as a tool towards a proactive work of both the parties (see Peters, ‘International Dispute Settlement: A Network of Cooperational Duties’ 
(2003) 14(1) EJIL 1, 2).
The consultative measures encourage a flexible resolution process, 
where parties have control over the procedure, being able to set the rules, 
manage the time and conduct in a way they deem most appropriate (at 9).
However, as stated by the International Court of Justice, consultations are to be conducted by the parties in a meaningful way with a view to agreeing in good faith (para 85).
Therefore, they are not used as a tool of showing the power of one party, for example the EU, over a weaker party, for instance South Korea. 
This method means that  the dispute is explored within its context. 
This ensures that the parties are more likely to comply with the relevant agreement in pursuing the common goals of the parties. 

© Anita Dangova

How Does that Work with Developed States? 

A good example to show how such a mechanism works is the recent discussions held in the framework of the EU-South Korea bilateral FTA. Indeed, a recent consultations request was made by the EU after establishing that Korea had failed to ratify the ILO conventions regarding the right of freedom of association and collective bargaining.  Under article 14.3(1) of the FTA, either party can commence consultations, which are to be conducted in good faith and ‘with the aim of reaching mutually agreed solution’, when there is an issue regarding the implementation of the ILO labour standards, as defined under Chapter 13. Under article 14.4, unsuccessful consultations would initiate an arbitration procedure, leading to further costs, delay of settlement and intensified pressure. These consequences, therefore, can encourage Korea to ‘change its behaviour’ at the consultations, by acting in a meaningful way and eventually ratifying the labour standards, which the State is legally bound by the agreement to do. 

Another example is the EU-Canada Comprehensive Economic and Trade Agreement (CETA) agreement under which matters, related to the implementation of labour standards, can be resolved with a recourse to consultations’ request, with the objective to reach a ‘mutually satisfactory resolution’ (article 23. 11). Therefore, we can see that the EU FTAs generally encourage maintenance of the labour standards provisions through soft dispute settlement mechanism, incorporating consultations. This additionally shows that the mechanism’s effectiveness in encouraging developed states to ratify the labour provisions, which they agreed to be bound by, is considerably recognised both in the law and in practice. 

What about Developing States?

Under article 50 of the Cotonou Agreement, the parties, i.e. the EU and African, Caribbean and Pacific countries, reaffirm their commitment to enforce the application of five core ILO labour standards conventions (Abolition of Forced LabourFreedom of AssociationCollective BargainingNo DiscriminationAbolition of Child Labour.) The first step of ensuring the effective implementation of article 50 is to conduct a political dialogue (article 8). This again reflects the EU’s idea of soft, yet effective, cooperation. When all options of dialogue are exhausted, the parties can commence diplomatic consultations (article 96(2)(a)). The provision expressly states that the consultations shall be conducted in a manner, appropriate to find a solution. In case of a failure to find a solution, ‘appropriate measures‘, such as compensation, can be taken. Aware of the subsequent pressure, which will be caused by those measures, the developing states will seek to avoid paying compensation and will thus after the consultations be incentivised to ratify the relevant labour standard conventions. That is why it can be argued that the consultations mechanism, adopted by the FTAs, is an effective way of maintaining labour standards in developing states. 

The first stage (at 25) of labour standards dispute settlement is the following:                  

Statistics Never Lie 

© Anita Dangova (based on information provided in Reich, The Effectiveness of the WTO Dispute Settlement System: A Statistical AnalysisEUI Working Papers, Law 2017/11)

To assess the effectiveness of consultations more generally we can consider the WTO’s dispute resolution system as set out in article 4 of the Dispute Settlement Understanding. In case of a dispute between two member states, either one is capable of initiating a consultations request.  Between 1 January 1995 and 31 December 2016, the system has dealt with 573 requests for consultations. Out of this number, it has issued about 350 mutually agreed dispute settlement decisions (see Reich, The Effectiveness of the WTO Dispute Settlement System: A Statistical AnalysisEUI Working Papers, Law 2017/11, at 4). Therefore, this constitutes a strong evidence that consultations are generally an effective way of settling disputes in the field of economic law.  

Conclusion

In this blog post I have argued that the FTA consultations mechanism is an effective way of ensuring the implementation of labour standard commitments, based on the EU soft consultative dispute resolution system. I have, furthermore, showed that this system works with developing and developed states, basing my analysis on examples such as the Cotonou, EU-South Korea and CETA agreements. 

Take advantage of degree apprenticeship SME funding with UWE Bristol

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15 May 2019 15:00 – 17:00

Register here

Are you interested in upskilling your workforce and does the cost of training seem a barrier to accessing local talent?

This event provides an opportunity to hear first-hand accounts from existing businesses who have apprentices at UWE, and how to make it work. In addition to this, we will be highlighting upcoming degree apprenticeships and further opportunities for your business to train your employees at degree level with the funding available.

UWE Bristol is the only university in the region with funding from the Education and Skills Funding Agency (ESFA) to support non-levy employers and has secured funding to support apprentices from Small and Medium-sized Enterprises (SMEs).

David Barrett, Director of Apprenticeships at UWE Bristol, will welcome you to the event and alongside the Degree Apprenticeship Hub team will be able to help identify your training needs and suitable solutions.

Spaces are limited for this event, so please register below.

If you have any questions about this event or degree apprenticeships please feel free to contact Ellen Parkes.

We are looking forward to meeting you and beginning the degree apprenticeship partnership journey.

The event takes place in the University Enterprise Zone on Frenchay Campus from 15:00 – 17:00.

Register here

Corruption in the Global Era: Causes, Sources and Forms of Manifestation (The Law of Financial Crime)

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New book publication by Lorenzo Pasculli (Editor), Nicholas Ryder (Editor)

Professor Nicholas Ryder’s new edited collection “Corruption in the Global Era” has been published with Routledge.

Corruption is a globalising phenomenon. Not only is it rapidly expanding globally but, more significantly, its causes, its means and forms of perpetration and its effects are more and more rooted in the many developments of globalisation. The Panama Papers, the FIFA scandals and the Petrobras case in Brazil are just a few examples of the rapid and alarming globalisation of corrupt practices in recent years. The lack of empirical evidence on corrupt schemes and a still imperfect dialogue between different disciplinary areas and between academic and practitioners hinder our knowledge of corruption as a global phenomenon and slow down the adoption of appropriate policy responses.

“Corruption in the Global Era” seeks to establish an interdisciplinary dialogue between theory and practice and between different disciplines and to provide a better understanding of the multifaceted aspects of corruption as a global phenomenon. The book gathers top experts across various fields of both the academic and the professional world – including criminology, economics, finance, journalism, law, legal ethics and philosophy of law – to analyze the causes and the forms of manifestation of corruption in the global context and in various sectors (sports, health care, finance, the press etc.) from the most disparate perspectives.

The theoretical frameworks elaborated by academics are here complemented by precious insider accounts on corruption in different areas, such as banking and finance and the press. The expanding links between corrupt practices and other global crimes, such as money laundering, fraud and human trafficking, are also explored. The book is an important resource to researchers, academics and students in the fields of law, criminology, sociology, economics and ethics, as well as professionals, particularly solicitors, barristers, businessmen and public servants.

Reducing the use of pre-trial detention in the Chinese criminal justice system

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By Dr Tom Smith

In February 2019, Dr Tom Smith spent a week working in China as an expert consultant for a research and training project, entitled ‘Reducing pre-trial detention through improved defence and non-custodial alternatives’. The project forms part of a broad reform programme aimed at improving pre-trial detention practice in the Chinese criminal justice system, by lower detention rates; improving defence rights for suspects; and widening the use of non-custodial alternatives (such as conditional bail). A significant part of the reform programme is the introduction of pre-trial detention hearings (known as ‘official arrest hearings’). These can be most closely compared to a defendant’s first appearance in a Magistrates’ Court in England and Wales (although with a number of distinct differences). At present, these hearings are being piloted in a number of cities across China, with the aim of increasing the participatory nature of proceedings; improving the transparency of the process;  and enhancing scrutiny of detention decision-making. The project is being co-ordinated by the Great Britain China Centre (based in London), in partnership with academics from the Centre for Criminal Justice Reform at Renmin University of China (Beijing), and the Supreme People’s Procuratorate of the People’s Republic of China (the national agency responsible for regulating criminal prosecution and investigation).

Tom Smith and Luke Meyer at Shenzhen Procuratorate training day

Tom’s primary role in this phase of the project was the design and delivery of training sessions for a variety of Chinese criminal justice professionals, including procurators (whose role is comparable to both a Magistrate and a prosecutor); defence lawyers; and police officers. The purpose of the training was to improve the professionalism of the procurators, lawyers and officers in two pilot cities (Shenzhen, in Guangdong province; and Hefei, in Anhui province). In addition, the training aimed to influence their approach to considering the protection of human rights in criminal justice proceedings by introducing perspectives on best practice in England and Wales, whilst providing a critical insight into our pre-trial detention system. The training sought to equip defence lawyers with knowledge and skills applicable to their role in pre-trial detention hearings, which is essentially an adversarial one. Tom was accompanied by criminal defence lawyer Luke Meyer, a Partner at Tuckers Solicitors in Kent. Together, they co-designed the structure of and materials for the training sessions (lasting a day in each pilot city), combining both academic and practical perspectives. The training covered topics such as the current structure of English and Welsh law on remand (i.e. court bail and pre-trial detention of defendants); insight into day-to-day practice in police stations and courts; a review of existing research on pre-trial detention in England and Wales (largely based on Tom and Professor Ed Cape’s report, ‘The Practice of Pre-trial Detention in England and Wales’); and a series of thematic sessions examining criminal legal aid, the use of video-link technology, alternatives to detention in custody, and impact on vulnerable groups of defendants.

Tom Smith and Luke Meyer at Shenzhen Procuratorate training day

Tom and Luke delivered the first training day in Shenzhen on February 22nd and 23rd, alongside sessions by leading Chinese academics and senior figures from the Supreme People’s Procuratorate. On February 25th, they observed an official arrest hearing in Hefei, via video link technology. This offered first-hand experience of the practical implementation of the reform programme, involving a real-life criminal case. The figures involved included two procurators (acting in a similar capacity to Magistrates); a defence lawyer; two police officers (acting in a similar manner to prosecutors in England and Wales); and the defendant (who appeared via video-link). After the hearing concluded, Tom and Luke were invited to ask questions of the deciding procurators in the case as well as the participating police officers. This was a rare privilege: this might be equated to the opportunity to question a bench of Magistrates and a prosecutor about their handling of a remand decision, directly after completing it – something that simply would not happen in England and Wales. This underlines how unusual and important this opportunity was, and provided a significant and unique insight into the progress of the reform programme on the ground. The second day of training was then delivered in Hefei. During both training days, and during associated networking events, Tom and Luke met with procurators, lawyers, academics, and senior local and governmental officials, and answered a variety of questions about English and Welsh law and practice. They were also invited to offer recommendations for continuing the progress of the project.

Tom Smith at Hefei Procuratorate training day

The opportunity to be involved in this highly significant reform programme was an undoubted privilege. The processes being introduced in China are novel to its criminal justice system, which does not have the same legal traditions and adversarial roots as English and Welsh criminal procedure. The energy and effort that is being directed towards the programme by the various parties involved was impressive and engaging. It is worth remembering that these were two of several pilot cities across the country, involving and effecting thousands of people. Above all, the programme has clear potential for positive impact on the lives of criminal defendants in China, emphasising the protection of human rights, increasing the scrutiny of decision-making, and working towards reduced use of detention before trial. Such goals are shared by many jurisdictions, particularly in light of the United Nations’ Sustainable Development Goals (SDGs), one of which (SDG 16) includes reduction of unnecessary pre-trial detention. This is therefore likely to be part of the long-term agenda for reform in China and beyond. The chance to contribute to this project, by sharing knowledge and understanding of pre-trial detention practice in England and Wales, was a very positive experience. It is hoped that there will be further involvement in this project, as well as a wider strengthening of ties between UWE and China.

Featured researcher: Dr Thomas Smith

Thomas is an in Law and member of the Centre for Applied Legal Research. His research areas include pre-trial detention and bail; disclosure of evidence in criminal proceedings; criminal defence lawyers; access to justice and criminal legal aid.

Email: Thomas8.Smith@uwe.ac.uk Phone: +4411732 84617