26 February 2009

The Court of Appeal's View of Hawala Banking

The Court of Appeal in, Khanani, R. v [2009] EWCA Crim 276 considers a case that is connected with what they call the Hawala banking system.

Here is what LORD JUSTICE TOULSON has to say,

"There is nothing unlawful or irregular in itself about a Hawala banking system. The judge and jury were assisted by admissions made by both parties about the nature of such a system. We quote from the admissions:

"Hawala is a method by which funds can be transferred between people or companies, often across international boundaries. A particular Hawala system will generally be built upon links based upon family, tribe or ethnicity. Transfers of Hawala funds are facilitated through an informal system operated by active Hawalader Brokers, who execute swaps of value or transfers between themselves to settle debts, thus reducing the amount of administrative records and avoiding local controls. The system is built both upon trust and on a history of success.

In 2005 the Court of Appeal in Hussain and Ali [2005] EWCA Crim 87 21 & 22 paragraphs described the detail of the process as follows:

'21. Hawala banking is an arrangement by which individuals (or intermediaries who have collected money from individuals) deposit money, usually in the form of modest amounts of cash, with a Hawalader in, for example, the UK to be remitted to beneficiaries abroad, commonly in the country from which the remitters' family originate, for example Pakistan. The UK Hawalader will have a Hawala contact in Pakistan who will pay a sum in rupees, at a rate of exchange which may have been agreed with the remitter in advance. The payment will commonly be made more quickly, more cheaply and with less formality than any corresponding service that might be available through the medium of the commercial banks. There is commonly a family relationship between the UK Hawalader and his contact in Pakistan which enables the transaction to be completed with a greater reliance on trust than is necessary in other commercial financial dealings.

22. For ordinary Hawala there must be records to show the identities of the individuals from whom the money had originally been collected in the UK and of those to whom it was ultimately to be paid in Pakistan.'

It is not inconsistent with the Hawala process that a Hawaladar or his agent in the UK should collect a stock of cash from different customers and use it to compete entirely separate transactions on behalf of a Pakistani Hawaladar.

Hawala banking represents (for the customer) an alternative to the use of the conventional banking system, but a Hawala banker in the UK is subject to exactly the same legal obligations as a conventional banker."

So, for the avoidance of doubt,

"There is nothing unlawful or irregular in itself about a Hawala banking system."

Here is a link to J Orlin Grabbe's "In Praise of Hawala."

25 February 2009

Cheerful Attitude

Just reading Going Postal by Mark Ames.

One thing of note can be found on page 23,

"A "cheerful attitude" and laughing are tactics employed by all Americans,at an unconscious, even genetic level. Though many Americans know that one's own smile is an attempt to put the other party at ease rather than a reflection of one's own inner happiness, publicly, this is rarely admitted. Thus few of us know how many Americans also force this desperate smile - we all think we're the only ones faking it. These smiles are more like mammal calls used to identify the individual with the herd, to keep from being expelled."

Interesting enough but then I heard the following interview on the radio.

The UK recession is now affecting most sectors of the economy and all regions of the country. Over the next 12 months, the Today programme will be following four people who have been made redundant. Reporter Sanchia Berg meets Alan South, who worked in the City of London for 30 years before he lost his job.

The "cheerful attitude" described by Ames can be clearly heard in the article.

But it gets worse; as soon as you start noticing it, it crops up again and again. Here's another example from the following day,

The UK recession is now affecting most sectors of the economy and all regions of the country. Over the next 12 months, the Today programme will be following four people who have been made redundant. Reporter Sanchia Berg visits a jobs fair in Sunderland to meet Shaun Fenwick.

I also wonder how much I behave in this manner.

18 February 2009

The Law and Subversion and Insurgency Suppression

General Sir Frank Kitson GBE, KCB, MC and Bar, DL wrote, "Low intensity operations: subversion, insurgency, peace-keeping in 1971. In it, he discusses the use of the law by the state (page 69).

"... [T]he way in which the Law should work. Broadly speaking, there are two possible alternatives, the first one being that the Law should be used as just another weapon in the government's arsenal, and in this case it becomes little more than a propaganda cover for the disposal of unwanted members of the public. For this to happen efficiently, the activities of the legal services have to be tied into the war effort in as discreet a way as possible ... . The other alternative is that the Law should remain impartial and administer the laws of the country without any direction from the government. Naturally the governement can introduce new legislation to deal with the subversion which can be very tough if necessary, and once this becomes law the legal services will administer justice based upon it. But the resulting situation situation is very different from that described in the first alternative because in the second case the officers of the law will recognize no difference between the forces of the government, the enemy, or the uncommitted part of the population."

So, with regard to Kitson's analysis, where is Blighty?

The first point to make is that "... [n]aturally the governement can introduce new legislation to deal with the subversion ..." which has been been done. One obvious example is the Terrorism Act 2000 (which has been discussed earlier on this blog; see, To Proscribe Or Not To Proscribe), there are also other examples.

Moving beyond the obvious point the question becomes which of the two Kitson alternatives are being employed in England and Wales?

It is extremely difficult to analyse and not as clear cut as Kitson outlines. I would argue that the latter situation; ie, the law remains impartial.

Unfortunately, the problem with this analysis is that in some circumstances the law cannot be applied impartially. This is seen when the law has to deliberate on, for example, intelligence matters. In this situation, the law is that the judges and law lords have to defer to the State. For example, take the recent decision in Corner House where it was found (in law) that the Head of the Serious Fraud Office was allowed to pull the plug into bribery and corruption allegations between a Saudi Prince and BAe. In this ruling, Lord Bingham of Cornhill at paragraph 23 says,

"On an application for judicial review the court could not assess the extent of the risk to life or to national security by those who advised the Attorney General and the Director, and the Director himself could not exercise an independent judgment on these matters (para 55). He might lawfully accord appropriate weight to the judgment of those with responsibility for national security who had direct access to sources of intelligence unavailable to him. In cases touching on foreign relations and national security the duty of decision on the merits lay with the Government, and the courts were obliged to maintain the boundary between their role and that of the Government."

An interpretation that was echoed by Lord Justice Thomas in Binyam Mohamed (BM),

"In R (Corner House Research) v Director of the Serious Fraud Office [2008] UKHL 60, it was again emphasised that the duty of decision in relation to national security and foreign relations lay with the Executive branch of the State. (See paragraph 23)

64 The judgement as to whether the national security of the United Kingdom will be compromised in the circumstances described is a matter on which the Foreign Secretary is the expert and not ourselves.

The problem is that although the law can be applied impartially (Kitson's latter description); unless it can analyse the the bases upon which decisions are made; eg, Foreign relations and intelligence, the results may not be impartial.

This is simply because the expert evidence (Foreign relations, intelligence) may be a complete and utter pack of lies (recall the Matrix Churchill affair). The system does not allow for the aspect of elite theory that suggests that States collude with one another in order to murder, rob and generally suppress their citizens. Thus, decisions reached by the courts with regard to the separation of powers are tainted by the leak of poisonous statements such as, "... [it] is a matter on which the Foreign Secretary is the expert and not ourselves ...".

Update 27th February 2010. However, when the bases upon which decisions are made; eg, Foreign relations and intelligence, are analysed by the Courts we get a very different picture. This happened in the continuing case of Binyam Mohamed [2010] EWCA Civ 158 which in its dying gasps argued about one of the paragraphs that was circulated to the parties prior to final publication. The paragraph suggested that the Foreign Secratary, whilst acting on good faith, had made various submissions to the court that where of dubious value because they were based upon information supplied by the security services.

We have,

"The good faith of the Foreign Secretary is not in question, but he prepared the certificates partly, possibly largely, on the basis of information and advice provided by Security Services personnel. Regrettably, but inevitably, this must raise the question whether any statement in the certificates on an issue concerning the mistreatment of Mr Mohamed can be relied on, especially when the issue is whether contemporaneous communications to the Security Services about such mistreatment should be revealed publicly. Not only is there some reason for distrusting such a statement, given that it is based on Security Services' advice and information, because of previous, albeit general, assurances in 2005, but also the Security Services have an interest in the suppression of such information."

This statement is extraordinarily damning of the executive and the security services, whilst in another place, the judgment has a dim view of Parliament in that it suggests that it was easy to pull the wool over the eyes of the security select committee.

Lastly, it is anticipated that the statement may have a far reaching effect on other cases; in that, in the absence of this level of scrutiny, is it possible for justice to be done?

13 February 2009

Hate Week Brought to you by Wilders and UK Gov

The background to this story has been covered elsewhere, for eample, The Times Online has the headline, "Banned Dutch MP Geert Wilders hits out at 'cowards' after being sent back" which is up to date and covers the background to the story.

"... [T]he Dutch MP determined to test the Government’s entry ban after it was decided that he should not be allowed to attend a screening of Fitna at the House of Lords last night.

Mr Wilders, 45, caught a British Midland flight from Amsterdam brandishing his passport. He said that he would have to be physically restrained from entering the country. “I’ll see what happens at the border. Let them put me in handcuffs,” he said.


The aircraft landed at 2pm but before they could disembark, Mr Wilders and his entourage were confronted by two plain-clothes UK Border Agency guards. Towering over them, the Dutch MP and his two minders offered no resistance and were escorted through passport control into a holding room.


The MP had been invited to attend a showing of his 17-minute film at the House of Lords by Lord Pearson. The film features verses from the Koran with images of terrorist attacks in New York, London and Madrid, and calls on Muslims to remove “hate-preaching” verses from the text. Lord Pearson said that the screening would go ahead regardless.

The decision to refuse Mr Wilders entry provoked Maxime Verhagen, the Dutch Foreign Minister, to call David Miliband, the Foreign Secretary, to protest against the decision. “The fact that a Dutch parliamentarian is refused entry to another EU country is highly regrettable,” Mr Verhagen said.

The Home Office said: “The Government opposes extremism in all its forms. It will stop those who want to spread extremism, hatred and violent messages in our communities from coming to our country.”

It appears that this spectacle was planned in Jerusalem. The Israel Jerusalem Post explains in, 'Fitna' filmmaker to attend Jerusalem parley, that, "[s]elected European lawmakers, along with Dutch parliamentarian Geert Wilders, whose controversial 15-minute film Fitna has sparked world-wide Muslim outrage, will gather in Jerusalem in December to "plan practical steps in the struggle against the spread of Islam in Europe," MK Aryeh Eldad (NU/NRP) said Wednesday."

Is this one of those "practical steps"?

If so, who is in on it, wittingly or otherwise?

As has been explained by Head of Legal, 'the Home Office's Decision is unlawful'.

And as pointed out by Cranmer "... it is a curious state of affairs that the EU’s ‘free movement of people’ means that the British Government can do nothing to prevent Dutch thieves, fraudsters, murderers, rapists and paedophiles from entering the UK. But they set such legislation aside when it comes to barring a democratically-elected Dutch politician who talks about the sources of terrorism."

I don't believe that they have 'set [the] legislation aside'; instead, I would speculate that both Wilders and some members of the British Gov are colluding with one another to peddle hate.

My opinion is similar to Michael Portillo's, except he tends to the 'cock-up' rationale.

11 February 2009

Good Risk vs Bad Risk or Good Aids vs Bad Aids

Jaqui Smith has recently trotted out the Good Aids / Bad Aids argument in response to a comparison between the risks of ecstasy use and horseriding.

"The government's drugs adviser last night apologised for saying that the risk in taking ecstasy was no worse than in riding a horse."

The comments, made by the academic in a scientific paper, have attracted other criticisms. Here is one from the Spectator,

"I agree entirely with Prof. Nutt's comments. What he didn't point out is that horse riding has high developed safety structures (helmet, saddle harnesses etc...) whilst ecstasy is entirely unregulated (tainted, random dosages etc..) The truth is ecstasy is probably a hell of a lot safer than horse riding, but the lack of government regulation makes it as about as dangerous as jumping on a horse. The real issue is how this will be explained to the public through the media. Cue the Telegraph wheeling out bereaved mother. And there in lies the crux, people accept her view that ecstasy killed her daughter and should be banned. If her daughter had died horse riding and demanded that that be banned, surely: "The poor dear's been driven mad by grief and doesn't know what she's talking about" oh well." Penned by a commentator called Oliver Lewis.

The arguments against the war on drugs and its legitimacy have been aired many times and in many places.

However, as an excuse to extract money from taxpayers; as a means of adding value to national currencies, and as a means of funding covert wars, the policy has been a massive success.

It looks as though the policy will continue in Blighty for some time, yet.

Background Reading Narco Dollars by Catherine Austen Fitts. Keep a look for the following picture:

NYSE Chairman Richard Grasso with a FARC Commmander

10 February 2009

Laxton's Intention?

Laxton of the FO "was arrested for inciting religious hatred - which can carry a seven-year prison term - and bailed to reappear at a central London police station at the end of March", according to yesterday's (9th Feb) Times newspaper.

The report describes how Mr Laxton, "allegedly shouted "f***ing Israelis, f***ing Jews" while watching television reports of the Israeli attack on Gaza last month.

He is also alleged to have said that Israeli soldiers should be "wiped off the face of the Earth" during the rant at the London Business School gym near Regents Park on January 27. The tirade reportedly continued even after other gym users asked him to stop.

But what was Laxton's intention during this tirade?

I ask because, according to the story, he was arrested for 'inciting religious hatred'. This offence is found in the Racial and Religious Hatred Act 2006, particularly section 29B(1) which provides, "[a] person who uses threatening words or behaviour, or displays any written material which is threatening, is guilty of an offence if he intends thereby to stir up religious hatred."

So, did he intend to stir up religious hatred?

I don't know but from this report I wouldn't think that it would be reasonable to conclude that he was intending to stir up religious hatred.

This begs the question as to why he was arrested (in order to keep the peace); anyway, I doubt he will be charged when he appears at the 'central London police station'.

Anyone want to take a wager?

Update - 17th Sept 2009. You should have taken the wager. "Foreign Office official 'said Israelis should be wiped off the face of the earth'. It looks as though the chap is looking at up to six months in prison or the maximum fine or being found not guilty.

18th Sept ... Further thoughts - was Laxton's intention oblique?

Imagine that someone is irritating you; they are in a house, looking out of the window and laughing and pointing at you. You decide to throw a stone at them to 'smash their face in'; after throwing the stone, the person ducks, he isn't hit. But you've just broken the window. You may say (and sincerely believe) that it was never your intention to break the window but this is usually taken as an example of oblique intention.

Wikipedia has ..."Oblique intent: a person has oblique intent when they foresee the certainty of a consequence of their act, even if it is not their main objective."

Would Laxton of the FO have been able to foresee that his behaviour would have stirred up racial hatred?


23rd Sept ... Of the six or so articles found by plugging 'Laxton' into google news (today) the story from the Guardian titled, "Foreign office official denies gym outburst was antisemitic from 17th Sept appears to be the most useful.

Firstly, the expression "F***ing Israelis" is admitted but "F***ing Jews" is denied. He expresses contrition, mitigating circumstances have been introduced (divorced on the same morning) and he was supported by character witnesses. Another point provided by the story came from Laxton's barrister who said,

"his client would not be guilty of inciting religious hatred or causing alarm, harassment or distress because he had no reason to believe anyone could hear him.

Summing up he said: "If you say something and you have got no reason to believe someone is going to hear you, no matter how offensive it is, you are not guilty of an offence.

"The words were not directed at any person, the police spoke to 12 other people who were in the gym that evening and none of them heard it.

This speech is attempting to diffuse the oblique intention point raised above: if Laxton thought that no one could hear him, he couldn't foresee that he would be inciting racial hatred. Of course, the court may find that if you start ranting in a public place, it is foreseeable that someone would hear you.

Cards on the table: I'd give the chances of conviction at 55%. Under the same circumstances, I'd give someone else a greater chance of being convicted.

08 February 2009

Furazolidone (Norwich Pharmacal)

The Norwich Pharmacal case is well known. In it, Lord Reid explains that, "[d]iscovery as a remedy in equity has a very long history. The chief occasion for its being ordered was to assist a party in an existing litigation. But this was extended at an early date to assist a person who contemplated litigation against the person from whom discovery was sought, if for various reasons it was just and necessary that he should have discovery at that stage. Such discovery might disclose the identity of others who might be joined as defendants with the person from whom discovery was sought. Indeed in some cases it would seem that the main object in seeking discovery was to find the identity of possible other defendants."

He goes on to say, "[t]hey [the earlier authorities] seem to me to point to a very reasonable principle that if through no fault of his own a person gets mixed up in the tortious acts of others so as to facilitate their wrong-doing he may incur no personal liability but he comes under a duty to assist the person who has been wronged by giving him full information and disclosing the identity of the wrongdoers. I do not think that it matters whether he became so mixed up by voluntary action on his part or because it was his duty to do what he did. It may be that if this causes him expense the person seeking the information ought to reimburse him. But justice requires that he should co-operate in righting the wrong if he unwittingly facilitated its perpetration."

Adding, "... [i]f the Respondents have any doubts in any future case about the propriety of making disclosures they are well entitled to require the matter to be submitted to the Court at the expense of the person seeking the disclosure. The Court will then only order discovery if satisfied that there is no substantial chance of injustice being done."

Reading the Mohamed judgement at the moment and being a chemist; one can't but help but think of the chemical compound in the Norwich Pharmacal case.

Image produced courtesy of Daylight by posting the SMILES string into their depict facility.

smiles string O=N(=O)C1=CC=C(O1)C=NN2CCOC2(=O)

Patent GB735,136, thanks to Dave.

04 February 2009

"A man cannot be deceived if he knows the truth."

Said Lord Justice Ward in the recent case, Sprecher Grier Halberstam Llp & Anor v Walsh [2008] EWCA Civ 1324.

(Followers of Guido Fawkes' blog may find the case of interest).

It was also explained in the case that,

"The requirements for a valid claim in deceit

10 Taking it from the 19th edition of Clerk and Lindsell on Torts at 18-01:

"Where a defendant makes a false representation, knowing it to be untrue, or being reckless as to whether it is true, and intends that the claimant should act in reliance on it, then in so far as the latter does so and suffers loss the defendant is liable for that loss."

Which leads to the following case, "Cheltenham director Christine Laird sued for 'lying about illness'".

"... in her pre-employment questionnaire she had replied “no” when asked: “Do you see yourself as disabled?” Asked whether she enjoyed good health, she had replied, “yes.”

The council said that she had failed to disclose three bouts of moderate depressive illness since May 1997 and had taken time off work. “As a result, the council was wrongly advised that she was medically fit for the job and it proceeded to implement its decision - reached by a narrow 18 to 17 majority - to employ her,” Tim Kerr, QC, told Mr Justice Hamblen. “In consequence, the authority sustained loss and damage of just over £982,000.”

The hearing continues.

Will be interesting to hear the results of the case.

Wild Cats v Laval (ECJ)

At the moment, in the UK, there are a series of wild cat strikes going on. The BBC has an up to date report of the situation, "Foreign labour row deal rejected , with a map (go to BBC link for key).

The problem has been the general reporting of the dispute.

From the BBC link above, this passage, ...

"The CBI has backed the company at the centre of the dispute, while Business Secretary Lord Mandelson has said the country should focus on the economics of the recession, not on "the politics of xenophobia"."

... is a reflection of the depth of reporting elsewhere.

In other words, nothing has been explained.

If you want to get a greater understanding of what's going on, may I refer you to Mark Mardel's Euroblog - Labour law wrangling.

Mardel makes some good points - "What is interesting to me is not that the compromise plan proposes half the jobs going to British workers, but that the Italian company has accepted that all its workers on this job will get the standard terms and conditions as negotiated in the past by British unions. The company says they were anyway, but few of the protesters believe them."

That is interesting to me, too. There is some cost difference in the labour somewhere; I don't know where but I suspect it has something to do with differences in local labour laws. In the UK people are employed and layed off as and when. In other countries in Europe this isn't the case; it is a lot more difficult to lay off people. Perhaps this cost difference has been reflected in the tendering process.

Mardel then discusses the European case Laval, "[t]he EU rules say that companies must obey the minimum standards of the host country, such as maximum working hours and the minimum wage.

But what happens if, over years and years, the unions have managed to negotiate above minimum wage and above national standards conditions for that particular job?

Also, how does someone apply for these jobs? If the workforce is built up in Italy in order to work anywhere within the EU, how does the local workforce apply for these jobs?

In this situation it becomes obvious that local workers are being discriminated against. Further, this discrimination is enshrined in EU law.

These strikes and the reasons for them; the fact that they have to be wild cat ie illegal (it would be illegal for the unions to be organising them); the fact that they are so poorly reported is both worrying and interesting.

The situation stinks of elitist deals done somewhere to the detriment of the workers of the EU.

See Matt Johnson's Heartland in order to aid contemplation.

  • Unions fear ECJ ruling in Laval case could lead to social dumping for more analysis.
  • Head of Legal: British jobs for British workers excellent, as usual.
  • EDM 677 "Early Day Motion
    EDM 677


    Cruddas, Jon

    That this House notes that global companies based in Europe are free under EU law to tender for British building and service contracts and to hire their own direct labour force; further notes that such posted workers in the UK have to be paid only the statutory minimum wage, which has the effect of undermining union negotiated collective agreements which are not recognised as `universally applicable' in the UK; further notes that since December 2007 numerous European Court judgments, including the Viking, Laval and Ruffert judgments, have all served to weaken employment standards for working people; calls on the Government to support the European TUC proposals for a Social Progress Protocol to be attached to the EU Treaty so that the internal market is not an end in itself, but helps to improve the living and working conditions of workers and citizens; also calls on the Government to initiate effective reform of the EU Posted Workers Directive so that employers posting workers to the UK are required to observe the terms of appropriate collective agreements as well as minimum terms laid down in statute; finally recognises that what motivates members of GMB, UNITE and other trade unions is not protectionism or xenophobia but a desire for fairness; and congratulates their refusal to allow the British National Party to infiltrate into the action.

02 February 2009

Cephalotaxane and Paclitaxel

Patent US005760251 from June 1998 describes a process for preparing the anti-cancer drug, paclitaxel.

The "Summary of Invention" explains that "[t]he process of the invention shown in Scheme A provides an improved synthesis of taxol and related structures ...".

Taxol process and compounds Yun Gao et al: "20 O R The process of an improved coupling of an 25 acid IX with the in which R2 is a coupled with the suitably protected Consistent with common usage "

On paper, this looks like a very clever idea. After esterification, the amino protecting group is removed and the benzoyl group walks from the oxygen (leaving an alcohol), to the amine forming the required amide.

But there appears to be a problem.

A later patent, US7,169,774 from June 2007, discussing Cephalotaxanes reports,

Cephalotaxane derivatives and their processes of preparation and purification Jean-Pierre Robin et al: "groups forming a ring resolving all of the harringtonic and acids in order to couple them cephalotaxines One part of the present invention thus in particular anhydroharringtonine anhydro homo harringtonine and homo The present invention also relates to or metal alkoxides thereof with N bamoyl 2 alkylisoserine Following observations and comparative out in the taxane series it was found that R8 R6 O CH2 n R5 "

Quoting from the above image, "... although the attempts to acylate baccatin protected with a chain bearing an (hydroxyl group protected with a benzoyl group all failed)."

Which is a direct contradiction of the earlier patent.

This raises a couple of questions particularly with regard to the first patent.

A search of the United States Patent Office, specifically the 'public PAIR' site reveals that ...

"07-02-2002 Expire Patent
06-05-1998 Recordation of Patent Grant Mailed

Patent Expired Due to NonPayment of Maintenance Fees Under 37 CFR 1.362"

This post raises a lot of issues, perhaps I'll bring some of them up later.

01 February 2009

Valorisation Fever (or, Is and Ought Fallacy)

val·or·ize (vl-rz)
tr.v. val·or·ized, val·or·iz·ing, val·or·iz·es
1. To establish and maintain the price of (a commodity) by governmental action.
2. To give or assign a value to: "The prophets valorized history" Mircea Eliade.

Valorisation fever has infected the western world. Everyone and his dog thinks that they know what the price of something should be, usually in opposition to what the market says it is.

The fever has made people delirious: we hear comments from politicians saying that the market has failed (sic). Further, people allow the same politicians to sell them and their children into debt bondage for years and years so that they can valorise some price.


If a bank can't repay its loans it has no value. It isn't worth anything. Is this obvious to only the market and I? The market is working perfectly.

As a plenary, here's The Fall with 'White Line Fever', I hope you regard it as apt.