The Kinahan organised crime group - seven individuals and three companies - has been named by the US Department of the Treasury as a Significant Transnational Criminal Organisation.
What does that mean?
According to the Transnational Criminal Organizations Sanctions Regulations - the federal laws the US Treasury's Office of Foreign Assets Control (OFAC) is relying on to sanction the Kinahans - it means "a group of persons that includes one or more foreign persons; that engages in or facilitates an ongoing pattern of serious criminal activity involving the jurisdictions of at least two foreign states, or one foreign state and the United States; and that threatens the national security, foreign policy, or economy of the United States".
So the government of the United States now deems Christy Kinahan Snr and his associates as a threat to national security. Just think about that phrase.
How much more difficult it is going to be for the Kinahans to continue with "business as usual?"
The Kinahan organised crime group (KOCG in US Treasury Department terminology), now faces very significant problems in doing business around the world - not just in the United States. Red flags will be popping up anywhere the Kinahan group does business with a financial institution.
Not only has the KOCG and the named individuals and companies had any US assets frozen, but other non-US financial institutions will also add their names to their own sanctions registers.
Even if those institutions don't feel the need to report the Kinahans to the US authorities, they will not want to risk the damage to their own reputation of doing business with people who are on a list of people the US government regards as threatening "the national security, foreign policy or economy of the United States".
Any institution that does so will itself appear on a US Treasury list, drawing unwelcome attention to itself - probably for a very long time to come. It will simply not be worth the hassle for the vast majority of financial institutions to do any kind of business with any of the individuals and companies named on the list.
Another point worth bearing in mind - the sanctions do not only apply to the named individuals and companies: any company or entity that is 50% or more owned or controlled by any of the named will itself become subject to the sanctions regime. So subsidiaries or associated companies can be sanctioned even if they are not explicitly named.
And the powers under the Federal Regulations are sweeping. Look at how they define "property" belonging to an individual or company on the list:
"The terms property and property interest include money, checks (cheques), drafts, bullion, bank deposits, savings accounts, debts, indebtedness, obligations, notes, guarantees, debentures, stocks, bonds, coupons, any other financial instruments, bankers acceptances, mortgages, pledges, liens or other rights in the nature of security, warehouse receipts, bills of lading, trust receipts, bills of sale, any other evidences of title, ownership, or indebtedness, letters of credit and any documents relating to any rights or obligations thereunder, powers of attorney, goods, wares, merchandise, chattels, stocks on hand, ships, goods on ships, real estate mortgages, deeds of trust, vendors' sales agreements, land contracts, leaseholds, ground rents, real estate and any other interest therein, options, negotiable instruments, trade acceptances, royalties, book accounts, accounts payable, judgments, patents, trademarks or copyrights, insurance policies, safe deposit boxes and their contents, annuities, pooling agreements, services of any nature whatsoever, contracts of any nature whatsoever, and any other property, real, personal, or mixed, tangible or intangible, or interest or interests therein, present, future, or contingent."
Then there is the exact nature of business that the US Treasury is sanctioning. Effectively it is shutting the Kinahans out of the world to doing business in dollars. This is what the federal law says about what is prohibited under the term "transfer":
"Any actual or purported act or transaction, whether or not evidenced by writing, and whether or not done or performed within the United States, the purpose, intent, or effect of which is to create, surrender, release, convey, transfer, or alter, directly or indirectly, any right, remedy, power, privilege, or interest with respect to any property. Without limitation on the foregoing, it shall include the making, execution, or delivery of any assignment, power, conveyance, check, declaration, deed, deed of trust, power of attorney, power of appointment, bill of sale, mortgage, receipt, agreement, contract, certificate, gift, sale, affidavit, or statement; the making of any payment; the setting off of any obligation or credit; the appointment of any agent, trustee, or fiduciary; the creation or transfer of any lien; the issuance, docketing, filing, or levy of or under any judgment, decree, attachment, injunction, execution, or other judicial or administrative process or order, or the service of any garnishment; the acquisition of any interest of any nature whatsoever by reason of a judgment or decree of any foreign country; the fulfillment of any condition; the exercise of any power of appointment, power of attorney, or other power; or the acquisition, disposition, transportation, importation, exportation, or withdrawal of any security."
That effectively covers doing any kind of business - anywhere in the world - even if it’s not written down - once US dollars are involved anywhere along the line. Even giving it away as a gift is banned.
Of course there are gaps, even in the most stringent legislation. Ultimately they could chose to do business in cash - but it's bulky, costly to handle, difficult to transport, insecure - and ultimately has to end up in some part of the financial system. The more suspicious the transaction, the higher the "handling fee" charged to bring it in.
While the Kinahans are alleged to have made their money in the illegal drugs trade, the US sanctions announced today will make it much, much harder for that money to make its way into the world of legitimate business. That helps prevent dirty money being laundered into respectable profits, which are harder for law enforcement agencies to seize.
The companies
The US Treasury has imposed sanctions on three companies it alleges are linked to the Kinahan organised crime group.
Ducashew General Trading LLC, registered in Dubai, is alleged to be owned or controlled by Daniel Kinahan.
The Treasury statement says Ducashew "is a UAE-based business management consulting company. Ducashew was designated for being owned or controlled by, directly or indirectly, Daniel Kinahan. Daniel Kinahan runs Ducashew through various individuals and is involved in its financial and business management".
Hoopoe Sports LLC, is also based in Dubai, and is alleged to be owned or controlled by Ian Dixon.
He was designated for "providing material assistance to, or acting for or on behalf of, Daniel Kinahan".
According to the US Treasury, Hoopoe Sports is "a UAE-based sports management and advisory company. Hoopoe Sports was designated for being owned or controlled by, directly or indirectly, Ian Dixon. Ian Dixon is a 49% shareholder, and he also receives 80% of Hoopoe Sports’ profits. Ian Dixon is the sole manager of Hoopoe Sports and has full executive power over the company."
The third company is Nero Drinks Company Limited, based in Glasgow, Scotland.
It is alleged to be controlled or owned by Johnny Morrissey, who was designated by the US Treasury for "providing material assistance to or acting for or on behalf of the KOCG".
The Treasury said: "John Morrissey, who outwardly serves as the Nero Drinks’ brand ambassador, is heavily invested in Nero Drinks and has given a significant portion of the business to Daniel Kinahan to compensate for loads of drugs seized by law enforcement. Nero Drinks company is a small business incorporated in Glasgow, Scotland. The company markets Nero Vodka, a spirit which its website describes as a "multi award winning British potato vodka."
The website lists the business address at a small industrial estate on a farm in rural Leicestershire. Nero Vodka lists 14 locations where it is on sale, mostly in Manchester, and London.
The Sunday World reported on the launch of Nero Vodka at a party in Puerto Banus, Marbella in December 2020.
Company House records for Nero Drinks Company Limited show it was established in March 2018. The incorporation documents also list a Relevant Legal Entity - a Gibraltar registered company called Emperor Uno Limited - which the documents state counts as a Person with Significant Control - defined as a person or entity with more than 75% of the shares and voting rights in the company, directly or indirectly. The involvement of Emperor Uno Ltd ended in May 2018, two months after Nero Drinks Company was incorporated.
Summary accounts show the company was inactive until 2020, when it registered a charge on the company in favour of Advantedge Commercial Finance (North) Ltd.
The filings show it finished 2020 with bank loans of £152,000 and £32,836 owed to the directors loan account. In 2021, the latest year for the accounts, the bank debt had increased by £20,000 to £172,861, and the directors loaned account to £99,319, leaving shareholders funds negative to the sum of £270,491. The summary accounts record net wages of £4,146 paid in 2020, with no wages paid in 2021.
