Another in our series looking at government and corporate mismanagement, misinformation and malfeasance.

“The desire of regulators local and global, is the Chinese model. Maximum population control with zero privacy. Only Bitcoin fixes this”

Camilo Jorajuria, Argentinian legal consultant and expert in Bitcoin and blockchain affairs

US Treasury Secretary Janet Yellen has recently given a warning about Bitcoin being “extremely inefficient”. She went on to say:

“I don’t think Bitcoin is widely used as a transaction mechanism. It is a highly speculative asset and you know I think people should be aware it can be extremely volatile and I do worry about potential losses that investors can suffer.”

Now with the advent of cryptocurrencies, Bitcoin, DeFi and blockchain driven financial solutions are reshaping the financial playing field. With a background in traditional finance, Yellen is certainly out of touch when it comes to crypto in general. She comes out with the same boring mantra that Bitcoin is used to enable illicit transactions and fund terrorism. She should be taking a look at what is going on in those neighboring countries of South America to see how crypto adoption there is working so well with several countries taking a positive approach to blockchain technologies. Admittedly, Bolivia and Ecuador have banned all crypto currencies outright but those governments cannot see that using this technology in a proper business and regulatory environment can attract investment and projects that could play a vital role in a country’s development.

https://blog.chainalysis.com/reports/latin-america-cryptocurrency-market-2020

In Argentina for instance, a small bank there called Banco Masventas has partnered up with the Latin American exchange Bitex to offer its customers a cryptocurrency settlement service. The new service makes international transfers easier and cheaper as costs associated with such transfers are reduced as no international banks are acting as intermediaries. Argentina is one of the countries in South America with a more positive approach towards crypto and with the permission of the Central Bank of the Argentine Republic, Bitcoin ATMs have been installed across the nation.

Bitcoin are not actually considered legal tender due to the fact that they are not issued by the Central Bank. The cryptocurrency was viewed as a good or thing and thus governed by the rules under the sale of goods law. This was up until December 2017 when the government amended the law on income tax. This provided that the profits derived from the sale of digital currency were to be considered as income from stock and bonds and taxed as such. Whether any Bitcoin transactions were declared to the tax authorities is of course another matter.

According to Bitcoin trading platform Paxful, 80% of Colombians are open to investing in cryptocurrency. Many young people are already used to trading with digital coins and almost half of those surveyed between 25 and 40 held cryptocurrencies or planned to buy some soon. By South American standards, Colombia is not suffering from high inflation, so with a recovering economy the population is open to opportunities with cryptocurrencies and fintech start-ups. In 2018, Bogota ranked seventh in the list of top bitcoin cities, with 87 active crypto businesses.

As South America’s largest nation, Brazil has been experiencing a surge in cryptocurrency transactions and at one stage in July of 2019, it was recorded as having the world’s fourth largest transaction volume. Shortly after, the Banco Central do Brazil (BCB) took the positive step of stating that the buying and selling of cryptocurrencies would be logged as “produced assets”, meaning that crypto trading statistics would be included in balance of payments asset calculations. The BCB went on to say that “cryptocurrency mining activity would now be considered as productive process.”

An exchange called Foxbit claims to have 400,000 registered users and this compares well to the 600,000 Brazilians who are registered as having stock brokerage accounts. Eduardo Ferreira, head of international business development for Foxbit in London said

“For the guys who used to hide dollars under their mattresses, now they are hiding it in Bitcoin. It’s students buying it. It’s 60-year-old bus drivers.”

Fernando Furlan, the former head of Brazil’s antitrust division, now the runs the Brazilian Association of Cryptocurrency and Blockchain. He said

“It’s easy to understand why so many are interested in it. This is a nation of lower-and working-class people, and they don’t have stock brokers. They have all heard about how this thing called Bitcoin is making people rich. Crypto is introducing a whole class of people in Brazil to investing.”

Whilst Venezuela’s government-issued petro cryptocurrency was supposed to help the country transact outwith the US dollar, it has evidently had little support and failed in this respect. Suggestions that the token sale had raised billions of dollars were quickly refuted by Reuters who calculated that only 850 million had been sold. In addition, they concluded that

“...there is no way to verify that those were sales, and no large investors have admitted to taking a position in the petro.”

However, in terms of other digital currencies, the general population have a braced them as a way of storing their money due to the rampant inflation which plagues Venezuela. Many Venezuelans work as freelancers for overseas customers but don’t have dollar accounts abroad and taking payment in the rapidly declining bolivar is meaningless. Therefore instant payments via Bitcoin are becoming the norm. Holding Bitcoin gives people access to the financial world outside Venezuela as it is prohibited to exchange the bolivar to dollars or any other currency. Thus crypto allows Venezuelans to bypass these barriers.

South American countries are some of the most crypto-friendly in the world, this having been brought about by frequent currency devaluations and unstructured monetary policy. With the uncertainty regarding the value of currencies such as the Brazilian Real or the Argentine Peso, individuals and businesses are looking for ways to hedge their domestic currency through alternative asset classes. With a high number of internet users in South America, it is easier for citizens to access a crypto wallet than try to integrate with the traditional financial system.

“They’ve flooded the information space with nonsense so we can’t get at the truth.”

– Charles Arthur, UK cybersecurity expert

Whilst ranked third among countries in terms of volume of cyber activity (behind the US and China), Russia is regarded as having the most sophisticated and skilled hackers. Unlike the Chinese government which employs thousands of hackers in the People’s Liberation Army, the Russian government’s relationship with resident hackers is much murkier. The trails of cyber attacks originating in Russia tend to end at civilian hacktivist groups and criminal organizations, perhaps providing officials with plausible deniability.

Russian hacking is not just restricted to attacks on large corporations and government institutions. GCHQ and the FBI have warned in a joint statement that hacks on domestic computers and smartphones can be used to coordinate attacks on the UK infrastructure. In the joint “technical alert”, the two countries urged members of the public and businesses to help combat vulnerabilities with basic security precautions. Commenting on the statement, Ciaran Martin, director of the UK’s National Cyber Security Centre said it was a:

“significant moment in the transatlantic fightback against Russian aggression in cybersecurity. We have been tracking some of these attacks for around a year and the attack groups behind them for longer than that. In terms of scale, there have been millions of machines that have been globally targeted. It’s about trying to gain control over the devices to allow them not just to spy on the primary organization but the organizations they connect to.”

The total is believed to include tens of thousands of home devices in the UK alone, which could be used “at scale” for wider operations. Security services admitted they do not know the full scale of attacks by state-sponsored Russian hackers, who are using routers connecting peoples’ homes and offices to the internet, to spy on information going through them, harvesting passwords, data and other information that could later be used in an attack.

FBI Deputy Assistant Director Howard Marshall said breaking into the system and being able to wait:

“is a tremendous tool in the hands of an adversary. We have high confidence that Russia has carried out a coordinated campaign to gain access to enterprise, small office, home office routers and residential routers. This activity isn’t always to steal information from the network that is targeted in these operations, but sometimes used to facilitate other operations that Russians can do against high value targets worldwide.”

Whilst covert hacking is a serious threat, fake social media accounts which show an open hostility to the West on Facebook and Twitter are also dangerous. Cybersecurity expert Charles Arthur said:

“The real Russian attacks are happening on social media: the spread of disinformation and efforts to undermine trust in authoritative sources is almost as big a problem for governments as the undercover efforts to hack emails and computer systems. We usually think of ‘hacking’ as something done where we can’t see it, but a lot of Russia’s efforts are happening right in front of us, on Twitter, Facebook and its public statements - many of which are logically inconsistent, impossible or absurd.”

https://www.thesun.co.uk/news/6068752/russia-targeted-millions-of-uk-computers/

Facebook and Twitter have taken down networks of accounts with links to the same Russian troll farm responsible for interfering in the 2016 US presidential election. Russia’s Internet Research Agency (IRA) has been using social media accounts to spread inflammatory memes to sow discord. The IRA has gone to new lengths to disguise its involvement, not operating the accounts out of Moscow as it did in 2016, but run by groups in Ghana and Nigeria according to the companies. Facebook’s Head of Security Policy, Nathaniel Gleicher, wrote in a statement:

“They frequently posted about US news and attempted to grow their audience by focusing on topics like black history, black excellence and fashion, celebrity gossip, news and events related to famous Americans like historical figures and celebrities, and LGBTQ issues. Although the people behind this activity attempted to conceal their purpose and coordination, our investigation found links to EBLA, an NGO in Ghana, and individuals associated with past activity by the IRA.”

Another method suspected of being used by the Russians for disseminating fake news is “fishwrapping”. This involves recycling old terror events as breaking news. Threat intelligence firm Record Future, which has published a study of this, has developed tools for detecting and analyzing operations by nation-states and have been tracking this phenomenon. Coining the term “fishwrap”, Record Future says the disinformation network could be acting independently or as part of a foreign government. Co-founder Staffen Truve said:

“Somehow we haven’t seen any way they are trying to monetize what they are doing. So our assumption is that the people doing this are either a state-sponsored actor or a politically inspired group. It’s a classic fear, uncertainty and doubt campaign as part of a larger attempt to manipulate election results in the European Union. These guys are running a professional operation. They keep track of their results, see how many clicks they can get and of course there’s some demographics of the people who are following this and reading it. This could be in preparation for a future operation where once you’ve got established followers to these accounts, you could start spreading genuinely fake news.”

It may not be possible to know with certainty what motivates the Russians to conduct these types of cyber activities but it could well be that Russian officials view this cyber warfare as a political tool which is extremely effective in achieving a geopolitical goal. The new Cold War continues...

“In some cases we see more effort going into stopping counterfeit production of Louis Vuitton bags than lithium batteries. Both need attention. But lithium batteries are a safety risk.”

~ Alexandre de Juniac, CEO of the International Air Transport Association (IATA)

Counterfeiting is now considered to be the largest criminal enterprise in the world with trade in counterfeit and pirated goods running at $1.7 trillion per year which is more than drugs and human trafficking. There are estimates that it is expected to grow to $2.8 trillion and cost 5.4 million jobs by 2022.

https://cms.iccwbo.org/content/uploads/sites/3/2017/02/ICC-BASCAP-Frontier-report-2016-Executive-Summary.pdf

Nothing is exempt when it comes to fakes. According to a Federal Aviation Authority (FAA) estimate, about 520,000 counterfeit or unapproved parts are making it into planes annually. Whilst legitimate suppliers are being cheated out of money, it is more worrying that pilots, crew and passengers are being put at risk.

The situation is so bad that the FAA even have an acronym for it – SUP – “suspected unapproved parts”. This problem has been going on for decades as an internal FAA database obtained by Business Week in 1996 found out. It revealed that from 1973 to 1993, fake parts played a role in at least 166 US-based aircraft accidents or less serious mishaps. Four of these were accidents involving commercial carriers that resulted in six deaths. The FAA’s SUP program has been a step in the right direction, as well as the Aircraft Safety Act of 2000 which details a four-tier punishment system for would-be offenders.

Many unapproved parts have been traced back to China where safety testing, which is often bypassed by counterfeiters, can cost a significant amount. The product is then sold for considerable profit, often with the purchaser none the wiser. Paul Kocher is president and chief scientist of Cryptography Research Inc., a San Francisco-based company that specializes in anti-counterfeiting technology. He said:

“One of the factors that determines the ease of counterfeiting relates to how some of the distribution channels work, and whether there are enough people who are effectively distributors with very low profit margins who are involved in the distribution chain. The more you’ve got and the smaller the profit margins are, and the more competitive the business is, then the more likely you are to have counterfeiting problems.”

Counterfeiters often attempt to recreate components by copying the part or serial number of an item. With electrical components the identification information, or the key, is contained in a chip within the part. Counterfeiters can pull the identification information from the legitimate electrical component by taking a chip apart and looking at it under a microscope, then using the same number to produce a fake.

Cryptography Research Inc. adds a piece of circuitry into chips to ensure proper authentication. Kocher explains:

“At the highest level, we are building circuits that have cryptographic keys built into them. Also in the circuit is logic that does mathematical computations using the key. The key can create messages or provide responses that can show to somebody else or to another component that the key is known by that chip, but it doesn’t reveal the key itself."

Much of the fault around counterfeit parts lies with the airlines themselves as they often go to the lowest-cost maintenance company without ensuring each part is carefully authenticated. Kocher says:

“There needs to be a custody chain that goes all the way back to an approved manufacturer. If all of these things get done, you’d still have some problems, but it could easily be a quarter of what it is now.”

Who’s Policing Counterfeit Airplane Parts?

https://www.arabianaerospace.aero/fake-parts-a-real-threat.html

Apple are also finding that similar products to theirs are being sold with counterfeit trademarks. A US based Chinese national pleaded guilty in February of 2019 to one count of conspiracy to traffic counterfeit goods and also one of trafficking in counterfeit goods. Apparently this involved over 40,000 “electronic devices and accessories including iPhones and iPads” into the US.

Two Chinese engineering students scammed Apple out of nearly $1 million worth of iPhone replacements. Starting back in 2017, the pair smuggled thousands of counterfeit iPhones into the US from China. Following that, they would send the phones to Apple for repair claiming the devices would not power up. In many cases, Apple replaced the iPhones, unaware that they were counterfeit. Quan Jiang and Yangyang Zhou were accused of stealing $895,000 of iPhones from Apple through this scheme. The partnership between the two consisted of Zhao smuggling the counterfeit iPhones into the US. Jiang would then take the counterfeit iPhones to Apple, either in-person to Apple retail stores or via the online repair program. Once Apple replaced the counterfeit iPhone with a real iPhone, they would mail them back to China to sell at a profit.

Counterfeit and substandard batteries coming out of China are putting everyone who uses an electrical device at risk. It’s unfortunate that e-Commerce sites nowadays do absolutely nothing to protect consumers from the proliferation of these dangerous products. Horror stories abound of equipment going on fire and one unfortunate family lost their entire house to a blaze caused by a hoverboard. The item was bought on Amazon from a “sham entity” selling counterfeit products from China.

Amazon tried to weasel their way out of responsibility by claiming that the platform was not responsible for items sold by third parties. They maintained that Amazon was only an online advertising portal and could not be held liable. However, a federal judge ruled otherwise and ordered that the company should take responsibility. As a result of this, Amazon reached a confidential settlement with the owners of the home.

Amazon Pays Hoverboard Lawsuit Settlement After House Fire

The US Consumer Product Safety Commission (CPSC) says on their website that there have been numerous recalls for counterfeit batteries including counterfeit branded Nikon, Samsung, Blackberry, Xenon and LG to name a few. Moreover, the CPSC’s SaferProducts.gov website, a site that allows users to report unsafe products, has multiple complaints of fake batteries causing safety related incidents. It is not known how many counterfeit battery incidents go unreported or how often OEM companies are blamed for safety issues caused by counterfeits.

https://www.saferproducts.gov/IncidentReporting

Among all of the Covid 19 pandemic news which currently dominates the headlines, we should not lose sight of some actions being taken by EU governments to spy on unsuspecting citizens.

Heise Online is a well respected German magazine focusing on PC-orientated publications. Last month it issued a worrying report about moves by the German Federal government to reform the Code of Criminal Procedure to allow for the scanning of vehicle license plates. One particular paragraph of the Code enables law enforcement officers to automatically collect “license plates of motor vehicles as well as place, date, time and direction of travel”, this being without the knowledge of the persons concerned. This data then gets compared with other vehicles registered to suspects.

The Code states that, in theory, there must be “sufficient factual evidence that a criminal offense of considerable importance has been committed”. This somewhat vague definition refers to commercial, gang and organized crime in general. The Code stipulates that data collected should only be held on a temporary basis and be deleted if of no immediate use to law enforcement. There is no mention of a system of oversight and experience in other countries, such as the UK, shows that much of this type of data can remain on file for long periods.

Germany is really pushing hard with its efforts to invade people’s privacy and has long been trying to have backdoors installed in end-to-end encryption. Back in 2015, the then German Federal Minister of the Interior, Thomas de Maiziere, stated at the International Forum for Cyber Security that German security authorities must be “authorized and able to decrypt or circumvent encrypted communications when necessary for their work to protect the population”. Prior to de Maiziere’s comments, the then British Prime Minister David Cameron said he wanted his secret services to be able to eavesdrop on all communications channels. In his opinion, encrypted chats should be prohibited by law if necessary.

Also in 2015, an EU counter-terrorism report, in a paragraph headed “Encryption/interception”, it was suggested that the Commission “be invited to explore rules obliging internet and telecommunication companies operating in the EU to provide under certain conditions as set out in the relevant national laws and in full compliance with fundamental rights, access to relevant national authorities to communications (ie share encryption keys)”.

These proposals were met with much criticism from various groups. The Greens in the EU Parliament said:

“Anyone who wants to oblige IT services to crack secure communications is definitely overriding the fundamental rights to data protection and privacy, as well as communication secrecy.”

https://www.statewatch.org/media/documents/news/2015/jan/eu-council-ct-ds-1035-15.pdf

The German Home Office is still unable to resist the temptation to stick its nose yet again into the end-to-end encryption debate. Commenting on an EU draft document which was released towards the end of last year, Interior Minister Horst Seehofer said the document didn’t contain “any proposed solutions or demands for a weakening of encryption systems,” adding that the resolution was to be “a first step towards a trustworthy discussion and cooperation between politics, business and academia.”

The EU have realized that the somewhat brutal approach suggested by David Cameron is a non-starter. Therefore, it can be seen in the document that a more measured approach is proposed to enable a backdoor. It states that the aim of the initiative is “to enter into a permanent dialogue with the industry on proposed solutions which represent the least possible interference with the encryption systems.” Well, a backdoor is a backdoor even if it is described as “the least possible”. Like a dog with a bone, the Federal government won’t let go, as they pressed on, talking about the “need to strike a balance between the protection of company secrets and personal data and the needs of the security authorities.”

Any weakening of end-to-end encryption will of course be strongly opposed. The deputy chairman of the board of the IT association ECO, Klaus Landefeld said:

“This deep intervention that thwarts IT security and manipulates complex software systems of the operators of messenger services is in no relation to the as yet unproven benefits in the fight against crime and terrorism.”

Dirk Engling, a spokesman for the Chaos Computer Club warned that:

“Secure end-to-end encryption must become a rule in order to guarantee the protection of business, civil society and politics in the 21st century. Instead, this shot in our own knee would catapult us back into the Stone Age.”

The creeping invasion of privacy in Germany continues with a new requirement to add fingerprints to national ID cards and residence documents. This will actually be EU-wide starting on August 2, 2021. So from that date onward, applicants will have to give prints from their left and right index fingers. Anyone who is now eligible for an ID card should therefore apply before that date whilst the fingerprinting is not a requirement and thus maintain a degree of privacy during its ten year validity period. Previously in Germany, it was voluntary as to whether or not you wanted your fingerprints included on your ID card although this option was never highlighted during the application process.

Now with the inclusion of fingerprinting, people will be identifiable for life even if they change their name and location to escape persecution or threats. Moreover, without oversight, since 2017 police and secret services in Germany have been able to automatically access the biometric photos from ID cards and soon fingerprints will also be readily available to them. Those traveling abroad with biometric passports are also at risk when they visit authoritarian countries as their complete data will be captured and retained forever.

This relentless encroachment on the rights of the individual is something we must all stand up against.

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex:32019R1157

You have been warned! More next week...

Another episode in our weekly series, EXPOSED! where we reveal the most blatant examples of corporate malfeasance and government corruption.

“The difference is the Russians don’t get caught as often as the Chinese. But hackers from both countries are going after American intellectual property on a grand scale that goes beyond individual larceny to national strategy.”

--David Smith, director of the Potomac Institute’s Cyber Security Center.

With both governments and companies always on the lookout for a technological or competitive advantage, industrial espionage is becoming more and more prevalent. This is not limited to simply stealing trade secrets but can also include blackmail, bribery and hi-tech surveillance. Sabotaging ones competitors can also be considered as a form of industrial espionage. China is very much in the spotlight nowadays when it comes to the theft of intellectual property, this being not just for commercial use but to gain military technological superiority as well.

David Smith’s opinion is alarming:

“What you have right now is systematic espionage against the United States. This is not intelligence agencies stealing this or that secret, this is not industrial espionage where some company in another country wants to get the process for something or other. We’re talking about a systematic effort to equalize the technology edge that the United States enjoys over every other country in the world by stealing US intellectual property….This is strategic”.

For years, the Chinese government has engaged in cyber-enabled economic espionage and other covert and clandestine activities to strengthen China’s economic competitiveness and strategic position. China is estimated to be responsible for 50 to 80 percent of cross-border intellectual property theft worldwide. Various study groups have estimated that Chinese intellectual property theft could cost over $300 billion annually to the US economy. The US-China Economic Security and Review Commission has concluded that Chinese espionage:

“comprise the single greatest threat to US technology.”

Chinese espionage has not only damaged US companies, but has also helped China save on research and development expenses while catching up in several critical industries. Perhaps most worryingly, China is reversing many of the US military’s technical and industrial advantages and creating potential vulnerabilities should a conflict arise.

https://www.nbr.org/wp-content/uploads/pdfs/publications/IPCommissionReportUpdate.pdf

The resources China devotes to cyber activities are massive. The Chinese campaigns are of such large scale that most experts believe they require, and so probably receive,  some type of state sponsorship. The FBI estimates that China has more than 30,000 military cyber spies, plus an additional 150,000 private sector cyber experts whose mission is to steal American military and technological secrets. Although Chinese officials frequently dispute foreign accusations that the PRC is involved in malicious cyber activities, there is robust evidence that specific actors within China – and within the Chinese government – have often been responsible. China’s cyber groups operate partially at the behest of the PLA through a dual civil-military command structure and the state has consolidated control over some private cyber actors. Differentiating military from civilian groups is often difficult; the line itself may be blurry, since Chinese writings highlight the importance of civil-military integration for cybersecurity.

Frequently invoked is former National Security Agency Director Keith Alexander’s comment that theft of economic information is:

“the greatest transfer of wealth in human history.”

It is ironic that this is the same Keith Alexander who lied to congress under oath in 2012, claiming that the NSA didn’t spy on US citizens. And on the subject of spying and data harvesting, it is of note that Alexander joined the Amazon board in September of 2020. That prompted the following tweet from Edward Snowden:

“It turns out ‘Hey Alexa’ is short for ‘Hey Keith Alexander’. Yes, the Keith Alexander personally responsible for the unlawful mass surveillance programs that caused a global scandal.”

Former FBI Director James Comey has made a scathing comment about the Chinese when it comes to their hacking activities:

“There are two kinds of big companies in the United States; there are those who’ve been hacked by the Chinese and those who don’t know they’ve been hacked by the Chinese.”

US allies and partners also suffer considerable damage because of Chinese cyber attacks. South Korea estimated in 2008 that foreign economic espionage cost its companies $82 billion. The effect in Germany has been particularly significant, given that Made in China 2025 is modeled on Germany’s Industrie 4 plan. In the context of this competition, German experts suggest that China has conducted industrial espionage against the country’s car manufacturing, renewable energy, chemistry, communications, optics, x-ray technology, machinery, materials research and armaments industries. In just one month, a single German telecommunications firm reported over 30,000 Chinese cyber attacks. Estimates indicate that German firms lose $28 to $71 billion annually as a result. Several cases of Chinese espionage have reached courts, yet most incidents do not reach the press because companies do not wish to expose their vulnerabilities or risk business opportunities in China.

Unless US and European leaders prioritize Chinese cyber-enabled economic espionage, Beijing is unlikely to curb these activities. Better data provided directly by victims as well as through public reporting would provide decision makers with a fuller understanding of the threat landscape.

The extent to which the Chinese go to spy on companies was reflected in a report from the Nikkei Asian Review. It claimed that companies are worried:

“that China could be spying on them using power cords and plugs...”

“...have asked their Taiwanese suppliers to shift production of some components out of the mainland.”

Tien Chin-Wei, a deputy director at the Cybersecurity Technology Institute told the Nikkei Asian Review that the concerns were “totally reasonable,” because:

“technically, it is doable and not difficult for hackers to use the power supply system or power cords to retrieve data stored in servers...”

“...every interface between components, or between motherboards and power supply systems could be a loophole for malicious implants. You only reduce or manage the risks, but it is no possible to entirely eliminate the threats.”

You have been warned!

Tate and Lyle is a British-headquartered global supplier of food and beverage ingredients to industrial markets. In February 2008 it was announced that Tate & Lyle granulated white cane sugar would be accredited as a Fairtrade product, with all the company’s other products to follow in 2009. The Fairtrade certification initiative was created to form a new method of economic trade. This method takes an ethical standpoint and considers the producers first.

In recent years, land grabbing has become increasingly prevalent in Cambodia. The most extensive instances are economic land concessions (ELCs) whereby up to 10,000 hectares of government land per concession can be granted to private companies for agro-industrial exploitation for a fixed period of years, capped at 99 years. The 2001 Land Law of Cambodia also allows the government to expropriate private land from citizens for ELCs. In reality, however, many ELCs of private land have been unlawful as they involve forced eviction of land owners. The situation has become so bad that in September of last year, about 1,000 villagers from 3 Cambodian provinces blocked the road leading to the Land Ministry in Phnom Penh demanding government help in resolving disputes over land taken by private companies and politically connected business people.

In August 2006, 19,100 hectares of private land in Cambodia’s Koh Kong province that are good for growing sugarcane were unlawfully granted in ELCs to two Cambodian Sugar companies, Kon Kong Plantation Co, Ltd and Koh Kong Sugar Co. Ltd. The two companies are owned and managed by the same entities, share the same office space and had applied for the ELCs on the same dates. Using two separate companies to apply for ELCs was clearly the owner’s attempt to circumvent the legal restriction of 10,000 hectares per ELC. The two ELCs resulted in a single sugar plantation operated by the Thai company Khon Kaen Sugar Ltd. (KSL), majority owner of the two companies.

To make room for the sugar plantation, about 4,000 Koh Kong villagers were violently evicted from their lands and forced to relocate with nominal offers of compensation, violating the Land Law and Constitution which require “fair and just compensation in advance.” The villagers complained that they were never consulted prior to the grant of the concessions and that the land transfer was illegal. In February 2007, the villagers filed a complaint against the sugar companies seeking cancellation of the concession contract.

In 2009, KSL entered into a five-year contract to sell raw sugar produced on the plantation exclusively to Tate & Lyle Sugars and the first shipment of 10,000 tons arrived in the UK the following year.

In 2012, a judge ruled that the court did not have the power to hear land disputes and transferred the case to the Cadastral Commission. However, the villagers argued that the case should go back to the court as their claim was about the legality of the concession rather than land ownership. In June 2015, the National Human Rights Commission of Thailand released a report in which it recognized that human rights violations had occurred at the site of the sugar plantation.

In March 2013, 200 villagers filed a complaint in England against Tate & Lyle and Tate & Lyle Sugars Limited (a subsidiary of American Sugar Refining). The plaintiffs maintained that they remained the legal owners of the land on which the Koh Kong companies grew sugar. Therefore they claimed under Cambodian law that they were the rightful owners of the crops grown on their land. The villagers claimed compensation for the profit from selling the sugar. For their part, Tate & Lyle argued that they had no knowledge of the facts asserted by the villagers wherein they claimed to be the rightful owners of the sugar purchased from the Koh Kong companies.

After lengthy negotiations, the villagers had the impression that Tate & Lyle would provide significant compensation for the families. Now, in 2021, Tate & Lyle announced it would not pay compensation to the plaintiffs, but would continue to pressure the supplier KSL to ensure compensation is provided to the effected families.

Ann Haiya, a community leader from Koh Kong said: “Initially we thought that Tate & Lyle respected human rights, and we hoped they would take responsibility. The community is very, very angry and feels hopeless, but they keep their will to work with the community leaders to keep fighting against Tate & Lyle”.

Martin Day, senior partner of the firm Leigh Day, which represents the families said:

“The claimants entered into settlement discussions with Tate & Lyle in good faith over six years ago but these discussions have led to nothing but empty promises and disappointment.”

http://www.boycottbloodsugar.net/wp-content/uploads/2012/07/NHRC-Findings-on-Koh-Kong-25-July.pdf

Another in our weekly series, EXPOSED! where we reveal the most blatant examples of corporate malfeasance and government corruption.

“It’s difficult not to conclude they are harvesting public information and aggregating it as a form of surveillance.”

--Alan Woodward, Professor of Cybersecurity at Surrey University

Don’t think for a minute that China is only interested in snooping on its own citizens. It has recently been alleged in an article in the Guardian that China was exploiting cellphone networks in the Caribbean to conduct ‘mass surveillance’ on Americans. Gary Miller, a former vice president of network security at California-based analytics company Mobileum, told the newspaper he had amassed evidence of espionage conducted via “decades-old vulnerabilities” in the global telecommunications system.

While not explicitly mentioned in the report, the claims appear to be centered around Signaling System 7 (SS7), a communications protocol that routes calls and data around the world and has long been known to have inherent security weaknesses. These signaling messages are commands that are sent by telecoms operators across the global network, unknown to the mobile user. They allow operators to locate mobile phones, connect mobile phone users and assess roaming charges. According to Miller, his analysis of “signals data” from the Caribbean has shown China was using a state-controlled mobile operator to “target, track, and intercept phone communications of US phone subscribers.”

Miller claimed that China appeared to exploit Caribbean operators to conduct surveillance on Americans as they were traveling, alleging that attacks on cellphones between 2018 and 2020 likely affected “tens of thousands” of US mobile users in the region. The mobile researcher said that “once you get into the tens of thousands, the attacks qualify as mass surveillance, primarily for intelligence collecting and not necessarily targeting high profile targets.” Miller went on to say that:

“Government agencies and the US Congress have been aware of public mobile network vulnerabilities for years. Security recommendations made by our government have not been followed and are not sufficient to stop attackers. No one in the industry wants the public to know the severity of the ongoing surveillance attacks. I want the public to know about it.”

The majority of the attacks were routed through China Unicom, a state-owned operator. Miller noted that in 2019 the attacks through the Caribbean networks shot up – suggesting that Beijing was attempting to mask its activities through foreign operators.

A spokesperson for China Unicom told the Guardian that it:

“strongly refutes the allegations that China Unicom has engaged in active surveillance attacks against US mobile phone subscribers using access to international telecommunications networks.”

Questions are being raised about the spread and scope of China’s intelligence gathering operations. The Chinese Communist Party is snooping on millions of people around the world by harvesting data from many sources including the dark web. A Chinese company with links to Beijing’s military and intelligence networks has been amassing a vast database of detailed personal information on thousands of Britons, Americans, Australians and Indians plus Canadians, Indonesians and Malaysians.

The database, known as the Overseas Key Individual Database, was understood to have been stolen by an anti-China activist who shared it with a cybersecurity firm called Internet 2.0 which reconstructed the data. It then shared the data with the Five Eyes grouping which is composed of the UK, the US, Canada, Australia and New Zealand.

The database with some 2.4 million people came from the Shenzhen company Zhenhua Data which is believed to be used by China’s intelligence service, the Ministry of State Security. Zhenhua has the People’s Liberation Army and the Chinese Communist Party as its main clients.

The company views its mission as using big data for the “great rejuvenation of the Chinese nation.” Information collected includes dates of birth, addresses, marital status, along with photographs, political associations, relatives and social media IDs. This has mostly been collated from Twitter, Facebook, Linkedin, Instagram and even Tik Tok accounts. Data has also been taken from news stories, criminal records and corporate misdemeanors. Some profiles have information which appears to have been sourced from confidential bank records, job applications and psychological profiles most likely obtained on the dark web. Sensitive information about the movements of UK and US ships, satellites, aircraft and buoys was also listed.

Robert Potter, co-founder and chief executive of Internet 2.0 said:

“Zhenhua has violated the privacy of millions of global citizens.”

China has been installing secret surveillance apps onto tourists’ phones in order to scan for Quran passages, Dalai Lama photos and other things the authorities don’t want to be brought into the Xinjiang region. Those arriving at border points of entry have no choice but to hand over their phones to security officials. The phones are taken to a separate room and after about an hour returned to their owners. An app called Fengcai (which roughly translated means bees collecting honey) is installed which downloads the phone’s data – all text messages, contacts, call log history, calendar entries and installed apps. All this sensitive data is then sent, unencrypted, to a local server.

The major investigation that uncovered details of this app – a collaboration between the New York Times, Vice’s Motherboard, the Guardian, Sueddeutsche Zeitung and the German broadcaster NDR – makes it clear that China’s mass surveillance is increasingly spreading to foreigners. The app was installed in the phones of several tourists who, after leaving China, went to reporters in Germany with the story. A journalist on the investigative team also attempted to cross the border into Xinjiang and had the same app force-installed before being allowed to enter the region.

Uighurs, a mostly Muslim ethnic minority concentrated in the Xinjiang region, are used to this sort of surveillance. China profiles them using a facial recognition system that the New York Times called “automated racism”.

China depicts the Uighur people as a separatist and terrorist threat and is constantly tightening control over them. The authorities have even gone to the extent of flying drones disguised as birds over the region.

But what happens in Xinjiang doesn’t stay in Xinjiang. The region functions as a laboratory for authorities’ experiments in high-tech surveillance. Some of the tech they try out on Uighurs is later applied more broadly in the country and even sold abroad.

You have been warned!

Here at decentralize.today, we return for the new year and continue with our weekly series, EXPOSED!, where we reveal the most blatant examples of corporate malfeasance and governmental corruption. Today we return for a further look at a previous transgressor, online retailing giant Amazon...the world's most notorious middleman!

“I see them as a kind of great white shark. You don’t really want to mess with them.”

--Rachel Greer, former Amazon product manager.

Many companies have fallen victim to the aggressive techniques Amazon uses to achieve market dominance as the company spreads its tentacles into groceries, TV, robotics, cloud services, healthcare and consumer electronics.

Of all the top US industries by GDP - information, manufacturing non-durable goods, retail trade, wholesale trade, manufacturing durable goods, healthcare, finance and insurance, state and local government, professional and business services and real estate -  Amazon has a finger in all but real estate.

Corporate Copycats?

Amazon has long been accused of making knockoffs of products which sell successfully on their site. It doesn’t even bother to make any changes to the products – just sticks their smiley arrow logo on it, sells it for half the price and kills off the competition. In one particularly galling instance reported by the Wall Street Journal, Amazon focused on a small business selling camera tripods on the site. That company’s sales turnover was $3.5 million which represented 0.001% of Amazon’s revenue. In 2010, Pirate Trading was selling its Ravelli-brand tripods on Amazon and according to owner Dale Thomas, come 2011 Amazon had created their own version of six of its most popular products. These were copied exactly and sold as AmazonBasics tripods. Having bought one to check, Thomas even alleged that the tripods were made by the same manufacturer. The prices Amazon charged were lower than the manufacturing cost, with Thomas claiming it would be cheaper for him to buy them on Amazon and repackage them rather than buy from the original manufacturer. In 2015, Thomas said Amazon suspended all sales of Ravelli products including Pirate Trading’s tripods. In response to the Wall Street Journal report, Amazon’s evasive response was that:

”AmazonBasics’ tripods don’t violate any intellectual-property rights."

The price is right?

In order to benefit from the lucrative market for products to new parents, Amazon acquired Quidsi Inc. for $545 million in 2010. Quidsi operated Diapers.com, Soap.com and Wag.com. The acquisition was the culmination of an intense price battle between the two companies, one which threatened to push the Jersey-based Quidsi out of business. By March of 2017, Amazon announced that it was shutting down Diapers.com with the loss of 263 jobs. In a statement, an Amazon spokesperson blamed the shutdown on profitability issues:

“We have worked extremely hard for the past 7 years to get Quidsi to be profitable, and unfortunately we have not been able to do so. Quidsi has great brand expertise and they will continue to offer selection on Amazon.com; the software development team will focus on building technology for AmazonFresh.”

However, an antitrust Congressional hearing earlier this year released emails showing that Amazon made an effort to weaken Diapers.com before buying it. Emails written by Amazon retail executive Doug Herrington said:

“We have already initiated a more aggressive ‘plan to win’ against Diapers.com, to the extent that this plan undercuts the core diapers business at Diapers.com, it will slow the adoption of Soap.com.”

Herrington referred to Quidsi as Amazon’s No. 1 short-term competitor and said in another email

“We need to match pricing on these guys no matter what the cost.”

Representative Mary Gay Scanlon questioned Bezos about documents showing Amazon was willing to lose $200 million in one month on diapers alone. She accused Amazon of raising prices on diapers after the elimination of its competitor. Bezos responded:

“I don’t remember that at all."

Further denials of stealing customers' data were made by Amazon following the hearing in Congress, with a spokesperson saying:

“Like other retailers we look at sales and store data to provide our customers with the best possible experience. However, we strictly prohibit our employees from using non-public, seller-specific data to determine which private label products to launch.”

Interviews of 20 former employees by the Wall Street Journal told a different tale. One former employee who accessed the data and described a pattern of using it to launch and benefit Amazon products:

“We knew we shouldn’t, but at the same time, we are making Amazon branded products, and we want them to sell.”

Current action by EU antitrust regulators against Amazon could end up costing the company up to 10% of its annual revenue which could be as much as $37 billion. Charges have been filed against the eCommerce giant of using business data to yield an unfair advantage over smaller merchants operating on its platform. This comes after a two year investigation into Amazon’s “dual role” as both a provider of an online marketplace for independent merchants and a platform for its own retail sales. The EU commission said it took issue with Amazon “systematically using non-public business data of independent sellers” and then conducting sales on its platform, to the benefit of its own retail arm which competes with these same sellers.

Margrethe Vestager, the EU’s Commissioner for competition said:

“Amazon illegally distorted competition in online retail markets. This is a case about big data. We do not take issue with the success of Amazon or its size. Our concern in very specific business conducts which appear to distort genuine competition.”

In response, an Amazon spokesperson said:

“We disagree with the preliminary assertions of the European Commission and will continue to make every effort to ensure it has an accurate understanding of the facts.”

How low can Amazon go?

The company has been accused of stealing tech from startups under the pretext of funding them. This ugly predatory behavior runs via Amazon’s venture capital arm as it invests in small firms to actually obtain information about products developed by them. Amazon’s fund invested in DefinedCrowd and gained access to the technology startup’s finances and other confidential information. Four years later, DefinedCrowd founder and CEO Daniela Braga accused Amazon of stealing their concept because Amazon Web Service’s product called A21 competed directly with them. All this under the guise of venture capital funding. Amazon’s Echo seems to have been developed this way also. The company which built the smart speaker Ubi, met Amazon to discuss funding and concepts. Not long after, Amazon launched Echo, following which Ubi has all but disappeared. It is hard for small startups to take on the mighty Amazon in court but fortunately the company is now answerable to the House Judiciary Committee for its immoral and unethical behavior.

This is not the first time we have run an EXPOSED! on Amazon

And for all the above reasons and more, ladies and gentlemen, are why we support and admire the work particl.io does. Taking on Amazon and giving power and control back to the creators, the sellers, the people who matter.

See you next time for more dirt on the global bad guuys!