On 9 August, an article in Eurasia Review reported that the World Bank had published a scathing report on Lebanon’s financial crisis and alleged acts of deception that appear to have made the country’s economic collapse inevitable. The report compares the Mediterranean country’s economic model since 1993 to a Ponzi scheme.
Well, things may have seemed to die down, and the teachers are back at work, but it is reported that road protests are scheduled to restart (where they in fact had ended…) on Wednesday, 10 August, with Single Union of Construction and Similar Workers (Suntracs) having announced nationwide protest actions . We are due to be away then, so might have problems getting back. We’ll see.
Meanwhile, ex-President Martinelli, despite he and wife having sued the La Prensa newspaper for reporting that the tax authorities were investigating his affairs, and denying such a thing was happening, is nevertheless launching an action to stop the investigation that he says is not happening…
It is also reported that David McCulloch, who wrote the award-winning story of the Panama Canal – “A Path Between Two Seas: The Creation of the Panama Canal” – has died.
8 AUGUST 2022
GREEK WIRETAPPING SCANDAL
On 6 August, Ekathimerini reported on claims that the phone of Nikos Androulakis, an MEP who is the leader of the opposition socialist PASOK party, had been bugged. In the aftermath, the prime minister’s chief of staff (who is also the PM’s nephew) and the head of the intelligence service resigned. Government officials claimed that the “legal wiretapping” of Androulakis was carried out at the request of the Ukrainian and Armenian intelligence services, implying the MEP was being spied on because he is too close to Russia and Turkey.
AUSTRALIAN COMMUNICATIONS AND MEDIA AUTHORITY FORMAL WARNING TO A SUPPLIER FOR PROVIDING GAMING SOFTWARE TO 13 ILLEGAL ONLINE CASINOS
On 8 August, iGB reported that the ACMA had issued its first formal warning, saying that Proxous Advanced Solutions was knowingly involved in the provision of prohibited interactive gambling services to Australians.
US REGULATORS TO SHUT DOWN POLITICAL BETTING SITE PREDICTIT
On 8 August, iGB reported that there is a federal ban on online gambling on election results, but that nonetheless PredictIt, a not-for-profit project run by the Victoria University of Wellington, a New Zealand-based research institution, had been allowed to operate. This had made it effectively the only regulated political betting site in the US, as well as the only cross-state betting exchange regulated in the US.
FIRST CONVOY OF SHIPS CARRYING UKRAINIAN GRAIN LEAVES ODESSA
On 5 August, the Wall Street Journal reported that the convoy consisting of the bulk carriers Navi Star, Rojen and Polarnet and left Odessa on 5 August carrying nearly 60,000 tons of corn.
ERICSSON SUED BY US TERROR VICTIMS OVER ALLEGED IRAQ BRIBE PAYMENTS
On 5 August, the Wall Street Journal reported that Ericsson is being sued by hundreds of Americans who say the company’s alleged payment of bribes to Al Qaeda and Islamic State — protection money meant to let it operate in Iraq — also helped fund acts of terror. It faces claims from more than 500 US service members and civilians who were victims of terrorist attacks and hostage takings from 2005 to 2021, along with the families of those killed in attacks. In February, it announced that it had found “serious breaches of compliance rules” in Iraq, including evidence of corruption-related misconduct, and in 2019 paid about $1 billion to settle with US prosecutors over allegations of bribery in 5 countries, a deal that didn’t include any conduct in Iraq.
THE RUSSIAN IMPERIAL MOVEMENT (RIM): A PUTIN REGIME PROXY
On 7 August, C/O Future published a post about this organisation, formed in 2002, with deep links into the KGB (and later FSB). It is described as a right wing and Russian nationalist/white extremist organisation whose policies and actions closely support the Putin regime even though it claims in its narratives to be directly opposed to it. It operates within Russia, train foreign fighters supporting Russian separatists in the Donbas and Luhansk, and even send fighters in direct support of Russian combat operations taking place abroad.
RUSSIA BARS EXXON AND OTHER WESTERN INVESTORS FROM SELLING SHARES IN STRATEGIC BUSINESSES
On 5 August, the Wall Street Journal reported that Russia has barred investors from nations it deems unfriendly from selling shares in certain strategic enterprises through to the end of the year. It is said to be part of a range of special measures being enacted in the sphere of finance and fuel and energy.
US: APPLYING THE BANK SECRECY ACT, FINCEN REGULATIONS, AND SANCTIONS TO THE NASCENT NFT MARKET
On 4 August, Baker Hostetler LLP published a briefing saying that NFT often involve 2 areas with known money laundering and terrorist financing risks: cryptocurrencies and high-value assets, like art. Recent actions and statements from Congress also show an increased AML focus on the art world, suggesting that the industry may be subject to more AML regulation, as are other industries with high-value assets, like precious metals, stones, and jewels. It comments on insights into the AML considerations that NFT market participants should bear in mind and what precautions they may wish to take currently.
UK: DIRECTOR DISQUALIFICATION ACTION AGAINST DISSOLVED COMPANIES
On 2 August, Weightmans LLP published an article saying that the Insolvency Service, has recently used its new powers to disqualify 3 former directors for dissolving their companies. The new powers enable it to disqualify former directors who abuse the company dissolution process, and these provisions apply where the relevant company has been dissolved without initiating a formal insolvency process. It published an earlier brief warning of the implications of this new legislation.
INDIA’S NEW HYPERSONIC MISSILE RELIES ON RUSSIAN TECH
On 4 August, the Asia Times reported that India’s new BrahMos II hypersonic missile may feature technology used in Russia’s Tsirkon hypersonic weapon, jointly developed by India’s Defense and Research Development Organization (DRDO) and Russia’s NPO Mashinostroyeniya. It is said that BrahMos II will not be exported, as India is a party to the Missile Technology Control Regime (MTCR), meaning India can develop missiles with ranges of more than 300 km and a weight of more than 500 kg but cannot sell such weapons to third countries.
DRONES USED BY IRAN-BACKED MILITIAS ARE COMING FROM CHINA
On 5 August, Al-Monitor reported US claims that unmanned drones fired by Iran-backed militias at targets across the Middle East in recent years are being supplied from China. The article also says that Iran is not thought to have purchased Chinese military drones, but has its own, which it has sought to export. As for other Middle East States, Saudi Arabia is said to have purchased China’s Wing Loong II and CH-4 drones starting in 2014, while the UAE is thought to have obtained the Wing Loong in 2011. Iraq and Jordan are also believed to have a small number of CH-4B, and Algeria, Egypt and Pakistan have also reportedly acquired military drones from China.
4 MORE RUSSIAN BILLIONAIRES LOSE CYPRIOT CITIZENSHIP
On 8 August, Schengen Visa reported that authorities have announced that 4 more Russian billionaires will lose their citizenship in Cyprus, acquired through the Golden Passport scheme, after they have been blacklisted by the EU following the invasion of Ukraine. In April, a statement said that a total of 11 members of Russian billionaire’s families would lose their citizenship. Following the Cypriot government policy, the names of persons affected by the recent decision have not been published.
HONG KONG POLICE SEIZE 126 KITTENS AND PUPPIES SMUGGLED BY SPEEDBOAT INTO CITY FROM MAINLAND CHINA
On 8 August, the South China Morning Post reported that all of the kittens and puppies are expensive breeds and only a few months old, with each animal able to fetch thousands of dollars at least. It was the third smuggling case involving kittens and puppies being shipped into Hong Kong from the mainland this year.
ISLE OF MAN: COMPANIES MUST COMPLY WITH RUSSIAN COURT ORDER
On 8 August, Isle of Man Today reported that the High Court has ruled that 2 island-based companies must comply with a bankruptcy order issued by a court in Russia, in a case which has its origins in Russia. The case went to the island’s courts because there are assets in the Isle of Man.
PwC FINED £1.75 MILLION OVER BT AUDIT FOLLOWING ‘FRAUD IN ITS ITALIAN OPERATIONS’
On 8 August, Telecoms.com reported that PwC was fined by the Financial Reporting Council over its work in auditing BT, following the identification of fraud in its Italian operations. It says that, apparently PwC and Audit Engagement Partner Richard Hughes each admitted ‘breaches of Relevant Requirements in relation to the audit of adjustments between the current and prior years disclosed by BT in its financial statements for the financial year ended 31 March 2017 (FY17 Financial Statements) which were made following the identification of a fraud in its Italian operations in 2016’.
NEW FORCED LABOUR REQUIREMENTS FOR MEMBERS OF THE CUSTOMS TRADE PARTNERSHIP AGAINST TERRORISM (C-TPAT)
On 8 August, Sandler Travis Rosenberg reported that US Customs and Border Protection has announced new minimum security criteria related to forced labour that members of the Customs Trade Partnership Against Terrorism will be required to comply with.
PAKISTAN FINDS EX-PM IMRAN KHAN’S PARTY RECEIVED MONEY FROM ABROAD
On 8 August, OCCRP reported that Pakistan’s elections monitoring body said it found that the party of former Prime Minister Imran Khan has received millions of dollars in donations from the US, UK, UAE and Australia which could be against the law.
On 5 August, Jurist reported that the ban will become active on 19 August and will cover weapons like pistols or revolvers that are designed to be shot with one hand. The majority of handguns sold in Canada are imported, so the ban is expected to virtually end all handgun sales.
AUSTRALIA: CONSULTATION ON A MULTINATIONAL TAX INTEGRITY PACKAGE TO ADDRESS THE TAX AVOIDANCE PRACTICES OF MULTINATIONAL ENTERPRISES (MNE) AND IMPROVING TRANSPARENCY THROUGH BETTER PUBLIC REPORTING OF MNE TAX INFORMATION
On 5 August, the Treasury reported that the consultation forms part of the Government’s commitment to ensuring that MNE pay their fair share of tax in Australia to help fund vital services, repair the Budget and level the playing field for Australian businesses.
SPANISH DRUG CONVICTION COUNTS FOR LITTLE IN ALBANIA
On 5 August, Balkan Insight reported that, for years, Albanian authorities failed to probe the wealth and connections of 2 Albanians convicted of drug trafficking in Spain. They have ever found themselves in the crosshairs of Albania’s ‘anti-mafia law’ – designed to dig into unexplained wealth and seize the proceeds of crime – despite widespread evidence that the Albanian construction sector is rife with laundered money. One of the brothers is heavily involved in the sector. Under a new name, in 2014, 4 years after fleeing his prison sentence in Spain, he founded his first business in Albania and expanded from concrete to high-end housing developments, plasterboard production and mining.
THE UK TRUMPETS NEW REGISTER TO REIN IN KLEPTOCRATS BUT IT’S 6 YEARS LATE AND RIDDLED WITH LOOPHOLES
On 3 August, Coda published an article by Oliver Bullough about the new UK law that provides that anyone wishing to deal in British property with a foreign-registered company will have to declare who owns it.
SINGAPORE: 2 E-SPORTS PLAYERS CHARGED WITH MATCH-FIXING, GAMBLING DURING TOURNAMENT
On 5 August, Channel News Asia reported that 2 men linked with professional e-sports have been charged with gambling and fixing a match during an online tournament. They are said to have committed the offences during a 2020 tournament featuring the game, Valorant.
UK: MAN ARRESTED IN DAIGOU SHOPPING MONEY LAUNDERING INVESTIGATION
On 4 August, a news release from NCA advised that a 35-year-old Chinese national has been arrested in Teesside as part of a NCA investigation into a suspected Chinese underground banking network. The case is said to involve so-called Daigou shopping, where high value retail items such as watches, jewellery or designer goods are purchased in the UK and then shipped to China to be re-sold.
UAE ISSUES NEW REPORTING RULES FOR REAL ESTATE TRANSACTIONS TO COMBAT MONEY LAUNDERING
On 8 August, The National reported that UAE has introduced new reporting requirements for “certain real estate transactions” conducted in the country to fight money laundering and terrorism financing. All real estate agents, brokers and law firms are required to file reports to the FIU on the purchase and sale transactions of freehold properties that involve 3 methods of payment, whether for a portion or the entirety of the property value.
US AND EU IMPORTS OF RUSSIAN URANIUM AND ENRICHMENT SERVICES COULD STOP
On 5 August, the Bulletin of the Atomic Scientists reported that imports of Russian uranium and uranium enrichment services could stop. This is a shift that has already started spontaneously. It explains how a complete transition away from Russian nuclear services could happen. It explains that, in 2021, Russia provided US nuclear utilities with 14% of their uranium purchases and 28% of their enrichment services. In 2020, EU utilities imported 20% of their natural uranium and 26% of their enrichment services from Russia. Combined, annual US and EU imports earn Russia only on the order of $1 billion per year.
WIFE OF SLAIN TEXAS TRUCKING MAGNATE NOW CHARGED IN MASSIVE FRAUD
On 5 August, Freightwaves reported that a woman convicted of killing her husband while chasing his mistress on a highway in 2016 has been charged with felony fraud relating to the company they co-owned. Frances Hall, 59, provided false payroll information over a 7-year period to avoid more than $9 million in insurance premium payments.
On 9 August, the Isle of Man advised that the Sanctions (Application) (Miscellaneous Amendments) Regulations 2022 come into operation on 9 August, once more bringing Island sanctions law into line with that in the UK.
WINE FRAUDSTER WHO SERVED LESS THAN 4 YEARS IN ITALIAN JAIL AFTER FLEEING THE UK MADE MORE THAN £38 MILLION IN TAX SCAM
On 8 August, the Mail Online reported that Livio Mazzarello skipped bail days before he was found guilty of fronting a scheme to dodge excise duty on wine being imported into the country from Europe. He was found guilty of fraudulent evasion of duty, fraudulent evasion of VAT and money laundering, and jailed for 14 years in his absence in July 2017. Italian authorities took over enforcement for his sentence and reduced it to 8 years, but he was released in June 2021 after serving less than 4 years in jail. He now faces a confiscation hearing, where UK authorities will try to claw back as much money as possible after he dodged millions in excise duty for nearly 5 years.
US WARRANT FOR SEIZURE OF AIRCRAFT OF SANCTIONED RUSSIAN OLIGARCH ANDREI SKOCH WORTH OVER $90 MILLION
A news release from US DoJ on 8 August advised that the US Government had been authorised to seize an Airbus A319-100 owned and controlled by sanctioned Russian oligarch Andrei Skoch. A federal court found that the aircraft is subject to seizure and forfeiture based on probable cause of violation of the federal AML laws.
US OFFICE OF FINANCIAL RESEARCH WORKING PAPER ON CENTRAL BANK DIGITAL CURRENCY
On 8 August, a release on Mondo Visione advised of the OFR working paper which looks at how introducing a central bank digital currency (CBDC) would affect the stability of the banking system. A blog post elaborates on the findings.
On 8 August, OFAC announced that it had sanctioned virtual currency mixer Tornado Cash, which has been used to launder more than $7 billion worth of virtual currency since its creation in 2019. This includes over $455 million stolen by the Lazarus Group, a Democratic People’s Republic of Korea (DPRK) state-sponsored hacking group. Tornado Cash is a virtual currency mixer that operates on the Ethereum blockchain and indiscriminately facilitates anonymous transactions by obfuscating their origin, destination, and counterparties, with no attempt to determine their origin. Criminals have increased their use of anonymity-enhancing technologies, including mixers, to help hide the movement or origin of funds. The sanctions mean that all property and interests in property of Tornado Cash that is in the US or in the possession or control of US persons is blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, 50% or more by one or more blocked persons are also blocked. All transactions by US persons or within (or transiting) the US that involve any property or interests in property of designated or otherwise blocked persons are prohibited unless authorized by a general or specific licence issued by OFAC, or exempt. These prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any blocked person and the receipt of any contribution or provision of funds, goods, or services from any such person.
On 5 August, the Law Commission advised that has been asked by the Government to examine the need for reforms to the appeals system, to ensure that the courts have the right powers to enable the effective, efficient and appropriate resolution of appeals. The comprehensive review, which will include a public consultation, follows calls from several leading bodies for improvements to the law on appeals to be considered.
On 8 August, OCCRP reported that before being considered for EU membership, the EU Council has said that Georgia must implement reforms to make its institutions more accountable and democratic. However, it says that, in a new investigation, reporters from OCCRP’s Georgian partner, Studio Monitor, found that the problem extends to the highest levels of the country’s judiciary. It says that one of Georgia’s most influential judges, Levan Murusidze, failed to disclose assets belonging to his long-term romantic partner in his asset declarations. This ensured that the multiple apartments, expensive jewellery, and designer clothes she acquired in recent years were hidden from public scrutiny. Previously Studio Monitor had found that another influential judge, Mikheil Chinchaladze, had failed to declare significant real estate holdings registered to his aunt. It says that Murusidze and Chinchaladze are alleged to be the leaders of a powerful group of judges, known as “the clan”, that is said to be blocking the kind of reforms required to deepen Georgia’s ties to Europe.
On 8 August, a special report from RUSI contains an examination of the components and functioning of 27 of Russia’s most modern military systems – including cruise missiles, communications systems and electronic warfare complexes – concludes that the degradation in Russian military capability could be made permanent if appropriate policies are implemented.
On 8 August, Balkan Insight reported that companies with ties to Slobodan Tesic’s are exporting ammunition to the very country – the US – that slapped sanctions on him and his associates in 2017 and 2019. It says that he has found a “way around” the US sanctions via 2 Belgrade-registered companies – Valir d.o.o. and Zenitprom. This is despite Tesic being blacklisted by US authorities for the past 5 years for bribery and violating arms embargos.
PANAMA: SUPREME COURT DENIES REQUEST TO LEAVE COUNTRY BY DEPUTY OF THE CENTRAL AMERICAN PARLIAMENT (PARLACEN) FACING EMBEZZLEMENT CHARGES
On 7 August, Newsroom Panama reported that the Court had denied Giselle Burrillo’s request to be allowed to leave the country. She is being prosecuted for alleged embezzlement at the Authority of the Micro, Small and Medium Enterprises (Ampyme) between 2011 and 2014 when she directed the institution. In June 2020, 3 former Ampyme officials were sentenced to 36 months in prison for embezzlement.
SUPPLY OF ILLEGAL SUPER-STRONG VAPES SMUGGLED TO UK FROM THE US ‘LINKED TO ORGANISED CRIME’
On 7 August, The i newspaper reported claims that super-sized and super-strong American vapes that have been smuggled into the UK and are being targeted at children is linked to organised crime. Trading Standards officers have seized thousands of the illegal products. Some of the vapes contain more than double the size and nicotine strength permitted under current UK law, and are offered in flavours like Fanta and Skittles.
PHILIPPINES: 21 TONNES OF SMUGGLED CHLORINE SEIZED IN CEBU On 7 August, Cebu Daily News reported that customs officials had seized drums of chlorine granules (sodium hypochlorite), a chlorine-based chemical compound. It is commonly used as household chemicals such as bleach, and for disinfection and sanitation, particularly for potable water and swimming pools.
MADAGASCAR: GOLD, AND WHY A BAN ON FLIGHTS TO/FROM SOUTH AFRICA WAS CONTINUED
On 5 August, the Institute for Strategic Studies published an article saying that, in April, Madagascar lifted its 2-year COVID-19-induced ban on international travel allowing commercial flights to resume, but not those involving South Africa. It says that one suggestion for a reason was that it was connected to 73.5 kg of unwrought gold bullion found in the hand luggage of 3 Malagasy nationals flying from Madagascar through Johannesburg and via Addis Ababa to Dubai in December 2020, when South African authorities arrested the men for attempted smuggling and confiscated the gold and some $20 000 in cash. In July, Madagascar’s Council of Ministers confirmed the gold and dollars were behind the flight ban – saying that air routes connecting Madagascar to South Africa were suspended pending the signing of an agreement or MoU “to ensure the prevention of the smuggling of national wealth”. It is said that South Africa is a key transit point for bullion smugglers channelling gold to and from Dubai. While the gold is worth around $4 million, the article suggests that the case suggests that the diplomatic spat is less about Madagascar’s national interest and more about the personal interests of high-up people there.
On 6 August, Modern Ghana reported that the Customs Division of the Ghana Revenue Authority (GRA) had intercepted a bus loaded with electricity prepaid meters that were allegedly being smuggled into the country, and hidden in the air-conditioning unit and other compartments of the bus.
HEAD OF AMNESTY INTERNATIONAL’S UKRAINE ARM RESIGNS AFTER BACKLASH TO REPORT
On 6 August, Axios reported that the leader of Amnesty International’s Ukraine arm had resigned amid fallout from report that the human rights organization issued criticising the Ukrainian military’s tactics amid the ongoing Russian invasion. It accused Ukraine of endangering its own civilians and allegedly violating international law, and said Ukrainian forces exposed civilians to Russian attacks by basing themselves in residential areas, schools and hospitals.
CAMBODIAN EX-LAWMAKER WAS REFUSED EU PASSPORT BY MALTA
On 5 August, RFA reported that Prime Minister Hun Sen’s niece, chief of police, finance minister, 2 personal advisors and a senator from his Cambodian People’s Party were all granted Cypriot passports in early 2017. However, then former CPP lawmaker and Transport Ministry secretary of state Ing Bun Hoaw sought a EU passport from Malta in 2017 he was refused.
ENGLISH FOOTBALL LEAGUE REVIEWING FILES LINKING CAMBODIAN DIPLOMAT TO SOCCER CLUB
On 3 August, RFA reported that the EFL has received evidence linking Cambodian diplomat Wang Yaohui to Birmingham City FC after the EFL successfully applied to Singapore’s Supreme Court to access records in a case brought against one of Wang’s companies. This was as part of an ongoing investigation by the league into allegations that Wang secretly controls a substantial portion of Birmingham City’s shares, in contravention of EFL regulations. The article suggests that the developments may explain why a putative takeover of the club had stalled.
AUSTRALIA: MAN SENTENCED AFTER $241 MILLION WORTH OF METH FOUND IN CANS OF COCONUT MILK
A news release from the Australian Federal Police and Australian Border Force on 5 August advised that a Sydney man, 22, has been sentenced to 6 years’ jail for importing about 700 litres (288 kg) of liquid methamphetamine with an estimated street value of over A$241 million concealed inside cans of coconut milk. This involved a air freight consignment of 86 boxes of coconut milk cans sent from Thailand which arrived in Sydney in August 2020.
TALIBAN’S BLACK GOLD: MILITANTS SEIZE ON COAL TO REBOOT ECONOMY
On 3 August, the Financial Times reported that, thanks to the global surge in commodity prices amid the Ukraine war and coronavirus-related disruption, business is booming at Afghanistan’s coal mines. To reboot the economy, the Taliban have aggressively increased coal exports, brushing aside environmental and ethical concerns. Much of the coal makes its way to Pakistan, from where some is sent to China. It is estimated that exports may have doubled.
On 22 June, an article from CSIS warned that the riskiest provisions in the proposed legislation would require big app store operators to allow third-party apps to be offered in their stores without a security review, or allow any developer direct access to a customers’ mobile devices, a practice called “sideloading”. The article says that to believe that only legitimate businesses will publish new apps or ask for source code is naive.
On 4 August, the Indian Express reported that the move comes after nearly 4 years of the Bill being in the works, where it went through multiple iterations including a review by a Joint Committee of Parliament (JCP), and faced pushback from a range of stakeholders including tech companies and privacy activists.
FRENCH COURT BACKS TAX FRAUD DETECTION PROGRAMME BASED ON ‘FREELY ACCESSIBLE’ DATA
On 27 July, EurActiv reported that French tax authorities and customs can continue collecting “freely accessible” data on social media networks such as Facebook to combat illegal sales or tax fraud; having already done so during a 3-year pilot programme.
CHINA: ANTI-CORRUPTION DRIVE TARGETS OFFICIALS IN SEMICONDUCTOR INDUSTRY
On 1 August, the China Digital Times reported that the long-running anti-corruption drive has found a new target: officials in charge of the country’s semiconductor industry. It also says that Chinese state media outlets have framed the anti-corruption drive as a means of strengthening China’s own chip industry in response to competition with the US.
On 7 August, the Mail Online reported that the Vatican failed to prevent UK judges from probing a £124 million investment property deal it made with a British financier, Raffaele Minicione, who holds both British and Swiss citizenship. He is accused by the Vatican of 10 criminal charges, including fraud, embezzlement and abuse of office dating back to 2014; and wants to bring civil action in the UK in order to counter publicity and protect his reputation.
FORMER DUTCH FOOTBALL PLAYER SUSPECTED OF MONEY LAUNDERING AND DRUG TRAFFICKING
On 7 August, NL Times reported that former footballer David Mendes da Silva was arrested at his birthday party and is suspected of money laundering and drug trafficking. He played with Sparta, Ajax, NAC Breda, AZ and others during his time in football, and it says that he is believed to be involved with Edobet, an illegal gambling website.
As cases have dropped to lower levels, though not have disappeared entirely, the Government has announced that the so-called “hospital hotels” are to cease being used. Since March 2020, around 23,000 patients used the 24 facilities – hotels and hostels throughout the country. In that time, 3 of the patients died. The former convention centre, converted into a temporary hospital, will continue to accept mild and moderate cases requiring quarantine.
Meanwhile, today a second case of moneypoz is reported (the first now having recovered). The 33-year-old male is said to have contracted the disease abroad.
6 AUGUST 2022
EU NOTICE: THE IMPORT BAN ON RUSSIAN CRUDE OIL AND PETROLEUM PRODUCTS AND BLENDED OIL
On 6 August, the EU Sanctions blog reported that on 3 August the EU issued a Notice saying that the ban covers Russian oil mixed with oil of other origin, unless the exact share of the non-Russian-origin oil can be clearly demonstrated, and if the proportion cannot be determined then the whole shipment is banned.
JAPAN: SCIENCE COUNCIL SAYS DRAWING LINE BETWEEN MILITARY AND CIVIL USE TECHNOLOGY IS DIFFICULT
On 28 July, The Mainichi daily published an article saying that the Science Council of Japan (SCJ) has drawn up a statement claiming that it’s become difficult to simply separate dual-use technology that can be applied to both military and civilian use from other technologies. The SCJ said that the growing significance of science and technology relating to national security, such as artificial intelligence and quantum technology, makes it difficult to impose blanket restrictions on research by discerning the possibility of a technology being diverted to military use.
On 5 August, Coindesk issued a video report saying that authorities had raided properties related to a director of the Mumbai-based trading platform and frozen $8.14 million in funds in connection with alleged money laundering.
COLOMBIA FIU FINDS EVIDENCE OF CRYPTO MONEY LAUNDERING
On 5 August, Citywire reported that the head of the country’s FIU Colombia had said that it had detected signs of money laundering and terrorist financing activities through the use digital assets. The comments came following the release of proposed draft rules released by the Financial Superintendence which would create an AML/CFT risk management system, including guidelines for methods of tracing crypto transactions. These were proposed to support the country’s ‘Sandbox’ initiative launched in 2021 which allows banks to work more closely with cryptocurrency exchanges to buy and sell digital assets.
UK: NATIONAL SECURITY AND INVESTMENT ACT 2021 – ORDER PREVENTING THE ACQUISITION OF INTELLECTUAL PROPERTY RELATING TO VISION-SENSING TECHNOLOGY
A Briefing from law firm HFW has advised that, for the first time, a final order has been published under the National Security and Investment Act 2021 to block a proposed transaction, in this case the acquisition by a Chinese company of intellectual property under a licence agreement relating to vision sensing technology. This was in relation to a licence agreement which had been entered into between the University of Manchester and Beijing Infinite Vision Technology Company Ltd. The impact of the order is that it prevents the “acquisition of the intellectual property from proceeding”.
CHILE ONLINE GAMBLING LAUNCH STALLED DUE TO TAX CONCERNS
On 5 August, SBC Americas reported that Chile’s online gambling marketplace launching has stalled due to political conflicts surfacing over outstanding tax concerns. There were plans to launch the country’s regulated online gambling by 2023, which would collect $55 million in taxes per year as well as shut down 900 unlicensed websites on the black market. However, it is now stated that the proposed taxes need to be reviewed.
IRELAND: SCREENING OF THIRD COUNTRY TRANSACTIONS BILL 2022
On 4 August, Irish law firm Matheson provided an article on the Bill designed to implement the EU Screening Regulation and put in place the legal tools to screen investments by non-EU/EEA undertakings and individuals of certain key infrastructure assets with an Irish nexus, in particular concerning foreign investments into critical utilities and infrastructure sectors, high-tech and personal data focussed businesses, and media businesses. It says that the key takeaways are that this new regime involves very low thresholds, covers a wide variety of sectors and needs to be considered in parallel with merger control rules. It remains to be seen how it will be implemented in practice.
CRYPTOASSETS HELD BY INDIVIDUALS: WHAT CONSTITUTES “TRADING” FOR UK TAX PURPOSES
On 4 August, a post from CMS Law says that HMRC continues to update and expand its guidance on the taxation of cryptoassets held by individuals; and CMS law says that a series of posts will explore various tax topics relevant to individuals buying, holding and disposing of cryptoassets. This article considers what constitutes a “trade” for tax purposes.
US: ALLEGED OPERATOR OF THE ILLICIT CRYPTOCURRENCY EXCHANGE BTC-E EXTRADITED FROM GREECE
A release on Mondo Visione on 5 August was concerned with Russian national Alexander Vinnik, who has been extradited to the US to be held accountable for operating BTC-e, a criminal cryptocurrency exchange, which allegedly laundered more than $4 billion of criminal proceeds.
US: FORMER UNIVERSITY PROFESSOR SENTENCED FOR MAIL FRAUD AND MONEY LAUNDERING AFTER LIVING AS A FUGITIVE IN IRAN AND TURKEY FOR MORE THAN A DECADE
A news release from US DoJ on 4 August advised that Parviz Sharifrazi, age 70, of Baton Rouge, Louisiana, had been sentenced to 24 months in federal prison following his convictions for mail fraud and money laundering. In 2008 and 2009, he was working as an associate professor at Southern University and trying to raise money for an unrelated business venture in Iran. He and a co-defendant conceived a scheme to defraud Southern by submitting fraudulent equipment quotes in the names of fictitious vendors and causing Southern to approve the quotes, while concealing their involvement in the scheme.
RUSSIA BECOMES INDIA’S THIRD-LARGEST COAL SUPPLIER IN JULY
On 6 August, Hellenic Shipping News reported that Russia became India’s third-largest coal supplier in July, with imports rising by over a fifth compared with June to a record 2.06 million tonnes. It says that Russia has historically been the sixth-largest supplier of coal to India, behind Indonesia, South Africa, Australia, and the US, with Mozambique and Colombia alternatingly featuring in the top 5.
BIDEN ADMINISTRATION ANNOUNCES NEW APL LANDMINES POLICY
On 24 June, the Stimson Center reported on an announcement which comes after a comprehensive review that began in April 2021 and essentially reverses the Trump Administrations January 2020 APL policy and reverts back to the policy established by the Obama Administration in 2014. The Trump Administration policy allowed the production and use of antipersonnel landmines for future conflicts, and this approach represented a dangerous roll back decades of US practice and approach, isolated the US. Instead, the US will now no longer produce, acquire, or replace antipersonnel mines and that the US would no longer use antipersonnel landmines anywhere in the world except for the Korean Peninsula. It also pledged — outside of Korea — not to assist or otherwise encourage other countries to engage in activities prohibited by the Mine Ban Treaty and to destroy any landmine stocks not required for the defence of South Korea.
THE PRESIDENTS OF RUSSIA AND TURKEY HAVE AGREED TO TRADE IN RUBLES
On 6 August, TeleSUR reported that the presidents of Russia and Turkey signed a memorandum on the development of their trade and discussed the use of Russian Mir cards. The Mir card system is currently used in Turkey, Vietnam, Armenia, Uzbekistan, Belarus, Kazakhstan, Kyrgyzstan, Tajikistan, South Ossetia and Abkhazia, and is a Russian alternative to European and US payment systems.
THE US STATE DEPARTMENT CHILD SOLDIERS PROTECTION ACT LIST
On 27 July, the Stimson Center reported on the latest annual report which includes a list of governments that have been identified as using or recruiting child soldiers, or supporting armed groups that do. The Child Soldiers Protection Act 2008 aims to prevent the recruitment and use of child soldiers worldwide by restricting the provision of certain US weapons and military assistance to countries whose governments or government-supported armed groups use or recruit child soldiers. The 2022 CSPA list includes 12 countries – Afghanistan, Burma, Central African Republic, Democratic Republic of the Congo, Iran, Mali, Russia, Somalia, South Sudan, Syria, Venezuela and Yemen. Russia is a new entry on the 2022 CSPA list – the only country to be listed for the first time this year. Several of the countries on the 2022 CSPA list have a long history of being implicated in child soldiers use – such as the DRC, Somalia and Yemen.
EUVAT ADMINISTRATIVE COOPERATION: CONSULTATION CLOSED ON 25 JULY
The EU Commission call for evidence on the framework for administrative cooperation on VAT and the fight against VAT fraud in the EU closed on 25 July. It is said that responses to the call for evidence will assist the EU Commission in its evaluation of all cooperation tools and which will focus predominantly on the provisions introduced in 2018. One of the things considered is how the rules set out in the VAT e-Commerce Package have been applied since they entered into force on 1 July 2021, since administrative cooperation on VAT is crucial for the proper functioning of the ‘one-stop-shop’.
RUSSIAN HYPERSONIC FLIGHT SCIENTIST ARRESTED FOR TREASON
On 5 August, Newsweek reported that scientist Alexander Shipliuk, an expert in hypersonic flight, has been arrested for alleged treason, according to Russian public media. He is the director of the Siberian Institute of Theoretical and Applied Mechanics of the Russian Academy of Sciences and becomes after his arrest the third Russian scientist arrested on suspicion of treason in recent months.
QUEEN DRAGGED INTO DIPLOMATIC ROW OVER 31 TONS OF VENEZUELAN GOLD IN A LONDON VAULT
On 6 August, The i reported that a legal battle over 31 tons of gold in a London vault has taken a new twist after the head of Venezuela’s central bank cited letters from the Queen as evidence the haul belongs to them. The president of Venezuela’s central bank, claims diplomatic letters signed by the Queen are evidence that Britain recognises the government of President Nicolas Maduro.
On 29 June, the World Bank/UNODC published this book which focuses on the benefits of interagency cooperation between tax authorities and law enforcement agencies working on preventing, detecting, and recovering the illicit financial flows derived from tax evasion, corruption, and money laundering. It maintains that a “whole-of-government” approach is needed to enable agencies to successfully detect, prosecute, and recover the proceeds of interconnected financial crimes. This approach requires commitment, investment, and coordination at various levels of government to overcome existing barriers.
A Policy Brief from the Global Center for Cooperative Security examines the online financing and support systems associated with US anti-authority and racially or ethnically motivated (AAREM) violent extremists. It focuses on the threat as manifest in the US and to a lesser extent the transnational dimensions of AAREM violent extremist financing. It says that clear linkages between US and transnational violent extremists, especially within white supremacist and neo-Nazi circles, also extend to the world of financing. It concludes with several policy solutions to better combat the financial support systems of AAREM violent extremists.
On 5 August, the EU published 3 news releases, saying that North Macedonia, Montenegro, Albania, Ukraine, Bosnia and Herzegovina, Iceland, Liechtenstein and Norway have undertaken to align themselves with –
Council Decision 2022/1271/CFSP which introduces further restrictive measures as well as clarifications to existing measures;
Council Decision 2022/1272/CFSP which adds 48 persons and 9 entities to sanctions lists and introduced further derogations concerning the asset freeze and the prohibition to make funds and economic resources available; and
Council Decision 2022/1276/CFSP which adds 6 individuals and 1 entity to the sanctions lists on the basis of their involvement in recruiting Syrian mercenaries to fight in Ukraine alongside Russian troops.
On 5 August, BIFA says that it has been highlighting the transition of HMRC import/export systems from CHIEF to CDS for some time. CHIEF will be closed to new Import Customs Declarations as of the 30 September, and this means that from the 1 October all import declarations will have to be submitted via the new Customs Declaration Service. It states that, in order for the new service to work efficiently all parties connected with providing information and submitting customs declarations need to be fully prepared for the change. It warns that BIFA Members who have preparing to move from CHIEF to CDS, software providers and CSP it is clear that the transition to CDS is hard at every stage. There is more data to collect, including valuation information, CPC are now in 2 parts and authorisations. The reality is that without having this information customs entries will be delayed, and freight movements disrupted.
Panama is the the Regional Logistics Center for Humanitarian Assistance (CLRAH) and in the first 6 months of the year dispatched some 670.5 tons of supplies, worth $13.6 million, to 38 nations of Latin America. This is according to data from the Ministry of Government (Mingob), the International Federation of the Red Cross and Red Crescent. The UN Humanitarian Response Depot (UNHRD) sent 481.4 tons of aid with a value of $8.87 million to 30 countries in the Americas. including equipment relating to the Covid pandemic. othe supplies included personal protective equipment (PPE), hygiene equipment, cooking and cleaning equipment, mosquito nets, plastic sheets and collapsible drums.
On Covid-19, the Ministry of Health (Minsa) is investigating the application of an annual vaccination against Covid-19, starting in 2023.
5 AUGUST 2022
UK: LAW COMMISSION TO UNDERTAKE REVIEW OF THE CRIMINAL APPEALS SYSTEM
On 5 August, the Law Commission announced that it has been asked by the Government to examine the need for reforms to the appeals system, to ensure that the courts have the right powers to enable the effective, efficient and appropriate resolution of appeals. The comprehensive review will include a public consultation. The project will consider the need for reform, with particular focus on identifying any inconsistencies, uncertainties and gaps in the law that may be hindering the ability of the appeals system to function as effectively and fairly as possible. The review will begin with initial scoping and pre-consultation engagement with stakeholders, followed by a published consultation paper containing provisional proposals for reform, a formal consultation process, and a published final report containing recommendations for reform.
SIHANOUKVILLE: PROJECTS GRIND TO HALT IN CAMBODIA RESORT TOWN
On 5 August, Nikkei Asia carried an article saying that the Cambodian city of Sihanoukville was once billed as “the Macau of Southeast Asia” as it embarked on a multibillion-dollar construction boom of casinos, malls and high-rise condos, mostly funded by Chinese investors. That boom went bust 3 years ago, leaving over 1,100 half-built projects gathering dust as developers scrambled for solutions. Now, the article asks, with the Chinese economy slowing, is the Sihanoukville dream gone for good?
FORMER PUERTO RICO GOVERNOR ARRESTED ON BRIBERY CHARGES
On 4 August, the Wall Street Journal reported that former Puerto Rico Governor Wanda Vázquez Garced had been arrested and charged with participating in a bribery scheme to finance her 2020 gubernatorial campaign. The alleged bribery scheme took place December 2019 through June 2020 and involved bank executives, a former FBI agent and a political consultant, according to the DoJ.
RUSSIAN BILLIONAIRE ALEXANDER ABRAMOV SUING AUSTRALIAN FOREIGN AFFAIRS MINISTER OVER FINANCIAL SANCTIONS
On 5 August, ABC News reported that a steel mogul, Alexander Abramov, a Russian billionaire is suing Australia’s Foreign Affairs Minister and claims sanctions imposed over the invasion of the Ukraine have caused him severe reputational damage. Abramov co-founded Russia’s largest steel producer, Evraz.
ABRAMOVICH’S EVRAZ PROFITS PLUNGE 99.5% AS SANCTIONS BITE
On 5 August, Market Insider reported that Russian steel giant Evraz saw its profits fall by 99.5% in the first half of the year due to sanctions and as demand for its products dried up.
RUSSIAN ACCUSED OF MONEY LAUNDERING AND RUNNING A BITCOIN EXCHANGE EXTRADITED TO US FROM GREECE
On 4 August, CNN reported that a Russian national accused of running a multibillion-dollar cryptocurrency exchange that allegedly profited from various hacking and extortion schemes has been extradited from Greece. Alexander Vinnik is accused of operating a cryptocurrency exchange known as BTC-e that allegedly did business with ransomware gangs, drug dealers and identity thieves.
UK: CHINESE NATIONAL DETAINED ON TEESSIDE IN RELATION TO ALLEGED UNDERGROUND BANKING IN CHINA
On 4 August, the Northern Echo reported that the 33-year-old man, a Chinese national, was detained on suspicion of money laundering as part of a NCA investigation. The investigation relates to the alleged laundering of criminal cash through so-called Daigou shopping, where high-value retail items such as watches, jewellery, or designer goods are purchased in the UK and then shipped to China to be re-sold.
CHEQUE FRAUD: STILL A MAJOR CHALLENGE IN THE DIGITAL AGE
On 21 July, ABA Risk & Compliance in the US carried an article saying that cheques remained the payment method most impacted by fraud activity, at 66%, according to reports from the 2021 Association for Financial Professionals Payments Fraud and Control Survey. Financial institutions encounter deposit fraud in many ways, including counterfeits, forgeries, alterations, serial numbers, stop payments and cheque kiting. It lists what it says are 3 proven ways to combat cheque fraud.
DISCLOSURE OF OVERHEARD PRIVATE BUSINESS CONVERSATIONS
On 5 August, an article from Bird & Bird was concerned with a recent High Court data protection case in the UK where the confidential discussions were overheard by someone who was on the opposite side of a business acquisition which the claimant was involved in. The judgment concerned an application for an injunction preventing disclosure of the content of the private, business conversations between representatives of the claimant, which were overheard by the defendant from another room during the course of the business acquisition meeting. The article explains that the law protects such information and allows those whose privacy, or confidence, has been breached to bring claims for breach of confidence and/or for misuse of private information. Another point raised was that general CCTV warning sign will not suffice in showing consent for the compilation or retention of personal data under the GDPR.
ENGLISH CIVIL COURT DISCLOSURE PILOT MADE PERMANENT
On 4 August, an article from Hogan Lovells advised that from 1 October the disclosure pilot in the Business and Property Courts will become a permanent part of the court rules. It says that the key takeaway from a client perspective is that parties need to think carefully about their disclosure obligations, and what disclosure they want or need from their opponents, at a much earlier stage in the litigation process.
BRIEFING: THE DATA PROTECTION AND DIGITAL INFORMATION BILL
On 5 August, the House of Commons Library released a briefing paper on this Bill which was introduced in the House of Commons on 18 July, and which is scheduled to have its second reading on 5 September.
On 5 August, the House of Commons Library released a briefing paper intended to answer FAQ about ports and shipping, including devolution, harbour powers, international treaties, decarbonisation, ferry passenger rights and seafarer employment rights.
CANADA’S YUKON/US BORDER CREATES A RIPE ENVIRONMENT FOR ORGANISED CRIME
On 4 August, OCCRP reported on a sparsely populated nearly 200,000 mile stretch of land wedged between the Alaska and the Arctic Circle where organised crime is growing, according to report from the Royal Canadian Mounted Police Force (RCMP). Nearly a quarter of all Yukoners belong to Canada’s First Nations populations. According to the RCMP, the rate of overdose death in the province is more than double that of the rest of Canada.
KAZAKHSTAN ARRESTS 23 FOR RUNNING CRYPTO CRIME RING
On 4 August, OCCRP reported that Kazakh authorities had arrested 23 people suspected of being members of a gang that used threats and blackmail to force IT specialists into running underground cryptocurrency mining farms. The racketeers would turn a profit of $300,000 to $500,000 per month for running illegal mining farms in the town of Talgar in the country’s Almaty region. The energy-rich nation currently ranks as the third-largest miner of bitcoin in the world, right after the US and China.
TRAVELLING GANG OF SOUTH AMERICAN THIEVES DISMANTLED AFTER ROBBERIES IN FRANCE AND SPAIN
On 5 August, a news release from Europol advised that law enforcement authorities in Spain, France and Chile, supported by Europol’s European Serious Organised Crime Centre, have closed in on a network of South American thieves who arrived in Europe as ‘tourists’ only to then carry out a string of burglaries in residential areas in France and Spain. 4 suspects – 2 Chileans, 1 Peruvian and 1 Argentinean – have been arrested in Spain.
On 5 August, Eurasia Review reported that a new analysis says that for the last 3 years, ISIS – The Islamic State in Iraq and Syria – has demonstrated considerable resilience against persistent coalition efforts at its eradication and has been slowly adapting, consolidating, and creating an environment favourable to its potential resurgence in central and north-eastern Syria.
HOW TO ADDRESS MODERN SLAVERY RISK ARISING FROM LABOUR SHORTAGES
On 4 August, an article from Out-Law says that the current labour shortages experienced around the world present a modern slavery risk to businesses. Criminal gangs are profiting from practices that provide unscrupulous or unwitting companies with access to workers who are subject to slavery, forced labour, servitude or human trafficking. Often the exploited workers include migrant labourers and other vulnerable groups. It says that businesses should be monitoring their supply chains to spot modern slavery ‘red flags’ and ensure that they comply with legal obligations that may apply to them.
ENGLISH COURTS INCREASINGLY GRAPPLING WITH COMPLEX CRYPTO DISPUTES
On 4 August, an article from Out-Law says that the courts have adapted quickly to increasingly complex disputes involving crypto assets, citing a recent ruling in a dispute over the ownership of an account worth roughly £30 million.
DHL SURVEY REVEALS SMALL BUSINESS EXPORTERS EXPERIENCE ONGOING POST-BREXIT CHALLENGES
On 4 August, CILT says that the new survey reveals mixed perspectives among small- and medium-sized British exporters for the remainder of the year, with one third of those who export or plan to (33%) feeling the outlook for their business is more positive for 2022, with the remaining disagreeing (30%) or undecided (37%). Reflecting on the time since the UK’s exit from the EU, businesses surveyed report ongoing challenges and concerns since the departure.
ISLE OF MAN FSA PUBLIC STATEMENTS – TRIDENT TRUST COMPANY (IOM) LIMITED AND R & M MANAGEMENT (IOM) LIMITED
On 5 August, the Financial Services Authority published 2 separate news releases containing public statements relating to –
the failings of Trident IOM that occurred during the period 2010 and 2020 and the penalty imposed; and
the failings of R&M that occurred during the period 2010 and 2020 and the penalty imposed.
It is said that the failings identified at the firms could have significantly increased the risk that services could have been exploited by persons who may wish to launder money or finance terrorism. The firms were both licensed entities and Trident IOM provided management and administration services to R&M. Since February 2019, Trident IOM has been subject to enhanced supervision around aspects of its conduct of regulated activity including its programme of remediating the contraventions and breaches identified. R&M has also been subject to enhanced supervision since February 2019 around aspects of its conduct of regulated activity including its programme of remediating the contraventions and breaches identified.
THE OLD SCHOOL FRIENDS RUNNING A UK FORMATION AGENCY LINKED TO THE RUSSIAN LAUNDROMAT SCANDAL
On 3 August, Finance Uncovered was concerned with the UK-based company formation agency ComForm, formed in 2007, it soon became one of the leading suppliers of low-cost anonymous British companies, catering to customers across the former Soviet Union. Several companies created by the formation agency Pestuns founded have been linked to controversy. It is said that there is no suggestion that Comform, its employees, nominees or proxies participate in or know of wrong-doing linked to companies it helped create.
US NEARS AGREEMENT ON NIGERIAN GOVERNOR’S MONEY LAUNDERING CASE
On 5 August, Bloomberg reported that the US is nearing an agreement with the brother of a leading member of Nigeria’s ruling party to resolve a court case over more than $140 million that it says was laundered by the politician. The case involves 4 investment portfolios held in trust for Abubakar Bagudu, the governor of the north-western Kebbi state, and his family since 2013. The US alleges that he was part of a network controlled by former dictator Sani Abacha that misappropriated billions of dollars in the 1990s.
KEY TAKEAWAYS FROM THE CFIUS ANNUAL REPORT FOR 2021
On 5 August, Torres Trade Law provided a brief summary of the highlights of the US Committee on Foreign Investment in the United States Annual Report to Congress for calendar year 2021.
US: THE CHIPS AND SCIENCE ACT COULD BRING BIG CHANGES
On 5 August, an article from Bass Berry & Sims was concerned with the new Act which provides $52.7 billion in subsidies and incentives to domestic semiconductor manufacturers to strengthen existing supply chains and better compete with China. It is explained that the legislation the bill requires a “covered entity” seeking CHIPS funding to enter into a “guardrails provision” agreement with the Department of Commerce – prohibiting the entity from engaging in any “significant transaction” promoting the “material expansion of semiconductor manufacturing” in China or any “other foreign country of concern”. A “foreign country of concern” is defined to include China, North Korea, Russia, and Iran. The firm says in the article that Congress now has a tool with the guardrails provision to limit US investments in select sectors of foreign economies, and that it believes this could have significant implications for the future of outbound corporate investment.
GOVERNMENT CRITICS FEAR INDIA’S REVISED AML LAWS MAY BE USED AGAINST THEM
On 5 August, the Strait Times reported that a decision by the Supreme Court to uphold the powers of the country’s financial crime investigation agency has drawn flak, with legal experts concerned that the authorities can continue to detain suspects without bail on weak evidence. It has also stoked fears that critics of the government, including the opposition, may be targeted under amended laws. The BJP government claims the amendments were necessary to strengthen the Enforcement Directorate’s ability to investigate serious financial crimes. Modi’s government has used the law and the ED, which operates under the Ministry of Finance, more vigorously than its predecessors.
US: ITAR-RELATED OPEN GENERAL LICENSES AND RELATED FAQ
On 5 August, a post from Baker McKenzie reported that, in July, the Department of State’s Directorate of Defense Trade Controls issued 2 Open General Licenses (OGL) permitting certain re-exports and retransfers to certain parties under the International Trade in Arms Regulations (ITAR). One OGL authorises limited re-transfers of unclassified defence articles to the Australian, Canadian, and UK governments. The second authorises re-exports of defence articles to, and among, the same recipients in Australia, Canada, and the United Kingdom as the first OGL. The several FAQ also issued seek to explain the use of the OGL.
MEXICAN ARCHEOLOGICAL ITEM RETURNED HOME BY BELGIAN AUTHORITIES
On 5 August, Newsroom Panama reported that the items were to be auctioned in the city of Bruges in March. However, the Mexican authorities contacted the auction house, which stopped the sale of the figures. It is reported that, in the last 4 years the Mexican Government has recovered 8,970 pieces of cultural heritage from abroad.
On 5 August, Holland & Knight published an Alert providing advice for companies that may be seeking an engineer who is a foreign national, considering raising capital from a foreign venture capital firm or other foreign investor, or is interested in sourcing components or creating manufacturing capacity overseas. It says that while the rules related to export controls and foreign investment are highly complex and impossible to detail in a couple of pages, the Alert provides several entry points as a primer for early-stage companies to consider.
On 31 July, ABC News in Australia reported that a Chinese state-owned company is negotiating to buy a deep-water port and WW2 airstrip in the Solomon Islands, as new documents detail how money from China has helped keep the Pacific nation’s controversial leader in power. An asset being targeted by China is a hardwood forestry plantation on the island of Kolombangara, which features a protected harbour, deep-water port and an airstrip. A local MP is quoted saying that China’s ambition to house military assets in the country remains strong. Documents obtained by the channel show a Chinese slush fund was activated twice last year and dispersed nearly $3 million directly to members of parliament loyal to the Prime Minister. The PM described the money as a “stimulus package” to revitalise the economy, although it was only given to MPs loyal to him.
This briefing from the Chartered Institute of Logistics and Transport reviews the current nature of the air freight sector, and aims to highlight areas where policy makers in government and industry with a particular interest can assist with the progress required to support UK cargo aviation.
On 3 August, Insight Crime carried a series of disturbing articles saying that illegal, unreported and unregulated (IUU) fishing vessels are hoovering marine life and harvesting endangered sharks for their fins. It explores predatory tactics, rogue actors, and legal loopholes that fuel IUU fishing across Ecuador, Chile, Uruguay, and Argentina.
A news release from INTERPOL on 4 August advised that a new report explores the nexus between organised crime and pollution crime. The new INTERPOL report targets an information gap with an in-depth examination of 27 pollution crime case studies shared by law enforcement in INTERPOL member countries. While most of the cases come from European countries, investigations demonstrate that the organised crime-pollution crime nexus is a global phenomenon, involving a wide variety of perpetrators and organizational structures. A majority of the cases examined by the INTERPOL report were cross-border, underscoring the importance of international police cooperation to combating pollution crime.
On 1 August, the law firm released the 2nd edition of this guide, saying that since the first edition the new online environments have developed significantly and, similarly, the regulations and body of law governing them have evolved. This updated edition sets out to cover the key developments that have taken place in the last year, from the development of new regulations to real-world examples of the technologies in practice. It includes a helpful glossary of terms used in connection with the metaverse (which is great use in itself).
With the teachers now back at work, the children in the state school around the corner from us can be seen, smartly dressed in uniforms, tunring up before 7 am. I don’t think you would see most British schoolchildren even awake at that time – certainly I would not have been up and out by then when I was their age.
Meanwhile, the talks on the other various disputes continue…
4 AUGUST 2022
ISLE OF MAN: CONSOLIDATED RUSSIAN SANCTIONS LEGISLATION
On 4 August, the Isle of Man authorities published a useful consolidated version of its Russian sanctions legislation (which mirrors that of the UK) to date.
ENTRY INTO THE UK: UPCOMING CHANGES – ELECTRONIC TRAVEL AUTHORISATION (ETA) SYSTEM
On 2 August, an article from Envoy Global Inc said that the UK has announced a new plan which outlines how the UK will digitise the immigration process and achieve a contactless border crossing plan by 2025. This involves ETA, which, much like existing systems in the US (ESTA), Canada (ETA), Australia (eTA), and New Zealand (NZeTA), will be used for more visibility in tracking travel and to maintain new secure border crossing protocols, and for all visa-exempt travellers seeking to enter the UK. Applicants for an ETA will be required to provide their biographic, biometric and contact details as well as answer a set of questions before approval can be granted. Those seeking employment etc will need to additionally apply for a visa or other permission.
The EU, of course, is also due to introduce its equivalent in 2023.
UAE EXCHANGE HOUSE FINED $1.4 MILLION FOR INSUFFICIENT POLICY ON TERRORISM FINANCING
On 27 July, Alarabiya News reported that the UAE has issued a $1.4 million fine on an exchange house for not sufficiently following policy to prevent money laundering and financing terrorism. The company was not named.
PHILIPPINES SUSPENDS CREWING AGENCY FOR ILLEGAL PRACTICES
On 4 August, Seatrade Maritime News reported that crewing agency Global Marine and Offshore Resources has had its licence suspended by the Filipino authorities for illegally charging placement fees and breaching seafarer contracts. Allegations highlighted the illegal charging of placement fees to seafarers, as well as being placed on different vessels to those described in their contract, and failure to pay wages.
NEW ZEALAND DECLARES PROUD BOYS AND THE BASE TERRORIST ORGANISATIONS
On 30 July, PBS reported that New Zealand’s government has declared US far-right groups the Proud Boys and The Base as being terrorist organisations, making it illegal in New Zealand to fund, recruit or participate in the groups, and obligating authorities to take action against them. In the US, the State Department only lists foreign groups as terrorist entities, but the Proud Boys were last year named a terrorist group in Canada, while The Base has previously been declared a terrorist group in Britain, Canada and Australia. New Zealand police issued a 29-page explanation of why the Proud Boys were designated.
FOCUS ON VICTIMS’ RIGHTS LEADS TO INVESTOR PAY-OUTS IN CREDIT SUISSE CASE
On 4 August, the Wall Street Journal reported that earlier this year the DoJ said it would place an increased emphasis on compensating the victims of white-collar crime. For 2 decades, federal prosecutors have aggressively prosecuted companies and executives that pay bribes to win business overseas, most often through use of the FCPA, but rarely have they sought to identify specific victims of corruption – but this is changing and companies like Credit Suisse are paying closer attention to the possibility of restitution claims made by victims when negotiating settlements over criminal wrongdoing. As part its restitution deal, Credit Suisse AG agreed to a pay-out to a group of investment firms, pension funds and money managers that helped finance the project.
GUERNSEY’S NEW CHARITIES LAW: KEY POINTS FOR TRUST AND CORPORATE SERVICE PROVIDERS
On 1 August, an article from Ogier said that Guernsey had introduced new charities legislation on 29 April, redefining charities and non-profit organisations under Guernsey law, setting out criteria to determine which of them are required to be registered on the Register of Charities and other Non Profit Organisations, and laying out the governance and risk mitigation measures that such organisations are required to implement.
ARTISANAL GOLD MINING IN SOUTH AFRICA IS OUT OF CONTROL
On 4 August, Defence Web reported that recent incidents point to a spike in the scale of illegal activity, conflict and criminality. It explains that artisanal mining is a labour-intensive form of mining that uses rudimentary tools and technologies. It has been estimated that approximately 30,000 illegal miners produce over $8 million worth gold per annum, and the UAE and Switzerland have been identified as the primary export destinations.
DECHERT TO MAKE A £20 MILLION INTERIM PAYMENT TO FORMER CLIENT EURASIAN NATURAL RESOURCES CORPORATION (ENRC) AFTER DEFEAT IN THE HIGH COURT
On 4 August, the Law Society Gazette reported that the law firm was to make the payment after it was found that the firm’s former co-head of white-collar crime Neil Gerrard, 67, deliberately leaked ENRC’s confidential information to the press and the Serious Fraud Office.
NIGERIA: PENTECOSTAL CHURCHES COMPLICIT IN HUMAN TRAFFICKING
On 3 August, OCCRP reported claims by an Italian investigative body that throughout Nigeria, Pentecostal churches act as a gateway for criminal organisations to traffic young girls across Europe and coerce them into the world of prostitution. It is alleged that women linked to the churches recruit young girls with the promise of work in Europe; in exchange for organising the logistics, they demand that their victims repay them through various employment opportunities, all of which turn out to be prostitution.
On 2 August, an analysis published by Eurasia Review said that, since the late 1980s, the Islamic Republic of Iran has been plying the Hamas terrorist group with cash and weapons while also teaching it how to be self-sufficient. However, it says, Iran’s role is often overlooked when assessing the performance of Hamas in its multiple armed confrontations with Israel. It says that history shows that Iran has played a major part, and that with continued Iranian assistance, Hamas can only be expected to grow in sophistication and lethality.
THE WAY FORWARD FOR BETTER REGULATION IN THE EU – BETTER FOCUS, SYNERGIES, DATA AND TECHNOLOGY
On 4 August, a briefing paper from the EU Parliament Research Service looks at the use of data for the purpose of regulatory assessment/evaluation. The author finds that data is needed to support evidence-based regulation, that information technologies, and in particular AI, can enable a more extensive and beneficial use of data, and that the use of data in ex-post evaluations can improve the regulatory process. The in-depth analysis offers policy recommendations.
HONG KONG: SFC SEEKS TO INCREASE ENFORCEMENT POWERS
On 4 August, Eversheds Sutherland reported that the Securities and Futures Commission in Hong Kong was consulting the market on proposed changes to the existing enforcement regime under the Securities and Futures Ordinance. It would like to to expand the SFC’s disciplinary power in respect of the breach of its codes and guidelines by a regulated person, clarify the professional investor exemption to the prohibition on the issue of advertisements, and the territorial scope of the insider dealing provisions of the Ordinance.
ITALIAN TAX POLICE SEIZE PROPERTY OF ARCHITECT WHO DESIGNED ‘PUTIN’S PALACE’
On 4 August, Rferl reported that tax police in Italy have seized assets worth more than €141 million said to belong to an architect who designed a luxury estate dubbed “Putin’s Palace” by opponents of the Russian President. Reuters said the assets belonged to Lanfranco Cirillo. Authorities said that a “well-known professional” failed to pay taxes from 2013 to 2019.
UKRAINE CALLS ON LEBANON TO RECONSIDER DECISION TO ALLOW TRANSPORTATION OF SHIP WITH ‘STOLEN’ GRAIN
On 4 August, Refrl reported that Ukraine has called on Lebanon to reconsider a court decision to allow a seized Syrian ship, the Syrian-flagged Laodicea, carrying what it says is stolen Ukrainian grain to sail.
VIETNAMESE GARMENT MANUFACTURERS STRUGGLE TO COMPLY WITH US BAN ON XINJIANG COTTON
On 4 August, RFA reported that Vietnam’s heavy reliance on cotton imports from China could lead it to fall foul of a US ban on cotton produced by forced labour in Xinjiang province. Vietnamese manufacturers say it is hard to prove where the fabric in their garments comes from. The move has reportedly led fashion chains such as Japan’s United Arrows to stop selling clothes made from Xinjiang cotton. Countries such as Vietnam and Bangladesh, the world’s second and third largest garment exporters, still depend heavily on imports of Chinese fabric and yarn, particularly high-end materials.
AUSTRALIA: REPORTS OF HUMAN TRAFFICKING AND SLAVERY TO THE AFP HAVE INCREASED TO THE HIGHEST-EVER LEVEL
On 30 July, a news release from the Australian Federal Police advised that 294 reports of human trafficking or slavery made to the AFP in the last financial year the 5 most reported crime types were:
FRAUDULENT CARIBBEAN RESORTS OWNER CONVICTED AFTER SFO INVESTIGATION
On 3 August, a news release from the SFO advised that it has successfully convicted the individual behind a £226 million fraud involving celebrity-endorsed luxury resorts in the Caribbean. David Ames, 70, was found guilty by a jury at Southwark Crown Court on 2 counts of fraud by abuse of position. He offered no evidence in his defence. Ames deceived over 8,000 UK investors in the Harlequin Group, a hotel and resorts development venture. Victims were led to believe they had a secure investment in property whereas, in reality, Harlequin Group was never operating as promised.
US: BIOTECHNOLOGY COMPANY BIOGEN DISCLOSES $900 MILLION AGREEMENT IN WHISTLEBLOWER KICKBACK SUIT
On 21 July, Compliance Week reported that the Massachusetts-based biotechnology company reached an agreement in principle to resolve a False Claims Act lawsuit brought by a whistleblower alleging the payment of unlawful kickbacks to physicians. The National law Review said that the claims were based on allegations that Biogen’s speaker and consultant programs were a façade for a scheme to pay doctors in exchange for prescribing Biogen drugs in violation of the Anti-Kickback Statute (AKS). The latter source also says that applying the lessons of recent enforcement efforts and government statements about speaker programs may be the key to mitigating the risks inherent in such programs.
EUROPEAN DATA PROTECTION SUPERVISOR WARNS THAT UK GDPR REFORMS COULD CREATE FRICTION WITH EU
On 13 July, Compliance Week reported that the EDPS had said that the UK keenness to agree to its own data adequacy decisions with countries like the US could become a contentious issue with the EU. The European Commission has concerns about how EU date sent to the UK is then transferred to third countries not considered to have the same level of data protection. The UK adequacy agreement with the EU is up for renewal in 2025.
US CONSIDERS CRACKDOWN ON MEMORY CHIP MAKERS IN CHINA
On 1 August, Reuters reported that the US is considering limiting shipments of US chipmaking equipment to memory chip makers in China including Yangtze Memory Technologies Co Ltd (YMTC), according to people familiar with the matter, part of a bid to halt China’s semiconductor sector advances and protect US companies. This could also hurt South Korean memory chipmaker Samsung Electronics Co Ltd which has two big factories in China.
US ENFORCEMENT ACTION AGAINST VENEZUELAN CARGO AIRLINE FOR VIOLATION OF US EXPORT CONTROLS
On 2 August, a news release from the US Commerce Department’s Bureau of Industry and Security said it had suspended the export privileges of Venezuela-based cargo airline Empresa de Transporte Aéreocargo del Sur SA (aka Aerocargo del Sur Transportation Company, or EMTRASUR) for 180 days for acquiring custody or control of a US-origin Boeing 747 aircraft from Mahan Air of Iran in violation of US export controls and for engaging in further violations by operating that aircraft on flights between Venezuela, Iran, and Russia. The aircraft is currently detained in Argentina, according to media reports.
RUSSIA’S OIL EXPORTS TO CHINA VIA ‘DARK’ SHIP-TO-SHIP TRANSFERS HAVE SURGED AS TRADING SECRECY GROWS
On 30 July, Market Insider reported that the amount of Russian oil involved in “dark” ship-to-ship (STS) transfers has risen sharply over the last few months, as Western sanctions lead to higher levels of secrecy in global crude markets and a redirection of supplies towards Asia. It explains that, in a STS transfer, one vessel unloads its cargo into another while at sea. When such a transfer is “dark”, it means at least one vessel has turned off the tracking signal that lets authorities see where it is.
ASSET TRANSFERS BY OWNERS OF RUSSIA’S ALFA-BANK TOTAL IN THE BILLIONS
On 2 August, Kharon reported that Russian oligarchs hit by US and EU sanctions have transferred assets worth billions of dollars to close business associates who do not appear on sanctions lists, in efforts to avoid asset freezes. It goes on to say that the founders and directors of Alfa-Bank and its parent company Alfa Group — Mikhail Fridman, German Khan, and Alexei Kuzmichyov — have been sanctioned by Canada, the EU, and UK. In March, they transferred their ownership interests in Luxembourg-based ABH Holdings SA to their business associate Andrei Kosogov, who has not been targeted by sanctions.
PROFESSIONAL’S GUIDE TO GENERATING BLACK MONEY IN INDIA
On 2 August, Newsinterpretation carried an article about “Black Money”, which is money which has evaded tax and provides one method by which accountants in India generate Black Money. This uses fake invoices.
SWITZERLAND PARTIALLY IMPLEMENTS SEVENTH EU SANCTIONS PACKAGE
On 4 August, Baker McKenzie reported that the Swiss Federal Council had decided on the partial implementation of the substantive amendments to the EU sanctions (i.e. the seventh sanctions package). The measures include the ban on gold, gold products and services relating to them, and carve-outs for agricultural and food products and oil supplies.
CANADA: RUSSIA SANCTIONS – ADDITIONAL DESIGNATIONS ON 43 MILITARY OFFICIALS AND 17 DEFENCE SECTOR ENTITIES
On 4 August, a post from Baker McKenzie reported that, with effect from 29 July, Canada had designated an additional 43 individuals, which includes some individuals identified “as military officials involved in the Bucha massacre”. In addition, it designated an additional 17 defence sector entities considered by the Government to be directly or indirectly supporting the Russian military.
THE 4 BIG CHALLENGES OF EXPORTING SUCCESSFULLY: EXPLAINED AND ANSWERED
On 3 August, an article from the Global Trade Magazine identified the 4 areas of challenge as the Choice of Incoterms, logistics, import clearance, and getting paid.
On 3 August, an article from the Carnegie Middle East Center asks, as Tunisia slips back into apparent autocracy, why did Tunisia change direction so abruptly, and what lies ahead for the birthplace of the Arab Spring? It says that the major issue in Tunisia remains the ailing economy, and this may yet undermine President Qaïs Saied’s autocratic ambitions.
On 4 August, a news release from the EU advised that it had added the pro-Russian former President of Ukraine Viktor Fedorovych Yanukovych and his son Oleksandr Viktorovych Yanukovych to the list of persons, entities and bodies subject to restrictive measures for their role in undermining or threatening the territorial integrity, sovereignty and independence of Ukraine and the state’s stability and security, as well as – in the case of Oleksandr Viktorovych Yanukovych – for conducting transactions with the separatist groups in the Donbas region of Ukraine.
On 4 August, the Asia-Pacific group, a FATF-style regional body, released details of the outcomes of its recent annual meeting in July in Kuala Lumpur. Its work included adoption of mutual evaluation follow-up reports for Bangladesh, Cambodia, Myanmar, New Zealand, Palau, Samoa, Solomon Islands, Sri Lanka, and the US; and of the 2022 APG Yearly Typologies Report containing over 200 case studies outlining new and emerging trends in money laundering and terrorist financing not only in the Asia-Pacific region but globally.
On 4 August, GAFILAT, the FATF-style body for Latin America, reported on the Plenary held at the end of July in Quito. It discussed and approved the Mutual Evaluation Report (IEM) of Paraguay, and progress reports were also received from Chile, Colombia, Costa Rica, Cuba, Guatemala, Honduras, Nicaragua, Panama, Peru, the Dominican Republic and Uruguay. The revision of FATF Recommendation 24, its Interpretative Note and the addition of 2 new definitions in the Glossary were approved. It adopted the strategic vision of the Global Network, which was developed as a priority aspect of the FATF Presidency of Germany, and approved 3 documents designed to assist members, including additional e-learning courses.
On 3 August, the BBC reported that Ministers have acknowledged concerns about companies known as English Limited Partnerships (ELP), which have also been abused by criminals. Such a type of company is not required to identify its real owners. In 2016 and 2017, the UK Government introduced measures that forced almost all UK companies to identify their real owners, but ELP were not covered by these new transparency laws and, since then, more than 4,500 of them have been set up.
The ELP situation is contrasted with that for Scottish LP. After these were repeatedly linked to major international money laundering scandals, the UK Government changed the law so they had to provide information about those who ultimately owned or controlled them.
On 3 August, Out-Law published an introduction to multilateral development banks (MDB), such as the World Bank. It is said that play an increasingly prominent role in policing fraud, corruption, collusion and other forms of corporate misconduct. They carry out many investigations each year that regularly result in action being taken against companies. Companies that borrow from MDBs or work on MDB-funded projects as contractors or otherwise need to understand how the integrity units work and what the consequences of investigations and so-called sanctions proceedings are to avoid potentially commercially crippling consequences such as debarment.
On 4 August, Dryad Global reported that Cameroon’s growing fishing fleet have been accused of illicit activities at sea. Currently, an investigation by the Associated Press found that 14 of these vessels are owned or managed by companies based in EU member states: Belgium, Malta, Latvia and Cyprus. the Vessels involved changed flags to Cameroon between 2019 and 2021, though they had no obvious link to the country and did not fish in its waters. In recent years, Cameroon has emerged as one of several go-to countries for the widely criticised “flags of convenience” system. Such ships are supposed to abide by that nation’s fishing agreements with other countries, but experts say weak oversight and enforcement of fishing fleets by countries with open registries like Cameroon offer shipping companies a veil of secrecy that allows them to mask their operations. Cameroon has long been criticised for lax oversight of its fishing fleet. Data from maritime intelligence companies reveals an accelerated growth in the number of vessels that sail under the Cameroonian flag in the past 4 years, from 14 vessels in 2018 to more than 129 in 2022.
UK: GAMBLING COMMISSION FINES LeoVegas £1.3 MILLION FOR FAILINGS INCLUDING IN AML
On 3 August, iGB reported that the Gambling Commission has ordered LeoVegas to pay a fine of £1.3 million after identifying a series of failings, many related to setting triggers too high between October 2019 and October 2020. AML failures included setting financial triggers for AML reviews too high.
US: ALIEN TORT STATUTE – RECENT SUPREME COURT DECISIONS HAVE ERODED THE EFFECTIVENESS OF THE STATUTE IN ADDRESSING HUMAN RIGHTS VIOLATIONS, ESPECIALLY FOR HARM INFLICTED ABROAD
A post on the Transnational Law Blog on 1 August explains that the Statute gives federal courts jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the US, and dates from 1798. It says that as the law was used against US and foreign officials as well as corporations’ opposition to it by powerful interests grew, with the latest decision in 2021 that underlined the presumption against extraterritoriality. Historically, the most commonly alleged international law violations brought under the statute are torture, deprivation of liberty, and cruel, inhumane and degrading treatment. Despite decisions limiting its use, the post says that the statute is still part of the toolbox to address human rights violations against non-US nationals, but that barring legislative amendment its usefulness in transnational litigation has been severely undercut by the restrictive reading of the statute’s territorial reach.
US: FEDERAL COURT REJECTS SERVICE BY EMAIL ON CHINESE COMPANIES
On 2 August, a post on the Transnational Law Blog reported that a court in New York had rejected service by email on Chinese companies in a trademark and copyright infringement case. China and the US are parties to the Hague Service Convention, but the court reasoned that the Convention precludes service by email, particularly given China’s objection to service by “postal channels”.
HALTING THE KLEPTOCRATIC CAPTURE OF LOCAL GOVERNMENT IN NIGERIA
On 18 July, a paper from the Carnegie Endowment for International Peace argues that, despite their hard-hitting rhetoric, Nigeria’s political leaders have done little to rein in local government corruption and the governance failures it causes. It explains that the country’s government consists of 3 layers: the federal government in Abuja, 36 state governments, and 774 local governments. It says that its local governments are disproportionately important; if they functioned well, they would be best positioned to meet people’s basic needs and to build their resilience to cope with everyday challenges – but local government corruption is quietly hobbling Nigeria, Africa’s largest economy and most populous nation. It argues that local government in Nigeria is fundamentally corrupt, flawed by design, and not fit for purpose. While is not the only reason for local government dysfunction, but it is the root cause. Corruption takes various forms: contract fraud, bribery and kickbacks, ghost workers, “security vote” slush funds, favouritism, embezzlement, and even some ostensibly legal activities and kleptocratic kleptocratic capture of local government is orchestrated by governors, tolerated by state legislators, and perpetuated by its local beneficiaries.
ISLE OF MAN: RUSSIA GENERAL TRADE LICENCE – AMENDMENT
On 3 August, the Isle of Man advised of an amendment which enables the provision of insurance and reinsurance to a person connected with Russia in relation to the matters covered by the Licence, subject to the wider restrictions and conditions of the licence.
On 3 August, the Manila Times reported that the Department of Agriculture is investigating the proliferation of fake fertiliser in the country. Farmers were advised to check every detail, including the marking or label of fertilisers they buy from suppliers.
US ADDS 25 AIRBUS AIRCRAFT OPERATED BY RUSSIAN AIRLINES TO EXPORT VIOLATION LIST
On 2 August, Reuters reported that the Commerce will add 25 Airbus airplanes operated by Russian airlines believed to violate US export controls which rules cover US-made aircraft as well as foreign-made ones that have least 25% US-origin content. These 25 the first foreign aircraft added to the export control list. The Airbuses are operated by Ural Airlines, S7 Airlines, Red Wings, Yamal Airlines, Nordwind, and I-Fly, and the controls aim to deny the airlines access to refuelling, spare parts and maintenance services.
PHILIPPINE POLICE LAUNCH MANHUNT FOR BREN eSPORTS OWNER AFTER BUSTING MAJOR METH SMUGGLING OPERATION
On 3 August, PC Gamer and others reported that Bernard Chong maintains his innocence, but authorities urge him to turn himself in. He is currently wanted due to his ties to Fortuneyield Cargo Services Corporation (FCS), which is accused of trying to smuggle about 276 kg of meth through Manila International Container Port 3 years ago, and is alleged to be one of the owners of Fortuneyield Cargo Services.
INDIA: ARRESTED BROTHERS ‘SMUGGLED GUNS FROM EUROPE FOR OVER 10 YEARS’
On 3 August, The Print reported that one of the brothers and his wife were intercepted with consignment of 45 guns at Delhi airport in July, while the elder brother Manjit Singh was arrested a week later. They had allegedly been smuggling guns into the country for over a decade through air, sea, and postal routes
AUSTRALIA: PASSENGER FINED NEARLY $2,000 AFTER DETECTOR DOG FINDS SMUGGLED McMUFFINS IN LUGGAGE
On 2 August, CBS in Iowa reported that the Australian Government announced in a news release that an unidentified man flying into the Darwin Airport from Indonesia failed to disclose he was bringing some food items with him – the contraband includes 2 sausage, egg, and cheese McMuffins, 2 McDonald’s pancakes, and a ham croissant.
MEXICO TO INVESTIGATE FORMER PRESIDENT PENA NIETO’S FINANCES
On 3 August, Deutsche Welle reported that Enrique Pena Nieto, who was in power from 2012 to 2018, has been accused of several alleged crimes including money laundering.
UK IS ‘CARD FRAUD CAPITAL OF EUROPE’, WARNS TOP THINK TANK
On 3 August, City AM reported that the UK suffers on average 134 frauds per 1,000 people with scammers making off with £8,833 per 1,000 people, the Social Market Foundation (SMF) found in analysis of European central bank data. Britons are almost 9 times more likely to be a victim of fraud than Germans.
UK: PUBLIC SECTOR FRAUD AUTHORITY HAS BEEN LAUNCHED
On 3 August, the Cabinet Office announced that a new team at the heart of government has been told to hunt down fraud committed against the public purse, with a £180 million target set for the first 12 months. The Public Sector Fraud Authority will be made up of counter fraud and data experts, using best-in-class tools and advanced analytics to help departments and public bodies protect public money.
OLIGARCH’S CASE AGAINST SWISS ART DEALER CONTINUES IN GENEVA
On 2 August, OCCRP reported that a Swiss court has decided to continue investigating the case Russian oligarch Dmitry Rybolovlev has been pursuing against a Swiss art dealer, Yves Bouvier, who charged him obscene mark-ups on 38 works of art and this way allegedly defrauded him of $1.1billion over a period of 11 years. Rybolovlev has pursued legal action against Bouvier in 9 cases at courts in Singapore, New York, Monaco, and Hong Kong – all of which were closed or concluded in Bouvier’s favour.
FIFA AND UNODC WRAP UP YEAR-LONG GLOBAL PROGRAMME TO TACKLE MATCH MANIPULATION IN FOOTBALL
On 3 August, a news release from the UN Information Service said that FIFA and the UN Office on Drugs and Crime (UNODC) concluded its first-ever international integrity education programme, designed to support all 211 member associations in their efforts to tackle match manipulation in football. Since its launch in March 2021, some 400-plus representatives from governments and football associations across the globe took part in 29 workshops which covered several key topics, including establishing an integrity initiative, reporting mechanisms, competition protection, cooperation between and among member associations and law enforcement.
UK: NITROUS OXIDE – LAUGHING GAS DEALER CAUGHT WITH 25,000 CYLINDERS JAILED
On 2 August, the BBC reported that a man has been jailed for more than 2 years after he was caught with more than 25,000 cannisters of laughing gas. The drug, also known as nos, comes in small metal vials often seen littering the streets. The police explained that it is illegal, in England and Wales, for anyone to sell nitrous oxide to people under-18, if they think they are likely to be inhaling it.
LATIN AMERICA TO BE A KEY PLAYER AS GLOBAL DEMAND FOR LITHIUM SKYROCKETS
An analysis from Control Risks on 2 August says that, as de-carbonisation initiatives gain momentum worldwide, lithium has become a new mining frontier, even called “white gold”. It is the main component in electrical vehicles batteries and is also used in many other electronic devices. According to data by the US Geological Survey, Australia is the largest producer. However, Latin America holds a significant share of the world’s lithium reserves, and this makes the region a potential mining hub for the next several years. The analysis warns that, from a risk management perspective, successful investors in the region will likely be those who implement comprehensive pre-investment risk (including ESG) assessments and continuous monitoring strategies based on solid local knowledge.
CHINESE GIANTS COMMITTING FRAUD IN INDIA? WHY XIAOMI, VIVO, OPPO, HUAWEI ARE UNDER FIRE
An article in The Print on 1 August set out to explain why smartphone leaders like Xiaomi, Vivo, Oppo, and Huawei, besides smaller fintech players, are under the scanner of various central agencies in India for a laundry list of alleged offences. After banning more than 200 Chinese apps since June 2020, the Modi government is targeting several Chinese companies, from Xiaomi, Vivo, Oppo, and Huawei to smaller fintech firms.
On 2 August, a post from Baker McKenzie provided an update on the transition to the new UK Conformity Assessed (UKCA) regime that will replace the EU CE marking regime for the Great Britain market.
US REPORT: CORRUPTION AND WEAK JUDICIAL SYSTEM WEIGH ON PANAMA’S INVESTMENT CLIMATE
On 3 August, La Estrella de Panama reported that a US State Department in a report on Panama’s investment climate for 2022, while praising the country for having one of the best growth rates in the region, warned that Panama’s structural deficiencies weigh on its investment climate. The report also highlights Panama’s presence on the FATF grey list since June 2019.
CHINA SUSPENDS FOOD IMPORTS FROM TAIWAN AND THE EXPORT OF NATURAL SAND
On 3 August, EU Sanctions blog reported that, in the wake of US House of Representatives Speaker Nancy Pelosi’s visit to the country, China had blocked imports of 2,066 food products from Taiwan, as well as imports of sand.
RUSSIA WANTS VIKTOR BOUT BACK, BADLY – THE QUESTION IS: WHY?
On 30 July, the Washington Post posed this question about a man who is serving a 25-year term after building a gun-smuggling empire that spanned the globe. There is little doubt that Bout would be the top prize for Russian officials in any prisoner swap, who have protested his treatment since his 2008 arrest in Thailand after a DEA sting. It is said that Bout could never have operated such a large smuggling business without government protection, but that he never spoke about it, and “The Russian government is eager to retrieve him so that it stays that way”.
US: AMENDMENT OF RUSSIA SANCTIONS RUSSIA-RELATED GENERAL LICENSES WHICH WERE ISSUED ON 2 AUGUST
On 3 August, OFAC announced that the amendment to Russia-related General Licenses 40A, 47, and 48 is merely to clarify that the licenses apply to Joint Stock Company State Transportation Leasing Company. Licenses as issued did not include the term ‘Leasing’ in the company’s name. They are otherwise unchanged.
PODCAST: “BLOOD AND OIL: MOHAMMED BIN SALMAN’S RUTHLESS QUEST FOR GLOBAL POWER”
In the latest TRACE podcast, Bradley Hope discusses his book about the rise of Crown Prince Mohammed Bin Salman and key milestones like the “Ritz Carlton Prison”, the kidnapping of Prime Minister Hariri of Lebanon and the murder of Jamal Khashoggi. He also discusses some of MBS’s modernisation efforts and what the Kingdom might look like if he hadn’t risen to a position of power.
SWITZERLAND HAS BANNED BUYING, IMPORTING OR TRANSPORTING GOLD AND GOLD PRODUCTS FROM RUSSIA
On 3 August, the EU Sanctions blog reported that the Swiss had fallen in line with the EU 7th sanctions package. A post also mentions that there are 2 new exceptions from Russia sanctions with respect to agricultural products and oil supplies to third countries, an asset freeze has been imposed on Sberbank, and that, as of 28 July, the EU and Swiss sanctions lists are aligned.
On 3 August, USNI News reported that, on 25 July, a Congressional Research Service In Focus report was concerned with Iran and Nuclear Weapons Production.
THE NEW FACE OF CORPORATE ESPIONAGE AND WHAT CAN BE DONE ABOUT IT
On 3 August, this article from US law firm Troutman Pepper starts by saying that the word espionage brings to mind secret agents stealing classified information from tightly-guarded buildings, barely escaping with huge explosions in the background. While that’s one type of espionage, there’s another, much more common type happening at nearly every company in the world. Modern-day corporate espionage is the infiltration or exfiltration of data, documents, and information belonging to one company, individual, or state actor for use by another company, individual, or state actor. It explains the internal threats from insiders etc, and then outlines 3 key steps companies should take to prevent both exfiltration and infiltration of confidential company materials.
On 3 August, Insurance Marine News reported that Lebanon’s top prosecutor has lifted a seizure order on Syrian-flag cargo ship Laodicea, which is accused of carrying flour and barley stolen from Ukraine by Russia, but the ship remained unable to sail due to another seizure order issued by a judge in Tripoli, where the ship is docked. The vessel had docked in Tripoli, apparently having been diverted from Syria because it could get a higher price for its cargo in Lebanon, where there is a serious bread shortage.
On 3 August, an article from the Society of Corporate Compliance and Ethics in the US says that the Association of Certified Fraud Examiners (ACFE) has been publishing a study on fraud every 2 years since 1996. This year’s edition is said to be filled with plenty of interesting data culled from 2,110 fraud cases submitted by fraud examiners from investigations conducted between January 2020 and September 2021 – and is useful for compliance professionals, particularly in identifying trends that should be considered in conducting compliance risk assessments. The article comments on the increasing complexity of fraud cases over the years. The 2022 report indicates 86% of cases involve asset misappropriation, 50% involve corruption, and 9% financial statement fraud; with the big jump in corruption, but without any decrease in asset misappropriation. The article also notes that, in 2022, single-perpetrator schemes are down to 42%, meaning that schemes involving collusion are now more common than those involving one person — and by a pretty large margin.
On 3 August, the EU Sanctions blog reported that the Swiss had fallen in line with the EU 7th sanctions package. A post also mentions that there are 2 new exceptions from Russia sanctions with respect to agricultural products and oil supplies to third countries, an asset freeze has been imposed on Sberbank, and that, as of 28 July, the EU and Swiss sanctions lists are aligned.
On 3 August, the Guardian reported that global management consultancy Bain & Company has been barred from tendering for UK government contracts for 3 years after its “grave professional misconduct” in state corruption in South Africa.
On 3 August, the Jerusalem Post reported that the unannounced arrival of the plane in Argentina in June has sparked weeks of intrigue as well as concern within the Argentine government over its ties to Iran and Venezuela. The confiscation request followed the unsealing of a July 19 warrant for the aircraft’s seizure in a US federal court, which alleged that the aircraft could be confiscated because it violated export control laws, The DoJ argues that the US-origin Boeing 747-300 aircraft is subject to sanctions as its sale from Iran’s Mahan Air to Emtrasur last year, part of the Venezuelan Consortium of Aeronautical Industries and Air Services (Conviasa), violates US export laws. Both companies are sanctioned by the US for alleged collaboration with terrorist organisations.
Well, some good news – Panamanian health authorities have only registered 1 case of monkeypox and this person has already recovered. Meanwhile, in just 3 months authorities have given 1 million flu vaccinations.
2 AUGUST 2022
UK: WILLS – FRAUDULENT CALUMNY AND UNDUE INFLUENCE
On 28 July, an article from Herbert Smith Freehills reported that the High Court had examined the circumstances in which a will can be set aside on the basis of fraudulent calumny and/or undue influence. It says that this decision is relevant to those wishing to challenge the validity of wills on the basis they were procured improperly, and to those who are seeking to defend such a challenge. It helpfully explains that fraudulent calumny occurs where a beneficiary of a will makes untrue comments to the testator about the character of another potential beneficiary in order to reduce their entitlement under the will, and that there is a high burden of proof on the Claimant for proving fraudulent calumny.
On 1 August, the Home Office issued updated guidance on extradition processes and agreements between the UK and other countries, including the role of the Secretary of State, the High Court and Supreme Court.
On 1 August, the House of Commons Library published a briefing which considers Brexit and the 14 Overseas Territories, in relation to trade, funding, defence and sovereignty (of Gibraltar and the Falkland Islands).
THE NEW CAYMAN ISLANDS RESTRUCTURING OFFICER REGIME
On 1 August, Walkers published an article saying that reforms to the Cayman Islands restructuring and insolvency legislation will come into force on 31 August. They will introduce a new restructuring officer regime available to companies in financial distress, which can be accessed without the need to present a winding up petition to the Grand Court.
On 1 August, Reuters reported that Honduran authorities announced the discovery of more than 1.6 million coca leaf bushes in the most important seizure of its kind. The bushes, used to make cocaine, were discovered after a 3-day operation and were located in 42 blocks in at least 4 plantations in mountainous areas in the coastal department of Colon. The action brings total seizures so far this year to 2,625,015 bushes, up significantly from the 424,900 bushes found by local authorities in 2020 and 531,826 bushes found in 2021.
UK REGISTER OF OVERSEAS ENTITIES – A JERSEY PERSPECTIVE
On 1 August, an article from Appleby considers the effects of the new UK requirements, saying that any Jersey entities who are currently actively considering acquiring a relevant interest in land should ensure their application to be registered is done as soon as possible from 1 August to account for any delays or teething issues. On and from 1 February, all Jersey entities owning land in the UK will need to be registered before any application or dealing made at the relevant Land Registry in respect of such land will be successfully registered.
SECURITIES COMMISSION MALAYSIA SEEKS ASSISTANCE FROM MEMBERS OF THE PUBLIC FOR INFORMATION TOWARDS LOCATING THE WHEREABOUTS OF 6 INDIVIDUALS
On 2 August, a release on Mondo Visione advised that the 6 persons are being investigated for possible breach of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLA) for receiving illegal proceeds via their bank accounts.
UN VOTES TO EASE ARMS EMBARGO ON CENTRAL AFRICAN REPUBLIC
On 29 July, the UN advised that its Security Council has extended its arms embargo against the Central African Republic — as well as a travel ban and assets freeze imposed on certain individuals and entities, as designated by its Sanctions Committee — for 1 year to 31 July 2023, eased some of the embargo’s restrictions and renewed for 13 months the mandate of the Panel of Experts tasked with assisting that body. Measures shall not apply to supplies brought into the CAR by Chadian or Sudanese forces solely for their use in international patrols of the tripartite force established to enhance security in the common border areas. Supplies of non-lethal military equipment, intended solely for humanitarian or protective use, and related technical assistance or training, as notified to the 2127 Sanctions Committee are also exempted.
AUSTRALIA: MAN CHARGED WITH ALLEGEDLY CREATING AND SELLING SPYWARE PURCHASED BY DOMESTIC VIOLENCE PERPETRATORS AND OTHER CRIMINALS
On 30 July, the Australian Federal Police advised that the man was 15 years old when he allegedly created the Remote Access Trojan (RAT). He is now 24. It is said that, in a world first for any law enforcement agency, the AFP was not only able to identify the alleged Australian offenders who bought the RAT but also identified the Australian victims who were targeted.
On 31 July, CoinDesk carried an interview with 3 leading members of Binance’s investigations team, who opened up about what it takes to deal with fraud, money laundering, terrorist financing and bad press for the world’s largest crypto exchange. They shared insights about the scale of illicit activity at Binance and its crime-fighting methods.
The fall of the British Passport after Brexit, formerly ranked as the most powerful in the world. According to the Henley Passport Index, one could visit more destinations without a prior visa than any other nationality.
UAE CENTRAL BANK ISSUES NEW GUIDELINES ON DEALING WITH POLITICALLY EXPOSED PERSONS (PEP)
On 2 August, The National reported that the Bank had issued new guidelines on the risks related to PEP to help licensed financial institutions combat money laundering and terrorism financing. It requires institutions to carry out risk ratings and additional assessments of such persons, and they are also required to conduct on-going monitoring of their business relationships with PEP.
BREXIT IS RADICALLY RESHAPING TRADE ON THE ISLAND OF IRELAND
On 2 August, Hellenic Shipping News reported that, amid acute political uncertainty and the upheaval of Brexit, the movement of goods on the island of Ireland has been transforming and seeing a significant boost. According to figures from Ireland’s Central Statistics Office, in the first quarter of 2022 imports from Northern Ireland grew 34% year-on-year to €294 million and exports to the north grew 49% to €368 million. Since early 2021, there has been a rapid increase in the number of cargo ships leaving Irish ports, such as Dublin and Rosslare in the south-east of the country, for ports in France and Spain to avoid the red tape of crossing through Britain.
On 2 August, the US Treasury published the public version of the Committee on Foreign Investment in the United States (CFIUS) Annual Report to Congress for calendar year 2021. It highlights key indicators of the CFIUS process and provides statistics on transactions that were filed with CFIUS in 2021, the first full year since the regulations implementing the Foreign Investment Risk Review Modernization Act of 2018 were finalised. Among other things, the Annual Report details measures taken to address national security risks arising from covered transactions. During the year CFIUS reviewed a record number of covered transactions, including 164 declarations and 272 notices.
US: UPDATED LIST OF FOREIGN-PRODUCED COMMERCIAL AIRCRAFT EXPORTED TO RUSSIA IN APPARENT VIOLATION OF EXPORT CONTROLS
On 2 August, KPMG reported that the Commerce Department had announced an update to the list of aircraft that have flown into Russia or Belarus in apparent violation of the Export Administration Regulations (EAR) and added the first 25 foreign-produced aircraft that BIS has identified as apparently violating the de minimis threshold for US components. There are now a total of 183 aircraft identified on the list for apparent violations of US export controls.
ISLE OF MAN NOTES CHANGES FOR VENEZUELA, RUSSIA AND NORTH KOREA SANCTIONS REGIMES
On 2 August, 3 news releases advised that the Isle of Man noted the various changes notified by HM Treasury earlier that day, and which also have effect in the Island.
WHO IS VIKTOR BOUT, ARMS DEALER LINKED TO SWAP FOR AMERICANS HELD BY MOSCOW?
On 2 August, EurActiv provided a profile of the jailed arms dealer. Although previously used by the UN and others to move materials, Bout, 55, became one of the world’s most wanted men prior to his 2008 arrest on multiple charges related to arms trafficking following a DEA sting in Thailand.
UK: OFFSHORE CRYPTOCURRENCY EXCHANGE OBTAINS CLARITY FROM HIGH COURT ON OWNERSHIP AND CONTROL OF TRADING ACCOUNT
On 2 August, an article from White & Case LLP reported that the High Court in London had considered the entitlement to a cryptocurrency trading account, and the ownership of its contents, in proceedings brought by the operator of a cryptocurrency exchange. This was in a stakeholder application, which are used as a means of determining entitlement to money or goods held by an entity that does not itself have a claim to the money or goods.
US: $30 MILLION PENALTY ON ROBINHOOD CRYPTO FOR SIGNIFICANT AML, CYBERSECURITY & CONSUMER PROTECTION VIOLATIONS
On 2 August, a release on Mondo Visione advised that the New York Department of Financial Services had fined Robinhood Crypto LLC for significant failures in the areas of bank secrecy act/AML obligations and cybersecurity. The firm will also be required, as part of the settlement, to retain an independent consultant that will perform a comprehensive evaluation of its compliance with the Department’s regulations and its remediation efforts with respect to the identified deficiencies and violations.
SECURITIES COMMISSION MALAYSIA SEEKS PUBLIC HELP TO LOCATE 6 INDIVIDUALS CONNECTED TO MONEY LAUNDERING-RELATED OFFENCES
A release on Mondo Visione on 2 August advised that the Commission is seeking assistance from members of the public for information towards locating the whereabouts of 6 individuals, who are being investigated for having allegedly received illegal proceeds via their bank accounts.
CHINA’S BELT AND ROAD GRAPPLES WITH MOUNTING DEBT CRISIS, IMPACTING CENTRAL ASIA, PAKISTAN, AND BEYOND
On 2 August, Rferl reported that shortly before the Sri Lankan president fled the country amid growing protests triggered by its debt-laden economy’s default and financial crisis, a top Kyrgyz official issued a warning about his country’s own dire forecast as the turmoil unfolded. Both took on billions worth of loans over the last decade from China’s Export-Import Bank for a series of infrastructure plans under the Belt and Road Initiative. The warning comes as sovereign-debt distress spreads in several countries along the BRI, prompting China’s first overseas debt crisis as it grapples with a mounting pile of nonperforming loans and increased scrutiny of how Chinese lending has exacerbated economic pressures on vulnerable governments.
On 2 August, an article in Finextra contends that the insurance industry might not have the obvious routes for laundering cash that banks present, but there are still many opportunities; and furthermore, insurers are seemingly an easier target because fewer counter measures are in place. It argues that insurance companies need to become as wise to the threat of money laundering as their banking cousins -and fast.
On 2 August, OFAC imposed new sanctions said to target Kremlin-connected elites, a major multinational company, and a sanctions evasion operation, as well as a yacht (in fact, 2 yachts are on the new list). It says that elites and businesses operate in economic sectors generate substantial revenue for the Russian regime, including from sources outside of Russia. These measures were taken in tandem with the Department of State, which imposed its own sanctions and visa restrictions.
OFAC also deleted 3 entries from its sanctions list, said to have been linked to Sberbank, and a number of other amendments have been made.
The General Licenses are concerned with civil aviation safety, dealings with Nord Gold PLC and a number of other entities.
The State Department actions include visa restrictions on 893 Russian Federation officials, including members of the Federation Council and members of Russia’s military; and visa restrictions on 31 foreign government officials who have acted to support Russia’s purported annexation of the Crimea region of Ukraine.
On 2 August, a Notice from HM Treasury advised that Didier Casimiro and Zeljko Runje, connected to Rosneft, have been added to the sanctions lists. These 2 persons were removed from the sanctions lists on 15 July, having been first listed on 24 March. Olga Ayziman has been removed from the sanctions lists.
On 2 August, a Notice from HM Treasury advised that the entry for Elvis Eduardo AMOROSO had been amended, and those for Jose Gregorio NORIEGA FIGUEROA and Jose Adelino ORNELAS FERREIRA have been corrected.
On 2 August, a Notice from HM Treasury advised that 48 entries have been amended and remain subject to an asset freeze. This followed changes notified by the UN in July of amendments to 44 entries on its sanctions lists.
On 2 August, FATF-style regional body APG published the 3rd follow-up report on the Philippines, following the 2019 mutual evaluation report. It analyses the progress of the Philippines in addressing the technical compliance requirements of the recommendations being re-rated, with technical compliance re-ratings given where sufficient progress has been demonstrated. Effectiveness ratings are not addressed. The Philippines has 37 FATF Recommendations rated C/LC and will remain in enhanced follow-up. The next progress report is due 1 February.
On 2 August, FATF-style regional body APG published the 4th follow-up report on Pakistan, following the 2019 mutual evaluation report. It analyses the progress of Pakistan in addressing the technical compliance requirements of the recommendations being re-rated, with technical compliance re-ratings given where sufficient progress has been demonstrated. Effectiveness ratings are not addressed. Following progress with technical compliance made as set out in October 2020 follow-up report, Pakistan was moved from enhanced (expedited) to enhanced follow-up. Pakistan has 38 FATF Recommendations rated C/LC and will remain in enhanced follow-up, with the next progress report due 1 February.
On 2 August, FATF-style regional body APG published the 5th follow-up report on Mongolia, following the 2017 mutual evaluation report. It analyses the progress of Mongolia in addressing the technical compliance requirements of the recommendations being re-rated, with technical compliance re-ratings given where sufficient progress has been demonstrated. Effectiveness ratings are not addressed. Mongolia was in the enhanced follow-up process. Following the review, Mongolia has 39 FATF Recommendations rated Compliant/Less Compliant, and it will remain in enhanced follow-up. The next progress report is due 1 February.
On 1 August, Coin Telegraph reported that scammers are using fake crypto apps to steal funds from investors, and some malicious apps find their way into official app stores. Schemes reportedly take advantage of heightened interest in cryptocurrencies, especially during bull market runs, to beguile crypto users.
The World Bank has published this report analysed the National Risk Assessments published by 8 systemically important countries – Canada, Italy, Singapore, Japan, the Netherlands, Switzerland, UK and US – to test whether they demonstrate that basic understanding and to draw lessons for national governments from those NRA. It says that the 8 show very different conceptualisations, analytic approaches, and products. Each raises serious issues regarding the risk assessment methodology. For example, most relied largely on expert opinion, which they solicited in ways that are inconsistent with the well-developed methodology for making use of expert opinion. They misinterpreted data from suspicious activity reports and failed to provide risk assessments relevant for policymakers. Only one described the methodology employed. Although the challenge of conducting strong risk assessments is great, given the difficulty of estimating the extent of money laundering in any sector, the findings based on this limited sample point to ways to improve substantially on existing practices. The report concludes with a set of suggestions for (international) policy makers and those conducting NRA for improving risk assessments. Suggestions include increased clarity about the conceptualisation of risk, transparency about data and methods so that each country can learn from others, and the adoption of more formal and standardised methods of eliciting expert opinion.
As nominations closed, 34 people have put themselves forwards as independent candidates for the 2024 Panama Presidential Election. They now have from 15 August to 31 July nest year to collect a minimum number of signatures of support, and then only the 3 candidates who have obtained the most signatures may participate in the election. There will be party candidates as well – in the last election there were 7 persons offered to the public.
The latest Covid-19 report from the Ministry of Health said that 13 more people had died 24-30 July, taking the total to date to 8,425. the average positivity in tests has fallen to 15.1%. On 30 July, there were “just” 7,906 active cases, with 31 in ICU and 132 in other wards.
1 AUGUST 2022
THE BIG 4 ACCOUNTING FIRMS UNDER SCRUTINY
On 28 July, Deutsche Welle released a documentary saying that the Wirecard scandal brought the role of big auditing firms into focus. Their work is supposed to create trust in companies. But are appearances deceptive? Hundreds of Wirecard employees lost their jobs, and thousands of investors lost a total of €4.5 billion. Why didn’t the auditors recognize the fraud? Were they negligent, overextended? The documentary explores the role auditors played in the Wirecard scandal, investigates potential conflict of interest within the Big Four, and sheds light on the companies’ role within a complex web of political and economic dependencies.
ISLE OF MAN: NEW RUSSIA SANCTIONS GENERAL LICENCE, EXTENSION TIME LIMIT FOR ANOTHER AND UPDATED SANCTIONS GUIDANCE.
On 1 August, the Isle of Man granted a licence which allows only those individuals or entities designated under UK sanctions regimes that have effect on the Isle of Man to make payments to IOM insurers for insurance premiums and broker commissions relating to the provision of building and engineering insurance cover provided to Isle of Man or UK properties. A General Licence concerned with involvement with Rosbank PJSC has been extended by 2 months to 30 September. The Financial Sanctions guidance has also been amended following changes to the statutory documents relating to financial and trade sanctions.
UKRAINE: FIRST GRAIN SHIP LEAVES UNDER RUSSIA DEAL
On 1 August, the BBC reported that Turkish and Ukrainian officials say the ship left the southern port of Odesa early on the morning of 1 August. The Sierra Leone-flagged vessel, Razoni, is due to dock at the port of Tripoli in Lebanon, carrying some 26,000 tonnes of corn. A General Licence concerned with involvement with Rosbank PJSC has been extended by 2 months to 30 September. The Financial Sanctions guidance has also been amended following changes to the statutory documents relating to financial and trade sanctions.
EBA PUBLISHES NEW GUIDELINES ON ROLE AND RESPONSIBILITIES OF THE COMPLIANCE OFFICER
On 21 July, Spanish law firm Garrigues published an article about the new guidelines issued by the European Banking Authority whih, it says, adopt a model that strengthens the role of compliance manager, in contrast to the Spanish model which has a collective internal control body with representation in the various areas of an entity’s business, as the individual responsible for implementation of AML/CFT policies and procedures. The guidelines also contain rules and principles on outsourcing the compliance officer’s tasks, as well as the compliance function within a group of companies.
Another article from Spanish law firm Garrigues on 21 July starts by saying that the non-fungible tokens (NFT) market presents similar money laundering risks to the traditional money laundering model used in the art market. It highlights a practice known as “wash trading”, consisting of transactions in which the seller and purchaser of NFT is the same person in successive transactions, which results in buyers buying an asset at a very (artificially inflated) high price with enrichment for the agent who gave rise to the wash trading.
US FEDERAL MARITIME COMMISSION (FMC) IS STRENGTHENING ITS ENFORCEMENT ROLE WITH A NEW BUREAU OF ENFORCEMENT, INVESTIGATIONS, AND COMPLIANCE (BEIC)
On 1 August, Seatrade Maritime News reported that the new Bureau consolidates investigation and prosecution processes as the FMC looks to strengthen enforcement around the Ocean Shipping Reform Act 2022. One of the targets of the new Bureau is perceived excess profiteering by shipping lines, and a failure to serve US exporters and consumers.
US CONSIDERING SANCTIONS FOR A UAE-BASED BUSINESSMAN AND A NETWORK OF COMPANIES SUSPECTED OF HELPING EXPORT IRAN’S OIL
On 31 July, the Wall Street Journal reported that the proposal part of a broader effort to escalate diplomatic pressure on Iran as US officials push to reach a deal on Iran’s nuclear program. It is said that those under scrutiny have been using ship-to-ship transfers of oil in waters that lie between Iraq and Iran and then forging documents to hide the origin of the cargo – and by passing off the blended oil as Iraqi, those involved can avoid Western sanctions targeting Iranian oil.
HOW TO STEM THE ILLICIT FINANCIAL FLOWS THAT PARALYSE TUNISIA?
On 21 June, an article from ENACT Africa asked this question, saying that anti-corruption reforms are needed to quench the outflows that weigh on the Tunisian economy. About $1.2 billion a year due to illicit financial flows (IFF), which accounts for about 3% of its GDP. According to FATF, tax evasion and tax avoidance based on false invoicing and abusive transfer pricing represent a shortfall of more than $500 million each year in Tunisia. According to the UN, IFF normally have 3 sources: commercial activities (such as tax evasion), criminal activities (such as drug, arms and human trafficking, fraud and money laundering) and corruption – and it is said that Tunisia has all 3. It includes the smuggling of goods – from fuel and electronics to cooking oil and textiles – between Tunisia and neighbouring Algeria and Libya, but IFF in Tunisia are mainly rooted in state corruption at the highest level. It is said that, on paper, Tunisia has a comprehensive institutional framework to ensure accountability, integrity and transparency – in practice, there are few concrete actions, and the Tunisian authorities must completely reform their approach to the implementation of the anti-corruption policy.
On 31 July, an article from ENACT Africa focussed on sand mining, saying that it must be stopped before it devastates the country’s communities and environment entirely. After water, sand is the most used natural resource in the world, and it takes millions of years for sand to form in waterways – but just hours to strip and send it along an illegal chain of trade. It is sourced in most of Kenya’s semi-rural counties in the east, west, central and coastal parts where informality and lawlessness reign. Cartels illegally mining sand in Kenya include brokers, loaders and gangs who operate at local levels where the sand is sourced. Transport companies use brokers to source sand locally. Loaders fill sand trucks for the brokers, while gangs offer protection and prevent conflict with local communities or other cartels.
MEMBERS OF US CONGRESS CALL FOR THE IMPOSITION OF SANCTIONS ON 3 OLIGARCHS FROM MOLDOVA
On 31 July ZDG in Moldova reported on reported attempts by the lawmakers in the US to have the Biden Administration impose sanctions under the Magnitsky Global Human Rights Accountability Act on certain corrupt actors in Moldova. They claim that the 3 named are responsible for a series of fraudulent acts both in Moldova and internationally.
UK: NUMBER OF LAW FIRMS FINED BY SRA INCREASES FOLLOWING AML COMPLIANCE CRACKDOWN
On 1 August, City AM reported that the number of fines against law firms, handed out by the solicitors’ watchdog, has increased 6-fold over the past 5 years following an AML compliance crackdown. The number of fines issued against law firms has also more than doubled each year over the past 3 years.
INDIA: MP AND PARTY LEADER SANJAY RAUT ARRESTED IN MONEY LAUNDERING CASE
On 1 August, various media reported that Sanjay Raut MP, leader of the right wing policitcal party, Shiv Sena Rajya Sabha had been arrested by the Enforcement Directorate in Mumbai, after hours of searches at his residence, in connection with an alleged land scam case.
UK: JAILED FORMER COOLEY ASSOCIATE BANNED FROM LEGAL PROFESSION
On 1 August, the Law Society Gazette reported that a high-flying lawyer who defrauded international firm Cooley and the Commonwealth Secretariat out of more than £600,000 has been banned from working in the profession. Joshua Brien, a dual Canadian-Australian citizen who was registered by the Solicitors Regulation Authority as a foreign lawyer until April 2021, has now been banned from being employed by a law firm as ‘it is undesirable for him to be involved in a legal practice’.
SHIPS OF HUMANITARIAN ORGANISATIONS SYSTEMATICALLY MAY BE SUBJECT TO CONTROLS BY THE PORT STATE – BUT THEY MAY ADOPT DETENTION MEASURES ONLY IN THE EVENT OF A CLEAR RISK TO SAFETY, HEALTH OR THE ENVIRONMENT
On 1 August, a news release from the CJEU issued a news release about the outcome of a case involving German humanitarian rescue organisation SeaWatch and the detention of 2 of its vessels by authorities in Italy. The decision was that while such authorities may detain such vessels, the this was only in the event of a clear risk to safety, health or the environment, and that it was for the state port authority to demonstrate the risk.
FIJI OPPOSITION CALLS FOR SCRUTINY OF GRACE ROAD CHURCH’S OPERATIONS
On 1 August, OCCRP reported on calls for an official inquiry into the operations of the Grace Road Church after OCCRP revealed that the sect, accused of various human rights abuses, has used state loans to build its business empire on the archipelago. The Grace Road Church is a South Korean doomsday sect, which has, since 2014 when its members moved to Fiji, become a major player in the local economy.
MOROCCAN GOVERNMENT HAS CREATED AN “ECOSYSTEM OF REPRESSION”
On 1 August, OCCRP reported on a Human Rights Watch report which claims that Moroccan authorities have created an “ecosystem of repression” to stifle free speech and scare off critics in practices that increasingly target journalists and dissidents with false charges. Surveillance, smear campaigns, intimidation and imprisonment following unfair trials are just some of the tactics used by the authorities as part of its “comprehensive methodology to muzzle dissent,” according to the report.
US CUSTOMS TO TAKE ACTIONS TO ADDRESS CONCERNS RAISED IN A RECENT REPORT ABOUT ITS SCREENING OF CRATED CARGO
On 1 August, Sandler Travis Rosenberg reported that US Customs and Border Protection has said that by 30 November it will take actions to address concerns raised in a recent report about its screening of crated cargo. According to a Government Accountability Office report, non-containerised cargo accounted for about 32% of the $1.5 trillion total maritime cargo value in the US in 2020; and this category includes breakbulk cargo, such as goods packaged and shipped on pallets or crates, as well as bulk cargo such as crude oil, chemicals, grain, coal, and lumber.
REGULATION OF INTERMEDIARIES, INCLUDING TAX ADVISERS, IN THE EU AND MEMBER STATES AND BEST PRACTICES FROM INSIDE AND OUTSIDE THE EU
On 1 August, a briefing from the EU Parliament Research Service provides an overview of the regulatory environment of tax intermediaries. It presents a comparative analysis of 5 selected countries, 1 being non-EU. For each country, it provides an understanding of the landscape of the tax profession, the current regulatory framework and its impact on tax compliance and draws attention to some weaknesses across this regulatory space. It also highlights some proposed remedies and direction for further in-depth research in this area.
On 29 July, a report from Project Syndicate says that the Democratic Republic of the Congo has been pillaged by foreign governments and corporations for more than 500 years, and this sordid pattern continues to this day. Given this history – a process which started in the late 1400s, when the Portuguese landed on the shores of what was then known as the Kongo Kingdom – is it any wonder that the country suffers from massive corruption, perpetual conflict, and state capture? In recent years, the rapid expansion of cell phones, laptops, and video-gaming consoles drove a spectacular increase in the price of tin, tantalum, tungsten, and gold – all of which are plentiful in the DRC. Now, the expanding electric-vehicle industry is stoking global demand for cobalt and copper (key ingredients in lithium-ion batteries), raising new concerns about corruption, mine safety, and child labour issues in the Congo’s vast mines.
US COURT FINDS LIBYA’S KHALIFA HAFTAR LIABLE FOR WAR CRIMES
On 29 July, Middle East Eye reported that a federal judge had issued a default judgement against Libyan commander Khalifa Haftar, finding him liable for war crimes against several Libyan families who have accused him of extrajudicial killings and torture. This paves the way for the families in 3 separate civil suits to seek monetary compensation. Haftar, a US citizen who had been a Virginia resident for decades, unsuccessfully tried to have the civil lawsuits tossed out under the claim of immunity as head of state.
$10 MILLION REWARD OFFERED FOR INFORMATION ON FOREIGN GOVERNMENT-LINKED MALICIOUS HACKERS
On 28 July, website State of Security reported that a $10 million reward is being offered by the State Department for information leading to the identification or location of malicious hackers working with North Korea to launch cyberattacks on US critical infrastructure.
BVI: WARNING ABOUT A MONEY LAUNDERING SCHEME THAT HAS BEEN TARGETING THE BANKING AND HOSPITALITY INDUSTRIES
On 29 July, BVI News.com reported that the Financial Investigation Agency (FIA) has issued a warning about a money laundering scheme that has been targeting the banking and hospitality industries. The FIA said the scheme was being executed by unknown individuals using legitimate businesses and individuals’ identification information.
UK: HIGH COURT RULES AGAINST VENEZUELA’S MADURO IN $1 BILLION GOLD BATTLE
On 29 July, Yahoo Finance reported that the High Court has rejected President Nicolas Maduro’s latest efforts to gain control of more than $1 billion of Venezuela’s gold reserves stored in the Bank of England’s underground vaults in London.
BURKINA FASO COULD BE NEXT FOR RUSSIA’S WAGNER GROUP
On 27 July, Foreign Policy published an article saying that US intelligence officials have told the magazine that Burkina Faso could be the next country where the Wagner Group could make an appearance, following the coup there.
SEC CHARGES 11 IN MULTIMILLION-DOLLAR CRYPTO PYRAMID SCHEME
On 1 August, ZyCrypto reported that the SEC had indicted 11 individuals for their connection with a global crypto Ponzi Scheme that spanned 2 years. 4 of the 11 are the founders of the crypto pyramid scheme Forsage, which raised $300 million from retail investors while promising mouth-watering returns. Their most recent residences were in Russia, the Republic of Georgia, and Indonesia.
ARMS DEALER ‘100% SURE’ RUSSIAN AGENTS BEHIND BLAST AT BULGARIAN ARMS DEPOT
On 1 August, the Guardian reported that a Bulgarian arms dealer who survived an apparent novichok poisoning in 2015 said he was “100% sure” that Russian operatives were behind an explosion and subsequent fire at one of his depots in the country. It is the fifth time in recent years that blasts have occurred at facilities belonging to Emco, Gebrev’s arms company. Gebrev said the warehouse contained munitions meant for African countries that had been ordered several years ago but the buyers had not followed through with payment.
US: “BOILER ROOM” OPERATOR PLEADS GUILTY TO INTERNATIONAL SECURITIES FRAUD CONSPIRACY
A news release from US DoJ on 1 August advised that a UK citizen, Lee Cohen, had pleaded guilty to conspiracy to commit securities fraud for his role in a scheme to manipulate the price and trading volume of HD View, 360, Inc, a publicly traded company that purported to distribute and install security surveillance systems. Cohen also admitted that he agreed to launder money that was purported to be the proceeds of similar securities fraud schemes. Cohen operated a self-described “boiler room” in the Philippines.
US: FORMER OWNER OF T-MOBILE RETAIL STORE IN EAGLE ROCK FOUND GUILTY OF COMMITTING $25 MILLION SCHEME TO ILLEGALLY UNLOCK CELLPHONES
A news release from US DoJ on 1 August announced that the defendant had been found guilty of 14 federal criminal charges for his $25 million scheme to enrich himself by stealing T-Mobile employee credentials and illegally accessing the company’s internal computer systems to illicitly “unlock” and “unblock” cellphones. At the time of the offences, most cellphone companies – including T-Mobile – “locked” their customers’ phones so they could be used only on the company’s network until the customers’ phone and service contracts had been fulfilled.
XINJIANG PAIRING ASSISTANCE PROGRAM INCENTIVISES CHINESE COMPANIES TO MOVE MANUFACTURING OPERATIONS INTO THE REGION
On 30 June, C4ADS published a report saying that the Chinese government is undertaking a concerted drive to industrialise the Xinjiang Uyghur Autonomous Region (XUAR), which has led an increasing number of corporations to establish manufacturing operations there. This centrally-controlled industrial policy is a key tool in the government’s efforts to forcibly assimilate Uyghurs and other Turkic peoples through the institution of a coerced labour regime. The report says that while companies work to avoid goods produced by Uyghur forced labour, there are still mechanisms that allow these products into international markets — such as this Program.
THE UK’S LATEST POSITION ON RESPONSIBLE CYBER POWER
A post from lawfare on 1 August reviewed (and criticised) what the post describes as a lack of ambition in leading the agenda on how offensive cyber operations can be used by a “responsible and democratic cyber power”.
THE WAR IN UKRAINE: A NEW PARADIGM OF SANCTIONS PRACTICE
On 1 August, a post from Lawfare said that the Russian invasion triggered a warp-speed rollout of sanctions, which have, alongside the export of weapons and materiel to Ukraine, constituted the primary international response to Russia’s aggression. The world has witnessed a breakneck expansion of the number of individuals and organisations added to countries’ sanctions lists, not to mention a torrent of wider economic measures – but the post argues that it is not just the sheer numbers that are important. The developments, the post goes on to discuss, have altered the modern paradigm of sanctions policy and practice, collectively opening up new risks and possibilities for the future.
On 1 August, FATF published the MER prepared by the FATF-style regional body, the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG), on Eswatini (the former Swaziland in Southern Africa). It followed an on-site visit in May/June 2021, and criticisms include about awareness levels, the National Strategic Plan 2018-2022, and that the competent authorities in Eswatini suffer from acute resource shortages which has undermined their ability to exercise their mandates and demonstrate acceptable levels of effectiveness across the AML/CFT system. The criticisms are reflected in the low scores for effectiveness.
On 1 August, FATF published the MER produced by the FATF-style regional body, the Eurasian Group, which says that the country has made significant efforts to identify, understand and assess its risks and develop measures to mitigate them, but the report speaks of evidence that the degree of threat of frauds and robberies/thefts is underestimated in the country’s national risk assessment of 2019.
On 1 August, FATF published a list of links to national risk assessments from a large number of countries, plus supranational risk assessments from the EU and for SE Asia and Australia in 2016. It also published a 2017 Opinion from the European Supervisory Authorities and the GAFILAT 2017 risk assessment for Latin America.
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