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OTHER THINGS YOU MAY HAVE MISSED – JULY 10

Panama Covid-19 update – lots of video of people getting their free flu vaccination on the news today (cue crying babies), available to over-60s, pregnant women and the young, the argument is that you don’t want to risk getting both flu and Covid-19. This time of year, as the weather changes, is the usual time of year when flu breaks out.

Meanwhile, in neighbouring Costa Rica which, like Panama, seemed to be better than other countries at first, has introduced new tight restrictions.  Again like Panama, it seems it faced a surge of cases after it tried to loosen previous controls.

The daily figures remain worrying – 1,041 new infections (now up to 43,257 – so that cases have reached the 1% of the population figure), with 24 more fatalities (863 in total), with a fatality rate of 1.98% of cases. There are currently 20,968 active cases recorded (just under 0.5% of the population),

10 July 2020

RUSSIAN CYBERCRIME GANG CREATED FAKE MERGER AND ACQUISITION SCENARIOS OVER EMAIL TO TRICK SENIOR EMPLOYEES INTO TRANSFERRING VAST SUMS OF CASH

On 8 July, the Verdict website reported that the “Cosmic Lynx” gang is believed to be the first reported case of a business email compromise (BEC) criminal ring operating out of Russia. A US company says it has found that the gang has targeted executives spanning 46 countries and 6 continents.

https://www.verdict.co.uk/cosmic-lynx-russian-bec/

US PROBES ALLEGED GOLD TRADE BETWEEN VENEZUELA AND LIBYAN WARLORD

On 9 July, the Wall Street Journal reported that Libya and the US are said to be investigating suspected gold-for-cash trades between Venezuela and Libyan militia leader Khalifa Haftar. The LNA has been tracking Haftar’s private jet, which is suspected of carrying gold from Venezuela to West Africa, and from there to Europe and the Middle East, US, European and Libyan security officials said.

https://www.wsj.com/articles/libya-u-s-probe-alleged-gold-trade-between-venezuela-and-warlord-11594319062

PANAMA: FORMER PRESIDENT HAS ASSETS OF FORMER ATTORNEY GENERAL SEIZED

In a bizarre situation in Panama, Newsroom Panama on 9 July reported that sheriffs, supported by police, had raided the home of a former Attorney general who had been responsible for criminal investigations into former President Martinelli under a court order allowing seizure of $120,000 in assets. The raid had the purpose of looking for those movable assets liable to be seized, such as furniture, ornaments, clothing, paintings. In January, Martinelli filed 2 criminal complaints against the former Attorney General, for the alleged commission of crimes against the public administration and for slander, although the seizure of assets is said to be connected to a civil lawsuit.  Meanwhile, Martinelli is facing trial for allegedly using state funds to purchase a publishing company.

https://www.newsroompanama.com/news/martinelli-strikes-back-with-sheriffs-raid

US: WHAT ARE THE BIGGEST CHALLENGES FACING THE AML AND FINANCIAL CRIMES COMMUNITIES?

On 2 July, the American Bankers’ Association’s Risk & Compliance blog carried a post asking this question re a survey conducted into how companies’ AML and anti-financial crime compliance communities are dealing with the unprecedented challenges brought on by the COVID-19 pandemic. Hoping to gain some insight into how compliance professionals are dealing with the challenges as a result of the pandemic, surveys went out to those in the banking, regulation, law enforcement, auditing, compliance and technology industries. It is said that the results illustrate different pandemic response strategies and what the “new normal” will look like in the post-pandemic era. The results also provided insightful knowledge as to how institutions can be better prepared for future crises.

https://bankingjournal.aba.com/2020/07/what-are-the-biggest-challenges-facing-the-aml-and-financial-crimes-communities/

FRANCOPHONE GROUP TO LIFT 4-YEAR SANCTIONS AGAINST BURUNDI

On 10 July, BNN Bloomberg reported that the International Organisation of la Francophonie will resume cooperation with Burundi after suspending programmes in 2016, citing a political crisis in the country.  Burundi’s new President is moving to renew relations with nations and organizations that were strained or broken amid political upheaval under his predecessor’s rule.

https://www.bnnbloomberg.ca/francophone-group-to-lift-four-year-sanctions-against-burundi-1.1463413

INDONESIA: POLICE CHARGE FUGITIVE LINKED TO 2003 FRAUD WITH CORRUPTION AND MONEY LAUNDERING

On 10 July, the Jakarta Post reported that National Police have brought multiple charges relating to corruption and money laundering against Maria Pauline Lumowa, who has been wanted for 17 years as a suspect in a major fraud case. It is said that National Police had so far confiscated and tracked down assets in the form of her unmovable and movable property as well as money and goods that had been confiscated and auctioned, valued at $9.14 million. She obtained Dutch citizenship in 1979 and was hiding in the Netherlands, having fled Indonesia just before she was named a suspect of a fraudulent loan scam in 2003. She allegedly used a fictitious letter of credit to obtain $136 million and €56 million in bank loans issued to her company PT Gramarindo Group between 2002 and 2003.

https://www.thejakartapost.com/news/2020/07/10/police-charge-fugitive-maria-lumowa-with-corruption-money-laundering.html

STEEL TYCOON PRAMOD MITTAL FACES BANKRUPTCY

On 10 July, the Daily Mail carried an article about Pramod Mittal, 64, scion of the ultra-rich Mittal steel dynasty who originated in India but built up a worldwide business empire. He was served a bankruptcy order over a debt of £139,786,656.43 – plus interest – in the Insolvency and Companies Court in London last month. Pramod is also entangled in a probe into organised crime in Bosnia where he was arrested last year and released on bail. The article asks why his brother Lakshmi, whose Luxembourg-based Arcelor Mittal steel business is valued at just over £9 billion on the stock market, making his holding worth more than £3 billion – and who also owns a 20% stake in Queens Park Rangers football club and has an estimated £6.8 billion. The Mittal family fortunes stem from the steel empire founded by their father Mohan in India in the 1950s and Pramod and another younger brother, Vinod, ran parts of the family empire including a company called Global Steel Holdings.

https://www.thisismoney.co.uk/money/news/article-8507147/Downfall-big-spending-tycoon-Pramod-Mittal-faces-bankruptcy.html

US NGO WINS SANCTIONS EXEMPTION FOR AGRICULTURAL PROJECTS IN NORTH KOREA

On 10 July, NK Pro reported that the American Friends Service Committee, which has been granted an exemption by the relevant UN sanctions committee, says work will help to address the “critical issue of food availability” in the DPRK.

https://www.nknews.org/pro/u-s-ngo-wins-sanctions-exemption-for-north-korea-agricultural-projects/

CHINA’S STATE-BACKED SHIPPING INDUSTRY

On 8 July, CSIS in the US published a brief saying that Chinese companies are increasingly dominant across the maritime supply chain, aided by a complicated and opaque system of formal and informal state support that is unrivalled in size and scope. It says that China has evolved increasingly sophisticated financial tools to select and support winners that render the traditional understanding of China’s state capitalist system largely outdated; and that future research will be needed to understand its evolving playbook for supporting the global rise of strategically significant industries. The brief points out that China is also helping domestic operators bulk-up via mergers and acquisitions in ways that would be all but impossible for foreign firms both in China and in their home countries where more restrictive anti-monopoly laws limit anti-competitive behaviour. The brief points out that, with 90% of global trade traveling by sea, the US has both commercial and strategic interests in maintaining robust maritime capabilities, but to fashion a response it must first have an accurate assessment of the forces driving China’s shipping sector. In strategic areas such as shipping, the United States needs to strike a balance and maintain sufficient capabilities of its own.

china

https://www.csis.org/analysis/hidden-harbors-chinas-state-backed-shipping-industry

AFRICA: ILLEGAL IVORY TRADE SHRINKS WHILE PANGOLIN TRAFFICKING BOOMS, UN SAYS

On 10 July, Defence Web reported that the illegal global trade in ivory has shrunk while the trafficking of pangolins has soared, a UN report on wildlife crime based on 4 years’ data has said. The report says that national bans on selling ivory, particularly China’s in 2017, appear to have helped further erode ivory trafficking after it peaked around 2011-2013.

https://www.defenceweb.co.za/security/border-security/illegal-ivory-trade-shrinks-while-pangolin-trafficking-booms-un-says/

FATF BUSINESS BULLETIN FOR JULY 2020

On 10 July, FATF published its regular Business Bulletin providing updates in the last quarter, including new publications.

http://www.fatf-gafi.org/media/fatf/documents/bulletin/Business-Bulletin-July-2020.pdf

Q&A ON UK ARMS EXPORTS TO SAUDI ARABIA

On 10 July, a Briefing Paper from the House of Commons Library following the recent Government statement on licensing of exports to Saudi Arabia and new processes, following a hiatus after a court ruling in 2019.  The Briefing Paper is an updated version of one first published in 2018, and previously updated in 2019.

http://researchbriefings.files.parliament.uk/documents/CBP-8425/CBP-8425.pdf

FORMER PILATUS BANK OWNER MAY BE WORKING WITH US LAW ENFORCEMENT TO INDICT MALTESE MONEY LAUNDERERS

The Lovin Malta website repeats claims made by Kenneth Rijock in big blog that the former owner of Pilatus bank, Ali Sadr Hasheminejad, may be cooperating with US law enforcement to fight Maltese financial crime, after the US government dropped its case against the Pilatus owner who was convicted of violating US sanctions against Iran.

https://lovinmalta.com/news/former-pilatus-owner-may-be-working-with-us-law-enforcement-to-indict-maltese-money-launderers-according-to-financial-crime-blog

FRANCE UNCOVERS ‘MASSIVE FRAUD’ OF CORONAVIRUS WAGE PAYOUTS

On 10 July, RTE and others reported that the Paris prosecutor’s office has said it is investigating “massive fraud” across France by people falsely claiming temporary wage assistance for employees laid off during the coronavirus lockdown.

https://www.rte.ie/news/coronavirus/2020/0710/1152515-france-coronavirus

CROSS-BORDER VAT FRAUDSTERS BUSTED IN PORTUGAL: 6 ARRESTS AND 32 INDICTMENTS

A news release from Europol on 10 July advised that police have dismantled an organised crime group involved in cross-border VAT fraud (missing trader intra-community fraud or MTIC fraud). Police in Spain and Portugal arrested 6 suspects while 18 companies and 32 individuals of Pakistani and Portuguese origin were indicted for taking part in the criminal scheme. The criminals used traders and conduit companies based in Spain and Portugal, and by not paying VAT in Portugal the suspects were able to gain a 23% margin (the VAT rate in Portugal). They used this margin to lower the price of the goods, which they were selling on the black market, mainly food and alcoholic beverages.

mtic

https://www.europol.europa.eu/newsroom/news/cross-border-vat-fraudsters-busted-in-portugal-6-arrests-and-32-indictments

NIGERIA SUSPENDS ANTI-GRAFT CHIEF DURING INVESTIGATION INTO AGENCY

On 10 July, Reuters reported that Nigeria has suspended the head of its anti-corruption body – Ibrahim Magu, head of the Economic and Financial Crimes Commission (EFCC), days after the attorney general accused the agency of diverting funds that had been recovered during investigations into graft.

https://uk.reuters.com/article/uk-nigeria-corruption/nigeria-suspends-anti-graft-chief-during-investigation-into-agency-idUKKBN24B1QV

NAMIBIA: THE SPOILS OF FISHROT – SUSPECTS BOUGHT PROPERTY AFTER PROPERTY

On 10 July, All Africa provided an updated on the “Fishrot” corruption scandal in Namibia, saying that an accused has over the past 5 years bought houses “like someone picking goods off a supermarket shelf”. His cousin also saw a substantial increase in his property portfolio – from 2 properties to 22. It is said that the spending on property points to a trend among those accused of benefiting from the spoils of the Fishrot scandal. The scandal involves is one of the biggest corruption cases in Namibia. Among others, it led to the arrest of 2 sitting government ministers. It involves allegations of money laundering, fraud, bribery and corruption involving top ministers, their families, friends and political cronies and the Icelandic seafood company, Samherji.

https://allafrica.com/stories/202007100797.html

UAE K9 HOWITZER SUPPLY BY SOUTH KOREA FROZEN UNDER GERMAN ARMS EMBARGO

On 8 July, Janes.com reported that a UAE order for the K9 Thunder self-propelled howitzer from South Korea has been stopped by German restrictions on defence exports to UAE. The K9 use MT 881 Ka-500 diesel engines made by the German company MTU Friedrichshafen.

https://www.janes.com/defence-news/news-detail/uae-k9-howitzer-acquisition-frozen-under-german-arms-embargo

GLOBAL SEA PIRACY TICKS UPWARD, AND THE CORONAVIRUS MAY MAKE IT WORSE

On 9 July, Insurance Maritime News reported that a Professor of Political Science & a Global Security Fellow at the Howard Baker Center, University of Tennessee, has said that the Covid-19 pandemic could exacerbate the current piracy levels worldwide.

https://insurancemarinenews.com/insurance-marine-news/global-sea-piracy-ticks-upward-and-the-coronavirus-may-make-it-worse/

STRATEGIC TRADE ATLAS 2014-2018 – WHAT STRATEGIC GOODS GO WHERE

The EU Science Hub has released an updated Strategic Trade Atlas, which was developed to promote understanding of global trade flows of strategic goods (i.e., goods of militarily strategic value, including dual-use goods). The Atlas provides graphical representations of global trade flows classified under Harmonized System (HS) codes associated by the WCO with strategic commodities. The profiles provide information-rich representations of strategic commodity-related imports and exports classified under these HS codes, based on data originally reported to and made publicly available by the UN Statistical Division, then processed to reconcile trade asymmetries. This and other high-quality, statistically relevant data sources exist, but are largely untapped resources for strategic trade control purposes. Efforts to promote and facilitate use of trade data should enhance the effectiveness and efficiency of strategic trade control efforts.

https://publications.jrc.ec.europa.eu/repository/bitstream/JRC121084/strategic_trade_atlas_2014_2018_final_1.pdf

THE FRENCH BAR ADOPTS INTERNAL INVESTIGATIONS GUIDELINES

On 7 July, Global Investigations Review reported that France’s National Bar Council (CNB) has published comprehensive internal investigations advice focusing on how to protect attorney-client privilege, conduct interviews and adhere to the French Blocking Statute. The Blocking Statute prohibits individuals and companies from disclosing economic, technical and commercial information, including the results of an internal investigation, to foreign authorities, unless they gain approval from French authorities.  It is said that France’s recent adoption of US-style anti-corruption trends and enforcement, such as the introduction of deferred prosecution agreements (DPA), prompted the group to draw up the guidance.

https://media-exp1.licdn.com/dms/document/C4E1FAQFDXcEP6csvDg/feedshare-document-pdf-analyzed/0?e=1594486800&v=beta&t=XDrzmAmTihOWB761p5LLd2EETe9tGX_73Cdhn1cOXf8

PAKISTAN EXPECTS UAE REMITTANCES TO BE SLASHED AS PANDEMIC HITS MIGRANT WORKERS

On 10 July, CNBC reported that 20% of the UAE’s majority-expat population is Pakistani, and in a typical year the South Asian nation of 212 million receives $4.6 billion in remittances from the UAE alone, but swathes of these workers are being laid off and sent back home.

https://www.msn.com/en-us/news/world/pakistan-expects-uae-remittances-to-be-slashed-as-pandemic-hits-migrant-workers/ar-BB16yUa7?ocid=msedgdhp

OPERATION STOLEN PROMISE

The US Department of Homeland Security has a website which sets out to record what is being done by the Department to combat the increasing and evolving threat posed by COVID-19-related fraud and criminal activity. Operation Stolen Promise (OSP) targets COVID-19-related fraud and other criminal activity. The initiative combines HSI’s expertise in global trade investigations, financial fraud, and cyber investigations with robust private and public partnerships to disrupt and dismantle this criminal activity and strengthen global supply-chain security. The website includes statistics on operations and assets seizures etc. For example, to 8 July, there had been 841 cases involving seizures of COVID-19-related material, such as masks, kits etc.

https://www.ice.gov/topics/operation-stolen-promise

US IMPOSES 25% TARIFF ON FRENCH GOODS OVER DIGITAL TAX, BUT DELAYS EFFECTIVE DATE

On 10 July, Reuters reported that the Trump administration said it would slap additional duties of 25% on French imports valued at $1.3 in response to France’s new digital services tax, but would delay implementation of the new tariffs for up to 180 days.

https://uk.reuters.com/article/uk-usa-trade-france/u-s-slaps-french-goods-with-25-tariff-over-digital-tax-but-delays-effective-date-idUKKBN24B31K

EU: EU PARLIAMENT VOTES TO ACCEPT EU AML/CFT ACTION PLAN

On 9 July, a news release from the European Parliament advised that MEPs had voted in favour of an EU Action Plan on how to fight effectively against money laundering and terrorist financing and highlighted the most pressing changes needed to achieve an efficient EU framework.

https://www.europarl.europa.eu/news/en/press-room/20200706IPR82728/meps-set-out-new-measures-to-stop-money-laundering

US: 2 DOCTORS AND 5 OTHERS CHARGED IN GENETIC TESTING KICKBACK AND BRIBERY SCHEMES

A news release from the DoJ on 9 July advised that 7 people have been charged for their roles in conspiracies to pay and receive kickbacks in exchange for ordering genetic tests.  The doctors each began in 2018 accepting monthly cash kickbacks and bribes in exchange for collecting DNA samples from Medicare patients and sending them for genetic tests to clinical laboratories.

https://www.justice.gov/usao-nj/pr/two-pennsylvania-based-doctors-and-five-others-charged-genetic-testing-kickback-and

BANK FRAUD AND TRANSACTION LAUNDERING ALLEGATIONS ABOUT MARIJUANA BUSINESS PAYMENTS

On 1 July, the Wall Street journal reported that an alleged scheme to disguise $100 million in cannabis product sales in a case that could have implications for industry. This followed the arrest of a German businessman named Ruben Weigand at Los Angeles International Airport, during a layover on his way to Costa Rica. In the US, the Forensic News website links this arrest to alleged miscoding of marijuana sales to mislead card companies and thus utilise the US payments industry, with over $100 million in credit card transactions for the purchase of marijuana. It is claimed that fake companies and websites were employed to label credit card transactions to appear as if they were for legitimate purposes such as dog products or health supplements like face cream – and this forms the basis of the bank fraud charges. The prosecutors describe this type of scheme “transaction laundering”.

https://www.wsj.com/articles/bank-fraud-allegations-test-marijuana-business-11593605701

https://forensicnews.net/2020/07/09/us-investigators-probe-massive-global-financial-crime-network-connected-to-fbme-bank

ARGENTINE FEDERAL JUDICIARY EXTENDS FREEZE OF HEZBOLLAH FUNDS

On 10 July, the Jerusalem Post reported that the finance have been frozen for an additional year by the Argentine’s federal judiciary. The action is reported to be linked to the 1994 joint Iranian-Hezbollah operation which blew up the AMIA Jewish community centre in Buenos Arias, and Hezbollah’s alleged illicit finance activities continue in the country and in the Tri-Border Area (i.e. the junction of Paraguay, Argentina and Brazil).

https://www.jpost.com/middle-east/argentine-federal-judiciary-extends-freeze-of-hezbollah-funds-634669

 

 

 

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FBI CONCERNED OVER LAUNDERING RISKS IN PRIVATE EQUITY AND HEDGE FUNDS

A post from Thomson Reuters on 10 July referred to an internal memo from the FBI in May which says that the FBI believes firms in the nearly $10-trillion private investment funds industry are being used as vehicles for laundering money at scale.  It says that “Threat actors” – including criminals in it for the money and foreign adversaries – “use the private placement of funds, including investments offered by hedge funds and private equity firms” to reintegrate dirty money into the legitimate global financial system, and the industry lacks adequate AML programmes and called for greater scrutiny by regulators. It cites 4 cases of planned or reported laundering operations, involving hundreds of millions of dollars, utilising private funds.

https://drive.google.com/file/d/1tj3EvnajLjSiFJuoS0Zu-jkkB9cDY-vJ/view

https://blueleaks.io/jric/files/DDF/200501%20LES%20FBI%20Intelligence%20Bulletin%20-%20Threat%20Actors%20Likely%20Use%20Private%20Investment%20Funds%20to%20Launder%20Money%2C%20Circumventing%20Regulatory%20Tripwires.pdf

 

 

 

 

 

 

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G4S £44 MILLION DEFERRED PROSECUTION AGREEMENT TO SETTLE ELECTRONIC-TAGGING FRAUD CASE

On 10 July, the Belfast Telegraph reported that security company G4S is to pay more than £44 million after it “repeatedly lied” to the Government over electronic-tagging contracts, following investigations by the SFO, and under a deferred prosecution agreement (DPA) settlement deal relating to the investigation, which started in 2013.

https://www.belfasttelegraph.co.uk/news/uk/g4s-to-pay-out-44m-to-settle-electronic-tagging-fraud-case-39357878.html

 

 

 

 

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DESPITE SANCTIONS, THE NETWORKS OF VENEZUELA’S RULING ELITE CONTINUE TO REACH THE US

On 2 July, Transparency International published an article about a new website from the OCCRP which features highly revealing social media-style profiles of the country’s military and political elite. It shows them partying in St. Barts, living at Caribbean resorts and owning luxury properties in Miami. Transparency International points out that the lack of a requirement to disclose beneficial owner makes it easier for rich Venezuelans to “hide” behind US corporations etc.

The OCCRP website is at –

https://elfeis.occrp.org/projects/caribe/

https://www.transparency.org/en/blog/despite-sanctions-venezuela-corrupt-reach-united-states-anonymous-companies

 

 

 

 

 

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UN WORLD WILDLIFE CRIME REPORT 2020

On 10 July, the UN Office of Drugs and Crime released this report, saying that the COVID-19 pandemic has shown that wildlife crime is a threat not only to the environment and biodiversity, but also to human health. It points out that zoonotic diseases represent up to 75% of all emerging infectious diseases and include SARS-CoV-2 that caused the COVID-19 pandemic.  The report draws heavily on UNODC’s World WISE database, which contains almost 180,000 seizures from 149 countries and territories. The database shows that nearly 6,000 species have been seized between 1999-2019, including not only mammals but reptiles, corals, birds, and fish. It also says that, like many other markets, trade in wildlife and wildlife products have also expanded into the digital sphere; and argues the need for stronger criminal justice systems focusing on improving legal frameworks and strengthening the prosecutorial and judicial process.

https://www.unodc.org/unodc/press/releases/2020/July/unodc-world-wildlife-crime-report-2020_-the-covid-19-pandemic-has-shown-that-wildlife-crime-is-a-threat-not-only-to-the-environment-and-biodiversity–but-also-to-human-health.html

https://www.unodc.org/documents/data-and-analysis/wildlife/2020/World_Wildlife_Report_2020_9July.pdf

 

 

 

 

 

 

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IMPORTING/EXPORTING BETWEEN UK AND EU AFTER 1 JANUARY 2021 AND IMPORT AND EXPORT LICENCES AND CERTIFICATES AFTER 1 JANUARY 2021

On 10 July, HMRC released guidance on procedures from 1 January – note, however, that the guidance actually covers movements between Great Britian (GB) and the EU – Great Britain is England, Wales and Scotland.  It is said that guidance on moving goods into, out of and through Northern Ireland will be added to GOV.UK in the coming weeks. On the same date, the Home Office published a news release concerned with licences, certificates and special rules for bringing goods into the UK from 1 January, and covering animals, plants, food and agricultural products, drugs, chemicals and waste. Also on 10 July, the Department for International Trade published information on licences, certificates and special rules for taking goods out of the UK from 1 January – for animals, plants, food and agricultural products, chemicals and waste, controlled goods (e.g. military, dual-use, torture equipment), diamonds and in respect of sanctions law.

https://www.gov.uk/prepare-to-import-to-great-britain-from-january-2021

https://www.gov.uk/prepare-to-export-from-great-britain-from-january-2021

https://www.gov.uk/guidance/declaring-goods-brought-into-great-britain-from-the-eu-from-1-january-2021

https://www.gov.uk/guidance/import-licences-and-certificates-from-1-january-2021

https://www.gov.uk/guidance/export-licences-and-certificates-from-1-january-2021

 

 

 

 

 

 

 

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OFAC REMOVES 4 NAMES FROM ITS SOMALIA SANCTIONS LIST

On 10 July, OFAC advised that 4 names had been removed from the list of those subject to sanctions in respect of Somalia.

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20200710.aspx

 

 

 

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UK REMOVES 5 NAMES FROM SANCTIONS LISTS AND AMENDS ANOTHER

On 10 July, OFSI advised that the following entries have been removed from the UK Consolidated List – Ri Pyong Chol in the North Korea sanctions list; Robert Kibelisa and Lambert Mende in the DRC sanctions list; Mas’ud Abdulhafiz in the Libyan sanctions lists; and Fahd Jasim al-Furayj in the Syrian sanctions lists.  The entry for Ahmed al-Jarroucheh has been updated.

On 10 July, the Isle of Man issued news releases advising that the changes also had effect in the Island.

https://www.gov.uk/government/publications/financial-sanctions-consolidated-list-of-targets

https://www.gov.uk/government/publications/financial-sanctions-north-korea-democratic-peoples-republic-of-korea

https://www.gov.uk/government/publications/financial-sanctions-syria

https://www.gov.uk/government/publications/financial-sanctions-libya

https://www.gov.uk/government/publications/financial-sanctions-democratic-republic-of-the-congo

https://www.gov.im/news/2020/jul/10/financial-sanctions-democratic-peoples-republic-of-korea-north-korea/

https://www.gov.im/news/2020/jul/10/financial-sanctions-syria/

https://www.gov.im/news/2020/jul/10/financial-sanctions-libya/

https://www.gov.im/news/2020/jul/10/financial-sanctions-democratic-republic-of-the-congo/

 

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US WIRE TRANSFERS ARE SUFFICIENT TO CONFER US JURISDICTION IN COMMERCIAL BRIBERY PROSECUTION

On 7 July, Baker McKenzie published an article about a recent court decision which affirmed the convictions of 2 foreign nationals, former officials of FIFA and the Confederación Sudamericana de Fútbol (CONMEBOL), for conspiracy to commit honest services wire fraud – which is an offence in US criminal law which has been used in cases of public corruption as well as in cases in which private individuals breached a fiduciary duty to another.  It held that the use of US wire services could be sufficient in itself to confer US jurisdiction over foreign nationals in such prosecutions, even if the remainder of the fraudulent scheme took place outside of the US. The article examines the decision, and says that it means that companies and individuals doing business outside the US should be aware of the possibility of US prosecutors using the honest services wire fraud statute to prosecute foreign commercial bribery where the funds were routed through the US. Companies should ensure that their policies, procedures and trainings strictly prohibit commercial bribery – even if there is no specific local law to that effect in their jurisdiction.

https://insightplus.bakermckenzie.com/bm/compliance-investigations_1/international-us-second-circuit-rules-that-us-wire-transfers-are-sufficient-to-confer-us-jurisdiction-in-commercial-bribery-prosecution-what-does-this-mean-for-apac-companies

 

 

 

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OTHER THINGS YOU MAY HAVE MISSED – JULY 9

Panama Covid-19 update – an interesting item on last night’s news conference, that a brand of hand cleanser had been banned as it didn’t provide sufficient protection against Covid-19 – checked the various we had and we didn’t have any… And a news story today concerned a pregnant woman who went out before her test results had been received and (in theory at least) now faces a $50,000 fine (that’s for a first offence, it’s $100, 000 for a second offence)! I am guessing that in her case it’s a notional $50K, it does seem a bit over the top… Mind you, I worry about the $100 fine for not wearing a mask (I set out early this morning and had to hurry back because I forgot!).

For the daily statistics – new case figures remain high at 965 (42,216 to date), with 20,940 currently active – 159 in ICU, 890 in other hospital wards, 709 in hotels and 19,182 at home.  There were 20 more fatalities, taking the total to 839; but now 20,437 people are said to have recovered from knowingly having the virus.

9 July 2020

US: NYDFS AND OCC ANNOUNCE MAJOR OVERHAULS IMPORTANT FOR VIRTUAL CURRENCY BUSINESSES

On 8 July, Crowell Moring reported that the Office of the Comptroller of the Currency (OCC) and the New York Department of Financial Services (NYDFS) each recently took significant steps to address the key impediments for virtual currency companies in the US. NYDFS announced significant updates to its approach on Bitlicenses, New York’s business license for such activities, which has traditionally been considered difficult to obtain. On 25 June, the former Chief Legal Officer of Coinbase Inc, and current Chief Operating Officer and First Deputy Comptroller at the OCC, announced that the OCC is planning to unveil a “payments charter” later this year which is intended to serve as a “national version of a state money transmission license”.

https://www.cmtradelaw.com/2020/07/nydfs-and-occ-announce-major-overhauls-important-for-virtual-currency-businesses

NIGERIAN SCAMMER ARRESTED BY FBI COULD BE BEHIND €13 MILLION BANK OF VALETTA CYBERATTACK IN 2019

On 8 July, Malta Today reported that the criminal complaint against Ramoni Igbalode Abbas (aka “Hushpuppi”) contains details of his alleged crimes that appear to suggest that he was behind the scam perpetrated on the Bank of Valetta in February 2019.

https://www.maltatoday.com.mt/news/national/103453/nigerian_scammer_arrested_by_fbi_could_be_behind_13m_bov_cyberattack#.XwcxuxOSmM-

BILLIONAIRE GERTLER THREATENS NGO OVER CONGO INVESTIGATION INTO EVADING US SANCTIONS

On 7 July, RFI reported that 2 NGO that ran an investigation into Israeli businessman Dan Gertler – saying that he appeared to have avoided US sanctions for “corrupt mining and oil deals” in DRC by using a suspected money laundering network – say they have been targeted by a “vexatious” lawsuit in France. He is accused by the US Treasury of having “amassed his fortune through hundreds of millions of dollars’ worth of opaque and corrupt mining and oil deals in the Democratic Republic of the Congo (DRC)”.

https://www.rfi.fr/en/africa/20200707-billionaire-gertler-hits-back-at-ngos-over-congo-investigation-into-evading-us-sanctions

SCREENING FAILURES BUY AMAZON A SANCTIONS PENALTY

On 8 July, Kharon reported that deficiencies related to Amazon.com Inc’s screening processes led the online retailer to sell goods to sanctioned parties and to people located in embargoed jurisdictions. In hundreds of instances, the screening processes failed to flag the names and addresses of parties on the US sanctions list, the notice said. Orders specifically referencing common alternative spellings of Crimea were not flagged, nor were purchases shipped to Iranian embassies in third countries, according to OFAC.

https://brief.kharon.com/updates/screening-failures-buy-amazon-a-sanctions-penalty

RUSSIA WANTS ITS CIVIL AND MILITARY SECTORS TO COOPERATE

On 9 July, Defense One said that the Russian government has ordered its energy sector and its defence industry (OPK, for short) to combine efforts in R&D and production.  The Russian government has revised its approach, aiming to foster collaboration between the energy sector, with its lavish research funding, and its tech-heavy defence sector – but the Kremlin also has reduced defence spending, gradually since 2015 and with plans for more drastic cuts through 2027. The article then says officials are now ordering defence companies to devote an increasing share of their production capacity to civilian and dual-use products, with official goals have been set: 30% in 2030; up to half by 2050. The article describes the plans as the “Chinese model”.

https://www.defenseone.com/ideas/2020/07/russias-latest-efforts-civil-military-cooperation-arent-going-so-great/166754/

CHINA COAST GUARD BUSTS SMUGGLING SHIP CARRYING 10,000 TONS OF COAL

On 9 July, Shine in China reported that the Chinese Coast Guard discovered a coal smuggling ship off Shanghai – a suspicious ship with its name whitewashed over. There were said to be about 10,000 tons of coal on the ship but no freight records.

https://www.shine.cn/news/metro/2007091827/

INDIA: ‘GOLD SMUGGLING CARGO’ BELONGED TO UAE CONSUL GENERAL
The Times of India reported on 9 July that the woman who is wanted for allegedly aiding smuggling of 30 kg of gold in Kerala through diplomatic channels is to claim that the gold belonged to the UAE Consul General and that she is entitled to diplomatic immunity, saying that she has been working with the consulate general office of UAE sing 2016.
http://timesofindia.indiatimes.com/articleshow/76868730.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

PHILIPPINES PROBES ONLINE SALE OF SMUGGLED FROZEN PIGEONS FROM HONG KONG

On 9 July, The Inquirer reported that the Department of Agriculture (DA) is currently investigating reports of smuggled frozen pigeons from Hong Kong being sold online as illegal traders switch to it to evade being apprehended.

https://business.inquirer.net/302105/da-probes-online-sale-of-smuggled-frozen-pigeons-from-hong-kong

BAHRAIN CONVICTS 5 OFFICIALS AND 4 BANKS IN MONEY LAUNDERING CASE

On 9 July, the Middle East Monitor reported that Bahrain’s High Criminal Court has convicted 5 officials in a Bahraini bank and 3 Iranian banks in a major money laundering case.

https://www.middleeastmonitor.com/20200709-bahrain-convicts-5-officials-4-banks-in-money-laundering-case/

GUERNSEY NATIONAL RISK ASSESSMENT: IMPLICATIONS FOR BUSINESSES

On 9 July, Ogier published an article saying that following the MONEYVAL evaluation in 2016, the island’s AML/CFT legislation was fully overhauled.  It also undertook a national risk assessment (NRA) to identify jurisdiction-wide and systemic risks to which its financial system is deemed particularly vulnerable, which was published in January 2020. Individual specified businesses were initially given until the end of May 2020 to update their business risk assessments (BRA), but in response to the impact of the COVID-19 pandemic, the FSC extended some of the timeframes contained in FSC handbook. The article examines the contents of the NRA and the implications for specified businesses in Guernsey. It also provides some practical considerations for businesses.

https://www.internationallawoffice.com/Newsletters/Private-Client-Offshore-Services/Guernsey/Ogier/National-risk-assessment-implications-for-businesses

UAE: FATF MUTUAL EVALUATION REPORT 2020 – TIME TO PLAY BALL FOR BUSINESSES IN THE UAE
An article from AL Tamini on 8 July looked at conclusions of the UAE’s Mutual Evaluation Report, released on 30 April which says that the UAE is required to make “fundamental and major improvements” to ensure its systems are more effective in the fight against money laundering. Of the 11 key areas rated for effectiveness by the FATF, the UAE is considered to have a “substantial level of effectiveness” in only one: the investigation and prosecution of terrorist financing offences. In the remaining 10 areas, it is deemed to have only moderate or low levels of efficacy. As such, all businesses and persons operating in the UAE, regardless of their sector, have a collective responsibility to ensure they are doing their bit to win this fight. The article says that FATF identified that the UAE has a number of key risk areas, and particular sectors, including financial services and notably, Designated Non-Financial Businesses and Professions (DNFBP), were highlighted as areas of heightened concern due to the systematic use of large cash transactions and potential to facilitate financial crime offences.

https://clientcomms.tamimi.com/60/828/july-2020/the-financial-action-task-force-(fatf)-uae-mutual-evaluation-report-2020–time-to-play-ball-for-businesses-in-the-uae.asp?sid=59a44350-4475-43a6-98a6-3ba059402f9c#

US: BOOKMAKER MUST FORFEIT MORE THAN $600,000 FOUND IN HOME AS PROCEEDS FROM GAMBLING RING

On 9 July, Cleveland.com reported that Ryan Driscoll, 46, a bookmaker, must forfeit more than $600,000 that authorities found in his home, proceeds that they say came from a large-scale gambling ring. He was also ordered him to pay $208,693 in restitution. Driscoll ran a bookmaking ring from 2015 to 2019 that provided his clients with access to offshore gambling websites to bet on sports.

https://www.cleveland.com/crime/2020/07/convicted-aurora-bookmaker-must-forfeit-more-than-600000-in-proceeds-from-gambling-ring.html

5 DUTCH BANKS TEAM UP TO COMBAT MONEY LAUNDERING

On 9 July, Retail Banking reported that ING, ABN Amro, Rabobank, Triodos Bank and Volksbank have joined forces to establish Transaction Monitoring Netherlands (TMNL) initiative in the fight against money laundering and terrorism financing – as an addition to the individual transaction monitoring activities of the 5 Dutch banks.

https://www.verdict.co.uk/retail-banker-international/news/five-dutch-banks-team-up-to-combat-money-laundering

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https://www.nvb.nl/english/transaction-monitoring-netherlands-a-unique-step-in-the-fight-against-money-laundering-and-the-financing-of-terrorism/

KUWAIT ISSUES ARREST WARRANT FOR EX-PREMIER’S SON

On 9 July, the Anadolu Agency in Turkey reported that Kuwaiti prosecutors have issued an arrest warrant for the son of a former prime minister and his partner amid a corruption probe of the so-called “Malaysian Sovereign Fund” case and following the arrest of Sheikh Sabah Jaber al-Mubarak al-Sabah and businessman Hamad al-Wazzan.

https://www.aa.com.tr/en/middle-east/kuwait-issues-arrest-warrant-for-ex-premiers-son/1905155#

BANGLADESH BLACKLISTS 14 MEDICAL CONTRACTORS AFTER MASK AND PPE SCAMS

On 9 July, bd24 News reported that the Directorate General of Health Services has blacklisted 14 contractors for their alleged involvement with corruption in the purchase of machinery for medical colleges and hospitals, a move which follows an Anti-Corruption Commission investigation.

https://bdnews24.com/bangladesh/2020/07/09/bangladesh-blacklists-14-medical-contractors-after-mask-ppe-scams

UK COURT ORDERS CONFISCATION OF THOUSANDS OF DOLLARS IN DRUG-DEALING PROFITS FROM 2 SONS OF BERMUDA MP.

On 9 July, the Royal Gazette reported that Marcus Weeks and Dalji Waldron — sons of Progressive Labour Party backbencher Michael Weeks — were jailed in 2018 after they admitted running a “mobile drug shop” that sold cocaine, ecstasy and cannabis.

http://www.royalgazette.com/crime/article/20200709/weeks-sons-have-proceeds-of-crime-seized

HMRC ARREST MAN SUSPECTED OF £495,000 FURLOUGH FRAUD – THE FIRST SUCH CASE IN THE UK

On 9 July, the Daily Mail reported that HMRC officers executed a search warrant in the Solihull area of Birmingham, seizing computers and other digital devices. Funds held in a bank account relating to his business have also been frozen. The man has also been linked to a suspected multi-million pound tax fraud and alleged money laundering.

https://www.dailymail.co.uk/news/article-8506203/Customs-officers-arrest-57-year-old-man-suspected-495-000-furlough-fraud.html

IRELAND: GARDA RAID IRISH OFFICE OF FAILED GERMAN PAYMENTS GROUP WIRECARD

On 9 July, the Irish Times reported that the garda raided the Irish office of failed Munich-based electronic payments provider Wirecard, as it seeks to assist German authorities in their fraud investigation into the once high-flying group, according to sources.

https://www.irishtimes.com/business/financial-services/garda-raid-irish-office-of-failed-german-payments-group-wirecard-1.4300258

UK: GOVERNMENT PLAN FOR NEW CHANGES TO CRIMINAL RECORDS DISCLOSURE REGIME

A news release from the MoJ and Home Office on 9 July advised that the Government intends to make changes to the criminal records disclosure rules, which it says are to ensure the right balance is struck between rehabilitating offenders and protecting the public. It plans to amend the filtering rules that govern what is automatically disclosed through standard and enhanced criminal records certificates issued by the Disclosure and Barring Service (DBS). The changes will remove the requirement for automatic disclosure of youth cautions, reprimands and warnings and remove the ‘multiple conviction’ rule, which requires the automatic disclosure of all convictions where a person has more than one conviction, regardless of the nature of their offence or sentence.

https://www.gov.uk/government/news/government-plan-new-changes-to-criminal-records-disclosure-regime

BOSNIA AND HERZEGOVINA ARRESTS 26 SUSPECTED TOBACCO TRAFFICKERS

On 9 July, OCCRP reported that police in Bosnia and Herzegovina said they arrested 26 people suspected of being members of an organised crime group that illegally trafficked tobacco and laundered money.  The group was producing and selling smoking tobacco and cigarettes without marking them with the country’s excise stamps.

https://www.occrp.org/en/daily/12717-bosnia-and-herzegovina-arrests-26-suspected-tobacco-traffickers

FINANCIAL CRIME OVERVIEWS – SEYCHELLES AND MAURITIUS

On 9 July, Appleby published 2 articles providing a Q&A guide for each jurisdiction to provide a high-level overview of matters relating to corporate fraud, bribery and corruption, insider dealing, market abuse, money laundering and terrorist financing, financial record-keeping, due diligence, corporate liability, immunity and leniency, and whistleblowing.

https://www.applebyglobal.com/publications/financial-crime-in-mauritius-overview/

https://www.applebyglobal.com/publications/financial-crime-in-seychelles-overview/

BUSINESS CRIME AND INVESTIGATIONS GUIDE – BERMUDA

On 9 July, Appleby published a Q&A guide that provides a high-level overview of matters relating to corporate manslaughter, environmental and health and safety offences.

https://www.applebyglobal.com/publications/business-crime-and-investigations-in-bermuda/

ANNUAL REPORT OF THE ISLE OF MAN SURVEILLANCE COMMISSIONER

The Order Paper for the Isle of Man’s parliament for 26 July included this report dated March 2020. It says that there were no uses of intrusive surveillance authorised during 2019, but that there were 35 authorisations for directed surveillance.

https://www.tynwald.org.im/business/opqp/sittings/20182021/2020-GD-0008.pdf

HONG KONG: FORMER OFFICER OF WONDERFUL WEALTH GROUP LIMITED (WWGL) CONVICTED OF HOLDING OUT AS CARRYING ON A BUSINESS OF DEALING IN FUTURES CONTRACTS AND ASSET MANAGEMENT WITHOUT A LICENCE

On 9 July, a release on Mondo Visione advised that the Eastern Magistrates’ Court has convicted Simon Chan Ying Ming in a criminal prosecution brought by the Securities and Futures Commission (SFC). Chan pleaded guilty to all 4 charges relating to activities in 2012, was fined $20,000 and ordered to pay the SFC’s investigation costs.

https://mondovisione.com/media-and-resources/news/hong-kong-securities-and-futures-commission-court-convicts-and-fines-former-off/

PNB CASE: UK EXTRADITION HEARING FOR NIRAV MODI TO RECOMMENCE IN SEPTEMBER

On 9 July, Business Today in India on 9 July reported that Nirav Modi had been remanded until at least 6 August, pending the resumed planned extradition hearing in September.

https://www.businesstoday.in/current/economy-politics/pnb-case-uk-court-extends-nirav-modis-judicial-remand-to-aug-6/story/409405.html

ONLY A TINY FRACTION OF CONTAINERS LOST AT SEA

On 9 July, American Shipper reported that the latest World Shipping Council report shows average trending downward to 779 containers lost annually. It says that, at any given point in time, more than 6,000 vessels carrying containers are sailing the world’s seas. While ship fires and capsizes make international headlines, container losses actually are few and far between.  In fact, an average of only 1,382 containers were lost at sea per year between 2008 and 2019, the WSC said in a report.

https://www.freightwaves.com/news/tiny-fraction-of-containers-lost-at-sea

NEW UK RESTRUCTURING TOOL: A POTENTIAL GAME CHANGER FOR THE MARITIME SECTOR

In the Ince Shipping e-Brief for July it was reported that the Corporate Insolvency and Governance Act 2020, which came into force on 26 June provides for a new restructuring tool. It says that the Restructuring Plan largely mirrors the English Scheme of Arrangement, but does have a number of additional features which will make it an even more effective restructuring tool in many circumstances and the only restriction is that the proposed plan must address a company’s actual or likely financial difficulties. The Plan provides for a mechanism to impose a restructuring solution on all creditors and shareholders where a restructuring proposal has the support of the requisite majority of those stakeholders. Stakeholders whose legal rights are sufficiently similar to allow them to vote together with a view to their common interest are grouped together into classes for voting purposes

https://www.incegd.com/sites/default/files/2020-07/Ince-Shipping-E-brief_July-2020.pdf

THE INITIATIVE TO COMBAT CORRUPTION IN CONSTRUCTION IN MALAWI

On 9 July, the Basel Institute on Governance carried an article about the success of the Construction Transparency Initiative (CoST) in Malawi which shows the impact Collective Action can have on addressing corruption and levelling the playing field even in difficult environments.

https://www.baselgovernance.org/blog/corruption-construction-how-cost-initiative-building-better-business-environment-malawi

UNDER COVER OF CORONAVIRUS LOCKDOWN, A BOOMING TRADE IN CONGO CONFLICT GOLD

On 9 July, the Wall Street Journal carried an article saying that about $100 million of Congolese conflict gold is trafficked through Uganda monthly, according to the UN, with much of it piggy-backing Covid-19 aid transports. It starts by relating the story of $5 million in gold found when Ugandan police searched 2 cardboard boxes in a white pickup truck that were due to be loaded onto a cargo flight at Entebbe Airport.

https://www-wsj-com.cdn.ampproject.org/c/s/www.wsj.com/amp/articles/under-cover-of-coronavirus-lockdown-a-booming-trade-in-conflict-gold-11594285200

US DoJ ANNOUNCES $42 MILLION TO COMBAT ILLEGAL MANUFACTURE AND DISTRIBUTION OF METH AND OPIOIDS

On 29 June, an article in Homeland Security Today reported that the DoJ Office of Community Oriented Policing Services (COPS Office) has announced nearly $42 million in funding to support state-level law enforcement agencies in combating the illegal manufacturing and distribution of methamphetamine, heroin, fentanyl, carfentanil, and prescription opioids.

https://www.hstoday.us/subject-matter-areas/law-enforcement-and-public-safety/doj-announces-42-million-to-combat-illegal-manufacture-and-distribution-of-meth-and-opioids/

THE AMAZON CASE: WHY CONDITIONS OF USE MUST BE ACCOMPANIED BY RISK-BASED CONTROLS TO ACHIEVE EFFECTIVE COMPLIANCE WITH OFAC-ADMINISTERED SANCTIONS AND EMBARGO REGULATIONS

An article from Arnall Golden Gregory LLP on 9 July, in the light of the fine paid by Amazon.com, reproduces the “strong” conditions of use from the Amazon website but then discusses why such a strong statement in a conditions of use must be accompanied by risk-based controls to achieve effective compliance with OFAC-administered sanction and embargo regulations. OFAC explicitly noted in its announcement of the settlement that the case “demonstrates the importance of implementing and maintaining effective, risk-based sanctions compliance controls” especially for e-commerce and other “large, sophisticated” businesses operating on a global scale. The article advises that, despite the global economic slow-down, now may be the right time to review a businesses’ export compliance programme.

https://www.agg.com/news-insights/publications/primed-for-export-control-compliance/

AUSTRALIA SUSPENDS EXTRADITION WITH HONG KONG AND OFFERS PATH TO CITIZENSHIP FOR CITY’S RESIDENTS

On 9 July, CNN reported that Australia has also updated its travel advisory for Hong Kong, warning Australians of the possibility of detention in the city under its “vague” law. It says that current students or skilled visa holders in Australia from Hong Kong will be afforded an extra five years on their visa, with a pathway to permanent residency, he said, adding that future students or skilled visa applicants will also be granted those 5 extra years should their applications be successful.

https://www.msn.com/en-us/news/world/australia-suspends-extradition-with-hong-kong-and-offers-path-to-citizenship-for-city-s-residents/ar-BB16w9wG?ocid=msedgntp

https://www.msn.com/en-us/news/world/australian-government-advises-citizens-not-to-travel-to-hong-kong-due-to-national-security-law/ar-BB16vJQk?ocid=msedgntp

MULTINATIONALS SHIFT $1.3 TRILLION INTO TAX HAVENS EVERY YEAR

On 9 July, The Independent reported analysis by the Tax Justice Network of new data and says that the UK is a key part of an “axis of tax avoidance“, along with the Netherlands, Switzerland and Luxembourg, that facilitates 72% of corporate tax dodging.  This costs governments $330 billion in lost revenues, deepens inequality and benefits a minority of wealthy individuals and large corporations at the expense of ordinary people and public services. The analysis is of data collected by the OECD, which breaks down, for the first time, where businesses make their profits, rather than simply where their accountants choose to say those profits are made.

https://www.independent.co.uk/news/business/news/tax-avoidance-dodging-multinationals-uk-netherlands-oecd-a9611231.html

LUXURY CARS AND $15 MILLION IN CRYPTO SEIZED IN CHINESE ARBITRAGE SCAM BUST

On 9 July, Cryptoglobe reported that Chinese authorities have reportedly seized more than $15 million in crypto-assets and $2 million in supercars after busting up an arbitrage scam selling counterfeit tokens. Police arrested 10 individuals connected to operating a fraudulent cryptocurrency scheme, with claims that the arbitrage group was scamming victims using blockchain smart contracts to generate fake cryptocurrencies.

https://www.cryptoglobe.com/latest/2020/07/luxury-cars-and-15m-in-crypto-seized-in-chinese-arbitrage-bust/

BITCLUB PROGRAMMER ADMITS MINING SCHEME STOLE $722 MILLION IN BITCOIN

On 9 July, Coindesk reported that the programmer, Silviu Catalin Balaci, a 35-year-old Romanian who was recently arrested in Germany, has admitted the economic damage that prosecutors accused the mining pool’s principals of committing: $722 million in stolen bitcoin over 5 years. Balaci said he assisted Matthew Brent Goettsche (arrested in December) and Russ Albert Medlin (arrested in June in Indonesia) in setting up the network as its programmer.

https://www.coindesk.com/bitclub-programmer-admits-mining-scheme-stole-722m-in-bitcoin

SWITZERLAND: SHIPOWNER GETS 5 YEARS IN PRISON FOR FRAUDULENT STATE CREDIT CLAIMS

On 9 July, Swissinfo reported that Hans-Jürg Grunder, 66, a former shipowner, has been sentenced to 5 years in prison for having falsified claims about his fleet in order to receive credit guarantees from the Swiss government. Until 2017 had operated a dozen ships and is said to have mislead authorities into believing his companies were in a worse financial situation than they actually were, in order to benefit from more state credit guarantees. Switzerland maintains a form of merchant marine (and has done since after WW2), to guarantee supplies for the landlocked country.

https://www.swissinfo.ch/eng/latest-news/shipowner-gets-five-years-in-prison-for-fraudulent-state-credit-claims/45892996

MEXICAN COMPANIES FACE RISK OF SECONDARY SANCTIONS FROM MEXICAN PRESIDENT’S OFFER TO SELL GASOLINE TO VENEZUELA

On 8 July, an article from Morgan Lewis said that the President recently announced that Mexico is willing to ship gasoline to Venezuela notwithstanding the threat of US sanctions against such activity. It says that this issue is likely to be on the agenda of the current summit with President Trump, which includes the US-Mexico-Canada Agreement and a number of other trade related topics.

https://www.morganlewis.com/pubs/mexican-companies-face-risk-of-secondary-sanctions-from-mexican-presidents-offer-to-sell-gasoline-to-venezuela

THE RISE OF DRONES IN LOGISTICS AND TRANSPORTATION

An article in the Global Trade Magazine on 6 July is concerned with the tremendous rise in the use of drones (or UAV or UAS, though there are also drones that operate on, or under, the water), and the rapid increase in the industry developing, manufacturing and operating them. It refers to a recent report from Transparency Market Research (TMR), which decoded some of the leading factors pertaining to the growth of UAV use.  That review is not confined solely to logistics and transportation, as it also delves into the relevance of drones across military, aviation, construction and entertainment sectors.

https://www.globaltrademag.com/that-buzzing-is-the-sound-of-freedom-thank-the-defense-industry-for-the-rise-of-drones-in-logistics-and-transportation/

RESEARCHER CHARGED WITH ILLEGALLY USING US GRANT FUNDS TO DEVELOP SCIENTIFIC EXPERTISE FOR CHINA

A DoJ news release on 9 July advised that Song Guo Zheng, 57, who was arrested in May, is a rheumatology professor and researcher with strong ties to China has been charged with grant fraud for not disclosing that he was engaged in a sophisticated scheme to use approximately $4.1 million in grants from the National Institutes of Health (NIH) to develop China’s expertise in the areas of rheumatology and immunology.  He is also charged with making false statements about maintaining employment in China at the same time he was employed at universities in the US, including The Ohio State University.

https://www.justice.gov/opa/pr/researcher-charged-illegally-using-us-grant-funds-develop-scientific-expertise-china

DANSKE BANK AND DEUTSCHE BANK IGNORED ESTONIA RISKS IN LUCRATIVE SET-UP

On 8 July, an article from Bloomberg says that the banks ignored years of warnings that money flowing from Russia through an Estonian branch was suspicious and that Deutsche bank only pulled out more than half a decade after its own staff pointed to the risk of money laundering at Danske’s Estonian unit, for which Deutsche was a correspondent bank. Almost 60% of payments that the Estonian unit cleared through Deutsche were from Russia and other former Soviet states.  The unit cleared more than $267 billion through Deutsche over 8 years; of that, $150 billion was from Russia and other former Soviet states.

https://www.bloomberg.com/news/articles/2020-07-08/danske-deutsche-bank-ignored-estonia-risks-in-lucrative-setup

 

 

 

 

 

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TRACE WEBINAR RESOURCES AVAILABLE FREE ONLINE

TRACE, which describes itself as a globally-recognised anti-bribery business association, and which provides the weekly TRACE podcast interviews on compliance-related issues, has made available on its website  a selection of its most recent compliance webinars in an effort to provide companies with additional resources during Covid-19 crisis.  The resources include webinars on –

  • Developments in Human Trafficking and Modern Slavery Regulation and Compliance: The Impact on Your Business;
  • The Mechanics Behind Corruption;
  • The Impact of a Global Crisis on Anti-Bribery Compliance;
  • Proposed Expansion on UK “Failure to Prevent” Legislation and What It Could Mean for Compliance Requirements of UK Corporations;
  • The Anti-Bribery Compliance Landscape in South Korea;
  • Addressing Compliance Risk in the Logistics and Freight Forwarding Industry; and
  • The Potential for Corruption in 5G Telecom Implementation.

. https://info.traceinternational.org/webinar-hub

 

 

 

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DESPITE TRADE TENSIONS FIREWORKS EXPORTS FROM CHINA ARE BOOMING

Global Trade Magazine on 8 July carried an article saying that China produces some 90 percent of the world’s fireworks. Around 60 percent of those are made in Liuyang. It says that Nearly all the fireworks US consumers purchase came from China – about $296.2 million worth – this being about half of the total Chinese output. However, the Washington Post has reported that around 70% of all Chinese fireworks entering the US are produced, warehoused, transported, and ultimately imported under the control of companies owned by just one Chinese businessman and his companies have imported 7,400 containers into the US so far this year, averaging around 72 per day.

fireworks

https://www.globaltrademag.com/despite-trade-tensions-fireworks-exports-from-china-are-booming/

 

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LATIN AMERICA ANTI-CORRUPTION EFFORTS EXPERIENCING “2 STEPS FORWARD, 1 STEP BACK”

On 8 July, a news release from Miller & Chevalier, announcing survey results, says that despite Latin America’s anti-corruption progress over the last decade, including blockbuster investigations, high-powered politicians and business leaders behind bars, and improved laws in key jurisdictions, new survey data reveals corruption risk to be at an all-time high across the region.  54% of survey respondents said corruption is a significant obstacle to doing business – up 10% since 2012 – while only 45% of respondents believe offenders are likely to be prosecuted, down from 66% in 2008. Enhancements to local anti-corruption laws in numerous countries are generating some signs of hope, the survey finds. When asked if they think anti-corruption laws are having an impact, respondents from these countries show greater optimism than the regional average of 50%: Argentina (72%), Brazil (74%), Chile (59%), Colombia (55%), Mexico (68%), and Peru (63%). The news release also says that the survey results on common areas of bribery risk bring into focus specific COVID-related corruption threats, but that more companies, both local/regional companies and multinationals, are embracing corporate anti-corruption compliance standards, a trend that has steadily increased over the last decade.

https://www.millerchevalier.com/news/latin-america-anti-corruption-efforts-experiencing-two-steps-forward-one-step-back-new-miller

The survey is at –

https://www.millerchevalier.com/sites/default/files/publications/LACS/2020-Latin-America-Corruption-Survey-Report_English.pdf

 

 

 

 

 

 

 

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ISLE OF MAN FIU STRATEGIC DELIVERY PLAN 2020-21

The Order Paper for the Isle of Man’s parliament for 26 July included this report which lays out as its strategic objectives –

  • Provide a high level of focus to the development of analysis products both operational and strategic;
  • Provide support to the Economic Crime Unit to seek an improvement in the use of financial intelligence to successfully investigate and prosecute money-laundering offences, and confiscate the proceeds of crime;
  • Develop and improve access to the widest possible range of financial intelligence; and
  • Focus on the development of knowledge and skills for combatting the emerging threats from crypto-enabled crime and convertible and non-convertible virtual currencies.

https://www.tynwald.org.im/business/opqp/sittings/20182021/2020-GD-0016.pdf

 

 

 

 

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ANNUAL REPORT OF THE ISLE OF MAN FIU

The Order Paper for the Isle of Man’s parliament for 26 July included this report

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https://www.tynwald.org.im/business/opqp/sittings/20182021/2020-GD-0014.pdf

 

 

 

 

 

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LATIN AMERICAN SMUGGLING NETWORKS EXPLOIT THOUSANDS OF PEOPLE FROM AFRICA AND ASIA AS THEY TRY TO MAKE THEIR WAY TO THE US AND CANADA

On 9 July, OCCRP published a feature saying that police documents, official statistics, and accounts from dozens of migrants suggest Latin America’s smuggling networks are making hundreds of millions of dollars a year from the clandestine trade, which is then moved around the world through front men, small businesses, and money transfer companies. It reports on what is described to be the largest-ever journalistic investigation into these little-known routes.

https://www.occrp.org/en/cruel-road-north/

 

 

 

 

 

 

 

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CMA CGM SHIPPING LINE TO TIGHTEN RULES FOR SHIPPING PROTECTED SPECIES – BLACKLIST OF EXPORTERS AND BAN ON TIMBER EXPORTS FROM THE GAMBIA

On 9 July, Lloyds Loading List reported that the French container shipping line will toughen its rules for shipping protected species, draw up a blacklist of exporters suspected of illicit trafficking, and freezing timber exports from The Gambia to help prevent deforestation. Shippers must state whether a species is covered by CITES and provide the required export permits whenever animals or plants are carried.

https://www.lloydsloadinglist.com/freight-directory/news/CMA-CGM-tightens-rules-for-shipping-protected-species/76947.htm#.XwdRNxOSmM8

 

 

 

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FinCEN RED FLAGS OF FINANCIAL CRIME IN COVID-19 CASES

On 9 July, Kenneth Rijock published in his blog what he described as an “outstanding” summary of the tactics employed by fraudsters seeking to entrap unwary victims, taken from the latest FinCEN Advisory.

https://rijock.blogspot.com/2020/07/read-fincens-red-flags-of-financial.html

https://www.jdsupra.com/legalnews/fincen-issues-advisory-on-covid-19-and-47300/

https://www.fincen.gov/sites/default/files/advisory/2020-07-07/Advisory_%20Imposter_and_Money_Mule_COVID_19_508_FINAL.pdf

 

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OFAC ADDS THE XINJIANG PUBLIC SECURITY BUREAU AND CHINESE INDIVIDUALS TO SANCTIONS LISTS

On 9 July, OFAC announced that the XINJIANG PUBLIC SECURITY BUREAU and 4 official sin Xinjiang have been added to OFAC’s sanctions list for alleged involvement in human rights abuses.

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20200709.aspx

https://home.treasury.gov/news/press-releases/sm1055

 

 

 

 

 

 

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UK: COURT OF APPEAL DECISION MAY MEAN THAT NOT ALL COMMUNICATIONS BY IN-HOUSE LAWYERS WILL BE COVERED BY LEGAL ADVICE PRIVILEGE

Bird & Bird has published an article about the recent Court of Appeal case of CAA v Jet2.com which clarified that a “dominant purpose” test applies when assessing if a communication or document is protected by LAP. The article looks at the practical implications of this decision for in-house lawyers, particularly those who have a dual commercial and legal role, and at the importance, especially now, when major commercial and legal decisions are being made remotely, of keeping legal and commercial advice separate to avoid the risk of privilege being lost.

https://www.twobirds.com/en/news/articles/2020/uk/the-english-court-of-appeal-decision-in-caa-v-jet2-com-may-mean-that-not-all-communications

 

 

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US: ITAR COMPLIANCE FOR SECOND AND THIRD TIER GOVERNMENT CONTRACTORS AND SUPPLIERS

An article from Williams Mullen on 8 July said that companies in the US defence industry increasingly are being asked by their customers whether they are “ITAR-compliant” (referring to the International Traffic In Arms Regulations) and if they can document this.  Many small and mid-sized contractors and suppliers do not know how to respond to these requests, and how to respond can have important consequences for these companies. There is a major concern within the US Government that, while large prime contractors have strong ITAR compliance, many mid-sized and small companies in the defence supply chain do not, and that this gap creates significant national security risks for the US. The article says that ITAR sets forth a number of requirements that apply to companies in the defence sector, and sets out these requirements. However, it says, there are a number of important steps that small-/mid-sized contractors can take to come into compliance with the law and address these requests from prime contractors.

https://www.jdsupra.com/legalnews/itar-compliance-for-second-and-third-42359/

See also the firm’s White paper –

ITAR FOR GOVERNMENT CONTRACTORS REVISED FOR RECENT AMENDMENTS

https://www.williamsmullen.com/sites/default/files/files/NEWITAR%20For%20Government%20Contractors_McVey_5_2020.pdf

 

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DIRECT ACCESS IN DATA GATHERING: A SEA CHANGE IN US/UK CRIMINAL INVESTIGATIONS

An article from Allen & Overy on 8 April says that an agreement for accessing electronic data in cases of serious crime, which was negotiated and released in Autumn 2019, is about to enter into force.  It permits criminal authorities in each country to obtain electronic data directly from a range of telecommunications companies (so-called “Covered Providers”) in the other country – without any need to go through the domestic authorities in the recipient country, a mutual legal assistance treaty (MLAT) or any of the other cumbersome routes currently used.  This, it says,  could have a major impact on any company whose business satisfies the definition of Covered Provider: social media platforms; data hosting, storage and processing; cloud storage; or potentially any other company to the extent it provides clients with an ability to communicate, process or store data.  The article provides a summary of the key features of the Agreement and thoughts on some of the thorny issues that are likely to emerge.

https://www.allenovery.com/en-gb/global/news-and-insights/publications/direct-access-a-sea-change-in-data-gathering-in-us-uk-criminal-investigations

 

 

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OTHER THINGS YOU MAY HAVE MISSED – JULY 8

Panama Covid-19 update – another 960 cases (41,251 to date), with another 20 fatalities (819 to date), with 743 more people “recovered”, and 158 in ICU and 860 in other wards.  In Panama, the daily news reports detail the ages of those affected, where they are located, and what complications etc those who have died suffered from.  For example, in the last 24 hours, the 960 new cases came mostly from the lower-risk age groups (424 for ages 20-39, 328 40 to 59 and 89 under 20 years old), with 98 in the over-60s.  Of the 20 fatalities, 2 were in the 20-39 age group, 3 in the 40-59 group, 10 in 60-79 age group and 5 were 80+. So, it would seem, from this figures, the majority of new cases were from the lower-risk groups, but the majority of deaths were in the higher-risk age groups…

8 July 2020

ARGENTINA AIDE WHO TESTIFIED IN KIRCHNER CORRUPTION CASE IS FOUND MURDERED

On 8 July, KYC 360 reported a Times story that Fabián Gutiérrez, 48, a former private secretary to Argentina’s vice-president has been murdered, fuelling speculation that he was targeted for being a whistleblower in a corruption case.

https://www.thetimes.co.uk/article/argentina-aide-fabian-gutierrez-who-testified-against-kirchner-is-found-murdered-5x55x5pkf

OECD NEW REPORTING FRAMEWORK FOR THE GIG ECONOMY

On 7 July, Financial Management reported that the OECD has released model rules that would require digital platforms to report information to tax authorities about platform users’ income from offering accommodation, transport, and personal services. They are designed to help those in the gig and sharing economy “in being compliant with their tax obligations” and ensure a level playing field with traditional businesses, according to OECD.

https://www.fm-magazine.com/news/2020/jul/oecd-reporting-framework-for-gig-economy.html

The model rules are at –

http://www.oecd.org/ctp/exchange-of-tax-information/model-rules-for-reporting-by-platform-operators-with-respect-to-sellers-in-the-sharing-and-gig-economy.pdf

US INTERNATIONAL DEVELOPMENT FINANCE CORPORATION (DFC) TO SUPPORT NUCLEAR POWER PROJECTS

On 8 July, Real Clear Energy reported that, in June, the DFC has given notice of a proposed change to the agency’s Environmental and Social Policy and Procedures that would remove the prohibition on support of nuclear power projects.  The article says that removal of the ban on nuclear project finance provides an opportunity for the US to push back on Russian and Chinese dominance in third-party countries while simultaneously supporting development objectives.

https://www.realclearenergy.org/articles/2020/07/08/lifting_the_dfc_nuclear_finance_ban_supports_us_national_security_interests_498455.html

COMPLIANCE WITH CANADIAN SANCTIONS LAWS

On 8 July, an article from Miller Thomson LLP says that under Canadian and international law, there are a variety of sanctions laws that apply to all individuals and businesses in Canada and to all Canadian citizens and Canadian-incorporated businesses operating outside of Canada. Understanding the restrictions and your obligations on lenders are essential. It provides an overview of Canadian economic sanctions law, lender due diligence reference materials and other restrictions on Canadian business.

https://www.millerthomson.com/en/publications/communiques-and-updates/financial-services-restructuring-communique/july-7-2020-fsi/lender-know-your-client-diligence-compliance-with-canadian-sanctions-laws

US: 81 CARS WORTH $3.2 MILLION SEIZED IN VENEZUELA SMUGGLING OPERATION

On 8 July, NBC Miami reported that some of the vehicles were equipped with police equipment such as lights and sirens and are said to be intended for the Venezuelan National Police. The vehicles seized were purchased by straw buyers and were destined to be illegally shipped to Venezuela as part of an international car smuggling operation but were seized in South Florida

https://www.nbcmiami.com/news/local/feds-seize-81-cars-worth-3-2-million-in-venezuela-smuggling-operation/2259349/

INDIA: EVERYTHING YOU WANTED TO KNOW ABOUT KERALA GOLD SMUGGLING ROW

On 8 July, News 18 India published an article providing background to the seizure of 30 kg of gold that landed in “diplomatic baggage” by air cargo.

https://www.news18.com/news/india/nuggets-of-key-information-everything-you-wanted-to-know-about-kerala-gold-smuggling-row-2707295.html

NEW REPORT SAYS DUBAI IS A ‘HAVEN FOR MONEY LAUNDERING’

On 8 July, TRT World reported that UAE’s unwillingness to tackle corruption and money laundering, is a global challenge that must be addressed, according to a US think tank.  Dubai is one of the 7 emirates that make up UAE, and has built its reputation on becoming a regional business hub in the Middle East. It notes that previously the NGO Transparency International Dubai has described Dubai as having become an active global hub for money laundering … where the corrupt and other criminals can go to buy a luxurious property with no restrictions.

https://www.trtworld.com/magazine/new-report-says-dubai-is-a-haven-for-money-laundering-37970

GIBRALTAR: YACHT SEIZED IN ONGOING OPERATION INTO MONEY LAUNDERING & DRUG TRAFFICKING

On 8 July, GBC in Gibraltar reported that a Gibraltar-registered yacht has been seized by police following ongoing operation into money laundering and cross border drug trafficking.

https://www.gbc.gi/news/locally-registered-yacht-seized-rgp-following-ongoing-operation-money-laundering-cross-border-transn

PODCAST: IMPRISONED IN CHINA: PETER HUMPHREY’S STORY

In the latest TRACE podcast, an interview with Peter Humphrey and his wife, who were well-respected compliance professionals active in China when they were arrested, tried and imprisoned for 2 years.

https://traceinternational.org/resources-podcast

US VISA RESTRICTIONS ON PRC GOVERNMENT AND CHINESE COMMUNIST PARTY OFFICIALS OVER TIBET

A news release from the US State Department on 7 July announced visa restrictions on government and Chinese Communist Party officials determined to be “substantially involved in the formulation or execution of policies related to access for foreigners to Tibetan areas,” pursuant to the Reciprocal Access to Tibet Act of 2018.

https://www.state.gov/implementing-visa-restrictions-under-the-reciprocal-access-to-tibet-act/

EU TO DISCUSS PEOPLE-SMUGGLING WITH AFRICAN STATES

On 8 July, EU Observer reported that ministers from Algeria, Libya, Mauritania, Morocco and Tunisia will be attending a conference to tackle human smuggling and hosted by Italy. The hope is that the outcome of this conference will be that we can build partnerships to fight human smuggling.

https://euobserver.com/tickers/148883

‘TORTURE CHAMBER’ FOUND IN DUTCH SEA CONTAINERS

On 8 July, EU Observer reported that Dutch police have arrested 6 men after discovering sea containers converted into a makeshift prison and sound-proofed “torture chamber”. It is said to give an insight into the increasingly violent Dutch criminal underworld, which is involved in the large-scale production and trafficking of drugs.

https://euobserver.com/tickers/148882

https://www.theguardian.com/world/2020/jul/07/dutch-police-arrest-six-men-after-discovery-of-torture-chamber

EU: PROJECT FOR THE DEVELOPMENT OF AN INTERNATIONALLY RECOGNISED SYSTEM FOR THE VALIDATION OF ARMS AND AMMUNITION MANAGEMENT ON THE BASIS OF OPEN INTERNATIONAL STANDARDS

EU Council Decision 2020/979/CFSP said that the EU will support a project for establishing the feasibility of the development of a voluntary internationally recognised system for the validation of arms and ammunition management on the basis of open international standards. The first phase is for a feasibility study into the development of an Arms and Ammunition Management Validation System (AAMVS) to investigate options for appropriate methodologies and tools for the assessment of risk and quality. An expert working group (EWG) is to be created to support and review the feasibility study and to raise awareness of the project. The project is intended to take 2 years.

https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32020D0979&from=EN

EU COURT DISMISSES APPEAL BY BRAZILIAN MEAT PRODUCERS OVER IMPORT BAN ON PUBLIC HEALTH GROUNDS

A news release from the EU on 8 July advised that the EU General Court had dismissed action brought by 2 Brazilian meat producers seeking the annulment of the EU Regulation prohibiting, for public health reasons, the export to the EU of certain products of animal origin from establishments belonging to those producers. The producers had been delisted on the ground that the Brazilian authorities had not provided, in respect of those establishments, the requisite guarantees concerning compliance with public health rules on importing the products at issue.  There had also been cases of fraud detected in March 2018, in Brazil, during the laboratory certification of the meat and meat products exported to the EU.

https://curia.europa.eu/jcms/upload/docs/application/pdf/2020-07/cp200083en.pdf

WORKER EXPLOITATION IN UK CLOTHING SUPPLY CHAINS

On 8 July, an Insight from the House of Commons Library said that campaign groups argued that poor working conditions in garment factories in Leicester contributed to the spread of the Covid-19 virus and the subsequent renewed lockdown in that city. It has been reported that the NCA has been asked to investigate for modern slavery in certain Leicester garment factories. The Insight discusses exploitation in UK garment factories, how workers’ rights are enforced, and the calls to make companies responsible for rights violations in their supply chains.

https://commonslibrary.parliament.uk/economy-business/work-incomes/worker-exploitation-in-uk-clothing-supply-chains/

https://www.nationalcrimeagency.gov.uk/news/nca-statement-on-modern-slavery-allegations-in-leicester?src=ilaw

edps

https://edps.europa.eu/sites/edp/files/publication/20-01-28_edps_quickguide_en.pdf

INDIA: GANDHI FAMILY TRUSTS FACING GOVERNMENT PROBES

On 8 July, Business Today in India reported that the probe will primarily focus on money laundering, manipulation in declaration and filing of income tax and foreign money angles. It says that the trusts under scrutiny are the Rajiv Gandhi Foundation, Rajiv Gandhi Charitable Trust and Indira Gandhi Memorial Trust. The family says the investigation is politically motivated.

https://www.businesstoday.in/current/economy-politics/3-gandhi-family-trusts-to-face-probe-govt-forms-investigation-panel/story/409268.html

https://bangaloremirror.indiatimes.com/news/india/home-ministry-orders-probe-into-funding-of-trusts-run-by-gandhi-family-congress-calls-it-political-vendetta/articleshow/76857163.cms

PALESTINIAN AUTHORITY POLICE ARREST TOP ANTI-CORRUPTION ACTIVIST

The Jerusalem Post on 8 July reported that security forces had arrested prominent anti-corruption activist Fayez Sweiti after he complained about unequal distribution of financial aid to Palestinians. The financial aid was being distributed by the Wakfet Izz Fund, a national fund established by the PA government to face the ramifications of the coronavirus pandemic in the West Bank and Gaza Strip.

https://www.jpost.com/middle-east/palestinian-authority-police-arrest-top-anti-corruption-activist-634289

THE VENEZUELA OIL AND GAS INDUSTRY

On 8 July, a feature in Forbes took a detailed insight into the state of the Venezuelan oil and gas industry in the light of the collapse of the oil industry and the economy (and US sanctions) in Venezuela which has left the country in a humanitarian, institutional, and political crisis like no other in recent history. It is said that data suggests that, in June, not a single oil rig was in operation – with limited oil storage, PDVSA has been forced to shut down several wells. Venezuela’s oil woes also affect the domestic energy market, which suffers from a chronic shortage of gasoline, diesel, and natural gas, and problems in the energy sector are just a glimpse of the overall state of the country, where high inflation levels and a dramatic fall in economic activity have persisted for several years. The article refers to a new report – “Venezuela and its Calamities: Add Covid-19 to the List” – from the Baker Institute at Rice University. That report says that, despite its massive geological endowment and receiving what could be considered the largest windfall in its economic history, Venezuela entered 2020 in the middle of an unprecedented economic crisis. The Covid-19 pandemic and turbulence in oil markets represent the latest in a string of problems that expose the country’s vulnerability.

https://www.forbes.com/sites/thebakersinstitute/2020/07/08/venezuela-sells-but-whos-buying

The report is at –

https://www.bakerinstitute.org/files/16074/

MONACO COURT UPHOLDS CASE DISMISSAL AGAINST ART DEALER ACCUSED OF DEFRAUDING RUSSIAN OLIGARCH

On 8 July, Reuters reported that a Monaco court has upheld an earlier ruling dismissing a case against a prominent art dealer, Yves Bouvier, accused by a Russian oligarch, Dmitry Rybolovlev – owner of Monaco’s soccer team, of fraud and money laundering.  Bouvier still faces criminal proceedings brought by Rybolovlev in Geneva, where he is also charged with fraud, abuse of trust and money laundering.

https://uk.reuters.com/article/uk-oligarch-monaco-lawsuit/monaco-court-upholds-case-dismissal-against-art-dealer-accused-of-defrauding-russian-oligarch-idUKKBN2492GK

UK: WEALTHY HULL BUSINESSMAN COMMITTED £300,000 FRAUD TO ‘FAN HIS OWN EGO’

On 8 July, the Hull Daily Mail reported that Marc Hackney, 52, had set up his successful wealth management company, Vobis, in 2009 and built up an A-list client base of celebrities and sports stars. However, being a director at the Hull KR rugby club put a financial strain on him but he did not want to give up his dream position on the board and began to hatch a plot to gain the liquidity he needed. After taking on the management of a client’s charitable foundation set up to help fund Great Ormond Street Hospital and Cancer Research in 2018 he set up a bank account which allowed him to make withdrawals from the foundation and, not only failed to consult with the other trustee, but even forged her signature.

https://www.hulldailymail.co.uk/news/hull-east-yorkshire-news/wealthy-hull-businessman-fraud-ego-4303759

US NATIONAL CARGO BUREAU (NCB) REPORTS ‘ALARMING’ LEVEL OF MISDECLARED DANGEROUS CARGO

On 8 July, Lloyds Loading List reported that recent inspection initiative by NCB found more than half of containers non-compliant, 43% failing to secure dangerous goods correctly, and more than 6% of containers carrying dangerous cargo misdeclared, and more than 6% of containers carrying dangerous cargo misdeclared. It is said that a NCB white paper called for industry “to adopt a comprehensive, holistic and coordinated approach to address this worrying trend” and called for “urgent reform to stem the increasing number of container-related incidents caused by poorly stowed, undeclared or misdeclared dangerous cargoes”.

https://www.lloydsloadinglist.com/freight-directory/news/NCB-reports-%E2%80%98alarming%E2%80%99-level-of-misdeclared-dangerous-cargo/76938.htm#.XwXyK-WSmM8

http://www.natcargo.org/NCB-press-release-dangerous-cargoes.htm

The White Paper is available at –

http://www.natcargo.org/Holistic_Approach

http://www.natcargo.org/Holistic-Approach-For-Undeclared-Misdeclared-And-Other-Non-compliant-Dangerous-Goods_White-Paper-by-NCB.pdf

TRANSPORTED ASSET PROTECTION ASSOCIATION (TAPA) AND STANDARDS BODY BSI JOIN UP TO BOOST CARGO SECURITY STANDARDS

On 8 July, Lloyds Loading List reported that the idea behind the link-up is to support the digital transformation of its supply chain Security Standards audit processes and to increase its members’ access to new levels of risk management intelligence and incident data. It is also said that, in addition to auditing services, BSI and TAPA will exchange supply chain security intelligence and BSI will also provide subject matter experts for TAPA webinars and other member events and communications. TAPA and BSI will also look to develop joint research opportunities, following the publication of their ‘Last Mile Cargo Theft Report’ earlier this year.

https://www.lloydsloadinglist.com/freight-directory/news/TAPA-and-BSI-link-up-to-boost-cargo-security-standards/76945.htm#.XwXyNeWSmM8

OECD: NEW CORPORATE TAX STATISTICS PROVIDE FRESH INSIGHTS INTO THE ACTIVITIES OF MULTINATIONAL ENTERPRISES

A news release from OECD on 8 July advised that new data provides aggregated information on the global tax and economic activities of nearly 4,000 multinational enterprise (MNE) groups headquartered in 26 jurisdictions and operating across more than 100 jurisdictions worldwide. It explains that under the BEPS programme large MNE are required to disclose important information about their profits, tangible assets, employees as well as where they pay their taxes, in every country in which they operate. Country-by-Country reports (CbCR) provide tax authorities with the information needed to analyse MNE behaviour for risk assessment purposes.

A list of FAQ about CbCr is also available at –

http://www.oecd.org/tax/tax-policy/corporate-tax-statistics-country-by-country-reporting-FAQs.pdf

http://www.oecd.org/newsroom/new-corporate-tax-statistics-provide-fresh-insights-into-the-activities-of-multinational-enterprises.htm

BELGIUM IMPORTS: LOCKDOWN DID NOTHING TO STIFLE DRUGS TRADE

On 8 July, the Brussels Times reported that Customs authorities seized a total of 28.865 tonnes of illegal drugs in the first 6 months of 2020 – 5 tonnes more than in the same period in 2019.  Customs has seized record quantities of cocaine in the port of Antwerp for 7 years in a row – an increase of 660% since 2013.  South America remains the predominant source of drugs headed for Antwerp, led by Ecuador (10,700 kg), Brazil (5,214 kg) and Paraguay (4,478 kg), followed by the US (1,485 kg) and Costa Rica (1,287 kg).

https://www.brusselstimes.com/all-news/120705/us-withdrawal-from-who-weakens-fight-against-coronavirus-china-says/

THE ABANDONMENT OF ENVIRONMENTAL FINES FOR ILLEGAL DEFORESTATION IN BRAZIL HAS SPARKED A POLITICAL SCANDAL

On 8 July, an article in Insight Crime says that the scandal involves a cabinet minister potentially being removed from office and state governments breaking with the policies of President Jair Bolsonaro. The country’s Attorney General’s Office has called for the Environment Minister to be dismissed.  It is alleged that he had deliberately reduced the number of environmental fines issued to their lowest in 20 years while seeing forest fires grow to record levels, and he fired environmental inspectors after they carried out successful raids against criminal group. In April 2019, President Bolsonaro had issued a decree, allowing those given fines to avoid paying them by engaging in unspecified “environmental recovery and protection actions”. However, it is said that there are signs the Bolsonaro government is beginning to feel increased pressure on the environmental front and, in May, thousands of army troops were deployed across the Amazon to fight deforestation.

https://www.insightcrime.org/news/brief/environmental-brazil-deforestation-crisis/

IRELAND INTRODUCES CENTRAL BENEFICIAL OWNERSHIP REGISTER FOR SOME INVESTMENT FUNDS

An article from out-Law on 8 July was concerned with the Central Bank of Ireland being made the registrar of beneficial ownership for certain collective investment funds.

https://www.pinsentmasons.com/out-law/news/ireland-introduces-beneficial-ownership-register-investment-funds

UK: STUN GUN IMPORTS, WHAT OFFENCE HAS BEEN COMMITTED?

On 8 July, the Police National Legal Database published legal advice for a situation where a stun gun disguised as a torch has been intercepted prior to arriving at its desired destination. Though clearly a “section 5” prohibited firearm, , due to the item never reaching the desired location, is there a power to arrest for importing the item?

https://www.pnld.co.uk/your-legal-questions-answered/a-stun-gun-has-been-intercepted-by-ukba-what-offence-has-been-committed/

TOYS CONTINUE TO TOP EU LIST OF DANGEROUS PRODUCTS

EU Business reported that latest the latest EU report on its alert system to prevent the selling of dangerous products flagged up a record number of dangerous products in 2019, with toys and cars heading the list.  under the EU’s ‘Rapid Alert System’ the number of actions taken by authorities following an alert is growing year on year, reaching 4,477 in 2019 compared to 4,050 in 2018.  Toys were the most notified product category (29% of total notifications), followed by motor vehicles (23%), and electrical appliances and equipment (8%). Cosmetics, clothing, textiles and fashion items, as well as childcare articles and children’s equipment also had a high number of alerts.

https://www.eubusiness.com/news-eu/dangerous-products.77jd

US: FIRST CFTC ENFORCEMENT ACTION TARGETING ACTIVITY DIRECTLY TIED TO COVID-19

A release on Mondo Visione on 8 July advised that the Commodity Futures Trading Commission has filed a complaint in Texas against James Frederick Walsh of Florida, charging him with fraudulent solicitation and failure to register with the CFTC. Walsh’s fraudulent solicitations include falsely claiming to generate increased profits as a result of the COVID-19 pandemic. The complaint alleges that from at least September 2019, Walsh fraudulently solicited members of the public for the purported purpose of trading foreign currency (forex) for them. It is also claimed that Walsh falsely represented that he was earning even greater trading profits now that the COVID-19 pandemic had impacted the financial markets.

https://mondovisione.com/media-and-resources/news/cftc-charges-florida-man-for-attempting-to-fraudulently-profit-from-covid-19-f/

BREXIT: UK HAS SUBMITTED APPLICATIONS TO THE EU TO CREATE BORDER CONTROL POSTS (BCP) AT NORTHERN IRELAND PORTS

On 8 July, Hellenic Shipping News reported that BCP are facilities used to check animals and food arriving in the EU Single Market. At the end of the Brexit transition on 1 January, Northern Ireland will stay in the Single Market for goods. As the rest of the UK will not remain in the Single Market, some products entering Northern Ireland from Great Britain will need to be checked at the posts.

https://www.hellenicshippingnews.com/brexit-application-for-border-posts-at-ports-sent-to-eu/

DUTCH COURT TO QUESTION ING AND EX-CEO IN MONEY LAUNDERING CASE

On 8 July, Reuters reported that a Dutch court has said it wanted to question the ING bank and its former CEO Ralph Hamers, now heading for UBS, to determine whether to reopen a case that led to ING being fined for lax prevention of money laundering in 2018.  The largest bank in the Netherlands paid €775 million in a settlement with Dutch prosecutors after failing for years to spot money laundering and other criminal activities happening through its accounts.

https://uk.reuters.com/article/uk-ing-money-laundering-hamers/dutch-court-to-question-ing-and-ex-ceo-hamers-in-money-laundering-case-idUKKBN2492EW

STEPSON OF MEXICAN DRUG KINGPIN HELPED FAMILY SELL HOUSE TO EVADE US SANCTIONS

On 7 July, Kharon reported that the stepson of a Mexican drug trafficker acted as a straw man for his parents, helping them sell a house in Mexico so it would not be blocked due to US sanctions, according to court documents. Bryant Espinoza Aguilar is the stepson of sanctioned Sinaloa Cartel leader Rafael Caro Quintero and is a US citizen.

https://brief.kharon.com/updates/stepson-of-longtime-mexican-drug-kingpin-helped-family-sell-house-to-evade-sanctions-us-says/

SOUTH AFRICAN TRADING POOL ACCUSED OF CRYPTO FRAUD IN TEXAS

On 8 July, Coindesk reported that the Texas State Securities Board (TSSB) has ordered Mirror Trading International (MTI) to cease operations immediately, alleging the South African bitcoin and forex trading network is a multilevel marketing scam. MTI is described as an “investor club” that claims to yield  0.5% daily returns for 76,000 members through artificial intelligence-boosted bitcoin trades on foreign exchanges. The TSSB alleged Mirror CEO Johannes Steynberg was perpetrating an international multilevel marketing fraud and that Texans are among the victims.

https://www.coindesk.com/mirror-trading-bitcoin-scam-texas

JUDGE DISMISSES GM BRIBERY LAWSUIT AGAINST FIAT CHRYSLER

The Midland reporter Telegram in the US on 8 July reported that a federal judge in Detroit has tossed out General Motors’ lawsuit alleging that Fiat Chrysler paid off union leaders to get better contract terms than GM.

https://www.mrt.com/news/article/Judge-dismisses-GM-s-bribery-lawsuit-against-Fiat-15394776.php

CALIFORNIA AND COLORADO RESIDENTS, COMPANIES AND LAW FIRM NAMED IN MULTI-MILLION PONZI CHARGES

On 8 July, a release on Mondo Visione advised that the Commodity Futures Trading Commission has announced it has filed a civil enforcement action charging a number of individuals and entities with operating a $14.5 million binary options and retail foreign currency (forex) Ponzi scheme. Named were John D Black from California and his affiliated entities Financial Tree (Financial Tree Trust), Financial Solution Group (Financial Solution Group Trust), and New Money Advisors, LLC, and associates Christopher Mancuso and Joseph Tufo; Colorado-based defendants John P Glenn and his law firm, The Law Firm of John Glenn, PC. The complaint names 7 relief defendants who received funds from the scheme to which they have no lawful entitlement.

https://mondovisione.com/media-and-resources/news/cftc-charges-california-and-colorado-residents-in-ongoing-multimillion-dollar-po/

FATF: BENEFICIAL OWNERSHIP BEST PRACTICES GUIDE (IN SPANISH)

Made available through the GAFILAT website, this best practice document aims to provide suggested solutions, supported by cases and examples of best practices in response to the challenges countries face in the implementation of FATF Recommendation 24 on transparency and final beneficiary of legal persons.

https://www.gafilat.org/index.php/es/biblioteca-virtual/gafilat/documentos-de-interes-17/buenas-practicas-18/3826-mejores-practicas-sobre-beneficiarios-finales-para-personas-juridicas/file

US: 11 PROPERTIES IN PALM BEACH COUNTY, FLORIDA SEIZED FOR ALLEGED TIES TO MONEY LAUNDERING

On 6 July, the Real Deal website reported that the properties are tied to a false and fraudulent asylum and work permit applications scheme between 2012 and 2020, according to prosecutors, naming Laura Luz Maria Torres.

https://therealdeal.com/miami/2020/07/06/feds-seek-to-seize-11-properties-in-palm-beach-county-allegedly-tied-to-money-laundering/

AUSTRALIA: QUEENSLAND POLICE FIND $4.35 MILLION STASHED INSIDE CAR DURING ROUTINE TRAFFIC STOP

On 7 July, ABC News reported that a Brisbane man has been granted bail on a tainted property charge after a routine traffic stop unearthed $4.35 million of cash in his car.   $1.75 million was in cash stacked inside a suitcase and $2.61 million in a cardboard box.

https://www.abc.net.au/news/2020-07-08/queensland-police-find-millions-in-cash-in-car-south-of-brisbane/12434556

 

 

 

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UN REPORT: COVID-19-RELATED TRAFFICKING OF MEDICAL PRODUCTS AS A THREAT TO PUBLIC HEALTH

A Research Brief from the UN Office on Drugs and Crime says that the emergence of trafficking in PPE signals a significant shift in organised criminal group behaviour that is directly attributable to the COVID-19 pandemic, and that criminal behaviour will shift from trafficking in PPE to the development and delivery of a COVID-19 vaccine.  It also says that weak regulatory and legal frameworks to the prevention of the manufacturing and trafficking of substandard and falsified products and cyber security shortcomings, were evident before COVID-19, but the pandemic has exacerbated them and it will be difficult to make significant improvements in the immediate short term.  It concludes that that crime targeting COVID-19 medical products will become more focused with significantly greater risks to public health as the containment phase of the pandemic passes to the treatment and prevention stages.

UNODC

https://www.unodc.org/documents/data-and-analysis/covid/COVID-19_research_brief_trafficking_medical_products.pdf

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UK EXPORT FINANCE PLAYS DOWN CORRUPTION WARNINGS OVER AFRICA TRANSACTIONS

On 8 July, Global Trade Review reported that the UK’s official export credit agency says that it carries out rigorous and ongoing due diligence on all transactions it supports, after anti-corruption investigators warned of “multiple red flags” in its activities in Sub-Saharan Africa. This followed a UK-focused campaign group saying that stress-testing of the agency’s latest anti-bribery and corruption procedures suggests it is “taking on extraordinarily high risk” across much of its current portfolio. The group said that, of 11 recent UKEF-backed deals, 3 posed “exceptionally high” risks in terms of corruption or bribery, involving trade with Angola, Ghana and Uganda and carried a total value of over £270 million. The article details the concerns expressed

https://www.gtreview.com/news/europe/uk-export-finance-plays-down-corruption-warnings-over-africa-transactions

 

 

 

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WHY URUGUAY FINISHED TOP IN AN ANTI-CORRUPTION RANKING

On 8 July, Americas Quarterly reported that Uruguay typically performs well compared to most Latin American countries in a variety of governance indicators — including rankings from multilateral banks, research institutions and the private sector. Now it has finished as top of the annual Capacity to Combat Corruption survey and its overall score was the highest by far. The survey assesses 14 different sectors of the anti-corruption environment and Uruguay ranked first in 13 of these 14 areas. Even in sectors historically seen as problematic for Uruguay, such as the fight against money laundering, the country surpassed the others.

https://www.americasquarterly.org/article/why-uruguay-finished-first-in-our-anti-corruption-ranking

 

 

 

 

 

 

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OFAC SETTLEMENT AGREEMENT WITH AMAZON.COM INC

On 8 July, OFAC announced a $134,523 settlement with Amazon.co​m Inc. It is said that Amazon provided goods and services to persons sanctioned by OFAC; to persons located in the sanctioned region or countries of Crimea, Iran, and Syria; and to individuals located in or employed by the foreign missions of countries sanctioned by OFAC. Amazon also failed to timely report several hundred transactions conducted pursuant to a general license issued by OFAC that included a mandatory reporting requirement.

https://content.govdelivery.com/accounts/USTREAS/bulletins/2949e27

https://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20200708_amazon.pdf

 

 

 

 

 

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SPANISH POLICE ARREST 2 PEOPLE FOR SMUGGLING DUAL-USE EQUIPMENT TO PAKISTANI MILITARY COMPANIES

On 8 July, Latestly reported that, according to sources, the technology being smuggled could be used for missile guidance systems. The men were said to be operating a company said to be specialising in autonomous navigation technologies for UAV.

https://www.latestly.com/agency-news/world-news-spanish-police-apprehend-2-people-for-smuggling-dual-use-equipment-to-pakistani-military-companies-1873881.html

https://www.newkerala.com/news/2020/121289.htm

 

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INTERNATIONAL INVESTORS BOUGHT BONDS BACKED BY ITALIAN MAFIA CRIME PROCEEDS

The Financial Times has reported that international investors have bought an estimated €1 billion in bonds linked to assets created by front companies for the Calabrian ’Ndrangheta mafia group. It says that Banca Generali (in a transaction with Ernst & Young provided consulting services), pension funds, hedge funds and family offices invested in the bonds — which were created out of unpaid invoices to Italian public health authorities from companies providing them with medical services.

https://www.ft.com/content/bcebd77c-057b-4fd0-bd99-b97e0e559455

https://www.riskscreen.com/kyc360/news/mafia-linked-bonds-sold-to-banca-generali-other-investors-ft/

 

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UK: REPORT ON MOBILE PHONE DATA WHEN CONDUCTING CRIMINAL INVESTIGATIONS

On 6 July, Addleshaw Goddard LLP reported that the Information Commissioner’s Office (ICO) has released an investigation report on policy extraction of mobile phone data when conducting criminal investigations in England and Wales following concerns about excessive processing of personal data. The report says that a whole-of-system approach is needed to improve privacy protection whilst achieving legitimate criminal justice objectives.  Recommendations in the report include the introduction of a new code of practice to improve practices and better support for police and prosecutors in their work.

The report is at –

https://ico.org.uk/about-the-ico/news-and-events/news-and-blogs/2020/06/ico-releases-findings-on-the-use-of-mobile-phone-extraction-by-police-forces/

 

 

 

 

 

 

 

 

 

 

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UK: DISHONESTY IN COMPLEX FRAUD CLAIMS

On 7 July, Mayer Brown published an article saying that the Court of Appeal has confirmed that the new test for dishonesty that is now applied in civil cases in England and Wales applies equally in criminal cases. It says that there is now no subjective element and no longer will a defendant be able to argue their innocence because they did not realise their actions were dishonest. This clarification has implications for criminal cases of serious fraud, where successful prosecutions of individuals have been thin on the ground. The article says that the most immediate effect of the judgment is that it makes each case much more fact-specific than was the case with the previous Ghosh test. Only time will tell whether this will result in an increase in successful prosecutions of individuals in cases of complex fraud.

https://www.mayerbrown.com/en/perspectives-events/publications/2020/07/dishonesty-in-complex-fraud-claims

 

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OTHER THINGS YOU MAY HAVE MISSED – JULY 7

Panama Covid-19 update – in the Telemetro newspaper the news that the strain of coronavirus circulating here is more infectious (which might explain the consistently high number of cases) but less lethal than other strains (which may explain the relatively low fatality rate). With a fatality rate of 2% or less, Panama has one of the 2 lowest in the Americas – the US is up around 7% and, for some reason, Mexico is 12%.

Meanwhile, another 957 new cases have been added to the total, taking that total to over 40,000 (40,291), with just less than half said to be “recovered”.  Another high figure for fatalities (29) takes us to 799 to date.

7 July 2020

UK GLOBAL HUMAN RIGHTS SANCTIONS: CONSIDERATION OF DESIGNATIONS

On 6 July, the FCO published a Policy Paper which aims to highlight factors relevant to whether a person may be designated under the Global Human Rights Sanctions Regulations 2020.

https://www.gov.uk/government/publications/global-human-rights-sanctions-factors-in-designating-people-involved-in-human-rights-violations/global-human-rights-sanctions-consideration-of-targets

US EXPORT CONTROLS AND HONG KONG – CHANGES UNDERWAY

On 7 July, Crowell Moring published a briefing outlining changes that the US has made in respect of exports to Hong Kong, including the removal of Hong Kong’s special treatment for dual-use export controls.

https://www.cmtradelaw.com/2020/07/us-export-controls-and-hong-kong-change-underway

FINANCIAL INSTITUTIONS AND REPUTATIONAL RISK

Thomson Reuters has published a White Paper on reputational risk. It says that there is an expectation that financial institutions will engage in perpetual scanning of reliable data for stories that are not only related to financial crime but also relate to their clients. It provides a broad definition of reputational risk to mean anything from “Do we want to be the bank that maintains relationships for this client?” to “What would it look like if this illicit client or the client’s activity were divulged in the media?”.  It is said that the expectation is that once a match from media event to the client is established, this will cause a so-called trigger event – which would require a review process and audit trail for the decision-making around why a client was or was not retained, and the strength and depth of their exit.  This straightforward as it pertains to money laundering, fraud, corruption, or other patently financial crime-related incidents, it is much less certain as it relates to reputational risk.  A regulators expectation and practice around external environment monitoring then becomes even more ambiguous the further an incident gets from clearly criminal activity. The Paper provides illustrative case studies. The Paper provides a suggested template for exit risk management and auditability.

https://legal.thomsonreuters.com/en/insights/white-papers/formalizing-a-reputational-risk-assessment-is-vital-for-financial-institutions

USE OF CUSTOMS INFORMATION IN RELATION TO PARALLEL IMPORTS

On 7 July, AKD Benelux Lawyers in the Netherlands published an article saying that, in a recent case before a court in the Netherlands, the court had to answer the question of whether information acquired during a customs seizure under the EU Anti-piracy Regulation (EU Regulation 608/2013) may be used for an unauthorised parallel import claim. In the EU, customs authorities must also, on request and where available, inform the rights-holder of the seizure of the names and addresses of the consignee, the consignor and the declarant or the holder of the goods of the customs procedure of the origin, provenance and destination of the goods whose release has been suspended or which have been detained. In this case, the importer stated that the information obtained by Armani through Customs should not be taken into consideration, since it was used for an unauthorised parallel import matter and the rights-holder was permitted to use the information only for a counterfeit matter.  The court correctly rejected the importer’s argument.

https://www.internationallawoffice.com/Newsletters/Litigation/Netherlands/AKD/Use-of-customs-information-in-relation-to-parallel-imports

UK: EXPORT LICENCE APPLICATIONS FOR MILITARY EXPORTS TO SAUDI ARABIA

On 7 July, the Department for International Trade published Notice to Exporters 2020/11.  It appears that the Secretary of State has assessed that there is not a clear risk that the export of arms and military equipment to Saudi Arabia might be used in the commission of a serious violation of international humanitarian law. This followed a decision of the Court of Appeal in 2019 which had found the Department’s decision-making process involving exports to Saudi Arabia as irrational and therefore unlawful. The case involved had begun in 2015, as a challenge to UK export policies re military exports to Saudi Arabia in the light of that country’s involvement in the war in Yemen.  The Secretary of State now says that, to address the Court of Appeal’s judgment, the Department has developed a revised methodology in respect of all allegations which it is assessed are likely to have occurred and to have been caused by fixed wing aircraft (the chief export to Saudi Arabia is of BAE Systems aircraft and related systems).  In the light of the revised methodology, the Secretary of State is to withdraw the application to appeal the Court of Appeal decision to the Supreme Court.

As a result of the changes in methodology, it is said that the previous undertakings given to the Court re exports to Saudi Arabia and its coalition partners “fall away”.  Further, the Notice to exporters says that the Government will now begin the process of clearing the backlog of licence applications for Saudi Arabia and its coalition partners that has built up since last year, to be carefully assessed against the EU and UK export licensing criteria – but that exporters should be aware that it may take some months to clear this backlog.

https://www.gov.uk/government/publications/notice-to-exporters-202011-progressing-licence-applications-for-military-exports-to-saudi-arabia/notice-to-exporters-202011-progressing-licence-applications-for-military-exports-to-saudi-arabia

WIRECARD WAS FOCUS OF ‘LAUNDERING’ WARNING TO MASTERCARD EXECUTIVES IN 2016

On 7 July, KYC 360 reports an article from The Times claiming that Mastercard was warned about Wirecard’s links to an alleged laundering network in 2016 and details of its alleged links to a scheme that used bogus online stores to disguise the processing of high-risk payments.

https://www.riskscreen.com/kyc360/news/wirecard-was-focus-of-laundering-warning-to-mastercard-executives/

MOZAMBIQUE IS EMERGING AS THE NEXT ISLAMIC EXTREMIST HOTSPOT

On 6 July, an article in defense One said that an Islamist terror group in Mozambique Al Sunnah wa Jama’ah – is staging increasingly sophisticated and destructive attacks on oil facilities and government targets this year. Its connections with Islamic State may be growing tighter, the article warns. Already, 447 people have died in attacks in 2020, compared to 660 deaths in 309 attacks in 2019.  The northern Cabo Ligado province is a resource-rich region, and Mozambique is notorious for smuggling links involving drugs, endangered species, timber etc, as well as having a poor record on corruption.

https://www.defenseone.com/threats/2020/07/mozambique-emerging-next-islamic-extremist-hotspot/166638/?oref=d_brief_nl

https://acleddata.com/2020/06/30/cabo-ligado-weekly-22-28-june-2020/

HEMP BANKING – FINCEN ISSUES NEW GUIDANCE REGARDING AML/BSA OBLIGATIONS

On 7 July, Bradley Arant Boult Cummings LLP published an article saying that, on 29 June, FinCEN issued guidance to address questions related to Bank Secrecy Act/Anti-Money Laundering (BSA/AML) regulatory requirements for providing banking services to hemp businesses. The article considers the guidance, saying that many financial institutions have remained hesitant to provide services to the hemp industry in the 18+ months since the 2018 Farm Bill, due in large part to the perceived burden of incorporating hemp-specific procedures into their AML Compliance Programmes, but that the new guidance might alleviate these concerns.

https://www.financialservicesperspectives.com/2020/07/hemp-banking-fincen-issues-new-guidance-regarding-aml-bsa-obligations/#page=1

INCOTERMS 2020: HANDY CHART OF RESPONSIBILITIES OF PARTIES

On 2 July, Sheppard Mullin provided a handy reference to the revised terms introduced by changes announced by the International Chamber of Commerce to its Incoterms in early 2020. It explains that Incoterms (short for “international commercial terms”) are pre-defined commercial terms designed to designate the actions, costs, and risks borne by each party in an agreement for the sale and international delivery of goods. The 2020 version changes the name of one of the old terms: DAT (Delivered at Terminal) is now known as DAP (Delivered at Place), with a couple other changes.

INCOTERMS

https://www.globaltradelawblog.com/2020/07/02/incoterms-2020

HOW ESG PROVIDES INVESTORS USEFUL INFORMATION

On 23 June, ACC.com published an article saying that Environmental, Social, and Governance (ESG) indicators can provide investors with useful information about a company’s strength and crisis preparedness.  For ESG standards, guidance for reporting ESG performance includes that from the Sustainability Accounting Standards Board (SASB), which models its standards after the Financial Accounting Standards Board (FASB) and its guidance for financial statement reporting. The article says that ESG has been receiving lately as a useful investing tool that augments financial reporting, and it provides examples that illustrate how ESG overlaps with practices that holistically strengthen a company (including recovering from a pandemic…).

https://www.accdocket.com/articles/how-esg-provides-investors-useful-information.cfm

LUXEMBOURG REGISTER FOR FIDUCIARIES AND TRUSTS BENEFICIAL OWNERS

On 6 July, Arendt & Medernach published a Newsflash article about a new law of 1 July which provides for the establishment of a register under the supervision of fiduciaries and trusts, and connected to implementation of the 4th and 5th EU AML Directives. The article explains the extent and effect of the new law.

https://s3.amazonaws.com/documents.lexology.com/d534c678-0a3a-43a0-b5c3-365b67b802dd.pdf?AWSAccessKeyId=AKIAVYILUYJ754JTDY6T&Expires=1594138328&Signature=oTkvz6%2FowXwP1gD4Z0OGwturgBY%3D

EU: CROSS-BORDER RECOVERY OF TAX DEBTS THROUGH SET-OFF

On 26 June, the European Tax Blog published a post reminding one that, if one EU Member State requests assistance from another Member State in respect of the recovery of a debt under the Mutual Assistance Recovery Directive (MARD), the requesting state’s claim is treated is if it was a claim of the requested state. The post considers a recent case in which the CJEU (the EU court) clarified what this means and discussed how far the requested state is required to go in recovering the debt. The case involved both a VAT debt and a VAT refund, which one might normally expect to see set off against one another. However, in this instance, the debt was in one state and the refund was due in another.

https://www.europeantax.blog/post/102gac4/cross-border-recovery-of-tax-debts-through-set-off

IRAN CONTINUES TO STOCKPILE URANIUM AND DEVELOP ADVANCED CENTRIFUGES

Arms Control Today reports that Iran’s stockpile of low-enriched uranium (LEU) continues to grow in violation of the limits imposed by the 2015 JCPOA, but the country is abiding by the monitoring and verification mechanisms put in place by the accord, the IAEA.  However, the article (based on a 5 June IAEA report) says that Iran now has enough LEU that, if enriched to weapons grade, is sufficient for one nuclear bomb, and hat Iran continues to breach limitations put in place by the JCPOA on research and development of advanced centrifuge machines.

https://www.armscontrol.org/act/2020-07/news/iran-continues-stockpile-uranium

OVER 30,000 ILLEGAL FIREARMS AND AMMUNITION DESTROYED BY SOUTH AFRICAN POLICE

On 7 July, The South African and others reported that over 30 000 illegal firearms confiscated by the South African Police Service (SAPS) are currently being melted down at an Arcelor Mittal steel factory in Vereeniging.

https://www.thesouthafrican.com/news/saps-destory-illegal-firearms-ammunition-guns-gauteng-police-7-july-2020/

CHINA CONCLUDES ALL LEGAL PROCEDURES OF ACCESSION TO UN ARMS TRADE TREATY (ATT)

In its 8 July edition, the Big News Network quotes a Chinese government spokesperson as saying that accession to the ATT is an important step in China’s active participation in global arms trade governance to safeguard world and regional peace and stability.  The treaty will enter into force for China 90 days after the deposit of the instrument of accession.

https://www.bignewsnetwork.com/news/265699605/china-concludes-all-legal-procedures-of-accession-to-arms-trade-treaty

DUBAI’S ROLE IN FACILITATING CORRUPTION AND GLOBAL ILLICIT FINANCIAL FLOWS

On 7 July, the Carnegie Center published an e-book saying that Dubai is just one of many enablers of global corruption, crime, and illicit financial flows, but addressing its role presents anti-corruption practitioners, law enforcement agencies, and policymakers with particularly complex challenges. It says that there is a fleeting opportunity to elevate and address widespread concerns about Dubai’s role in enabling global corruption and its many destabilising effects. But doing so will require a fine understanding of why and how corruption has become such a central element of Dubai’s political economy. It will also require anti-corruption practitioners to recognise that traditional — and largely punitive — policy instruments will not succeed absent a more affirmative and sustained effort by Emirati leaders to ensure that Dubai’s economy remains competitive and attractive over the long term.

https://carnegieendowment.org/2020/07/07/dubai-s-role-in-facilitating-corruption-and-global-illicit-financial-flows-pub-82180

WHY STOPPING ENVIRONMENTAL CRIME IS A MATTER FOR NATIONAL SECURITY

An article in World Political Review on 7 July follows the new German presidency of FATF making combating illicit financial flows through environmental crime a priority. It says that wildlife crime, illegal logging, mining etc provide a valuable source of revenue for illicit state and non-state actors. However, it warns that curtailing such crime will require long-term investment.

https://www.worldpoliticsreview.com/articles/28892/why-stopping-environmental-crime-is-a-matter-of-national-security

SWITZERLAND ADDS 11 VENEZUELAN OFFICIALS TO SANCTIONS LIST

On 7 July, Swissinfo reported that Swiss authorities have added 11 leading Venezuelan officials because of their alleged role in undermining human rights and democracy. The sanctions include an entry and transit ban and a freeze on any assets held in Swiss banks.  The names added to the sanctions first imposed in 2018 include José Adelino Ornelas Ferreira, secretary general of Venezuela’s National Defence Council and Néstor Luis Reverol Torres, Minister for Interior, Justice and Peace.

https://www.swissinfo.ch/eng/switzerland-adds-11-venezuelan-officials-to-sanctions-list/45886918

INDIA: GOLD SMUGGLING – HIGH-PROFILE, POLITICALLY-CONNECTED IT CONSULTANT PRIME SUSPECT

On 7 July, Gulf News reported that the seizure of 30 kg of gold from a diplomatic consignment has snowballed into a major political controversy, as the prime suspect – Swapna Suresh – is a woman who appears to be close to the ruling Left Democratic Front government in Kerala state.

https://gulfnews.com/world/asia/india/involved-in-gold-smuggling-high-profile-it-consultant-creates-political-storm-in-kerala-1.1594139559869

59% OF CIGARETTES SOLD IN MALAYSIA ARE ILLEGAL

On 7 July, The Rakyat Post said that a new report claims that 59% of the cigarettes sold in Malaysia are from the illicit cigarette trade – with 75% made up of smuggled “whites”, i.e. cigarettes that were produced legally in other countries for the purpose of being smuggled. It is claimed that the presence of a large proportion of illegal cigarettes drives underage smoking.

https://www.therakyatpost.com/2020/07/07/stop-the-black-market-illicit-cigarette-trade/

INTERVIEW WITH CEO AND FOUNDER OF THE INTERNATIONAL ASSOCIATION OF MONEY TRANSFER NETWORKS ON REMITTANCES ETC

On 7 July, The Paypers carried an exclusive interview with Veronica Studsgaard, CEO and Founder of The International Association of Money Transfer Networks (IAMTA). In the interview, she shares insights about the challenges specific to cross-border remittances, how COVID-19 affects migrants and international money transfers, and the future of this industry. She says that one important challenge affecting the industry is bank de-risking, with banks withdrawing – or failing to offer – their facilities to specific customers in greater numbers than ever before. She says that IAMTN and its members have been working in this matter with FATF, US Treasury, HM Treasury and FSB, among others, on the action plan to assess and address the decline in correspondent banking relationships and remittance firms’ access to banking services.

https://thepaypers.com/interviews/exclusive-interview-with-veronica-studsgaard-ceo-and-founder-of-the-international-association-of-money-transfer-networks–1243353

INDIA: ANOTHER BIG MONEY LAUNDERING CASE INVOLVING MUMBAI AIRPORT COMPANY

On 7 July, The Hindu reported that the Enforcement Directorate has registered a money laundering case against G.V.K. Reddy, promoter of GVK Group and whole-time director of Mumbai International Airport Limited (MIAL), and others, and based on the corruption case lodged by the Central Bureau of Investigation last month. It is also said that unnamed officials of the Airports Authority of India (AAI) have also been accused of deliberately ignoring the alleged financial irregularities committed from 2012 to 2018. The case is apparently linked to contracts for the for the modernisation, upgrade and maintenance of the Mumbai airport.

https://www.thehindu.com/news/national/other-states/ed-files-money-laundering-case-against-gvk-group-mial-in-mumbai-airport-scam-case/article32011675.ece

DEUTSCHE BANK REACHES $150 MILLION SETTLEMENT LINKED TO JEFFREY EPSTEIN

On 7 July, Yahoo Finance reported that the bank had has agreed to pay $150 million in the US to settle investigations into compliance failings in part linked to dealings with Jeffrey Epstein, although the penalty also covers AML failings linked to Danske Bank Estonia and Cyprus-based bank FBME. However, it is said to be the first enforcement action by a financial regulator linked to the Epstein case.

https://finance.yahoo.com/news/deutsche-bank-jeffrey-epstein-new-york-penalty-150-million-danske-bank-140532188.html

https://www.cnbc.com/2020/07/07/jeffrey-epstein-case-deutsche-bank-fined-150-million-penalty-for-relationship.html

https://mondovisione.com/media-and-resources/news/superintendent-lacewell-announces-new-york-state-department-of-financial-service/

BRITISH COLUMBIA LOTTERY FINALLY REVEALS REASON FOR $700,000 PENALTY IN 2010

On 7 July, the Vancouver Sun reported that, after a decade-long court battle, the B.C. Lottery Corporation has revealed why FINTRAC fined it close to $700,000 for violating AML/CFT laws after on-site reviews of 6 land-based casinos. However, BCLC appealed the $penalty and the Federal Court set it aside in 2017, with the court making confidentiality orders in 2012 and 2014 barring the release of records related to the appeal. It is now revealed that that FINTRAC found 7 deficiencies in, including failures to mitigate high-risk gambling, obtain ID from people making large buy-ins, report large cash transactions and keep adequate records.

https://www.timescolonist.com/news/b-c/bclc-reveals-reason-for-700k-fine-from-watchdog-1.24165961

US: MILLIONS FROM PPP COVID-19 RELIEF FUNDS WENT TO COMPANY IDENTIFIED IN UKRAINE MONEY LAUNDERING CASE

On 7 July, Crains in Cleveland reported claims that a company accused of helping launder millions of dollars from Ukraine a decade ago is among the apparent recipients of US coronavirus relief funds, according to federal disclosures. It is reported that Optima 777 received at least $2 million in loans from the Paycheck Protection Program. It is said to be unclear who owns the company now.

https://www.crainscleveland.com/finance/ppp-millions-went-firm-identified-ukraine-money-laundering-suit

INDIA: WHERE WILL “BLACK MONEY” GO NOW – AS REAL ESTATE BECOMES MORE TRANSPARENT

On 7 July, the Financial Express asked where illicit funds would go now that the Modi administration has reduced the appeal of one of its former favourites – the real estate sector. It says that, with the amendment in the Prevention of Money Laundering Act (PMLA), transparency in India’s real estate sector has significantly improved. However, it is said that the sector still needs to address issues around corporate governance and regulatory enforcement to progress into the ‘transparent’ tier from ‘semi-transparent tier’.

https://www.financialexpress.com/industry/where-will-black-money-hide-now-modi-has-shrunk-illicit-moneys-pit-real-estate-transparency-jumps/2015643/

DANISH PERMIT HELPS RUSSIA TO EVADE US PIPELINE SANCTIONS

On 7 July, EU Observer reported that a Russian vessel can lay the last 160 km of the Nord Stream 2 gas pipeline after the Danish Energy Agency gave the go-ahead having decided that there were no old WW2-era chemical munitions in the area. US sanctions had previously forced a Swiss pipe-laying company to abandon the project.

https://euobserver.com/tickers/148872

EU: FRONTEX TRAINS NEW BORDER GUARDS ONLINE

On 7 July, EU Observer reported that the EU border agency is in the process of training 265 new border guards to be deployed in January. The e-learning phase will be followed by physical training. The recruits are part of the agency’s new standing corps, which may reach 10,000 personnel.

https://euobserver.com/tickers/148865

ZIMBABWE’S HEALTH MINISTER ACCUSED OF CORRUPTION AND SACKED

On 7 July, Reuters reported that Zimbabwe’s President Emmerson Mnangagwa has sacked health minister Obadiah Moyo with immediate effect for inappropriate conduct. Moyo was arrested in June over allegations of corruption related to the government’s procurement of $60 million worth of medical equipment for the country’s fight against the coronavirus.

https://uk.reuters.com/article/uk-zimbabwe-health-minister/zimbabwes-health-minister-accused-of-corruption-sacked-statement-idUKKBN2482ML

CANADIAN ALLEGED SWEEPSTAKE SCAM FRAUDTER TO BE EXTRADITED TO US

On 7 July, City News reported that, In upholding an earlier ruling, the Ontario Court of Appeal rejected arguments from Harry Cole (aka Akintomide Ayoola Bolu and John King, and by other names) that his identity as the man wanted on fraud and money-laundering charges was not proven. According to the US indictment, Cole and others would send letters to older victims indicating they had won millions of dollars in a sweepstakes or lottery. The letter included a bogus cheque and instructed targets to deposit the cheque in a personal bank account, immediately withdraw thousands of dollars in cash or money orders, and send the money to a “sweepstakes representative” in the US to collect on their prize.

https://toronto.citynews.ca/2020/07/07/alleged-sweepstakes-scammer-ordered-extradited-to-u-s-to-face-fraud-trial/

UK FINANCIAL SANCTIONS TARGETS BY REGIME

On 7 July, HM Treasury published an updated page providing  lists of all financial sanctions imposed in the UK by country, administration or terrorist group.

https://www.gov.uk/government/collections/financial-sanctions-regime-specific-consolidated-lists-and-releases

ITALY AND ROMANIA TAKE DOWN CYBER FRAUD RING GENERATING €20 MILLION PER YEAR IN CRIMINAL PROFITS

A news release from Europol on 7 July advised that the criminal group was using a large network of money mules in Italy to launder their criminal profits from a variety of cybercrime activities. The criminal group was involved in financial frauds and cyber scams such as rental fraud (fraud through the advertisement of non-existent properties to rent) and CEO fraud (impersonating a company official to trigger large transfers to bogus accounts).

https://www.europol.europa.eu/newsroom/news/italy-and-romania-take-down-cyber-fraud-ring-generating-%E2%82%AC20-million-year-in-criminal-profits

LARGE-SCALE COUNTERFEIT MONEY RING BUSTED IN SOUTHERN VIETNAM

On 4 July, Tuoi Tre News reported that police have broken up a large-scale ring of making, storing and using counterfeit money that operates across several southern provinces and cities.

https://tuoitrenews.vn/news/society/20200704/largescale-counterfeit-money-ring-busted-in-southern-vietnam/55415.html

THE ‘GO-TO’ SOLICITOR FOR CRIMINALS IS STRUCK OFF WHILE IN JAIL

On 7 July, Legal Futures reported that Ross Ian McKay, 41, a solicitor who was the ‘go to’ lawyer for a gang of criminals because he would not ask too many questions about where their money came has been struck off while serving 7 years in jail. He was convicted in 2018 on 3 counts under the Proceeds of Crime Act 2002.

https://www.legalfutures.co.uk/latest-news/criminals-go-to-solicitor-struck-off-while-in-jail

EU-IRAN: CAN THE JCPOA SURVIVE THE TRUMP PRESIDENCY?

On 7 July, the EU Parliament Research Service published a briefing paper which reviews the situation, saying that, with Iran continuing uranium enrichment to levels far exceeding the levels permitted under the JCPOA, and with the US threatening to trigger the re-imposition of UN sanctions against Iran, further escalation is likely. It says that security in the EU is linked to the security situation in western Asia. For that reason, Europe should maintain efforts to preserve the JCPOA and seek to reduce tension between Iran and the US.

https://www.europarl.europa.eu/RegData/etudes/BRIE/2020/652001/EPRS_BRI(2020)652001_EN.pdf

MSN

https://www.msn.com/en-us/news/world/western-powers-seek-condemnation-of-syria-over-sarin-attacks/ar-BB16rMKj?ocid=msedgdhp

10 KEY TAKEAWAYS FROM THE EUROPEAN COMMISSION’S REVIEW OF THE GENERAL DATA PROTECTION REGULATION (GDPR)

On 25 June, a post from Field Fisher identified 10 key takeaways from the report on the first review of the GDPR by the EU Commission, 2 years on from its introduction. The article sums up the review as saying – “some notable achievements, shows good potential but needs to pull up its socks in various areas”.

https://www.fieldfisher.com/en/services/privacy-security-and-information/privacy-security-and-information-law-blog/ten-key-takeaways-from-the-european-commission-s-r

UK HOUSE OF LORDS CALLS FOR LOOT BOXES TO FALL WITHIN THE SCOPE OF GAMBLING LEGISLATION

On 3 July, a post from Field Fisher was concerned with a report from the House of Lords Gambling Committee on 2 July covering “the social and economic impact of the gambling industry”. It is said that the report specifically addresses the topic of loot boxes in video games, and the Committee calls on the Government to act immediately to bring loot boxes with the remit of gambling legislation and regulation and makes 2 specific recommendations in relation to loot boxes in games. It notes that the UK Government has announced that a call for evidence in relation to the impact of ‘loot boxes’ would take place later this year.

https://www.fieldfisher.com/en/services/technology-outsourcing-and-privacy/technology-and-outsourcing-blog/uk-house-of-lords-calls-for-loot-boxes-to-with-the

TURKEY: SALE OF HAND-ROLLED CIGARETTES BANNED

On 3 July, TJI reported that ban aims to curb the country’s illegal cigarette trade and sellers will be punished with prison sentences of up to 6 years. It says that since cigarette prices have been on the rise, more people have been turning to the hand-rolled alternative sold in tobacco shops, according to the Daily Sabah.

http://www.tobaccojournal.com/Sale_of_hand-rolled_cigarettes_banned.55923.0.html

 

 

 

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UPDATED MAPPING OF ANTI-CORRUPTION AUTHORITIES

On 7 July, a post in the always-useful FCPA Blog advised that the Network of Corruption Prevention Authorities (NCPA), which is described as associated with the Council of Europe and is an association of anti-corruption agencies from across the world. The rotating presidency is currently held by the Agence Francaise Anticorruption (AFA). The mapping has been updated in May with further analysis and graphs, as well as references to leading anti-corruption publications.

https://fcpablog.com/2020/07/07/resource-alert-ncpa-releases-updated-mapping-of-anti-corruption-authorities/

The mapping document is at –

https://fcpablog.com/wp-content/uploads/2020/06/NCPA_Analysis_Report_Global_Mapping_ACAs.pdf.pdf

 

 

 

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ISRAEL’S IAI LEASE-TO-BUY OFFERS CHEAPER ROUTE TO MILITARY UAV USE

On 26 May, Aviation Technology reported that Israel Aerospace Industries (IAI) is supplying its drone systems under a lease-to-buy programme offering states with smaller defence and security budgets the ability to keep pace with countries that can afford to buy systems outright. The publication says that IAI has leasing agreements with Australia, Canada, Germany, the European Border and Coast Guard Agency (Frontex), and Israel’s MoD, and Greece. However, the company said more parties that cannot be named at this time are interested in the programme.

https://www.airforce-technology.com/features/iai-lease-to-buy-offers-cheaper-route-to-uas-use/

 

 

 

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UK FINANCIAL SANCTIONS TARGETS BY REGIME

On 7 July, HM Treasury published an updated page providing  lists of all financial sanctions imposed in the UK by country, administration or terrorist group.

https://www.gov.uk/government/collections/financial-sanctions-regime-specific-consolidated-lists-and-releases

 

 

 

 

 

 

 

 

 

 

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FATF REPORT TO G20 ON SO-CALLED STABLECOINS

On 7 July, FATF released this report. In October 2019, the G20 asked the FATF to consider the AML/CFT issues relating to so-called stablecoins. This report sets out the FATF’s views on stablecoins and addresses certain issues, including how the FATF Standards apply and the different businesses involved in stablecoins, and how FATF plans to enhance the global AML/CFT framework for virtual assets and stablecoins.

http://www.fatf-gafi.org/media/fatf/documents/recommendations/Virtual-Assets-FATF-Report-G20-So-Called-Stablecoins.pdf

 

 

 

 

 

 

 

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FATF: 12 MONTH REVIEW OF REVISED FATF STANDARDS – VIRTUAL ASSETS AND VASP

On 7 July, FATF said that it has completed a review of the implementation of its revised Standards on virtual assets and virtual asset service providers, 12 months after the FATF finalised these amendments. The June 2019 revisions to the FATF Standards clearly placed AML/CFT requirements on virtual assets and virtual asset service providers (VASP). A report published by FATF is the  12-month review it undertook to produce, to measure how jurisdictions and the private sector have implemented the revised FATF Standards, as well as monitoring for any changes in the typologies, risks and the market structure of the virtual assets sector. As well as reviewing progress, the report also issues identified with the revised FATF Standards and Guidance and its next steps regarding virtual assets. The review finds that 35 out of 54 reporting jurisdictions advised that they have now implemented the revised FATF Standards, with 3 having prohibited VASP. FATF has agreed to continue its focus on virtual assets and undertake ongoing monitoring and review, with a further report by June 2021. It will also consider whether further updates are necessary. It also undertook to provide update guidance, and to continue its programme of work to enhance international cooperation amongst VASP supervisors.

http://www.fatf-gafi.org/media/fatf/documents/recommendations/12-Month-Review-Revised-FATF-Standards-Virtual-Assets-VASPS.pdf

 

 

 

 

 

 

 

 

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WEBINAR SERIES: INSIDE THE ILLICIT GOLD TRADE – USING FINANCIAL TOOLS AND PUBLIC POLICY TO FIGHT MONEY LAUNDERING

ACFCS and the Global Financial Integrity NGO have joined up to offer 2 webinars on the illegal gold trade.  They will explore using financial tools and public policy to fight money laundering using gold, itself a part of the multitrillion dollar vulnerability of trade-based money laundering. They will also analyse gold trafficking as a key money laundering and financing tool for criminal groups and sanctions evasion. They will look at the illegal gold trade through Colombia, Venezuela, Uganda, along with highlighting the role of commodity trading hubs like Dubai and Switzerland and its impact on the US financial system.

https://www.acfcs.org/special-acfcs-gfi-webinar-series-inside-the-illicit-gold-trade-using-financial-tools-and-public-policy-to-fight-money-laundering/

 

 

 

 

 

 

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SIM-SWAPPING FRAUD IN EUROPE

On 7 July, an article in Info Security reported on recent cases of SIM-swapping, saying that as it requires substantial effort and costs from attackers, we are seeing high net worth individuals and people in positions of corporate, government, or social influence increasingly being targeted. It also asks what is the likely attack formula and how do you know if you have been attacked?  It then discusses how mitigate the risks of such an attack. It also warns that, with SIM-swap cases already rising and additionally cases of criminal activity being linked to the COVID-19 pandemic it is important to highlight that SIM-swapping is a key reason why a phone number may not be the best verifier of a person’s identity as it represents a hole in the authenticator process.

https://www.infosecurity-magazine.com/opinions/proliferation-sim-swapping-fraud/

 

 

 

 

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ISLE OF MAN AND THE UK GLOBAL HUMAN RIGHTS SANCTIONS

On 7 July, a news release advised that the new UK sanctions regime that came into effect on 6 July did not automatically extend to the Isle of Man, but would be extended to the Island in due course (a suitable application order would be required to make it part of Manx law, with any appropriate amendments).  In the meantime, the legislation and the requirements do not apply to Island businesses and persons – except to the extent that, as UK nationals or UK persons (e.g. a UK-registered company) are caught by the new regime’s extraterritorial reach (see the guidance from HM Treasury and the FCO for details).

https://www.gov.im/news/2020/jul/07/financial-sanctions-global-human-rights/

 

 

 

 

 

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FATF PLENARY OUTCOMES, ILLEGAL WILDLIFE TRAFFICKING REPORT RED FLAGS

On 6 July, K2 Intelligence published a Client Alert which considers the FATF documents and illegal wildlife trafficking, ad implications for the private sector.  It then lists a number of Red Flag indicators.

https://s3.amazonaws.com/documents.lexology.com/aa2fa25a-486c-4dc6-83a9-6334e1b52d93.pdf?AWSAccessKeyId=AKIAVYILUYJ754JTDY6T&Expires=1594137286&Signature=Coid5TaRGYQTmLkI8y%2BVUJNuOkg%3D

 

 

 

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ANALYSIS OF UN PANEL OF EXPERTS’ NORTH KOREA SANCTIONS REPORTS

On 1 July, the Institute for Science and International Security has published an analysis of the UN Security Council Panel of Experts’ report concerning the implementation of UN sanctions on North Korea. The report identified 250 alleged violations of North Korea sanctions involving 62 countries, an increase of 6 compared to the previous year. The number of countries engaged in military-related exports/training activities decreased from 15 to 9 (DRC, Egypt, Eritrea, Iran, Myanmar, Rwanda, Syria, Uganda, Yemen (Houthi faction)), but the number importing goods such as coal, earth/stone, and other sanctioned goods increased significantly from 13 to 21 countries. It is said that Iran and Eritrea hosted representatives of entities designated for their activities related to arms sales, and the report says that they warrant special scrutiny, as they provide a platform for the DPRK to sell arms (e.g. to Syria) and also make sensitive procurement for its own WMD and missile programmes.  26 countries and territories were involved in business and financial-related sanctions violations – Angola, Austria, Bulgaria, Cambodia, China, France, Hong Kong, Indonesia, Iran, Italy, Lebanon, Libya, Mozambique, Namibia, Nepal, Nigeria, Qatar, Russia, Senegal, Singapore, Syria, Tanzania, Thailand, Tunisia, UAE, Vietnam.  However, for both of the foregoing lists, China was involved in the majority of violations.  4 states had alleged business arrangements with designated DPRK entities – Cambodia, China, Namibia, Senegal.  17 countries were involved in the illicit supply of goods to North Korea – BVI, China, DRC, Germany, Guatemala, Honduras, Hong Kong, India, Indonesia, Italy, Luxembourg, Marshall Islands, Russia, Senegal, Singapore, South Africa, South Korea.  21 countries are listed as being involved in buying goods from North Korea – Algeria, Bolivia, Botswana, China, Colombia, Costa Rica, Cote d’Ivoire, El Salvador, Germany, Ghana, Guatemala, Honduras, India, Indonesia, Kenya, Russia, Senegal, South Africa, South Korea, Uruguay, Vietnam.  The report contains a sizeable section on shipping-related sanctions.

https://isis-online.org/uploads/isis-reports/documents/North_Korea_PoE_sanctions_analysis_report_July_1_Final.pdf

 

 

 

 

 

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OTHER THINGS YOU MAY HAVE MISSED – JULY 6

Panama Covid-19 update – life goes on, such as for the 2 sons of former President Martinelli, who recently were granted bail (for $7 million) on alleged corruption charges and which would have allowed them to return home. They have now been detained in Guatemala, possibly while on their way home, and face extradition to the US to face charges of conspiracy to money launder.

Meanwhile, the relatively high recent statistics continue, with another 1,185 new cases (now 39,334 total to date) and 23 more fatalities (770 to date since the start of March). There are said to now be 20,528 active cases, with 162 in ICU, 846 in other wards and 676 in requisitioned hotels. 3,197 new tests have been undertaken, and it is said that 18,036 people are now considered to be “recovered”.

6 July 2020

PANAMA: EX-PRESIDENT HAS ASSETS OF NEWSPAPER GROUP RESTRAINED OVER MONEY LAUNDERING ALLEGATIONS

On 5 July, Newsroom Panama reported that former Panama President , Ernesto Pérez Balladares, has had shares and bank accounts of Corporación La Prensa, SA (Corprensa) totalling $1.13 million restrained as part of a civil lawsuit filed 8 years ago against the media for alleged damages following claims that the ex-President was to be interviewed over alleged money laundering. The action has been criticised by the National Council of Journalism.

https://www.newsroompanama.com/business/ex-president-grabs-113-million-newspaper-assets

TURKISH JUDGE RELEASES MANAGER, PILOTS IN CARLOS GHOSN ESCAPE TRIAL

On 3 July, the Wall Street Journal reported that a Turkish judge has ordered the release of 5 defendants accused of assisting Carlos Ghosn in making an undeclared layover in Turkey late last year after he fled Japan.

https://www.wsj.com/articles/turkish-judge-releases-manager-pilots-in-carlos-ghosn-escape-trial-11593803710

US SENATE PASSES SANCTIONS BILL AGAINST CHINESE OFFICIALS OVER HONG KONG

On 5 July, the Wall Street Journal reported that the US Senate has passed by unanimous consent a bipartisan Bill to impose sanctions on Chinese officials who threaten Hong Kong’s limited autonomy, as well as the banks and firms that do business with them, sending the legislation to the president’s desk.  The Bill has already been passed by the House of Representatives.

https://www.wsj.com/articles/senate-passes-sanctions-bill-against-chinese-officials-over-hong-kong-11593707277

IRANIAN MILITARY-OWNED CONGLOMERATE SETS UP RETAIL OPERATION IN VENEZUELA

On 5 July, the Wall Street Journal reported that an Iranian conglomerate owned by the country’s military has established a retail foothold in Venezuela, according to officials and records detailing the move.  The Iranian company is working with the Maduro government’s emergency food program, which is the subject of US enforcement action as an alleged money laundering operation.

https://www.wsj.com/articles/iranian-military-owned-conglomerate-sets-up-shop-in-venezuela-11593972015

ENRON – BATTLE OVER $80 MILLION YACHT

On 6 July, KYC 360 reported that, almost 2 decades after the collapse of Enron, the energy-trading giant, there is a legal dispute  over the proceeds of the sale of a luxury yacht, the Galactica Star — a 213-feet vessel once worth more than $80 million. US authorities seized the yacht in 2018 after filing a lawsuit to recover assets it said were acquired by Nigerian businessman Kolawole Aluko. It says that prosecutors alleged that Aluko bought the yacht with bribes paid to Diezani Alison-Madueke — the first female president of OPEC and a former Nigerian oil minister. The boat was auctioned for $37 million in 2019 and renamed Illusion. In May, after Nigeria dropped its own claim to the funds, a US court agreed that the proceeds should be retained by the US government, but Enron Nigeria Power Holding Ltd says it’s entitled to part of the takings and is demanding $22 million.

https://www.riskscreen.com/kyc360/news/enron-legacy-returns-in-battle-over-80-million-yacht/

THE BIZARRE ENDANGERED SPECIES IMPORTED INTO IRELAND

On 6 July, the Irish Examiner carried an article about some of the items that people unsuccessfully tried to smuggle into the country through airports and mail centres last year. These included more than 2 dozen dead seahorses, 2 desiccated snakes and a pair of alligator heads, wildcat teeth, a turtle shell, and 2 kg of meat from a near-threatened species of antelope, a pair of dead snakes and 2 plastic bags full of meal worms from Angola.

https://www.irishexaminer.com/breakingnews/ireland/seahorses-snakes-and-wildcat-teeth-seized-by-customs-1009422.html

12-MONTH BARBADOS WELCOME STAMP FOR VISITORS PROPOSED

On 2 July, Invest Barbados said that the PM had said that the Barbados Government could soon be introducing the 12-month Barbados Welcome Stamp to allow visitors the option to work remotely from Barbados for a year at a time. This would allow persons to work remotely from there using digital services.

https://www.investbarbados.org/newsmain.php?view=TwelveMonth%20Barbados%20Welcome%20Stamp%20For%20Visitors#utm_source=Mondaq&utm_medium=syndication&utm_campaign=LinkedIn-integration

IS MAFIA ENTREPRENEURSHIP EXPLOITING THE PANDEMIC?

A paper from the Global Initiative Against Transnational Organised Crime looks at how the mafia groups have reacted to, or taken advantage of, the effect of Covid-19 in Italy – a country one of the worst affected in Europe.  The Global Initiative Against Transnational Organized Crime (GI-TOC) brought together 4 leading figures in Italy’s fight against the mafia in April for a virtual roundtable to discuss how the mafia is repositioning itself during the pandemic, what the implications are and how the Italian government is responding.

https://globalinitiative.net/wp-content/uploads/2020/04/Italian-Connection-v7.pdf

SOUTH KOREA REJECTS REQUEST TO EXTRADITE CHILD PORNOGRAPHY SITE KINGPIN

On 6 July, the Sydney Morning Herald reported that a South Korean court has rejected an extradition request by the US for Son Jong-woo, 24, a South Korean citizen convicted of running one of the world’s biggest child pornography websites on the dark web.

https://www.smh.com.au/world/asia/south-korea-rejects-request-to-extradite-child-pornography-site-kingpin-20200706-p559k1.html

BRAZIL: FEDERAL POLICE INVESTIGATION FOR FRAUD IN GOVERNMENT PENSION FUNDS

On 6 July, the Rio times reported that the investigation is one of the main priorities of Operation Greenfield, which uncovered losses in Brazil’s largest pension funds. It claims that Economy Minister Paulo Guedes is being investigated in for alleged fraudulent actions from 2009 to 2013.

https://riotimesonline.com/brazil-news/brazil/politics-brazil/federal-police-target-guedes-in-investigation-for-billionaire-fraud-in-state-pension-funds

UK EXPORT FINANCE UNDER FIRE FOR PAST INVOLVEMENT WITH AIRBUS DEALS

On 6 July, various media reported that the agency has been criticised by an anti-corruption group for providing at least £340 million of support to Airbus SE and aero-engine manufacturer Rolls-Royce Holdings Plc to help secure suspect contracts. It backed deals that were later found to have been tainted by graft, according to a report by Spotlight on Corruption. In the case of Airbus, the agency identified wrongdoing but took more than a year to report its suspicions to the SFO, the report said.

https://www.bnnbloomberg.ca/u-k-agency-under-fire-for-past-involvement-with-airbus-deals-1.1461046

https://www.source-material.org/blog/uk-export-agency-waited-a-year-before-reporting-airbus-corruption-evidence

MEXICO: SUSPECTED MEXICAN DRUG CARTEL PLANE CRASH LANDS ON HIGHWAY

On 6 July, Newsweek reported that an aircraft suspected of being used to carry illegal drugs burst into flames after landing on a highway in southern Mexico. It is said that the military later found a van containing more than 850 lb of cocaine, thought to have come from the aircraft. The twin-engine business jet is shown burnt-out on the highway.

https://www.newsweek.com/mexico-cocaine-plane-quintana-roo-1515604

GERMAN PROSECUTOR ARRESTS HEAD OF WIRECARD’S DUBAI UNIT

On 6 July, Reuters reported that German prosecutors have said they had arrested the head of Cardsystems Middle East FZ-LLC, a Dubai-based subsidiary of payments company Wirecard.

https://uk.reuters.com/article/uk-wirecard-accounts-arrests/german-prosecutor-arrests-head-of-wirecards-dubai-unit-idUKKBN2471XP

OECD RELEASES NEW GLOBAL TAX REPORTING FRAMEWORK

On 3 July, the OECD released the Model Rules for Reporting by Platform Operators with respect to Sellers in the Sharing and Gig Economy (MRDP). Digital platforms are required under the MRDP to collect information on the income realised by those offering accommodation, transport and personal services through platforms and to report the information to tax authorities. OECD says that the MRDP are designed to help taxpayers in being compliant with their tax obligations, while ensuring a level-playing field with traditional businesses, in key sectors of the sharing and gig economy. They further seek to avoid a proliferation of different and unilateral reporting regimes, allow for the use of novel technology solutions and help create a sustainable environment supporting the growth of the digital economy. It is also said that OECD will take forward work on the international legal and technical framework to facilitate the automatic exchange of the information collected under the MRDP.

http://www.oecd.org/tax/exchange-of-tax-information/oecd-releases-global-tax-reporting-framework-for-digital-platforms-in-the-sharing-and-gig-economy.htm

THE EXTRACTIVE INDUSTRIES TRANSPARENCY INITIATIVE

On 6 July, the UK Department of Business, Energy and Industrial Strategy published information on the EITI, a global drive to promote the open and accountable management of oil, gas and mineral resources. It is intended to ensure that each country manages its natural resources in a transparent and accountable way. In many resource-rich developing nations the benefits of resource extraction may be lost through mismanagement and corruption.  EITI requires oil, gas and mining companies to voluntarily disclose their payments to government agencies. The payments are then reconciled with government receipts from the companies. This data is published in the annual EITI reports.

https://www.ukeiti.org/

VENEZUELA DENIED ACCESS TO $1 BILLION IN GOLD IN THE UK

On 4 July, Jurist reported that the High Court in London has rejected an application by Venezuelan President Nicolás Maduro access because the UK does not recognize him as president of Venezuela.

https://www.jurist.org/news/2020/07/venezuela-denied-access-to-funds-at-bank-of-england-by-uk-high-court/

WHY “DEVELOPMENT BANKS” IN AFRICA NEED TO FOCUS ON ESG MANAGEMENT

An article from Control Risks on 6 July says that the Development Finance Institution (DFI) community has a critical role in supporting the rehabilitation of the private sector in Africa in the wake of the COVID-19 pandemic, and promoting positive environmental, social and governance (ESG) practices that will result in more resilient and sustainable businesses.  The article looks at how ESG issues have become more pressing in Africa as a result of COVID-19, and the role that DFI play in supporting companies to priorities these challenges.  It then provides recommendations on effective ways for DFI to support their investees through this challenge to ensure a lasting impact.  It argues that DFI need to “future proof” their approach to ESG management, and that this can be done in 3 ways – monitoring and tracking trends and assessing levels of preparedness; revisiting investees’ ESG practices and approaches, focusing specifically on labour relations and crisis preparedness; and with deep stakeholder engagement, particularly around worker/management relationships.

https://www.controlrisks.com/our-thinking/insights/why-dfis-need-to-focus-on-esg-management

UK: LORD CHANCELLOR SEEKS VIEWS ON POST-BREXIT COURT POWERS

On 2 July, the Law Society Gazette reported that the MoJ is seeking lawyers’ views on which British courts should have the power to depart from retained EU case law after the Brexit transition period ends.

https://www.lawgazette.co.uk/law/lord-chancellor-seeks-views-on-post-brexit-court-powers/5104859.article

US CUSTOM INTERCEPTS $5.5 MILLION OF FAKE GUCCI, FACEBOOK AND INSTAGRAM WOMEN’S SLEEPWEAR

A news release from US Customs & Border Protection on 3 July advised that officers had seized 16,340 counterfeit sleeping dresses arriving from China at the Los Angeles/Long Beach Seaport.  It is said that the goods arrived from China in a shipment containing 329 bales of clothing, and in 189 of those bales, officers discovered the counterfeit products hidden in between generic versions of the sleeping dresses in a clear smuggling attempt.

https://www.cbp.gov/newsroom/local-media-release/cbp-intercepts-55-million-fake-gucci-facebook-and-instagram-women-s

THE EFFECTS OF PARALLEL TRADE OF DRUGS IN EUROPE

An article from VOX, the Centre for Economic Policy Research (CEPR) website, on 4 July says that differences in regulated pharmaceutical prices within the EEA create arbitrage opportunities that pharmacy retailers can access through parallel imports.  It discusses recent findings showing that in a country which does not regulate pharmacy retailers’ margins, retailer incentives to bargain lower wholesale prices play a significant role in fostering parallel trade penetration, and that banning parallel imports would benefit manufacturers.

https://voxeu.org/article/effects-parallel-trade-drugs-europe

WHY DOES THE PHILIPPINES ATTRACT FINANCIAL FRAUD?

An opinion piece in the Nikkei Asian Review by a a security analyst and AML consultant on 6 July says that Wirecard is only latest example of the country being caught up in corporate misdeeds. It argues that recent cases point to is a lack of enforcement capacity on the part of the Philippines’ SEC; the Bangko Sentral ng Pilipinas, its central bank; and the Anti-Money Laundering Council (AMLC) – and a lack of the ability and willingness of these bodies to conduct meaningful routine monitoring and verification of financial institutions.

https://asia.nikkei.com/Opinion/Why-does-the-Philippines-attract-financial-fraud

BROOKLYN MAN INDICTED ON CULTURAL ARTIFACTS SMUGGLING CHARGES

A news release from US Immigration and Customs Enforcement on 6 July advised that Ashraf Omar Eldarir, 47, a US citizen, is being charged with smuggling Egyptian cultural property into the US and alleged involvement in the smuggling of nearly 590 artifacts pillaged from Egypt. It is reported that, on 22 January, Eldarir arrived at JFK airport from Egypt with 3 checked suitcases and he falsely declared to CBP that he was carrying goods valued at only $300. However, when officers opened his suitcases they found approximately 590 bubble and foam-wrapped Egyptian antiquities.

https://www.ice.gov/news/releases/brooklyn-man-indicted-cultural-artifacts-smuggling-charges

US SEEKS SEIZURE OF ALL IRANIAN GASOIL ABOARD 4 TANKERS HEADED TO VENEZUELA BASED ON CONNECTION TO IRGC

A news release from US Immigration and Customs Enforcement on 6 July advised that a forfeiture complaint and warrant filed in Washington DC alleges that all petroleum-product cargo aboard 4 ships – Bella (IMO number 9208124), Bering (IMO number 9149225), Pandi (IMO number 9105073), and Luna (IMO number 9208100) – are subject to forfeiture based on the terrorism forfeiture statute. Documents allege a scheme involving multiple parties affiliated with the Islamic Revolutionary Guard Corps to covertly ship Iranian gasoil, obtained via ship-to-ship transfers, to Venezuela. A judge issued a warrant to seize all Iranian gasoline on these 4 vessels, based on a probable cause showing of forfeitability.

https://www.ice.gov/news/releases/warrant-and-complaint-seek-seizure-all-iranian-gasoil-aboard-4-tankers-headed

WHAT IS BEHIND THE FINANCIAL CRISIS IN LEBANON?

For a background on the financial crisis and protests in Lebanon, you could do worse than listening to this 18 May podcast from the Foreign Policy Research Institute in the US. In the podcast, the host interviews the Washington correspondent of The National, the UAE-based newspaper.

https://www.fpri.org/multimedia/2020/05/a-financial-crisis-in-lebanon/

SPANISH COURT CLEARS EXTRADITION OF FORMER OIL EXECUTIVE TO MEXICO

On 6 July, Courthouse News carried an AFP report saying that a Spanish court is allowing the extradition of a former chief executive of Mexican state oil company PEMEX, Emilio Lozoya, its head from 2012 to 2018, who is accused of corruption in Mexico. He was a top advisor to former president Enrique Pena Nieto (2012-18) and allegedly used the bribes to help fund Nieto’s presidential campaign bid and is also accused of having authorised the acquisition by PEMEX of a factory for a $500 million price that prosecutors deem to have been suspiciously high.

https://www.courthousenews.com/spain-court-clears-extradition-of-former-mexico-oil-chief

UAE ARRESTS GOVERNMENT OFFICIAL FOR CORRUPTION

On 6 July, Gulf News reported that a government official at the Ministry of Interior and his accomplices have been arrested on charges of corruption, and for allegedly blackmailing others by threatening them to add their names to a ‘wanted’ list.

https://gulfnews.com/uae/government/uae-arrests-government-official-for-corruption-1.1594054738531

HOW TO IDENTIFY SUSPICIOUS USE OF VIRTUAL CURRENCIES

On 6 July, Barnea Jaffe Lande & CO published an article saying that the Israel Money Laundering and Terror Financing Prohibition Authority has published a document aimed at assisting financial bodies and law enforcement agencies to identify improper activity.  It says that the “red flags” document is intended for providers of financial services in virtual assets, but may also assist different “outer circle” supervised bodies that provide services to such providers. In addition, this document may also help private individuals who hold virtual assets to recognise improper activity.

https://www.jdsupra.com/legalnews/israel-how-to-identify-suspicious-use-22803

MEXICO’S SPIRALLING CRIMINAL MARKET

On 6 July, an article from the Brookings Institute says that recent spectacular attacks have highlighted that Mexican criminal groups believe that they  have essential impunity from law enforcement response. It says the essence of Mexico’s security problem is that 3 decades ago, its law enforcement lost its deterrence capability and has not been able to restore it since. The article contrasts Mexico’s bloody criminality with its extensive drug smuggling and other illegal economies, to those in other regions of the world which can be essentially peaceful.

https://www.brookings.edu/blog/order-from-chaos/2020/07/06/mexicos-spiraling-criminal-market

SAUDI ARABIA: CROWN PRINCE PREPARING NEW CHARGES AGAINST DETAINED FORMER CROWN PRINCE

On 6 July, Middle East Eye reported that Saudi Crown Prince Mohammed bin Salman is in the process of levelling corruption and disloyalty charges against his predecessor Mohammed bin Nayef.  It is reported that that an “anti-corruption committee” will level charges against him for allegedly siphoning billions of dollars through a network of front companies and private accounts when he was in charge of the interior ministry, and that he will be asked to re-pay more than $15 billion that it is claimed that he stole.

https://www.middleeasteye.net/news/saudi-crown-prince-demanding-15bn-bin-nayef

SAUDI ARABIA: CONTROL AND ANTI-CORRUPTION AUTHORITY INITIATED 105 CRIMINAL CASES IN THE LAST YEAR

On 6 July, the Saudi Press Agency reported that the Control and Anti-Corruption Authority had stated that the Authority had initiated 105 cases during the last period and the most prominent cases were as follow.  The news release details some of the most prominent of these cases.

https://www.spa.gov.sa/viewfullstory.php

EY’S SHAMEFUL YEAR – NMC HEALTH, LUCKIN, WIRECARD AND A FAILED ATTACK ON A WHISTLEBLOWER

On 6 July, an article in Forbes was concerned with the common factor in the NMC Health, UAE’s largest private healthcare provider; Luckin, China’s largest coffee chain; and German payments company Wirecard scandals was the involvement of an EY affiliate as auditor. Then, in April, a London court ordered EY to pay $11 million to a former partner in Dubai who blew the whistle on an alleged money laundering scheme by a client and sued for damages and expenses for the retaliation he suffered.

https://www.forbes.com/sites/erikakelton/2020/07/06/eys-shameful-year–nmc-health-luckin-wirecard-and-a-failed-attack-on-a-whistleblower/

US: 10 INDIVIDUALS CHARGED FOR $1.4 BILLION HEALTH CARE BILLING SCHEME

A DoJ news release on 29 June advised that an indictment contained charges against 10 individuals with health care fraud and wire fraud for allegedly participating in a pass-through billing scheme that used hospitals located in rural areas as shells to submit fraudulent claims worth $1.4 billion for laboratory testing. The individuals, including hospital managers, laboratory owners, and billers, were ultimately paid about $400 million by private insurers. It is alleged that the defendants would take over rural hospitals in Florida, Georgia, and Missouri that were in financial trouble using their own management companies.

https://www.justice.gov/opa/pr/ten-defendants-charged-14-billion-rural-hospital-pass-through-billing-scheme

THE STRUGGLE TO ERADICATE MONEY LAUNDERING FROM CAMBODIA

On 6 July, an article from Southeast Asia Globe said that Cambodia has introduced new laws to tackle money laundering following an EU ruling placing the country at “high-risk” for illicit cash flows – but experts say it will take extensive efforts and real political will to end the entrenched practice in the Kingdom.

https://southeastasiaglobe.com/the-struggle-to-eradicate-money-laundering-from-cambodia/

PANAMA: MARTINELLI SONS DETAINED IN GUATEMALA

On 6 July, Newsroom Panama and local media in Panama reported that Ricardo Alberto Martinelli Linares and Luis Enrique Martinelli Linares, sons of former Panama President, Ricardo Martinelli, have been detained in Guatemala. They were detained on a US request for extradition to the US on charges of conspiracy to commit money laundering. It is said that they were detained as they were preparing to board a private humanitarian flight in an aircraft reportedly owned by their father. It is reported that they carried passports that accredited them as members of the Central American Parliament (Parlacen), whose headquarters are in Guatemala, and said they had Italian-Panamanian nationality. Recently, one of the brothers had requested permission to enter Panama (which is under severe lockdown) and they were given bail of $7 million each on charges there relating to alleged corruption.

https://www.newsroompanama.com/news/martinelli-sons-seized-in-guatemala-in-us-money-laundering-probe-1

 

 

 

 

 

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TRADING HALTED IN PORTUGAL ENERGY PROVIDER AMID CORRUPTION PROBE

On 6 July, AP reported that the Lisbon stock exchange suspended trading in Portugal’s national energy provider EDP and its international renewable energy division after media reports said a magistrate had suspended the chief executives of both companies amid a major corruption investigation. EDP is one of Portugal’s biggest companies, with significant interests in the US renewable energy market and businesses in 19 countries on 4 continents. Its biggest shareholder is China Three Gorges, with about 21.5%.

https://apnews.com/b58f66c5b74374a3ff0f1ca1fc0167c6

 

 

 

 

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UK ADDS 49 NAMES TO SANCTIONS LIST USING NEW HUMAN RIGHTS ABUSE SANCTIONS LEGISLATION

A Notice from HM Treasury on 6 July advised that following the Global Human Rights Sanctions Regulations 2020 being laid before Parliament, HM Treasury has imposed financial sanctions on 49 individuals, adding them to its Consolidated List.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/898044/Notice_Global_Human_Rights_060720.pdf

 

 

 

 

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US SEEKS SEIZURE OF ALL IRANIAN GASOIL ABOARD 4 TANKERS HEADED TO VENEZUELA BASED ON CONNECTION TO IRGC

A news release from US Immigration and Customs Enforcement on 6 July advised that a forfeiture complaint and warrant filed in Washington DC alleges that all petroleum-product cargo aboard 4 ships – Bella (IMO number 9208124), Bering (IMO number 9149225), Pandi (IMO number 9105073), and Luna (IMO number 9208100) – are subject to forfeiture based on the terrorism forfeiture statute. Documents allege a scheme involving multiple parties affiliated with the Islamic Revolutionary Guard Corps to covertly ship Iranian gasoil, obtained via ship-to-ship transfers, to Venezuela. A judge issued a warrant to seize all Iranian gasoline on these 4 vessels, based on a probable cause showing of forfeitability.

https://www.ice.gov/news/releases/warrant-and-complaint-seek-seizure-all-iranian-gasoil-aboard-4-tankers-headed

 

 

 

 

 

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SECOND EDITION OF THE FCPA RESOURCE GUIDE

fcpa

The DoJ and SEC have jointly published the 2nd Edition of “A Resource Guide to the US Foreign Corrupt Practices Act”, originally published in November 2012. It is designed to provide companies, practitioners, and the public with detailed information about the statutory requirements of the FCPA while also providing insight into DoJ and SEC enforcement practices through hypotheticals, examples of enforcement actions and anonymized declinations, and summaries of applicable case law and DoJ opinion releases.

https://fcpablog.com/wp-content/uploads/2020/07/fcpa-guide-2020_final.pdf

 

 

 

 

 

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UK FREEPORTS: AN OPPORTUNITY FOR BUSINESSES?

A briefing from Dentons on 6 July says that, as the UK Government consultation on freeports post-Brexit closes on 13 July, it sets out the key elements, both by way of reminder of the final opportunity to submit views and a look ahead to proposals that one can expect to follow after the consultation closes.

https://www.dentons.com/en/insights/articles/2020/july/6/uk-freeports-an-opportunity-for-businesses

 

 

 

 

 

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THE CRIME-FRAUD EXCEPTION (CFE) – HOW CAN AN ALLEGATION OF WRONGDOING OVERRIDE LEGAL PROFESSIONAL PRIVILEGE (LPP)?

A blog post from Corker Bining on 5 July posed this question and is concerned with the so-called ‘crime-fraud exception’ (CFE), an example of where LPP is sidestepped by establishing that it never existed in the first place. It says that a recent High Court case is an excellent primer on CFE, not least because it highlights areas in which it may currently be underutilised or misunderstood.

https://www.corkerbinning.com/crime-fraud-iniquity-wrongdoing-legal-professional-privilege/

 

 

 

 

 

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