Panama Covid-19 update – concerns at the northern border, as the situation in Costa Rica appears to worsen, with an average 18 deaths per day. Meanwhile, here in Panama new cases and active cases continue to slowly increase again – with 389 new cases reported today and 3 fatalities, with 3,965 active cases, of which 58 in ICU and 306 in other wards.
6 MAY 2021
MoneyGram’s COMPLIANCE PROGRAM APPROVED AFTER 8 YEARS OF OVERHAULS
The Wall Street Journal reported that the move brings company one step closer to concluding settlement agreement reached with the DoJ in 2012 over AML failures. An “extreme” focus on transaction monitoring and know-your-customer rules helped MoneyGram International Inc. move closer to concluding a long-running settlement agreement, the company’s compliance chief said. The company created a new rules engine for identifying suspicious transactions, among other changes.
NEW SAUDI LAW BOOSTS EFFORTS TO COMBAT FINANCIAL FRAUD
On 5 May, Arab News reported that authorities in Saudi Arabia approved a new law designed to combat financial fraud and breach of trust. The new legislation defines all aspects of financial crimes in detail and sets out the maximum penalties, while attempting to take into account the rapid pace of technological advances around the globe.
On 5 May, the Strife website published an article about the Tatmadaw (the official name for the armed forces of Myanmar). Its military leadership has long nurtured a form of “crony capitalism, ,an economic system in which individuals and companies with political connections and influence are given unfair advantages. Senior generals and officers, operating through 2 military-run conglomerates – Myanmar Economic Corporation (MEC) and Myanmar Economic Holdings Limited (MEHL) – have been able to leverage the military’s coercive power to secure preferential access to key sectors of the economy, such as the lucrative jade mining industry. There is a network of commercial interests and holdings is essentially a mechanism to project military influence across the economy and reward members for their loyalty. In 2019, these military-connected entities came under threat when the NLD party secured control over the general administrative department controlled by the military and began to introduce laws regulating the jade and gemstone industry.
On 5 May, This is Money reported that 207 Regent Street is a smart Portland stone building in central London, with 5 floors based above a shoe shop. While the rent should be eye-watering, floor 3 could be yours for just £24 a month — as long as you don’t mind sharing with 3,900 other companies – because 207 Regent Street is what’s known as a virtual office with none of the companies’ staff based at the address, and any post is just forwarded on to their ‘real’ location.
ETHIOPIA TO DESIGNATE TPLF, OLF-SHENE AS ‘TERROR’ GROUPS
On 1 May, Al Jazeera reported that Ethiopia has added 2 armed groups to its “terror list” – the Tigray People’s Liberation Front (TPLF) and the OLF-Shene, a military splinter group from the Oromo Liberation Front, mostly in the Oromia region.
FRENCH POLICE DETAIN 8 MEN ACCUSED OF FINANCING TERRORIST ACTIVITY IN SYRIA
On 28 April, RFI reported that French anti-terrorist police have detained eight people in connection with an investigation into a terrorist financing network in Syria. 6 of the men, aged 28 to 48 are Russian, another is Georgian, and according to sources close to the investigation, some are connected to the Chechen community. Meanwhile, 6 men suspected of being members of the Islamic State or funding it were arrested in Denmark.
NORTH KOREA TO SEND MORE WORKERS TO MONGOLIA IN MAY
On 6 May, Daily NK reported that North Korean authorities plan to send workers to Mongolia this month, and this comes after the country’s leadership sent new batches of workers to Russia in March. It is said that the moves suggest that North Korea is expanding its efforts to raise funds following a shortage of foreign currency due to difficulties caused by COVID-19 and continuing international sanctions.
IS CONFIDENTIALITY CAUSING PROBLEMS FOR CLAIMANTS IN ART FRAUD CASES?
On 6 May, a post on the Art Law & More blog from Boodle Hatfield is concerned with a recent court case involving the use of Norwich Pharmacal applications. The claimant in the case sold a painting using an agent (now in prison in New York following a series of art frauds) but never saw her money. Without knowing any more about what had happened to her painting, who the buyer was, and the proceeds of sale, the claimant was left without the details needed to bring a claim. However, a successful Norwich Pharmacal application allowed her to find out further details of the transaction from the buyer’s representatives. In the case, the court commented that the fraudster involved had exploited market customs of confidentiality to carry out serial fraud in the international art market.
CONSEQUENCES OF BREXIT FOR THE CIRCULATION OF ARTWORKS
On 26 April, an article Luxembourg law firm Wildgen set out to briefly outline the main post-Brexit consequences that are likely to impact the circulation of artworks or cultural goods by answering the main practical questions that those involved in the Luxembourg art market are asking themselves in terms of formalities to be completed, taxes to be paid or legislation to be applied.
On 28 April, an article from Brdies LLP posed this question. It explains that UK businesses trading with the EU need an Economic Operator Registration and Identification (EORI) Number. But, it says, one question which was until recently unclear is whether businesses need both a UK and an EU EORI number. It points out that if a business only deals with import or export declarations in the UK, with a customer/client completing the equivalent declaration on the EU side of the border, then it only needs a UK EORI number. If registered for UK VAT, a UK EORI number should already have been assigned by HMRC.
DANISH PUMPS SUPPLY WATER TO CRIMEA DESPITE EU SANCTIONS
On 6 May, Taiwan News reported that getting water to the Ukrainian peninsula has been difficult following Russia’s annexation of Crimea in 2014. To improve the water supply in the city of Simferopol waterworks were constructed to tap an artesian aquifer using powerful, modern pumps. It is said that the pumps are, according to the Russian anti-corruption initiative, Scanner Project. According to the images seen by Deutsche Welle, 7 Grundfos CR 185-8 A-F-A-V-HQQV pumps were installed in the waterworks. They are the newest and most powerful models currently available and not officially for sale on the Russian market and, according to the technical specifications, the pumps are also equipped with Siemens motors. Denmark’s export control regulators say the matter was being looked into. Danish law calls for a fine or imprisonment of up to 4 months for violations of sanctions and up to 4 years where there are aggravating circumstances, Danish authorities said.
US TARGETS CENTRAL AMERICA OFFICIALS FOR POSSIBLE SANCTIONS OVER CORRUPTION
On 6 May, Radio New Zealand reported that the Biden Administration plans to release by the end of June a list of corrupt Central American officials who may be subject to sanctions. US officials see corruption as one of the main drivers for the flow of migrants – along with poverty, gang violence and the fallout from hurricanes last year.
LIBERIA IMPOUNDS 2.2 TONNES OF HARMFUL CHEMICALS ‘SMUGGLED’ FROM GUINEA
On 6 May, the Liberian Observer reported that the Environment Protection Agency (EPA) had seized over 2.2 tonnes of chemical smuggled into the country from Guinea. The confiscated chemical was packaged and labelled as sodium hypochlorite (bleach) — a compound most frequently used as a disinfecting agent for drinking water treatment. However, a second label identified it as cyanuric acid — a chemical used to prevent chlorine loss in swimming pools. The article also refers to an earlier dumping case. In January 2020, the anti-smuggling unit at the Free Port of Monrovia quarantined 4 40-foot containers after finding out that an unusual and foul-smelling odour was emanating from the containers, which had been smuggled into Liberia from Greece by a US waste management company.
UK: PROCESS FOR SUBMITTING A MODERN SLAVERY STATEMENT
On 6 May, the Home Office released guidance on what the required and optional questions are for submitting a modern slavery statement on the UK Government registry. It outlines the process for submitting a modern slavery statement on the government registry, and includes all the pages in the submission journey and questions at each stage, with the required and optional sections marked.
UK – POLICE POWERS: PRE-CHARGE BAIL AND GOVERNMENT RESPONSE TO CONSULTATION
On 6 May, the Home Office published the Government’s response to the issues raised during the consultation, an evidence review of pre-charge bail, the impact of the proposed changes and details of the 844 responses received.
FCA FINES SAPIEN CAPITAL LTD FOR SERIOUS FINANCIAL CRIME CONTROL FAILINGS IN RELATION TO CUM/EX TRADING
On 6 May, a news release from the FCA advised that a £178,000 fine had been imposed for failings which led to the risk of facilitating fraudulent trading and money laundering. The fine was reduced due to serious financial hardship. In 2015, it is said that Sapien failed to have in place adequate systems and controls to identify and mitigate the risk of being used to facilitate fraudulent trading and money laundering in relation to business introduced by the Solo Group. The Solo trading was characterised by what appeared to be a circular pattern of extremely high value trades undertaken to avoid the normal need for payments and delivery of securities in the settlement process. The trading pattern involved the use of over the counter (OTC) equity trading, securities lending and forward transactions, involving EU equities, on or around the last day securities were cum dividend. The FCA investigation found no evidence of change of ownership of the shares traded by the Solo clients, or custody of the shares and settlement of the trades by the Solo Group. Sapien did not undertake appropriate due diligence and failed to perform effective risk assessments on the Solo clients.
QATAR ORDERS ARREST OF FINANCE MINISTER OVER ALLEGED CORRUPTION
On 6 May, the Saudi Gazette reported that Qatar’s public prosecutor has ordered the arrest of the country’s finance minister, and the attorney general ordered the arrest of the Minister of Finance Ali Sharif Al-Emadi for questioning him over alleged misuse of public funds and abuse of power.
WORLD BANK GROUP SILENT ON OFFICE ON MYANMAR MILITARY-OWNED LAND
On 6 May, OCCRP reported that the World Bank Group has refused to say if it is considering moving out of the office it rents in a complex on military-owned land. Shangri-La Asia Ltd, which owns Sule Square, a high-end development in the centre of Myanmar’s commercial capital, Yangon, hosts the World Bank Group and other foreign companies and institutions. The land Sule Square sits on is owned by the Quartermaster General’s Office, which oversees military businesses.
UK: TRIAL SET FOR “MOST SERIOUS ALLEGATIONS” MADE AGAINST SOLICITORS IN CIVIL COURTS
On 6 May, Legal Futures reported that “the most serious allegations ever levelled against English solicitors in civil proceedings” will be heard in the High Court in London in January 2023. Allegations are made against law firm Dechert, 2 former London partners and a current partner. The case involves allegations of complicity in illegal rendition, abduction, torture and inhumane and degrading treatment, and the knowing procurement of false confessions, all as part of a campaign to harm and discredit perceived political enemies of the ruler of Ras Al Khaimah (RAK), one of the 7 emirates that makes up the UAE. The claimants are Jordanian lawyers currently in prison in the UAE, one of whom held a senior position that the Ras Al Khaimah Investment Authority, the sovereign wealth fund of the Emirate of Ras Al Khaimah.
The Order paper for the 18 May sitting of the Tynwald, the parliament of the Isle of Man, includes this report from the Tynwald Constitutional and Legal Affairs and Justice Committee. It says that, at present, the Attorney General’s core functions include acting as chief legal advisor to the Government, as legal advisor to Members of Tynwald, as guardian of the rule of law and the public interest, and as prosecutor in the Courts of General Gaol Delivery and Summary Jurisdiction. It is evident, it says, that these duties give rise to inherent conflicts when performed by one single person.
EUROPEAN BANKING AUTHORITY (EBA) CONSULTS ON ITS PROPOSALS FOR A CENTRAL AML/CFT DATABASE
On 6 May, a news release from EBA announced that the EBA has launched a public consultation on draft Regulatory Technical Standards (RTS) on a central database on AML/CFT in the EU. This database will be a key tool for the EBA’s recently enhanced mandate to lead, coordinate and monitor AML/CFT efforts in the EU. The consultation runs until 17 June. The EBA is required to establish and keep up to date a central database with information on AML/CFT weaknesses that competent authorities across the EU have identified in respect of individual financial institutions. The database will also contain information on the measures competent authorities have taken to rectify those material AML/CFT weaknesses. Information from this database will be used by individual competent authorities and the EBA to make the fight against ML/TF in the EU more targeted and effective in the future.
An article in Forbes Magazine on 3 May argues that although we are only intercepting a miserable 1% of dirty money, the costs that the regime impose on the finance sector are staggering – and these enormous costs achieve virtually nothing. It proposes a need to plan for this new form of CDD for the digital age.
UK: CONVICTION FOR MAN WHO RAN A FAKE PASSPORT FACTORY FROM HIS HOME
On 30 April, Homeland Security Today reported that an Ecuadorian man has been convicted for running a fake passport factory from his attic in south-west London. Rodolfo Napoleon Carpio Gonzalez, 46, was arrested in 2019. A search of his address revealed that he’d set up his attic as a dedicated workspace for the production of counterfeit passports of various European nationalities, including French, Belgian and Portuguese. He had used the space to produce hundreds of false documents, with investigators believing his activity dated back to at least 2011.
OFAC: NEW FAQ RELATED TO LUOKUNG TECHNOLOGY CORPORATION
On 6 May, OFAC issued new FAQ 893 which explains that on 5 May, a US court issued an order preliminarily enjoining the implementation and enforcement of the EO 13959 prohibitions against Luokung. Consequently, the prohibitions in EO 13959 do not apply with respect to Luokung pending further order of the Court.
INTERNATIONAL CONVENTIONS THAT MAY OVERRIDE STANDARD TRADING CONDITIONS
The British International Freight Association has produced a helpful summary of the main conventions which are relevant to claims for the carriage of goods by road, sea, air and rail. This digest outlines the key components for such claims, including identifying notification dates, time limits to sue, limitation in respect of loss and the relevant jurisdiction. The summary refers to terms and conditions which, dependent on circumstances, may be overridden by international convention, and these become particularly relevant at time of a major incident resulting in claims.
IRELAND: LIQUIDATOR APPOINTED TO SHIPPING LINE AT CENTRE OF ALLEGED FRAUD INQUIRY
On 6 May, Breaking News reported that a provisional liquidator has been appointed by the High Court to a shipping company – Co Louth-based freight forwarding business Fast Shipping Ireland Ltd – which has become “hopelessly insolvent” it is claimed due to an alleged fraud by its managing director.
On 6 May, a news release from Interpol advised that its ID-Art app enables users ranging from law enforcement to the general public to get mobile access to the INTERPOL database of stolen works of art, create an inventory of private art collections and report cultural sites potentially at risk. ID-Art is free to download from the (Android or Google) Play Store and the (Apple) App Store.
On 6 May, Hellenic Shipping News reported that carriers are not willing participants in the trafficking of drugs, but they may be exposed to various losses including fines if drugs are found on-board. It also says that P&I cover for fines arising out of smuggling was changed at the start of the 2021 insurance policy year, and is pointed out that P&I cover ceases in the event that the Ship, with the consent or knowledge of the Member, is being used for the furtherance of illegal purposes. Cover will cease if the Member, although aware of the fact that the crew is using the ship for drug smuggling purposes, fails to take any action to prevent them from doing so. After explaining the main routes and risks associated with drugs smuggling, the article points out that, on 20 February, a new rule came into force in respect of fines and saying that cover for a fine arising out of ’smuggling of goods’ is unavailable as a matter of right (and illegal drugs are considered to be ’goods’ in this context). The P&I cover does, however, allow for applications for discretionary cover and it would be a requirement for the consideration of discretionary cover that the member demonstrates that he took such steps as appear reasonable to avoid the placement of drugs aboard the vessel.
On 4 May, Osler, Hoskin and Harcourt LLP published a guide to amendments to the regulations made under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (the PCMLTFA) and which come into force on 1 June. The amendments are the latest development in a series of ongoing changes that have been made to the PCMLTFA and its regulations since 2019, the changes include new definitions, new virtual currency obligations for all reporting entities, obligations for foreign money services businesses, obligations regarding PEP and heads of international organisations, beneficial ownership reporting obligations, prepaid card obligations etc.
Panama Covid-19 update – firstly, a less than cheery note, as La Prensa reports that the Directorate General of the Social Security (CSS) sent an internal memorandum for the system to “prepare for a possible increase in cases” of Covid-19 in the country; with hospital occupancy at around 50%, although there a few places, such as in Chiriquí and Bocas del Toro, where cases are beginning to increase discreetly.
Meanwhile, numbers creeping up again…with 356 new cases reported today and 4 new fatalities. There are 3,895 active cases, of whom 60 are in ICU and 307 in other wards.
5 MAY 2021
ALLEGED ‘INDIRECT BRIBES’ TO FAMILY MEMBERS OF OFFICIALS IN LA CITY HALL CORRUPTION CASE
On 4 May, KYC 360 reported that, when the U corruption case targeting Los Angeles City Hall first broke into view, much of the public’s attention focused on vivid descriptions of cash bribes, escort services and lavish trips to Las Vegas. But federal prosecutors have laid out another, less sensational set of allegations: that a deputy mayor-turned-real estate consultant worked to arrange “indirect bribes” for city officials by routing the money through those officials’ family members. Experts say indirect bribes can be more difficult to uncover than a typical quid pro quo in which someone gives money directly to a government official.
ASIA’S MULTIBILLION DOLLAR METHAMPHETAMINE CARTELS ARE USING CREATIVE CHEMISTRY TO OUTFOX POLICE
On 4 May, CNN reported that authorities seized a record 175 tons of meth in 2020 throughout East Asia and Southeast Asia, a new record despite the Covid-19 pandemic, according to preliminary UNODC data. But seizures of ephedrine, pseudoephedrine and phenyl-2-propanone (P2P) – the most common chemicals used to make meth – basically dried up. This is said to leave experts with a puzzling question: How was the meth being made? The chemicals are referred to as “pre-precursors” or “non-scheduled-precursors”, and are made and sold legally but diverted for illicit use at some point in the supply chain. It says that pre-precursors are a global problem, with the increasing use of pre-precursors described as a critical challenge to the international drug control system. These issues are more acute in Asia because the illicit drug production centres in the Golden Triangle operatenext door to 2 of the world’s biggest chemical and pharmaceutical manufacturers, China and India, offering ready access to licit chemicals that can be used for illicit means.
US SANCTIONS ON RUSSIA TO HAVE LIMITED IMMEDIATE IMPACT BUT ADD TO POLITICAL, CONTRACT RISKS FOR BUSINESS
On 21 April, Control Risks published an article arguing that coverage understates a new and more significant sanctions reality for companies and investors involved or interested in Russia. It describes a sanctions grey zone for international companies and investors operating in Russia, or for investors considering technology sector targets outside Russia that might have connections to Russian counterparts. It says that companies and investors will need to conduct careful analysis of their current and future sanctions risk exposure when considering their Russian partners or indeed non-Russian investment targets with connections to Russia.
MALTA GAMBLING OPERATORS FAILING TO COLLECT EFFECTIVE AML DATA
On 5 May, iGB reported that the FIAU has warned that too many remote gaming operators only collect data that “add no value” for some high-risk players in conducting AML checks. All sectors, including remote gaming, saw an increase in suspicious transaction reports related to money laundering in recent years, and gambling was listed alongside banking as the 2 “main contributors” of STR. The FIAU says that investigations into gaming operators found that these operators often only gathered details that “add no value” in building a customer’s profile, such as simply stating that the customer is employed.
GAMBLING TRADE BODY EGBA CLAIMS “PUNITIVE” GERMAN TURNOVER TAX VIOLATES EUROPEAN LAW
On 4 May, iGB reported that the European Gaming and Betting Association (EGBA) has argued Germany’s proposed 5.3% turnover tax for online casino would not only push players to unlicensed operators, but is also in violation of EU law.
Carey Olsen has published 2 articles on 4 May about Protected Cell Companies (PCC) and Incorporated Cell Companies (ICC) in Guernsey. Guernsey introduced legislation permitting the formation of cell companies through the Protected Cell Companies Ordinance in 1997 – the first country in the world to do so. A PCC is a single legal entity. It is one company with one board of directors, one memorandum and articles of incorporation and one company registration number, and it comprises a core and any number of cells. An ICC is based on the same principles as the PCC: segregation of assets and limited recourse of creditors to specified pools of assets rather than to all of the assets of the company – but each incorporated cell of an ICC is a separately registered legal entity with its own memorandum and articles of incorporation, its own company registration number and its own board of directors.
KIM KARDASHIAN ORDERED TO REPATRIATE ANCIENT ROMAN STATUE OF ATHENA
On 5 May, the Art Law & More blog from Boodle Hatfield reported that she must forfeit an ancient Roman sculpture, according to a recent civil forfeiture action filed by the US Government. In 2016 Kardashian acquired the piece from an art dealer’s Belgium gallery, although authorities believe she was unaware of its dubious origins.
EUROPEAN AND UK CRITICAL RAW MATERIALS (CRM) SUPPLY CHAINS – “NATIONAL SECURITY” CONSIDERATIONS
On 3 May, an article from Vivien & Associés in France considers the impact of the national security aspects of the foreign investment policies of the UK and the EU. The Covid pandemic has shone a spotlight on global supply chains and their “resilience” in the face of diverse disruptions such as lockdown and quarantine, confirming the truth of the aphorism that “a chain is no stronger than its weakest link”.
NORTH KOREA CONTINUES TO BUILD UP CHEMICAL AND BIOLOGICAL WEAPONS
On 5 May, the Korea Herald and others reported that North Korea continues to build up its chemical and biological weapons, in addition to its other WMD such as nuclear weapons that pose a serious threat to US forces and South Korean allies, a ranking US official has said – and that Kim Jong-un may actually use such weapons in case of a conflict on the Korean Peninsula. The US Department of Defense official named China as one of the largest sources of chemical and biological weapons materials for North Korea and others. In 2020, the US Army estimated the North had up to 5,000 tons of chemical weapons of approximately 20 different types, making it the third-largest possessor of chemical agents in the world.
LAW ON PERSONAL DATA PROTECTION IN PANAMA HAS COME INTO FORCE
On 4 May, Nearshore Americas reported that, on 29 March, the long-awaited Law 81 on Personal Data Protection in Panama, originally passed in 2019, came into force. Like recent regulations on data protection in Latin America, Panama’s Law 81 was noticeably influenced by the European regulatory model and includes some of the innovations from the GDPR.
CFIUS DOES NOT MEAN CHINESE COMPANIES CAN’T INVEST IN THE US
On 5 May, Technode reported that the US government’s Committee on Foreign Investment in the United States (CFIUS) has steadily increased its scrutiny of Chinese investment in US businesses. Recent changes to US laws, including the Foreign Investment Risk Review Modernization Act (FIRRMA), have expanded CFIUS’s ability to block investments that it deems a threat to US national security – but this does not mean CFIUS will block all such transactions: in fact, the majority are still approved.
On 5 May, LSM and others reported that the Disciplinary Committee at Nasdaq Stockholm has ordered Swedbank to pay a fine of 12 annual fees, equivalent €4.57 million over historic failures in the field of AML measures linked to its Baltic operations.
SOUTH AFRICA: FUGITIVE BOBROFF LAWYERS GET BACK SOME OF MONEY FORFEITED TO STATE
On 5 May, IOL reported that former personal injury lawyers Ronald Bobroff and his son Darren – who fled to Australia in 2016 – have seen the Supreme Court of Appeal order that slightly over R7 million of the more than R100m which was earlier forfeited to the State be handed back to them. They had challenged the forfeiture of money said to be hidden in bank accounts in Israel. In 2010, allegations began to surface that their firm had over the preceding 3 years charged clients inflated fees.
MILITANTS ATTACK OIL WELLS IN IRAQ’S NORTH BUT PRODUCTION UNAFFECTED
On 5 May, Defence Web reported that militants using bombs attacked 2 oil wells at an oilfield close to the northern Iraqi city of Kirkuk. Industry sources said the attack had not affected production. A statement from the oil ministry did not comment on production.
UK: IMPORTS OF FIREARMS & AMMUNITION IMPORT LICENSING ARRANGEMENTS 2020
UK Notice to Importers 2944 of 1 April e sets out the licensing arrangements for imports of firearms and ammunition into the UK. It replaces all previous Notices to Importers on this subject and has been updated to reflect the firearms import licensing regime when the UK left the EU whilst detailing the impact of the Northern Ireland Protocol for imports into Northern Ireland.
NEW ACTION AT EU LEVEL AGAINST ‘NDRANGHETA IN ITALY AND GERMANY
On 5 May, a news release from Europol advised that Eurojust and Europol have supported the competent Italian and German authorities with the arrest of 31 suspects in both countries, alleged to be part of the ‘Ndrangheta mafia, operating in different regions of Italy and abroad. Further to this, in the context of a joint investigation team (JIT) between Italy and Germany, 65 other suspects have been identified and their places were searched during a large-scale action, for which around 800 police officers and tax officials were deployed in both countries.
US CUSTOMS SEIZES TOP GLOVE PRODUCTS UNDER FORCED LABOUR FINDING
A news release from US Customs & Border Protection on 4 May advised that officers in Cleveland seized a shipment of 3.97 million nitrile disposable gloves due to information indicating they were made by forced labour, a form of modern slavery. It reminds one that in March, CBP directed personnel at all US ports of entry to begin seizing disposable gloves produced in Malaysia by Top Glove.
VENEZUELA’S MODELLING AGENCIES REPEATEDLY LINKED TO HUMAN TRAFFICKING
On 5 May, Insight Crime reported that, as sex trafficking has soared in Venezuela, seemingly legitimate modelling agencies are repeatedly being linked to cases of human trafficking, often sending women abroad. A recent case is not the first time that Venezuelan modelling agencies have been linked to alleged prostitution and sex trafficking, including involvement with organised crime groups and government officials.
SWITZERLAND: ABOLITION OF THE BEARER SHARE – STATUS QUO AND RECOMMENDATIONS FOR ACTION
On 3 May, an article from Eversheds Sutherland reminded one that companies had until 30 April to convert remaining bearer shares into registered shares or to register a remark in the commercial register explaining why such a conversion is not necessary. Holders of bearer shares whose shares were converted had until that date to disclose their identity to the company in order to be registered in the company share register. Those who have failed to do so before this date can now be registered under stricter conditions only until 31 October 2024, and those who miss this deadline risk having their shares declared null and void and converted into the company’s own shares.
PHILIPPINES DETAINS 48 UNDOCUMENTED CHINESE WORKING AT STEEL PLANT
On 4 May, Radio Free Asia reported that Philippine authorities had detained the Chinese nationals who were working at a steel plant in the southern Philippines without proper papers, in the latest round-up of undocumented workers in the country. The raid was part of a nationwide crackdown on undocumented foreigners. More than 200,000 Chinese workers are employed mostly in the Philippine gaming industry, according to official statistics – but the figure could be much higher because it is said that some airport and immigration officials allegedly accepted bribes to allow Chinese nationals in.
US: PHARMACEUTICAL COMPANY HAS AGREED TO PAY $12.6 MILLION TO RESOLVE ALLEGATIONS THAT IT VIOLATED THE FALSE CLAIMS ACT BY PAYING KICKBACKS
A news release from US DoJ on 4 May advised that the pharmaceutical company headquartered in Delaware, Incyte Corporation, purportedly used an independent foundation as a conduit to pay the co-pays of certain federal beneficiaries taking Incyte’s drug Jakafi, which was approved to treat myleofibrosis in 2011.
On 4 May, the Financial Intelligence Analysis Unit (FIAU) in Malta published this factsheet in a bid to provide more insights on AML/CFT compliance trends. The Enforcement Section of the FIAU has analysed the enforcement actions undertaken in 2019 and 2020 and produced this factsheet which presents the conclusions of this analysis. It is said to provide insights into the most common observations which emanated from the AML/CFT supervisory visits.
UK GOVERNMENT “MAKES PROGRESS” ON ECONOMIC CRIME PLAN TO TACKLE FRAUD AND ECONOMIC CRIME
A news release on 4 May from the Home Office and HM Treasury contained a statement of progress shows improved understanding of threat and how the UK Government is investing in the law enforcement response to economic crime. The Economic Crime Plan was launched in 2019 and set out an ambitious programme of work to tackle fraud and money laundering and set out how the UK’s public and private sectors would work together to improve the response to economic crime.
NGO CALL ON US TO ASSIST HAITIAN GOVERNMENT IN FIGHTING CORRUPTION
On 4 May, Global Financial Integrity published an open letter from a number of NGO to the US Secretary of State saying that the recent violent protests in Port-au-Prince underscore the Haitian people’s acute frustration with weak democratic governance, systemic corruption and the severe poverty that results from the avarice of government officials. It calls on the Biden Administration to play a convening role by establishing a “Haiti Cooperation Group” (HCG) which would bring together multilateral institutions, donor countries and like-minded governments in the region.
In the latest TRACE podcast, Ike Sorkin, lawyer to both Bernie Madoff and Jordan Belfort, talks through their criminal financial schemes and how regulatory safeguards failed (This episode was originally published in June 2017).
UK: JUDGE CONDEMNS ‘REPREHENSIBLE’ BARCLAY OVER MONEY DISPUTE WITH ESTRANGED WIFE
On 5 May, the Belfast Telegraph reported on the outcome of the bitter divorce battle involving Sir Frederick Barclay, 86, one of a famous pair of twins who owned the Daily Telegraph and the Ritz, amongst other things. The judge said that Barclay sold a luxury yacht and “applied the equity for his own use” in breach of orders, and described his actions as “reprehensible”. A ruling sees the ex-wife receive £100 million (she wanted £120 million), though Sir Frederick had made an offer which might have led to Lady Barclay receiving nothing, and this after a 34-year marriage.
On 5 May, Field Fisher published the April edition of its Data Protection Times containing the latest updates from the data protection world, from its Privacy, Security and Information law team. It includes news on the question of adequacy for the UK vis a vis the EU on the transfer of personal information, with a review expressing some concerns, such as how the UK’s legal system will evolve, aspects of onward transfers and the mention and analysis of the term “lawful interception”. This has resulted in a request for an extension of time for MEPs to review the opinions and make a ruling.
DRAFT LEGISLATION FROM THE EUROPEAN COMMISSION SHOWS THE COMING AI LEGAL LANDSCAPE
On 5 May, the Compliance & Enforcement blog from the Program on Corporate Compliance and Enforcement from the New York University School of Law published Part III of a 5-part series by the authors on The Future of AI Regulation. Part I discussed US banking regulators’ recent request for information regarding the use of AI by financial institutions; and Part II outlined key features of the EU’s draft AI legislation – which is discussed further in this Part.
LOW INCOMES TAX REFORM GROUP (LITRG) RESEARCH REPORT LOOKING AT THE USE OF ‘UMBRELLA’ COMPANIES
Politics UK reported that, in a 150-page report issued on 6 April, LITRG takes a deep dive into the world of labour market intermediaries in the UK, with a large focus on umbrella companies. The report explores the benefits and complexities of umbrella companies. It also explores other types of labour market intermediaries and the use of disguised remuneration schemes which are used to pay workers instead of traditional wages.
ROYALTY PROPOSAL PUTS HALF OF CHILE’S COPPER MINES AND 25% OF OUTPUT AT RISK
On 5 May, Metal Bulletin reported that the head of mining association Sonami has claimed that almost half of Chile’s copper mines could be forced to halt operations in the future due to higher production costs if a proposed law to increase royalty taxes on the metal is approved.
UK: A RECORD NUMBER OF FINANCIAL SCAMS ARE BEING UNCOVERED
On 5 May, This is Money reported that a total of 219 warnings about sham firms were issued by the FCA last month. It is believed to be the most of any month on record and was nearly double March’s figure of 114. The frauds include those which are illegally selling financial products such as bonds, foreign currency exchange and shares without authorisation, as well as those pretending to be legitimate businesses.
SYRIA’S RIFAAT AL-ASSAD: FROM ‘BUTCHER OF HAMA’ TO REAL ESTATE TYCOON
On 5 May, France 24 carried an article as the appeal of Rifaat al-Assad goes ahead in Paris. Syrian President Bashar al-Assad’s uncle was initially convicted of money laundering as part of an organised gang, embezzlement of public funds and aggravated tax evasion. The article looks back at the long career of this Assad dynasty scion who amassed a colossal European property empire. Heis accused of fraudulently building a French property empire estimated at €90 million.
FORMER MINISTER IN BARBADOS SENTENCED 2 YEARS IN US PRISON
On 5 May, TeleSUR reported that Barbados’ former minister of Industry and Commerce Donville Inniss has been sentenced to 24 months in a US Federal Prison on money laundering charges. He was sentenced for his role in a scheme to launder bribe payments from the Insurance Corporation of Barbados through banks in New York.
CLSA PREMIUM NEW ZEALAND LIMITED (CLSAP NZ) HAS ADMITTED TO BREACHES OF THE ANTI-MONEY LAUNDERING AND COUNTERING FINANCING OF TERRORISM (AML/CFT) ACT
On 5 May, a release on Mondo Visione reported that the regulator FMA had commenced proceedings in 2020 alleging CLSAP NZ failed to comply with its obligations under the AML/CFT Act between April 2015 and November 2018. CLSAP NZ, formerly KVB Kunlun New Zealand Limited, is the local subsidiary of the Hong Kong parent, CLSA Premium Limited. CLSAP NZ provides derivatives trading services and is licensed by the FMA as a derivatives issuer.
US COURT AUTHORISES “JOHN DOE” SUMMONS TO SEEK NAMES OF US TAXPAYERS WHO USED CRYPTOCURRENCY
A release on Mondo Visione on 5 May advised that a federal court has allowed the IRS to serve a John Doe summons on Payward Ventures Inc, and subsidiaries seeking information about US taxpayers who conducted at least the equivalent of $20,000 in transactions in cryptocurrency during the years 2016 to 2020. The IRS is seeking the records of Americans who engaged in business with or through Kraken, a digital currency exchanger headquartered in San Francisco.
WILL A NEW ANTI- PIRACY FRAMEWORK SOLVE THE GULF OF GUINEA’S PIRACY WOES?
On 4 May, Dryad Global posed this question, saying that the latest self-enforcing regional commitments aimed at improving maritime security in the Gulf of Guinea have been announced by the Inter Regional Coordination Centre Yaoundé (ICC) and the Nigerian Maritime Administration and Safety Centre (NIMASA).
On 5 May, Dryad Global carried a feature and video illustrating the depths to which drug smugglers are going in their attempts to move their illicit cargo. The Hellenic Coast Guard has released video of a drug seizure hidden underwater behind the grate on a water intake in a bulk carrier’s hull.
On 4 May, Finance Isle of Man (a Government agency) reported that the recent 61st MONEYVAL Plenary Council meeting confirmed that the Isle of Man is no longer required to report to MONEYVAL on an annual basis. This decision is said to reflect the progress of the Isle of Man in developing its technical framework and provides reassurance to industry on the island. However, it does admit that the Isle of Man is currently remains in the ‘enhanced follow-up’ process, as are many other countries, and that this will continue to be the case until a further on-site review takes place.
Transparency International in the UK has published a report called “Make it Count” explores why and how a company ought to measure the effectiveness of its approach to anti-corruption. We analyse what is understood by “measuring effectiveness”, highlight practical considerations, and provide examples of metrics that are proving useful for companies.
On 4 May, the Law Society Gazette reported that the UK should not be allowed to join the Lugano Convention, the European Commission has said, in a potentially major blow to judicial cooperation across Europe. The Convention is an agreement setting out which country’s courts may hear cross-border disputes and which decisions can be enforced. Losing the Lugano framework means reverting to the national laws of each individual country to decide which court has jurisdiction over a legal issue and whether a judgment will be recognised.
Panama Covid-19 update – the Rt infection rate remains at 1., with another 320 new cases and 4 more fatalities reported today. There are currently 3,872 active cases, with 62 in ICU and 268 in other hospital wards
4 MAY 2021
DNB TO BE FINED $48.1 MILLION FOR AML INADEQUACIES
The Wall Street Journal reported that the lender acknowledged shortcomings related to CDD and said it has since strengthened efforts. The fine was imposed by Norway’s financial supervisory authority, Finanstilsynet,
On 12 April, Osborne Clarke published an article saying that the new Whistleblowing Directive is due to be implemented by EU Member States by the end of 2021. Businesses operating in the EU will need to review their policies and procedures in line with Member States’ requirements. The Directive provides protections for employees who report concerns from dismissal, degradation and other forms of discrimination. It also widens the net for protection, with job applicants, former employees, supporters of a whistle-blower and journalists also within scope.
FRENCH ANTI-CORRUPTION AGENCY ASSESSES PROGRESS IN ITS FIGHT AGAINST CORRUPTION
On 13 April, an article from Osborne Clarke says that the French Anti-corruption Agency (AFA) issued a report assessing the progress of its multi-annual national plan to fight against corruption for 2020-2022, which was launched on 9 January 2020. The AFA considers that companies’ anti-corruption programmes are incomplete and that the anti-corruption risk is only fully taken into account by 46% of companies. It says that in 2019, the Public Prosecutor processed 813 corruption cases involving 1,263 perpetrators and 242 legal entities.
IRELAND: LEVEL OF MONEY LAUNDERING DOUBLES AS CRIMINAL ACTIVITY SHIFTS ONLINE
On 4 May, the Irish Times reported that the number of money laundering crimes recorded in Ireland more than doubled last year and have increased six-fold in just 2 years. 524 money laundering crimes were recorded last year, up from 234 in 2019, while there were just 83 such offences in 2018, and fewer than 50 a year were recorded between 2012 and 2017.
On 1 May, an article from Bahamian law firm Parris Whittaker is concerned with a recent decision of the Court of Appeal in London which underlines the importance for businesses to understand the purpose behind a freezing injunction – to restrain unjustified disposals not to restrain all conduct, such as legitimate business pursuits which are pursued in good faith – even if risky; and not to be treated by an aggrieved party as a form of ‘security’ for an alleged debt. It is said that the ruling has provided important clarification on what might be excluded from the terms of a worldwide freezing order.
On 29 April, an article from Garrigues says that the 5th AML Directive has been transposed into Spanish law. This was long after the intended deadline for transposing into national law, which had been 10 January 2020. The article describes the main elements of the new law.
HONEYWELL FINED FOR EXPORTING SENSITIVE TECHNOLOGY TO CHINA
On 3 May, The Drive and others reported that US defence contractor Honeywell have reached a settlement over alleged export control violations. The penalty is for Honeywell’s alleged unauthorised export of dozens of technical drawings relating to components of various aircraft, missiles and tanks to multiple countries, including China. US officials contend that some of the disclosures harmed national security, something that Honeywell denies. Honeywell agreed to pay $13 million in civil penalties, among other things – $5 million was suspended on the condition that the company put it toward “remedial compliance measures”.
On 4 May, Mission Network News reported that Saudi Arabia and 4 neighbouring countries are banning Lebanese produce after massive drug seizures. In April, both Saudi Arabia and Greece made large drugs seizure.
BREXIT: EU COMMISSION COMMUNICATION ON THE UK’S APPLICATION TO JOIN THE 2007 LUGANO CONVENTION
On 4 May, the EU said that the Commission takes the view that the EU should not give its consent to the UK’s request to join the Convention. The Lugano Convention, amongst other things, extends the benefits of the EU’s framework on the recognition and enforcement of civil and commercial judgments to EFTA States (the Uk is now neither an EU nor an EFTA State). The Commission considers that the right framework for future cooperation between the EU and UK in the field of civil and commercial matters is provided by the multilateral Hague Conventions instead of the Lugano Convention. The European Parliament and the Council now have an opportunity to express their views before the Commission informs the Lugano Depositary accordingly.
UK: FCA CLOSE TO PARKING INVESTMENT SCAM SETTLEMENT
On 4 May, International Adviser reported that the FCA is nearing the end of negotiations in its efforts to secure refunds for investors in a parking investment firm accused of running an illegal collective investment scheme. Park First offered investments in multi-storey car parks spaces at Gatwick and Glasgow airports. It raised £230 million from around 4,600 clients, most of whom were elderly, and promised up to 12% returns.
UK: CHARITY FOUNDER JAILED AFTER BEING FOUND GUILTY OF FRAUD AND THEFT
On 4 May, Civil Society News reported that the founder and former director of Little Heroes Cancer Trust has been sentenced to 20 months in prison, after being found guilty of stealing £87,000 from the charity. The Little Heroes Cancer Trust was removed from the UK charity register in 2018.
On 4 May, Atoz reported that a key figure in OneCoin’s money laundering operations, has been arrested in France. A Luxembourg citizen, he is wanted by the US authorities for fraud in the OneCoin cryptocurrency pyramid and was arrested on the basis of a warrant issued by a New York court.
ROMANIAN BUSINESSMAN INDICTED IN COVID MEDICAL SUPPLIES FRAUD CASE HANGS HIMSELF
On 4 May, Universul reported that Romanian businessman and dentist Doru Bertea, indicted for bribery in a medical supplies fraud case, has hanged himself. He was indicted by anti-corruption prosecutors in two bribery cases and was under house arrest. It is said that Romania’s chronically underfunded health system is beset by corruption, inefficiency, and politicized management. It spends he least on healthcare in the EU in terms of the percentage of its GDP.
AFGHANISTAN: 37% INCREASE IN OPIUM POPPY CULTIVATION IN 2020
On 4 May, UNODC announced the release of the Afghanistan Opium Survey 2020. At 224,000 hectares, the area under cultivation was one of the highest ever measured. From the collected data, the potential opium production was estimated at 6,300 tons.
OUSTING OF EL SALVADOR’S TOP PROSECUTOR IMPERILS RULE OF LAW
On 4 May, Insight Crime reported that a decision by legislators aligned with El Salvador’s President Nayib Bukele to oust the country’s top prosecutor may spell the end of several crucial organised crime cases. Attorney General Melara had previously publicly announced that his office had opened investigations looking into the Bukele administration’s alleged profiteering related to pandemic spending and negotiations with the MS13 gang. The Congress, which Bukele’s party controls, also voted to remove 5 constitutional court justices. Concerns about the moves included those expressed by the US Vice-President.
HAITI MASSACRES REVEAL ACTIVE GANG SUPPORT FROM POLICE AND OFFICIALS
On 3 May, an article from Insight Crime says that a new report by Harvard Law School and a Haitian crime observatory alleges that state officials and police assisted in gang attacks that left hundreds of people dead, showing how the government has helped to unleash criminal violence on poor neighbourhood. The researchers lay out how the government of Haitian President Jovenel Moïse allegedly took part in state-sponsored massacres by providing gangs with money, weapons, police uniforms, and government vehicles.
On 30 April, Out-Law published a short explanation explaining statements of truth, saying that under the rules of court in England and Wales, certain documents must include a statement of truth to verify an honest belief in the accuracy of the content.
On 25 April, an article from the Police National Legal Database in the UK says that the number of antique firearms used in crime has remained at a relatively high level over the last few years, with the absence of a legal definition of ‘antique firearm’ being exploited by criminals. Following a public consultation, a new statutory definition for antique firearms has now been legislated. The explores the new definition and the changes to the law in more detail.
THE IMMUNITY OF SERVANTS AND AGENTS OF A FOREIGN STATE AND FORUM NON CONVENIENS
An article from Eversheds Sutherland on 4 May was concerned with a claim brought by an oil & gas company operating in the Kurdistan Region of Iraq against the Kurdistan Regional Government and the then Minister of Natural Resources of the KRG for his refusal to provide the KRG’s consent to an assignment (under the applicable production-sharing contract) and change of control over the relevant oil field. It is said to involve the latest take by an English court on the 2 aspects of English law. The High Court upheld the minister’s arguments and found that it had no jurisdiction and that had the minister not been entitled to avail himself of immunity, he would have stayed the proceedings on the grounds of forum non conveniens. The article identifies the key takeaways from the case.
SIBERIAN MUCKRAKER WHO EXPOSED MASSIVE OIL THEFT FACING 11 YEARS IN PRISON
On 4 May, Rferl reported that Eduard Shmonin, 50, became a journalist whose business model involved digging up dirt on officials and industry players — and then publishing it or withholding it, depending on the bidder. Now prosecutors have asked a court to sentence Shmonin to 11 years in prison on charges of blackmail and distributing pornography — allegations linked to media operations he ran in Russia’s oil-rich Khanti-Mansi Autonomous District in western Siberia. He believes he was targeted for a documentary he released exposing evidence of massive oil theft in the Khanti-Mansi region with the complicity of corrupt law enforcement officials.
UAE ISSUES NEW RULES FOR ‘LOW RISK’ SPECIALISED BANKS TO SERVE EMIRATIS AND RESIDENTS ONLY
On 1 May, Arabian Business reported that the Central Bank of the UAE has issued regulation to cover specialised banks which can only operate using dirhams. The regulation allows the specialised banks to practice different financial activities to serve the local community, such as account opening, card issuance, and retail and wholesale lending.
ARE INTERNATIONAL NORMS ON CHILD LABOUR ACTUALLY WORSENING CHILDREN’S LIVING CONDITIONS?
On 3 May, Swissinfo posed this question in an article which says that the failure of a key agreement on ending child labour in the cocoa industry has forced a reckoning over the taboo of working children. This year, Geneva and the ILO are marking the International Year for the Elimination of Child Labour. 2021 also marks the end of the Harkin-Engel protocol – a 2001 agreement that involved the US, Ivorian and Ghanian governments, the ILO and chocolate manufactures. Its goal was to eliminate the worst forms of child labour in the cocoa industry. A 2020 report commissioned by the US Department of Labour assessing progress showed that 1.56 million children were still in cocoa-related child labour in Ivory Coast and Ghana; and that 94% of children working in cocoa farming were working for either their parents or other relatives.
MALTA: FIAU ANNUAL REPORT FOR 2020 SHOWS THAT IT IMPOSED €4.6 MILLION IN ADMINISTRATIVE PENALTIES AS IT STEPPED UP ENFORCEMENT AND SUPERVISION
On 4 May, Malta Today reported thatinvestment services firms were hit with €1.3 million in penalties last year. Gaming operators were the second hardest hit sector with the FIAU imposing €791,917 in fines for AML control breaches. There were 9 prosecutions by the police last year, following reports passed on by the FIAU. Remote gaming companies accounted for almost half of the STR received by the FIAU last year. It is noted that 61 STR were submitted by Virtual Financial Asset Agents, which were only regulated from 2018. FIAU disseminated more than 4,500 intelligence reports to foreign counterparts, the Tax Commissioner and the police.
FORMER STATE SECURITY MINISTER BONGANI BONGO’S CORRUPTION CASE POSTPONED TO JANUARY NEXT YEAR
On 4 May, SABC reported that he and 10 others have appeared again briefly at Magistrate’s Court facing 69 counts of corruption, fraud, theft, money laundering and contravention of the Public Finance Management Act.
On 4 May, a post on the FCPA Blog says that is only in the last 10 years that incentives for whistleblowing have gained steam in Brazil. It briefly describes the current situation, and says that some legislative proposals that deal with the whistleblower are pending in the Brazilian Congress. However, it says, neither the reward determined by current legislation nor those provided for in draft laws constitute a sufficient incentive for whistleblowing.
US SETTLEMENT WITH US-BASED THERMAL IMAGING COMPANYFLIR SYSTEMS INC
On 4 May, EU Sanctions blog reported that the US Bureau of Industry and Security has announced a settlement with the company for it to pay $307,922 to settle allegations that it violated the Export Administration Regulations.
HIGHLIGHTS FROM USTR ANNUAL SPECIAL 301 REPORT FOR 2021 PROTECTION OF INTELLECTUAL PROPERTY RIGHTS
On 4 May, an article from Crowell & Moring published a report about the US Trade Representative annual report for 2021 on the adequacy and effectiveness of trading partners’ protection of intellectual property rights. It places placed 32 trading partners on the Priority Watch List or Watch List, with Argentina, Chile, China, India, Indonesia, Russia, Saudi Arabia, Ukraine, Venezuela on the Priority Watch List.
On 4 May, Infosecurity reported that a fraudulent website impersonating a biotechnology company to allegedly steal data has been seized by a US Attorney’s Office. “Freevaccinecovax.org” purported to be the domain name of a company that was developing a vaccine for COVID-19. However, the site was allegedly set up to collect the personal information of visitors and use it for nefarious purposes.
BLAMING COMPANY FORMATION AGENTS MISSES THE BIGGER PICTURE ABOUT AML IN THE UK
An article from BCL Solicitors Ltd on 30 April put forward this argument, saying that the NCA is planning a crackdown on company formation agents as part of an AML drive, and the author argues the problems are due to more significant holes in the UK’s financial crime safety net. It is said that the ability of money launderers to bypass formation agents altogether, and to incorporate companies directly through Companies House, means that AML rules against agents – even if perfectly enforced – would not be enough to resolve this problem.
3D REPLICA SHARK FINS TOOL FOR IDENTIFYING SHARK TYPES
The NGO TRAFFIC says that there are over 40 shark and ray species listed in the CITES Appendices and many of these are targeted for their valuable fins, mainly for consumption in Asia. Misdeclaring the relevant species on customs permits is one of the main ways sharks are traded illegally around the world. 22 shark fins from CITES-listed species were 3D-scanned, printed, and painted to provide a training and support tool for frontline enforcement officials required to identify shark fins in international trade. The article provides the full story behind the fins, more on why TRAFFIC made them, and why correct shark fin identification is critical to global shark conservation. The files necessary to 3D-print the fins are available to download.
PROUD BOYS CANADA DISSOLVES ITSELF, MONTHS AFTER DESIGNATION AS TERRORIST ENTITY
On 4 May, the Guardian reported that the far-right group that Canada named as a terrorist entity earlier this year, has dissolved itself, saying it has done nothing wrong, according to a statement by the organisation.
On 30 April, the Law Commission in the UK published a paper and launched aconsultation on proposals to allow for the legal recognition of electronic versions of documents such as bills of lading and bills of exchange. It is also considering reform of the legal treatment of cryptoassets and digital assets and has published a call for evidence as part of that process. It highlights 3 criteria that electronic trade documents would need to meet so that they can be possessed in the eyes of the law and therefore used for global trade as an alternative to paper versions. It claims that currently a single transaction can require between 10 and 20 paper documents, totalling over 100 pages with global container shipping estimated to generate 28.5 billion paper documents a year.
Panama Covid-19 update – another 195 cases reported today, with fatalities up at 5 today. 3,868 active cases include 68 in ICU and 275 in other wards.
3 MAY 2021
GERMAN REGULATOR ORDERS DEUTSCHE BANK TO BOOST MONEY LAUNDERING CONTROLS
On 30 April, the Wall Street Journal reported that BaFin is expanding the role of a monitor it appointed in 2018 to look over implementation, suggesting it still has found shortcomings. BaFin said the bank should “adopt further appropriate internal safeguards and comply with due diligence obligations, in particular with regard to regular customer reviews,” adding the same applied to correspondent relationships and transaction monitoring. It said it was expanding the role of a monitor it appointed in 2018 to look over implementation, KPMG having been appointed.
LEBANESE PROSECUTOR OPENS PROBE INTO CENTRAL BANK GOVERNOR AND BROTHER
On 3 May, Reuters reported that Lebanon’s public prosecutor is said to have launched an investigation into central bank governor Riad Salameh, after a Swiss legal request alleged that more than $300 million had been embezzled from the bank through a company owned by his brother.
On 3 May, the Australian Financial Review reported that AUSTRAC has put banks, casinos and wagering companies on notice by providing detailed guidance of the information it expects to see every time a suspicious transaction is reported. It reminded reporting entities they are expected to spell out exactly what the grounds are for submitting a suspicious matter report (SMR), submit them within 3 days or less and inform law enforcement where required. The updated guidance is contained in 3 separate documents: a checklist, a reference guide and a third document containing crime types and keywords that entities have been instructed not to share.
On 3 May, The Diplomat published an article saying that, as sanctions are reimposed, the country’s old business elite is slowly clawing back the ground lost during a decade of reform. The generals that seized power are from the same group that ruled Myanmar between 1962 and 2010 and as the screws tighten, they are re-visiting the system that kept them in power under their prior incarnation, the State Peace and Development Council (SPDC) junta. Myanmar’s economy is expected to contract by over 20% because of the coup. For the generals and the crony business elite, the SPDC days are viewed with nostalgia, and the current regime is re-visiting many of the policies from that era. While domestic and international pressure will make it nearly impossible for Myanmar to become a mainstream player in the international economy, the generals will likely survive.
SUCCULENT SMUGGLING: WHY ARE SOUTH AFRICA’S RARE DESERT PLANTS VANISHING?
On 3 May, the Guardian carried an article saying that unique species in ‘the world’s most biodiverse desert’ – the Richtersveld – are at risk from a warming planet and the lucrative plant poaching trade. For example, a shows that 85% of the population of the distinctive Pearson’s aloe – endemic to the Richtersveld – has been lost in the past 5 years, having been a stable presence for the previous 4 decades. It is said to be is just one of dozens of species Van Wyk fears may disappear in his lifetime. The plants face a number of threats, but it is the climate emergency and poaching that are having the biggest impact. In total more than 100 Richtersveld species have been uplisted on South Africa’s red list in the past 5 years due to the climate crisis, poaching, overgrazing, but also mining.
MAN EXTRADITED FROM ROMANIA TO US TO STAND TRIAL IN FAKE PET CASE
On 3 May, Universul in Romania reported that the suspect, Desmond Fodje Bobga, 28, a Cameroon citizen, defrauded people looking for companion animals online to alleviate isolation and stress during the pandemic. Puppies, supposedly being shipped domestically in the US to their new owners, never arrived and US federal authorities say the dogs never existed. He is charged with conspiracy to commit wire fraud, wire fraud, forging a seal of the US Supreme Court, and aggravated identity theft.
2021 UN International Year for the Elimination of Child Labour
BRITAIN’S BIGGEST-EVER ‘SUPERGRASS’ AND A HUGE CASE INVOLVING KIDNAP, BALKAN CRIME GANGS AND BRAZILIAN COCAINE
On 2 May, the Gazette Live in the UK reported on how a ‘supergrass’ gave key evidence to put away top level dealers in north-east England. 6 major organised crime group trials saw 29 gangland villains jailed for 250 years. Detective work had started in January 2016 in response to escalating violence on Wearside after a shipping container filled with high purity cocaine, worth around £2 million, was seized from Tilbury Docks in Essex.
MEXICO PORT WORKS ON US-SANCTIONED TANKERS THAT CARRY VENEZUELAN OIL
On 30 April, NASDAQ reported that 3 Cuban-flagged tankers that are under US sanctions for transporting Venezuelan oil to Cuba have been serviced in the port of Veracruz, according to vessel tracking data and industry sources. The maintenance work on the vessels is a potential breach of sanctions on Venezuela. Authorities said to have been unlikely to have checked if the tankers were sanctioned so may have inadvertently authorised blacklisted vessels. The shipyard would just have checked whether a ship was insured and classified, while the port authority would only have authorised a vessel to enter the port.
US: FORMER CEO OF LIVE WELL FINANCIAL CONVICTED IN CONNECTION WITH $200 MILLION BOND FRAUD SCHEME
A news release from US DoJ on 30 April announced that Michael Hild, the founder and former CEO of Live Well Financial Inc, has been convicted of securities fraud, wire fraud, and bank fraud charges in connection with a scheme to fraudulently inflate the value of a portfolio of bonds owned by Live Well in order to induce various securities dealers and at least one financial institution into loaning more money to Live Well. He is said to have used repurchase (“repo”) agreements and collateralised loans.
HONG KONG RECORDS NEARLY SIXFOLD RISE IN TECHNOLOGY-BASED CRIMES IN A DECADE
On 1 May, the South China Morning Post reported that cybercrime reports rose from 2,206 in 2011 to 12,916 last year, while the amount of money involved increased from HK$148 million to HK$2.96 billion. It also reported a sharp rise in online shopping swindles, including mask scams, amid coronavirus pandemic. Last year’s case figure was also up 55% from the 8,322 recorded in 2019. In 2020, police received reports of about 2,400 mask scams involving financial losses totalling more than HK$70 million.
ITALIAN MAFIA’S CUT IN TOURISM SECTOR IS OVER $2.6 BILLION
On 28 April, OCCRP reported that groups take control over legitimate businesses in order to launder revenue from illegitimate enterprises like drug and arms trafficking, experts say. Though $2.6 billion is barely 1% of Italy’s total tourism revenue of over $280 billion, it still represents a significant foothold in one of Italy’s largest industries. Tourism amounts for some 13% of Italy’s GDP. However, border shutdowns and global travel restrictions have put the industry in dire straits.
FORMER NETFLIX EXECUTIVE CONVICTED OF RECEIVING BRIBES AND KICKBACKS FROM COMPANIES CONTRACTING WITH NETFLIX
A news release from US DoJ on 30 April advised that Michael Kail, the former Vice President of IT Operations at Netflix, had been convicted of wire fraud, mail fraud, and money laundering. He had been indicted in 2018, of 19 counts of wire fraud, 3 counts of mail fraud, and 7 counts of money laundering. The indictment also sought forfeiture of Kail’s Los Gatos residential property. The jury returned a verdict of guilty on 28 of the 29 counts.
REMINDER ON ANCHORING SHIPS IN MALAYSIAN WATERS OFF EAST JOHOR
On 30 April, Insurance Marine News reported that Norway-based Gard has released an alert, with details supplied by Jeremy Joseph and Matthew Van Huizen of Joseph & Partners, which reminds Gard members of the current situation regarding anchoring off the Malaysian coast. During the past few weeks several vessels entered with Gard had been detained and fined by the Malaysian Maritime Enforcement Agency (MMEA) for anchoring in East Johor waters without the requisite permissions from the authorities.
NIGERIA: INVESTIGATING THE ‘BOKO HARAM’ PRESENCE IN NIGER STATE
On 30 April, a report from the Hudson Institute says that while previous Boko Haram’s operations have largely been confined to the north-east of the country since 2014, there have now been a string of attacks in the Niger State. It is said that the lines between banditry and terrorism are increasingly blurred, and many questions remain unanswered about the militancy in Niger State. It is said that testimonies suggest a complex and deteriorating situation in Niger State involving multiple sets of militants.
COMMENTARY ON THE UN HIGH-LEVEL PANEL ON INTERNATIONAL FINANCIAL ACCOUNTABILITY, TRANSPARENCY AND INTEGRITY FOR ACHIEVING THE 2030 AGENDA (FACTI PANEL)
On 6 April, the Global Anticorruption Blog published Part 1 of a Commentary. It is said that the final report laid out a series of recommendation for dealing with the problem of illicit international financial flows. Though the report states that it contains 14 recommendations, most of these have multiple subparts, which are really distinct proposals, it is claimed that the report actually lays out a total of 35 recommendations. The author of the blog says that, of the 35 distinct recommendations in the report, 8 of them deal with tax matters (such as tax fairness, anti-evasion measures, information sharing among tax authorities etc) and, while this is an important topic, it is both less directly related to anti-corruption and is said to be well outside the author’s areas of expertise. That left 27 recommendations, and Part 1 of the Commentary deals with 13 recommendations, with the other 14 to follow in Part 2. The recommendations dealt with in Part 1 include that – all countries should enact legislation providing for the widest possible range of legal tools to pursue cross-border financial crimes; the international community should develop and agree on common international standards for settlements in cross-border corruption cases; businesses should hold accountable all executives, staff and board members who foster or tolerate illicit financial flows in the name of their businesses; international AML standards should require that all countries create a centralised registry for holding beneficial ownership information on all legal vehicles, and the standards should encourage countries to make the information public; and promote exchange of information internationally among law enforcement, customs and other authorities.
RESEARCH ON COUNTRIES THAT HAVE ADOPTED THE EU DUAL-USE CONTROL LIST
On 16 April, the European Studies Unit at the Département de Sciences Politiques at Liege University published a report saying that it initiated research on countries that have adopted totally or partially the EU dual-use control list established in Annex I of the Council Regulation 428/2009/EC of 5 May 2009 setting up a Community regime for the control of exports, transfer, brokering and transit of dual-use items (itself updated lastly by EU Regulation 2020/1749/EU of 7 October 2020). The matrix produced is the first draft based on the information available. The authors say that they are almost certain that there are more states who are referring to the EU list. Therefore, this document should rather be seen as a call address to the international community to help us identifying countries that are referring to the EU list.
US DHS ANNOUNCES OPERATION TO TARGET CRIMINAL SMUGGLING ORGANISATIONS
On 27 April, Homeland Security Today reported that the US Department for Homeland security had announced a new counter-network targeting operation focused on transnational criminal organisations affiliated with the smuggling of migrants. The new anti-smuggling effort, called Operation Sentinel, is a collaborative effort with US Customs and Border Protection, US Immigration and Customs Enforcement’s Homeland Security Investigations, US Citizenship and Immigration Services, the Department of State, and the FBI and DEA. Partners in Operation Sentinel will target all personnel and identifiable resources that transnational criminal organisations require to operate. Actions will include the freezing of bank accounts and other financial assets tied to networks, and the suspension and debarment of trade entities.
COLOMBIAN FINANCE MINISTER RESIGNS AMID DEADLY PROTESTS
On 3 May, the Mail Online reported that Colombia´s finance minister resigned following 5 days of protests over a tax reform proposal that left at least 17 dead. His resignation comes a day after President Iván Duque withdrew the tax plan from congress in response to the protests, which have included riots and violent clashes with police. The tax reform, which was aimed at raising $6.7 billion for Colombia´s government as it struggles to pay debts while attempting to provide poor families with subsidies to mitigate the pandemic´s impact. It included a 19% sales tax on gasoline, as well as an effort to expand the country´s tax base by charging income taxes to people making $700 a month or more and a 19% sales tax on utilities in middle-class neighbourhoods, and a wealth tax for individuals with a net worth of $1.3 million or more.
DIGITAL CURRENCIES’ ROLE IN FACILITATING RANSOMWARE ATTACKS: A BRIEF EXPLAINER
On 3 May, the Third Way website published this Explainer on how Bitcoin is used to facilitate ransomware attacks and how criminals try — and sometimes fail — to cover their tracks. It is said that understanding how criminals use digital currencies for ransomware attacks can lead policymakers to solutions in thwarting and enforcing cybercrimes.
US: 3 FLORIDA MEN CHARGED IN $46 MILLION HEALTH CARE FRAUD, KICKBACK, AND MONEY LAUNDERING CONSPIRACY
A news release from US DoJ on 3 May advised that 3 telemarketing company owners have been charged for their alleged participation in a $47 million health care fraud, kickback, and money laundering scheme involving the referral of medically unnecessary cancer genetic tests to labs in exchange for kickbacks. The suspects allegedly participated in a scheme to operate a telemarketing campaign targeting Medicare beneficiaries in an effort to induce them to accept cancer genetic tests regardless of whether the tests were medically necessary or eligible for Medicare reimbursement.
FRENCH LEGAL COMPLAINT AGAINST LEBANON CENTRAL BANK CHIEF
The National on 3 May reported that 2 associations have said they filed a legal complaint against Lebanon’s central bank Governor, Riad Salameh, who they accuse of fraudulently amassing a large fortune in Europe. Sherpa, which specialises in fighting financial crime, and the “collective of victims of fraudulent and criminal activities in Lebanon” said they were also filing against Mr Salameh’s brother Raja, his son Nadi, his nephew, and a close associate at the central bank, Marianne Hoayek, in the case.
AUSTRAC ISSUES AML REMEDIAL DIRECTION TO AUSTRALIAN MILITARY BANK
On 3 May, Mirage News reported that AUSTRAC has issued a remedial direction to Australian Military Bank Ltd (AMB) requiring the mutual bank to review and uplift its compliance with AML/CTF laws. The move follows ongoing regulatory engagement with AMB which identified concerns related to the effectiveness of AMB’s AML/CTF systems and controls.
TURKEY CONVERTS ŞIMŞEK TARGET DRONE INTO KAMIKAZE UAV
On 3 May, Air Recognition reported that the CEO and President of Turkish Aerospace, Professor Temel Kotil said that Şimşek UAV is capable of being used as a kamikaze drone. It was originally a High-Speed Target Drone System programme, initiated in 2009 to meet the increased training requirements of the Turkish Armed Forces.
On 30 April, Accountancy Age published a report saying that accountants and agents dealing with Chinese clients should be aware of the risk of Chinese Underground Banking to their business and mitigate this risk by conducting client due diligence procedures and identifying sources of funds and wealth. It says that Chinese underground banking is commonplace within the Chinese community. Involving the transfer of value between countries without actually moving any funds, the informal value transfer system (IVTS) pre-dates Chinese commercial banking and postal systems, but is now being misused by criminals for commodity-based money laundering such as trafficking drugs and humans in the UK and in many other countries. The problem, and reason for the rise in use of IVTS is that moving money out of China is very difficult and there are significant restrictions on what money leaving the country can be spent on; Chinese law has a strict control on the purposes for which citizens can obtain foreign currency, ordinarily with a $50,000 annual limit for individuals – additionally, since 2017, the maximum allowed value of overseas withdrawals by a private individual using a Chinese bank card is around $14,000.
On 30 April, Computer Weekly reported that a senior lawyer told the Crown Prosecution Service (CPS) that there was a “substantial risk” that police warrants to obtain messages from the encrypted mobile phone network, EncroChat, would be found “unlawful”; and that that the CPS could face “formidable arguments” over the lawfulness of warrants obtained by the NCA. British police have made some 1,550 arrests after obtaining millions of hacked messages from EncroChat encrypted phones, and around 250 prosecutions are pending, involving multiple defendants who are accused of money laundering, supplying drugs, violent crime, or firearms offences.
On 29 April, an article from K & L Gates is concerned with a proposed new law that will introduce far-reaching supply chain due diligence obligations for certain businesses. The proposed law is the EU Directive on Mandatory Human Rights, Environmental and Good Governance Due Diligence, and the Commission has been tasked with drafting a formal legislative proposal for the Directive, to be presented to the European Parliament in Summer 2021. Whilst the Directive is not expected to come into force until late 2022 or early 2023, companies falling within its scope will need to start gearing up to ensure that they are ready when the new requirements kick in. The article summarises the aims of the Directive, who it will apply to, what they will need to do to comply, and what the risks will be if they do not do so. The Directive would apply to large businesses and seek to prevent potential adverse impacts in 3 fields of corporate responsibility: human rights, the environment, and good governance;
Panama Covid-19 update – 260 new cases reported today and 3 new fatalities.
2 MAY 2021
SPAIN BUSTS GANG SMUGGLING 7 TONNES OF HASHISH
On 2 May, Deutsche Welle reported that that 3 people have been arrested in one of Spain’s largest drug busts this year. Investigators said the gang’s tug could traverse the Mediterranean in bad weather to transport the hashish. The gang had apparently set up a front business in the southern Spanish town of Huelva and used it to run their operations.
On 30 April, Al Jazeera published an article and 26-minute video exploring the violent underbelly of Port Moresby, one of the most dangerous cities in the world. The gangs who rule the streets are known to be ruthless. They often recruit young people from the countryside, who move to the city in a desperate bid to escape poverty. The gangs target the country’s wealthy elite, many of whom have become rich thanks to country’s rich natural resources.
SWITZERLAND: EX-ROADS MINISTRY WORKER “PAID TO RIG EMISSIONS DATA”
On 26 April, Swissinfo reported that a former employee at the Swiss Federal Roads Office (FEDRO) and 2 board members of a vehicle exporter have been charged with fraudulently manipulating data to avoid CO2 emissions sanctions. The Swiss federal prosecutor’s office said that the fraud had illegally saved the vehicle exporter from paying $9.8 million in financial penalties relating to emissions.
METHAMPHETAMINE TAKING OVER MEXICO’S DOMESTIC DRUG MARKET
On 29 April, Insight Crime reported that methamphetamine use in Mexico has grown exponentially in recent years and now rivals marijuana as the drug most cited by patients in treatment for substance abuse. It says that until the early 2000s, most of the methamphetamine consumed in the US was produced in domestic laboratories, either tucked away in quiet suburbs outside of major cities or in rural communities. Now, Mexican organised crime groups are the “primary producers and suppliers of low cost, high purity methamphetamine” sent to US consumers, leading to “significant supply” of the synthetic drug in the US market, according to the DEA. As production ramped up, public health officials in Mexico started to notice the emerging threat methamphetamine posed amid a rise in addiction around 2009 or 2010.
RUSSIA SAYS HALF A MILLION PASSPORTS ISSUED IN EASTERN UKRAINE IN LAST 2 YEARS
On 2 May, Rferl reported that Russia’s Interior Ministry says that more than 527,000 people in parts of eastern Ukraine where Moscow-backed separatist formations are waging a war against Kyiv have been granted Russian citizenship over the past 2 years; but that around 40% of applications had been rejected
Panama Covid-19 update – as if a pandemic etc weren’t enough…in the early hours of this morning a magnitude 5 earthquake! It woke me, though in the morning I imagined I dreamed it, until I saw the news. My immediate reaction was that any vibration was not as bad as the “crack of doom” thunder we get in Panama. The earthquake was some 70-80 miles off the Caribbean coast (i.e. the other side of the country), and there are no reports of damage or tsunami…just disturbed sleep!
Meanwhile, 268 new cases reported today and 3 fatalities, with 3,896 active cases – 66 in ICU, 302 in other wards and 177 in “hospital hotels”.
DRAFT LEGISLATION FROM THE EUROPEAN COMMISSION SHOWS THE COMING AI LEGAL LANDSCAPE
On 30 April, a post from the Compliance & Enforcement blog from the Program on Corporate Compliance and Enforcement at the New York University School of Law is Part II of a 4-part series by the authors on The Future of AI Regulation. It says that the so-called “GDPR of AI”, if enacted, would place potentially onerous compliance obligations on a wide spectrum of companies using AI systems. The EU proposes to regulate AI based on the potential risk posed by its intended use: AI systems that pose an “unacceptable risk” would be banned outright; AI classified as “high risk” would be subject to stringent regulatory and disclosure requirements; and certain interactive, deepfake, and emotion recognition systems would be subject to heightened transparency obligations.
PHILIPPINES FLAGGED AGAIN BY THE US TRADE REPRESENTATIVE AS AMONG THE LEADING SOURCES OF COUNTERFEIT MEDICINES
On 1 May, the Manila Bulletin reported that concerns on counterfeit medicines were spotlighted with USTR noting that the review period for the latest report has taken place during the COVID-19 pandemic. The USTR raised this issue against the Philippines 2 years ago. China, India, the Philippines, Vietnam, Indonesia, and Pakistan are said to be the leading sources of counterfeit medicines distributed globally. It also said that the past year, countries reported significant quantities of COVID-19 testing kits, personal protective equipment (PPE) such as N95 and equivalent masks, and sanitizers, detergents, and disinfectants from China that were determined to be counterfeit. Furthermore, the increasing popularity of online pharmacies has aided the distribution of counterfeit medicines.
On 1 May, Mirage News reported that 3 illegal timber exporters have been sentenced after pleading guilty of illegally exporting a total of 208.5 tonnes of sandalwood to the value of A$3 million at the Perth District court. Convicted in December, they were sentenced to terms of imprisonment but released on good behaviour. They had pleaded guilty to aiding, abetting, counselling or procuring to commit an offence by exporting a prescribed good namely sandalwood, where no licence to export had been granted,
On 1 May, the Middle East Monitor reported that, for the first time in Kuwait, the Kuwaiti Public Prosecution has referred 8 judges for trial accused of money laundering in the Bnaider Network cases, with other media claiming that this case is linked to another criminal case.
UK: LAW FIRMS ACTING FOR A BANKRUPT CLIENT NOT REQUIRED TO REVEAL THE SOURCE OF HIS LITIGATION FUNDING
On 30 April, the Law Society Gazette reported a recent High Court case in London in which the judge has ruled that 2 law firms acting for a bankrupt client were not required to reveal the source of his litigation funding. The claimants in a shareholder dispute had applied for disclosure of information and documents relating to the source of funding for legal assistance provided to him by the firms, and had not accepted that the funding was genuinely third-party money and submitted that a freezing order had been breached. It is said to be an important ruling where clients are subject to freezing orders, and where costs are funded by third parties who want to maintain anonymity for fear of becoming “targets” themselves.
UK GAMBLING COMMISSION MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 2020
On 28 April, CMS Law published an article about the Assessment produced by the Gambling Commission in December. It followed the National Risk Assessment and highlighted the key risks the British gambling industry is facing, and builds on the Commission’s previous risk assessment. The only change in classification is that the risk of terrorist financing has moved from medium to low. Casinos (both remote and non-remote) and betting (non-remote, off-course) remain high risk. The Assessment details the existing inherent, additional inherent and emerging risks within each sub sector. Given the high-risk categorisation of casinos, the article sets out the key risks the Commission has raised in this regard. It is said that the National Risk Assessment noted that gambling is not considered to be an attractive method for terrorist financing, and there is limited evidence to show that the gambling sector is being used for these purposes. However, the Commission noted that operators must still be alert to the risks. It is said that operators must reflect on the learnings and updated risks from the Commission’s Risk Assessment and ensure that these are taken into account to mitigate risk within their own business.
UK: MORE THAN A THOUSAND STOLEN CATALYTIC CONVERTERS RECOVERED FOLLOWING NATIONAL CRACKDOWN
On 29 April, the National Police Chief’s Council reported that police forces across the UK have recovered over a thousand stolen catalytic converters and arrested more than 50 people as part of a joint operation to tackle catalytic converter theft. British Transport Police (BTP) coordinated the operation, codenamed Goldiron. Catalytic converters clean harmful gases before they exit a vehicle’s exhaust pipe and are stolen for the precious metal they contain. These metals have surged in value recently, leading to organised crime networks to commit more offences.
A VISIT TO THE SITE OF THE FUTURE HIGH-LEVEL RADIOACTIVE WASTE RESPOSITORY IN FRANCE
Experts at the Stimson Center share their field notes on a virtual visit to the site of France’s high-level radioactive waste disposal. It is said that the French case underscores the long timelines needed for the addressing technical, political, and societal elements of geological disposal. It serves as a case study for how the different safeguards commitments for nuclear-weapon States are valuable for understanding how designing and operating a future geological repository for high-level waste can be navigated.
The article also includes a helpful brief explanation of grades of waste. It says that radioactive waste is classified differently in different countries but generally relates to the waste’s level of radioactivity. In France, high-level waste (HLW) includes wastes from the reprocessing, or treatment and separation, of used nuclear fuel components. Long lived intermediate-level waste (LL-ILW) includes the cladding from used fuel while low-level waste (LLW) includes contaminated objects such as gloves or cleaning rags.
10 LESSONS FROM THE IRAN VERIFICATION AND MONITORING REGIME
On 21 April, the European Leadership Network published a paper which outlines 10 technical and political lessons relating to the sustainability of the JCPOA, which is currently at risk and illustrated by the course of events over the past 3 years. In the immediate timeframe, the paper highlights the strengths and weaknesses of the JCPOA that need to be understood in order to preserve it or to respond effectively to its collapse. In the longer term, these lessons should inform the architecture of future deals with Iran.
CZECH REPUBLIC: NEW REGULATION ON REGISTRATION OF ULTIMATE BENEFICIAL OWNERS OF LEGAL ENTITIES
On 1 May, an article from Baker McKenzie says that on 1 June the Registration of Ultimate Beneficial Owners Act will take effect, implementing the 5th EU AML Directive in Czech law and introducing new requirements regarding the publicity of selected data on beneficial owners, adopting mechanisms for the verification and checking of genuineness of data maintained in the register, as well as stipulating efficient sanctions for failure to meet certain duties. The article details the needs and requirements of the new Act.
On 30 April, an article in Insight Crime reported that a dozen people in Colombia are accused of laundering nearly $100 million belonging to crime groups ranging from a Mexico cartel to a Colombian drug gang – in a case that reveals how brokers offer their money laundering services to a spectrum of criminal clientele. Between 2017 and 2018, the criminal network laundered $98 million in drug cash, using national and international banking entities to introduce the funds into Colombia’s financial system. Trade-based money laundering was a major feature or the arrangements.
TURKEY ADDS CRYPTOCURRENCY TRADING PLATFORMS TO BUSINESSES COVERED BY AML/CFT REGULATIONS
On 1 May, Ahval and others reported that the Official Gazette said that “crypto asset service providers” would now be responsible for seeing their assets are not used for money laundering or financing terrorism. This comes in the wake of 2 Turkey-based cryptocurrency trading platforms, Thodex and Vebitcoin, being closed after separate investigations for fraud.
CHEMICAL WEAPONS CONVENTION (CWC) CENSURE SYRIA FOR CHEMICAL WEAPONS VIOLATIONS
In its May edition, the Arms Control Association reported that member states of the world’s chemical weapons watchdog have voted to suspend Syria’s rights and privileges under the CWC in an effort to hold that country accountable for repeated chemical weapons use. It was the first time the organization had suspended a member’s rights since the Organisation for the Prohibition of Chemical Weapons (OPCW) inception in 1997. The Syrian Foreign Ministry condemned the report and “categorically denies its use of poison gas in the town of Saraqib or any other Syrian town or village”.
An Occasional paper from RUSI on 30 April examines the illegal wildlife trade in West Africa, and provides recommendations on how to combat it. It says that in the last 5 years, West Africa has emerged as a major source and transit hub in the global illegal wildlife trade (IWT). The industrial scale of the multi-tonne, multi-product seizures originating from West Africa clearly demonstrates that profit-driven organised crime groups are running the trade. The Paper focuses on high-grossing trafficking in elephant ivory, pangolin scales and rosewood and provides recommendations to support the implementation of FATF guidelines in the region.
Panama Covid-19 update – well, I spoke too soon…belated side-effect of the Pfizer jab has now manifested itself in a widespread rash, and a trip to the doctor today. The rash is just tedious and annoying, but I have been told to expect something similar (and a bit worse) when I get the second vaccination at the end of May – but the doctor has already prescribed additional medications to cope with that. Not exactly something to look forward to, but still better than catching Covid!
Meanwhile, another 358 more cases reported today, with 5 more fatalities. With 3,959 active cases, the numbers in the iCU are unchanged at 66, but other wards’ numbers are up a jump to 306 (it was only 269 yesterday).
30 APRIL 2021
ISLE OF MAN MYANMAR SANCTIONS REGIME
On 30 April, the Isle of Man issued a news release advising of a new sanctions regime in respect of Myanmar which replaces the existing Burma sanctions regime, with 23 existing entries amended accordingly.
On 30 April, HM Treasury advised an amended General Licence under the counter-terrorism, ISIL and Al-Qaida sanctions regimes and applying to legal aid and legal services provided by the Legal Aid Agency and others, subject to any legal aid being reported to HM Treasury and there being no direct or indirect benefit for the designated person.
EU GENERAL COURT DISMISSES APPLICATION BY SYRIAN BUSINESSMAN TO ANNUL HIS SYRIAN SANCTIONS LISTING
On 30 April, the EU Sanctions blog reported that the General Court had refused the application of Syrian businessman Mazin Al-Tarazi to annul his inclusion on the Syria sanctions list. He was listed in 2019.
ARGENTINA: POWERFUL FAMILY HAD SECRET DEAL WITH AUSTRIAN BANK OVER POSTAL SERVICE INSOLVENCY
On 29 April, OCCRP reported that a leaked audit shows how the Macri family may have attempted to use a secret agreement with Meinl Bank to manipulate creditors over the landmark Correo Argentino bankruptcy case. The Austrian financial institution swooped in to buy up millions of dollars of debt accrued by Argentina’s postal service after it was privatised and sold to a powerful political family, the Macris. However, OCCRP claims that in 2005, just months before Meinl bought up nearly 40% of Correo Argentino’s debts, the bank signed a secret agreement with an offshore company linked to the Macri family patriarch, Franco Macri; with a secret trust agreement signed with the bank via a Liechtenstein company tied to Franco Macri. Meinl Bank (later Anglo Austrian AAB Bank AG) faced problems linked to the Odebrecht scandal, and individuals and entities connected with former Ukrainian president Viktor Yanukovich. It had its ECB licence withdrawn in 2019.
On 27 April, ENACT Africa reported that meeting the demands of the construction industry in Morocco is putting vulnerable coastal ecosystems at risk. Tourism is essential for the country’s economy. In an ironic Catch-22 situation however, meeting the demands of this industry is indirectly destroying the very coastline that tourists are coming to enjoy.
REPORT: CHILD TRAFFICKING FROM GUINEA-BISSAU TO SENEGAL
On 18 March, ENACT Africa published a report saying that the exploitation of children by organised trafficking syndicates is one of the fastest-growing criminal industries in West Africa. Taking children from Guinea-Bissau to Senegal and forcing them to beg on the streets has become the most visible form of human trafficking in both countries.
ARMS TRANSFERS TO CONFLICT ZONES: THE CASE OF NAGORNO-KARABAKH
On 30 April, the Stockholm International Peace Research Institute published a report which discusses the military build-up in both sides that preceded the 2020 war. It focuses on the role of external arms suppliers and their transfers of major arms and other military equipment to the 2 countries. This discussion forms part of a broader debate on the risks related to international arms transfers. SIPRI estimates that over the decade 2011–20 Russia was the largest exporter of major arms to both Armenia and Azerbaijan. It supplied nearly all of Armenia’s major arms during the period and almost two-thirds of Azerbaijan’s. Israel, Belarus and Turkey were, respectively, the second, third and fourth largest suppliers of major arms to Azerbaijan in 2011–20. However, several other countries supplied smaller volumes of arms to either Armenia or Azerbaijan in 2011–20 – including Jordan, Bulgaria and Slovakia.
On 30 April, the Council of Europe reported that the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL) held its 61st Plenary meeting in Strasbourg from 28 to 30 April. The Plenary discussed and approved the mutual evaluation reports of San Marino and the Vatican. It also adopted follow-up reports of Albania, Hungary, Malta and Slovenia. The Committee also adopted a number of documents related to cooperation with the Parliamentary Assembly and the Committee on Counterterrorism of the Council of Europe.
MALTA: EMPLOYERS GROUP ‘BREATHES SIGH OF RELIEF’ OVER POSITIVE MONEYVAL REVIEW
On 30 April, Malta Today reported that the Malta Employers’ Association has welcomed with “relief” Moneyval’s positive review in the wake of reforms to bolster the fight against money laundering. It said that the outcome was the result of extensive reforms to governance structures that were failing on many counts.
LIBERIA: FIU VALIDATES FINAL NRA ON MONEY LAUNDERING AND TERRORIST FINANCING
On 29 April, the Liberian Observer reported that FIU of Liberia has announced the final validation of the National Risk Assessment (NRA) on Money Laundering and Terrorist Financing in Liberia. The report will be published immediately after the final validation and be distributed to all stakeholders. NRA are currently being held in 11 African Countries along with Liberia, including Niger, Benin, Burkina Faso and Gambia.
DENMARK PROSECUTOR DROPS ALL FORMER DANSKE CEO MONEY LAUNDERING CHARGES
On 30 April, ERR in Estonia reported that Danish prosecutors have dropped all money laundering charges against former Danske Bank CEO Thomas Borgen; who was in charge at a time when one of the largest alleged money laundering cases came to light, centred on the bank’s now-defunct Tallinn branch.
THE ABRAHAM ACCORDS EFFECT: MORE ARMED DRONES IN MIDDLE EAST
On 30 April, an article from News.am reminded one that Israel, UAE, and Bahrain signed a historic agreement to normalise relations in August 2020, and warns that this may lead to the proliferation of unmanned combat aerial vehicles (UCAV) — and more specifically, armed drones. Armed drones are strategically decisive; they are here to stay; and their proliferation is already on the fast track. Israel is the number one exporter of drones in the world (supplying 56 countries) – more than both the US (which exports to 55 countries) and China (37 countries).
The House of Commons Library has produced an updated research paper on 30 April, saying that concerns have been raised about the “structural and psychological similarities” between loot boxes and gambling and that they can encourage children to gamble. The Gambling Act 2005 does not cover loot boxes, and it therefore cannot use any of its regulatory powers to take action. However, the Commission has also said that it is “concerned with the growth in examples where the line between video gaming and gambling is becoming increasingly blurred”. A consultation, including on loot boxes, as part of a wider review of the Act, closed on 31 March.
UK: PRE-PACK SALES TO FACE MANDATORY INDEPENDENT SCRUTINY
On 30 April, a news release from The Insolvency Service advised that new laws will require mandatory independent scrutiny of pre-pack administration sales where connected parties are involved in the purchase. The new regulations provide for the requirement for mandatory independent scrutiny of pre-pack administration sales where connected parties are involved in the purchase. The regulations place restrictions on the disposal of a company’s business or assets to a connected person during the first eight weeks of administration. The Government has published new guidance for all parties involved in the disposal of company assets in an administration to understand the regulations.
UPDATE ON UK AND EU REACH REGISTRATIONS POST-BREXIT
On 29 April, an update from McDermott, Will & Emery points out the 30 April deadline for UK-based companies to grandfather their EU REACH chemicals registrations. Companies who have not done so will not be able to rely on existing EU REACH registrations after 1 May. New registrations will be subject to fees equivalent to the registration fees under EU REACH, which can range from £1,138 to £29,419 per chemical substance. The update summarises steps companies needed to take to benefit from the UK REACH transitional provisions, and provides further information on how the Health & Safety Executive implements UK REACH, as well as exploring the impact of Brexit on EU REACH obligations.
An article from Insight Crime on 30 April reported that, while contraband flowing between Guatemala and Mexico is not out of the ordinary, authorities have targeted networks dedicated to an unusual tactic – the smuggling of chickens. In late April, Guatemalan police carried out a series of 33 raids in part of the country bordering Mexico, with the arrests of 21 individuals, including 3 police officials. Mexican birds should be quarantined to prevent avian flu outbreaks, according to government regulations.
OPINION OF THE EUROPEAN BANKING AUTHORITY ON THE RISKS OF MONEY LAUNDERING AND TERRORIST FINANCING AFFECTING THE EU FINANCIAL SECTOR
Plentitude Consulting has produced a paper which summarises the main findings and the proposed actions related to credit institutions and its point of view on the key considerations and practical steps firms should take to proactively address the findings in the joint opinion and pre-empt competent authority concerns. A survey was informed by over 50 competent authorities responsible for the AML/CFT supervision of credit and financial institutions. The joint opinion sets out proposed actions addressed to these, which are based on the detailed analysis and findings set out in the report. It makes a number of recommendations.
INDICTED PARAGUAY-BASED MONEY LAUNDERER LINKED TO BROADER ILLICIT FINANCE SCHEMES IN SOUTH AMERICA’S TRI-BORDER AREA
On 29 April, an article from Sayari says that a Paraguay-based currency exchange operator indicted in 2 US jurisdictions on several money laundering-related charges is linked to broader contraband and money laundering schemes in South America’s Tri-Border Area (where the borders of Argentina, Brazil, and Paraguay converge). It says that this demonstrates how currency exchange dealers continue to act as key nodes in international money laundering schemes, while also providing greater insight into how and to what extent disparate illicit financial networks converge in the Tri-Border Area. Federal investigations also highlight the ongoing risk of US-based import/export firms in either knowingly or unknowingly facilitating trade-based money laundering.
FinCEN REISSUES REAL ESTATE GEOGRAPHIC TARGETING ORDERS (GTO) FOR 12 METROPOLITAN AREAS
On 29 April, a news release from FinCEN advised the renewal of its Geographic Targeting Orders (GTO) that require US title insurance companies to identify the natural persons behind shell companies used in all-cash purchases of residential real estate. The GTO are identical to the November 2020 GTO. The purchase amount threshold remains $300,000 for each covered metropolitan area. Taking effect from 5 May, the GTO cover certain counties within the following major US metropolitan areas: Boston; Chicago; Dallas-Fort Worth; Honolulu; Las Vegas; Los Angeles; Miami; New York City; San Antonio; San Diego; San Francisco; and Seattle.
CHINESE MONEY LAUNDERING RINGS IN CHICAGO AND NEW YORK CLEANING MEXICAN DRUG CARTEL CASH
On 30 April, the Chicago Sun-Times carried a feature saying that rings used complex schemes to disguise millions in drug proceeds, making them seem to be legitimate transactions, according to law enforcement sources and court files. It is said that Mexican cartels started turning to Chinese money-laundering networks because they were faster and demanded lower fees than their Mexican counterparts. It is also said use of the networks also reduced the need for the cartels to move big loads of cash from drug sales across the US border, where it could be spotted and seized more easily.
This chart, introduced in court, shows how cash from Mexican drug cartels was moved to Chinese money laundering organisations. Xianbing Gan, a money laundering broker in Mexico, had a bank account in China. An associate in the US collected cash from cartel drug sales, removed an equal amount from a bank account in China and deposited it in Gan’s Chinese account to get around the US banking system and try to avoid detection, according to prosecutors, in what’s called a “mirror swap”.
A second swap was then done in Mexico to complete the money laundering and try to make the illegal drug proceeds look like a legitimate business transaction.
JERSEY FSC WEBINAR ON NATIONAL RISK ASSESSMENT FOR TERRORIST FINANCING
On 29 April, the Jersey FSC posted a video in which its International and Industry Engagement Coordinator was joined by representatives from the Government of Jersey and States of Jersey and together they covered why the assessment is important for the Island, the JFSC and the finance industry, what the findings mean and how the JFSC will action the report’s recommendations.
JERSEY’S MEDICINAL CANNABIS INDUSTRY PROFITS TO BE TAXED AT 20%
On 30 April, the BBC reported that companies growing medicinal cannabis in Jersey will pay 20% tax on profits. Ministers issued the first licences for the commercial cultivation of cannabis in December. The economic development minister said no tax subsidies or grants had been offered to growers, which he argued could contribute millions in taxes.
INTRODUCTION TO THE LEGAL REQUIREMENTS ON PERSONAL DATA PROTECTION IN CHINA
On 30 April, an article from Bryan Cave Leighton Paisner aims to provide a general introduction to the relevant legal requirements regarding data protection in China, particularly in the context of collecting, processing and storing personal data. It also covers some points to note when transferring personal data to overseas recipients outside China, including through storing personal data in a system with overseas network servers.
THE MATHESON AML TOOLKIT: A GUIDE TO AML IN IRELAND
On 30 April, Irish law firm Matheson published an updated version of its Toolkit. It includes a consolidated version of the Criminal Justice Money Laundering and Terrorist Financing Act 2010 reflecting all changes to same brought about since enactment. We have also included a marked-up version of the consolidation, focusing on the changes to various sections brought about by long-awaited Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2021. The Toolkit also includes overviews and commentary of other important AML / CFT developments at Irish, EU and International level.
On 19 April, the Wisconsin Project on Nuclear Arms Control published a report containing a timetable which estimates how soon Iran could produce the fuel for a small nuclear arsenal. It assumes Iran would try to build an arsenal of 5 warheads of the implosion type – the goal Iran set for itself when it began to work on nuclear weapons decades ago. The data estimates the weapon potential of Iran’s centrifuges and growing stockpile of enriched uranium.
UK INVESTMENT SCREENING BILL RECEIVES ROYAL ASSENT
An article from Gowling WLG on 30 April published an article saying that the National Security and Investment Bill became law as the National Security and Investment Act, with a new investment screening regime consists of 3 review mechanisms. The passage of the Act into law means that certain transactions must obtain approval from the Secretary of State prior to completion and completing a notifiable acquisition without such approval is a criminal offence. However, the Act requires regulations that must be made to prescribe the form through which businesses must submit notifications.
US ANNUAL “SPECIAL 301 REPORT” ON PROTECTING INTELLECTUAL PROPERTY RIGHTS
On 30 April, KPMG reported that the Office of the US Trade Representative has released its annual “special 301 report” on the adequacy and effectiveness of the US trading partner countries’ protection and enforcement of IP rights. It details the USTR’s findings of more than 100 trading partner countries after significant research and enhanced engagement with stakeholders.
THE UNRAVELLING OF SYRIA AND AMERICA’S RACE TO DESTROY THE MOST DANGEROUS ARSENAL IN THE WORLD
On 7 April, the Middlebury Institute of International Studies at Monterey released a video discussion which focused on past achievements and ongoing challenges related to Syria’s chemical weapons. In particular, the participants discussed different dimensions of the CW disarmament effort in Syria in 2013-14. They also discussed the post-2014 unravelling of international consensus on the Syria CW dossier, particularly as it has played out in the OPCW and UN Security Council, and addressed ways in which a further erosion of the CW taboo could be mitigated.
On 30 April, the EU Sanctions blog reported that a federal court in the US has moved to dismiss a claim brought under Title III of the Helms-Burton Act against Teck Resources, Canada’s second largest mining company, by the former owner of a Cuban mining company, former owners of assets latterly used by Teck.
On 29 April, Irish law firm Matheson published an article saying that the first Irish cross-government plan on implementing reforms to tackle economic crime and corruption was published by the Department of Justice on 19 April. The Action Plans sets an ambitious deadline of 18 months for 22 actions to achieve wide-ranging reform to be completed across government, underlining the priority and commitment afforded by government to achieving results in this area. The Action Plan follows hot on the heels of the publication of the Hamilton Report of December.
On 29 April, the Krebs on security blog carried a post saying that the group intends to disrupt cybercriminal ransomware gangs by limiting their ability to get paid, and targeting the individuals and finances of the organised thieves behind these crimes. The Rasonware Task Force, involving top executives from Amazon, Cisco, FireEye, McAfee, Microsoft and dozens of other firms joined the DoJ, Europol and the NCA in calling for an international coalition to combat ransomware criminals, and for a global network of ransomware investigation hubs.
AUSTRAC has released this Guidance says that SMR with incomplete, inaccurate or unstructured descriptions and summaries can make further meaningful analysis difficult and lessen the SMR’s overall usefulness. This document provides guidance to assist reporting entities in submitting more effective SMR, thus helping AUSTRAC to generate more actionable intelligence for police and other partner agencies. The better the quality, accuracy and timeliness of an SMR, the greater the value they have for the detection, deterrence and disruption of criminal and terrorist activity.
On 30 April, HM Treasury issued a Notice advising that the existing entries for Abd Al-Rahman AL-MILAD and Mohammed Muammar QADHAFI had been amended, although both remained designated. This followed an announcement from UN on 29 April.
ACAMS has published the results of this survey undertaken with RUSI. A year after the release of the FATF Guidance on Digital ID and after the Coronavirus pandemic placed a renewed emphasis on its importance, the survey takes stock of how this technology is perceived and the promise it holds for combating financial crime in the future. 82% of respondents were at least familiar with the concept of Digital ID and what it can be used for and 86% of respondents view Digital ID as a positive innovation. Respondents overwhelmingly said they would trust government issued Digital IDs, with 87% of respondents saying they would do so.
Panama Covid-19 update – to be fair, workers have been working non-stop to restore water supplies after the huge mains burst yesterday, but we have been without water (except for our stored supplies) all day so far – it’s due back tonight. Not the best situation when there’s an infection about (so we haven’t been out today, as we can’t clean up properly on return), and not good if you have a business relying on a water supply.
Meanwhile, another 323 new cases reported today, plus 5 fatalities; with 3,897 active cases – 66 in ICU and 269 in other wards.
AIRBUS SUBSIDIARY PLEADS GUILTY IN SAUDI BRIBERY CASE
The Wall Street Journal reported that the SFO said that GPT Special Project Management had pleaded guilty to corruption and was ordered to pay $38.9 million, plus costs.The case arose from a defence contract with Saudi Arabia.
NORTH KOREA TO BUILD ‘EXPORT PROCESSING ZONE’ IN BORDER TOWN NEAR CHINA
On 29 April, Yonhap News reported on plans to build an “export processing zone” – the “Musan Export Processing Zone” – near the border with China in a move that appears to be aimed at increasing trade with China amid economic challenges due to global sanctions.
INSIDE AN ONLINE TRADING CRIME RING THAT GRIFTED MILLIONS FROM MOM-AND-POP INVESTORS
On 27 April, the Gizmodo website published an article providing the inside story of Antonio Giacca – an Italian music producer and marketer living in Florida – who, in November 2020, pleaded guilty to criminal wire fraud charges. Between 2013 and 2018, Giacca and his fellow marketers made at least tens of millions of dollars advertising cryptocurrency cons, and recruiting investors for “binary options”, primarily used as a front for flimflam. The story involved copywriters, producers, and actors – and infomercial videos advertising apps with names like Cash Code, Binary Cash Creator, Secret Millionaire Society, and Golden Goose Method, each of which offered automated, easy to use, push-button money-making systems, supposedly using some genius new trading algorithm or financial loophole.
NIGERIAN POLITICIANS OWN 800 PROPERTIES WORTH $400 MILLION IN LONDON, DUBAI
On 28 April, the Premium Times reported that an expert has said that education and real estate sectors provide opportunities for PEP in Nigeria to launder money. He advised investigators to focus on real estate and education sectors, when tracking illicit financial flows and money laundering.
CANADA: PONZI SCHEME VICTIMS CALL FOR REOPENING OF PROBE OF TRANSFERS IN ISLE OF MAN
On 28 April, CBC reported that victims of a massive investment fraud that operated for years out of Montreal and siphoned more than $500 million offshore are calling on federal politicians to resume an inquiry into Canadian shell companies set up in the Isle of Man. 3 Montreal companies — Cinar, Norshield and Mount Real —bilked thousands of average Canadian investors. It also reminded one that KPMG had helped set up offshore shell companies for unknown wealthy Canadian clients. In 2016, a House of Commons finance committee closed its inquiry after objections were raised by KPMG about the potential impact on ongoing court cases. The Canada Revenue Agency eventually settled 3 of the tax cases out of court, but the committee never resumed its inquiry. The Montreal-based fraud operated for several years until 2005, when investors in the 3 companies learned hundreds of millions of their money had gone missing offshore. 3 executives of the companies were found guilty of fraud in 2016, but most of the money misappropriated has not been located.
DANSKE BANK MAY HAVE TO LOOK INTO ESTONIA DIRTY MONEY CASE AGAIN
On 28 April, Reuters reported that the Danish Danske Bank has said it may be required by authorities to conduct a further investigation into its former Estonian branch, possibly prolonging a money-laundering saga. Danske is under investigation in several countries, including the US, over some €200 billion of suspicious transactions that passed through the bank’s small Estonian branch between 2007-2015. Late last year, the bank completed a year-long internal investigation into its non-resident portfolio in the now shuttered Estonia branch and handed it over to authorities.
On 27 April, an article from Clyde & Co was concerned with corruption within Rotterdam’s shippers and operators which it says should serve as an alarm call for companies across the sector to revisit their anti-bribery and corruption controls and reinforce employee codes of conduct. It makes a number of recommendations.
On 29 April, the Stockholm International Peace Research Institute published a paper saying that the Iranian move comes against the backdrop of sensitive negotiations happening in Vienna aimed at rescuing the 2015 JCPOA Iran nuclear deal, and bringing the US back into compliance with the deal. Iran’s decision has also inevitably drawn international attention because it brings the country so close to producing 90%-enriched uranium, which is generally considered weapons-grade.
On 26 April, an article from Reynolds Porter Chamberlain outlines the powers HMRC has at its disposal when conducting a criminal rather than civil investigation, and HMRC’s ability to obtain communications data when investigating suspected criminal activity – including requests to access communications data.
SHIPBREAKING: THE SHIPPING INDUSTRY AND THE LAW OF NEGLIGENCE
On 28 April, an article from Leigh Day discusses a judgment of the Court of Appeal which it says will have far-reaching implications across the shipping industry and the way it disposes of end-of-life vessels. It was held that that a shipping company in England selling a vessel for dismantling in South Asia could owe a duty of care to shipbreaking workers in Bangladesh even where there are multiple third parties involved in the transaction, and this intensifies the international spotlight on environmental and health and safety practices across the maritime sector. It is said that the decision is likely to cause considerable concern within the shipping industry. It supports the principle that a ship owner’s liability does not automatically end once it sells a ship. If a duty of care exists at the time of sale, liability may be difficult to avoid if a vessel is sent to be scrapped on the beaches of South Asia.
RUSSIA MULLS FURTHER EXPORT RESTRICTIONS ON SCRAP METAL
On 28 April, Argus Media reported that higher steel prices driven by seasonal demand in Russia have revived consideration of stricter restrictions on ferrous scrap exports, but scrap market participants warn that any further restrictions will devastate the country’s scrap export industry. The relevant ministry said it may impose a €90/tonne duty on ferrous scrap exports, up from a 5% levy (or a minimum of €45/tonne). Other options such as reinstating export quotas, an export licensing system or measures to reduce the incentive to export could also be introduced.
REGULATING KHAT COULD DISRUPT EAST AFRICA’S ILLEGAL DRUG ECONOMY
On 29 April, the Institute for Strategic Studies published an article saying that different laws and controls among countries in the region allow for a thriving smuggling market. It says that organised crime researchers that the people involved in human trafficking could also be illegally trading khat along the same routes. Khat, a plant-based stimulant drug, is legal in Kenya, Ethiopia, Uganda and Djibouti – but is illegal in Rwanda, where it is classified as a narcotic and listed among other banned psychotropic substances. . It is a source of livelihoods and has become a major cash crop, but internationally, khat is classified as a new psychoactive substance. The illegal khat trade is controlled by criminals who are also involved in moving other illicit goods. The article suggests that regulating the khat trade would disrupt the criminal market and challenge the illegal drug economy – that is, trafficking khat alongside other illicit goods. The cost of the drug would also be regulated, thus limiting the current pattern of price hikes that increase smugglers’ profits. Legally growing and trading khat would enable countries to tap into the revenues generated from the trade, as is the case with Kenya and Ethiopia.
1,600 OFFENCES DETECTED IN A GLOBAL OPERATION AGAINST MARINE POLLUTION
A news release from Europol on 29 April advised that between 1 and 30 March, 300 agencies across 67 countries joined forces against marine pollution during the third global operation 30 Days at Sea. Europol and Frontex coordinated the European leg of the operation. The actions led to the identification of numerous crimes ranging from illegal discharge to waste trafficking and the investigation of thousands of suspects worldwide. Countries were able to connect pollution crime with other serious crimes such as fraud, corruption, tax evasion, money laundering, piracy, and illegal fishing. It is said that, with many enforcement resources being reassigned to tackle the pandemic, criminals have been quick to exploit growing vulnerabilities in different crime areas including environmental crime. A major criminal network trafficking plastic waste between Europe and Asia was exposed, and several countries from Europe, Asia and Africa reported illegal shipments of contaminated or mixed metal waste falsely declared as metal scraps.
UK: EXTRADITION ACT 2003 – CODES OF PRACTICE AND TRANSIT CODE OF PRACTICE
The Extradition Act 2003 (Codes of Practice and Transit Code of Practice) Order 2021 brings into operation codes of practice from 1 May. The revised Extradition Act 2003: Codes of Practice are aimed at police officers and customs officers They deals with Part 4 of the Act, which sets out powers of search and seizure of premises and persons, application for warrants and production orders, entry to premises and the treatment of detained persons after arrest in extradition cases (it does not apply in Scotland. Also involved is the Transit Code (entitled “Code of Practice for Non-UK Extradition Transit”) which is issued for the first time and is made in connection with the transit through the UK of persons being extradited from one foreign country to another foreign country. The Act provide powers to detain and search such persons and powers to seize, retain or return items seized, and this code applies throughout the UK.
GLOBAL ANTI-CORRUPTION SANCTIONS (OVERSEAS TERRITORIES) ORDER 2021
THE MYANMAR (SANCTIONS) (OVERSEAS TERRITORIES) ORDER 2021
These Orders extend with modifications the Myanmar Sanctions and the Global Anti-Corruption Sanctions regimes to all British Overseas Territories except Bermuda and Gibraltar (which implement sanctions under their own legislative arrangements).
IRELAND: 3 IN COURT CHARGED OVER €6 MILLION ‘GHOST BROKER’ FRAUD
On 29 April, RTE reported that 2 businessmen and an art teacher have appeared in court charged in connection with €6 million “ghost broker” motor insurance policy fraud. A court was told that more than 2,500 motor insurance policies, valued at €6 million were identified as having been fraudulently obtained from 10 insurance companies. Fraudulent documents were allegedly used get policies with beneficial premiums. The defendants are accused of using false information, including fake licences and no claims bonus certificates, to get genuine insurance policies with reduced premiums.
FCPA: A PRIMER ON GIFTS AND BUSINESS ENTERTAINMENT
On 29 April, an article from Thomas Fox looks at the FCPA rules in this area, cautioning that, as with most matters under the FCPA, there is little direct guidance on what conduct may step over the line.
CALIFORNIA MAN GUILTY IN $100 MILLION PHONY AFGHAN ELECTRIC GRID SCHEME
On 29 April, Manufacturing.net reported that a California manm Saed Ismail Amiri, 38, has pleaded guilty in a scheme to defraud the Afghanistan government out of more than $100 million with a phony bid to build an electric grid, authorities said. The scheme involved Amiri’s Afghan company, Assist Consultants Incorporated, federal prosecutors said. It is alleged that in 2015 and 2016, Amiri and others tried to win a US-funded contract to build 5 electric power substations in Afghanistan by submitting a false work history and phony supporting documents indicating the firm met requirements for the contract.
MALTA: TUMAS GAMING GETS €233,000 MONEY LAUNDERING FINE
On 29 April, Lobin Malta reported that Tumas Gaming has been hit with a €233,156 fine for breaching money laundering regulations, with the FIAU uncovering players splashing hundreds of thousands in cash with little oversight. Tumas Gaming is owned by Tumas Group, which was led by Yorgen Fenech until his arrest in connection with the assassination of journalist Daphne Caruana Galiza. Its COO Patrick Demanuele is currently under investigation as part of a money laundering and trading-in-influence investigation.
POPE ISSUES TOUGH NEW RULES AGAINST VATICAN FINANCIAL CORRUPTION
On 29 April, Catholic Culture reported a new bid to address persistent concerns about financial improprieties, and that Pope Francis has issued a motu proprio that sets tough standards for all Vatican officials. The new policies affect all Vatican officials who exercises “administrative or control and supervisory functions”. Vatican employees may not accept gifts of a value greater than €40 ($48).
UK: NATIONAL SECURITY AND INVESTMENT BILL RECEIVES ROYAL ASSENT
On 29 April, a Home Office news release advised that the landmark Act will modernise government’s powers to investigate and intervene in potentially hostile foreign direct investment, while protecting the UK’s reputation as an attractive place to invest. Like CFIUS in the US, the new Act strengthen the government’s ability to investigate and intervene in mergers, acquisitions and other deals that could threaten UK national security.
UK: AIR TRAFFIC MANAGEMENT AND UNMANNED AIRCRAFT BILL RECEIVES ROYAL ASSENT
A news release from the Department for Transport on 29 April advised that, among other things, the new Act provides the police powers to ensure skies remain safe and secure from disruption and illegal use of drone technology. The Act will support the safe practice of drone technology by giving police officers the necessary powers to tackle illegal misuse. This will include issuing fixed penalty notices, mandating a person to land an unmanned aircraft and introducing stop and search powers where offences involving an unmanned aircraft have been committed.
On 29 April, news releases from the MoJ about a review which will consider how the Human Rights Act is working in practice and whether any change is needed. One involves the Government response to recommendations made by the independent review. The Independent Review of Administrative Law made 2 recommendations for change in the substantive law, as well as various recommendations for changes in procedure.
GIBRALTAR REGULATORY AGENCIES TRIAL AML PLATFORM FOR CRYPTO ASSET INVESTIGATIONS
On 29 April, a Gibraltar Government news release advised that the Government of Gibraltar has entered into an agreement with Coinfirm Ltd., a leading RegTech firm, to trial a new AML risk management platform for crypto and blockchain assets. This is intended to benefit regulatory and law enforcement agencies in the jurisdiction with the use of advanced blockchain-native anti-money laundering and countering terrorist financing analytics. This is said to be the first time this innovative technology is being used to support Gibraltar’s work in the international fight against money laundering. The AML Platform is said to be able to monitor high-risk transactions and trace misappropriated funds through visualisers amongst other proprietary investigative tools. The smart, data-led automatic analytics can overcome highly-complex criminal enterprise schemes through deploying various methodologies including the destination and source of funds, fingerprints of activity, ownership analysis, e-discovery and clustering algorithms.
ITALIAN POLICE TACKLES GANG THAT ALLEGEDLY TRAFFICKED COCAINE FROM PERU
On 29 April, OCCRP reported that Italian authorities have ordered the preventive detention of 15 suspected members of an international gang believed to have imported cocaine from South America in cooperation with the ‘Ndrangheta, one of Italy’s 4 major mafia groups. 8 Peruvian and 7 Italian citizens in the northern region of Pavia are involved, while 5 gang members are believed to have left the country. To avoid customs controls, the gang used chemical procedures to hide the drug in book and magazine covers and in the coatings of suitcases. Once in Italy, the cocaine would be later refined in clandestine laboratories.
3 ARRESTED IN SPAIN FOR ENCOURAGING TERRORIST ATTACKS AGAINST FRANCE AND ITS INTERESTS ABROAD
A news release from Europol on 29 April announced that the Policia Nacional swooped on the members of a terrorist cell in the city of Granada, and 3 individuals were arrested on suspicion of encouraging terrorist attacks against France. The Spanish National Police used its specialist capabilities to identify the individuals behind these social media profiles with totalled almost 19 000 followers, in the wake of the French magazine Charlie Hebdo having republished caricatures of the Prophet Muhammad.
NEW ZEALAND: MEXICAN COCAINE “CARTEL” AND “FILTHY FEW” GANG MEMBERS
On 29 April, the New Zealand Herald reported that 8 people have been arrested after a joint police and Customs operation allegedly disrupted plans to import hundreds of kilograms of cocaine into the country via a Mexican “cartel”. Those arrested in the police raids include 2 patched Filthy Few biker gang members.
BRAZIL’S CHEAPER EXOTIC FISH STILL TARGETED BY TRAFFICKERS
On 29 April, Insight Crime reported that international animal trafficking rings often cash in on global demand for smaller, lesser-known species, as shown by the dismantling of a global smuggling ring that poached killifish from Brazil and other countries. In April, the US Fish and Wildlife Service and Brazilian police seized hundreds of endangered live killifish after carrying out searches in Maryland – with some 200 tanks of killifish along with hundreds of eggs inside a Maryland home.
PLANNED LITIGATION NO EXCUSE FOR EMPLOYEES ‘STEALING’ CONFIDENTIAL INFORMATION
A webcast 9with transcript) from Out-Law on 29 April involves a recent High Court case and says that employees who leave and take confidential information with them sometimes use the excuse that they needed for the purposes of litigation – litigation they are planning to bring against you, such as a whistleblowing claim. Is that a good reason for taking your most valuable assets? Is there anything you can do to protect the business from that happening?
An article from Eversheds Sutherland on 29 April reviews the powers and recent efforts of the Saudi Oversight and Anti-Corruption Authority (“Nazaha”), and the anti-bribery laws. Nazaha is an independent body enjoying independent administrative and financial juridical personality. It reports directly to the King, bypassing the Council of Ministers, which gives it autonomy and independence to monitor and investigate. The anti-bribery law has an extremely wide scope of application, particularly when compared to the FCPA. The law does not specifically identify the failure to prevent bribery as an offence, but it does incorporate an enhanced version of the US vicarious liability principle as it presumes corporate liability when the manager of the corporate entity or any of its employees are convicted of a bribery offence, when the relevant act was committed in favour of the corporate entity.
SWITZERLAND: IMPROPER DECLARATION OF IMPORTED TIMBER PROSECUTED FOR THE FIRST TIME
On 27 April, Swissinfo reported that the Federal Consumer Affairs Bureau (FCAB) carried out 121 checks in 2020 to ensure that wood and wood products were declared. Overall, almost a third of companies (32%) checked did not fully comply with the obligation to declare the species and origin of the wood they use. This is slightly lower than in 2019 (35%). The majority of wrongly declared products (62%) were related to the origin of the wood and concerned mainly small companies that have never been audited before. Authorities opened 2 legal proceedings against importers of exotic wood for repeatedly failing to correctly declare their origin.
On 28 April, the Global Initiative Against Transnational Organised Crime published a report saying that record-breaking cocaine seizures between 2019 and January 2021 in West Africa have drawn international attention to cocaine trafficking in the region. These incidents also position Guinea-Bissau, and its neighbouring vulnerable littoral states, at the heart of the region’s drug-trafficking activities. It says that the coastal countries stretching from Senegal, through Gambia and Guinea-Bissau to Guinea are once again operating as a major corridor for Latin American cocaine flowing through West Africa en route to end markets in Europe. Traffickers import cocaine into West Africa through multiple maritime entry points, both in the coastline stretching between Senegal and Guinea, and further south, with Cote D’Ivoire playing a prominent role since 2019. The report focusses on the corridor between Senegal and Guinea, and the geopolitical characteristics underpinning cocaine trafficking in this sub-region.
NUCLEAR BELT AND ROAD: CHINA’S AMBITION FOR NUCLEAR EXPORTS AND ITS GLOBAL IMPLICATIONS
The Wilson Center in the US has published this report which says that nuclear exports are an important and understudied part of the Belt and Road Initiative (BRI). Beijing plans to build and finance approximately 30 nuclear reactors in BRI countries in Asia, the Middle East and Africa over the next decade. It argues that China’s nuclear exports will increase recipient countries’ reliance on China for decades at the expense of the US, thereby threatening a shift in the balance of power in the international system. It is also said to poses environmental concerns because many recipient countries lack rigorous regulations and necessary technologies, know-how and personnel to handle the technology safely. Making recommendations for the US, the report argues that the US should act to thwart China’s nuclear export. In particular, it says the US should shed light on China’s chronic corruption problem, lack of transparency and shady business practices, such as the# of intellectual property, and poor safety standards.
US: CHINESE NATIONAL PLEADS GUILTY TO ILLEGAL EXPORTS WITH UNDERWATER AND MARINE APPLICATIONS
A news release from US DoJ on 28 April advised that Shuren Qin, 44, a Chinese national residing in Massachusetts had pleaded guilty in federal court in Boston in connection with illegally procuring and causing the illegal export of $100,000 worth of US-origin goods to Northwestern Polytechnical University (NWPU), a Chinese military university that is heavily involved in military research and works closely with the People’s Liberation Army on the advancement of its military capabilities. He had established LinkOcean Technologies, LTD., which he used to import goods and technology with underwater and marine applications into the PRC from the US, Canada and Europe.
GERMAN GOVERNMENT ESCALATES ITS FIGHT AGAINST MONEY LAUNDERING
On 29 April, a post on the Compliance & Enforcement Blog from the Program on Corporate Compliance and Enforcement at the New York University School of Law says that while Germany’s AML framework has already been described as insufficient by FATF in the past, the collapse of payment service provider Wirecard has seen the prevention of money laundering placed even higher on the German government’s agenda. The post says that implementation of the Fifth EU Money Laundering Directive on 1 January 2020 had already exceeded EU requirements, but a “National Strategy Package” and — in addition and as a direct reaction to the Wirecard collapse — the German government adopted a “16-Points Action Plan” at the beginning and in the middle of last year. The post goes on to describe the legal and control and administration changes being adopted.
FRANCE BEGINS SANCTIONING LEBANESE IMPLICATED IN CRISIS
On 29 April, L’Orient Today reported that France has begun imposing entry restrictions on certain Lebanese figures as a sanction for their role in Lebanon’s political crisis or corruption, and over their failure to reform the country in the wake of the deadly August 2020 Beirut port explosion. President Emmanuel Macron called for radical reform in Lebanon after the deadly Beirut port blast and has expressed exasperation at the lack of change.
INDIA: INTERPOL AGAIN REFUSES RED NOTICE AGAINST FUGITIVE TV EVANGELIST ZAKIR NAIK
On 29 April, the Hindustan Times reported that Interpol, for the third time, has rejected a request for a Red Notice to provisionally arrest controversial TV evangelist Zakir Naik on money laundering and hate speech charges. The fact that he raised money from his religious teachings and spent it is “irrelevant” and cannot amount to money laundering, Interpol’s adjudicating panel noted.
US RECOVERS $8.4 MILLION IN FRAUDULENT COVID RELIEF FUNDS FROM FAMILY
A news release from US DoJ on 29 April announced that the US has obtained a final civil judgment ordering the forfeiture of $8,417,261.38 in proceeds from bank fraud and money laundering offences related to COVID Relief Fraud. It is alleged that in April 2020, Joshua Edwards, Joy Edwards, Evan Edwards, and Mary Jane Edwards defrauded the Small Business Administration out of millions of dollars in coronavirus relief funds. Specifically, Joshua Edwards, on behalf of ASLAN International Ministry Inc., submitted a false and fraudulent loan application seeking funds.
NAMIBIAN MINISTRY OF FINANCE HAS ACCUSED 84 DOCTORS OF STEALING MILLIONS OF DOLLARS THROUGH THE GOVERNMENT’S MEDICAL AID SCHEME
On 29 April, Africa News reported that the doctors are accused of fraud and abuse of the Public Service Employee Medical Aid Scheme (Psemas). The ministry has launched a civil action against the doctors and has threatened to institute criminal charges against others.
HEATHROW URGES GOVERNMENT TO “GET A GRIP” OF IMMIGRATION AND CUSTOMS CONTROL AND SIMPLIFY THE MEASURES NEEDED FOR INTERNATIONAL ARRIVALS TO RESTART MASS TRAVEL FROM 17 MAY
On 29 April, the Guardian reported that despite a 90% drop in passengers in the first 3 months of 2021 there had been “horrendous queues” due to a lack of staff in immigration halls, which are operated by the government. The airport’s CEO says that it had to turn away flights because of congestion in immigration. However, Border Force suggested airlines should shoulder blame for queues as passengers were not completing paperwork correctly, with the additional Covid paperwork meaning the automatic gates cannot be used.
FBI RELEASES INTERNET CRIME REPORT SHOWING RECORD INCREASE IN CYBERCRIME
On 29 April, Alston & Bird published an article saying that the FBI’s Internet Crime Complaint Center (IC3) recently released its annual report, the 2020 Internet Crime Report, which gathers statistics from nearly 800,000 complaints of suspected cybercrimes that the department received in 2020. This is a record number of complaints — a 69% increase from 2019 — with reported losses exceeding $4.2 billion. The 3 most reported crimes in 2020 were phishing scams, non-payment/non-delivery scams, and extortion/ransomware. It identified the costliest scams as business email compromise scams, romance and confidence schemes, and investment fraud.
On 29 April, OFAC announced that it had agreed a settlement with MoneyGram Payment Systems Inc, the global payments company based in Dallas, Texas. MoneyGram agreed to remit $34,328.78 to settle its potential civil liability for 359 apparent violations of multiple sanctions programmes. it provided services to blocked individuals incarcerated in US federal prisons without a licence from OFAC, processed transactions on behalf of an additional blocked person, and processed transactions for individuals who initiated commercial transactions involving Syria. OFAC says that MoneyGram’s apparent violations were voluntarily self-disclosed and were non-egregious.
A separate agreement with SAP SE, a software company located in Walldorf, Germany, which has agreed to settle its potential civil liability for 190 apparent violations of the Iranian Transactions and Sanctions Regulations. SAP engaged in the export, re-export, sale, or supply of technology or services from the US to companies in third countries with knowledge or reason to know the software or services were intended specifically for Iran, and sold cloud-based software subscription services accessed remotely through SAP’s cloud businesses in the US to customers that made the services available to their employees in Iran. This agreement followed a self-disclosure by SAP.
On 26 April, RUSI announced that it has launched a freely available online risk assessment tool that helps private-sector companies ensure they do not unwittingly facilitate crime when operating in free-trade zones (FTZ). There has been a growing level of concern about the abuse of FTZ for illicit trade, money laundering and tax evasion. Despite global advances like the publication of the OECD Code of Conduct for Clean FTZ, businesses often find it difficult to distinguish between low-risk and high-risk FTZ.
On 29 April, the UK published these Regulations which revoke 2019 regulations, are made under the Sanctions and Anti-Money Laundering Act 2018 to establish a sanctions regime in relation to Myanmar for the purposes of: promoting the peace, stability and security of Myanmar; promoting respect for democracy, the rule of law and good governance in Myanmar; discouraging actions, policies or activities which repress the civilian population in Myanmar; and promoting compliance with international human rights law and respect for human rights in Myanmar.
On 29 April, Interest in New Zealand reported that the country’s latest country assessment, or mutual evaluation, has been released by FATF. FATF points out the country doesn’t have a register of all domestic trusts (of which there up to 500,000) and suggests the Government considers introducing one. FATF says New Zealand does well on the confiscation of proceeds of crime, but doesn’t do so well when it comes to white collar crime. Major gaps are said to include insufficient measures to mitigate the risks posed by nominee directors and shareholders, insufficient mechanisms for authorities to obtain adequate, accurate and current company, limited partnership and trust beneficial ownership information, and insufficient measures for adequate, accurate and current information on trusts. FATF says that New Zealand’s measures to combat money laundering and terrorist financing are delivering good results, but the country needs to focus more on improving the availability of beneficial ownership information, strengthening supervision and implementation of targeted financial sanctions.
On 29 April, various media reported that Malta’s efforts to clamp down on money laundering has won Moneyval’s approval, with the nation’s AML regime passing a review by the Council of Europe’s committee. Financial experts had warned that grey listing by FATF would come as a massive blow to Malta’s financial services industry and would discourage foreign direct investment in the country. Although grey listing remains possible, passing the Moneyval test will surely give Malta a major boost. The Council of Europe body had given Malta until last year to conduct an overhaul of its AML legislation. Moneyval had said that Malta was highly exposed to illicit finance and lacked the resources and infrastructure required to prosecute and seize assets from money launderers and the criminals they serve. Malta was given 58 recommendations. The reforms carried out included strengthening the roles of the Malta FSA and the Financial Intelligence Analysis Unit, setting up the police force’s Financial Crimes Investigation Department and providing training on AML crimes to members of the judiciary. The government submitted its final progress report to the Moneyval experts on 5 October. However, the assessment report will only be officially published later on this year. Moneyval has voted during a plenary in Strasbourg to approve a final report on Malta.
On 29 April, the Guardian reported that boat suppliers have been warned by the NCA that they face organised crime groups coming to them to buy or steal vessels and equipment for smuggling people across the Channel ahead of an expected increase over the Summer. The NCA has issued an alert to the UK maritime industry, warning that the significant rise in asylum seekers attempting to reach the UK from France has seen a rise in demand for boats, and identifying a number of red flags.
An article from Doughty Street Chambers considers a recent Law Commission consultation paper of June 2018 on search warrants, with its final report last year. The report made 64 recommendations to the UK Government with particular focus on issues relating to access to electronically-stored data. The article considers the legal background and what the report said, as well as the implications.
Panama Covid-19 update – water off today after a big burst (of a 66-inch diameter pipe, which looked more like a tributary of the Canal than a leak…), not the best thing during the ongoing coronavirus thing…
Meanwhile, another 362 new cases reported today and 4 new fatalities; figures in ICU and other wards rose slightly to 69 in ICU and 287 in other wards, with another 163 in so-called “hospital hotel” rooms, with a total of 3,899 active cases in all.
28 APRIL 2021
TERRORIST GROUP ELN STEPS INTO VENEZUELA AS LAWLESSNESS GROWS
On 26 April, the New York Times carried an article saying that, like elsewhere in Latin America, Venezuela harboured illegal armed groups long before the current economic crisis. Colombian guerrillas have used the Venezuelan countryside as a haven for decades, and neglected Caracas shantytowns have long been home to organised crime. Now, in return for bringing stability, the ELN Colombian rebel group took over the smuggling and drug trafficking routes in villages and towns, much as they have in parts of Colombia. They also began taxing shopkeepers and ranchers, with the ELN having quickly displaced the local gangs that terrorized villages.
BARBADOS EX-MINISTER SENTENCED TO 2 YEARS PRISON IN US FOR LAUNDERING BRIBES
On 27 April, Reuters reported that a former minister in the government of Barbados – Donville Inniss, 55, who served as minister of industry – was sentenced to 2 years in prison for laundering bribes he received from a Barbadian insurance company through a US bank.
On 28 April, KYC 360 reported that more than half the people granted EU citizenship under Cyprus’s “golden passport” scheme should not have qualified, an inquiry has found. 6,779 people, most of them Russian, obtained citizenship between 2007 and 2020 by buying property on the island worth at least €2 million, entitling them to receive a Cypriot passport within a matter of months.
ALLEGED $336 MILLION BITCOIN-LAUNDERING KINGPIN ARRESTED
On 27 April, Wired reported that the IRS says it has finally identified the Russian-Swedish administrator behind long-running anonymising system Bitcoin Fog and charged him with laundering hundreds of millions of dollars in bitcoins, much of which was sent to or from dark web drug markets. US authorities arrested Roman Sterlingov, a citizen of Russia and Sweden, in Los Angeles. He took commissions on those transactions of 2% to 2.5%, and, in total, the IRS calculates, Sterlingov allegedly took home roughly $8 million worth of bitcoin through the service.
A PROPOSAL FOR A BAN ON DESTRUCTIVE ANTI-SATELLITE TESTING: A ROLE FOR THE EU
The Stockholm International Peace Research Institute published a paper saying that, among threats to space security, destructive anti-satellite (ASAT) testing has emerged as a particularly destabilising force. With an increasing number of states demonstrating ASAT capabilities, the regulation of ASAT demands action to prevent tensions from escalating to the point of conflict. This paper gives an overview of past ASAT tests and argues that destructive ASAT testing requires urgent policy intervention. The paper proposes a complete ban on destructive ASAT testing, drawing inferences from the EU’s draft Code of Conduct for Outer Space Activities. The paper additionally proposes that the EU assumes the role of facilitator in the proposed policy measure.
THE USE OF NORWICH PHARMACAL ORDERS IN TACKLING ART FRAUD AND THEFT
On 27 April, an article from Rahman Ravelli outlines a case that illustrates the circumstances when an NPO can be granted. Norwich Pharmacal Orders (NPOs) can require the other side to disclose certain requested documents or information, and they are commonly deployed against innocent third parties in order to fully establish a claim against a defendant. The article considers a case in England which explored the circumstances when an NPO can be granted. It is a case that gives particular hope to victims of art fraud and theft that the English courts are willing and able to assist victims in tracing the relevant property. It is said to show that the courts are willing to extend the reach of the remedies available to those who have fallen victim to acts of art theft or fraud.
SWITZERLAND: COMPULSORY CONVERSION OF BEARER SHARES INTO REGISTERED SHARES
A newsletter from Walder Wyss on 26 April says that by 30 April, companies having bearer shares outstanding should take the necessary measures to convert all bearer shares into registered shares or file the fact that they rely on an exception with the commercial register. Within the same deadline, holders of bearer shares should comply with their reporting obligations. The newsletter describes the steps to be taken in connection with the legislative changes adopted by the Swiss Parliament on 21 June 2019, and the new legislatives changes, which entered into force on 1 November 2019.
MALTA: ASSET RECOVERY BUREAU LEFT WITHOUT A CEO FOR 4 MONTHS
On28 April, the Times of Malta reported that the agency responsible for confiscating and administering criminals’ assets has been left without a head for months, despite it being one of the worst performers in an ongoing review of the country’s AML regime. It has not had a CEO for nearly 4 months after its last head left for another new agency responsible for assisting the victims of crime.
ALBANIAN COURT RULES TO SEIZE ASSETS OF FORMER CONSTITUTIONAL COURT AND HIGH COURT JUDGES
On 28 April, Exit News reported that Albania’s Special Court Against Corruption (SPAK) has ruled to seize the assets of 2 former members of the Constitutional Court and 1 of the High Court. The court has accepted the request of SPAK for the sequestration of the assets of Fatos Lulo, Bashkim Dedjes, and Shkelzen Selimi. This is after data emerged that these subjects owned immovable property, which they could not justify with legal sources or property that they hid. SPAK has been working on the investigation of magistrates.
IRS AUDITS OF CORPORATIONS, WEALTHY AMERICANS WOULD INCREASE UNDER BIDEN TAX PLAN
On 28 April, the Los Angeles Times reported that President Biden will propose giving the IRS $80 billion and more authority over the next 10 years to help crack down on tax evasion, especially by wealthier Americans and large corporations.
UK: 630 FINES ISSUED TO AIRLINES CARRYING PASSENGERS WITH INCORRECT PAPERWORK
On 28 April, a news release from the UK Department for Transport says that the Civil Aviation Authority has issued 630 fines since February to airlines carrying passengers without the right documents under Covid-19 regulations.
UN PANEL OF EXPERTS REPORT ON NORTH KOREA: MORE ADVANCED WEAPONRY, BETTER SANCTIONS EVASION
A Commentary from RUSI on 27 April says that the North Korean regime is evading sanctions at a faster rate than the international community is able to tighten the sanctions regime. It reminds one that the UN Panel of Experts on North Korea released their annual report on sanctions implementation. Issued every year since 2012, the reports have been an invaluable resource, shedding light on how North Korea evades international sanctions. This year, even with the adverse impacts of the coronavirus pandemic, appears no different. It says that research shows that lax enforcement of sanctions is a core issue. Whatever one’s view on the current regime, if they are not enforced, they will not have the intended effect. They will thus become less effective measures than were agreed, and will be drawn out for longer than necessary.
NEARLY 120 FAKE KRUGERRAND COINS SEIZED BY US CUSTOMS IN NEW YORK
On 27 April, The South African reported that USCustoms said its officers encountered a shipment on 5 April containing 119 one-ounce Krugerrands shipped in an unmarked shipping bag. Gold Kruggerrands are restricted from distribution by the South African Mint, and an authentic gold Krugerrand coin from 1972 has a value of $1,800 or more, being said to be the most popular gold bullion coin in the world. US Customs said the gold coins discovered were made of a low-quality metal and did not have the weight of authentic gold. It was determined that the coins were counterfeit.
30 ARRESTED IN THE NETHERLANDS AND POLAND AFTER 5.4 MILLION COUNTERFEIT CIGARETTES SEIZED
A news release from Europol on 28 April announced that a law enforcement operation involving the Netherlands, Poland and Europol has resulted in the arrest of 30 members of a prolific organised crime gang flooding Europe with millions of counterfeit cigarettes. 94 tonnes of tobacco and 5.4 million counterfeit cigarettes have been removed from circulation. 2 illegal factories were dismantled in the Dutch cities of Schaijk and Heerlen with a production capacity of over 1 million cigarettes per day – 21 Polish and Ukrainian workers were arrested on site and 5.4 million counterfeit cigarettes were seized, alongside 40 tonnes of raw tobacco and 800 kg of hookah tobacco. Polish law enforcement raided a dozen of addresses across the country and, as a result, 9 individuals were arrested and 54 tonnes of tobacco were seized, alongside machinery used for the production of cigarettes.
A news release from US Customs & Border Protection on 27 April advised that officers in Cincinnati seized 9,377 pieces of jewellery from a shipment originating in China and destined to an address in McAllen, Texas. Items bore protected trademarks from Tiffany, Pandora, Cartier, Bvlgari, Dior, Gucci, Chanel, Rolex, Versace, and Tous. Unprotected “generic” jewellery was comingled in the same box with protected jewellery that was undervalued on the invoice.
AVIATION TYCOON IN ARGENTINA ORGANISED DRUG FLIGHTS ACROSS AMERICAS
On 28 April, an article in Insight Crime claimed that, despite numerous investigations against him, an Argentine aviation tycoon was able to exploit aircraft registration loopholes in the US to help traffickers across Latin America source drug planes. Frederico Machado, an Argentine businessman and owner of 2 Florida-based aviation companies, was arrested in Argentina pursuant to an Interpol red alert. He may soon be extradited to the US, where he is accused of being part of a complex drug trafficking conspiracy. He has been indicted for allegedly purchasing and the illegal registration of aircraft under foreign corporations and individuals. The planes were used to traffic cocaine.
RESEARCH SHOWS 91% OF COMPLIANCE PROFESSIONAL BELIEVE THAT MORE GUIDANCE FROM THE REGULATORS WOULD HELP MAKE THEIR AML PROGRAMMES MORE EFFECTIVE
On 28 April, a release on Mondo Visione reported on research data released by LexisNexis Risk Solutions. It reveals that 91% of compliance professionals across the banking, lending, and wealth management sectors believe that better guidance would help their firms make AML programmes more effective. An overwhelming majority of compliance professionals say the lack of guidance and support from regulators is contributing to a significant delay in implementing the latest AML regulations. It reports a lack of urgency amongst firms comes despite 60% of those surveyed predicting that the regulator will begin to clamp down on non-compliance within the next 6 months. Of this, half think the clampdown will come in the next 3-5 months.
AUSTRALIA: CROWN CASINO FINED RECORD $1 MILLION BY GAMBLING REGULATOR
On 27 April, 7 News reported that Crown Casino has been fined a record $1 million by the Victorian Commission for Gambling and Liquor Regulation regulator for failing to vet its junket operators. The regulator had been investigating the Southbank casino after 2019 media reports alleged junket operators who brought in high-rolling gamblers had links to organised crime. The $1 million fine is the maximum available to the regulator under the Casino Control Act.
CANADA EXTENDS SURVEILLANCE OPERATION FOR VIOLATIONS OF SANCTIONS AGAINST NORTH KOREA
On 28 April, Yonhap News in South Korea reported that Canada has extended a maritime surveillance programme designed to capture violations of UN sanctions on North Korea for another 2 years. Under Operation NEON launched in 2019, Canada has periodically deployed its surveillance assets in the Asia-Pacific region, keeping an eye on possible violations of global sanctions against the North.
PODCAST: MONEYLAND, KLEPTOPIA AND ON CORRUPTION IN AMERICA
In the latest TRACE podcast, Oliver Bullough, Tom Burgis and Sarah Chayes, authors of 3 of the best books on global corruption, gathered for a panel at the Annapolis Book Festival for a fascinating discussion about how the corrupt operate, often with impunity, and what can be done to slow the pace of looting.
THE STRATEGIC IMPLICATIONS OF WHITE SUPREMACIST EXTREMIST TRAVEL BETWEEN THE US AND CANADA
On 18 April, the International Centre for Counter-Terrorism in The Hague published an article saying that white supremacist extremists travel across the border between the US and Canada to perpetrate violent attacks, spread propaganda, recruit, and network. This cross-border activity threatens to strengthen extremist movements in both countries.
UK GOVERNMENT SETS OUT MAJOR CYBERSECURITY LEGISLATION PLANS
The International Security Journal reported that the UK Government has published plans to protect people from cyber-attacks. The announcement comes as new figures commissioned by the Government revealed that 49% of UK residents have purchased at least one smart device since the start of the COVID-19 pandemic. It says that that the makers of smart devices – which include phones, speakers and doorbells – will need to tell customers upfront how long a product will be guaranteed to receive vital security updates. The article sets out the aims of Government’s proposed law which will see that virtually all smart devices meet various requirements.
EU GENERAL COURT ANNULS 2017 AND 2020 DESIGNATIONS OF AISHA QADDAFI
On 28 April, EU Sanctions blog reported that the Court had annulled the 2017 and 2020 listings (implementing UN listings) of Aisha Qaddafi, the daughter of the late Colonel Qaddafi. While the EU Council was entitled to refer to her designation under UN SCR 1970 (2011) in her EU listing information, the Council had failed to identify the individual, specific and concrete reasons as to why she remained on the EU sanctions list, and, having relied on alleged public statements made in support of the Qaddafi regime these from some years previously.
US Customs & Border Protection has published this article asking what is the true cost of a ream of paper or hardwood flooring? Are they worth a life? Economic and environmental destruction? It says that US Customs and Border Protection partners with Homeland Security Investigations, as well as a network of other partner government agencies and nongovernmental organizations, to investigate illegal logging practices around the world – and this works tirelessly to disrupt and dismantle transnational criminal organisations that threaten the welfare of the American people and economy, as well as communities around the world. It refers to date which says that between 10% and 30% of globally traded timber is illegal, and for tropical timber, that rate is as high as 90%. Because wood is often processed outside of its country of origin, it can be difficult to trace a shipment back to the original stump, especially if exporters intentionally obscure that information. There are many reasons why an importer would attempt to falsify the country of origin and other import data. One reason is to bypass export bans set by international governments worldwide to prevent environmental degradation. Another is to bypass US customs laws.
THE HONG KONG INTERNATIONAL CONVENTION FOR SAFE AND ENVIRONMENTALLY SOUND RECYCLING OF SHIPS (HKC)
On 28 April, Hellenic Shipping News carried an article about this 2009 Convention. Though not yet in force, recycling facility owners in India, Bangladesh, Turkey, and China came forward to comply with HKC Recycling Standards voluntarily. The article explains the process to obtain a Statement of Compliance (SOC).
US CHARGES OWNER OF SHIP WITH NORTH KOREA SANCTIONS-BUSTING AND MONEY LAUNDERING
On 28 April, Hellenic Shipping News reported charges against the owner of tankship Courageous (IMO 8617524) with conspiring to evade economic sanctions on DPRK and money laundering conspiracy. In March 2020, Cambodian authorities arrested the ship on charges of illicit North Korean ship-to-ship transfers. The ship had been sailing under a Cameroonian flag prior to its detention. A civil forfeiture complaint was also filed against the tanker, which the officials alleged was purchased and operated by the owner to make illicit deliveries of petroleum products through ship-to-ship transfers with North Korean vessels, and direct shipments to the North Korean port of Nampo.
An article from OCCRP on 28 April said that, 2019 SOS International (SOSi), a Virginia company with links to the US military, won exclusive access to mines across Afghanistan; and President Ashraf Ghani’s brother is a major shareholder of a SOSi subsidiary. President Ghani granted this SOSi subsidiary, Southern Development, rights to buy artisan-mined ore, and Southern Development operates a mineral processing plant on the outskirts of Kabul. Despite being shut down after an inquiry, these projects have since been quietly restarted as a private venture, and are benefitting those closest to the President.
On 28 April, Ripples Nigeria reported that the AfDB has announced the debarment of a Nigerian company, Maxicare Company Limited for engaging in collusive and fraudulent practices. The debarment took effect from February 23 and is to last for 36 months. At the expiry of the debarment period, Maxicare Company (Nigeria) Limited will only be eligible to participate in Bank Group-financed projects on the condition that it implements an integrity compliance program consistent with the Bank’s guidelines.
On 28 April, the Law Society Gazette reported that a mammoth tax fraud case involving over 100 defendants and 18 solicitors’ firms has fallen at the first hurdle after a judge ruled that Denmark is not entitled to enforce its own tax laws through an English court. The Danish national tax authority brought action against 114 defendants in a bid to recover £1.5 billion paid out in dividend tax reclaims between 2012 and 2015. The authority alleges it was wrongly induced to make the refunds.
SWIFT has released a paper from Regulation Asia which says that independent testing can serve as a functional, scientific and transparent approach to bolster the effectiveness of sanctions screening systems. Regulators expect financial institutions to be able to demonstrate that their sanctions screening systems are configured and working correctly. The report examines why financial institutions that have not yet put effective sanctions testing systems in place should do so, and how they can benefit.
Panama Covid-19 update – the approval of the 122 guest doctors assisting the medical authorities in Panama has been extended for a further 2 months.
The big weekly news conference revealed the Rt infection rate up at 0.98, so only just below the crucial figure of 1. Alongside this, 368 new cases were reported and 3 more fatalities, with 3,914 active cases, of whom 64 are in ICU and 283 in other wards.
27 APRIL 2021
FORUM CONVENIENS – CONTEXT IS KEY
On 27 April, an article from RPC said that the High Court in London has allowed conspiracy proceedings brought by 2 Russian banks against several Russian nationals to proceed in England despite there being “no doubt, and no dispute, that [it] is a Russian case”. The Court accepted the claimants’ argument that 3 of the defendants, who are located in the US, should be parties to the English proceedings to avoid the risk of inconsistent decisions if they were instead sued in separate proceedings elsewhere.
DUTCH SEIZED €303 MILLION IN CASH AND CRYPTOCURRENCY LAST YEAR
On 25 April, the NL Times reported that the Public Prosecutors Service seized around €303 million worth of cash and cryptocurrency in criminal cases in 2020. The amount is considerably higher than it was in 2019 when a total of €258.1 million was confiscated. The Public prosecutors seized €184 million at the request of foreign countries.
HONG KONG GOVERNMENT PLAN TO RESTRICT ACCESS TO COMPANY HEADS’ PERSONAL DATA “WILL SHIELD LAWBREAKERS”
On 24 April, the South China Morning Post reported that a government proposal to restrict public access to the personal information of company directors has sparked concerns that it could lead to unscrupulous individuals getting away with illegal activities such as money laundering, fraud and debt evasion. Critics warned the changes threatened to undermine public scrutiny, press freedom and the chances of holding potential wrongdoers to account. The government proposes restricting access to the home addresses and Hong Kong identity card (HKID) numbers of company directors and officers listed in the Companies Registry.
UK TO COME UNDER SCRUTINY IN ITALY’S LARGEST MAFIA TRIAL IN DECADES
On 27 April, the Guardian reported that, in Calabria, Calabria. about 900 witnesses are set to testify against more than 350 defendants, including politicians and officials charged with being members of the ’Ndrangheta, Italy’s most powerful criminal group. Several of the defendants will be asked to respond to charges of money laundering over establishing companies in the UK with the alleged purpose of simulating legitimate economic activity, and it is said that Ndrangheta interests in the UK have figured prominently. Italy’s national anti-mafia prosecutor is quoted as saying that when the UK was part of the EU, it benefited from the effective sharing of data in the fight against organised crime – but now that it has left the EU, problems will start to emerge.
SWISS BANK PAYS UP TO SETTLE GERMAN TAX EVASION PROBE
On 26 April, Swissinfo reported that Migros Bank has agreed to pay €2.4 million to settle cross-border tax evasion issues with Germany. Migros is one of several Swiss banks that have paid a penalty to avoid prosecution in the neighbouring country.
On 23 April, articles from Wolters Kluwer Australia were concerned with the Australian Government having released the data standards and disclosure framework for its Director Identification Numbers system. The disclosure framework allows the disclosure of protected information (director ID) to government entities, Public Governance, Performance and Accountability (PGPA) bodies, courts and tribunals, to enable those entities to exercise their functions or powers. PGPA bodies may include, corporate Commonwealth entities, non-corporate Commonwealth entities, Commonwealth companies and multi-agency taskforces. The data standards set out the information which the Registrar will require in order to be able to provide a director ID to an individual who has applied under the Act. The introduction of a director ID requirement is one of the Government initiatives to promote good corporate conduct, facilitate confidence, and deter and penalise illegal phoenixing, fraudulent corporate activity and business misconduct. The director ID will require all company directors to confirm their identity. The director ID will be a unique identifier for each individual who consents to being appointed as a company director. An individual will keep that unique identifier permanently, even if they cease to be a director.
VENEZUELA: REGISTRY FOR ENTITIES THAT CARRY OUT ACTIVITIES THAT COULD BE USED FOR MONEY LAUNDERING
On 26 April, an article from Bake McKenzie said that, in February, the National Office against Organized Crime and Financing of Terrorism (ONDOFT) created the Unified Registry of Obligated Subjects before the ONDOFT, which obligates individuals and entities to register if the activities they carry out could be used for money laundering and financing of terrorism. The Rules entered into force on 30 March.
On 22 April, an article from Rouse looks at publicly available data on customs seizures for the UAE and Saudi Arabia: It is said that the Middle East is recognised as a key transhipment hub where counterfeits arrive in large quantities in containers and are sent to other countries in Africa and the EU. It also notes that the unstable political situations in many of Middle Eastern countries such as Syria, Iraq, Yemen, Lebanon, and Palestine are considered to be the perfect environment for counterfeiters to increase their activity due to their poor governance, high levels of corruption and poor intellectual property protection.
On 26 April, Insight Crime published an article saying that US agents and authorities in Panama have recently targeted one of the country’s largest gangs, known as Bagdad, revealing its ability to coordinate drug shipments northward. Panama’s security forces and the DEA have carried out a series of raids — dubbed Operation Neptune — that led to the arrests of at least 20 suspected members of Bagdad.
US: BUSINESSMAN TO ADMIT SMUGGLING MARINE TECH TO CHINA
On 27 April, the Wall Street Journal reported that Qin Shuren, a Chinese national, is set to plead guilty in federal court to felony charges that he illegally procured more than $100,000 in US marine technology for a Chinese military research institute. Under a plea agreement he is expected to plead guilty to counts of conspiring to commit export violations, visa fraud, lying to government agents, money laundering and smuggling.
UK: AUCTION HOUSE CANCELS SALE OF BENIN BRONZE OVER LOOTING CONCERNS
On 22 April, The Times reported that an auction house has withdrawn a Benin bronze from sale and the vendor will consider its repatriation to Nigeria after an expert raised concerns about its “uncertain” provenance. The bronze, which had an estimate of £10,000-£15,000, was described as “an extremely rare Benin bronze ancestral plaque, 16th/17th Century”.
VATICAN REFORMS AT A CROSSROAD, PART I: THE FINANCIAL SCANDALS
On 26 April, Catholic Culture published Part 1 of a 2-part series on financial scandals at the Vatican. It says that more than 8 years have passed since Pope Francis was elected, with a clear mandate from the College of Cardinals to reform the Roman Curia and clean up the Vatican’s financial scandals. Now a new Moneyval report on the Vatican’s progress toward financial accountability will grade the Vatican’s success in eliminating the dangers of money laundering. It considers the cases that Vatican prosecutors have brought most recently for financial irregularities. Part 2 will show how the Secretariat of State has impeded the process of financial reform.
TAJIKISTAN: 9 JAILED OVER SMUGGLING OF LARGE STASHES OF GOLD AND CASH
On 27 April, the Big News Network reported that a court has sentenced 9 people for smuggling large amounts of gold and cash from Dushanbe to Dubai and Istanbul. 5 were convicted of smuggling cash and gold to foreign countries and 4 others – 3 border guards and a police officer – were found guilty of aiding the smugglers. Investigations revealed that the group smuggled nearly 1.4 tons of gold bars and more than $100 million in cash between early September and mid-November last year using forged documents. Authorities seized nearly 90 kg of gold bars and about $15 million in cash from smugglers at the Dushanbe airport in November.
On 27 April, a news release from the Council of Europe said that, amid the rise in counterfeiting and other illegal activities related to the pandemic, the Council of Europe is issuing new recommendations to governments. As regulators around the world approve more vaccines for sale, reports of seizures of counterfeit vaccines continue to rise. The recommendations set out 13 measures to prevent and combat the presence of counterfeit vaccines on the market, including vaccines that misrepresent their identity and/or source, as well as the diversion of legally produced vaccines from the legal supply chain.
TOTAL DECLARES FORCE MAJEURE ON MOZAMBIQUE LNG AFTER INSURGENT ATTACKS – WITHDRAWS STAFF
On 26 April, Defence News reported that French energy group Total has declared force majeure on its $20 billion liquefied natural gas (LNG) project in Mozambique and confirmed it had withdrawn all staff from the construction site following insurgent attacks last month. Declaring force majeure implies a weightier suspension and allows Total to cancel contractors.
UK: SFO UNDER FIRE AS TAGGING PROSECUTION THROWN OUT
On 27 April, the Law Society Gazette reported that a high-profile prosecution of 2 former directors of outsourcing giant Serco collapsed when a judge directed a jury to acquit following admissions of disclosure failings by the SFO. A prosecution review of its disclosure process ‘uncovered errors made in the non-disclosure of certain materials’. White collar crime experts lambasted the SFO over the disclosure failing.
On 27 April, Finextra carried an article which discusses how IFA can conveniently comply with KYC and AML requirements without the money and resources available to larger financial organisations. It says that the need for thorough and transparent KYC checks is just as important for IFA as it is for a large investment banks – although the depth of the processes required may vary, according to the nature of the business and likely risk profile.
On 26 April, an article in The East African reflects on apparent growing confidence under the new President. It says that trade with DRC is currently a preserve of China, South Africa, Zambia, Belgium and India, with China taking 31% ($2.07 billion) of the Congo’s total imports ($6.66 billion) in 2019. A new study by the East African Business Council in collaboration with the German International Co-operation Agency shows that the country presents a huge trade opportunity given that its huge population accounts for almost half of the population of the East African Community member states combined.
HOW IRAN USED AN INTERNATIONAL PLAYBOY TO LAUNDER OIL MONEY
On 27 April, a report from OCCRP focuses on the role played by Turkish President Recep Tayyip Erdoğan, a state bank, and a money launderer, Reza Zarrab. It says that Zarrab’s extravagant lifestyle made him famous in Istanbul, where he was known as “The Turkish Gatsby”, and his 2016 arrest in Miami established him as the star witness in what became the long-running prosecution of Halkbank, Turkey’s leading state-owned bank. For more than a year, a group of journalists led by OCCRP analysed nearly 750,000 documents and transaction records used in Zarrab’s US prosecution, as well as SAR that became part of the “FinCEN Files” in 2020. The report details what was found.
PROCUREMENT DURING THE PANDEMIC: IS THERE A CASE FOR PROSECUTING UK PUBLIC OFFICIALS FOR MISCONDUCT IN PUBLIC OFFICE?
On 27 April, a post from the consistently interesting and relevant blog at law firm Corker Bining posed this question. It examines whether, in addition to a public inquiry, the criminal law might have a role to play as part of the UK day of reckoning with coronavirus. In particular, would UK law enforcement be able to prosecute the offence of misconduct of public office in relation to the procurement of supplies during the pandemic?
BLACK AXE MAFIA: ITALIAN POLICE ARREST 30 NIGERIAN SUSPECTED GANG MEMBERS
On 26 April, the BBC reported that Italian police have carried out raids across the country, arresting some 30 people suspected of operating for the Nigerian Black Axe mafia syndicate. They face about 100 charges including drug and people trafficking, prostitution and internet fraud and allegedly used the Bitcoin cryptocurrency to carry out clandestine financial transactions on the dark web. Black Axe emerged from Nigeria in the 1970s, where they carried out rape, mutilation, and ritual murders, and they went on to build a powerful international network.
SWISS FOREIGN MINISTRY DROPS GLENCORE AND OTHER CONTROVERSIAL SPONSORS
On 25 April, Swissinfo reported that the Swiss foreign ministry has ended sponsorship agreements with dozens of companies including mining and trading giant Glencore and chocolate maker Läderach because of image concerns.
RUSSIAN MILITARY COURT SENTENCES FORMER TOP SECURITY AGENT TO PRISON FOR MASSIVE FRAUD
On 23 April, Rferl reported that a Moscow military court has sentenced a former senior officer in the Federal Security Service (FSB), Kirill Cherkalin, a former lieutenant colonel in the security service’s so-called banking department, to 7 years in prison after he and 2 others were caught with tens of millions of dollars of cash in 2019. He was arrested in April 2019, along with 2 other FSB officers, Dmitry Frolov and Andrei Vasilyev, on charges of bribe-taking and fraud. The court ordered Cherkalin to pay $4.2 million each to 2 victims of the fraud.
On 27 April, OFAC released replacements for the regulations that were published in abbreviated form in May 2010, with a more comprehensive set of regulations that includes additional interpretive and definitional guidance, general licenses, and other regulatory provisions that will provide further guidance to the public.
EUROPEAN COURT CONSIDERS APPEAL AGAINST ANNULMENT OF 2014 – 2017 SANCTIONS LISTING OF KURDISTAN WORKERS’ PARTY (PKK)
On 27 April, the EU Sanctions Blog reported that the European Court of Justice has given judgment in an appeal brought by the EU Council challenging the General Court’s decision to annul the listing. The ECJ said the General Court had erred in its analysis of the duty to give reasons and has remitted the case to the General Court.
CAMEROONIAN CITIZEN EXTRADITED FROM ROMANIA TO FACE COVID-19-RELATED FRAUD CHARGES
On 27 April, a news release from US DoJ announced that Desmond Fodje Bobga, 28, a citizen of Cameroon was extradited to the US to face federal charges for his alleged involvement in a fraud scheme perpetrated against American consumers. Bobga is charged with conspiracy to commit wire fraud, wire fraud, forging a seal of the US Supreme Court, and aggravated identity theft. Bobga knowingly conspired with others to offer puppies and other animals for sale on internet websites. He and others communicated by text message and email with potential victims to induce purchases.
On 23 April, TRAFFIC published a report which says that tther ivory trades often overshadow the hippopotamus ivory trade. Following several developments surrounding hippos and the trade in ivory, there has been increased interest in this often-overlooked trade. Research assessed quantities of hippo ivory internationally traded between 2009 and 2018 and identified the major exporting and importing countries/territories. The research also sought to estimate the equivalent number of animals or offtake from the wild hippo population based on the quantities of ivory international traded. It found that hippo ivory was predominantly exported from east and southern African range states to Asia, Europe, and North America. Much of the hippo ivory was re-exported to countries/territories within the EU, Hong Kong, Turkey, and the US.
Panama Covid-19 update – another 3 fatalities reported today, together with 198 new cases. 3,906 active cases include 63 in ICU and 296 in other wards.
26 APRIL 2021
VENEZUELA PROSECUTOR WHO DEFIED MADURO IMPLICATED IN BRIBERY
On 22 April, AP reported that a former Venezuelan attorney general who defied President Nicolas Maduro by siding with his opponents has been implicated in a major corruption case in Miami involving a Venezuelan businessman who has pleaded guilty to paying $1 million in bribes.
PARENT COMPANIES’ DOCUMENTS FOUND TO BE IN SUBSIDIARIES’ CONTROL FOR DISCLOSURE PURPOSES
On 23 April, an article from Herbert Smith Freehills reported that the High Court in London has found that documents held by the claimants’ parent companies, and individuals connected with those entities, were within the claimants’ “control” for the purposes of their disclosure obligations in the litigation. This is the latest in a line of first instance decisions which have held a party will have the requisite degree of control over a third party’s documents, for disclosure purposes, if there is an arrangement or understanding which means the documents are within the party’s practical control, even though the party does not have a presently enforceable legal right to obtain the documents. The claimants are BVI companies which own or have owned properties in the UK, and allege that the manager of their London property portfolio, and its directors and holding company, were complicit in a substantial fraud perpetrated on the claimants by their own appointed representative.
UK: COURT OF APPEAL CONFIRMS FRAUD EXCEPTION TO THE WITHOUT PREJUDICE RULE EXTENDS TO CASES WHERE A PARTY WISHES TO REBUT ALLEGATIONS THAT A SETTLEMENT AGREEMENT IS INVALID
An article from Herbert Smith Freehills on 22 April reported that the Court of Appeal has upheld a High Court judgment which found that defendants could rely on without prejudice statements made in a mediation position paper to rebut the claimants’ allegations that a settlement agreement apparently concluded should be set aside for fraud. The article says that that the decision confirms that the fraud exception to the rule extends further than had generally been understood. It is not limited to a situation where a party wishes to rely on such material to show that a settlement agreement should be set aside on grounds of misrepresentation, fraud or undue influence. The exception will apply equally where a party wishes to rely on the material to rebut an allegation that the agreement is invalid on these or similar grounds.
TAIWAN SET TO ROLL OUT NEW AML REGULATIONS FOR CRYPTO EXCHANGES
On 26 April, Forkast reported that Taiwan is poised to roll out new regulations that would heighten AML requirements for cryptocurrency exchanges operating on the island. The new rules, which will take effect on 1 July, would affect cryptocurrency exchanges and other platforms that operate security token offerings. They will be required to report transactions worth over $17,800 conducted in cash, and they also will need to fulfil KYC requirements to ensure identity authentication of their clients.
SMUGGLERS INFILTRATING BIG SHIPPING COMPANIES IN ROTTERDAM AND POLICE CAN’T KEEP UP
On 26 April, NL Times reported claims that criminals now commonly infiltrate big shipping companies and use a variety of smuggling techniques. Last year, a record 40.9 tonnes of cocaine were seized by the so-called “Hit And Run Cargo” (HARC) team. However, it is said that the HARC team consists of only 18 people. “There were 18 in 2014 when 7.5 tonnes was found and now there are still only 18.
FIRE EXTINGUISHED ON OIL TANKER OFF SYRIA AFTER SUSPECTED DRONE ATTACK
On 25 April, Defence News reported that Syria’s oil ministry said firefighters had put out a fire on an oil tanker off the Baniyas refinery after a suspected attack by a drone coming from the direction of Lebanese waters. It is said to be one of 3 Iranian oil tankers that had recently arrived at the Syrian oil terminal. Syria has grown more dependent on Iranian oil shipments in recent years
HOW TO COMPLY WITH UK AND EU REACH CHEMICAL REGULATIONS
Updated information from DEFRA on 26 April on how to comply with the EU and UK REACH chemical regulations when using, making, selling or importing chemicals in the UK and in the EU. UK REACH is part of the UK’s chemicals regulatory regime and if you sell or distribute chemicals in the UK and the EU, you’ll need to follow both UK REACH and EU REACH rules. UK REACH maintain EU REACH’s aims and principles
CHINESE CUSTOMS SEIZE MORE THAN 15,000 FAKE AUTO PARTS
On 25 April, Shine reported that officials discovered a batch of oil filters with trademarks, including Ford, Toyota, Honda, had been declared for export. During an inspection, Customs found that the parts were crudely made and the printing on the packaging was fuzzy. After checking with related companies, these were all declared infringing products. In addition, more than 3,700 door closers with fake UL Certification were seized
CHINA’S CUSTOMS CONFISCATE PETRIFIED TEETH OF PRIMITIVE SHARK
On 25 April, MENA-FN reported that Customs had confiscated 2 fossilised teeth of a megalodon, a primitive species of shark. The megalodon, signifying “big tooth,” was a giant shark that lived around 28 million to 150,000 years ago. It is supposed to be a violent predator in primitive oceans with a bite force five times that of a huge white shark.
HOW GOLD TRADE DATA COULD BE BETTER USED FOR DUE DILIGENCE
On 20 April, Global Witness said that trade data could be an important resource for responsible gold supply chains but refiners have often ignored data that pointed to obvious red flags. On the other hand, it says, huge gaps in the availability of data and poor data quality are limiting the potential use of trade data for due diligence purposes. Gold leaves traces when it crosses borders since shipments of gold are usually registered by customs when leaving and entering countries. Trade data can be a means of carrying out simple checks for red flags related to the gold they source. While the analysis of gold trade data can be complex, the NGO found cases in which very basic checks would have raised red flags of links to conflict, human rights violations and environmental damage.
US: OWNER OF ILLEGAL RACEHORSE DOPING WEBSITES PLEADS GUILTY
A news release from US DoJ on 23 April advised that that Scott Mangini had pleaded guilty to conspiring to unlawfully distribute adulterated and misbranded drugs with the intent to defraud and mislead. He is said to have created and flooded the supply side of a market of greed that continues to endanger racehorses through the sale of performance-enhancing drugs. He designed and created dozens of products intended for use by those engaged in fraud and animal abuse. His products were manufactured with no oversight of their composition and in shoddy facilities. A former pharmacist whose licence was suspended in 2016, he sold the drugs through several direct-to-consumer websites designed to appeal to racehorse trainers and owners, including, among others, “horseprerace.com” and “racehorsemeds.com”.
HMRC RECORDS 1 MILLION SCAMS AS CRIMINAL GANGS TARGET COVID FURLOUGH SCHEME AND TAX PAYMENTS
On 25 April, the I newspaper in the UK reported that the Covid-19 pandemic has led to a record number of tax scams, with HMRC receiving 1 million complaints about criminal attempts to con people over the past year.
CYBERCRIME AGAINST THE SHIPPING INDUSTRY – PART 2: RANSOMWARE
On 23 April, an article in Insurance Marine News says that cyber hackers were continuing to home in on the shipping industry, which they considered to a vulnerable and highly lucrative target. The article introduces the second part of legal firm Clyde & Co’s study of cybercrime within the global shipping sector. Although malware had been found aboard ship’s IT systems, Clyde said that the majority of cyber-attacks had been perpetrated on shore-based systems, business offices and data centres from which ships, clients and personnel were managed and the logistics of transport organized. There has been a 400% increase in attempted cyber hacks on maritime companies between February and June 2020, while ransomware attackers were reported to have made at least $350 million in cryptocurrency in 2020. It refers to a recent OFAC Advisory which alerted companies of the potential sanctions risks for facilitating ransomware payments to sanctioned entities, and set out the factors considered when determining an enforcement response to an apparent violation.
THE SHIPPING INDUSTRY FACES EXPANDED RISKS FROM THE NEW US RUSSIA SANCTIONS
An article from Windward on 26 April comments on what it calls the wide-ranging risks they pose to the shipping industry and the sizable challenge maritime actors face to manage the new risk. It looks at the sanctions evasion risk around the Crimean peninsula, which is sizable. In March 2021 alone it is said that one has seen suspicious activity from over 500 vessels conducting 3327 ship-to-ship meeting.
US: IPR CENTER LAUNCHES COMMUNITY-BASED INITIATIVE TO HELP SMALL BUSINESS PROTECT THEMSELVES AGAINST INTELLECTUAL PROPERTY THEFT, OTHER FRAUD
On 26 April, a news release from US Immigration and Customs Enforcement advised that the National Intellectual Property Rights Coordination Center in partnership with Michigan State University’s Center for Anti-Counterfeiting and Product Protection (A-CAPP), the US Chamber of Commerce, and the Better Business Bureau announced the launch of “IP Protect”. This joint initiative provides resources – free of charge – to aid small to mid-size businesses in protecting themselves against IP theft, fraud and cyber security awareness.
On 26 April, an article from Thomas Fox in FCPA Compliance & Ethics Report says that one of the more confusing areas of the FCPA is in that of facilitation payments. Facilitation payments are small bribes but make no mistake about it, it is said, they are bribes. It points out that the Bribery Act in the UK does not exempt facilitation payments from its provisions, and explains the implications of this for a US business.
UK: PROSECUTORS’ CASE AGAINST EX-SERCO EXECUTIVES COLLAPSES AT TRIAL
On 26 April, the Wall Street Journal and others reported that the acquittal comes after the SFO failed to disclose evidence to the defence. 2 former executives at security company Serco were acquitted of defrauding the Ministry of Justice after the SFO failed to disclose documents to the defence. They had been accused in a £12 million electronic tagging scam case and were accused of reducing Serco’s profits from a Government-awarded prisoner tagging contract from £27 million to £15 million and this meant more than £12 million in profits were concealed.
UK SANCTIONS GUPTA BROTHERS OVER SOUTH AFRICA CORRUPTION
On 26 April, Business Day in South Africa reported that the sanctions were imposed against 3 Gupta brothers who were previously accused of being in a corrupt relationship with former President Jacob Zuma. Ajay, Atul, and Rajesh “Tony” Gupta are among 22 people from 6 countries who face restrictions ranging from visa bans to asset freezes after the UK expanded its sanctions regime to include corruption for the first time. The Guptas, who no longer live in South Africa, have denied wrongdoing.
SEC EMERGENCY ACTION AND TEMPORARY RESTRAINING ORDER AND AN ASSET FREEZE TO STOP AN ALLEGED PONZI SCHEME AND MISAPPROPRIATION OF INVESTOR PROCEEDS PERPETRATED BY A FLORIDA RESIDENT THROUGH SEVERAL ENTITIES HE CONTROLS
A release on Mondo Visione on 26 April advised that the SEC alleges that since 2015, Jonathan P. Maroney and his companies raised at least $17.1 million from more than 100 investors in a series of fraudulent securities offerings.
On 26 April, HM Treasury issued a Notice advising that 22 names had been designated under the new regulations that came into force on the same day. The new regulations provide for the freezing of funds and economic resources of certain persons, entities or bodies involved in serious corruption. The list includes nationals from Guatemala, Dubai, South Africa, Russia, India and Honduras.
On 26 April, OFAC announced 2 addition of 2 Guatemalan nationals to its sanctions lists – Gustavo Adolfo Alejos Cambara, the former Chief of Staff for the Alvaro Colom presidential administration, and Felipe Alejos Lorenzana, an elected delegate to the Congress of the Republic of Guatemala. The new measure reinforces actions taken last year by the Department of State to publicly designate both individuals, and their immediate family members, due to their involvement in significant corruption, and banning them from entry into the US.
On 26 April, Daily NK reported that North Korea is in the midst of recruiting labourers to send abroad as part of full-fledged efforts to earn foreign currency. Labourers are being recruited by the country’s External Construction Bureau, and recruitment efforts are focused on men in their 30s and 40s who will be sent to construction projects abroad.
A release from the University of Washington on 21 April is concerned with what a new University-led study calls “location spoofing”. Photos — created by different people, for different purposes — are fake but look like genuine images of real places; and with the more sophisticated AI technologies available today, researchers warn that such “deepfake geography” could become a growing problem. A team of researchers set out to identify new ways of detecting fake satellite photos, warn of the dangers of falsified geospatial data and call for a system of geographic fact-checking.
On 20 April, OCCRP published a feature saying that amid the ongoing fight for global financial transparency, a new concept has emerged: unexplained wealth – assets that are clearly incommensurate with a person’s publicly-declared earnings or known business interests. In the feature, OCCRP examines the impact of those measures in the UK’s “uphill battle” to fix its reputation as a favoured spot to launder ill-gotten gains, and presents some of its “unexplained wealth” investigations from recent years.
These Regulations came into force on 26 April and enable the Secretary of State to impose financial sanctions and travel bans on persons involved in serious corruption. They also apply to conduct by UK persons outside the UK, and to conduct by any person in the territorial sea adjacent to the UK. They will enable the UK to designate persons who are involved in certain activities identified as the most harmful types of corruption: bribery and misappropriation of property involving public officials. Such persons are able to be designated for the purpose of a travel ban and/or financial sanctions. The designation of such persons would be intended to prevent and combat serious corruption. It is said that guidance will be published in relation to the prohibitions and requirements under the Regulations.