The JMLSG has published proposed revisions to Sector 15 (Trade Finance) in Part II of its Guidance. Comments on the proposed revisions, which were approved by the JMLSG Board on 14 April, should be received by 18 June.
https://jmlsg.org.uk/consultations/consultation-part-ii-sector-15/
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The Terrorism Act 2000 (Proscribed Organisations) (Amendment) Order 2021 adds both the Atomwaffen Division and the National Socialist Order (as an alias). It is a criminal offence for a person to belong to, or invite support for, a proscribed organisation. It is also a criminal offence to arrange a meeting to support a proscribed organisation; or to wear clothing or carry articles in public which rouse reasonable suspicion that an individual is a member or supporter of a proscribed organisation.
https://www.legislation.gov.uk/uksi/2021/501/contents/made
https://www.gov.uk/government/news/white-supremacist-group-atomwaffen-division-banned-in-the-uk
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On 23 April, Devdiscourse and others reported that Saudi Arabia had announced a ban on imports of fruits and vegetables from Lebanon, blaming an increase in drug smuggling, in a measure that will add to Lebanon’s economic woes.
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Panama Covid-19 update – another 314 new cases reported today, with 2 more fatalities and 3,845 active cases – 66 in ICU and 324 in other wards.
22 APRIL 2021
US: 3 INDICTED FOR PLOT TO STEAL FROM SAFETY DEPOSIT BOXES AT FOREIGN BANKS AND LAUNDER THE PROCEEDS IN THE US
On 20 April, CBS8 News reported that prosecutors say 3 US residents used sophisticated equipment to burglarise safe deposit boxes at overseas banks an alleged scheme to steal more than $30 million then launder the money in the US. They were charged with money laundering conspiracy and conspiracy to violate the Travel Act. The men allegedly stole the millions from safe deposit boxes at mostly Eastern European banks that did not have high levels of security – including Ukraine, Russia, North Macedonia, Moldova, Latvia, Uzbekistan and Azerbaijan.
TURKEY FREEZES ASSETS OF 377 PEOPLE, ORGANISATIONS ON TERROR CHARGES
On 7 April, the Stockholm Center for Freedom reported that Turkey has frozen the assets of 377 individuals and institutions, including the US-based Muslim cleric Fethullah Gülen and people with links to the worldwide civic initiative inspired by him. Among the 365 individuals whose assets have been frozen by way of the 12-page decision are 77 members of the outlawed Kurdistan Workers’ Party’s (PKK), 9 members of the Revolutionary People’s Liberation Party/Front (DHKP/C), 86 Islamic State in Iraq and the Levant (ISIL) members and 205 followers of the faith-based Gülen movement, which is regarded as a terrorist organisation by Turkey.
https://stockholmcf.org/turkey-freezes-assets-of-377-people-organizations-on-terror-charges/
PFIZER IDENTIFIES FAKE COVID-19 SHOTS ABROAD AS CRIMINALS EXPLOIT VACCINE DEMAND
On 19 April, the Wall Street Journal reported that Pfizer Inc says it has identified in Mexico and Poland the first confirmed instances of counterfeit versions of the Covid-19 vaccine. Vials seized by authorities in separate investigations were tested by the company and confirmed to contain bogus vaccine. The vials recovered in Mexico also had fraudulent labeling, while a substance inside vials in Poland was likely an antiwrinkle treatment, Pfizer said.
SRI LANKA EXPELS SHIP CARRYING NUCLEAR MATERIAL FOR CHINA
On 21 April, Military.com reported that Sri Lankan authorities have expelled an Antigua-registered ship that entered the island’s territory without declaring a radioactive cargo bound for China. It was found to be in the Chinese-run port of Hambantota carrying uranium hexafluoride. The ship had come from Rotterdam but authorities did not say where in China it was headed. It was an offence to enter a port without declaring the material, which is used to enrich uranium, the fuel for nuclear power stations and weapons.
UK: FORGER RAN FAKE PASSPORT FACTORY FROM HIS ATTIC
On 21 April, a news release from the NCA announced that an Ecuadorian man has been convicted for running a fake passport factory from his attic in south-west London. He had been linked by fingerprints to a false passport carried by a man suspected of illegally smuggling migrants into the UK. He had set up his attic as a dedicated workspace for the production of counterfeit passports of various European nationalities, including French, Belgian and Portuguese.
https://www.nationalcrimeagency.gov.uk/news/forger-ran-fake-passport-factory-from-his-attic
UKRAINE: NABU PUTS IHOR HLADKOVSKY ON WANTED LIST IN CASE OF ‘SCHEMES’ IN UKROBORONPROM
On 22 April, Interfax Ukraine reported that the National Anti-Corruption Bureau of Ukraine (NABU) has put Ihor Hladkovsky, one of the suspects in the Optimumspetsdetal corruption case, on the wanted list.
https://en.interfax.com.ua/news/general/739431.html
ITALIAN HOSPITAL EMPLOYEE ‘EARNED £465,000 OVER 15 YEARS WITHOUT EVER WORKING’
On 22 April, the Irish Examiner reported that authorities have placed 6 hospital employees in Italy under investigation for abuse of office after they allegedly allowed a 67-year-old to draw more than €500,000 in salary over 15 years without ever working. Guardia di Finanza said in a statement that he allegedly had someone threaten a hospital superior in 2005 to keep him on the payroll, and superiors then failed to take action or sanction him even after launching an internal investigation.
https://www.irishexaminer.com/world/arid-40272413.html
HIGH CARGO CRIME RATES IN EUROPE, THE MIDDLE EAST AND AFRICA IN 2020 CONTINUE DESPITE LOCKDOWNS
On 21 April, Lloyds Loading List reported that goods thefts in Europe, the Middle East and Africa in 2020 produced losses of more than €172m despite most of the region being in lockdown. This was information contained in the according to the Transported Asset Protection Association’s (TAPA) Cargo Theft Annual Report. Trucks, trailers and Last Mile delivery vans were by far the most popular target for cargo thieves, as in previous years.
US RETURNS 33 LOOTED CULTURAL ARTIFACTS TO AFGHANISTAN
On 22 April, OCCRP reported that 33 cultural artifacts, worth some $1.8 million, have been returned to Afghanistan after authorities found them among more than 2,500 looted antiquities held in the collection of a notorious New York art dealer. In the past few months, the Manhattan DA has repatriated 338 items from his collection to their countries of origin which include India, Pakistan, Nepal, Afghanistan and Sri Lanka.
https://www.occrp.org/en/daily/14269-us-returns-33-looted-cultural-artifacts-to-afghanistan
NIGERIA: CUSTOMS IMPOUNDS 42 DRUMS OF EXPLOSIVES FROM BENIN REPUBLIC
On 21 April, the Guardian in Nigeria reported that the Nigeria Customs Service (NCS), had intercepted 42 drums of calcium carbide smuggled into the country from the Benin Republic. It says that security experts have warned that calcium carbide could be used as explosives to bring down a building, especially when some chemical components are added to it.
https://guardian.ng/news/customs-impounds-42-drums-of-explosives-from-benin-republic/
US CUSTOMS SEIZES RUSSIAN ODOMETER MANIPULATING DEVICES
A news release from US Customs & Border Protection on 21 April advised that officers had seized 5 odometer manipulating devices in early April that were shipped from Russia and destined to addresses in Connecticut, Georgia, Florida, and Illinois in individual express international parcels. Internet research revealed that the devices connect to a vehicle’s instrument panel for the sole purpose of manipulating a vehicle’s mileage. It is estimated that more than 450,000 vehicles are sold each year with false odometer readings and this costs American car buyers more than $1 billion annually.
OLIGARCH’S SON TOLD TO PAY MOTHER £75 MILLION AFTER WORLD’S BIGGEST DIVORCE CASE
On 21 April, The Guardian reported that the son of an oligarch was said by a judge in London to be “a dishonest individual who will do anything to assist his father”. Temur Akhmedov was found to have worked together with his father, the billionaire Farkhad Akhmedov, to hide hundreds of millions of pounds of assets – including several mansions, a superyacht, a helicopter and an extensive art collection – in order to avoid paying a £453 million divorce settlement.
UK: POST OFFICE SCANDAL: WHAT THE HORIZON SAGA IS ALL ABOUT
On 21 April, the BBC produced a summary of the Post Office scandal, where a group of former sub-postmasters and sub-postmistresses, who say they were victims of a massive miscarriage of justice, are awaiting a ruling by the Court of Appeal. This marks the latest stage of a computer scandal, and a long and complex legal battle, which could leave the Post Office with a huge compensation bill. Between 2000 and 2014, the Post Office prosecuted 736 sub-postmasters and sub-postmistresses – an average of 1 a week – based on information from a recently installed computer system called Horizon.
https://www.bbc.com/news/business-56718036
COOPERATION TO STRENGTHEN THE EU CUSTOMS UNION
On 22 April, the EU Parliament Research Service published a briefing paper about the new, updated customs cooperation programme for customs authorities in the EU. The new programme envisages more intense cooperation, including through more electronic systems that have a satisfactory level of innovation, and with more uniform application of the customs rules across all 27 Member States.
https://www.europarl.europa.eu/RegData/etudes/BRIE/2021/690571/EPRS_BRI(2021)690571_EN.pdf
PRIVATE JETS LADEN WITH COCAINE TRAVEL FROM BRAZIL TO EUROPE
On 21 April, an article from Insight Crime reported that business jets are on the radar of European authorities after the dismantling of a ring that used private aircraft to smuggle cocaine from Brazil to Portugal. 8 aircraft held by companies operating illegally in Brazil were seized in a police operation to dismantle the smuggling ring, which came to light after seizures on 2 private aircraft. Besides having less security in general, airports that service private jets also avoid interfering with their wealthy clientele, making them ideal for traffickers.
https://insightcrime.org/news/brazil-private-jets-cocaine-trafficking-europe/
UAE HAS ISSUED NEW AML/CFT GUIDELINES TO RAISE AWARENESS OF THE IMPORTANCE OF ADHERING TO FINANCIAL CRIME LEGISLATION
An article from Out-Law on 22 April advised that the National Anti Money Laundering and Combatting Financing of Terrorism and Financing of Legal Organisations Committee (NAMLCFTC) had adopted the guidelines for financial institutions, designated non-financial businesses and professions in April, and are set to be published on the NAMLCFTC and other regulatory bodies’ websites, to increase knowledge of the rules and ensure action by licensed entities. The committee also approved 6 risk assessment reports related to terrorist financing, trade-based money laundering, misuse of legal persons, non-profit organisations, lawyers and the gold sector.
https://www.pinsentmasons.com/out-law/news/uae-introduces-guidelines-to-combat-anti-money-laundering
UK: LAW COMMISSION CONSULTS ON SMART CONTRACTS
An article from Dentons on 22 April advised that a “smart contract” is a legally binding contract in which some or all of the contractual obligations are recorded in or performed automatically by a computer program deployed on a “distributed ledger”. Distributed ledger technology is a method of recording and sharing information across a computer network in a way that makes it very difficult to amend. It says that the Law Commission has consulted on these definitions and other issues as part of its review of how England and Wales’ legal framework could facilitate smart contracting. It is expected to scope out the legal reforms necessary to enable this technology to thrive in late 2021.
US SANCTIONS HELP CRACK MALAYSIAN CRIME RING
On 21 April, radio Free Asia reported that a series of US sanctions on a Macau underworld kingpin helped Kuala Lumpur pry the lid off a Malaysian connection to criminal groups in China and related police corruption. They allowed the Royal Malaysia Police to connect the dots, which led to the uncovering of the Nicky Gang allegedly headed by Nicky Liow Soon Hee – was close to Wan Kuok Koi (commonly known as Broken Tooth), the leader of 14K Triad – one of the largest Chinese organised crime gangs in the world that has tentacles in many countries.
https://www.rfa.org/english/news/china/crime-04212021192034.html
ALLIANZ REVEALS £65.8 MILLION WORTH OF INSURANCE FRAUD IN 2020
On 21 April, the Insurance Times reported that the insurer had focused on rogue loss adjusters, which had reduced its exposure to fraud, saying it had detected a record £65.8 million in fraud in 2020. It identified several areas as being particularly prone to fraud in 2020.
FORMER FISHERIES MINISTER OF INDONESIA CHARGED IN BRIBERY CASE
On 20 April, Seafood Source reported that the Corruption Eradication Commission (KPK) – has accused former fisheries minister Edhy Prabowo of taking bribes in a case involving issuance of lobster seeds exports.
SOUTH AFRICA: AUTHORITIES HAVE CUT DEALS WITH MEMBERS OF AN ABALONE POACHING SYNDICATE
On 20 April, Eyewitness News reported that a court had given suspended sentences to 6 people arrested in the Western Cape and Gauteng in February last year. They have all been handed sentences of 2 years imprisonment wholly suspended for 5 years with stringent conditions. However, the syndicate’s kingpin in the Western Cape, Solomon Sauls, was sentenced to an effective 18 years’ direct imprisonment in February.
ANTWERP PROSECUTOR INVESTIGATION INTO THE BANKRUPTCY OF THE COMPANY THAT WAS FORMERLY THE CITY’S LEADING DIAMOND DEALER
On 21 April, the Brussels Times reported that Eurostar Diamond Traders, owned by the family of 71-year-old Kaushik Mehta, was at one point the diamond city’s major trader in both rough and cut diamonds. Then, suddenly in 2019, the business was declared bankrupt, and it turned out the company had a mountain of debt.
UAE GOES LIVE WITH ‘TRADE CONNECT’, A BLOCKCHAIN-BASED TRADE FINANCE PLATFORM, TO COUNTER FRAUD RISKS
On 19 April, Gulf News carried a report about the launch of Trade Connect. This brings together telecom giant Etisalat and a consortium of 7 leading local banks, led by FAB (First Abu Dhabi Bank). Currently, the platform is primarily into fraud detection within the trade finance space, but the promoters expect it to evolve into handling trade-based money laundering or sanctions busting. And at a later date, get into e-invoicing.
MSC SHIPPING COMPANY SPENT “TENS OF MILLIONS” OF DOLLARS AFTER MSC GAYANE DRUGS BUST
On 21 April, Hellenic Shipping News reported that Switzerland-based Shipping company MSC told a court prior to the sentencing of several crew members on a charge of drugs smuggling on the MSC Gayane in 2019 that it had since spent “tens of millions of dollars in making its systems more secure. Of the ship’s crew of just over 20, at least 8 were involved according to prosecutors. 4 crew members from Montenegro led the operation. They had taken jobs on the ship intending to smuggle cocaine. They recruited at least 4 other crew members. The US government also targeted the ship with a forfeiture action, and MSC placed $10 million in a CBP security account and provided CBP with a $40 million surety bond in order to release the ship.
UN PANEL OF EXPERTS REAFFIRMS CALL TO SANCTION SUBSIDIARIES OF LIBYAN SOVEREIGN WEALTH FUND
On 20 April, Kharon reported that the panel had repeated its call to impose sanctions on subsidiaries of the Libyan Investment Authority (LIA), citing mismanagement, a lack of transparency and other issues at the embattled sovereign wealth fund. The LIA, established in 2006, has total declared assets of about $65 billion, according to the UN panel. The fund was sanctioned by the U.N. in March 2011 amid the uprising against deceased former strongman Muammar Qadhafi, citing his and his family’s then-control of its assets, and how it had served as a potential revenue source. The sanctions involved the LIA, and the Libyan Africa Investment Portfolio (LAIP), a subsidiary of the fund. It mentioned that LAIP controls several holding companies, including the Libyan African Investment Company (LAICO), though it has “limited activity”, a UN report said. LAICO has 32 companies and is the sole shareholder of 19 of them, the UN said. LIA subsidiaries maintain active operations in Libya and abroad, Kharon found.
CALL FOR CHINESE BANKS TO STOP LAUNDERING WILDLIFE TRAFFICKERS’ MONEY
On 22 April, OCCRP reported that TRAFFIC, an NGO focusing on the global trade in wild animals and plants, released a report this month which found that the illegal wildlife trade generates between $7 billion and $23 billion each year – as much as the illegal trafficking of narcotics, arms, and humans generate – and this cannot occur without financial crime and corruption. It has called on Chinese banks to prevent illegal wildlife traffickers from exploiting their networks to launder money. Otherwise those banks will risk greater scrutiny and pressure from foreign governments.
AMERICAN CHEMIST “STOLE TRADE SECRETS IN ORDER TO START A COMPANY IN CHINA”
On 22 April, Just the News reported that the DoJ had announced that Dr Xiaorong You, aka Shannon You, 59, of Lansing, Michigan, had been convicted of conspiracy to commit trade secret theft, conspiracy to commit economic espionage, possession of stolen trade secrets, economic espionage, and wire fraud. She is said to have stolen trade secrets, valued at almost $120 million to start a business in China – to set up a new BPA-free coating company in China with a Chinese corporate partner.
INDIA: CLAIMS THAT NIGERIAN OIL COMPANY STILL SHIPPING PRODUCT DESPITE MONEY LAUNDERING ALLEGATIONS
On 22 April, The Hindu reported claims that Nigeria-based Sterling Oil Exploration & Energy Production Co (SEEPCO) Limited was still in operation, exporting oil, despite an Enforcement Directorate request to the Nigerian government to restrain its assets in connection with a money laundering case against SEEPCO’s parent, Sterling Biotech, and others. The crude oil produced by the company is said to be finding its way to various countries, including India. In June 2019, the ED attached (i.e. applied restraint orders) against overseas assets including included 4 Nigeria-based oil rigs and an oil field, several ships registered in Panama, an aircraft registered in the US, and a flat in London. The oil rigs and oil field were in the name of SEEPCO, Nigeria.
UK TASKFORCE TO PROBE HOW A DIGITAL POUND COULD COMPLY WITH AML AND DATA PROTECTION RULES
On 22 April, GRC World Forums reported that the Bank of England and HM Treasury have announced a joint Central Bank Digital Currency (CBDC) taskforce to explore the practicalities of establishing a digital pound. As part of the efforts, the Bank of England has set up an engagement forum to discuss the practical challenges of implementing and designing a CBDC, including examining ‘data and privacy implications’.
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On 22 April, Deutsche Welle reported that Turkey has opened an investigation into Fatih Faruk Ozer, founder of cryptocurrency platform Thodex. It seems that Ozer is now wanted on suspicion of fraud and founding a criminal organisation.
https://www.dw.com/en/turkish-cryptocurrency-platform-founder-vanishes-fraud-suspected/a-57302955
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On 21 April, OCCRP carried a report saying that few have heard of the illegal dog trade, but it is believed to rank among Europe’s fastest-growing illicit markets. It generates more money than the illegal human rogan trade, poses a greater risk to public health than the illegal wildlife trade, and kills more European animals than the illegal arms trade kills Europeans. It involves smuggling, tax evasion, market fraud, consumer fraud, animal abuse, and danger to individual and public health.
https://www.occrp.org/en/37-ccblog/ccblog/14263-the-canine-connection-europe-s-illegal-dog-trade
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EU Regulation 2021/655/EU removes 6 entities from the EU sanctions lists following the decision of the relevant UN Sanctions Committee.
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On 22 April, EU Observer reported that, despite having the second-lowest waste-recycling rates in the EU, Romania has become overflowing with waste and garbage – most of it brought in illegally from abroad. A recent case involved 189 tonnes of waste from Italy and authorities established that those importing the waste had no facility to recycle it, and it would most likely will end up in illegal landfills.
https://euobserver.com/news/151622
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On 22 April, the EU Observer reported on an investigation into the sale of passports in Malta. It said that Chinese, Russian, and Saudi millionaires bought EU passports from Malta using loopholes according to leaked documents from Henley & Partners, a London-based firm which designed Malta’s golden-passport industry. Many passport-buyers spent less than 3 weeks in Malta and left letterbox-type residences empty most of the time, the leaked files. The investigation is into the sale of passports by the Daphne Caruana Galizia Foundation, The Guardian, Dossier Centre and five independent media organisations in Malta: Lovin Malta, Malta Today, The Malta Independent, the Times of Malta and The Shift. The most prominent country of origin is Russia, which comprises approximately 37% of all applicants for Maltese citizenship, irrespective of their success in doing so. Second is China with approximately 12% of all applicants, followed by Saudi Arabia at roughly 10% of all applicants. A considerable number of applicants for Maltese citizenship already held multiple passports at the time of applying and many held citizenship of St Kitts and Nevis. It points out that obtaining dual citizenship with Malta is illegal for citizens of some countries. This is certainly the case with Saudi Arabia, for instance. Saudi citizens must seek discretionary royal permission to obtain an additional passport elsewhere.
https://euobserver.com/tickers/151635
https://www.daphne.foundation/passport-papers/
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Panama Covid-19 update – as if the virus wasn’t enough, the fallout from the recent St Vincent volcano is reaching Panama – dust and sulphur dioxide, with warning of possible nasal irritation and conjunctivitis…
Meanwhile, another 359 new cases (with figures continuing to hold up worryingly) and 3 new fatalities. There are 3,900 active cases (actually 1 more than yesterday), with 60 in ICU (up 3) and 313 in other wards (down 7).
21 APRIL 2021
SNC-LAVALIN SAYS WORLD BANK LIFTS SANCTIONS IMPOSED IN 2013
The Wall Street Journal reported on 20 April that the sanctions (debarment from applying for World Bank funding – or funding from other similar bodies) stemmed from allegations the Canadian engineering company bribed officials in Bangladeshin connection with a bank-funded project, and were lifted after an assessment and monitoring process by authorities at the bank, the company said.
https://www.wsj.com/articles/snc-lavalin-says-world-bank-lifts-sanctions-imposed-in-2013-11618942254
BAHRAIN: PROPOSED AMENDMENTS TO ITS AML LAW FOR REGULATED SECTORS
On 19 April, Al Taminin & Company said that Bahrain’s Parliament has voted to approve Royal Decree No 29 of 2020 amending certain provisions of Decree Law No 4 of 2001, bringing it one step closer to imposing the highest level of financial integrity protections recommended by international standards. It says that of particular relevance to Bahraini businesses is the new administrative penalty, which will see companies fined for failures to properly implement the required compliance measures prescribed by the law. Where there have been multiple failures, this fine can be multiplied by the number of violations, amounting to potentially astronomical fines for the most egregious laxities. Other important updates contained in the Decree include a general prohibition to all natural and legal persons to implement targeted financial sanctions imposed by the UN Security Council, extension of corporate liability provisions for money laundering and terrorism financing offences, and broadening of key definitions to increase the scope of activity that could potentially fall within the remit of the AML law.
COUNTERFEIT GOODS IN THE MIDDLE EAST
On 20 April, an article from Rouse says that an OECD/EUIPO report identifies several important transit points for trade in counterfeits. In particular, 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 says that there are no accurate and official statistics available to the public except in the UAE and Saudi Arabia and, as a result, the data on the quantities seized by the Customs are subject to debate. The article says 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. The article goes on to provide publicly available data on customs seizures for the UAE and Saudi Arabia: It also says that it is obvious the Turkey plays an important role as a source country for shipments of fake products. These shipments include a mix of local production and well as trans-shipments. For the purpose of implementing successful enforcement strategies, the article recommends that brand owners should also consider what it describes as 3 tiers of countries in terms of customs activities and effectiveness against counterfeits in the Middle East – explaining the tiers.
https://rouse.com/insights/news/2021/counterfeit-goods-in-the-middle-east
PHILADELPHIA MAN ADMITS CONSPIRING TO EXPORT FIREARMS PARTS FROM US TO TURKEY AND GEORGIA
A news release from US DoJ on 20 April announced that Samet Doyduk, 35, pleaded guilty by videoconference to conspiracy to violate the Arms Export Control Act and anti-smuggling laws. Doyduk admitted that from November 2018 through March 2019, he and other conspirators agreed to ship firearms parts from the US to Turkey and the Republic of Georgia.
CHINESE POLICE SEIZE $6 MILLION OF SMUGGLED DIAMONDS
On 21 April, IDEX and others reported that Chinese police have seized diamonds worth over $6.1 million and arrested 20 people suspected of smuggling them onto the mainland through Hong Kong. Officers believe gang members have been buying gems from foreign websites since last July and smuggling them into the mainland, undeclared, to avoid paying tax.
https://www.idexonline.com/FullArticle?Id=46652
SWEDISH POLICE WARN GAMBLING UNDER “HIGHEST THREAT” FROM MONEY LAUNDERING
On 21 April, iGB reported that Swedish police has warned that gambling is at its “highest threat level” of money laundering in the country’s National Risk Assessment of Money Laundering and Terrorist Financing report. The report said that said gambling businesses are often unknowingly “at risk” of money laundering exploitation – with gambling at state-owned casinos and online gambling were highlighted as areas where the risk was especially high.
https://igamingbusiness.com/swedish-police-warn-gambling-under-highest-threat-from-money-laundering/
meanwhile –
SWEDISH GAMBLING OPERATORS FLAGGED OVER 700 MONEY LAUNDERING REPORTS IN 2020
On 9 March, iGB reported that a report from Sweden’s Financial Police said that more than 700 reports of suspected money laundering were made by gaming companies in the jurisdiction in 2020.
https://igamingbusiness.com/swedish-operators-flag-over-700-money-laundering-reports-in-2020/
This is a schematic of the Swedish system for combatting money laundering and terrorist financing, as regulated chiefly in the Act on Measures against Money Laundering and Terrorist Financing (2017:630). The entities without a dedicated supervisory authority are defined in items 15–16, 18–19 and 21–22 in the second section of the Act and are subject to supervision by the County Administrative Boards of Skåne, Stockholm and Västra Götaland. The entities with a dedicated supervisory authority are defined in items 13–14, 17 and 20 in the same section and are subject to supervision by the Estate Agents Inspectorate, the Gambling Authority, the Inspectorate of Auditors and the Bar Association.
Illustration: Government Offices of Sweden
MOROCCO: PARLIAMENT AMENDS AML LAW
On 21 April, Asharq Al-Awsat reported that the House of Representatives has unanimously approved a Bill to amend the penal code and the law to combat money laundering. It extends the cts that constitute the money laundering to include even those committed abroad and expands “confiscation of property” to include “the predicate offense of money laundering”. It provides that financial and non-financial institutions, such as lawyers, notaries and others, are required to provide details to the National Financial Information Authority, and gambling activities in ships and trafficking in precious stones are subject to controls.
MOZAMBIQUE’S PRESIDENT VOWS TO RESTORE PEACE IN GAS-RICH CABO DELGADO
On 21 April, Defence Web reported that President Filipe Nyusi said the government will work to restore peace in the country after a deadly militant attack last month near multi-billion-dollar gas projects backed by global oil companies. The stakes are high for Mozambique, with peace a “fundamental condition” for the development of the projects, and he called on all stakeholders to overcome this crisis. He said the government foresees “direct benefits” of more than $100 billion dollars from the gas projects, which will diversify the state’s income base and allow for reinvestment in other sectors.
UK: BRIEFING ON THE NATIONAL FRAUD INITIATIVE DATA MATCHING POWERS CONSULTATION PROPOSALS
On 21 April, the Open Rights Group published a briefing which summarises our main concerns with the Cabinet Office’s National Fraud Initiative (NFI) data-matching powers consultation proposals. The proposal sets out a range of proposals that would dramatically expand data-sharing powers in the public sector. The briefing identifies the issue, provides context and summarises Open Rights Group’s (ORG) main concerns about the proposals. It explains that the NFI is ‘an exercise that matches electronic data within and between public and private sector bodies to prevent and detect fraud’ and is managed by the Cabinet Office. The ORG says that the most problematic issue in the proposals is the extension of the powers for crime and offenders, expanding the capacity of police to collate information from public and private bodies.
EX-CHAIRMAN OF KYRGYZ FINANCIAL POLICE FOUND GUILTY OF CORRUPTION
On 21 April, 24KG reported that a criminal case against ex-chairman of the State Service for Combating Economic Crimes of Kyrgyzstan (Financial Police), Bakir Tairov, came before the Pervomaisky District Court of Bishkek, and the court was told he had entered into a plea bargain in February. The indictment states that Bakir Tairov, being the head of the Financial Police, instructed the former director of the State Agency for Land Resources Kanybek Botobaev to collect money from the territorial divisions of Cadastre state institution in favor of Birimdik party before the upcoming parliamentary elections in October 2020.
ROMANIA: SENATE APPROVES CRIMINAL PROSECUTION REQUEST AGAINST EX-MINISTER BODOG
On 21 April, the Romania Journal reported that the plenary sitting of the Senate (Romanian Parliament’s upper chamber) has given the green light for the National Anti-corruption Directorate’s request to criminally prosecuted the former PSD minister of Health, Florian Bodog, currently a senator. Prosecutors accuse the former Health minister of intervening so that a person he had hired as personal advisor should receive his salary for a period of 12 months without coming to work and without carrying out this paid activity.
IRAQ ISSUES ARREST WARRANTS FOR 58 OFFICIALS ON CORRUPTION CHARGES
On 21 April, Middle East Monitor reported that Iraq’s Commission on Public Integrity (CPI) has announced the issuance of arrest warrants and summons against 58 current and former officials accused of corruption. The arrest and detention orders included current and former governors, as well as 25 executive directors of state institutions, including current and former officials, in addition to several government employees who were appointed to temporarily fill vacant posts. 22 members of local councils and others are also wanted by the authorities.
EU CROWDFUNDING REGULATION – CROSS-BORDER OPPORTUNITIES ON THE HORIZON
On 15 April, Irish law firm Matheson published an article which says that at present within the EU the is no EU-wide legislation of crowdfunding instead, several, but by no means all, Member States have established their own regimes. Ireland is one of those Member States which has not implemented any specific regulations regarding crowdfunding, although the adoption of regulations has been proposed in various government plans. It says that the EU Crowdfunding Regulation (and accompanying Directive) establishes a single market for the provision of an alternative source of financing for start-ups and SME, crowdfunding can provide a viable solution to the lack of access for such entities and further contribute to the establishment of the Capital Markets Union and grow the EU’s market share in this sector. In this article, the law firm complements an earlier article published in November and considers some of the potential wider implications of the Crowdfunding Regulation. It is said that the Crowdfunding Regulation is a welcome regulatory development to facilitate the integration of crowdfunding services provided across member states of the EU and one which is expected to contribute to further growth in the crowdfunding market in the EU.
US CUSTOMS SEIZES CHICKEN LOLLIPOPS (PET TREATS)
A news release from US Customs & Border Protection on 20 April advised that agriculture specialists working at the Dallas Fort Worth International Airport intercepted a shipment of prohibited and restricted pet treats that was manifested as men’s sweaters. The chicken lollipop pet treats shipped from Hong Kong.
https://www.cbp.gov/newsroom/local-media-release/cbp-seizes-chicken-lollipops
MALTA: CUSTOMS SEIZE 900 REPLICA ASSAULT RIFLES
On 20 April, Newsbook in Malta reported that a Libya-bound container loaded with more than 900 dummy replicas of the AK 47 assault rifle was intercepted by the Customs Department. There are suspicions that they were intended to be used for training, assault courses and weapon possession familiarisation.
https://newsbook.com.mt/en/customs-seize-900-replica-assault-rifles/
228 ARRESTS AFTER 70,000 INDIVIDUALS CHECKED ACROSS EUROPE TO TACKLE MOBILE CRIMINALITY
On 21 April, a news release from Europol advised that law enforcement authorities from 17 countries targeted mobile organised crime groups active across Europe as part of the latest edition of Operation Trivium. The operation was coordinated by the Netherlands and supported by Europol. Seizures included 88 vehicles, stolen goods, illegal substances and large amounts of cash. One objective of this year’s operation was to locate wanted convicts of organised property crime on the run. Investigations during the operation identified the whereabouts of a number of these individuals.
UK: ACCOUNTANT GIVEN 11 YEARS’ IMPRISONMENT FOR £1.3 MILLION FRAUD
On 19 April, a news release from the CPS advised that an accountant, Stephen Day, 53, who defrauded the NHS, companies, and individuals out of more than £1.3 million has been jailed for multiple counts of fraud and theft. Day became a board member or trustee of 8 companies, working to persuade them to use his business for their payroll services and financial management operations. Once they agreed, he would use his authority to take hundreds of thousands of pounds out of their bank accounts under the guise of legitimate payments.
https://www.cps.gov.uk/cps/news/accountant-given-11-years-imprisonment-ps13-million-fraud
4 SECURITY CHALLENGES AWAITING ECUADOR’S NEXT PRESIDENT
On 20 April, Insight Crime reported that Ecuador’s next president will face an unprecedented set of security challenges, as prison violence has soared to record levels, the country’s corruption is receiving international attention and the criminal situation along the border with Colombia continues to sour. It lists unprecedented levels of gang warfare, including prion gangs; Ecuador as a major transit hub for cocaine and heroin shipments from Colombia and Peru; corruption; and fragmented control of criminal economies along Ecuador’s borders with Colombia and Peru which pose significant security challenges.
https://insightcrime.org/news/four-security-challenges-awaiting-ecuador-president/
SOLICITOR WHO MISLED HUNDREDS INTO INVESTING £19 MILLION IN FAILED CLAIMS SCHEME IS STRUCK OFF
On 21 April, Legal Futures reported that a solicitor who misled hundreds of investors and attracted £19 million to bring claims for miscalculated mortgage payments – none of which succeeded – has been struck off. He dishonestly told investors that there was no chance of losing their money.
THE SCOPE OF “REASONABLE EXCUSE” PART II: WHEN CAN A PERSON LAWFULLY REFUSE TO ANSWER QUESTIONS IN A COMPELLED INTERVIEW IN A CRIMINAL INVESTIGATION?
A blog post from Crowell Moring on 20 April commented further on the aftermath of the recent UK Supreme Court case which held that a foreign company cannot be compelled pursuant to section 2(3) of the Criminal Justice Act to produce documents held overseas. It explains that compelled interviews are creatures of statute. The SFO Director is empowered by section 2 to issue a notice compelling a person to “answer questions…”. FCA investigators are empowered by section 171 Financial Services and Markets Act 2000 to issue a notice compelling a person to “answer questions…”. HMRC, NCA and police officers are empowered by section 62 of the Serious Organised Crime and Police Act 2005 to issue a notice compelling a person to “answer questions with respect to any matter relevant to the investigation”. The language of these statutes varies slightly but the general legal obligation is identical: the interviewee must answer the investigator’s questions provided those questions are relevant to the investigation.
https://www.corkerbinning.com/the-scope-of-reasonable-excuse/
LOUIS VUITTON, CARTIER, PRADA TO USE BESPOKE BLOCKCHAIN TO TACKLE COUNTERFEIT GOODS
On 20 April, Coindesk reported that a trio of high-end luxury companies are coming together to tackle counterfeit goods through a blockchain-based seal of authenticity.
https://www.coindesk.com/louis-vuitton-cartier-prada-aura-blockchain-consortium
SPAIN DISMANTLES CHINESE GANG SELLING CANNABIS ACROSS EUROPE
On 20 April, AP reported that police in Spain said that they have dismantled one of the largest criminal gangs growing cannabis in the country and trafficking it across Europe. At least 65 people, most of them Chinese nationals, were arrested in several Spanish cities, Portugal and the Netherlands. Police identified the gang as “Bang of Fujian”, in reference to the eastern Chinese province where the 2 main families that formed it originated. The group operated mainly from its Barcelona base, in north-eastern Spain. The investigation began in 2019 when the first parcels containing packaged marijuana were detected.
https://apnews.com/article/europe-spain-police-reform-de7e12adbcef140ee89feac93b00c4d7
ALI KHALILMERHI: HOW A ONE-TIME FUGITIVE FOUND FORTUNE IN SOUTH SUDAN
A report in The Sentry said that Lebanese businessman Ali Khalil Merhi fled Paraguay while awaiting his trial and crossed the border into Brazil in 2000, escaping mounting scrutiny from authorities, facing piracy charges and suspicions of links to terror financing. He obtained a new passport under the name Ali Khalil Myree, established more than a dozen new companies, and cultivated a new network of powerful government contacts—all in South Sudan. It is said that The Sentry found that for more than a decade, the government of South Sudan has supported the Lebanese tycoon, granting him citizenship, lucrative contracts, and even the title of honorary consul.
https://thesentry.org/reports/metamorphosisofmerhi/
PARISIAN COURT RULES THAT GERMAN PAINTING, SEIZED UNDER SUSPICION OF FORGERY IN 2016, MUST NOW BE RETURNED TO THE PRINCE OF LIECHTENSTEIN
The Art Law & More blog on 21 April carried a post saying that the painting was controversially seized 5 years ago after an anonymous complaint alerted the high-profile anti-forgery investigation. The investigation closed in 2018, but the painting was never given back. The painting was once owned by an infamous collector, who allegedly masterminded an international trafficking ring of forgeries.
TELLTALE SIGNS A FLAG IS GOING BAD: AN ANALYSIS OF THE CAMEROONIAN SHIPPING FLEET
On 21 April, Windward published an article saying that over the past few decade’s flag registries have again and again hit the headlines and come under criticism, much of which has centred around the practice of flags of convenience, their susceptibility to abuse by illicit players, and insufficient flag state regulations and enforcement. Stories over recent months led Windward to take a deeper look into how monitoring flag registries and vessel flags can pre-emptively minimise risk and aid governments, flag and port authorities, and even commercial organizations identify flag weaknesses that illicit players and sanctioned regimes are exploiting.
FORMER DRC MINISTER HELD IN THE CONGO REPUBLIC OVER EMBEZZLEMENT CASE
On 21 April, the Daily Mail reported that a former DR Congo minister, Willy Bakonga, a former education minister, has been arrested in neighbouring Republic of Congo at the request of authorities in Kinshasa who have accused him of embezzlement.
SOUTH AFRICAN EX-PRESIDENT ZUMA’S LEGAL TEAM QUITS AHEAD OF CORRUPTION TRIAL
On 21 April, Reuters reported that former South African President Jacob Zuma’s legal team has quit less than a month before he goes on trial on corruption charges. Zuma and French arms company Thales are due in court in May on charges related to a $2 billion arms deal from the 1990s.
GUATEMALA PROSECUTORS PURSUE EX-PRESIDENT JIMMY MORALES
On 21 April, ABC News reported that Guatemalan prosecutors have requested that former President Jimmy Morales (2016-20) be stripped of his immunity so he can be prosecuted for violating the mandate of the UN-backed anti-corruption mission then working in the country. Although when he assumed the presidency he pledged to battle corruption, once he and family members became targets of the anti-corruption mission, he moved to push it out of Guatemala.
NEW YORK FISHERMAN AND FISH DEALER CHARGED WITH CONSPIRACY, FRAUD, AND OBSTRUCTION RE A SCHEME TO ILLEGALLY OVER-HARVEST FLUKE AND BLACK SEA BASS
A news release from US DoJ on 21 April announced that a Grand Jury in New York had unsealed the indictment of one fisherman, a wholesale fish dealer, and 2 of its managers in connection with a scheme to illegally overharvest fluke and black sea bass 2014-16.
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On 21 April, Transparency International released a new report – “Track and Trace”, a comprehensive study to date of UK public procurement during the pandemic and involved a painstaking review of nearly 1,000 contracts worth a total of £18 billion. The report details how critical safeguards designed to prevent corruption were suspended without adequate justification. The report concludes that poor record keeping combined with opaque, uncompetitive contracting and a suspiciously high number of awards to companies with political connections has undermined public trust and justifiably fuelled criticism of the Government.
https://www.transparency.org.uk/track-and-trace-uk-PPE-procurement-corruption-risk-VIP-lane-research
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On 21 April, The Independent reported that fraudsters posing as Chinese security officials trick victim, a 90-year-old woman, into emptying bank accounts
https://www.independent.co.uk/asia/china/hong-kong-phone-scam-fraud-b1835233.html
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On 19 April, OFSI in the UK posted on its blog information on how its licensing system works, and changes having effect following the end of the Brexit transition period on 31 December.
https://ofsi.blog.gov.uk/2021/04/19/introduction-to-licensing/
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On 21 April, OFAC announced the deletion 15 Panamanian entities
https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20210421
The listings were linked to the so-called Waked Money Laundering Organisation took place in 2016 and involved no less than 77 entities and individuals –
https://www.treasury.gov/press-center/press-releases/Pages/jl0450.aspx
https://www.newsroompanama.com/news/waket-money-laundering-organization-names
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On 21 April, OFAC designated 2 Burmese state-owned enterprises, Myanma Timber Enterprise (MTE) and Myanmar Pearl Enterprise (MPE), which are responsible for timber and pearl exports from Burma. The timber and pearl industries are key economic resources for the Burmese military regime that is violently repressing pro-democracy protests in the country and that is responsible for the ongoing violent and lethal attacks against the people of Burma, including the killing of children.
https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20210421
https://home.treasury.gov/news/press-releases/jy0138
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A briefing from PraxisIFM says that while art market participants (AMP) have been subject to general proceeds of crime regulations for many years the latest EU Directive, which was incorporated into UK domestic law and came into force on 10 January 2020, introduces formal AML processes for AMP. It includes the requirement for registration with HMRC, putting AMP in a similar position to financial services businesses. The briefing note provides some guidance on the new regulations, and the full guidance notes issued by the British Art Market Federation and approved by HMRC can be found online.
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Panama Covid-19 update – the Rt rate has crept up again, though still below the magic 1 figure, at 0.92. ICU and other ward numbers also slightly up… However, there were 275 new cases and 3 new fatalities reported today. Of the 3,899 active cases, 57 are in ICU and 320 in other wards, with 207 more in so-called “hospital hotel” rooms.
20 APRIL 2021
WHEN CAN DELIBERATE CONCEALMENT POSTPONE LIMITATION PERIODS?
On 20 April, RPC published an article about a recent case in which the Court of Appeal explored the meaning of ‘deliberate concealment’ and held that there need not be “active steps of concealment” for the start of a limitation period for enforcement of a debt to be delayed under the Limitation Act 1980. It says that the court has shed light on the meaning of ‘deliberate concealment’ and says that ‘deliberate’ does not require a claimant to prove actual knowledge on the part of a defendant and so the burden on claimants is easier to overcome.
GUERNSEY: 12-YEAR DISQUALIFICATION PENALTY IMPOSED ON COMPANY DIRECTOR
On 20 April, an article from Ogier was concerned with a recent decision of the courts in Jersey and a disqualification which is far reaching and in summary prohibits an individual from being a director of a company, but also extends to a prohibition on participating, directly or indirectly, in the management, formation or promotion of a company, both domestically and in respect of overseas companies. It explains that a prohibition order was initially made against the individual concerned regarding his involvement in a business enterprise. The individual subsequently became involved with Immuno Biotech Limited, although he was only the financial controller and not a director of the company. Immuno Biotech’s business activities involved the sale and distribution of unlicensed medicinal products and the director of the company was sentenced to 15 months in custody in England. The court was asked to make an exception in relation to 2 BVI companies of which the individual was a director and that were party to longstanding litigation proceedings, but the court determined that it would be an “irresponsible exercise” of its discretion to allow an individual to be a director of an overseas company when it had determined that they were unfit to be a director of a Guernsey company.
NOTIFICATION INJUNCTIONS IN THE CAYMAN ISLANDS
On 20 April, an article from Ogier explained that a notification injunction is an alternative to the conventional freezing order that is available where there is concern that a respondent may deal with their assets so as to frustrate the enforcement of any future judgment. It says that this new breed of quia timet ‘notification’ injunction does not prevent the disposal of or dealings with assets, but instead requires a respondent to give an applicant prior notice before the defendant can dispose of or deal with its assets. They are granted as an alternative to a freezing order, where the grounds for a freezing order are made out but the court prefers to order a less intrusive form of relief and does not consider a freezing order to be necessary.
SOUTH KOREA TO CRACK DOWN ON CRYPTOCURRENCY-RELATED ILLEGALITIES
On 18 April, Yonhap News reported that South Korea has said that it plans to crack down on any illegality involving cryptocurrencies, such as money laundering, until June amid skyrocketing prices of virtual money. The crackdown comes as the latest frenzied buying of bitcoin and other cryptocurrencies raises concerns about speculative investments and potential illegal activities. The actions will include keeping close tabs on illegal transfers of virtual assets abroad.
https://en.yna.co.kr/view/AEN20210419005500320
IRELAND: NEW GARDA POWERS UNDER REVIEW TO TACKLE WHITE-COLLAR CRIME
On 19 April, the Irish Times reported that significant new powers are being considered for the garda to tackle white collar and other economic crimes, including new search warrants for gaining access to the passwords and other login details of suspects’ computers and mobile phones – include access to data and evidence stored in cloud, or virtual, storage.
THE INCREDIBLE RISE OF NORTH KOREA’S HACKING ARMY
On 19 April, a feature in The New Yorker says that despite how hard, or impossible, it is for ordinary North Korean citizens to learn about the outside world, a tiny fraction of 1% of North Koreans has access to the Internet. Yet, paradoxically, the North Korean government has produced some of the world’s most proficient hackers. Like many countries, including the United States, North Korea has equipped its military with offensive and intelligence-gathering cyber weapons, but North Korea is the only nation in the world whose government is known to conduct nakedly criminal hacking for monetary gain – with tactics ranging from bank heists to the deployment of ransomware and the theft of cryptocurrency from online exchanges.
https://www.newyorker.com/magazine/2021/04/26/the-incredible-rise-of-north-koreas-hacking-army
THE DOUBLE LIFE OF AN ACCUSED US-ALBANIAN DRUG TRAFFICKER
On 20 April, Balkan Insight carried a feature about Ylli Didani, who appeared to be a successful businessman with stakes in companies in the US, Albania and Kosovo, where he enjoyed a business relationship with a former security aide to ex-Kosovo Prime Minister Ramush Haradinaj. However, according to the DEA, 43 year-old Didani led a double life, ostensibly mining for minerals while in fact smuggling cocaine from South America to Europe and laundering the proceeds. Although arrested in the US this month, prosecutors in his native Albania dropped a probe in 2018 into suspicious bank transfers of hundreds of thousands of dollars. According to the DEA, Didani’s organisation had links in North America, South America, Albania, Turkey, Germany, Belgium, Spain, the Netherlands and UAE.
CHEMICAL WEAPONS WATCHDOG WEIGHS IMPOSING SANCTIONS ON SYRIA
On 20 April, WION and others reported that Syria faces the loss of its “rights and privileges” at the Organisation for the Prohibition of Chemical Weapons (OPCW) after a probe found it had carried out 3 attacks in 2017. It would be the first time a country had faced such punishment in the history of the OPCW, which was founded nearly a quarter of a century ago to rid the world of chemical weapons.
https://www.wionews.com/world/chemical-weapons-watchdog-weighs-imposing-sanctions-on-syria-378833
SINGAPORE PROSECUTION FILES MORE CHARGES OVER NICKEL TRADING SCANDAL
On 20 April, Reuters reported that Singapore prosecutors have filed 5 additional charges against businessman Ng Yu Zhi in relation to a scheme that allegedly raised at least S$1 billion ($746 million) from investors to fund bogus nickel trades.
BOLIVIAN JUSTICE ORDERS DETENTION OF FORMER HEALTH MINISTER OVER COVID-RELATED ALLEGATIONS
On 20 April, Prensa Latina reported that A issued a house arrest for former interim Health Minister Eidy Roca, who has been charged with alleged corruption crime for illegal purchase of Covid-19 respirators in 2020.
https://www.plenglish.com/index.php
UK: FOREIGN SECRETARY CONFIRMS MAGNITSKY SANCTIONS WILL BE INTRODUCED TO TACKLE DIRTY MONEY
On 20 April, the Belfast Telegraph reported that the Government will introduce Magnitsky sanctions to tackle dirty money following the Russia report. The Foreign Secretary’s comments came as MPs raised concerns about rising tensions at Ukraine’s border due to the recent Russian military build-up of forces there.
MEXICAN STEEL TYCOON FACING CORRUPTION AND LAUNDERING CHARGES RELEASED
On 20 April, Borderland Beat reported that a judge has ordered that Mexican steel executive Alonso Ancira be released after he worked out a deal with Mexican prosecutors a to have his corruption and money laundering charges dropped. He was extradited from Spain earlier this year to face corruption and money laundering charges after he was implicated in the fraudulent sale-purchase of Agros Nitrogenados, a plant fertiliser company and subsidiary of Altos Hornos de Mexico (AHMSA).
https://www.borderlandbeat.com/2021/04/mexican-steel-tycoon-wanted-for.html
ARE NONFUNGIBLE TOKENS (NFT) SUBJECT TO US AML REQUIREMENTS?
On 20 April, an article from Skadden explains that an NFT is a certificate of ownership stored on a blockchain typically associated with a digital asset, such as art, videos, music, games, or tweets. Unlike certain other virtual assets on the blockchain, such as cryptocurrencies, NFT are unique or “nonfungible”. While the US authorities have not yet indicated whether certain NFT market participants (e.g. creators, sellers, dealers, marketplace operators) are or may become subject to AML regulatory requirements, recent developments and concerns of US lawmakers and regulators regarding the financial crime risks associated with virtual assets make regulatory scrutiny of NFT likely. The article looks at recent developments, whether NFT should be dealt with like virtual currencies and implications for the art trade.
https://www.jdsupra.com/legalnews/are-nonfungible-tokens-subject-to-us-8498289/
UK GOVERNMENT TO LAUNCH INDEPENDENT REVIEW INTO COLLAPSE OF FOOTBALL GAMBLING FIRM
On 20 April, a news release advised that an independent review examining the circumstances surrounding the collapse of the gambling company, Football Index, is to be launched. It explains that Football Index, operated by BetIndex Ltd, had a model that allowed customers to buy ‘shares’ in footballers and receive returns based on their performance. It entered into administration in March with the Gambling Commission suspending the firm’s operating licence shortly after. It had many thousands of customers, with some having lost very large sums of money as a result of its demise. As well as establishing how the operator collapsed and identifying any lessons to be learned, the review will look at the decisions and actions of the Gambling Commission, which licenses and regulates the gambling industry.
US IMPOSES VISA RESTRICTIONS ON UGANDAN GOVERNMENT OFFICIALS ACCUSED OF HUMAN RIGHTS VIOLATIONS AND REPRESSIVE ACTS DURING THE JANUARY ELECTIONS AND CAMPAIGN PERIOD
On 20 April, Jurist reported that President Yoweri Museveni has been in power for 35 years, and after the January general election, he was declared the winner with 58% of the votes. During the campaign and election, opposition candidates were reportedly harassed, arrested and held illegally without charge; and security forces were responsible for killing and injuring dozens of bystanders, opposition supporters and journalists. On 16 April, the US State Department imposed the visa restrictions on those believed to be responsible for, or complicit in, undermining the democratic process in Uganda, including during the general elections and the campaign period that preceded it.
https://www.state.gov/imposing-visa-restrictions-on-ugandans-for-undermining-the-democratic-process/
PORTUGUESE AUTHORITIES ARREST MEMBERS OF MONTENEGRIN MAFIA
On 20 April, OCCRP reported that authorities in Portugal said that they have arrested 2 alleged members of a Montenegrin criminal organisation who are sought in the Balkans for extortion and drug trafficking. The suspects allegedly belong to the Montenegrin Kavač gang which is involved in extortion, trafficking and money laundering. The gang has been fighting a bloody war with another clan from Montenegro called “Škaljari” over control of cocaine smuggling from South America. Initially part of the same gang, the Kavač and Škaljari clans split in 2014.
https://www.occrp.org/en/daily/14261-portuguese-authorities-arrests-members-of-montenegrin-mafia
EU AUDITORS: INCONSISTENT CUSTOMS CONTROLS AFFECT EU REVENUES
On 31 March, the Brussels Times reported that the European Commission should enhance uniform application of customs controls and establish a fully-fledged analysis and coordination capacity at EU level, according to a report from the European Court of Auditors (ECA). Despite a recently adopted customs financial risk framework, the member states are carrying out custom controls inconsistently which affects custom revenues negatively and is vulnerable to corruption.
UK: COURT HEARING OVER UK’S £400 MILLION TANK DEAL DEBT TO IRAN POSTPONED
On 19 April, the Guardian reported that a High Court hearing designed to resolve the UK’s non-payment of a debt to Iran has been postponed again, leaving the families of dual nationals detained in Iran distraught since they believe the debt is critical to their release of loved ones.
IRELAND: MAN JAILED FOR 7 YEARS OVER €3.7 MILLION CASH SEIZURES
On 20 April, the Irish Examiner reported that Darren Hoey, 46, who pleaded guilty under money laundering legislation to possessing huge amounts of cash at a house in Co Kerry, and at a second property in Co Laois, and has been sentenced to a total of 7 years imprisonment.
https://www.irishexaminer.com/news/courtandcrime/arid-40267274.html
COVID-19 HAS TRANSFORMED SOMALILAND’S REMITTANCE LIFELINE
On 19 April, the Open democracy website carried a report about the effect on Somaliland (note – not Somalia, but the separate and largely unrecognised state). It says that remittances were projected to crash at the start of the pandemic, but in Somaliland COVID-19 created an opportunity for digital disruption instead. For Somaliland, a country of less than 4 million people in the Horn of Africa, remittances amounted to $1.4 billion in 2018, or around 50% of its GDP. Covid-19 restrictions and restrictions on international flights have affected hawala-type transfers – this being addition to problems caused by KYC and other AML.CFT controls. However, it says that the disruption of cash-based hawalas has provided business opportunities for cashless digital money transfer operators and the 2 banks in Somaliland that use the SWIFT system.
SINGAPORE: SYNDICATE MEMBER BEHIND S$2.5 MILLION CROSS-BORDER INVESTMENT SCAM GETS JAIL, SQUANDERED MILLIONS AT CASINO
On 19 April, Channel News Asia reported that a member of a syndicate linked to S$2.5 million worth of cross-border investment scams, perpetuated via shell companies with fake office fronts at Marina Bay Financial Centre, was given 12 years and 1 month’s jail. However, China national Wei Yong, 44, gambled away most of his criminal proceeds, transacting a total of S$30 million at Singapore’s casinos, and was unable to make any restitution.
RISE IN PRODUCTION OF SYNTHETIC DRUGS POSES LEGAL CHALLENGES FOR PROSECUTORS
On 19 April, a news release from Eurojust says that the stark rise in the production of synthetic drugs such as (meth-)amphetamines poses increasing challenges for prosecutors across Europe. Through new substances, producers try to exploit legal gaps and avoid prosecution. Also, due to legal uncertainties, it is often difficult to prove suppliers are deliberately selling illegal drugs or substances.
https://www.eurojust.europa.eu/rise-production-synthetic-drugs-poses-legal-challenges-prosecutors
SRI LANKA: WARNING THAT COLOMBO PORT CITY COULD BE A SAFE HAVEN FOR MONEY LAUNDERING ACTIVITIES
An article in the Sri Lankan Daily Mirror on 20 April carried an article in which former Justice Minister Wijayadasa Rajapakshe PC said that once the Colombo Port City Economic Commission Bill comes into effect, the Colombo Port City (CPC) will be a safe haven for money laundering activities. He is quoted as saying that the new legislative regime which would function as CPC, allows for tax exemption, tax-free salaries and to be an offshore financial centre; and that this is going to be a safe haven for money laundering activities.
THE US DILEMMA OVER THE NORD STREAM 2 PIPELINE
On 15 April, an article from the Belfer Center said that the controversial and costly Nord Stream 2 pipeline is intended to carry natural gas from Russia to Germany. As it nears completion, European countries and the US continue to disagree over the advantages and disadvantages – and possible security threats – of the pipeline. The article says that the Center has asked transatlantic, Russia, and energy-focused experts to share their thoughts on the implications of the Nord Stream 2 pipeline for Europe’s security and energy supply, transatlantic relations, and policy toward Russia, as well as what actions the US and European countries should take at this point.
https://www.belfercenter.org/publication/dilemma-over-nord-stream-2-pipeline
US: UPDATED TECHNOLOGY TO DETECT RADIOLOGICAL THREATS AT PORTS AND AIRPORTS
On 16 April, Homeland Security Today reported that the Department of Homeland Security (DHS) Countering Weapons of Mass Destruction Office (CWMD) has completed a technical refresh of 60 mobile Radiation Portal Monitors currently deployed and used by US Customs and Border Protection (CBP). CWMD supplies CBP with this capability to scan cargo for potential radiological threats.
ISIS CYBER GROUP WARNS OF TRACKING THROUGH BITCOIN USE
On 20 April, Homeland Security Today reported that an ISIS-supporting cybersecurity group has warned followers to avoid using Bitcoin because of the potential for jihadists to be tracked through use of the cryptocurrency. The Electronic Horizons Foundation, which launched in January 2016 as an IT help desk of sorts to walk ISIS supporters through how to encrypt their communications and otherwise avoid detection online.
THE UNITED STATES OF WEED
Curious about the status of cannabis? Here’s where legalisation stands, state by state.
https://www.rollingstone.com/culture/culture-features/cannabis-legalization-states-map-831885/
UK: 2 SOLICITORS FACE DISCIPLINARY ACTION OVER WORK ON AN ALLEGEDLY FRAUDULENT “QUICK SALE” PROPERTY SCHEME
On 20 April, the BBC reported that the Wolverhampton-based solicitors’ service to homeowners has been investigated by the Solicitors Regulation Authority (SRA). Meanwhile, West Midlands Police is continuing to investigate Speedy Property which, in adverts across newspapers and online, promised house sellers a fast-cash, quick-sale service, and for which the solicitors did work.
https://www.bbc.com/news/uk-wales-56759679
US: FINTECH CEO PLEADS GUILTY TO MULTIPLE FRAUD SCHEMES, INCLUDING PANDEMIC LOAN FRAUD AND SECURITIES FRAUD
A news release from the US DoJ on 20 April was concerned with SHENG-WEN CHENG (aka Justin Cheng; Justin Jung) – a Taiwanese national who entered the US on a student visa, and is a self-proclaimed “serial entrepreneur” who earned a Bachelor’s Degree from Pennsylvania State University. He has pled guilty to major fraud against the US, bank fraud, securities fraud, and wire fraud in connection with multiple fraud schemes he perpetrated. He engaged in a scheme to fraudulently obtain over $7 million in Government-guaranteed loans designed to provide relief to small businesses during the novel coronavirus/COVID-19 pandemic. He also solicited and obtained investments in Alchemy Coin Technology Limited and related companies controlled by him through materially false and misleading statements and omissions. Lastly, he fraudulently obtained due diligence fees from various start-up companies as part of an advance fee scheme.
TURKEY: ARE FINES FOR WESTERN FINANCIAL INSTITUTIONS THE LATEST MOVES IN AN ONGOING TIT-FOR-TAT BANKING WAR BETWEEN THE WEST AND TURKEY OVER TERROR FINANCING AND MONEY LAUNDERING?
On 20 April, the Jerusalem Post reported that Turkey fined a long list of Western financial institutions, including Goldman Sachs, Bank of America, JPMorgan, Credit Suisse, Barclays and others hefty fines for short selling without proper notification. The move came just a week after foreign investors pulled funds from Turkey’s stock and bond markets. It says that some analysts interpret these dynamics as action and reaction to President Recep Tayyip Erdogan’s firing of Central Bank Governor Naci Agbal in March, but also says that there is a strong case to be made that these are in fact the latest moves in an ongoing tit-for-tat banking war between the West and Turkey over terror financing and money laundering. The article ends by warning investors, or would-be investors, of the risk of collateral damage to anyone still doing business with The Turkish banking system, and in particular its Northern Cypriot satellites.
US – RED FLAGS AND SAR: THE SEC WARNS BROKER/DEALERS ON AML
On 20 April, an article from The National Law Review said that FinCEN had issued a Risk Alert on “Compliance Issues Related to Suspicious Activity Monitoring and Reporting at Broker-Dealers”, its relevant division being concerned that broker/dealers and mutual funds are failing to meet their obligations as “financial institutions” subject to monitor and report to FinCEN activities that are “suspicious”. The article says that the failures noted in the Risk Alert depict an industry focused on earning commissions and neglectful of its AML obligations.
https://www.natlawreview.com/article/red-flags-and-sars-sec-warns-brokerdealers-aml
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On 19 April, an article from White & Case says that governments worldwide are sharpening their focus on money laundering executed through international trade. Companies active in international trade, regardless of where they are located, should take notice as their supply chains continue to come under greater scrutiny, as international attention on trade-based money laundering continues to grow. The article also mentions a corollary process called Trade-based Terrorist Financing (TBTF), which uses the same processes as TBML to finance terrorism, but the value moved can come from both legitimate and illegitimate sources. It is important, it says, to note that the aim of TBML/TBTF is the movement of money, and the movement of goods is the mechanism for obscuring the true origins or purposes of the money. One of the article’s conclusions is that, while most such companies do not have specific obligations to address TBML/TBTF yet, the expectations on such companies continue to rise, as AML stakeholders understand the value such companies hold to understanding and combatting TBML/TBTF.
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On 19 April, an article from the Center for Strategic and International Studies takes the form of a Q&A about the situation in Xinjiang. It points out that, among policymakers there is bipartisan support for legislative and executive action to sanction China and curb imports of products with forced labour in their supply chains. However, there is a practical conundrum. The US — and global — solar panel manufacturing industry is dependent on a supply of cheap critical components that are made in Xinjiang. It argues that the Biden administration and US Congress must navigate carefully to align measures against China’s human rights abuses with domestic support for the US solar industry and consumer market.
https://www.csis.org/analysis/dark-spot-solar-energy-industry-forced-labor-xinjiang
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On 20 April, the Law Society of Scotland advised that the Legal Sector Affinity Group (LSAG), which includes the Society and all legal sector supervisors named in the AML regulations, has released further guidance for specialist areas of legal practice. A redraft of the main Part 1 guidance for the legal sector had been released in January. The new Part 2 AML guidance comes in 3 sections – Part 2a – for barristers/advocates; Part 2b – for legal professionals providing trust and corporate services; and Part 2c – for legal professionals providing notarial services.
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On 20 April, ITV News reported that the risk of Jersey’s finance industry and non-profit organisations (NPO) being used to fund terrorism has been classed as medium to low. This is according to a report produced by the National Risk Assessment (NRA) Working Group produced in response to requirements of FATF.
https://www.gov.je/News/2021/Pages/NationalRiskAssessment.aspx https://www.gov.je/SiteCollectionDocuments/Industry%20and%20finance/National%20Risk%20Assessment%20of%20Terrorist%20Financing%20April%202021.pdf
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The EU agency for criminal justice cooperation has published a report on 19 April which deals with experiences and challenges in judicial cooperation. It says that organised criminal networks operating in Europe benefit from open borders and take advantage of the complexity of the many different legal frameworks in the EU. This report looks at experiences and challenges in judicial cooperation on the fight against drug trafficking. The methodology used consisted of the identification and analysis of a selection of suitable cases, drawn from the practical experience gained through the agency’s support for drug trafficking casework between 2017 and 2020 (1,838 cases). It concludes that, inter alia, financial investigation in drug trafficking cases and particularly asset freezing, confiscation and recovery have been shown to be of the utmost importance, considering their impact on organised crime groups
https://www.eurojust.europa.eu/eurojust-report-drug-trafficking
Executive summary –
https://www.eurojust.europa.eu/sites/default/files/Documents/pdf/21_eju_068_en.pdf
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EU Regulation 2021/638/EU imposed sanctions on 9 additional persons and 2 entities connected to the military junta. entities are owned by the Myanmar Armed Forces and provide it with revenue. The sanctions “target the economic interests of Myanmar’s military regime, which is responsible for the overthrow of Burma’s democratically elected government”.
https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32021R0638&from=EN
https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32021D0639&from=EN
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Panama Covid-19 update – missed yesterday’s statistics, but it seems “only” 1 fatality but 244 new cases, with 4,043 active cases and 55 in ICU.
Today, reports say there has been again just 1 fatality, with 203 new cases for a total of 4,020 active cases. 311 people remain in hospital wards, with another 56 in ICU.
19 APRIL 2021
BREXIT MYTH BUSTERS
On 15 April, an article from Herrington Carmichael Solicitors says that between the UK and the EU coming into force on 1 January, there have been many Brexit myths and misconceptions that the firm has tried to clear up in the article. It addresses – EU law no longer has any applicability in the UK; you don’t need to make any changes to existing agreements as a result of Brexit; you now need to change my governing law and jurisdiction clauses given we are no longer in the EU; there are no import tariffs or other customs duties or quotas on the movement of goods between the EU and the UK; as a supplier, you are responsible for any increased costs of providing goods/services to my clients in the EU as a result of Brexit.
https://www.herrington-carmichael.com/brexit-myth-busters/
UK: LATEST SFO INVESTIGATION EVIDENCE OF GROWING COOPERATION BETWEEN ENFORCEMENT AGENCIES
On 15 April, a post from Burges Salmon says that the SFO has opened an investigation regarding suspected fraudulent activity in connection with the Raedax Consortium group of companies, which includes Buy2Let Cars, PayGo Cars, Raedex trading as Wheels4Sure and Rent2Own Cars. The SFO announcement acknowledged assistance the SFO has received with the matter from the National Economic Crime Centre (NECC) and FCA, and from the NCA and City of London Police.
BACK TO BASICS: INTERNATIONAL TRADE AND SUPPLY OF SERVICES
On 16 April, an article from Gowling WLG considers how the international trading rules apply to cross-border trade in services. It advises that businesses supplying services across borders should ensure that they are aware of any applicable conditions on the sector in which they operate, noting that the restrictions may vary depending on the mode through which the service is delivered.
CANADA: FINTRAC UPDATES GUIDANCE ON RECORD KEEPING, CLIENT IDENTIFICATION, BENEFICIAL OWNERSHIP AND CORRESPONDENT BANKING
On 14 April, McCarthy Tetrault published an article saying that FINTRAC updated its guidance in March which reflects the series of regulatory amendments made to the law over the past few years, the majority of which will come into force on 1 June. The firm has previously published summaries of the regulatory amendments and this latest article outlines some notable changes to the various guidance documents.
https://www.mccarthy.ca/fr/node/70661
4 DRUGMAKERS ARE SLATED TO GO ON TRIAL IN CALIFORNIA OVER CLAIMS THEY FED THE OPIOID CRISIS IN THE US
On 18 April, the Wall Street Journal reported that the case is just the second to go to trial out of thousands of similar lawsuits accusing the drug industry of fuelling an opioid epidemic. 4 California communities allege that Johnson & Johnson , Teva Pharmaceutical Ltd. , Allergan and Endo International PLC ran misleading marketing campaigns that played down the risks of opioid addiction to boost sales of powerful prescription painkillers.
https://www.wsj.com/articles/drugmakers-go-on-trial-over-opioid-epidemic-11618758002
INTRODUCTION TO SANCTIONS LICENSING IN THE UK
On 19 April, a blog post from OFSI says that the new UK autonomous sanctions framework in place since January brings important opportunities and changes. Among the updates contained in these new regulations, some of these specifically relate to licensing. The post provides an overview of the licensing process, explaining the new changes, OFSI process and some top tips on how to complete a licence application.
https://ofsi.blog.gov.uk/2021/04/19/introduction-to-licensing/
ITALY’S ’NDRANGHETA MAFIA CLAN SPREAD TENTACLES AND TOXIC WASTE INTO TUSCANY
On 19 April, an article from KYC 360 reported that prosecutors claim that Italy’s most dangerous mafia clan has moved into Tuscany, buying businesses, dumping toxic waste in streams and using it to lay the foundation for roads through one of Italy’s most verdant regions.
DANSKE BANK CEO RESIGNS AFTER BEING NAMED A SUSPECT IN DUTCH PROBE
On 19 April, Reuters reported that Chris Vogelzang, the CEO of Denmark’s Danske Bank resigned after Dutch authorities named him as a suspect in an investigation into violations of money laundering regulations at ABN Amro.
https://www.reuters.com/article/idUSL1N2MC087
and
NETHERLANDS: ABN AMRO TO SETTLE MONEY LAUNDERING PROBE FOR €480 MILLION
On 19 April, Reuters reported that Dutch bank ABN Amro said it had reached a €480 million settlement with prosecutors in the Netherlands over money laundering allegations. The prosecution service said in a statement its investigation was ongoing and that 3 former board members, who it did not name, had been identified as suspects said to be “effectively responsible for violation” of AML laws. The investigation into ABN started a year after fellow Dutch bank ING paid a record fine of €775 million to settle a similar case.
https://www.reuters.com/article/idUSKBN2C60HK
SPANISH POLICE RAID FACTORY MAKING 3D-PRINTED WEAPONS
On 19 April, EU Observer reported that Spanish officers raided an illegal 3D-printing weapons workshop in Santa Cruz de Tenerife in Spain’s Canary Islands and arrested the owner, who has been charged with illegal possession of weapons and explosives.
https://euobserver.com/tickers/151589
VAT AND OVERSEAS GOODS SOLD DIRECTLY TO CUSTOMERS IN THE UK
On 19 April, HMRC released updated guidance on how sellers deal with VAT for goods from overseas that they sell direct to customers in the UK.
https://www.gov.uk/guidance/vat-and-overseas-goods-sold-directly-to-customers-in-the-uk
HMRC UPDATES GUIDANCE ON IMPORTING AND EXPORTING COMMERCIAL GOODS IN BAGGAGE
On 19 April, Accountancy Daily reported that HMRC had updated its “Merchandise in Baggage” guidance to include details information about making simple online declarations.
https://www.gov.uk/guidance/taking-commercial-goods-out-of-great-britain-in-your-baggage
https://www.gov.uk/guidance/bringing-commercial-goods-into-great-britainin-your-baggage
UK: POST OFFICE HORIZON IT INQUIRY 2020
On 19 April, the Department of Business, Energy and Industrial Strategy published information concerned with the inquiry into the scandal at the Post Office which saw subpostmasters accused of fraud and theft. The Inquiry is seeking accounts from those affected (including but not limited to postmasters) and information from the organisations: the Post Office Limited, Fujitsu, the Department of Business, Energy and Industrial Strategy, and UK Government Investments.
https://www.gov.uk/government/publications/post-office-horizon-it-inquiry-2020
LITHUANIA: LARGE CONSIGNMENT OF SMUGGLED CIGARETTES FROM BELARUS SEIZED
On 19 April, Belsat reported that Lithuanian border guards had detained a large batch of smuggled cigarettes from Belarus – about 300 thousand packs of cigarettes “NZ Gold” and “Minsk Superslims” with an estimated value of more than €1 million.
HONG KONG: CUSTOMS SEIZE COUNTERFEIT SHOES AND HANDBAGS WORTH HK$2.7 MILLION
On 19 April, The Standard reported that Customs seized around 22,000 items of suspected counterfeit goods worth about HK$2.7 million, after officers inspected 2 40-foot containers arriving in Hong Kong from Mainland China. They found 2 batches of suspected counterfeit goods, including smart phone accessories, handbags, shoes and watches inside the containers; and initial investigation suggests that the counterfeit goods were intended for re-export to North American and Middle East countries.
ILLEGAL IMPORTED HARMFUL ANTS SEIZED BY CHINESE CUSTOMS
On 19 April, Global Times reported that Customs in Qingdao of East China’s Shandong Province seized a consignment of imported living ants which were identified as illegal imported harmful insects. A total of 38 ants were kept in test tubes concealed in a foam parcel box. Living insects from abroad are not allowed to enter China by post.
https://www.globaltimes.cn/page/202104/1221406.shtml
COURT OF APPEAL ALLOWS APPEAL BY COUNCIL OVER £270 CONFISCATION ORDER FOR UNLAWFUL FLATS CONVERSION WHEN IT CLAIMED FOR MORE THAN £455,000
On 19 April, Local Government Lawyer reported that the London Borough of Barnet has won an appeal after the Crown Court imposed a confiscation order of £270 when the council had contended for more than £455,000. The original case involved an alleged offence of failure to comply with an enforcement notice, and at some point the property involved had been converted from a 5-bedroom single dwelling into separate flats. The defendant had been fined £10,000.
UK: WOMAN JAILED FOR FRAUD FOR PROVIDING UNQUALIFIED IMMIGRATION ADVICE
On 19 April, Legal Futures reported that a woman has been jailed for fraud and providing unqualified immigration advice and services, with her husband sentenced to community service. The court heard that many of the complainants handed over large amounts of money and legal documents such as birth certificates and passports, and the defendants refused to hand them back or even to speak to the complainants leading to one contacting the Legal Ombudsman.
https://www.legalfutures.co.uk/latest-news/woman-jailed-for-providing-unqualified-immigration-advice
THE IRAN THREAT NETWORK (ITN)
The RAND Corporation has published a report saying that the Iran Threat Network (ITN) is a formidable force made up of tens of thousands of fighters and spreads across the Middle East and South Asia and has ties to and influence in Africa and Latin America. It affords Iran the ability to have a presence and project power throughout the region, and to deter and harass its adversaries. The network consists of diverse and disparate groups, which is reflected in the nature and amount of support provided and the level of command and control exerted by Tehran over each group. These differences allow Iran to employ the ITN to achieve four buckets of political and military objectives. It argues that Iran’s further expansion of the ITN would increase its ability to use the network to undermine stability in the region, antagonise US allies and partners, undercut US influence, and pose a risk to US military personnel. In light of this expansion. The study explores Iran’s relationships with its nonstate network to better enable the US Government to counter Iranian subversion in the region via the ITN. It classifies the ITN under 4 headings – Targeters, Deterrers, Stabilizers, and Influencers.
https://www.rand.org/content/dam/rand/pubs/research_reports/RR4200/RR4231/RAND_RR4231.pdf
UK REGTECH INDUSTRY BACKS FCA CALL FOR “PURPOSEFUL” AML POLICIES
On 19 April, a release on Mondo Visione reported that regtech industry experts have spoken out in support for the recent call for ‘purposeful’ AML controls and financial fraud action. The FCA Executive Director for Enforcement at the FCA had called for better systems and controls that are “purposeful, efficient and courageous in identifying suspicious activity”, and that system and controls currently in place are flawed. In response, a representative of the regtech sector is quoted as saying that existing money laundering and financial crime systems and controls in the UK are far from perfect, and the advent of Covid-19, remote working, and digital banking has made the war against financial crime all the more challenging.
THE BANK OF ENGLAND AND HM TREASURY HAVE ANNOUNCED THE JOINT CREATION OF A CENTRAL BANK DIGITAL CURRENCY (CBDC) TASKFORCE TO COORDINATE THE EXPLORATION OF A POTENTIAL UK CBDC
A release on Mondo Visione on 19 April announced that the Bank of England and HM Treasury have announced the joint creation of a Central Bank Digital Currency (CBDC) Taskforce to coordinate the exploration of a potential UK CBDC. A CBDC would be a new form of digital money issued by the Bank of England and for use by households and businesses. It would exist alongside cash and bank deposits, rather than replacing them. The Taskforce aims to ensure a strategic approach is adopted between the UK authorities as they explore CBDC, in line with their statutory objectives, and to promote close coordination between them. The Bank of England has also announced it will establish a CBDC Unit. This new division of the Bank of England will lead its internal exploration around CBDC. It will also lead the Bank’s external engagement on CBDC, including with other UK and international authorities.
PHILIPPINES SEIZES ILLEGALLY HARVESTED GIANT CLAM SHELLS WORTH $25 MILLION
On 17 April, the Guardian reported that around 200 tonnes of illegally harvested giant clam shells worth nearly $25 million have been seized in one of the biggest known operations of its kind in the country. Conservationists have expressed alarm over the surging illicit trade in the endangered creatures, which are used as a substitute for ivory. The Philippines is home to most of the world’s giant tropical clam species.
MEDICINAL CANNABIS COMPANIES BEGIN TO LIST ON LONDON STOCK EXCHANGE
Law firm Bird & Bird has produced an update saying that a number of cannabis companies have been vying to be the first to list on the London Stock Exchange after the FCA gave the green light to certain specific cannabis-related businesses last year.
MOST CYPRUS PASSPORTS ISSUED IN INVESTMENT SCHEME WERE ‘ILLEGAL’
On 16 April, Al Jazeera reported that more than half the passports Cyprus issued to rich foreigners in an investment scheme were illegal, a government-appointed board of inquiry has found. More than 3,000 foreign investors paid up to €2 million for Cypriot passports between 2013 and 2019. The programme was terminated last year after a corruption scandal.
LEBANON-SYRIA: SMUGGLING AND SANCTIONS, THE NEW FRONT LINE
On 16 April, France 24 carried a report saying that, in order to dodge international sanctions on the Assad regime products such as food and petrol are being smuggled across the border into Syria on a massive scale. Reporters have investigated a phenomenon that costs the Lebanese economy several million euros a day and prevents the international community from coming to its aid.
BOOMS AND BUSTS IN MARITIME TRANSPORT COSTS AND THEIR DRIVERS
On 18 April, VOX at the Centre for Economic Policy Research says that, as the recent past has shown, maritime transport costs are subject to wide swings. The article analyses a large new dataset on dry bulk freight rates from 1850 to 2020, when maritime transport costs fell 79%. Turning to the drivers of booms and busts in the dry bulk shipping industry, it finds that shipping demand shocks dominate both fuel price and shipping supply shocks. Shipping demand shocks have increased in importance over time while shipping supply shocks have become less relevant.
https://voxeu.org/article/booms-and-busts-maritime-transport-costs-and-their-drivers
US: DANGERS OF ILLEGAL GAMBLING MACHINES
On 19 April, SBC Americas reported that the American Gaming Association (AGA) has released a white paper underlining the dangers of unregulated, illegal gambling machines proliferating across the US. These illegal gambling machines, AGA says, are not subjected to meaningful testing, licensing or regulatory standards and are often tied to criminal activity, including money laundering, drug trafficking and violent crime. The report recommends that law enforcement and policymakers need to prioritise robust enforcement of laws to root out illegal and unregulated gaming machines.
BULGARIA: PROSECUTORS DISRUPT COMPUTER FRAUD AND MONEY LAUNDERING RING
On 19 April, the Bulgarian News Agency BTA reported that prosecutors claimed that, over a period of 2 years, the criminal operation withdrew or rechannelled $1.2 million and €200,000 by using
computer fraud methods against companies in various countries, including one in Hong Kong. After hacking the victims’ bank accounts, the group transferred the money to front men. The
financial flow sometimes went through several countries and the final destination was China.
https://www.bta.bg/en/c/DF/id/2399781
JERSEY: AML/CFT HANDBOOK AMENDMENT WEBINAR
On 19 April, the Jersey FSC released a recording of a recent webinar about the changes to the AML/CFT Handbooks. It says that the amendments are a direct result of aligning the regulatory regime with FATF Recommendations and industry consultation feedback.
https://www.jerseyfsc.org/news-and-events/watch-our-amlcft-handbook-amends-webinar/
FinCEN SEEKS COMMENT ON BENEFICIAL OWNERSHIP REPORTING REQUIREMENTS
On 19 April, a post from Crowell Moring advised that FinCEN was seeking public comment on 48 questions with respect to the implementation of the beneficial ownership reporting requirements in the Corporate Transparency Act (CTA) and the implementation of the related database maintenance use and disclosure provisions. The deadline for comment is 5 May.
OFAC NEW, AMENDED BELARUS SANCTIONS LICENCE
On 19 April, OFAC advised that General License 2H, which authorises a 45-day wind-down period for certain transactions involving 9 sanctioned Belarusian state-owned entities, and entities in which they own a 50% or greater interest. It replaces previous General License 2G, which previously authorised such transactions.
https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20210419
https://home.treasury.gov/system/files/126/belarus_gl2h.pdf
BIDEN RAMPS UP RUSSIA SANCTIONS PRESSURE
K2 Integrity has produced a Policy Alert saying that on 15 April, the Biden Administration imposed new sanctions on Russia in response to its efforts to interfere in US and other countries’ elections; the Solar Winds hacks; and Russia’s continued occupation of the Crimea region of Ukraine. These new sanctions include broad authority under a newly-issued Executive Order to impose sanctions across any sector of the Russian economy, including asset freezes, additional targeted designations, and visa restrictions.
https://f.datasrvr.com/fr1/721/38596/Biden_Ramps_Up_Russia_Sanctions_Pressure.pdf
SETTLEMENT AGREEMENT BETWEEN OFAC AND ALLIANCE STEEL INC OVER IRAN SANCTIONS VIOLATIONS
A news release from OFAC on 19 April advised OFAC had agreed a settlement with Alliance Steel Inc, a designer and manufacturer of prefabricated steel structures headquartered in Oklahoma City, Oklahoma. It agreed to remit $435,003 to settle its potential civil liability for apparent violations of the Iranian Transactions and Sanctions Regulations. It is said that on at least 61 occasions between October 2013 and October 2018, it knowingly imported engineering services from a third-party engineering company located in Iran. Multiple members of Alliance senior management were aware of these transactions and participated in the approval process, which, in each transaction, included reviewing a 2-page invoice containing the company’s permanent address in Tehran.
https://content.govdelivery.com/accounts/USTREAS/bulletins/2cddc3e
https://home.treasury.gov/system/files/126/20210419_alliance.pdf
MARITIME PIRACY ON THE INCREASE IN THE GULF OF GUINEA AND AMERICAS
On 16 April, Homeland Security Today reported that the Gulf of Guinea accounted for 43% of all reported piracy incidents in the first 3 months of 2021, according to the latest figures from the International Chamber of Commerce’s International Maritime Bureau (IMB), although the overall number of incidents are down compared to 2020, and there was only one incident of reported piracy around Somalia. In the Americas, it mentions reported piracy incidents in Callao Anchorage, Peru and container vessels are the target of attacks while underway or at anchor in Colombian waters. It says that in these attacks, perpetrators have been known to open containers and steal cargoes even while vessels are under pilotage.
UK: NEW CRIMINAL, CIVIL AND INVESTIGATORY POWERS FOR THE PENSIONS REGULATOR
On 19 April, Bryan Cave Leighton Paisner produced an article saying that the Pension Schemes Act 2021 significantly augments the enforcement powers of the Pensions Regulator. The Act not only creates new criminal offences but also enables the regulator to make use of civil financial penalties and new powers of investigation. The article takes a look at the key changes industry which practitioners should note.
US: SENATE EYES NEW ROLE FOR CFIUS IN COMBATING ‘FOREIGN MALIGN INFLUENCE OR ESPIONAGE ACTIVITIES’ TARGETING ‘INSTITUTIONS OF HIGHER EDUCATION
On 19 April, an article from Arent Fox says that a potential expansion of the powers of the Committee on Foreign Investment in the United States (CFIUS) suggests broader congressional concern about attempts by Chinese entities to circumvent CFIUS reviews and access critical technologies. New legislation may soon expand the jurisdiction of CFIUS. The Strategic Competition Act, if enacted, would create a new role for CFIUS in preventing “foreign malign influence or espionage activities” directed towards “institutions of higher education” in the US – defined as, generally speaking, a nationally accredited public or private college or university that receives federal funding. This legislative provision is especially noteworthy because it would represent an expansion of CFIUS jurisdiction to include transactions that are not actually investments.
ITALIAN MAFIA HAS MASTERED COMPLEX ECONOMIC SCHEMES
On 19 April, an article from OCCRP reported that the Italian mafia is no longer just a violent gang running local rackets and smuggling drugs, but has mastered complex financial operations that can impact the country’s economy, experts have said following a massive bust of money laundering operations run by several Italian mafia groups.
https://www.occrp.org/en/daily/14254-expert-italian-mafia-has-mastered-complex-economic-schemes
US: CANTON WOMAN SENTENCED FOR ROLE IN BUSINESS EMAIL COMPROMISE (BEC) SCHEME
A news release from the US DoJ on 19 April announced that Bintu Toure, 26, was sentenced to 1 year and 1 day in prison, 3 years of supervised release, restitution and forfeiture. In January Toure had pleaded guilty to wire fraud and money laundering conspiracy. She conspired with others to open numerous bank accounts in Massachusetts in the name of sham companies, as part of a BEC scheme — a sophisticated scam often targeting businesses involved in wire transfer payments.
https://www.justice.gov/usao-ma/pr/canton-woman-sentenced-role-bec-scheme
MORE IRISH-BRITISH TRADE DIVERTED VIA NORTHERN IRELAND POST-BREXIT
In its 20 April edition, Hellenic Shipping News reported that more companies are shipping goods between Ireland and Britain via Northern Ireland to avoid post-Brexit red tape and delays, the head of Dublin Port has said, describing it as a “worrying” and potentially permanent development. The introduction of checks on some goods since neighbouring UK left the EU has led to a sharp fall in trade between Ireland and the UK and a big increase in shipping routes from Ireland to mainland Europe. Dublin, Ireland’s largest port reported a 29% year-on-year drop in trade volumes between Ireland and Britain in the first quarter. It is also reported that Irish ro-ro volumes to and from France, Belgium and the Netherlands increased by 26% in the first quarter while lift-on/lift-off services between Dublin Port and mainland European ports were 18% higher.
TAJIK CITY’S CHINATOWN DREAM COMES CRASHING DOWN
On 19 April, a depressing article in Rferl reported that in 2015 city officials in Khujand and private Chinese investors had signed an agreement to build a massive residential and leisure complex called Chinatown in the neighbourhood, replacing its one-story houses with modern apartment blocks and recreational facilities. More than 30 houses were bulldozed in the picturesque area on the banks of the Syrdaryo River when the project officially kicked off in August 2015. The excited residents were promised new homes in Chinatown’s first buildings, which authorities said would be completed within a year. The project, which also included recreational and leisure facilities, was supposed to be finished in 2020. It seemed too good to be true – and it was. Khujand officials say the Chinese investors abandoned the project in 2018.
https://www.rferl.org/a/tajikistan-chinatown-dream-comes-crashing-down/31209646.html
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A release on Mondo Visione on 19 April reported that the SEC had charged Israeli-based Spot Tech House Ltd (formerly known as Spot Option Ltd, Malhaz Pinhas Patarkazishvili (aka Pini Peter) and Ran Amiran. The SEC alleges that Spot Option – under the control of Patarkazishvili, the company’s founder and former chief executive officer, and Amiran, the company’s former president – defrauded retail investors worldwide through a scheme involving the sale of online binary options.
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This new standard, published on 13 April, specifies requirements and provides guidelines for establishing, developing, implementing, evaluating, maintaining and improving an effective compliance management system (CMS) within an organisation. It is said that the standard is applicable to all types of organizations regardless of the type, size and nature of the activity, as well as whether the organisation is from the public, private or non-profit sector. A CMS is a set of processes to make sure that an organisation operates in accordance with all applicable laws, regulations and codes of conduct. ISO 37301 and ISO 37001 (the standard for anti-bribery management systems) are both based on the ISO principles for management systems, such as the risk-based approach as well as the “Plan-Do-Check-Act” (PDCA) process cycle. Whereas ISO 37301 takes a holistic approach to compliance management, ISO 37001 focuses on anti-bribery management. Because both standards are based on the same principles, it is said that they can easily be implemented in an integrated way.
https://www.iso.org/standard/75080.html
https://committee.iso.org/sites/tc309/home/projects/published/ongoing-3.html
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On 15 April, EurActiv published an article saying that worrying allegations of political interference in Slovenian law enforcement agencies tasked with investigating and prosecuting foreign bribery have been mounting in recent years. In particular focus has been the National Bureau of Investigation. The article reports on a report from the OECD on 18 March which details Slovenia’s achievements and challenges with respect to implementation and enforcement of the OECD Anti-Bribery Convention, as well as progress made since the Phase 3 evaluation in 2016.
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On 19 April, an article from OCCRP provides brief details of the arrests.
Any modest contributions for my time and ongoing expenses are welcomed! I have a page, where contributions start as low as $3, at https://www.buymeacoffee.com/KoIvM842y
EU Regulation 2021/628/EU has amended the entry relating to Bi Sidi SOULEMAN, following an update issued by the relevant UN sanctions committee.
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On 19 April, a news release from the Home Office announced that the Home Secretary is taking action to proscribe Atomwaffen Division – a predominantly US-based white supremacist group that celebrates and promotes the use of violence in order to bring about a fascist, white ethno-state by means of a ‘race war’; and would also list its alias – National Socialist Order. If proscribed it would be a criminal offence to be a member of, or invite support for the group, with those found guilty facing up to 10 years in prison (a Bill before Parliament seeks to increase this to 14 years). It is said that the Atomwaffen Division claimed it had disbanded in March 2020 following pressure from US law enforcement agencies, but in July 2020, National Socialist Order announced itself online as its ‘successor’. It is anticipated that the proscription (listing) will take effect next week.
https://www.gov.uk/government/news/government-to-ban-white-supremacist-group-in-the-uk
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Panama Covid-19 update– from Monday, 19 April outdoor sports activities and bars with outside terraces will be allowed to open.
No figures for new cases etc received as yet, so will have to update later…
18 APRIL 2021
MULTINATIONAL CLOTHING COMPANIES DIVIDED OVER XINJIANG COTTON
Various article from Nikkei Asia report the division between clothing companies over the use of cotton from Xinjiang province in China. For example, China’s largest sportswear company is at loggerheads with its own international subsidiary over whether to use cotton tied to reports of forced labour, underlining how the retail world is being split over an issue that has already brought Western brands into conflict with Chinese consumers. Meanwhile, some H&M outlets in China have been forced by landlords to close, while a government official said the Swedish fashion retailer and other foreign brands should refrain from politicising business decisions. And it not just in the clothing sector that problems have arisen, as Nikkei Asia also reports that leading Japanese ketchup producer Kagome has stopped importing tomatoes from Xinjiang, joining the growing ranks of Western brands that have ceased sourcing materials from the region over reported abuses against Uyghur Muslims.
https://asia.nikkei.com/Business/Retail/H-M-shops-in-China-forced-to-close-amid-Xinjiang-backlash
https://asia.nikkei.com/Business/Food-Beverage/Japan-s-ketchup-king-halts-Xinjiang-tomato-imports
EU WILL PROVIDE NEW FUNDING FOR THE EFFECTIVE IMPLEMENTATION OF THE UN ARMS TRADE TREATY (ATT)
On 17 April, MENA-FN reported that the EU had adopted a Decision allowing the EU to support 3 projects of the ATT Secretariat in Geneva with a contribution of €1.37 million. The aim is to help states parties to the treaty to strengthen their national arms export control systems.
https://menafn.com/1101934348/EU-steps-up-support-in-fight-against-illicit-arms-trade
https://gulfnews.com/world/americas/infographic-us-sanctions-on-russia-1.1618744584435
MALAYSIA: 3,000 SMUGGLED TURTLE EGGS SEIZED
On 18 April, The Star reported that 3,000 turtle eggs were seized from a boatman trying to slip into waters near Sandakan in Sabah’s east coast.
https://www.thestar.com.my/news/nation/2021/04/18/gof-seizes-3000-smuggled-turtle-eggs-near-sandakan
ILLEGAL ARMS THREATEN NIGERIA SURVIVAL, EX-GENERALS WARN
On 18 April, This Day in Nigeria reported that 4 retired generals of the Nigerian Army have warned the federal government that Nigeria might cease to exist with over 6.145 million small arms and light weapons (SALW) illegally in circulation nationwide. They called on the federal government to declare a state of emergency on arms proliferation and try to stop them from coming into the country instead of focusing on the demand side only.
REPORT ON THE ISLE OF MAN LEGAL PROFESSION
A new report to go before the Island’s parliament on 20 April, from its Constitutional and Legal Affairs and Justice Committee, examines and makes recommendations about the legal system in the Isle of Man. It usefully explains the system as a whole, and how law firms and advocates are regulated. An Appendix details the regulation of legal services in the UK, Ireland and the Isle of Man. The report makes a number of recommendations, including separating the Law Society’s role as both representative and regulator of the sector, reforming the disciplinary process and introducing a CPD system.
https://www.tynwald.org.im/business/pp/Reports/2020-PP-0191(1).pdf
US: WUNDERKIND EX-MAYOR TO FACE FRAUD AND BRIBERY CASE
On 18 April, the Daily Mail reported that, after he was elected mayor of Fall River, Massachusetts, at just 23, it seemed Jasiel Correia’s political career had nowhere to go but up. Bright and dynamic, Correia charmed voters by portraying himself as a successful entrepreneur who could revive the struggling old mill city. he now faces charges that he stole more than $230,000 from investors in a smartphone app he created. He is also accused of convincing his chief of staff to give him half of her salary in order to keep her city job and extorting hundreds of thousands of dollars from marijuana businesses seeking to operate there.
METHAMPHETAMINE DEVELOPMENTS IN SOUTH ASIA: THE SITUATION IN IRAN AND THE IMPLICATIONS FOR THE EU AND ITS NEIGHBOURS
The European Monitoring Centre for Drugs and Drug Addiction has produced this report which says that Iran is a key transhipment point for illicit drugs along the Balkan and Southern trafficking routes. As a result of the large flow of drugs through the country, combined with widespread socioeconomic insecurity due to decades of sanctions and domestic political factors. This report builds on the study published by the EMCDDA on the Afghan methamphetamine trade in 2020 and addresses the threats posed by Iran’s potential emergence as a transhipment point, as suggested by a reported increase in methamphetamine seizures originating from Iran and bound for countries in Southeast Asia and Oceania. The report also examines production of the drug in Iran, thought to be from around 2004-2005.
CYBERCRIME AND MONEY LAUNDERING ON THE INTERNET IN LEBANON
A situation report from the CyberSouth Project, which is funded by the EU and Council of Europe, sets out to assist authorities of the project countries to increase their knowledge on fighting against cybercrime and targeting online crime proceeds. Its aims include examining challenges related to online crime proceeds and identify methods to enable project countries to identify and make use of national legislation and tools; review interagency cooperation relating to search, seizure and confiscation of online crime proceeds; and making recommendations to the project countries for strengthening of current capacities, tools and interagency cooperation to conduct improved financial investigations and better target online crime proceeds in investigations and prosecutions relating to cybercrime and online crime. It makes a number of recommendations, including creating a system that enables cryptocurrencies that may be confiscated or seized to be legally held in wallets or similar under the control of the authorities, and making parallel financial investigation a strategic part of all investigations where online proceeds of cybercrime are involved.
https://rm.coe.int/report-fin-investig-lebanon-final/1680a1cbf8
WAS A CLEVELAND KOSHER BUTCHERY A FRONT FOR MONEY LAUNDERING AND ILLICIT VAPE TRADE?
On 18 April, The Forward carried a report about Tibor’s Kosher Meats and allegations that is was used as a money laundering front for a drug-trafficking business and is connected to a business, Dank Vapes and Dankwoods — which was implicated in a spate of vape-related hospitalisations and deaths in 2019, and involving vapes infused with THC.
https://forward.com/news/467897/the-kosher-cartel-was-this-cleveland-butcher-shop-a-front-for-money/
GRECO ANNUAL REPORT – ANTI-CORRUPTION TRENDS, CHALLENGES AND GOOD PRACTICES IN EUROPE AND US
In March, the Council of Europe Group of States against Corruption (GRECO) adopted this report which highlights the main trends drawn from GRECO’s evaluations and recommendations. It also presents examples of good practices, and shows the situation as regards the level of implementation of GRECO’s recommendations by member states. It says that the 5th evaluation round is fully underway and by the end of 2020 a total of 21 5th round evaluations had been carried out. This round focuses on corruption prevention in central governments, including the top executive functions, and law enforcement.
https://rm.coe.int/21st-general-activity-report-greco-2020/1680a2173c
TURKEY LEAST COMPLIANT IN GRECO 2020 CORRUPTION REVIEW
On 18 April, Ahval in Turkey reported that the Council of Europe’s GRECO report for 2020 for 2020 shows that Turkey is among the least compliant in terms of adopting recommendations to fight corruption. It says that Norway was the only country that fully followed the GRECO recommendations in 2019, while Turkey ranked last among countries for compliance with the recommendations, while Austria, which did not follow 70% of the recommendations, was the second-to-last country to follow Turkey.
https://ahvalnews.com/turkey/turkey-least-compliant-greco-2020-corruption-review
https://www.visualcapitalist.com/worlds-top-10-hedge-fund-managers-by-earnings/
INTERPOL RED, YELLOW, GREEN AND BLUE NOTICES AND DIFFUSIONS
Estund Law in Florida hosts a set of articles (and a blog) providing information on Interpol notices.
A Red Notice is issued because the country that is seeking the person is asking Interpol’s other member countries to help apprehend the Red Notice subject and help extradite him or her back to the country where the crime is supposed to have happened.
Green Notices are used when one country wishes to notify other Interpol member countries that an individual may be likely to commit a specific type of crimes in other countries. Green Notices are often used to prevent individuals with sexually motivated crime convictions in one country from entering other countries.
A Yellow Notice is issued for missing people who have been kidnapped or have disappeared without explanation, but sometimes Yellow Notices are improperly issued.
A Blue Notice is issued when a person is believed to have information about a crime or a criminal suspect. The Blue Notice allows the person to be more easily tracked and potentially contacted while authorities investigate a case.
Diffusions are similar to Red Notices, but they can be issued from one country to another, or to a few countries, rather than to the entire INTERPOL data network (like a Red Notice). Diffusions are also easier to issue because they do not undergo the same level of scrutiny as Red Notices.
MOLDOVA LOSES AROUND $1 BILLION A YEAR DUE TO ILLICIT FINANCIAL FLOWS LINKED TO CRIMINAL ACTIVITY
On 18 April, Modova.org said that a report – “Illicit Financial Flows and asset recovery in the Republic of Moldova” was recently published by the United Nations Interregional Crime and Justice Research Institute (UNICRI), with the support of the EU. It details the main organised crime activities in the country, saying that the biggest of them being the 2014 billion theft, which involved the banking sector and government corruption. It is said that Moldova is not a major drug producing country, but is a trans-shipment location for heroin traffickers into Europe from Turkey, which is the dominant heroin supplier to Europe. The report claims that overall, an amount of about $9 billion was estimated as the total illicit financial flows (IFF) from Moldova between 2004 to 2013, and that the Moldova Bank Fraud in 2014 has deprived the country of at least $1 billion.
SAUDI ARABIA INITIATES 11 CRIMINAL CASES AGAINST GOVERNMENT EMPLOYEES OVER CORRUPTION
On 18 April, Al Arabiya News reported that the cases included a retired Major General Government officials and retired employees who were arrested for obtaining cash from local and foreign contracting companies.
A CZECH EXPLOSION, RUSSIAN AGENTS AND A BULGARIAN ARMS DEALER
On 18 April, Rferl published a report saying that, in 2014 an explosion destroyed a cache of ammunition and related weaponry. The bodies of 2 men who worked at the site were recovered nearly a month later. A second explosion occurred about 2 months later at nearby location, about 1 km away. On 17 April, Czech officials made a stunning allegation, drawing a direct line between the explosions and the Russian military intelligence agency GRU. Czech authorities also drew an indirect line not only to Ukraine’s war with Russia, but to a mysterious poisoning 6 months later in the Bulgarian capital that nearly killed an arms dealer named Emilian Gebrev. Unit 29155 of the GRU is also linked to the Skrypal poisoning in the UK with the suspects in that case also having been in eastern Czech Republic in October 2014, around the time of the explosions, and are wanted for questioning.
UKRAINIAN NATIONAL GETS 10-YEAR SENTENCE IN US HACKING CASE
On 17 April, Rferl reported that Ukrainian national Fedir Hladyr, 35, has been sentenced to 10 years in prison in the US after pleading guilty to participating in the FIN7 hacking group. He was arrested in Dresden in 2018 and extradited to the US. The group breached computer networks in all 50 US states and the District of Columbia and stole more than 20 million credit-card records.
https://www.rferl.org/a/ukrainian-national-fin7-hacking-group-sentencing/31208555.html
US RELIANCE ON RUSSIAN OIL HITS RECORD HIGH DESPITE SOURING TIES
On 18 April, Hellenic Shipping News reported that Russian and US relations have turned frosty again after a new round of US sanctions but when it comes to Moscow’s oil, US refiners are more dependent on it than ever. Imports of Russian oil, which consists mainly of fuel oil feedstocks and some crude, recently reached a 10-year high. US imports of Russian crude and petroleum products were at their highest level in almost a decade last year, and a similar pattern is playing out in 2021. Total Russian oil imports are even higher than flows from key ally Saudi Arabia. It is said many refineries have been deprived of access to Venezuelan crude by US sanctions and have turned to Russia to meet some of their requirements.
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Panama Covid-19 update – cases still keep appearing, with another 348 reported today, and 2 more fatalities. Meanwhile, other figures slowly drop – or should do, perhaps, as active cases have actually risen to 4,063, as have the number of people in hospital wards other than the ICU – 317 (up 20 on yesterday). However, ICU occupancy remains the same at 57.
17 APRIL 2021
ITALY RELEASES SUSPECT SAYING PANAMA NEVER RATIFIED EXTRADITION TREATY
On 16 April, Newsroom Panama reported that the Italian Ministry of Justice is said to be perplexed at Panama’s National Assembly not having ratified the bilateral extradition treaty that would have facilitated the surrender of Adolfo Chichi De Obarrio , former private secretary of former President Ricardo Martinelli. The treaty was signed by both countries in 2013, and the Italian Senate did ratify it in 2016 and it has been in force in Italy since November 2018. The article says that published reports reveal that when he was appointed to the $5,000-a-month job he had less than $20 in his bank account, but 5 years later he was a millionaire who spent $700,000 on his wedding.
https://menafn.com/1101931528/Italians-mystified-at-inaction-of-Panama-Assembly
EU DATA PROTECTION: UK ADEQUACY DECISION IS ONE STEP CLOSER
On 16 April, an article from White & Case LLP published an article saying that, on 14 April, the European Data Protection Board announced that it had adopted 2 Opinions on the draft UK adequacy decisions issued by the European Commission on 19 February. The EDPB’s take on the draft adequacy decisions is broadly positive, and will come as welcome news to UK and EEA businesses with cross-border data flows. Under the Trade and Cooperation Agreement, transfers of personal data from the EEA to the UK can continue unrestricted until 1 May, a deadline automatically extended to 1 July unless either side objects. After this appropriate safeguards (e.g., Standard Contractual Clauses) will be needed in order to transfer personal data from the EEA to the UK, unless the draft adequacy decisions are approved.
https://www.whitecase.com/publications/alert/uk-adequacy-decision-one-step-closer
US ISSUES NEW GUIDANCE ON NORD STREAM 2 SANCTIONS
On 16 April, Dentons reported that on 9 April the US Department of State issued updated guidance on how it plans to implement the high-profile statutory sanctions authority targeting the Nord Stream 2 pipeline and the Turkstream pipeline, with the US retaining discretion on whether and how to impose sanctions on project participants.
https://www.jdsupra.com/legalnews/us-issues-new-guidance-on-nord-stream-2-5318913/
https://www.state.gov/wp-content/uploads/2021/04/PEESA-As-Amended-Public-Guidance.pdf
NEARLY $3.6 MILLION WORTH OF FAKE CARTIER BRACELETS SEIZED BY US CUSTOMS
A news release from US Customs & Border Protection on 16 April reported that officers in Cincinnati inspected a large shipment from China and found what appeared to be 242 fake Cartier Love bracelets. It explained that Cartier has configuration trademarks on their Love bracelet and has recorded those trademarks with CBP. Furthermore, a company does not have to put a “Cartier” wordmark or design on their products to violate these trademarks. In this instance, further inspection of the bracelets revealed that their shape and design replicated the protected Cartier configuration.
COCAINE SEIZURES ON THE HONDURAS ATLANTIC COAST HIGHLIGHTS THE REGION’S IMPORTANCE IN THE TRANSNATIONAL DRUG TRADE
On 16 April, Insight Crime published a report saying that a string of bumper cocaine seizures on the Honduras Atlantic has provided a stark reminder of the region’s importance in the transnational drug trade. Between January and mid-April 2021, Honduran authorities seized some 4 tons of cocaine in the department of Colón. It says that Colón’s recent spike in cocaine seizures is a sign that the smuggling routes passing through the department are experiencing a relative boom.
https://insightcrime.org/news/cocaine-spike-puts-spotlight-on-honduras-atlantic/
US CUSTOMS ISSUES FORCED LABOUR FINDING ON CERTAIN GLOVES
On 16 April, an article from Baker McKenzie was concerned with a notice of finding that certain disposable gloves produced in Malaysia by the Top Glove Corporation Bhd with the use of convict, forced or indentured labour are being, or are likely to be, imported into the US. This finding applies to any merchandise described in Section II of the notice that is imported on or after 29 March. It also applies to merchandise which has already been imported and has not been released from CBP custody before 29 March.
https://globalcompliancenews.com/united-states-cbp-issues-forced-labor-finding-on-certain-gloves/
UN EXTENDS MEASURES AGAINST ILLICIT PETROLEUM EXPORTS FROM LIBYA
On 16 April, a news release from the UN advised that the Security Council had adopted 2 Resolutions which extended the authorisation of measures against the illicit export of crude oil and other petroleum products from Libya as well as the mandate of the panel of experts helping to oversee them, while also approving modalities for a new, Libyan-led and Libyan-owned ceasefire monitoring mechanism.
https://www.un.org/press/en/2021/sc14496.doc.htm
SriLankan AIRLINES BILLION DOLLAR LAWSUIT AGAINST AIRBUS CONTINUES
On 14 April, Simple Flying reported that the airline is continuing to pursue its lawsuit against Airbus. The lawsuit revolves around murky allegations of bribery, reputational damage, and lost income. The case links to a 2020 settlement and a court finding that Airbus had engaged in bribery in relation to aircraft deals. Sri Lankan Airlines is seeking damages concerning the loss of reputation, interest, and other expenses.
https://simpleflying.com/srilankan-airlines-airbus-lawsuit/
UK SAILORS WITH BOATS IN EUROPE GRANTED RETURNED GOODS RELIEF EXTENSION
On 30 March, Yachting Monthly reported that UK boat owners, whose vessels were in the EU at the end of the Brexit transition period, now have an extra 6 months until 30 June 2022 to qualify for Returned Goods Relief (RGR). HMRC had announced that owners of boats which have been in the UK under present ownership and were in the EU at the end of the transition period, could avoid paying a second VAT payment if the vessel returned to the UK before 31 December 2021; and this applied regardless of when the boat left the UK.
US EFFORTS TO COMBAT TRADE-BASED MONEY
https://www.gao.gov/products/gao-20-314r
Any modest contributions for my time and ongoing expenses are welcomed! I have a page, where contributions start as low as $3, at https://www.buymeacoffee.com/KoIvM842y
On 15 April, the European Studies Unit at Liege University in Belgium said that it had initiated a research on non-EU countries that have adopted totally or partially the EU dual-use control list established in Annex I of the Council Regulation (EC) 428/2009.
https://www.esu.ulg.ac.be/wp-content/uploads/2021/04/EU-list-worldwide-rev9.pdf
Any modest contributions for my time and ongoing expenses are welcomed! I have a page, where contributions start as low as $3, at https://www.buymeacoffee.com/KoIvM842y
Panama Covid-19 update – new cases up again at 419 today, though fatalities down to just 2. 3,930 active cases include 57 in ICU (unchanged) but higher numbers in other wards at297.
16 APRIL 2021
US CONSIDERING NEW TARIFFS ON VARIOUS GOODS FROM 6 COUNTRIES
On 6 April. Global Trade Magazine reported that the Office of the United States Trade Representative (USTR) announced that it is accepting comments on whether to impose 25% tariffs on roughly $880 billion of goods imported from Austria, India, Italy, Spain, Turkey, and UK in retaliation for digital services taxes (DST) imposed by those countries.
https://www.globaltrademag.com/ustr-considering-new-tariffs-on-various-goods-from-six-countries/
LESSONS FROM THE “EVER GIVEN” FOR AN INCREASINGLY TURBULENT GLOBAL SUPPLY CHAIN
On 12 April, the Global Trade Magazine published an article saying that the blockage of the Suez Canal, which accommodates 30% of the word’s daily container freight shipments, has been yet another reminder of how unforeseeable and remote events can dramatically disrupt one’s business. The traffic jam it caused worsened Asia’s shipping container shortage, further delaying the export of consumer goods; spoiled countless goods sitting in transit; and temporarily exacerbated a global semiconductor shortage affecting countless manufacturing industries. The article makes a number of recommendations so as to be better prepared for such disruption.
PANAMA: ANATOMY OF A BUSTED CRIMINAL GANG
On 15 April, Newsroom Panama carried a report saying that the Baghdad criminal network aided by corrupt, National Police providing “logistical support” moved at least 1,057 kg of drugs, between 2017 and November 2020, according to the specialised superior drug prosecutor. That may represent between 30% or 40% of the total drugs that the gang may have moved during this period.
https://www.newsroompanama.com/news/anatomy-of-a-busted-criminal-gang
SINGAPORE TRADER’S LAVISH LIFESTYLE ALLEGEDLY FUELLED BY $740 MILLION FRAUD
On 16 April, KYC 360 published an article about Ng Yu Zh, who prosecutors allege had a dark secret: his lavish lifestyle, they say, was built on lies. Ng was charged last month with 4 counts of fraud for allegedly raising at least S$1 billion from investors for commodity trades that didn’t exist.
THE $571 MILLION MANCHESTER ‘BITCOIN SCAM’
On 16 April, KYC 360 reported that a a Manchester man is being sought by US authorities as the alleged mastermind behind a Bitcoin scam that swindled thousands of victims and owes $572 million. Benjamin Reynolds, 38, appears to have vanished without a trace and questions have now emerged over whether he ever existed. The Commodity Futures Trading Commission (CFTC) accused Reynolds of stealing bitcoin worth around $1.3 billion through a company named Control-Finance. A court in New York has ruled that Reynolds owes $143 million in restitution in addition to a $429 million fine.
https://www.riskscreen.com/kyc360/news/the-mysterious-case-of-the-571m-manchester-bitcoin-scam
AEO – WHAT YOU NEED TO KNOW
On 15 April, the Institute of Export and International Trade in the UK released a You Tube video. It and the slides from the presentation are available online at –
https://www.export.org.uk/page/AEOInfo
IRANIAN OPPOSITION GROUP MEMBERS CHARGED IN DENMARK WITH FINANCING TERRORIST ACTIVITY
On 15 April, Rferl reported that Denmark’s public prosecutor has charged 3 members of an Iranian Arab opposition group with financing and supporting terrorist activity in Iran and aiding Saudi intelligence services. The prosecutor said the case was linked to a 2018 police operation over an alleged Iranian plot to kill one or more opponents of the Iranian government. The case is also connected with a criminal case that is currently pending against a Norwegian citizen of Iranian origin who is charged with having helped the Iranian intelligence service plan the murder in Denmark of one of the 3.
https://www.rferl.org/a/iran-opposition-charged-denmark-financing-terrorism/31205348.html
WHAT’S AT STAKE IN THE US CASE AGAINST A CRYPTO REBEL
On 15 April, Bloomberg Businessweek published an article saying that Arthur Hayes became a star in the Bitcoin universe, he’s been called many things, from trailblazer to anarchist. He has now surrendered to US authorities in Hawaii to face charges, and prosecutors accused him and 3 others of failing to implement adequate money laundering controls. Hayes pleaded not guilty and was released on $10 million bond pending federal court proceedings in New York. Hayes and his 2 co-founders also face civil charges from the Commodity Futures Trading Commission that they ran an exchange without being registered in the US. Co-founders Benjamin Delo and Samuel Reed have also pleaded not guilty in the criminal case and were released on bond.
HOW MUCH OF A PROLIFERATION THREAT IS IRAN’S URANIUM ENRICHMENT?
A paper from the Stockholm International Peace Research Institute on 16 April addressed this question, saying that Iran’s recent production of 20%-enriched uranium metal is a clear and deliberate step away from compliance with the terms of the troubled 2015 JCPOA Iran nuclear deal. Iran’s production of 20 per cent-enriched uranium does not necessarily bring it closer to producing a nuclear weapon. In fact it diverts resources away from any weapons programme. It says that there is good reason to believe that it is about producing research reactor fuel for civilian purposes, not a step towards producing a nuclear weapon.
https://www.sipri.org/commentary/essay/2021/how-much-proliferation-threat-irans-uranium-enrichment
CORPORATE CRIMINAL LIABILITY IN POLAND – A BRIEF GUIDE
A guide from Wardyński & Partners says that in Poland the Act on Liability of Collective Entities for Punishable Offences has been in force for nearly 18 years. It regulates the liability often referred to in practice as corporate criminal liability. It outlines the rules for corporate criminal liability under the current law.
https://www.wardynski.com.pl/wp-content/uploads/2021/04/Corporate-criminal-liability-in-Poland-1.pdf
PODCAST: UNDERSTANDING NORTH KOREA’S FUEL SMUGGLING NETWORKS IN EAST ASIA
On 14 April, The Diplomat released a podcast in which the host speaks to Lucas Kuo of C4ADS and Joseph Byrne of the Royal United Services Institute about North Korean maritime fuel smuggling activities.
https://thediplomat.com/2021/04/understanding-north-koreas-fuel-smuggling-networks-in-east-asia/
GUERNSEY’S TAX OFFICE SENDS OUT 400 PENALTY NOTICES BY MISTAKE
On 15 April, ITV News reported that Guernsey’s tax office has apologised to hundreds of islanders after issuing fines to them by mistake for filing their returns too late. It was said to be due to “human error”.
UK GOVERNMENT APPROVES EXTRADITION OF FUGITIVE INDIAN NIRAV MODI
On 16 April, various media reported that the UK had approved the extradition to India of Nirav Modi
ST LUCIA THREATENS TO BLOCK GOOGLE OVER CRITICAL BLOG POST
On 15 April, Kenneth Rijock in his blog reported that Saint Lucia Government officials and attorneys acting on its behalf have threatened Google with totally blocking its content and search engine on the island, unless it took down our news article, which originated in the US, reporting on rampant official corruption among judges, lawyers and senior government officials.
https://rijock.blogspot.com/2021/04/government-of-st-lucia-censors-news.html
KYRGYZSTAN CLOSES CASE AGAINST POWERFUL FORMER CUSTOMS BOSS
On 15 April, OCCRP reported that Kyrgyzstan has closed a money laundering case against former deputy chief of customs Raimbek Matraimov and released him from custody, putting an end to the investigation of a corruption scandal that marked last year’s election and made him hand over more than $24 million to the country’s budget.
https://www.occrp.org/en/daily/14245-kyrgyzstan-closes-case-against-powerful-former-customs-boss
IRAN IS A MAJOR TRANSIT POINT FOR THE GLOBAL METH TRADE
On 15 April, OCCRP said that an EU report says that Iran’s role as a key node in the smuggling routes for methamphetamines from Central and South-East Asia to Europe has left the country with a significant drug problem.
ESG: GREENWASHING AND THE EU TAXONOMY REGULATION – PART 1: GREENWASHING, WHAT IS IT?
On 15 April, Irish law firm published an article saying that an area of concern in so-called sustainable finance is the risk of “greenwashing” which arises where a lender or borrower claims a loan is green or sustainability linked but such loan is actually not. It will also come into sharper focus for lenders in the future as the EU has announced that it is considering lowering capital requirements for sustainable finance.
https://www.matheson.com/insights/detail/greenwashing-and-the-eu-taxonomy-regulation-part-one
233% INCREASE IN FENTANYL SEIZURES AT US SOUTHERN BORDER
On 15 April, Fox News reported that new data released by US Customs and Border Protection has revealed that the total fentanyl seized at the border in the first quarter has seen a 233% increase from this same time last year. CBP has seized up 2,098 lb of smuggled fentanyl compared to the 629 lb apprehended between January and March of 2020.
https://www.foxnews.com/politics/border-crisis-mexico-southern-border-fentanyl-mccarthy
THE UK SENIOR ACCOUNTING OFFICER (SAO) REGIME
On 15 April, an article from Out-Law outlined the SAO regime whereby certain large UK companies must appoint an individual to be their SAO to ensure the company establishes and maintains appropriate tax accounting arrangements to allow tax liabilities to be calculated accurately in all material respects.
https://www.pinsentmasons.com/out-law/guides/senior-accounting-officer-sao
UNAUTHORISED PAYMENTS FRAUD – UK COMMERCIAL COURT SUPPORTS RECOVERY EFFORTS
On 16 April, an article from Eversheds Sutherland reports that a recent High Court case in London has demonstrated that, where there is cogent evidence, it will support the efforts of victims of fraud to recover stolen funds. The victim deployed a number of methods, including non-party disclosure orders, worldwide freezing injunctions, proprietary injunctions and an application for summary judgment to dispose of the proceedings speedily, without a full (and costly) trial. Some €15 million had been misappropriated but the quick and effective legal actions taken, saw some €11.5 million recovered and, as a result of the latest judgment, it now appears the victim now has a route to recover the outstanding balance of some €3.5 million, plus interest and costs. The case provides welcome encouragement for the steps that can be taken by victims of unauthorised payment frauds to secure a recovery.
DUBAI’S ECONOMIC DEPARTMENT TO ROLL OUT BLOCKCHAIN-BASED CORPORATE KYC
On 14 April, the Coin Telegraph reported that Dubai’s Department of Economic Development wants to accelerate the total adoption of UAE KYC — the national Know Your Customer standard running on blockchain technology. Dubai’s Department of Economic Development, or “Dubai Economy,” and the Dubai International Financial Centre are working to expand their Know Your Customer platform to financial institutions across UAE.
US CUSTOMS MARKS THE ANNIVERSARY OF OPERATION “STOLEN PROMISE” WITH $48 MILLION IN COVID-19 FRAUD PROCEEDS, 21.2 MILLION FAKE RESPIRATOR MASKS SEIZED
A news release from US Immigration & Customs Enforcement on 16 April advised that US Immigration and Customs Enforcement (ICE) Homeland Security Investigation’s (HSI) marked the 1-year anniversary of the announcement of Operation Stolen Promise, the ongoing operation protecting the US from COVID-19 related crime. Combining HSI’s investigative expertise in intellectual property and trade violations, financial fraud, and cybercrime, HSI and its partners have seized over $48 million in illicit proceeds, opened more than 1,000 criminal investigations and made more than 2,000 seizures of mislabelled, fraudulent, or prohibited COVID-19 vaccines, test kits, including more than 21.2 million counterfeit respirator masks prevented from reaching hospital workers and first responders since 15 April 2020.
US RETURNS MORE THAN 500 PRE-HISPANIC ERA ARTIFACTS TO MEXICO
A news release from US Immigration and Customs Enforcement on 15 April advised that Homeland Security Investigations (HSI) has returned 523 pre-Hispanic archaeological pieces to Mexican officials during a repatriation ceremony at the Mexican Consulate. The pieces include stone arrowheads, knife blades and tools that were illegally imported into the US from Mexico and offered for sale.
https://www.ice.gov/news/releases/hsi-el-paso-returns-more-500-pre-hispanic-era-artifacts-mexico
CLIENT ALERT ON NEW US SANCTIONS TARGETING RUSSIA
On 16 April, a Client Alert from Wilmer Hale explains the new sanctions imposed by the US, including by OFAC on 15 April.
FinCEN INFORMATION-SHARING FACTSHEET
In December, FinCEN issued an updated factsheet replacing previous guidance on voluntary information sharing under section 314(b) of the USA Patriot Act. This was as FinCEN Director Kenneth A. Blanco announced that section 314(b) allows banks to share more financial crime data among themselves.
US SANCTIONS ON RUSSIAN DEBT STILL ‘MORE BARK THAN BITE,’ ANALYSTS SAY
On 16 April, Rferl reported that the latest US sanctions targeted ruble-denominated sovereign debt, a key ingredient in Russia’s economic activity and the topic of animated discussions about potential new sanctions for months. However, the Russian market’s reaction was muted, indicating the punishments will not be as painful economically as some had expected.
17 INCIDENTS OF PIRACY AND ARMED ROBBERY AGAINST SHIPS IN ASIA DURING THE FIRST QUARTER
On 16 April, Hellenic Shipping News reported that 16 actual incidents and one attempted incident) were reported in Asia during January-March 2021. All the incidents reported during January-March 2021 were armed robbery against ships. No piracy incident was reported. The figure is a 39% decrease in the total number of incidents compared to the same period in 2020.
ROMANCE FRAUD INVESTIGATION
On 16 April, the Association of British Investigators published an article which opens by saying that, according to UK Finance, bank transfer fraud linked to romance scams increased in 2020 by 20% on the previous year. UK Action Fraud confirmed that the total value lost to such scams over the period was £68 million, which has now overtaken online shopping fraud. The article considers the psychology, the targets, what a victim can do etc.
https://www.theabi.org.uk/news/romance-fraud-investigation
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On 16 April, the Racing Post reported that Phoenix Thoroughbreds, owned by Amer Abdulaziz, has had Racing New South Wales and Racing Victoria move to freeze all prize-money won by the group after an investigation into allegations of money laundering, which first surfaced in November 2019. It is said that the move from the industry bodies comes some eight months after action in Europe had been taken against the operation. France banned horses owned by Phoenix from participating in races in the country in August last year, with Britain following suit in September.
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EU Regulation 2021/612/EU added Mesut SEKERCI to its ISIL/Al-Qaida sanctions lists.
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On 14 April, the Rockefeller Institute of Government published a report saying that President Biden on 7 May announced multiple executive actions on gun violence with several specifically targeted at addressing the nation’s ghost gun problem. But, the report asks, what exactly are ghost guns, what challenges do they pose, and how would these actions help find a solution? It explains that ghost guns are homemade firearms that do not have a serial number and cannot be traced by law enforcement. There are several different types of ghost guns, but the two most frequently discussed are 3D-printed guns and guns made from “80 percent lowers”. 80% lowers are the unfinished lower halves of firearms, often bought as part of a kit, which can be modified and assembled into a fully-functioning gun by a purchaser.
https://rockinst.org/wp-content/uploads/2021/04/210413-Ghost-Guns-web.pdf
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On 16 April, a Notice from HM Treasury advised that OFSI had removed 6 entities from its list of those subject to sanctions in respect of Iraq. This followed a news release on 15 April from the UN.
https://www.un.org/press/en/2021/sc14495.doc.htm
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Panama Covid-19 update – good news for the Government, in that the Supreme Court has ruled that pandemic curfew is not unconstitutional.
For myself, after many months delay, my personal effects arrived. Interestingly, the nice team who delivered them had all been tested after one of their colleagues had died of Covid. It brings it home when you meet someone directly affected.
Meanwhile, another 4 fatalities today, and 314 new cases reported. 3,929 active cases include 57 in ICU and 389 in other wards.
15 APRIL 2021
FORMER MEXICAN SENATOR HIT WITH CRIMINAL CHARGES TIED TO ENERGY REFORM
On 13 April, Reuters reported that Mexican prosecutors have filed criminal charges against Jorge Lavalle, a former senator who under the previous government helped to pass a major energy reform which has been attacked as tainted by corruption.
HONG KONG: 16 ARRESTED IN POLICE SWOOP ON BOOKMAKING SYNDICATE THAT LAUNDERED MONEY FOR 10 MONTHS
On 13 April, the South China Morning Post reported that the group include 3 from triad backgrounds and it used help of overseas website that offered gambling games and used online banking to avoid detection. The group is said to have laundered US$23 million in criminal proceeds over 10 months.
2 AUSTRALIAN BANKS PULLED BANKING SERVICES FROM FINTECH UNICORN AIRWALLEX OVER AML RISK FEARS
On 13 April, the Sydney Morning Herald reported that hyped Australian international payments ‘unicorn’ Airwallex has defended its approach to compliance amid revelations it was denied key banking services by 2 major lenders due to concerns about its adherence to AML laws. National Australia Bank cancelled transactional banking services for Airwallex’s customers in 2018 and it was later denied services by global banking giant Citigroup.
PHILIPPINES TIGHTENS KNOW-YOUR-EMPLOYEE RULES FOR BANKS
KYC 360 reported on 15 April that the Philippine central bank has approved rules that will strengthen banks’ know-your-employee procedures as financial frauds surge during the pandemic. There must be adequate understanding of a candidate’s background and character, conflict of interest and “propensity to commit fraud or irregularity”.
https://www.riskscreen.com/kyc360/news/philippines-tightens-know-your-employee-rules-for-banks
2 CHARGED IN SUSPECT $1 BILLION TRANSFER USING NEW YORK CREDIT UNION
On 15 April, KYC 360 reported that 2 people were charged with using a New York state employees credit union to process more than $1 billion in suspect financial transactions while failing to file SAR or maintain adequate AML controls. It is alleged that the defendants “devised a scheme to bring lucrative and high-risk, international financial business lines to small, unsophisticated financial institutions”. It is said that the transactions involved had red flags that should have prompted them to report the transactions to US authorities and demand more information about them.
FORMER ZIMBABWE CRICKET CAPTAIN BANNED OVER BETTING CORRUPTION
On 13 April, iGB reported that the International Cricket Council (ICC) has handed an 8-year ban to former Zimbabwe captain and coach Heath Streak after ruling that he breached its anti-corruption regulations.
https://igamingbusiness.com/former-zimbabwe-cricket-captain-banned-over-betting-corruption
5 ARRESTS IN SWEDISH TENNIS MATCH-FIXING INVESTIGATION
On 14 April, iGB reported that Swedish Police have arrested of 5 people in Stockholm in connection to a tennis match-fixing investigation. The alleged match-fixing is said to involve substantial sums of money, though the amount was not revealed.
https://igamingbusiness.com/five-arrests-in-swedish-tennis-match-fixing-investigation/
UK PUBLISHES NEW GUIDANCE ON TECHNOLOGY EXPORTS – 5 KEY TAKEAWAYS FOR COMPANIES USING THE CLOUD
On 13 April, Baker Mckenzie published an article saying that the UK Export Control Joint Unit has published revised guidance on exporting military or dual-use technology. This clarifies a number of common queries regarding technology exports, particularly around the use of cloud storage and remote data infrastructure through which information could be routed. The guidance also addresses the application of the special arrangements in Northern Ireland under the EU-UK Withdrawal Agreement. The guidance affirms the position on how key definitions and concepts in UK export control laws will be interpreted in relation to technology exports. The article provides its 5 key takeaways for companies using the cloud and remote infrastructure to store and share export-controlled technology:
ANTI-CORRUPTION IN LATIN AMERICA
On 9 December, Latin Lawyer published a report which considers some of the background diversity in anti-corruption risks that companies confront across the region. It then explores some of the most important recent trends in anti-corruption enforcement in the region, including standardisation in anti-corruption legislation and the increase of coordinated enforcement actions and resolutions. Finally, it focuses on important ways to mitigate the challenges of navigating and avoiding a cross-border corruption crisis: whether by effectively gathering and sharing information when a problem arises, or by ensuring that compliance programmes are effectively designed and implemented with certain key elements.
IRELAND: MLD5 TRANSPOSITION AND AML HORIZON-SCANNING
On14 April, Irish law firm A & L Goodbody published an article as a Q&A on the implementation of the EU 5th AML Directive in Ireland, as well as clarification on the scope of the framework for the beneficial ownership of express trusts and other AML news, including elements of the EU AML Action Plan.
https://www.arthurcox.com/wp-content/uploads/2021/04/MLD5-Apr-2021.pdf
MALTA: BNF BANK DISTANCES ITSELF FROM FORMER MANAGER FACING MONEY LAUNDERING CHARGES
On 15 April, the Times of Malta reported that the BNF Bank has distanced itself from a former manager Albert Buttigieg, who faces money laundering charges. He and ex-footballer Darren Debono’s step-daughter Florinda Sultana, are facing money laundering charges. The latter fronted companies that manage 2 fish restaurants allegedly involved in laundering money linked to oil smuggling.
DIGITAL ID PERCEIVED AS BENEFICIAL IN COMBATTING FINANCIAL CRIME
On 15 April, regulations Asia reported that digital ID are perceived as beneficial for the fight against financial crime, an ACAMS-RUSI survey finds. However they may also present risks. Some 86% of 300 participants surveyed view Digital ID as a positive innovation, though respondents remained split on whether they face legal barriers to its widespread use. 85% of respondents say that Digital ID would most benefit customer onboarding. In the context of financial crime, 62% of participants cited the provision of consistent customer ID data as the most important advantage conferred by Digital ID, while 57% indicated that it would enhance the ability of institutions to identify red flags and typologies of illicit finance. However, the survey highlighted that use of digital ID may also present risks to users and to the institutions that accept them. The greatest risks of Digital IDs are perceived to come from data breaches (69%), the exploitation of the vulnerable (67%), identity theft (58%), increased cybercrime (57%), and increased fraud (43%) – but respondents felt that paper-based ID are still more vulnerable than Digital ID.
https://www.regulationasia.com/digital-id-perceived-as-beneficial-in-combatting-financial-crime/.
The survey can be accessed at –
https://www.acams.org/en/media/document/18401
COUNCIL OF EUROPE URGES STATES TO PREVENT CORRUPTION RISKS WHEN TACKLING THE COVID-19 PANDEMIC’S ECONOMIC IMPACT
On 15 April, Council of Europe body GRECO said that governments should rigorously manage the corruption risks that have emerged due to the need to take extraordinary measures to combat the COVID-19 pandemic, including the infusion of large amounts of money into the economy to alleviate its economic and social impact. It says that risks may be particularly pronounced in respect of public procurement systems when it comes to issues such as conflicts of interest and the role of lobbying.
UK: LAW SOCIETY WARNS THAT OVERSEAS INVESTMENT CURBS COULD HIT LEGITIMATE BUSINESS
On 15 April, the Law Society Gazette reported that the Law Society for England & Wales has said that the well-intentioned bid to tackle foreign investments that present a security risk to the UK could hit legitimate international business at a time when the economy can least afford it.
WHY THE DEFENCE INTEGRATED REVIEW MATTERS FOR THE UK’S DOMESTIC RESPONSE TO ECONOMIC CRIME
A Commentary from RUSI on 14 April says that the Integrated Review offers an opportunity to reposition economic crime as a ‘whole of system’ responsibility rather than a domestic one, and a hope that the Government may have grasped the importance of tackling the UK’s problem with dirty money. It says that the reference to issues such as fraud against UK citizens and UK corporate registry reform within national security policy seemed inconceivable even just a few months ago. It is argued that policymakers will be required to take the good ideas scattered throughout the Integrated Review’s ‘Strategic Framework’ and grow them for the future. The Integrated Review could provide useful leverage in the internecine battleground of the next spending round negotiations. In short, it is time for UK economic crime policy to move up a league.
https://rusi.org/commentary/getting-serious-illicit-finance-finally-uk-foreign-policy-issue
CORRUPTION PLAGUES LITHUANIA’S PRISON LABOUR SYSTEM
On 15 April, LRT reported that a state-owned company manufacturing goods by employing prison labour stands at the centre of a complicated alleged corruption scheme, linking to a former justice minister as well as senior officials in the country’s prison system. In January, the Lithuanian Prison Department’s Criminal Intelligence Unit announced a pre-trial investigation into influence peddling and embezzlement at the state-owned company Mūsų Amatai. Scandals have been plaguing the company for several years. Amatai is a state-owned company and employs prison labour to manufacture various goods, mostly furniture used in schools.
OECD AND AFRICAN DEVELOPMENT BANK TO TACKLE CORRUPTION, BRIBERY IN NIGERIAN BUSINESSES
On 15 April, the People’s Gazette reported that the OECD and the African Development Bank have increased efforts in tackling corruption and bribery among businesses in Nigeria and other African countries. It is mentioned that the only African country that has ratified the OECD Anti-Bribery Convention is South Africa.
https://gazettengr.com/oecd-afdb-to-tackle-corruption-bribery-in-nigerian-businesses
US WARNS OF PUNITIVE ACTIONS FOR LEBANESE BLOCKING CORRUPTION REFORMS
On 15 April, Naharnet reported that A senior US official has warned that Lebanese politicians who continue to block reforms in the crisis-hit country could face punitive actions. It is thought that the US and its allies may impose sanctions on Lebanese politicians in order to force them to end a months-long political deadlock and start badly needed reforms to fight corruption.
OFFICIALS SAY CROATIAN PORT APPEARS TO BE NEW ENTRY POINT FOR DRUGS
On 15 April, OCCRP reported that Croatian police confiscated nearly 600 kg of cocaine concealed in a shipment of bananas that arrived from South America to the Adriatic port of Ploče, saying that organised crime seems to be looking for alternative routes in the south of the continent. The port of Ploče seems to be attractive to drug smugglers, as it is not equipped with special x-ray monitors for containers, so illegal goods can only be detected by random inspections or sniffing dogs. 3 serious drug seizures were conducted in the port since the beginning of this year, according to Croatian customs officials.
CHINESE CUSTOMS BEEF UP CRACKDOWN ON SMUGGLING OF ALIEN SPECIES UNDER NEW BIOSECURITY LAW
On 15 April, Global Times reported that customs authorities have strengthened checks on international travellers, transportations, containers, cargos and articles, packages and ballast water discharges from ships on international voyages in and out of the country. Customs authorities across the country were already engaged in a campaign called Green Gate Shield 2021. The new law has 8 provisions to manage and supervise biosecurity threats like major emerging infectious diseases, epidemics and sudden outbreaks, and biotechnology research, development and application.
https://www.globaltimes.cn/page/202104/1221133.shtml
FENTANYL SEIZURES EXPLODE ACROSS THE US
On 15 April, Insight Crime reported that seizures of the synthetic opioid fentanyl by customs agents in the US have skyrocketed with over 2.5 tons seized nationwide between October 2020 and March 2021, representing a 322% increase year-on-year. It says that heroin has increasingly been displaced by fentanyl, with customs having seized just under 1.2 tons of heroin during the last 6 months, less than half the amount of captured fentanyl.
https://insightcrime.org/news/fentanyl-seizures-explode-united-states/
UK: PROFESSION HAS STRUGGLED WITH AML RULES, SAYS LAW FIRM FINED £10,000
On 15 April, Legal Futures reported that a Surrey law firm has been fined £10,000 for breaches of the AML rules, but that it argued that a “significant proportion” of law firms had “struggled to achieve compliance” with the 2017 Money Laundering Regulations. Regulator the SRA described the firm’s level of culpability as “moderately high” because the failures on risk assessment and training “continued over a prolonged period”, despite the specific transaction that triggered the action only yielding £850 in fees.
THE UK-US EXTRADITION TREATY IN THE SPOTLIGHT
A blog post from law firm Corker Bining on 14 April considering the case of Mike Lynch, facing extradition from the UK to the US for alleged fraud leading to huge losses by US computer company, Hewlett Packard. It is said that logic dictates that if there is to be a trial of Mr Lynch, it should be in the UK. Indeed, it is pointed out, Hewlett Packard, chose to bring civil fraud proceedings in London, in what is reportedly the UK’s largest ever civil trial – judgment in that case has yet to be handed down. It makes the point that it would seem perverse if Hewlett Packard were unable to prove on a balance of probabilities in the High Court in London that fraud had been committed and yet at the same time extradition courts in London allowed the US DoJ to continue to pursue the case before a US criminal court on substantially the same facts (where they would have to persuade a jury beyond reasonable doubt). On the extradition issue, Lynch is unable to challenge it on the basis that there is insufficient evidence to demonstrate a prima facie case – and so would have to rely on the “forum bar”, which the post explains and which it says was intended to provide real protection against the extra-territorial, over-zealous overreach of US (and other) prosecutors.
https://www.corkerbinning.com/uk-us-extradition-treaty/
SEC ANNOUNCES AN AWARD OF OVER $50 MILLION TO JOINT WHISTLEBLOWERS WHOSE INFORMATION ALERTED SEC STAFF TO VIOLATIONS
A release on Mondo Visione on 15 April advised that the joint whistleblowers provided exemplary assistance to the SEC staff during the investigation, including meeting with staff numerous times and providing voluminous detailed documents. The information provided by these individuals resulted in the return of tens of millions of dollars to harmed investors. The SEC has now awarded approximately $812 million to 151 individuals since issuing its first award in 2012.
NORTH KOREA BUILDS NEW RAIL ROUTE TO HANDLE CHINESE FREIGHT DURING PANDEMIC
On 14 April, Radio Free Asia reported that North Korea has built a new rail route to its border with China designed to isolate freight in order to prevent the spread of coronavirus, an important first step toward restarting imports from its largest trading partner. The new railroad is said to be directly connected to the Sino-Korean Friendship Bridge.
https://www.rfa.org/english/news/korea/train-04142021175556.html
CHINA HAS TRADEMARKED THE ENTIRE SOUTH CHINA SEA
On 13 April, radio Free Asia reported that, not content with claiming sovereignty over nearly every crag of rock and spit of sand in the South China Sea, China has taken the unusual step of registering trademarks over hundreds of land features scattered throughout those disputed waters. This may be an attempt by China to control how domestic and even foreign companies use South China Sea branding.
https://www.rfa.org/english/news/china/mark-04132021192429.html
https://www.rferl.org/a/russia-military-buildup-near-ukraine-border/31203623.html
LITHUANIAN MAFIA GANG ‘ALL BUT GONE’ IN IRELAND FOLLOWING GARDA CLAMPDOWN
On 15 April, The Journal reported that gardaí have managed to dismantle the main working aspects of a Lithuanian criminal gang responsible for heroin smuggling and people trafficking across Ireland.
https://www.thejournal.ie/lithuanian-mafia-gang-dismantled-5404046-Apr2021/
DRUG MAP SHOWS HOW CARTELS USING IRELAND TO FLOOD ‘TSUNAMI OF COCAINE’
On 13 April, Dublin Live reported that Irish airspace and airports are being used to smuggle millions of euro worth of cocaine into Europe, Europol has warned. Sources said they could not discount cartels using private jets to smuggle large amounts of cocaine into Ireland for onward delivery to other European states, but they said it was most likely that they were using drug mules to bring smaller amounts on commercial flights from South America via third countries.
https://www.dublinlive.ie/news/dublin-news/gangland-map-drugs-cocaine-ireland-20374902
IRELAND: BRIBES AND BLACKMAIL UNCOVERED AS FORMER BANK WORKER ARRESTED IN MAJOR FRAUD PROBE
On 14 April, the Irish Independent reported on an an investigation into a former employee of the Central Bank, who allegedly committed fraud crimes after he set up a business to help clients apply for bank licences.
CONTAINER SHIP CREW MEMBER SENTENCED TO 5+ YEARS FOR CONSPIRACY TO SMUGGLE $1 BILLION WORTH OF COCAINE INTO THE US
A news release from US DoJ on 13 April announced that Vladimir Penda, 27, of Montenegro, had been sentenced to 5 years and 10 months in prison, and 2 years of supervised release. For the first half of 2019 until mid-June of that year, Penda, a crew member who worked on board the shipping vessel MSC Gayane as the ship’s fourth engineer, conspired with others to engage in a bulk cocaine smuggling scheme.
BACKGROUND TO THE OFFENCE OF MISCONDUCT IN A PUBLIC OFFICE
On 7 April, an interesting post from The Global Anticorruption Blog looks back to 1783, when the English common law offence was created in the case of The King v Bembridge, involving an accountant in the receiver and paymaster general’s office of the army. The post comments that what makes misconduct in public office a prosecutor’s dream is its vagueness – which also meant it was more a choice for them in certain cases even after the Bribery Act came into force. A 2020 Law Commission report criticised the offence and recommended it be replaced by statutory offences.
MOZAMBIQUE REBELLION BEGINS TO THREATEN SHIPPING
On 14 April, Insurance Marine News reported that there are worries that the current insurgency in Northern Mozambique was steadily transmuting into a serious maritime security threat in the Western Indian Ocean. It says that the obvious concern is that an increasing ability to work at sea as well as on land could be only a short step towards piracy, as nearly a third of the world’s tanker traffic transits the Mozambique Channel.
THE EVOLUTION AND ESCALATION OF THE ISLAMIC STATE THREAT TO MOZAMBIQUE – ANALYSIS
On 15 April, Eurasia Review published a report looking at the background to, and prospects for, the insurgency in Mozambique.
FRAUD CASES IN SWITZERLAND IN 2020
https://home.kpmg/ch/en/home/insights/2021/04/forensic-fraud-barometer-2020.html
https://assets.kpmg/content/dam/kpmg/ch/pdf/forensic-fraud-barometer-2021.pdf
MORE AIRLINES BANNING THE SHIPMENT OF VIVO MOBILE PHONES AFTER A FIRE AT HONG KONG AIRPORT
On 15 April, Loadstar reported that this is likely to have a serious impact on Vivo, which is ranked number 5 in global smartphone shipments. Indian carriers Spicejet and Go Air, as well as Garuda, IAG Cargo and Lufthansa Cargo have also told customers the shipments are banned.
BUSINESS TEXTS ON PERSONAL PHONES: THE GROWING COMPLIANCE AND ENFORCEMENT RISK AND WHAT TO DO ABOUT IT (PART II)
On 15 April, the Compliance & Enforcement blog at the Program for Corporate Compliance and Enforcement at the New York University School of Law published Part 2 of 3-part series of posts. Part 1 discussed recent enforcement actions related to employees’ use of personal devices, and the challenges employees’ use of personal devices pose for compliance with books and records and communication supervision rules. Part 2 looks at policies and training.
US: BRAZILIAN OIL EXECUTIVE PLEADS GUILTY TO BRIBERY IN PETROBRAS SCHEME
On 15 April, Courthouse News and others reported that attorneys for Jose Carlos Grubisich, 64, say he was caught up in a corrupt company culture while serving as CEO of the Odebrecht-owned petrochemical company Braskem SA. The former CEO of Brazil’s largest petrochemical company pleaded guilty to bribery conspiracy charges, saying he helped to facilitate payments to government officials to secure business deals.
https://www.courthousenews.com/brazilian-oil-exec-pleads-guilty-to-bribery-in-petrobras-scheme/
UK: ACCOUNTANT JAILED FOR ‘INDUSTRIAL SCALE’ £1.4 MILLION FRAUD
On 15 April, the BBC reported that an accountant who committed “industrial scale dishonesty” to fund a lavish lifestyle has been jailed. Steven Day, 51, of Perthshire, plundered £1.4 million from businesses and defrauded the NHS 2012-15. He admitted 12 fraud offences and was jailed at Leeds Crown Court for 11 years and 5 months.
https://www.bbc.com/news/uk-england-merseyside-56765120
SEC RAISES MORE RED FLAGS OVER BROKER-DEALER AML COMPLIANCE
On 15 April, an article from Alston & Bird says that it has analysed a new risk alert from the SEC Division of Examinations and what it means for future enforcement. The Risk Alert details compliance concerns related to AML obligations of broker-dealers. It chronicles various compliance deficiencies observed during recent examinations of broker-dealers’ suspicious activity monitoring and reporting obligations under the Bank Secrecy Act (BSA) and related regulations.
https://www.alston.com/en/insights/publications/2021/04/sec-raises-more-red-flags
IRELAND: MAN SENTENCED TO 7 YEARS IN JAIL FOR LAUNDERING €3.7 MILLION
On 15 April, the Irish Times reported that Darren Hoey, 46, has been sentenced to 7 years in prison after pleading guilty under money laundering legislation to possessing almost €3.7 million. Other charges he pleaded guilty to are related to possession of articles to aid and assist a crime organisation. He was described as a trusted and responsible member of an organised crime group involved in drug trafficking.
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On 12 April, AARP reported that cybercrime complaints in the US soared to a record high last year, when total losses surpassed $4.2 billion and losses to those 50 and older exceeded $1.8 billion, according to FBI data for 2020. The nearly 792,000 in overall reports from all ages was a 69% jump from 2019.
https://www.aarp.org/money/scams-fraud/info-2021/fbi-cybercrime-report.html
Any modest contributions for my time and ongoing expenses are welcomed! I have a page, where contributions start as low as $3, at https://www.buymeacoffee.com/KoIvM842y
On 15 April, news release from the Foreign, Commonwealth and Development Office calling out Russia for carrying out the SolarWinds compromise, part of a wider pattern of activities by the Russian Intelligence Services against the UK and our allies. It is said that the activity demonstrates that Russia remains the most acute threat to the UK’s national and collective security. The UK reveals for the first time that Russia’s Foreign Intelligence Service (SVR) was behind a series of cyber intrusions, including the SolarWinds compromise, as part of a wider pattern of cyber intrusions by the SVR who have previously attempted to gain access to governments across Europe and NATO members.
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On 13 April, Charles Russell Speechlys published an article saying that ESG stands for Environmental, Social and Governance, and it explains what the E, S and G stand for and mean. It also provides a selection of key moments in the chronology and development of ESG, and comments on the Covid-19 effect on ESG.
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On 15 April, a news release from US Treasury advised that it has taken multiple sanctions actions targeting aggressive and harmful activities by the Government of the Russian Federation. These include the implementation of new prohibitions on certain dealings in Russian sovereign debt, as well as targeted sanctions on technology companies that support the Russian Intelligence Services’ efforts to carry out malicious cyber activities against the US. The measures include
a new authority in response to Russian malign activities;
sovereign debt prohibitions;
designation of Russian companies in the technology sector supporting Russian intelligence services; and
tTargeting of Russian malicious cyber actors.
They involve a new Presidential Executive Order, and a new Directive issued under that Order.
https://home.treasury.gov/news/press-releases/jy0127
https://home.treasury.gov/system/files/126/russian_harmful_for_act_eo.pdf
https://home.treasury.gov/system/files/126/sovereign_debt_prohibition_directive_1.pdf
US TREASURY DESIGNATES RUSSIAN COMPANIES IN THE TECHNOLOGY SECTOR SUPPORTING RUSSIAN INTELLIGENCE SERVICES
It has targeted companies operating in the technology sector of the Russian Federation economy that support Russian Intelligence Services. The following companies are designated for operating in the technology sector of the Russian Federation economy: ERA Technolopolis; Pasit, AO(Pasit);Federal State Autonomous Scientific Establishment Scientific Research Institute Specialized Security Computing Devices and Automation (SVA); Neobit OOO (Neobit); Advanced System Technology, AO (AST); and Pozitiv Teknolodzhiz, AO (Positive Technologies).
OFAC DESIGNATES 5 INDIVIDUALS AND 3 ENTITIES RELATED TO RUSSIA’S OCCUPATION OF THE CRIMEA REGION OF UKRAINE AND HUMAN RIGHTS ABUSES AGAINST THE LOCAL POPULATION.
In partnership with our international allies, it has designated Leonid Kronidovich Ryzhenkin (Ryzhenkin), Lenpromtransproyekt, and Joint-Stock Company The Berkakit-Tommot-Yakutsk Railway Line’s Construction Directorate in response to their involvement in the construction of the Kerch Strait Bridge. The entities are Lenpromtransproyekt, a Russian company that designed the Kerch Strait Bridge; the Berkakit-Tommot-Yakutsk Railway Line’s Construction Directorate; and the Simferopol SIZO-1 pre-trial detention center in Simferopol.
US TREASURY TARGETS KNOWN RUSSIAN AGENT KONSTANTIN KILIMNIK
Kilimnik is described as a Russian and Ukrainian political consultant and known Russian Intelligence Services agent implementing influence operations.
US TREASURY FURTHER TARGETS YEVGENIY PRIGOZHIN’S NETWORK IN AFRICA AND HIS ATTEMPTS TO EVADE SANCTIONS
Yevgeniy Prigozhin (Prigozhin) is the Russian financier of the Internet Research Agency (IRA), the Russian troll farm that OFAC has designated in 2018 for interfering in the 2016 presidential election.
US TREASURY TARGETS INTERNET RESEARCH AGENCY (IRA) ENABLER
Pakistan-based Second Eye Solution (SES), aka Forwarderz, is an organisation that specialises in creating and selling fraudulent identities and is said to have assisted the IRA in concealing its identity to evade sanctions. Since at least 2012, SES engaged in a scheme to provide digital photographs of fake documents including passports, driver’s licences, bank statements, utility bills, and national identity documents. SES markets these fake documents for use to verify online accounts including money service business accounts and social media website accounts.
https://www.cisa.gov/rumorcontrol
The complete list (with identifying information) for those affected by the above sanctions measures can be found at –
https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20210415
Together with new and updated FAQ
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Panama Covid-19 update – finally received my, delayed, vaccination appointment for 23 April…meanwhile, the curfew is reducing again from Monday – it will now be from midnight to 0400, and pubs and bars with outside seating etc (as most do here) can reopen.
However, the virus is still around, albeit that the Rt rate has fallen, with 395 new cases reported today, and 4 new fatalities. There remain 4,021 active cases – 61 in ICU and 404 in other wards.
14 APRIL 2021
US: BUSINESSES TARGETED BY CYBER ATTACKS – A CHECKLIST TO PROTECT YOUR COMPANY FROM RISK
On 6 April, Masuda, Funai, Eifert & Mitchell Ltd published an article which listed a number of steps which it said were to help guard against the increased threat of cybersecurity incidents, and recommended that businesses consider taking them as soon as possible.
HUMAN RIGHTS DUE DILIGENCE IN SUPPLY CHAIN CONTRACTS: A SHARED RESPONSIBILITY OF BUYER AND SUPPLIER?
On 12 April, an article from Mayer Brown said that the American Bar Association had published a report on its suggested Model Contract Clauses to Protect Workers in International Supply Chains. It suggests that these clauses, while not put forward as a binding standard, provide food for thought for companies who are seeking to align their supply chain contracts with UN guidance, and the increasing tide of mandatory human rights due diligence legislation.
LATVIAN PROBE FAILS TO PROVE ABLV MANAGERS’ INVOLVEMENT IN CORRUPTION
On 14 April, the Baltic Times reported that the Corruption Prevention and Combating Bureau (KNAB) has not found evidence of corruption on the part of ABLV Bank’s managers, which has been alleged by FinCEN.
FAKE COVID-19 CERTIFICATES AFFECTING AIRLINES
On 13 April, the Wall Street Journal reported that airlines are battling a scourge of passengers traveling with falsified Covid-19 health certificates. The International Air Transport Association (IATA) says it has tracked fake certificates in multiple countries, from France to Brazil, Bangladesh and Afghanistan. Border control authorities and police forces have also reported arrests of people selling documents in the UK, Spain, Indonesia and Zimbabwe, among others. Airlines say their staff aren’t equipped to handle and police all the new health certifications needed and worry the problem will be exacerbated when some countries also start to ask for vaccination certificates.
CYPRUS, GHANA AND KENYA JOIN GROWING LIST OF COUNTRIES TO CREATE BENEFICIAL OWNERSHIP REGISTRIES
On 13 April, ICIJ carried an update report concerning the “Panama Papers” affair.
MALAYSIA IS AMONG 3 ASEAN COUNTRIES TO HAVE ENACTED AN EXPORT CONTROL LAW WHICH ALLOWS FOR EXTRA-TERRITORIAL CRIMINAL JURISDICTION
On 14 April, the Star reported that the Strategic Trade Act 2010 regulates the activities of exports, transits, transshipments and brokering of strategic items – including arms and related material that can be used for the design, development and production of WMD and their delivery systems. Strategic items include goods and technology that are high-tech and specialised equipment. It also reports that the Strategic Trade Secretariat (STS) has been established under the Ministry of International Trade and Industry (MITI).
https://www.thestar.com.my/news/nation/2021/04/14/integrated-controls-on-shipment-of-strategic-goods
MALAYSIA: BANK J SAFRA SARASIN FOR MONEY LAUNDERING BREACHES
On 14 April, Fin News Asia reported that the breaches took place during customer on-boarding and in the ongoing monitoring of business relations with customers 2014-18. The Singapore branch of the Swiss wealth manager was fined S$1 by the Monetary Authority of Singapore (MAS) for serious breaches of AML/CFT requirements. It is said that in many cases, BJS relied on customers’ representations without corroboration.
LIBYA FREES UN-SANCTIONED HUMAN TRAFFICKER
On 14 April, EU Observer reported that Libya has freed a man under UN sanctions for trafficking and drowning migrants, Abd al-Rahman Milad, due to “lack of evidence” in his trial.
https://euobserver.com/tickers/151536
GULF OF GUINEA RETAINS WORLD PIRACY HOTSPOT STATUS
On 14 April, Defence Web reported that Africa, particularly the Gulf of Guinea, remains the world hotspot for piracy with 43% of all incidents reported in the first quarter of this year. A report records 38 incidents since the start of 2021 – compared with 47 incidents in the same period last year. Despite a drop in reported piracy incidents for quarter one, violence against crew is rising when compared to previous years. The Gulf of Guinea for all 40 kidnapped crew incidents, as well as the sole crew fatality.
https://www.defenceweb.co.za/featured/gulf-of-guinea-retains-world-piracy-hotspot-status/
NEW ZEALAND TO BE THE FIRST COUNTRY IN THE WORLD TO REQUIRE ITS FINANCIAL SECTOR TO DISCLOSE THE IMPACTS OF CLIMATE CHANGE ON ITS BUSINESS
On 13 April, Jurist reported that the Financial Sector (Climate-related Disclosure and Other Matters) Amendment Bill has been introduced to New Zealand’s Parliament. The Bill will require New Zealand financial institutions to report on the climate impacts of their investments and to explain the institutions’ plans for managing the climate risks and sustainability opportunities of their business decisions.
HONDURAS ARRESTS MAN WHO PURCHASED USELESS COVID MOBILE HOSPITALS
On 13 April, OCCRP reported that Honduran authorities have arrested the former head of an institution that purchased old and useless mobile hospitals at highly inflated prices for the Honduran government at the hight of the COVID-19 pandemic. It bought 7 mobile hospitals as part of the emergency purchases for a value of about $47 million.
UK: SOLICITOR STRUCK OFF FOR “SOPHISTICATED” LAND REGISTRY FRAUD
On 14 April, Legal Futures reported that a solicitor jailed for more than 3 years for forging Land Registry documents in a family dispute with the owners of a Newcastle takeaway has been struck off. She was described by the judge who convicted her as “cunning” and “manipulative”.
COSTA RICAN DRUG GANG WORKED WITH AGENTS IN AN ELITE INVESTIGATIVE UNIT TO STEAL COCAINE SHIPMENTS
On 13 April, a report from Insight Crime concerns a case which the article says is yet another sign of the reach of drug corruption in the country. At least 2 agents with Costa Rica’s Judicial Investigation Department (Organismo de Investigación Judicial) have been charged with working on behalf of accused trafficker Darwin González Hernández, aka “Pancho Villa”. In December, a judge was among 16 people arrested on charges of being part of a criminal organisation dedicated to drug trafficking and money laundering. A police officer was also arrested in that case. Earlier, in November, a judge and judicial assistant were accused of receiving bribes to help traffickers avoid imprisonment, and both judges are alleged to have handed over information on local anti-narcotics operations to traffickers.
https://insightcrime.org/news/costa-rica-police-corruption-cocaine-shipment-theft/
ATTORNEY-CLIENT PRIVILEGE IN THE US
On 14 April, a briefing from Eversheds Sutherland says that the application of attorney-client privilege in litigation, internal investigations, and regulatory investigations in the US is a complex area of the law. The article provides a high-level overview. It cautions that that while state jurisdictions may differ slightly, the article examines the law generally applicable to all US state jurisdictions.
THE ROLE OF DIRECTORS AND AUDITS IN TACKLING FRAUD
An article from Eversheds Sutherland on 14 April says that the Bryden Report of December 2019 in the UK concluded that reform was needed to increase the prospect of fraud detection and improve confidence in auditors in respect of the challenge of fraud in the context of corporate reporting. Recommendations sought to address this through proposed reform of relevant auditing standards, increased training in fraud detection for auditors and further explanation in the annual report from directors and auditors concerning controls around fraud – but implementation has been slow. In the UK, some recommendations have been adopted, although the Government’s proposals are subject to consultation and will not come into effect until 2023 at the earliest. However, it is said that directors and auditors will want to consider carefully what aspects of the proposals they want to adopt now, particularly given the expectation that fraud will have been on the increase during the pandemic. The article examines the new standards and the UK Government consultation.
THERE’S A GOOD CHANCE YOUR COTTON T-SHIRT WAS MADE WITH UYGHUR SLAVE LABOUR
On 9 April, the Guardian carried an article saying that much of the world’s cotton comes from the Uyghur region, where the Chinese government is ethnically cleansing its Muslim minority, and that fashion conglomerates know this. It claims that 1 in 5 cotton garments on the global marketplace is tainted by forced labour.
https://www.theguardian.com/commentisfree/2021/apr/09/cotton-slave-labor-uyghur-region-china
US: MANUFACTURER SENTENCED FOR CONSPIRING TO MANUFACTURE AND SELL COUNTERFEIT GOODS
A news release from the US DoJ on 12 April advised that a New York businessman who admitted to arranging the manufacture of counterfeit clothing, apparel, and gear, in China and Pakistan, that was shipped to wholesalers for distribution in the US, including to the US military, has been sentenced to 18 months in federal prison and ordered to pay a $15,000 fine. Bernard Klein, 40, conspired with New York wholesaler Ramin Kohanbash, 51, to arrange the mass production of goods in China and Pakistan that carried counterfeit markings and labels.
CRACKING THE ENCRYPTEDMESSAGES OF BALKAN CRIME GANMGS
On 12 April, Balkan Insight carried a feature saying that among the evidence gathered against a notorious Serbian crime gang rounded up in February were photos sent via an encrypted messaging app popular with drug smugglers. The downfall of Sky ECC and EncroChat has been a boon for police in Europe and the US, but raises a host of questions going forward. Canada-based Sky ECC described itself as “a global leader in secure messaging technology”, helping to keep a host of industries safe from identity theft and hacking. However, it is reported that law enforcement authorities in the US and Europe, however, say it was created with the sole purpose of facilitating drug trafficking and had become the messaging app of choice for transnational crime organisations. In March, the US Jean-Francois Eap, chief executive officer of Sky Global, the company behind Sky ECC, and Thomas Herdman, a former high-level distributor of Sky Global devices. Sky ECC surged in popularity after messages sent via another encrypted messaging service, EncroChat, were intercepted and decoded in a French and Dutch-led operation in mid-2020. It is said that organised crime groups from the Balkans have adapted quickly and cleverly in recent years to innovate and use technology to their advantage.
DARIO MESSER WAS ABLE TO MOVE MILLIONS OF DOLLARS THROUGH BRAZIL’S EMERALD MINING INDUSTRY
On 14 April, an article from Insight Crime reported that an investigation by Brazilian prosecutors showed that the “notorious money launderer” laundered at least $44 million between 2011 and 2017 through an exporter of precious stones based in Rio de Janeiro. The emeralds were sold to buyers abroad, mostly in India and Hong Kong. A police investigation showed that the emeralds themselves were being illegally extracted in Brazil’s north-eastern state of Bahia, an area with a history of illegal mining. Messer was a crucial actor in money laundering schemes that emerged during Operation Car Wash. In August, Messer was sentenced to over 18 years in jail by a court in Rio de Janeiro and agreed to return around $184 million in embezzled funds.
https://insightcrime.org/news/brazils-emerald-exports-the-latest-revelations-about-dario-messer/
NORTH KOREAN SHIPS VISIT CHINESE COAL AND IRON PORTS – POSSIBLY FOR ILLEGAL SALES
On 14 April, NK Pro reported that at least 5 North Korea-linked ships took turns at Longkou Port for possible sales between 29 March and 13 April. The article says an analysis shows that North Korean shipping operations have returned to pre-pandemic lows as of early April after months of cargo vessels idling at sea last year, with both North Korean-flagged and foreign-flagged ships appeared to have engaged in trade.
US: PHONY IMMIGRATION ATTORNEY FILED HUNDREDS OF FRAUDULENT CLAIMS – SENTENCED TO MORE THAN 20 YEARS IN FEDERAL PRISON
On 13 April, a news release from US Immigration & Customs Enforcement advised that a Florida man, Elvis Harold Reyes, 56, was sentenced to 20 years and 9 months in federal prison for mail fraud and aggravated identity theft in connection with a scheme where he posed as an immigration attorney and filed hundreds of fraudulent asylum applications. Reyes targeted undocumented immigrants from Spanish-speaking countries who were seeking Florida driver licenses and work authorization. Reyes gave false, inaccurate and incomplete legal and immigration advice to victims to induce them to retain his services and those of his company, EHR Ministries. Reyes filed more than 225 fraudulent applications, intending to cause victim loss of more than $1 million. His victims’ actual losses exceeded $411,000. Reyes threatened aggrieved victims who confronted him by claiming that he could have them deported. And, when investigative reporting revealed the scheme, he attempted to obstruct justice by having a friend wipe his computers.
INDONESIAN MAN CONVICTED OF FRAUD TIED TO INTERNATIONAL COUNTERFEIT WINE SCAM DEPORTED FROM US
On 13 April, a news release from US Immigration & Customs Enforcement advised that Rudy Kurniawan, 44, unlawfully present in the US, was removed to his home country of Indonesia on a commercial flight. He featured in the Netflix 2016 documentary, “Sour Grapes,” which describes the story of a scheme that flooded the American wine market with fake vintage wine valued in the millions of dollars. He was sentenced to 10 years in prison for wire and mail fraud in 2014.
HMRC GUIDANCE FOR SENIOR ACCOUNTING OFFICERS (SAO) UPDATED FOLLOWING APPEAL IN THE CASTLELAW CASE
On 14 April, Ross Martin reported that the guidance has been relaxed in relation to reporting obligations for dormant companies and penalties for late certificate filing. A tribunal had found that penalties for not including a dormant company on the group notification had been correctly applied, and that there was no reasonable excuse defence available – but that HMRC should have applied its discretion in light of the facts. Under UK law, the SAO of a large company is required to ensure the existence of, and report on, the appropriateness of their tax accounting arrangements. Penalties are charged in the event of failures.
https://www.rossmartin.co.uk/sme-tax-news/5450-hmrc-updates-sao-manual-following-ftt-decision
FORMER US SHOE COMPANY EXECUTIVE CHARGED IN $30 MILLION EMBEZZLEMENT SCHEME
On 14 April, Business of Fashion reported that the former chief financial officer of the over 136-year-old heritage brand has agreed to plead guilty to wire fraud, unlawful monetary transactions and filing a false tax return. He is said to have issued cheques to himself and transferred funds from company accounts to his personal accounts, and to the account of another individual — who a lawsuit names as local TV star and fashion influencer.
FRANCE: SAPIN II – WHAT RECOMMENDATIONS SHOULD BE FOLLOWED FROM 2021 ONWARDS?
On 14 April, K & L Gates published an article says that the 2016 Sapin II law introduced to legal entities additional compliance requirements to address corruption in order for France to meet the highest European and international standards. AFA urges all entities to implement an anticorruption process, independently of the thresholds required under the law. On 12 January, the AFA anti-corruption agency published new recommendations which entered into force on 13 January. AFA will refer to the Recommendations for audits that will begin 6 months after their entry into force, i.e. as of 13 July.
https://www.jdsupra.com/legalnews/sapin-ii-what-recommendations-should-be-9428667
SEC CHARGES 2 WITH AML FAILURES FOR $1 BILLION HIGH-RISK TRANSACTIONS
On 14 April, a release on Mondo Visione advised that an indictment has charged 2 defendants with failing to maintain AML controls, failing to file SAR, and operating an unlicensed money transmitting business 2014-16. The 2 are said to have devised and executed a scheme to bring lucrative and high-risk international financial business to small, unsophisticated financial institutions. Being trained in AML compliance and procedures, they represented to the financial institutions that, because of their experience and training, they understood the risks associated with the high-risk business and would conduct appropriate AML oversight as required by the Bank Secrecy Act.
SEC CHARGES 7 WITH DEFRAUDING INVESTORS THROUGH A MULTIMILLION DOLLAR OIL-AND-GAS OFFERING FRAUD AND RELATED MARKET MANIPULATION SCHEME
A release on Mondo Visione on 14 April advised that the defendants are said to have raised more than $16 million from more than 300 investors through an unregistered private placement of the common stock a Dallas-based company that claimed to be focused on the oil and gas industry. However, it is alleged that, instead of using investors’ money to capitalise the company, they misappropriated millions of dollars raised in the offering, using the funds to pay for luxury goods, rental apartments, a car, and to make cash payments to friends, family members, and girlfriends.
THE SWISS INVESTIGATION OF THE LONGTIME HEAD OF LEBANON’S CENTRAL BANK
On 14 April, L’Orient Today carried an article saying that, in January, Switzerland requested legal assistance from Lebanon in an investigation into “money laundering to the detriment of Banque du Liban”. In response, Lebanon’s chief prosecutor questioned Riad Salameh, who denied any wrongdoing. The article says that items mentioned in the Swiss request raise several questions. According to sources, the investigation is into the alleged payment of more than $330 million in brokerage fees between 2002 and 2014 by the governor to a company registered in 2001 in the BVI, whose beneficiary owner is Raja Salameh, the governor’s younger brother, and related matters.
ODEBRECHT IN PANAMA
On 14 April, La Prensa in Panama published (in Spanish) what it described as a review of facts and works that marked his time in Panama, while the Public Prosecutor’s Office begins the process of delivering the result of its investigations.
https://www.prensa.com/impresa/panorama/odebrecht-su-avasallante-legado-de-corrupcion/
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Also on 14 April, the EU released this strategy which focuses on on preventing the crime, bringing traffickers to justice and protecting and empowering victims. It includes plans for a dialogue with internet and technology companies to reduce the use of online platforms for the recruitment and exploitation of victims.
https://ec.europa.eu/commission/presscorner/detail/en/ip_21_1663
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On 14 April, the EU released a new strategy focusing on boosting law enforcement and judicial cooperation, tackling organised crime structures and high priority crimes, removing criminal profits and ensuring a modern response to technological developments. It is claimed that, in 2019, criminal revenues in the main criminal markets amounted to 1% of the EU GDP, i.e. €139 billion. The Strategy sets out the tools and measures to be taken over the next 5 years to disrupt the business models and structures of criminal organisations across borders, both online and offline. It is estimated that over 60% of criminal networks active in the EU engage in corruption and more than 80% use legitimate businesses as a front for their activities, while only 1% of criminal assets is confiscated. The EU Commission says that it will propose to revise the EU rules on confiscating criminal profits, develop the EU AML rules, promote the early launch of financial investigations and assess the existing EU anti-corruption rules. This, it says, will also help prevent infiltration into the legal economy.
https://ec.europa.eu/commission/presscorner/detail/en/ip_21_1662
https://ec.europa.eu/commission/presscorner/detail/en/qanda_21_1664
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On 14 April, Rolling Stone magazine reported that the disgraced, who carried out the largest Ponzi scheme in history, has died at the Federal Medical Center in Butner, North Carolina. He was 82. Madoff was arrested in December 2008, and charged with securities fraud. His firm’s statements at that time stated there was about $65 billion in its accounts, although most of that wasn’t real.
https://www.rollingstone.com/culture/culture-news/bernie-madoff-dead-obituary-1155523/
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On 14 April, the US Treasury announced that OFAC had identified Audias Flores Silva as a significant foreign narcotics trafficker pursuant to the Foreign Narcotics Kingpin Designation Act. Flores Silva (aka “Jardinero”) is one of the Cartel de Jalisco Nueva Generacion’s (CJNG) regional commanders in control of large portions of CJNG territory along the Pacific coast of Mexico, including the state of Nayarit. CJNG is described as a violent Mexican drug trafficking organization responsible for trafficking a significant proportion of the fentanyl and other deadly drugs that enter the US.
https://home.treasury.gov/news/press-releases/jy0122
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On 14 April, The Standard reported that 5 suspects, including 2 tutors, were arrested. The electronic question banks, which had been provided to 500 primary schools by textbook publishers, were intended to be sold at HK$100 to HK$600 per copy. Officers seized pirated electronic files containing infringing question banks on subjects ranging from Chinese, English and Math to Liberal Studies from multiple publishers, as well as 5 computers, 4 tablets, 7 phones and a set of flash drives.
https://www.thestandard.com.hk/section-news/section/4/229198/59,000-pirated-test-papers-seized
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Panama Covid-19 update – the Rt rate is down to 0.86, but there were 329 new cases reported and 4 new fatalities. 3,995 active cases include 62 in ICU and 407 in other wards.
13 April 2021
EASTERN CARIBBEAN DOLLAR GOES DIGITAL
On 8 April, AP reported that the Eastern Caribbean has created its own form of digital currency – the Eastern Caribbean Central Bank DCash – meant to help speed transactions and serve people without bank accounts. It became available in 4 island nations under a year-long pilot programme: St. Lucia, Grenada, Antigua and Barbuda, and St. Kitts and Nevis.
NEW ZEALAND CENTRAL BANK LAUNCHES NEW ENFORCEMENT DEPARTMENT
On 12 April, Reuters reported that the Reserve Bank of New Zealand (RBNZ) said that it was expanding its regulatory resources with a new standalone enforcement department focusing on compliance in the banking, insurance and AML sectors.
AUSTRALIA: LEGISLATION FOR DIRECTOR IDENTIFICATION NUMBERS COMMENCES
On 6 April, an article from Wolters Kluwer says that legislation requiring new and existing directors to obtain director identification numbers (“DIN”) has commenced. However, directors will not need to obtain a DIN for some time yet.
US: EXPANDED MEASURES IMPOSE AML OVERHAUL ON ART AND ANTIQUITIES MARKET
On 8 April, Baker & Hostetler LLP reported that on 1 January 1, Congress passed the Anti-Money Laundering Act of 2020 within the broader National Defense Authorization Act, imposing significant AML reforms, some of which target the art and antiquities market. Persons “engaged in the trade of antiquities, including an advisor, consultant, or any other person who engages as a business in the solicitation or the sale of antiquities” are now required to meet certain record-keeping, reporting and other compliance requirements as “financial institutions”. While further guidance is forthcoming, FinCEN has already provided specific guidance for antique and art traders to identify and report suspicious activity using SAR.
https://www.bakerlaw.com/alerts/expanded-measures-impose-aml-overhaul-on-art-and-antiquities-market
DUAL-USE TECHNOLOGY IMPORTS AIDING PAKISTAN’S COVERT NUCLEAR PROGRAMME
On 12 April, Modern Diplomacy reported that a recent threat assessment report by the Norwegian security agencies reportedly highlighted the unhindered exploitation of dual use technology by Pakistan. Norway is not the only country to realise the immense risk stemming from transferring critical technologies to Pakistan. Its assessment follows several other countries’ public acknowledgement of the nuclear threat posed by Pakistan.
US: COURT STRIKES DOWN THE 30-YEAR SENTENCE OF AN INTERNATIONAL ARMS DEALER – FINDING HE CANNOT BE TRIED FOR CHARGES THAT DID NOT APPEAR ON HIS EXTRADITION REQUEST
On 12 April, Courthouse News reported that US Authorities arrested Rami Najm Asad-Ghanem, a naturalised US citizen, in Greece in December 2015 as part of an undercover investigation. Ghanem tried to purchase multiple weapons from international buyers that would be sent to Libya, including sniper rifles, pistols, silencers and other weapons according to prosecutors. Ghanem operated a company called Gateway to MENA while living in Egypt. The court vacated Ghanem’s conviction for selling a missile systems not included on the extradition request, vacated the sentence and remanded the case for resentencing and further proceedings.
https://www.courthousenews.com/added-charge-dooms-part-of-30-year-sentence-for-weapons-trader/
NORTH KOREAN DIPLOMATS REGULARLY FLEW ON EMIRATES TO SMUGGLE GOLD AND CASH
On 13 April, NK Pro reported that the airline was unable to provide a “substantive” response to inquiries, a UN Panel of Experts report said. North Korean diplomats in Iran who were also as gold and cash smugglers regularly used the airline to fly between Tehran and Dubai, allegedly involved hundreds of flights over the years between the two capital cities.
BRAZIL: NEW ANTI-MONEY LAUNDERING AND TERRORISM FINANCING RESOLUTION COMES INTO FORCE ON 1 JUNE
On 12 April, Mayer Brown reported that the Resolution regulates the adoption of policies, procedures and internal controls to prevent money laundering, terrorist financing and the financing of WMD, and is intended to help companies that are supervised by the Financial Activities Control Council (COAF) comply with the provisions of Federal Law. Entities supervised by COAF must implement and maintain an AML/CFT/WMD policy.
MALTA: FISH RESTAURANTS LINKED TO EX-FOOTBALLER’S MONEY LAUNDERING CASE
On 13 April, the Times of Malta reported that an ex-footballer’s step-daughter and a former high-ranking bank official fronted companies that managed 2 fish restaurants allegedly involved in laundering money linked to oil smuggling. Investigators working on unraveling the workings of a suspect organised crime group, allegedly involved in a €30 million fuel smuggling racket, had traced the restaurant-owning companies with links to a man who was arrested in December.
US: FLORIDA COURT FINDS 2 MEN GUILTY OF $7.2 MILLION WORKERS’ COMPENSATION INSURANCE FRAUD
On 13 April, Global Construction Review reported that Dennis Barahona and Gregorio Fuentes-Zelaya are now being pursued by authorities for $5.7 million in restitution for tax fraud and $1.4 million in forfeiture from wire fraud. They made money by renting out workers’ compensation insurance policies through their shell companies, taking advantage of a Florida law that requires workers to have compensation insurance. They rented the certificates to hundreds of work crews who falsely claimed that they worked for their companies.
https://www.globalconstructionreview.com/news/florida-court-finds-two-men-guilty-72m-workers-com/
DENMARK CHARGES 6 FROM UK AND US WITH CUM-EX FRAUD
On 13 April, the BBC reported that prosecutors in Denmark have charged 3 Britons and 3 Americans with defrauding Denmark of more than $175 million through a German bank. 2 British citizens have already been charged as part of a “cum-ex” trading fraud. Denmark’s was just one of a number of European states caught up in the so-called “cum-ex” scandal, in which tax refunds on share sales were claimed by both parties on tax that had only been paid once.
https://www.bbc.com/news/world-europe-56731339
IRELAND’S ILLEGAL PUBS TURN TO ORGANISED CRIME TO SOLVE GUINNESS SHORTAGE
On 13 April, OCCRP reported that since the pandemic has temporarily closed most pubs in the country, forcing Guinness to slow production, beer kegs have become a hot commodity in Ireland and organised crime is stepping in to fill the gap. It reports that police Operation Navigation which is meant to clamp down on illegal premises in defiance of COVID-19 regulations. Garda believe that criminal gangs have entered the business, finding it a lucrative source of funding, and during one raid, officers found nearly $80,000 worth of beer in a single truck.
TOP RUSSIAN FSB OFFICIAL HAS MULTIPLE UNDERWORLD TIES
On 12 April, a report from OCCRP said that Sergei Korolev, who was appointed to a key FSB (i.e. the former KGB) position earlier this year by President Vladimir Putin, is connected to leaders in the Russian criminal underworld accused of dozens of murders and kidnappings.
ECUADOR: A CHANGE TO THE CRIMINAL CODE HAS POSSIBLY MADE IT MORE DIFFICULT TO PROSECUTE LARGE-SCALE DRUGS TRAFFICKERS
On 12 April, Insight Crime reported that, despite being on track to break last year’s record haul of cocaine, having seized 35 tons in the first 4 months of 2021, it is said that the country is failing to prosecute large-scale offenders while punishing low-level ones. It appears that the problem may stem from a recent change in the country’s chief anti-drug law which sought to help in efforts to decriminalise small-scale drug use, prosecutors have a high bar for any person apprehended with drugs to prove commercial trafficking.
https://insightcrime.org/news/ecuador-drug-trafficking-law/
UK TAX COMPLIANCE AND ENFORCEMENT FOR WEALTHY INDIVIDUALS
On 13 April, Out-Law published an article saying that wealthy individuals with tax disputes may find their matter being handled by a specialist unit within HMRC’s high risk wealthy programme. If evasion is suspected, HMRC’s fraud investigation service is likely to be involved. Criminal powers are much more likely to be used to deter non-compliance by the wealthy in comparison with the position a decade ago. Although HMRC is unable to discuss publicly its open criminal casework, a recent freedom of information request revealed that 15% of those charged with tax offences in 2019-20 were from the ‘wealthy’ segment.
THE DEFERRED PROSECUTION AGREEMENT (DPA) REGIME: ALIGNING RHETORIC AND REALITY
A blog post from law firm Corker Bining on 13 April seeks to query whether the SFO has been acting, as it is obliged to do, in the interests of justice in its use of DPA, with an absence of the essential judicial scrutiny.
https://www.corkerbinning.com/deferred-prosecution-agreement/.
THE ILLEGAL WILDLIFE TRADE AND THE BANKING SECTOR IN CHINA
NGO TRAFFIC has released a report containing Guidelines which have been prepared to provide practical guidance to banks in China on the systems and processes that they need to have in place to manage the business risks associated with the illegal wildlife trade and thereby play a key role in combatting that trade. It says that, given that the Chinese banking sector is the largest in the world and given the scale of the illegal wildlife trade in Asia, Chinese banks have a key role to play. These banks therefore need to ensure that they and the banking network as a whole are not used to launder the proceeds of the illegal wildlife trade.
THE EVOLUTION OF METHAMPHETAMINE MARKETS IN EASTERN AND SOUTHERN AFRICA
On 24 March, the Global Initiative Against Transnational Organised Crime published a report which examines the existing retail markets for meth across several countries in eastern and southern Africa. This is achieved through an analysis of meth availability, retail meth prices, distribution systems and domestic marketplaces.
https://globalinitiative.net/analysis/meth-africa/
NORTH KOREAN EFFORTS TO EVADE SANCTIONS “UNSUCCESSFUL”
On 13 April, an article in Yonhap News reported that UN sanctions are believed to be pressuring the country, even though it has tried to evade them, a researcher at the Korea Institute for National Unification (KINU), a state-run think tank, has said. Its annual exports reached around US$3 billion from 2012 to 2016 but dropped to nearly one-tenth the amount after harsh sanctions were imposed in 2016, the expert said, and that illegal smuggling is not enough to “compensate for the damage from the sanctions”.
https://en.yna.co.kr/view/AEN20210413005800325
MICROSOFT WON A LAWSUIT AGAINST NORTH KOREAN HACKERS, BUT THE PAYOFF IS UNCLEAR
On 13 April, NK News reported that Microsoft was not awarded damages from the 2 unidentified hackers working for the DPRK-linked Thallium Group. The company was not awarded any damages or financial compensation, but it did manage to get the deceiving domains closed.
MASS KIDNAPPING IN CENTRAL SYRIA REVEALS DYNAMICS OF ISIS RESURGENCE
On 11 April, Homeland Security Today reported that an ISIS cell attacked and kidnapped civilians in Syria’s Hamah province, and the group made the unprecedented move to free its captives in exchange for family members held in regime prisons. It says that the incident raises new questions about the structure of the insurgency. ISIS cells consisting of locals form a crucial bridge between the civilian population, itself largely apathetic toward President Bashar al-Assad, and the foreign fighters that continue to flow into in the region.
IRS CHIEF: TAX EVASION IS CHEATING US OUT OF $1 TRILLION A YEAR
On 13 April, the Irish Examiner reported that IRS commissioner Chuck Rettig said previous tallies of the tax gap didn’t include some tax-evasion techniques that weren’t on their radar at the time. New estimates include the use of cryptocurrency, he said.
https://www.irishexaminer.com/business/economy/arid-40265345.html
UK: COUNTERFEIT CONTACT LENSES ‘POSED HEALTH RISK’
On 13 April, the BBC reported that a jury in Newcastle heard that a woman sold counterfeit coloured contact lenses which posed a “public health concern”. They were found to be counterfeit versions of the Novartis AG lenses, the court heard. A number of the lenses, which the defendant had bought from China and South Korea, were tested and all were found to be counterfeit,
https://www.bbc.com/news/uk-england-tyne-56735937
PANAMA: TRIAL OF 50 PEOPLE LINKED TO ODEBRECHT CASE
On 13 April, TeleSUR reported that in Panama, the Special Anti-Corruption Prosecutor’s Office (FEA) summoned 50 people to trial in connection to the Odebrecht bribes case – for money laundering charges and crimes against the public administration. Former President Ricardo Martinelli (2009-2014) is implicated in the Odebrecht case, together with two of his sons, who are in detention in Guatemala waiting for extradition to the US. In Panama, the construction company was awarded ten projects, including Madden Colon, Panama Metro, Remigio Rojas irrigation system, and San Felipe’s historic heritage rehabilitation. The Public Prosecutor’s Office has recovered over $49 million so far.
THE SILENT RISE OF INDIA’S PRIVATE PORTS
On 13 April, Hellenic Shipping News reported on what it described as a silent shift in cargo traffic growth from government-run to private ports. It says that the goal of doubling India’s GDP is also not possible without a significant ramp up in exports, and thus, if things go according to plan, private ports are uniquely placed to reap a windfall. It says that India’s port ecosystem is broadly divided into 12 major ports (controlled by the central government), a handful that are run as public-private partnerships, and countless minor ports, owned privately or by state governments, which dot the country’s 7,500-km long coastline. It is in these smaller, nimbler minor ports that much of the action lies.
https://www.hellenicshippingnews.com/the-silent-rise-of-indias-private-ports/
US INTELLIGENCE COMMUNITY RELEASES 2021 ANNUAL THREAT ASSESSMENT
On 13 April, Lawfare reported that the Director of National Intelligence (DNI) has released the US intelligence community’s unclassified 2021 Annual Threat Assessment and the 27-page document details “the most direct, serious threats to the United States during the next year”. The report identifies China, North Korea, Russia and Iran as countries that have “demonstrated the capability and intent to advance their interests at the expense of the United States and its allies”. The threat assessment also notes that “the effects of the COVID-19 pandemic will continue to strain governments and societies, fuelling humanitarian and economic crises, political unrest, and geopolitical competition”. The document covers a wide range of threats facing the US, from transnational issues like climate change to the conflict in Afghanistan to the potential for Iran to develop a nuclear weapon.
https://www.lawfareblog.com/us-intelligence-community-releases-2021-annual-threat-assessment
https://www.documentcloud.org/documents/20614223-2021_annual_threat_assessment
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NORTH KOREA TRANSFERS CONTROL OF IMPORTANT MILITARY SHIPBUILDING FACTORY IN MOVE SEEN TO BOOST SUBMARINE MISSILE PROGRAMME
On 12 April, Daily NK reported that North Korean authorities have reportedly transferred a shipyard that used to be controlled by the navy to the Munitions Industry Department (MID), raising its status to a joint enterprise. The move appeared to be part of North Korea’s efforts to accelerate the development and production of submarines and submarine-launched ballistic missiles (SLBM). Established in 1947, the October 3 Factory was the first ship repair and maintenance facility built in North Korea.
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