On 3 October, OFAC announced that it had designated 2 individuals and 1 business entity in Bosnia and Herzegovina (BiH). These designations follow the recent designation of a corrupt state prosecutor in BiH and build on other recent sanctions imposed on individuals and entities in the region. Te=he actions are said to target those in Bosnia and Herzegovina who are undermining democratic institutions and processes for their own political gain and to reward their patronage networks, the designations include Slobodan STANKOVIC, one of the wealthiest individuals in BiH, and Fadil NOVALIC, Prime Minister.
Today it was reported that, so far, at least 150,000 “irregular migrants” have crossed the Darién Provice from Colombia – more than the 133, 716 for the whole of 2021. According to data from the National Migration System of the 151,572 irregular migrants, 107,723 are from Venezuela, 8,579 from Haiti, 4,032 from Cuba and 14,297 from other countries. It is also reported that in September more than 2,000 migrants were arriving per day and that 80% were citizens of Venezuela.
2 OCTOBER 2022
AUSTRALIA: HOW DOES THE GOVERNMENT’S LONG-AWAITED ANTI-CORRUPTION BILL RATE?
On 28 September, Transparency International in Australia published 2 releases. These note that it is 17 years since Transparency International Australia first recommended the reform in question – which involves the National Anti-Corruption Commission Bill. One of the 2 releases examines the Bill, which still faces a select committee and review, so may well be amended. The second article notes that alleged corruption will be examined behind closed doors after the disturbing decision to hold public hearings only in ‘exceptional circumstances’.
JERSEY: RETIRED NIGERIAN ARMY GENERAL WHO TRANSFERRED NEARLY £2 MILLION OF ‘TAINTED’ MONEY INTO HIS BANK ACCOUNTS LOSES APPEAL AGAINST SEIZURE
On 2 October, the Jersey Evening Post commented on the decision of the Royal Court involving Lieutenant-General Useni, who held high political office during the Abacha regime, and £1.9 million deposited between 1989 and the late 1990s. the money was seized on corruption grounds and because his Island accounts were opened under the false name of Tim Shani.
AMERICANS RELEASED IN VENEZUELA FOLLOWING CLEMENCY FOR 2 NEPHEWS OF ITS FIRST LADY
On 1 October, the New York Times reported that 7 Americans held in Venezuela for years were released after President Biden agreed to grant clemency to 2 nephews of Cilia Flores, Venezuela’s first lady. The men had been sentenced in 2017 to 18 years in prison for conspiring to smuggle cocaine into the US, and are known as the “narco nephews” — Efrain Antonio Campo Flores and Franqui Francisco Flores de Freitas.
A NEW FRONTIER IN THE FIGHT AGAINST CYBERCRIME: THE SECOND ADDITIONAL PROTOCOL TO THE BUDAPEST CONVENTION
On 28 September, an article from Clifford Chance noted that, on 12 May, 22 Members Countries of the European Council ratified the Second Additional Protocol to the Convention on cybercrime (aka the “Budapest Convention”) on enhanced cooperation and disclosure of electronic evidence (aka the “Second Protocol”). It explains that the Second Protocol aims to create common norms, at the international level, to strengthen cooperation in fighting cybercrime and in collecting electronic evidence in connection with criminal investigations or proceedings. The new Protocol requires that countries create specific rapid and direct communication channels between all the state authorities involved as well as between the state authorities and the private sector, such as online service providers located in foreign jurisdictions, so as to allow collection and disclosure, easily and quickly, of information relating to, for example, registration of domain names, subscribers and traffic data.
CHINA FORMER TOP GRAFT BUSTER INDICTED ON BRIBERY CHARGES
On 28 September, ABC News reported that a former top official at the ministry for intelligence and counterintelligence has been indicted on bribery charges. Liu Yanping headed the State Security Ministry’s branch of the party’s Central Commission for Discipline Inspection. It is said that Liu was found to have “engaged in superstitious activities” and accepted invitations to golf games, banquets, tours, and medical services from private business people.
SHIP CAPTAINS HELD BY INDONESIAN NAVY COMPLAIN OF BRIBES AND BETRAYAL
On 27 September, Yahoo News carried a Reuters report on the plight of ships arrested for anchoring in Indonesian waters without a permit while waiting to enter Singapore. It is alleged that most of the captains were freed after a few weeks once ship owners made unofficial payments to navy intermediaries. Dozens of ships waiting to enter Singapore have been seized over the last year by the Indonesian navy for illegally anchoring in its waters, with most being released after ship owners made unofficial payments.
OPTUS: HOW A MASSIVE DATA BREACH HAS EXPOSED AUSTRALIA
On 30 September, the BBC reported that Australian telecommunications giant Optus had revealed about 10 million customers – about 40% of the population – had personal data stolen in what it calls a cyber-attack. Optus said that current and former customers’ data was stolen – including names, birthdates, home addresses, phone and email contacts, and passport and driving licence numbers, but stressed that payment details and account passwords were not compromised.
CHINA IS ALLEGEDLY OPENING “POLICE STATIONS” ON CANADIAN SOIL
On 27 September, the National Post reported claims by an NGO that vaguely named stations are an ‘extrajudicial’ way for China to keep tabs on their nationals abroad, and to keep an eye on the Chinese-Canadian diaspora. It is said that 3 addresses in Toronto are known to be registered as “service stations” operated by the Fuzhou Public Security Bureau, a police force active in the Chinese metropolis of Fuzhou. It is reported that Canada is only one of several dozen countries that are now home to overseas outposts of Chinese law enforcement – recently the Irish Times noted the opening of a Fuzhou Overseas Police Service Station in central Dublin.
US IDENTIFIES FOURTH IRANIAN CARGO PLANE OPERATING IN APPARENT VIOLATION OF US EXPORT CONTROLS ON RUSSIA
On 26 September, a news release from the US Commerce Department Bureau of Industry and Security (BIS) advised that BIS has updated its list of aircraft that have flown into Russia in apparent violation of the Export Administration Regulations (EAR) by adding a fourth Iranian-owned and -operated aircraft providing cargo flight services on US-origin aircraft to Russia. This is an aircraft owned by Saha Airlines, which itself is owned and operated by the Islamic Republic of Iran Air Force.
THE BLACK SEA GRAIN INITIATIVE: WHAT IT IS, AND WHY IT’S IMPORTANT FOR THE WORLD
On 23 September, the UN Committee on Trade and Development released this explanatory article about the initiative set up to reintroduce vital food and fertiliser exports from Ukraine to the rest of the world, and identifying some key points to understand.
TRUSTEES AND SANCTIONS: THE POSITION FOR TRUSTEES CONCERNED ABOUT FALLING FOUL OF SANCTIONS
An article in the October issue of Trusts and Estates Journal and Tax Journal contains the highlighted comments “It is very difficult to see how (given the combined scope of the application of EU and UK sanctions to EU and UK citizens) there will be anyone left in places like Jersey able to administer structures that have a Russian connection”. It also says that the near-ceaseless expansion of the sanctions regime since the beginning of 2022 has proved to be one of the biggest logistical challenges the trust and fiduciary services sector has faced in recent years.
On 29 September, CSIS published an article saying that large leaks were detected in both Nord Stream 1 and Nord Stream 2 pipelines, driving speculation about a new escalation in the energy brinksmanship between Europe and Russia. It says that addressing some of the vulnerabilities will likely require significant investment and cross-Atlantic cooperation on cyber and physical security of energy infrastructure. Beyond malicious attacks, downtime due to aging infrastructure or outages due to accidents will have outsized impacts on tight energy markets. Energy security for Europe will increasingly entail securing and maintaining critical infrastructure, including in the US.
On 28 September, CSIS published a report saying that ransomware attacks have now become a clear and present danger to entities of every size and function. The number of ransomware attacks and the price of demanded ransoms have escalated steeply since 2018. This report aims to put the reader in the shoes of the victim. It walks through a set of decisions that victim must make on their worst day and in the weeks to follow. How well an entity succeeds in navigating that peril depends on decisions made well before an attack, so the report also makes recommendations for both government and industry on how to encourage preparation and simple defensive steps.
MONEY LAUNDERING WITH THE HELP OF NFT WASH TRADING
An article from PWC in Switzerland says that the boom in the NFT market also opens the door to criminal activities. Such crimes can include market manipulation or money laundering using NFT by means of “wash trading”, which is the focus of this article. It explains thatNFT wash trading aims to give market participants a misleading picture of an asset’s value and liquidity. In doing so, an NFT will be sold at a higher price to a new wallet, which is also controlled by the original owner. The article asks if NFT wash trading a predicate offence to money laundering under Swiss financial market law?
Lighthouse Reports in the Netherlands has highlighted a useful resource, saying that the war in Ukraine has thrown an unprecedented spotlight on Russian oligarchs, triggered waves of sanctions and made them an urgent priority for investigative journalists. Who is an oligarch? How many are there? Who else has been sanctioned? Making sense of these questions, it says, requires adding meaning and context to the raw data, and it has defined and categorised more than 500 Russians and Belarusians added to international sanctions lists since 1 January 2022. A sanctions tracker website acts as a portal for journalists and researchers to quickly find answers to some of the key questions arising from this fast-moving, complex and vitally important story.
The President has announced that, after 2 years away due to Covid, the annual carnivals will return to Panama in February. In November, the Fiestas Patrias, which celebrate 2 independence days (from Spain and then Colombia).
1 OCTOBER 2022
TANKER TIED TO NORTH KOREAN OIL SMUGGLING MIMICKED SCRAPPED VESSEL
On 30 September, NK Pro reported that an oil tanker implicated in several investigations into North Korean sanctions evasions has continued to fraudulently assume the identities of other vessels in a bid to dupe investigators, a forthcoming report from the UN panel of Experts will say. The 9,200-ton oil tanker Diamond 8 tried to pass itself as a ship that had been in a scrapyard for a year.
On 30 September, the International Chamber of Commerce announced the publication of this Guide, the latest in a series of guides explaining how ICC’s trade terms apply in practice, it provides answers to the most important and recurring questions that will be asked about the Incoterms® 2020 rules.
HMRC UMBRELLA COMPANY TAX AVOIDANCE ACTION IS ‘A DROP IN THE OCEAN’
On 30 September, Personnel Today reported that, as a further 3 tax avoidance schemes were yesterday named by HMRC, tax authorities have been criticised for not going further to stamp out umbrella employment schemes that involve tax avoidance. Off-payroll working reforms have resulted in increased use of rogue umbrella companies, along with a number of workers who are being treated as employees for tax purposes, but who lack employment rights.
URUGUAY PASSPORT SCANDALS FORCE RECKONING ABOUT GOVERNMENT CORRUPTION
On 30 September, Insight Crime said that the arrest of the Uruguayan President’s head of security in an alleged passport scam marks the country’s second such scandal and raises questions about whether official corruption has too long gone unnoticed. Alejandro Astesiano was arrested on 25 September on charges that he led a criminal ring, which provided fake birth certificates stating that Russian citizens had Uruguayan parents, with hundreds or perhaps thousands of falsifications of Uruguayan documents alleged.
OUTGOING MEXICO GOVERNOR TO LOSE IMMUNITY FROM LONG-PENDING ARREST WARRANT
On 30 September, Insight Crime reported that Francisco Javier García Cabeza de Vaca, the outgoing governor of Mexico’s state of Tamaulipas, is about to lose immunity from a long-looming arrest warrant, and says that the protection he enjoyed while in office highlights some of the struggles Mexico faces in addressing official corruption.
FORMER CARGILL EMPLOYEE IS SENTENCED TO MORE THAN 4 YEARS IN PRISON FOR BRIBERY AND KICKBACK SCHEME
On 28 September, a news release from US DoJ advised that Michael A. Kennedy, 56, had been sentenced to 50 months in prison for his role in an extensive bribery and kickback scheme that defrauded Cargill. He was also ordered to pay restitution in the amount of $33.7 million.
VIETNAM: DEPUTY PM’S ASSISTANT ARRESTED IN PANDEMIC FLIGHT BRIBERY CASE
On 27 September, VN Express reported that Nguyen Quang Linh, assistant to Vietnam’s Deputy Prime Minister Pham Binh Minh, has been arrested for allegedly taking bribes while organizing Covid-19 repatriation flights. He is the nineteenth person to face criminal charges after investigation was launched 8 months ago in the pandemic flight bribery scandal. Vietnam organised around 800 repatriation flights and brought back over 200,000 citizens from over 60 countries and territories after the pandemic struck.
On 1 October, Hellenic Shipping News reported that new data from commodity analytics firm Kpler confirms that Russian seaborne petroleum exports remain historically high and the EU remains a major buyer. The EU ban on seaborne crude imports begins on 5 December, the ban on refined products imports on 5 February.
NICARAGUA HAS KICKED OUT HUNDREDS OF NGO – EVEN CRACKING DOWN ON CATHOLIC GROUPS LIKE NUNS FROM MOTHER TERESA’S ORDER
An article on The Conversation on 30 September argues that one method that today’s autocrats and the governments under their control are increasingly using to strengthen their grip on power is to crack down on non-governmental organizations. They are branding these often foreign-funded groups, known as NGO, as foreign agents or cast them – usually falsely – as money launderers and terrorists.
SUPERYACHT LINKED TO SANCTIONED RUSSIAN OLIGARCH IGOR KESAEV ON SALE FOR £26 MILLION
On 1 October, the Observer reported that a superyacht built for an oligarch subjected to sanctions over the supply of weapons to the Russian army is being discreetly offered for sale for £26 million, with buyers advised that any viewings will be in the Maldives.
2 more new cases of monkeypox announced, taking the total to 16…
30 SEPTEMBER 2022
EL SALVADOR – CENTRAL RESERVE BANK APPROVES TECHNICAL STANDARDS REGARDING AML/CFT/PROLIFERATION RISK MANAGEMENT
On 28 September, Arias reported that the Standards Committee of the Central Reserve Bank of El Salvador approved a document entitled “Technical Standards for the Risk Management of Asset and Money Laundering, Financing of Terrorism and Financing of the Proliferation of Weapons of Mass Destruction”, which will enter into force on 26 October.
EXTRACTION AND TRAFFICKING OF MOROCCAN COASTAL SAND
On 18 May, ENACT Africa had published an article (in French) saying that the resulting permanent damage to the country’s beaches will have a negative impact on local livelihoods and the national tourism industry, due to insufficient sanctions to crack down on illegal sand mining.
On 19 September, ENACT Africa published a report based on ground-breaking research from the DRC, Kenya and Uganda. It uses studies of illegal coltan mining in the Democratic Republic of Congo, sand trafficking in Kenya and wildlife crime in Uganda.
US PRESSURING ISRAEL TO CUT RESEARCH TIES WITH CHINA OVER DUAL-USE CONCERNS
On 29 September, Breaking Defense reported that an Israeli Ministry of Defense source told Breaking Defense that the US is especially concerned about the leakage of sensitive data about cyber capabilities, mini-satellites and electronic warfare systems. The move comes as Israel is moving to create stronger bonds with Chinese research institutes, including an agreement launched last year specifically “to attract excellent Chinese students” to come study in Israel.
ERICSSON KEEPS SUPPLYING RUSSIA DESPITE UKRAINE INVASION
On 26 September, the Telegraph reported that Ericsson is continuing to supply mobile phone equipment to Russia despite pledging to halt operations in the country. It applied for a dozen exemptions from local export controls on “dual-use” products, according to Swedish Radio.
UN RENEWS SHIP INSPECTIONS OFF LIBYA FOR SMUGGLED MIGRANTS
On 29 September, KTVZ reported that the UN Security Council has voted unanimously to authorise for another year the inspection of vessels off the coast of Libya suspected of smuggling migrants or engaging in human trafficking from the North African nation.
INSOLVENCY SERVICE WARNS OF WINE INVESTMENT RECOVERY SCAM
On 30 September, Drinks Business reported that, following the liquidation of Global Wine Exchange in March, investors are now being warned that scammers are making false claims that their funds can be recovered. It is said that recovery room scammers posing as trading standards officials are exploiting the fallout of the liquidation by asking for personal information and claiming that if it is not provided no funds will be transferred.
EUCOMMISSION SEEKS VIEWS ON THE FUTURE EUROPEAN CRITICAL RAW MATERIALS ACT
On 30 September, the EU launched a consultation in preparation of the European Critical Raw Materials Act. Interested parties are invited to provide comments and evidence and reply to targeted questions on the current problems faced along the critical raw materials supply chain within and outside of the EU and how to address them.
On 29 September, Jurist reported that the trial of Félicien Kabuga, one of the alleged financiers and masterminds of the 1994 Rwandan genocide began at The Hague. Kabuga was one of the financiers of the Rwandan media outlet Radio Télévision Libre des Mille Collines. In his role as financier, he supported and delivered broadcasts which named specific persons to be targeted, pointed out areas of attack and encouraged people to carry out searches for targeted individuals.
JERSEY: APPEAL AGAINST FORFEITURE OF £1.9 MILLION DEPOSITED INTO JERSEY NUMBERED BANK ACCOUNTS IN A FALSE IDENTITY BETWEEN 1989 AND LATE 1990S
A news release from the Jersey Government on 30 September advised that the Jersey Court of Appeal dismissed an appeal against the Attorney General’s application seeking the forfeiture of approximately £1.9 million deposited into Jersey numbered bank accounts in a false identity between 1989 and the late 1990s. The money is said to be linked to funds looted under the Abacha regime in Nigeria, and was regarded as “tainted”.
TRADE MARK OWNERS WITH UK RIGHTS ARE CHOOSING TO ENGAGE UK-BASED REPRESENTATIVES TO AVOID THE RISK OF LOSING ‘CLONED’ RIGHTS AFTER BREXIT
On 29 September, Out-Law reported that an increasing number of trade mark owners are acting to avoid the risk of losing ‘cloned’ rights after Brexit. It explains that such cloned UK trade mark registrations were created in the wake of the UK’s withdrawal from the EU, and mirror all EU trade mark (EUTM) registrations registered as at 1 January 2021, and are identical in all respects to the parent EUTM.
NEW JURISDICTIONAL GATEWAYS TO HELP UNMASK FRAUDSTERS OUTSIDE OF ENGLAND AND WALES
On 29 September, Out-Law reported that an update to the Civil Procedure Rules (CPRs) in England and Wales has handed fraud litigators a new key to help unmask fraudsters and trace misappropriated assets. From 1 October, it extends the current 21 “jurisdictional gateways” through which the English courts may give permission for a claim to be served outside the jurisdiction of England and Wales. It is said that victims of fraud will now be able to use Norwich Pharmacal Orders (NPO) and Bankers Trust orders with greater jurisdictional reach through the new gateway, allowing them to make a claim or application for disclosure in order obtain information from entities outside England and Wales to assist them in bringing further action in the English courts.
THE GLOBAL OPERATIONS BEHIND CHINA’S MASSIVE FISHING FLEETS TARGETING THE GALAPAGOS ISLANDS REVEALED
On 27 September, the Marine Megafauna Foundation carried an article about a major New York Times report which highlights how China’s enormous international fishing fleet has spread across the world’s oceans. The Galapagos Islands are a prime fishing target due to the abundant ocean wildlife. Satellite mapping from 2020–2021 shows how their fleets line the edges of international water surrounding the Galapagos, catching sharks and other marine life as they exit and enter protected waters. It also featured the journey of “Motherships”- gigantic refrigerated vessels that exist so smaller ships can unload their catch without ever needing to return to port, allowing them to fish continuously and making it easy to “underreport the catch and disguise its origins”.
UK: REGULATOR SETS OUT PROPOSALS TO GIVE GREATER PROTECTION AGAINST APP SCAMS
On 29 September, the Payment Systems Regulator published a consultation that it says will usher in greater protections from Authorised Push Payment (APP) scam losses and will see further action being taken to prevent scams from happening in the first place. It says that its ongoing work identified concerns about outcomes for victims under the current voluntary approach taken by banks and building societies.
NETHERLANDS: COPS SEIZED LARGE AMOUNTS OF CASH IN MONEY LAUNDERING CASE AROUND JUMBO CEO
On 30 September, the NL Times reported that police seized large amounts of cash in the money laundering investigation in which Jumbo CEO Frits van Eerd is also a suspect. The case revolves around money and property laundering through real estate transactions, car trading, unexplained cash deposits, and sponsorship deals in the motocross sport. There are 9 suspects in this case.
BULGARIA: COURT REMANDS IN CUSTODY TURKISH-GERMAN DUAL NATIONAL WANTED BY US FOR $23 MILLION FRAUD
On 30 September, the Bulgarian News Agency BTA reported that Metin Savas Koros, 59, a dual Turkish and German national, wanted in the US for $23 million fraud and money laundering, was remanded in custody for 60 days.
HONG KONG CHARGES 13 IN A PUMP-AND-DUMP SCHEME CRACK DOWN
On 30 September, Finance Magnates reported that the Hong Kong police and Securities and Futures Commission (SFC) have charged 13 suspects, a syndicate, of a sophisticated ‘ramp-and-dump’ (“pump and dump”) scheme.
TABLE OF IRANIAN NUCLEAR SITES AND RELATED FACILITIES
On 16 September, the Wisconsin Project on Nuclear Arms Control provided a list of facilities that carry out the different steps of the nuclear fuel cycle. This infrastructure includes the mine where Iran extracts natural uranium, the mill that processes uranium ore into a concentrate known as “yellowcake,” and the plant that converts this yellowcake into uranium hexafluoride (UF6) gas – the feedstock for centrifuges that enrich uranium. Iran operates several gas centrifuge plants and accumulates enriched uranium that can be used to manufacture fuel for nuclear reactors or nuclear weapons. It also operates reactors for the purpose of generating electricity and conducting research for medical and industrial applications. Because of the dual-use potential of many of these facilities, however, the international community has long raised concerns that Iran could use this infrastructure and expertise to develop nuclear weapons.
RESPONSIBILITY CHAINS: BUILDING GLOBAL GOVERNANCE FOR FOREST RISK COMMODITY CHAINS
On 13 September, the Stimson Center argues that, in order to promote a more effective global governance for forests, it proposes the creation of a Responsibility Chains Process. The paper is part of a series which provides a platform for leading and up-and-coming authors’ thinking on major contemporary global governance challenges with view to stimulating further debate and influence policy debates.
FORMER EL SALVADOREAN FOOTBALL OFFICIAL SENTENCED TO 16 MONTHS IN PRISON FOR CORRUPTION
On 29 September, the Global Investigation Review reported that Reynaldo Vasquez, the former president of El Salvador’s football federation FESFUTwill also pay $360,000 for his role in an international corruption scheme that the US has been pursuing for years. Vasquez was finally extradited to the US from El Salvador last year, having been indicted in 2015, and pleaded guilty in August 2021, and the conviction relates to accepting a bribe in 2012 from Miami-based Media World, which manages rights for Spanish-speaking broadcasters.
On 30 September, OFAC advised that the regulations previously published in abbreviated form in 2011. The new Libyan Sanctions Regulations includes additional interpretive guidance and definitions, general licenses, and other regulatory provisions that will provide further guidance to the public.
SLOVAK OIL REFINER TO KEEP SELLING RUSSIAN OIL, HOPES COMMISSION TURNS A BLIND EYE
On 30 September, EurActiv reported that Slovakia’s largest oil refiner Slovnaft will keep selling Russian oil on the domestic market even after its exemption under the EU embargo on Russian crude oil runs out at the end of 2023, the company’s CEO Marek Senkovič has said.
HARLEQUIN: MAN BEHIND A £226 MILLION FRAUD JAILED FOR 12 YEARS FOLLOWING AN INVESTIGATION BY THE SFO
A news release from the SFO on 30 September advised that David Ames, 70, who fraudulently abused his position as Chairman of the Harlequin business, exposing over 8,000 investors to huge losses between 2010 and 2015 had been jailed. Ames sold to a large number of people with Self-Invested Personal Pensions (“SIPPs”) before regulations were tightened in 2012, many of them elderly with little investing experience.
On 30 September, KPMG reported that the Bureau of Industry and Security (BIS) of the US Commerce Department advised that 56 of the entities will be listed on the entity list under the destination of Russia and 1 will be listed under the destination of the Crimea region of Ukraine. Being placed on the Entity List Entities means the entity is subject to licence requirements for the export or transfer of specified items, such as some US technologies.
On 30 September, OFAC issued this guidance which emphasises the importance of taking a risk-based approach to managing sanctions risks in the context of new payment technologies such as instant payment systems and to highlight considerations relevant to managing those risks. This guidance also encourages developers of instant payment systems to incorporate sanctions compliance considerations and features as they develop these systems.
On 30 September, OFAC announced a settlement with Tango Card Inc to settle its potential civil liability for 27,720 apparent violations of multiple US sanctions programs, said to be caused by deficient geolocation identification processes.
On 30 September, HM Treasury announced new moves to implement services sanctions and export ban that target Russian economic vulnerabilities in response to Putin’s illegal annexation of Ukrainian regions. It says that the UK is moving in lockstep with international partners to target key sectors of the Russian economy. The new measures will ramp up economic pressure on the Russian regime by targeting vulnerabilities and disrupting crucial supply chains. On 30 September, specifically, it designated Elvira Sakhipzadovna NABIULLINA, Governor of the Central Bank of the Russian Federation. The existing entries for Alexey Ivanovich ISAYKIN and Alexander Dmitrievich KHARICHEV are also amended.
On 30 September, OFAC announced the addition of a large number of new individuals and entities on its Russia sanctions list, with a number of others amended, plus new FAQ 1091. The new names comprise 14 persons in Russia’s military-industrial complex, including 2 international suppliers, 3 key leaders of Russia’s financial infrastructure, immediate family members of some of senior Russian officials; and 278 members of Russia’s legislature. OFAC also warned of the heightened sanctions risk that international actors outside of Russia would face for providing political or economic support to Russia as a result of its illegal attempts to change the status of Ukrainian territory.
On 28 September, the Wildlife Justice Commission published a report on the rise and fall of one of Vietnam’s biggest wildlife traffickers, Nguyen Van Nam (referred to in the report as Ah Nam). He was arrested in Hanoi on 30 September 2019 in connection with the illegal trade of ivory; on 16 July 2020 he was convicted and sentenced to 11 years in prison. Now that the investigation into one of his connections has been concluded, the full extent of efforts to bring Ah Nam to justice can be disclosed.
On 28 September, a news release from FINTRAC advised of the latest Operational Alert, Laundering of Proceeds from Illicit Cannabis, in support of Project Legion. This Operational Alert is meant to assist businesses subject to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act in better identifying and reporting to FINTRAC financial transactions related to the laundering of proceeds from illicit cannabis activities. It was developed in collaboration with law enforcement and Canada’s largest banks to advance and facilitate Project Legion, Canada’s most recent public-private partnership. The Alert includes an overview of FINTRAC’s analysis of suspicious transaction reports related to illicit cannabis; “red flags” in indicators of illicit cannabis in relation to online unlicensed dispensaries; and possibly related to illicit cannabis in relation to the cultivation, processing and preparation
On 30 September, an Insight from RUSI asks if ‘failure to prevent’ offences had an impact on the criminal liability for corporate entities? It explains that the basis of a failure to prevent offence is simple – to have any defence, an organisation needs to prove that it had ‘reasonable’ or ‘adequate’ procedures in place to prevent an individual associated with it from carrying out a criminal activity. The first failure to prevent offence was introduced in relation to bribery in 2010; 2 further failure to prevent offences followed in the Criminal Finances Act 2017 related to the facilitation of tax evasion.
NEW ZEALAND: CRIMINAL PROCEEDS (RECOVERY) AMENDMENT BILL INTRODUCED
On 23 September, Wolter Kluwer New Zealand published an article saying that this Bill was introduced into Parliament on 6 September, and that it would enable the High Court to make a disclosure of source order, in relation to property to which a restraining order applies if the respondent is overseas – if satisfied that there are reasonable grounds to believe that the property concerned is “tainted” property. It also closes an unintended loophole in the 2009 Act re the KiwiSaver scheme.
On 27 September, Browne Jacobson LLP reported that, hidden in the recent “mini-Budget”, was news that the off-payroll working rules (known as “IR35”) put in place for public and private sector businesses from 2017 and 2021 will be scrapped from April 2023. From April 2023, the rules will be reversed and the contractor (and the business engaging the contractor) will be responsible for determining the tax status of an engagement.
RUSSIA IS WEAPONISING ITS DATA LAWS AGAINST FOREIGN OPPONENTS
On 27 September, Tech Stream carried an article saying that a move against the Jewish Agency for Israel is the latest example of the Kremlin using laws governing online life in Russia to cement power offline, and its deployment against a group with little to no meaningful technology operation illustrates how those laws are being weaponised against groups viewed as a threat to the governing regime. Its growing frequency underscores that Moscow’s use of online laws to rein in civil society shows no sign of relenting, and, if anything, is only growing more creative.
On 29 September, Nikkei Asia reported that this rise is fuelled by the country’s ability to tailor its offering to the threat the customer country is facing. Defence sales doubled to $7 billion in 2021 and are expected to exceed $10 billion this year.
WEBINAR: CROSS-BORDER FRAUD: DUBAI TO BVI VIA LONDON
On 27 September, HFW released this hour-long video in which a panel of litigation experts focus on the increase of cross-border fraud in Dubai, the BVI and London, the far-reaching impact of cross-border fraud, as well as the role each region plays. Taking aspects from real world case studies, the team considers the systemic nature of this type of fraud, how it is so easily conducted and the repercussion in relation to litigation proceedings.
PANAMA: ODEBRECHT CORRUPTION HEARING ENDS – JUDGE HAS 30 DAYS TO RULE
On 29 September, Newsroom Panama reported that the huge corruption hearing, involving scores of defendants, including 2 ex-Presidents, has ended. The judge will now have up to 30 days to decide if the 49 defendants are to be prosecuted.
FRANCE ORDERS JAIL TIME FOR 2 MEN CHARGED WITH FUNDING TERRORISM IN SYRIA WITH CRYPTO
On 19 September, Coindesk reported that French authorities had finalised prison sentences for 2 men who were arrested on charges of funding terrorism in Syria via cryptocurrencies. Arrested in 2020, they were part of a network that was accused of having financed “jihadists” in Syria using crypto between 2018 and 2020, with the amount transferred via crypto estimated to be around €280,000.
MALI SAYS IT WILL NOT RESPECT REGIONAL SANCTIONS ON GUINEA
On 29 September, Devdiscourse reported that ECOWAS has imposed sanctions on Guinea’s ruling junta for taking too long to organise elections and restore democracy after seizing power last year. The measures include freezing junta members’ financial assets and barring them from travelling to other countries in the region. However, Mali does not respect and will not apply sanctions imposed on its neighbour – and would, if necessary, take measures to assist in order to counteract the effect of the sanctions.
HONG KONG: COUPLE ARRESTED FOR SMUGGLING MARK SIX LOTTERY TICKETS TO CHINA AND MACAU
On 29 September, The Standard reported that Customs officers had arrested a couple on suspicion of smuggling HK$330,000 worth of Mark Six lottery tickets. They seized 16,000 tickets suspected of being smuggled to China and Macau.
INDIA: DOES THE ENFORCEMENT DIRECTORATE HAVE TOO MUCH POWER?
On 29 September, an article in the India Business Law Journal asked this question, saying that fears of raids and asset seizures have turned the Directorate of Enforcement into a veritable bogeyman for “India Inc”.
CZECH REPUBLIC: AMENDMENT TO THE ACT ON REGISTRATION OF ULTIMATE BENEFICIAL OWNERS (UBO)
On 28 September, an article from Bird & Bird said that, on 1 October, an amendment to the Act on Registration of UBO will come into force; and asks what does this mean and how can it affect your business?
IRELAND MUST STEP UP ITS FIGHT AGAINST HUMAN TRAFFICKING
On 28 September, a news release from the Council of Europe advised that its Group of Experts on Action against Trafficking in Human Beings (GRETA), in its latest evaluation report, had urged authorities in Ireland to take further action against human trafficking, notably by improving prosecution of human traffickers and providing specialised shelters and compensation for victims. On the other hand, the report shows that the total number of presumed trafficking victims in Ireland fell from 103 in 2017 to 44 in 2021.
12 CHARGED AS PART OF NCA INVESTIGATION INTO CASH SMUGGLING FROM THE UK TO DUBAI
A news release from NCA on 28 September advised that 12 people have been charged as part of a major NCA investigation into the smuggling of millions of pounds in criminal cash out of the UK. All 12 are suspected of being cash couriers, responsible for transporting large amounts of money in suitcases on flights from the UK to Dubai.
AUSTRALIA: BILL INTRODUCED TO FORM A NATIONAL ANTI-CORRUPTION COMMISSION
On 29 September, Jurist reported that the commission will be able to investigate ministers, parliamentarians, parliamentary staff, statutory office holders and all government employees and contractors for criminal as well as non-criminal corruption offences. The Bill will include protections for whistleblowers and journalists who refer cases to the commission.
EUROPOL: HUNGARIAN SEX TRAFFICKING GANG DISMANTLED IN BERLIN
On 29 September, an article from OCCRP reported that German and Hungarian authorities had arrested the alleged kingpins of a Hungarian gang of traffickers for sexual exploitation, dismantling the criminal network. 3 of the gang members were arrested in both cities, including a Hungarian couple in Berlin – the suspected heads of the criminal operation. According to the EU police authority, the criminal gang had been active since 2017, recruiting young Hungarian women from vulnerable socioeconomic backgrounds to be exploited sexually in various streets of Berlin which were controlled by the criminal circle.
FRENCH LAW ENFORCEMENT DISMANTLE AN ORGANISED CRIME GROUP AND SEIZE ILLEGAL MEDICINES AS WELL AS FAKE PRESCRIPTIONS
A news release from Europol on 29 September advised that the organised crime group had specialised in acquiring psychotropic drugs containing the Pregabalin agent by using stolen or faked prescriptions in various EU Member States. Authorities seized fake Belgian identity documents, illegal medicines, fake prescriptions and cash.
FIGHTING ILLEGAL LOGGERS ON THE GUATEMALA-MEXICO BORDER
On 29 September, Insight Crime published a report from the jungles of Petén, a department in the extreme north of Guatemala. InSight Crime joined the convoy of park rangers on both sides of the border, spending 2 weeks deep inside the Mayan jungle to document the incursions of criminal groups. It explains that Granadillo, used for furniture and other luxury products despite being a protected species, is native to Mexico and Central America and can grow up 35 meters in height.
STRATEGIC LAWSUITS AGAINST PUBLIC PARTICIPATION (SLAPP)
On 29 September, a briefing from the EU Parliament Research Service explains that a SLAPP is an abusive or meritless lawsuit filed against someone for exercising their political rights or freedom of expression in relation to matters of public interest. The purpose of a SLAPP is not to seek justice but to intimidate, silence and drain the financial and physical resources of the targeted victims. On 27 April, the European Commission put forward a proposal for a Directive aimed at protecting persons who engage in public participation against manifestly unfounded or abusive civil court proceedings with cross-border implications, which is now being analysed by the co legislators. The proposal is accompanied by a recommendation to the Member States setting out guidance to address purely domestic cases of SLAPPs.
US DoJ ANNOUNCES TOTAL DISTRIBUTION OF OVER $4 BILLION TO VICTIMS OF MADOFF PONZI SCHEME
A release on Mondo Visione on 28 September advised that the DoJ had announced that the Madoff Victim Fund (MVF) began its eighth distribution of approximately $372 million in funds forfeited to the US Government in connection with the Bernard L Madoff Investment Securities LLC (BLMIS) fraud scheme.
JAPAN BANS CHEMICAL WEAPONS-RELATED GOODS TO RUSSIA
On 25 September, Yahoo Finance reported that Japan has decided to ban exports of chemical weapons-related goods to Russia in an additional sanction over its invasion of Ukraine. It also added 21 Russian organisations such as science labs as the target of existing export bans.
TORNADO CASH SANCTIONS ARE UNDULY “CREATIVE” WITH THE FIRST AMENDMENT
On 29 September, a post on Lawfare made this argument, saying that OFAC sanctioning of autonomous code controlled by no legal person ran headlong into the established precedent that code is speech and protected by the First Amendment. It is argued that OFAC is on firm ground when it sanctions people or property, including cryptocurrency, involved in criminal enterprises like the North Korean Lazarus Group – but that OFAC went too far in sanctioning code.
On 29 September, a post on the always interesting FCPA Blog reported that, so far this year, 2 FCPA enforcement actions have involved companies that resolved previous FCPA violations, and that the number of FCPA recidivists rises to 15. It calculates that, with 15 repeat offenders, the recidivism rate for all corporate FCPA defendants is now about 6.1%.
ECOWAS HAS ANNOUNCED THE IMPOSITION OF DIPLOMATIC, ECONOMIC AND FINANCIAL SANCTIONS ON GUINEA
On 29 September, the EU Sanctions blog reported on sanctions imposed by the Economic Community of West African States (ECOWAS), and it has given the Guinean authorities 1 month to accept a reasonable transition period. If this is not met, more severe sanctions will be imposed.
MONTENEGRO INVESTIGATES RUSSIANS AND MONTENEGRINS ON SUSPICION OF SPYING
On 29 September, EurActiv reported that authorities in Montenegro have launched an investigation against an unspecified number of people on charges of espionage. They have detained 6 Russian diplomats, 30 Russian nationals with temporary residence permits, and 2 Montenegrins on suspicion of espionage.
SEC CHARGES MAN FOR DEFRAUDING INVESTORS OUT OF MILLIONS OF DOLLARS BY POSING AS HEDGE FUND BILLIONAIRE
On 29 September, a release on Mondo Visione advised that the SEC had charged Justin Costello for using a false persona, as a Harvard-educated military veteran and hedge fund billionaire, to defraud investors out of millions of dollars. The SEC also charged Costello and David Ferraro, an associate of Costello’s, for promoting the stock of several microcap companies on social media without disclosing their own simultaneous stock sales as market prices rose.
SEC: DELOITTE’S CHINESE AFFILIATE TO PAY $20 MILLION PENALTY FOR ASKING AUDIT CLIENTS TO CONDUCT THEIR OWN AUDIT WORK
On 29 September, a release on Mondo Visione advised that the SEC has charged Deloitte Touche Tohmatsu Certified Public Accountants, the Chinese affiliate of the Deloitte global network of accounting firms, with failing to comply with fundamental US auditing requirements in its component audits of US issuers and its audits of foreign companies listed on US exchanges. Deloitte-China agreed to settle the charges by paying a $20 million penalty and agreeing to extensive remedial measures. The SEC order finds that, in the course of numerous audits over multiple years, Deloitte-China personnel asked clients to select their own samples for testing and to prepare audit documentation purporting to show that Deloitte-China had obtained and assessed the supporting evidence for certain clients’ accounting entries. This created the appearance that Deloitte-China had conducted the required testing of clients’ financial statements and internal controls when there was no evidence in the audit file that it had in fact done so.
On 29 September, the Wall Street Journal reported that the Financial Industry Regulatory Authority, Wall Street’s self-regulator, has for the first time provided guidance to its member broker-dealers on the potential penalties it could impose for violating rules intended to prevent money laundering.
On 29 September, the Guardian reported that Oleg Deripaska, 54, one of Russia’s most powerful oligarchs, who previously had deep links to British establishment figures, has been indicted by the US DoJ for criminal sanctions violations. The allegations include an elaborate and failed attempt by Deripaska and his associates to shuttle his pregnant girlfriend to the US so that she could give birth there and secure American citizenship for their second child. It is alleged that Deripaska evaded sanctions in a variety of ways, using corporate shell companies to hide his activities.
On 29 September, EurActiv reported that the European Commission has formally taken Malta to the EU’s highest court for its cash-for-passports scheme that endows Maltese citizenship on wealthy third-country citizens in return for money and investments.The Commission said it considers the scheme a violation of EU law and has long called on Malta to withdraw the scheme over fears of money laundering and citizenship being granted to high-risk individuals. It notes that, in March, the Commission issued a recommendation saying that EU Member States “still operating investor citizenship schemes need to terminate them immediately”.
On 29 September, OFAC announced that it has sanctioned an international network of companies involved in the sale of hundreds of millions of dollars’ worth of Iranian petrochemicals and petroleum products to end-users in South and East Asia. This action targets Iranian brokers and several front companies in the UAE, Hong Kong, and India that have facilitated financial transfers and shipping of Iranian petroleum and petrochemical products. The listing includes one vessel, the Gas Allure.
On 29 September, the EU Sanctions blog reported on the announced details of a further sanctions package following the “sham referenda” organised in occupied territories of Ukraine and movement toward annexation of occupied regions. It includes additional import and export bans; a ban on EU nationals sitting on governing bodies of Russian state-owned enterprises; a “legal basis” for the price cap on Russian oil; provision to list people who have circumvented EU sanctions; the extension of current restrictions on Crimea, Donetsk and Luhansk to all non-government-controlled areas of Ukraine; and further targeted sanctions on persons and entities.
On 29 September, FinCEN has published a Final Rule establishing a beneficial ownership information reporting requirement, pursuant to the bipartisan Corporate Transparency Act (CTA). The Rule will require most corporations, limited liability companies, and other entities created in or registered to do business in the US to report information about their beneficial owners to FinCEN. Designed to protect US national security and strengthen the integrity and transparency of the US financial system, the Rule is designed to help to stop criminal actors, including oligarchs, kleptocrats, drug traffickers, human traffickers, and those who would use anonymous shell companies to hide their illicit proceeds. The Rule is effective from 1 January 2024. Reporting companies created or registered before that date, will have 1 year (until 1 January 2025) to file their initial reports, while reporting companies created or registered after 1 January 2024, will have 30 days after creation or registration to file their initial reports. Once the initial report has been filed, both existing and new reporting companies will have to file updates within 30 days of a change in their beneficial ownership information. FinCEN says that it is committed to implementing these statutory obligations in a robust manner while minimising burdens on reporting companies.
On 27 September, the European Banking Federation advised that the European Banking Federation (EBF), the European Savings and Retail Banking Group, the European Association of Co-operative Banks, the European Association of Public Banks, and the European Fund and Asset Management Association sign a joint letter on the EU Parliament’s proposal to lower the threshold for determining beneficial ownership to 5%. They welcome the European Commission’s proposal to introduce a new harmonised Anti-Money Laundering Regulation – but do not agree that reducing the percentage threshold that serves as an indication of ownership of a legal entity from 25% to 5% would reduce opportunities for transparency rules to be circumvented.
On 28 September, Jersey advised that 2 key documents have been published which set out Jersey’s approach to combatting financial crime – the National Strategy for Combatting Money Laundering, the Financing of Terrorism and the Financing of Proliferation of Weapons of Mass Destruction and the National Statement on Financial Services and Financial Crime: Activities, Risk Appetite and Mitigation.
The current list is at the following address, though HMRC cautions that it is not a complete list of all tax avoidance schemes currently being marketed. Neither is it a complete list of all promoters, enablers and suppliers.
Today, news of a public opinion survey – some interesting results. 57% of respondents agree on the use of cannabis for medicinal purposes, but 88% said they do not agree with recreational use. 76% are against modifying the law on abortion to relax the laws further, while 70% of those interviewed do agree with sex education in schools. 57% of respondents indicated that LGTBTIQ+ should have the same rights as everyone else, but 77% said they do not agree with legalising unions between people of the same sex. In all this, remember that this is a near 100% Catholic country.
28 SEPTEMBER 2022
ARGENTINA MOVES TO MODERNISE ITS AML LEGISLATION
On 27 September, an article from DLA Piper reminded one that from 2009 to 2014, Argentina was on FATF’s so-called grey list of jurisdictions “under intensified monitoring”, and that a new evaluation is due. Recently, Argentina’s Executive Branch submitted a bill to Congress aiming to improve current legislation related to AML/CFT and the proliferation of WMD. The goal of the bill is to update Argentina’s regulations governing these practices.
DANISH GAMBLING REGULATOR BLOCKS RECORD 82 UNLICENSED WEBSITES
On 27 September, iGB reported that a court has ruled that Spillemyndigheden, the Danish gaming regulator, can continue blocking 82 unlicensed websites that offer illegal forms of gambling to Danish consumers – the highest ever blocked by the regulator in a single enforcement action. 227 sites have been blocked in total.
UK: BETFRED FINED £2.8 MILLION BY GAMBLING COMMISSION
On 28 September, iGB reported that Petfre Limited, the parent company of Betfred and Oddsking.com, has been fined £2.8 million by the Gambling Commission for a number of social responsibility and AML failures.
SPAIN: THE “QUEEN OF COCA” GETS 16 YEARS FOR DRUG TRAFFICKING AND MONEY LAUNDERING IN PANAMA
On 27 September, El Siglo reported that a court had sentenced Ana María Cameno, known as the “queen of coca”, to 16 years in prison for participating in the distribution of 100 kg of cocaine in different parts of Spain and for laundering millions of euros of profits in Panama. Cameno was arrested in 2014 in the town of Línea de la Concepción.
WINE CONTEST ORGANIZER HIT WITH UK FINE FOR VIOLATING RUSSIA SANCTIONS
On 27 September, the Wall Street Journal reported on OFSI imposing a £30,000 fine on Hong Kong International Wine and Spirit Competition Ltd over its dealings with a winery known as Massandra. According to OFSI, the winery was effectively confiscated in 2014 by authorities in Crimea.
AIRCRAFT BUST IN TEXAS HIGHLIGHTS HUMAN SMUGGLING TACTIC
On 27 September, Newsnation reported that authorities in Texas arrested 6 undocumented migrants attempting to charter a plane from Weslaco, Texas to Houston as part of a human smuggling operation. The migrants, 4 men and 2 women from El Salvador and Mexico, were caught with fraudulent Texas identification cards and turned over to US Border Patrol.
On 28 September, OCCRP published an article onhow undercover investigators brought down one of the top players in Vietnam’s wildlife trafficking underworld. Nguyen Van Nam, better known by his alias Ah Nam, was sentenced to 11 years in prison for trafficking in rhinoceros horn in July 2020.
CRYPTOCURRENCY DISPUTES INCREASINGLY REFERRED TO ARBITRATION, WITH UNIQUE ISSUES ARISING
On 27 September, an article from Out-Law says that cryptocurrency-related disputes are on the rise around the world, and that they are well suited for and are increasingly being referred to arbitration. It observes that the value placed on pseudonymity in crypto is closely related to confidentiality, a core feature of arbitration; and the contractual nature of crypto’s investor-platform relationships.
USING FREEZING ORDERS TO TACKLE CRYPTO FRAUD IN HONG KONG
On 28 September, Out-Law published an article saying that one of the legal tools to freeze stolen assets is to apply for a Mareva injunction, also known as freezing order, to prevent the suspected fraudster from dissipating the assets in question.
US NAVY BRIBERY FUGITIVE ‘FAT LEONARD’ SEEKS VENEZUELAN ASYLUM
On 27 September, AP reported that fugitive defence contractor Leonard Glenn Francis, nicknamed “Fat Leonard”, who orchestrated a huge bribery scheme involving dozens of US Navy officials, has requested asylum in Venezuela, nearly a week after he was arrested.
AUSTRALIA PLANS TO CHANGE PRIVACY RULES AFTER HUGE CYBER ATTACK ON OPTUS
On 26 September, Swissinfo reported that Australia plans to change privacy rules, allowing banks to be alerted faster to cyber attacks on companies, after hackers targeted the country’s second-largest telecoms company.
AUSTRALIA: IF CASINOS FACILITATED MONEY LAUNDERING AND CONSORTED WITH CRIMINALS — WHY HAVEN’T THERE BEEN CHARGES FOR EXECUTIVES OR DIRECTORS?
On 25 September, ABC News posed this question, saying that serious allegations have been aired during multiple inquiries into Australia’s largest casino groups – but no single staff member, executive or board director of either Crown Resorts or Star Entertainment has faced a civil or criminal sanction.
AN ANALYTIC REVIEW OF PAST RESPONSES TO ENVIRONMENTAL CRIME AND PROGRAMMING RECOMMENDATIONS
On 27 September, the Global Initiative Against Transnational Organised Crime published this report which argues that the international community is still failing to support effective, sustainable ways of combatting environmental crime.
THE KAZAKH PRESIDENT’S UNDERGROUND BUSINESS PASSED THROUGH SWITZERLAND
On 22 September, a report from Public Eye claims that unpublished documents reveal how Kassym-Jomart Tokayev, the current President of Kazakhstan and former Director General of the UN Office at Geneva, discretely owned assets linked to the extraction of oil and strategic metals in the mid-2010s, possibly in violation of Kazakh law. It alleges that the affair shows how Switzerland attracts the Central Asian elite and showcases a business model of welcoming wealth from opaque origins with open arms, despite repeated scandals.
HONG KONG CUSTOMS DETECTS MONEY LAUNDERING CASE INVOLVING ABOUT $370 MILLION
A news release from the Hong Kong Government on 28 September advised that customs mounted an operation and detected a suspected money laundering case. A man, who was suspected of using his personal and wholly owned company’s bank accounts at various banks in Hong Kong to launder a total of about $370 million from unknown sources between November 2019 and May this year, was arrested. Customs has arranged to freeze a total bank balance of about $7 million held by the arrestee.
RISKS OF LITHIUM-ION BATTERIES NEED TO BE UNDERSTOOD IN SHIPPING (AND YACHTING): REPORT
On 27 September, an article in Insurance Marine News was concerned with a report into the total loss of 220-ton commercial yacht Siempre has highlighted the need for crews to understand the risks posed by lithium-ion batteries on board.
Castellum AI has produced this interactive Index, where you click on a country and follow the link to learn more about their autonomous sanctions lists. It says that each sanctions list is rated against 20 distinct criteria and each criterium is weighted according to its impact on sanctions compliance. For example, Data Integrity has a higher weight than Guidance because obtaining the data itself is the first and most important step in compliance. If you don’t know who is on a list, guidance around it is largely useless. The final weighted score goes from 0-100% and ranks sanctions lists across languages, data formats, and size. Castellum.AI reviewed 198 countries as well as supranational sanctions lists issued by the UN and EU.
In the latest TRACE podcast, a conversation with Bill Browder at the TRACE London Forum. He discusses his new book, Freezing Order, and his ongoing quest for accountability and justice following the abuse and murder of his lawyer, Sergei Magnitsky.
OFAC: CENTRAL AFRICAN REPUBLIC SANCTIONS REGULATIONS AND WESTERN BALKANS STABILIZATION REGULATIONS REISSUED
On 28 September, OFAC advised that the regulations were previously published in abbreviated form in 2014. Today’s publications include additional interpretive guidance and definitions, general licences, and other regulatory provisions that it is said will provide further guidance to the public.
ARGENTINA: JUDGE RELEASES 14 OF 19 CREW FROM DETAINED JUMBO JET
On 28 September, TeleSUR reported that a judge had released 14 of the 19 crew members of the Venezuelan Emtrasur Boeing 747 that has been held in Argentina since 6 June. The other 5 crew members denied the accusations of links to terrorism. The aircraft entered Argentina on a cargo flight and in his crew were 5 Iranians and 14 Venezuelans. It was seized in Argentina is owned by a subsidiary of the Venezuelan airline Conviasa. It was purchased from Mahan Air, an Iranian company accused by the US of being linked to the Islamic Revolutionary Guard Corps of Iran-Qods Force, which the State Department lists as a terrorist organisation.
CHINA’S DEPENDENCE ON TAIWAN – THE ISLAND’S “SILICON SHIELD” AGAINST A CHINESE ATTACK
A paper from the Stimson Center on 16 August focuses on the semiconductor industry as a crucial part of broader US-China technological competition and considers 4 challenges for US semiconductors and policy towards China, including the possible longer-term consequences of US success in blocking China from acquiring the technology and machines needed to fabricate leading-edge chips.
US: PRESIDENT HONES GOVERNMENT’S FOREIGN INVESTMENT REVIEW
On 28 September, an article from Bass Berry & Sims comments on a new Executive Order (EO) meant to sharpen the focus of inbound investment screening by more formally tying the role of the Committee on Foreign Investment in the United States (CFIUS) to the President’s national security prerogatives. For the first time since the Committee was established in 1975, the EO provides formal presidential direction delineating 5 specific factors for the Committee to consider when reviewing foreign acquisitions of US companies.
FOOTBALL LEAGUE CLUBS TAKING CUT OF GAMBLERS’ LOSSES WITH SKYBET
On 28 September, the Guardian reported that English football clubs have been taking a cut of the money fans lose with the bookmaker SkyBet, the Guardian can reveal, prompting accusations that they are exploiting supporters and gambling addicts. It alleges that the EFL clubs operated as “affiliates” for SkyBet, explaining that an affiliate is a middleman who encourages a gambler to bet with a particular company, which then pays them a percentage of the money that person goes on to lose, sometimes for the rest of their life.
BELGIUM: 10 HOUSE SEARCHES FOR PREPARATION OF TERRORIST ATTACK – “LARGE NUMBER OF WEAPONS SEIZED”
On 28 September, HLN reported that, during the house searches in Merksem, Zandvliet, Antwerp, Deurne, Berchem, Kasterlee and Ghent, a large number of weapons were seized, some held legally. Those seized included automatic and semi-automatic weapons. The public prosecutor’s office says that the case is “probably situated in the extreme right-wing environment”.
A GUIDE FOR GOOD PRACTICES IMPLEMENTATION OF TRADE CONTROL REGIMES FOR BOTH CONVENTIONAL DEFENCE AND DUAL-USE CBRN ITEMS
On 27 September, a Guide from the Stimson Center is concerned with the implementation of international regimes to control trade and illicit trafficking in firearms, conventional arms, and dual-use chemical, biological, radiological, and nuclear items. It identifies 8 good practices common to effective national implementation and that can help states target limited resources efficiently. The Guide is intended as a guide for state-level policy makers on how to enable and empower frontline officers with the tools and resources they need to implement these instruments in a holistic and integrated manner, making most efficient use of limited resources while ensuring more effective implementation of international obligations and requirements.
On 22 September, a feature from Regtech Times looks into the background of the incident involving Danske Bank, which it is said is the most substantial money laundering case in recent history, with an estimated $236 billion in laundered funds being routed through its Estonian office.
On 28 September, the Jersey FSC advised that purpose of the national strategy and action plan is to document Jersey’s position in supporting international efforts in the fight against all forms of financial crime and areas of focus to increase effectiveness – and helps shape the strategic priorities, which align with the findings of the national risk assessments. The risk statement will be updated in response to any significant change in circumstances and will be revised annually. It is said that Industry should consider these documents when reviewing business risk assessments.
On 28 September, Europol reported that this campaign has been launched. The criminals in this year’s campaign are all wanted for serious crimes in Europe such as murder, trafficking in human beings, armed robbery and terrorism amongst other offences. This year’s list includes mafia bosses who have committed murder and massacred innocent people, drug traffickers, human traffickers, violent criminals who carry out murder or other violent acts on behalf of the criminal group, and money launderers and embezzlers.
In the week to 24 September, 1,052 new Covid-19 cases were reported in Panama (there were 1,580 the previous week), with 7 fatalities (up from 3 the previous week), on 24 September there were 1,496 active cases (down from 2,260), with 7 patients in ICU (unchanged) and 81 in other wards (up 6 on the week before). The good news is that the percentage of positive test results has fallen from 5.7% to 4.5%.
In other news, according to the International Organization for Migration (IOM) Panama, 2022 will close with a new historical number of irregular migrants who crossed the Darien jungle from Colombia, forecast to likely be around 200,000.
27 SEPTEMBER 2022
UKRAINE DOWNGRADES RELATIONS WITH IRAN OVER DRONE SUPPLIES TO RUSSIA
Aviation Week reported on 26 September that Ukraine had stripped the Iranian ambassador of his accreditation after loitering munitions supplied by Iran were used by Russia in its war in Ukraine.
On 21 September, Womble Bond Dickinson LLP published an article providing an update on bribery case developments and commenting that what remains clear is the US focus to curb corruption in Latin America.
WHEN WILL FRAUD TRIGGER THE INIQUITY EXCEPTION TO PRIVILEGE?
On 12 August, Herbert Smith Freehills LLP commented on a recent Court of Appeal case in England involving the “iniquity exception” – meaning that privilege does not apply to protect communications made in furtherance of a crime, fraud or equivalent conduct. It noted that an obiter dicta by the Court was to the effect that courts will look very carefully to see whether the necessary threshold for the iniquity exception has been met, particularly where mere allegations of fraud are made and are, as in this case, just repetitions of past fraud which gave rise to the original proceedings. It is not enough to allege fraud – there must be some evidence that it has some foundation in fact.
On 26 September, Rahman Ravelli reported on the role of secondary sanctions in the wake of 2 Turkish banks’ response to the latest US action against Russia, and that Isbank and Denizbank have suspended use of Russian payment system Mir.
FIDUCIARY DUTIES: WHEN CAN THEY ARISE OUTSIDE THE ESTABLISHED CATEGORIES OF FIDUCIARY RELATIONSHIPS?
On 26 September, an article from Herbert Smith Freehills LLP commented on a recent High Court decision in England which considered the principles the court will apply when deciding whether a party owed a fiduciary duty in circumstances outside of the established categories of fiduciary relationships and in the absence of an explicit undertaking. The case involved fraudulent misrepresentation. The article says that the decision illustrates that, while fiduciary duties can conceptually arise in any context where there is the necessary special relationship of trust and influence, claimants face a high bar in establishing the factual foundation for that.
PIRACY IN THE GULF OF GUINEA: IS THE TREND CHANGING?
An article from Creed & Brooks in Nigeria on 22 September posed this question, noting that about 95% of all piracy and armed robbery attacks in the world in 2020 being recorded in the Gulf of Guinea alone. It considers the launch of the Deep Blue Projec, an integrated national security and waterways protection infrastructure initiated by Nigeria, regional and internal cooperation, and enforcement of the Piracy Act 2019 in Nigeria.
MACAU TO ALLOW PACKAGE TOURS AND E-VISAS FROM NOVEMBER
On 26 September, iGB reported that the Macau chief executive said that he predicted that the number of daily visitors to Macau should rise to 40,000 as a result of these measures. The new rules will first apply to 4 provinces and city represented a majority of mainland Chinese journeys before the arrival of the Covid pandemic. The report notes that Macau has not yet followed Hong Kong’s lead in scrapping the mandatory 7-day hotel quarantine rules for international visitors, which remains a major impediment to recovery in international visitation numbers.
JAPAN: MONEY TRANSFER RULES TO BE AMENDED TO PREVENT CRYPTOCURRENCY USE IN MONEY LAUNDERING
On 27 September, Nikkei Asia reported that Japan is to amend the Act on Prevention of Transfer of criminal proceeds to require the sharing of customer information between exchange operators, as soon as the Spring of 2023.
MSC IS FOLLOWING ITS LARGEST RIVALS IN CONTAINER SHIPPING – MAERSK AND CMA CGM – IN SETTING UP A CARGO AIRLINE
On 27 September, Seatrade Maritime News reported that MSC container shipping line had been developing MSC Air Cargo for several months and that it would be available from early 2023, with the delivery of the first of 4 freighters operated by Atlas Air, to complements its core business of container shipping.
On 26 September, the New York Times carried a report and commenting that much of what China does, however, is legal — or, on the open seas at least, largely unregulated, but that doesn’t mean it is sustainable. In Summer 2020, nearly 300 Chinese ships operating near the Galápagos, just outside Ecuador’s 200-mile exclusive economic zone. The ships hugged the zone so tightly that satellite mapping of their positions traced the zone’s boundary. Together, they accounted for nearly 99% of the fishing near the Galápagos. It also notes that a single country has accounted for about 80% of the fishing in the international waters just off Argentina, Ecuador and Peru this year – not a South American country – China. Some experts are also worried that China is underreporting how much fish it catches: suspicious movement patterns suggest that some ships may be turning off their transponders to hide some catches.
FRENCH TRIAL USING CANINE SNIFFERS TO DETECT UNDECLARED LITHIUM BATTERIES
On 27 September, Loadstar reported on a successful 6-month French trial using canine sniffers to detect undeclared lithium batteries. However, while the trial results were positive, there remain regulatory obstacles, particularly in the UK which has a prohibition on using dogs to detect explosives. In Europe there is no regulatory framework for lithium detection and, therefore, no regulations or limits.
On 27 September, NK Pro published photos of a wide range of sanctioned products which have been available for purchase at stores in the North Korean capital this year. The photos show luxury alcohol products on offer at multiple locations in Pyongyang, as well as foreign fashion and cosmetic brands and high-tech and industrial Chinese goods at a high-end department store. The products and brands on offer likely breach a range of UN sanctions as well as US, EU, and Japanese ones.
BILLIONAIRE WITHOUT UK BANK ACCOUNT FIGHTS SANCTIONS PROBE
On 27 September, Bloomberg reported that Russian billionaire Petr Aven, fighting a UK investigation for evading sanctions, used companies supposed to manage expenses for his luxury mansion as a personal “piggy bank,” according to British authorities. He is suspected of using the accounts held by his wife and estate management firms to fund his lifestyle, lawyers for the NCA have told a judge. The investigation has focused on around £3.7 million routed to the UK from an Austrian trust in the hours before sanctions were imposed.
UK: FRC OBTAINS SIGNIFICANT SANCTIONS AGAINST AUDIT TEAM MEMBERS
On 27 September, an article from Osborne Clarke said that the Financial Reporting Council (the FRC) has published its report detailing the sanctions against KPMG and 6 individuals following a 5-week tribunal hearing that began in January 2022. The hearing related to the 2014 audit of Regenersis plc, and the 2016 audit of Carillion plc. It is said that this matter is a rare example of the FRC’s Disciplinary Tribunal ordering heavy sanctions against non-partner auditors.
RACING TEAM NEDERLAND OUT OF PETIT LE MANS AMID MONEY LAUNDERING CASE
On 26 September, Autosport reported that Racing Team Nederland LMP2 team has announced its withdrawal from the IMSA WeatherTech SportsCar Championship’s Petit Le Mans season finale, due to team owner/driver Frits van Eerd’s involvement in a money laundering case in the Netherlands.
HOW HAS IMMIGRATION CHANGED UNDER THE NEW UK “POINTS-BASED” SYSTEM
On 27 September, the House of Commons Library issued a briefing paper which removed the right to free movement for nationals or European single market countries, including those from the EU. It also to introduces a ‘points based’ system of eligibility criteria for work visas. This Insight explains what we know and don’t know about the effect of these changes on immigration to the UK, with a focus on migration from the EU.
On 27 September, the House of Commons Library issued a briefing paper which provides an outline of the current product safety framework. I t considers possible liability for a defective product under the common law of contract and negligence. It also looks at the CPA 1987, which gives rights to anyone injured by a defective product, regardless of whether the product was sold to them. However, this paper is predominantly concerned with the General Product Safety Regulations (GPSR). It looks in detail at the general product safety requirement, and the Regulations’ notification and recall requirements. This paper also summarises recent initiatives to improve the GB product safety regime, including a government commissioned review and the setting up of the new Office of Product Safety and Standards (OPSS). Finally, it provides statistics on the annual number of product recalls and provides some illustrative case studies of defective products.
FRANCE DEALING WITH INFLUX OF COCAINE FROM CARIBBEAN TERRITORIES
On 26 September, Insight Crime reported that a series of cocaine seizures in the French Caribbean territories of French Guiana, Guadeloupe, and Martinique has revealed how these territories provide another popular option for trafficking cocaine into Europe. French Guiana remains a popular departure point for cocaine due to its direct flight connections to France. While the Caribbean has proven a popular route for drug traffickers to send drugs from Colombia and Venezuela north to Central America, Mexico, and the US, much of the cocaine going through French Guiana, Guadeloupe, and Martinique is Europe-bound.
UK: LAW SOCIETY AND BAR COUNCIL OPPOSE ECONOMIC CRIME REFORMS
On 27 September, Legal Futures reported that the Law Society and Bar Council have expressed concern about new economic crime provisions put forward by the government that target the legal profession. The Economic Crime and Corporate Transparency Bill to remove the £25,000 cap on fines the Solicitors Regulation Authority (SRA) can impose in cases of economic crime.
HOME OFFICE U-TURN OVER DEPORTATION OF ALBANIAN ASYLUM SEEKERS
On 26 September, the Guardian reported that the Home Office has conceded that it does not have the right to fast-track the deportation of Albanian asylum seekers after their arrival in the UK, in an abrupt policy U-turn. The former home secretary, signed a deal with the Albanian government in August to return those who arrive illegally.
HOW PERU’S COCA PRODUCTION IS HELPING GLOBAL COCAINE BOOM
An article from Insight Crime on 27 September said that a new report says that an increase in coca cultivation and cocaine production in Peru is playing a large role in fuelling the current global cocaine demand boom. The report is from Peru’s National Commission for Development and Life without Drugs.
UK: EXCHANGES AS CONSTRUCTIVE TRUSTEES OF STOELN CRYPTOCURRENCIES AND SERVICE BY NFT
On 27 September, Evershed Sutherland reported on a recent High Court case which confirmed that there is a good arguable case that crypto exchanges will come under the duties of a constructive trustee; and the claimant could serve court documents by air drop of a non-fungible token (NFT) into a crypto wallet.
GERMAN AUTHORITIES RAID YACHT LINKED TO SANCTIONED RUSSIAN OLIGARCH
On 27 September, the Times of Israel reported that more than 60 police officers raided a luxury yacht in northern Germany linked to a Russian businessman in connection with alleged breaches of sanctions and money laundering rules. The businessman is said to be oligarch Alisher Usmanov, a close ally of Russian President Vladimir Putin.
HOW DOES THE EUROPEAN INVESTMENT BANK TEST FOR AND MONITOR FRAUD RISKS?
A post on the FCPA Blog on 26 September says that the EIB undertakes Proactive Integrity Reviews (PIR) to identify potential vulnerabilities and major fraud risks in EIB-funded operations and projects. The Investigations team at EIB uses proactive tools to test for fraud risks, included some developed in-house.
The Global Initiative Against Transnational Crime has published a 2-part report, saying that Cambodia has suffered some of the highest rates of deforestation (measured as a percentage of forest cover) of any country since the 1970s – and rates have been increasing significantly in the past decade. The first report “Forest crimes in Cambodia” explores the ways in which laws, regulations and policies designed to afford protection for Cambodian forests and the local and indigenous people who depend on them are being abused. The second report “Branches of illegality” is the culmination of research conducted from May to August 2021.
ECONOMIC CRIME AND CORPORATE TRANSPARENCY BILL: COMPANIES HOUSE REFORM WELCOME BUT GAPS REMAIN IN BRITAIN’S DIRTY MONEY DEFENCES
On 22 September, Transparency International published its response to the new UK Bill, saying that will strengthen Britain’s defences against dirty money – but the current drafting risks leaving vulnerabilities to exploit.
DEUTSCHE BANK IN $26.3 MILLION SHAREHOLDER SETTLEMENT OVER EPSTEIN AND RUSSIAN OLIGARCH TIES
On 23 September, Yahoo Finance reported that Deutsche Bank AG agreed to pay $26.25 million to settle a US shareholder lawsuit accusing the German bank of lax oversight while doing business with risky, ultra-rich clients like Jeffrey Epstein and Russian oligarchs.
DIAMOND SALES CONTINUE IN SECRET, REGARDLESS OF RUSSIAN SANCTIONS
On 25 September, Jeweller Magazine reported that, despite various sanctions being imposed on Russia and Alrosa (a Russian group of diamond mining companies), the country’s largest diamond producer, the international industry is increasingly being divided, with a small number of diamond traders snapping up large volumes at lucrative terms.
OFAC RELEASES LATEST QUARTERLY REPORT UNDER TRADE SANCTIONS REFORM AND EXPORT ENHANCEMENT ACT 2000 (TSRA)
On 27 September, OFAC published the latest report. Under the procedures established in its TSRA-related regulations, OFAC processes licence applications requesting authorisation to export agricultural commodities, medicine, and medical devices to Iran and Sudan under the specific licensing regime set forth in section 906 of the TSRA.
FEWER IRISH SME PAID RANSOMS TO CYBERCRIMINALS THAN 2021
On 26 September, EurActiv reported that a third of Irish small and medium enterprises (SME) have paid ransoms to cybercriminals this year, a significant decrease on the half that did so in 2021, research by cyber-security company Typtec found.
LAVISH AUSTRIAN PROPERTY OF EU-SANCTIONED BELARUSIAN OLIGARCH REVEALED
On 27 September, EurActiv reported that Belarusian oligarch Mikalai Varabei (Nikolay Vorobey), sanctioned by the EU in December 2020 due to his close relations with Belarusian President Alexander Lukashenko, continues to be linked to multiple properties in Austria, according to a new investigation.
IS A COMPANY PERMITTED TO TRANSFER PERSONAL INFORMATION FROM EUROPE TO THE US IN CONJUNCTION WITH DISCOVERY IN US LITIGATION?
An article from Greenberg Traurig on 27 September asked this question, saying that in such a situation, 3 further main privacy questions are raised, and the article describes the legal considerations that underpin each issue.
KEY RANGERS FC FIGURE DAVID GRIER UPS THE ANTE IN £8.7 MILLION MALICE CLAIM AGAINST PROSECUTORS
On 27 September, The Herald in Scotland reported that a man who a judge ruled should not have been prosecuted in connection with club fraud allegations has appointed top King’s Counsel (KC) in his malice claim against Scotland’s senior law officer and police chief. This The comes after the former Rangers administrators David Whitehouse and Paul Clark of Duff and Phelps (with whom Grier was an insolvency expert), agreed a settlement estimated to be around £24 million after an agreement in their malicious prosecution case against the Lord Advocate and the Chief Constable was reached “extra-judicially”. Mr Grier was charged in 2014 along with a number of other men during an investigation into how controversial businessman Craig Whyte bought the company that ran the Glasgow football club 3 years earlier.
RUSSIAN OLIGARCH’S SEIZED SUPERYACHT DETAINED IN GIBRALTAR SOLD FOR $37.5 MILLION
On 27 September, the Guardian reported that the Axioma, a luxury superyacht taken from a Russian oligarch facing sanctions has been sold to an undisclosed buyer for $37.5 million. The 72.5 metre superyacht was seized from the steel billionaire Dmitry Pumpyansky – the owner and chair of the steel pipe manufacturer OAO TMK, a supplier to the Russian state-owned energy company Gazprom. The yacht was seized on behalf of JP Morgan, which said that the fact the billionaire had been subjected to sanctions meant the terms of a loan for the boat had been breached because it legally could not accept repayments.
TERRA FOUNDER WANTED BY INTERPOL TWEETS HE IS MAKING ‘ZERO EFFORT’ TO HIDE
On 27 September, the Guardian reported that crypto entrepreneur Do Kwon has denied being in hiding, even as INTERPOL issued a “red notice” for his arrest, at the request of South Korea, after the collapse of the Terra project he founded. He moved to Singapore shortly after his project collapsed.
BBC Radio has a series of 15-minute programmes, presented by Mischa Glenny, author of McMafia, which explores the world of rare earth metals and other critical raw materials. It starts by explaining what the 17 rare earth metals are and their weird and wonderful applications. It also explains how China has managed to dominate the mining and refining of them.
On 21 September, The Sentry published this report describing how professionals such as bankers, attorneys, and accountants play a crucial part in driving global corruption and kleptocratic rule. The research provides a series of urgent recommendations for governments and financial institutions to counter the harmful impact of these actors. The report focuses on 16 case studies to analyse the profiles and detrimental impact of facilitators, revealing their ties to illicit financial flows, conflict, and human rights violations.
On 26 September, Homeland security Today reported that 4 suspects have been arrested over alleged plans for a terrorist attack in Iceland, according to police. Several semi-automatic weapons — some 3D printed — were seized from 9 different locations, along with a large quantity of ammunition, computers, telephones and digital media.
On 26 September, AUSTRAC reported that it had released 3 new risk assessments to help remittance service providers and bullion dealers understand the money laundering and terrorism financing threats and vulnerabilities they face. It also released a threat update for the superannuation sector, to update the existing superannuation risk assessment and examine current threats faced by the sector.
A release on Mondo Visione on 27 September advised that the SEC had announced settled charges requiring Oracle Corporation to pay more than $23 million to resolve charges that it violated provisions of the Foreign Corrupt Practices Act (FCPA) when subsidiaries in Turkey, the UAE, and India created and used slush funds to bribe foreign officials in return for business between 2016 and 2019.
On 27 September, a briefing paper from the House of Commons Library explains that property in England and Wales can be either registered or unregistered and the steps involved in tracing ownership will vary accordingly. Any member of the public can search online the Land Registry (a fee is payable). This briefing paper provides information on how to trace ownership of a property or piece of land, in the process it also provides a summary of land ownership and what is meant by registered and unregistered land. This briefing paper is concerned with England and Wales only; Scotland has its own land law. Northern Ireland and Scotland also have their own land registries.
On 28 September, HM Treasury advised that OFSI had imposed a monetary penalty of £30,000 against Hong Kong International Wine and Spirits Competition Ltd (“HKIWSC”) for breaches of Ukraine sanctions. It is noted that HKIWSC did not make a voluntary disclosure in this case, and therefore a penalty reduction discount was not applied.
A recent gallup poll has revealed that 44% of those consulted would vote for former President Martinelli, if there were elections at this time. This is despite he is currently one of dozens of defendants facing a huge trial alleging bribery and corruption connected to Odebrecht, his 2 sons being in jail in the US for money laundering offences and, it seems, a myriad of legal entanglements…
26 SEPTEMBER 2022
MAZDA IN TALKS TO END RUSSIA PRODUCTION, FOLLOWING TOYOTA EXIT
On 25 September, Nikkei Asia reported that Mazda is consider closing its joint venture in Russia with Sollers in Vladivostok, where Japanese parts are sent for local assembly.
UK: COURTS CONTINUE TO DETER SATELLITE LITIGATION ON WITNESS STATEMENTS
On 23 September, Cooley LLP published a post concerned with the detailed provisions regarding the preparation and content of trial witness statements and a recent High Court case in which a claimant who had committed multiple breaches of the rules and had exacerbated those breaches by being entirely dismissive of the defendant’s objections. A supplementary statement served on behalf of the claimant, failed to comply with practice directions in almost every respect and incurred a relatively lenient adverse costs order.
On 22 September, an article from Marks & Clark starts by asserting that owning whisky casks in the UK is an increasingly popular form of investment, but that some schemes have been revealed to be fraudulent. It warns that that whisky investment appears to fall between the authorities, and that the FCA would only be involved if the investment was structured under a collective investment scheme. The FCA had more than 36,300 enquiries about illegal activity from March 2021 to March 2022, up by a third on the same period in 2020. Of that figure, 58% were around potential investment scams.
SWITZERLAND: REVISED PRECIOUS METALS CONTROL ACT – NEW REGISTRATION AND LICENSING REQUIREMENTS FOR PURCHASERS OF OLD PRECIOUS METALS
On 22 September, an article from Pestalozzi Attorneys at Law advised that when the revised Anti-Money Laundering Act (AMLA) comes into force on 1 January, new licensing or registration requirements will be introduced in the area of the Precious Metals Control Act (PMCA) and the Precious Metals Control Ordinance (PMCO). The article provides an overview of the new licensing and registration requirements for purchasers of melt material under the revised PMCA and PMCO. In addition, the licensing requirement already introduced for trading in banking precious metals is addressed, in particular, the related licensing requirements, fees and supervisory levies.
SWITZERLAND – STRICTER DUE DILIGENCE REQUIREMENTS FROM 1 JANUARY
Meanwhile, another article from the firm on 21 September said that main part of the amendments to the Anti-Money Laundering Act (AMLA)as well as the other enactments amended by the revision will enter into force on 1 January. It advises that the changes entail certain stricter due diligence obligations, and that financial intermediaries should therefore review their internal directives and align them with the revised provisions of the AMLA by 1 January at the latest so that they continue to comply with their due diligence obligations.
NEW EU REGULATION ON EVIDENCE TAKING IN CIVIL AND COMMERCIAL MATTERS COMES INTO FORCE
On 23 September, an article from Osborne Clarke said that EU Regulation 2020/1783/EU on cooperation between the courts of the Member States in the taking of evidence in civil or commercial matters (taking of evidence) (recast) entered into force on 1 July. The main purpose of the Regulation is to improve judicial cooperation in the taking of evidence in cross-border proceedings at EU level, in particular, by taking advantage of technical progress and the benefits of digitisation.
WHAT THE NEW DoJ CORPORATE ENFORCEMENT POLICIES MEAN TO COMPLIANCE OFFICERS
On 26 September, a post on the Compliance & Enforcement blog from the Program on Corporate Compliance and Enforcement at the New York University School of Law contained further comments on a recent speech by Deputy Attorney General Lisa O Monaco detailing significant changes to the Department of Justice’s corporate prosecution policies.
ENGLISH FOOTBALL MUST DISTANCE ITSELF FROM THE POGOS
On 23 September, an Op-Ed piece in iGB argued that, in the wake of criminal scandals regarding offshore operators based in the Philippines, the continued association by English football clubs with the sector could be a ticking time-bomb for scandal. The sector has become deeply embedded in top-flight English football. It explains that a Philippines Offshore Gambling Operation (Pogo) is a Philippines-based gambling site that broadcasts games of chance to other jurisdictions – usually elsewhere in Asia. Almost by definition, this comes without approval by local authorities in the operator’s target markets. While China has been the highest-profile target, a number of Pogos also specialise in the Korean or Vietnamese markets. The sector is also widely believed to be infiltrated by criminal organisations.
On 26 September, Panama America carried an interview with biologist Samuel Valdés about the export potential for butterfly pupae. Amongst other things, he says that in Costa Rica more than 400 families export pupae to European and North American markets and that the US buys millions of dollars in pupae.
RUSSIAN SANCTIONS: FINLAND SEIZES BILLIONAIRE ‘MALTESE’ CITIZEN’S ASSETS
On 26 September, investigative website The Shift reported that Finnish authorities, have seized the assets in Finland of Russian billionaire and Maltese-citizen-since-2016, Arkady Volozh. It is said that he acquired Maltese citizenship in 2016 through the highly contentious Individual Investor Programme.
AFRICA: SMUGGLERS CARVE A NICHE IN AFRICA’S RARE ROSEWOOD
On 26 September, All Africa reported that harvesting of endangered rosewood (mukula) to make furniture for China’s elite threatens the species with extinction. It is the world’s most trafficked endangered timber, with a $26 billion illicit market. The article explains that African rosewood is a tropical timber found mainly in Madagascar, Zambia and the Democratic Republic of the Congo. It is essential for local ecosystems and biodiversity and, when harvested sustainably, supports local livelihoods. The wood is also used in traditional medicine.
US CHARGES 5 PEOPLE WITH STEALING $12 MILLION FROM HOMELESS SHELTER CONTRACTS
On 26 September, OCCRP reported that 5 members of a Queens-based construction company had been charged for their alleged role in a conspiracy to defraud New York City of $12 million intended for homeless shelter renovations.
US: GLENCORE WINS JUDGE’S APPROVAL OF MARKET MANIPULATION SETTLEMENT
On 23 September, the Wall Street Journal reported that a federal judge has accepted part of a $1.2 billion settlement that commodities giant Glencore PLC entered to resolve criminal probes over its involvement in foreign corruption and market manipulation. Prosecutors said the company had been involved in 2 long-running courses of criminal conduct: a decade-long scheme to pay bribes in several countries; and the manipulation of fuel oil prices at the Port of Los Angeles and the Port of Houston, 2 of the busiest US commercial ports.
On 26 September, the Home Office published updated information for competent authorities abroad (and in the UK) about obtaining evidence within the UK (or abroad) to assist in criminal investigations or proceedings.
On 26 September, the Evening Standard in the UK published an article explaining that the new visas will be available to people working remotely for companies outside of Spain and who earn a maximum of 20% of their income from Spanish companies. The scheme is only open to applicants from outside the EEA (which post-Brexit now includes those from the UK) who can demonstrate that they have been working remotely for at least a year.
WORLD’S BIGGEST MEAT COMPANY APPEARS TO HAVE AVOIDED MILLIONS IN UK TAX
On 26 September, the Guardian reported that companies supplying some of Britain’s most popular meat brands, including KFC, Nando’s chicken and Sainsbury’s organic range, appear to have been using offshore companies allowing them to avoiding paying millions of pounds in tax in the UK.
POLICE IN LATVIA DISMANTLE MAJOR MONEY LAUNDERING GROUP
On 21 September, the Baltic News Network reported that Latvian State Police have dismantled a criminal group that provided professional money laundering services in the country using a network of more than 90 “money mules”. The investigation indicated that there was a wide network of money mules in Riga, which consisted of youngsters aged 16 to 20 years, who received flash payments on their accounts. These payments mostly came from German citizens.
IRAN AND RUSSIA SEEK NEW SANCTIONS EVASION CORRIDOR
On 22 September, an article from the Center for European Policy Analysis in the US says that Russia and Iran are advancing the idea of a transportation route termed the International North-South Transport Corridor (INSTC). The INSTC can connect the Persian Gulf and Indian ports with Russia, and talks about the corridor have been underway since the early 2000s and are now nearing their final stages. What remains to complete is the Rasht-Astara railway section between Iran and Azerbaijan.
BOOSTING THE AWARENESS AND THE PUBLIC-PRIVATE ACTION AGAINST NEW COUNTERFEITING THREATS
A final report from Crime & tech srl at the Università Cattolica del Sacro Cuore (UCSC) – in April 2022 argues that, while both public authorities and online marketplaces are leading the fight against emergent threats, a new paradigm is necessary with respect to raising awareness, prevention, investigation, and cooperation. The report involves a study based upon in-depth review of case studies, judicial documents, institutional reports and a wide variety of other information collected from interviews with stakeholders and experts at both the national and international level, along with representatives from law enforcement, public authorities, online marketplaces, postal operators, logistics operators, companies and brand owners.
THE “QAnon QUEEN OF CANADA” HAS USED HER FOLLOWERS’ BANK ACCOUNTS, SOMETIMES WITHOUT PERMISSION
On 22 September, an article from Vice reported that Romana Didulo has used her followers’ bank accounts, sometimes without permission. And she’s raised more than CA$140,000. It explains that Didulo was initially a low-level QAnon influencer and came to prominence after the titular Q, the movement’s central figure, went quiet. She stepped into the power vacuum and gained a sizable following by framing herself as an active participant in the conspiracy, although she remains a fringe figure.
RUSSIA’S SWIFT ALTERNATIVE EXPANDING QUICKLY THIS YEAR, SAYS CENTRAL BANK
On 26 September, Hellenic Shipping News reported that the Russian central bank has claimed that its System for Transfer of Financial Messages has shown expansion this year because more foreign participants have joined.
ACCUSED RUSSIAN BOTMASTER ARRESTED IN BULGARIA AND REQUESTS EXTRADITION TO US
On 23 September, a post from Krebs on Security reported that a 36-year-old Russian man, Denis Kloster (aka Denis Emelyantsev), recently identified as the likely proprietor of the massive RSOCKS botnet has been arrested in Bulgaria at the request of US authorities. RSOCKS was a collection of millions of hacked devices that were sold as “proxies” to cybercriminals looking for ways to route their malicious traffic through someone else’s computer.
On 23 September, a briefing paper from the US Congressional Research Service was concerned with a recent US Court of Appeals case, saying that although possession of a large sum of cash may suggest criminal activity, police discovery of a substantial amount of currency is not enough alone to justify the government’s confiscation of the money.
SANCTIONS: OFAC SETTLEMENTS WITH SWISS AND MONACO SUBSIDIARIES OF CREDIT AGRICOLE
On 26 September, OFAC announced a settlement with CA Indosuez Switzerland S.A. (CAIS), an indirect subsidiary of Credit Agricole Corporate and Investment Bank located in Switzerland that specialises in wealth management and corporate and investment banking; and with CFM Indosuez Wealth (CFM), another indirect subsidiary of Credit Agricole Corporate and Investment Bank located in Monaco that also specialises in wealth management and corporate and investment banking. The settlements are concerned with apparent violations of sanctions against Cuba, Ukraine-related, Iran, Sudan, and Syria. CAIS agreed to remit $720,258 to settle its potential civil liability and CFM agreed to remit $401,039 to settle its potential civil liability for apparent violations.
NETHERLANDS AND SPAIN PROPOSE TIGHTER REGULATION ON LOOT BOXES
On 26 September, Field Fisher explained that “loot boxes” are “mystery reward packages” that players can purchase using real or in-game currency. It reports that recent reaction from Spain and the Netherlands seems to match earlier comments from Norway. It also says that it is not clear that guidance from the European Commission’s public consultation (expected towards the end of this year) will resolve the divergence in Member States’ positions.
On 26 September, the Law Society Gazette Ireland reported that the latest figures show that fraud crimes showed the biggest increase in the year to Q2 2022, up 43% or 4,877 compared with 2021. This increase was largely driven by unauthorised transactions and attempts to obtain personal or banking information online or by phone.
CHINA: LAW ENFORCEMENT SAID TO HAVE CRACKED CRYPTO FRAUD WORTH OVER $5 BILLION
On 26 September, Investing.com reported that Chinese police officers have successfully cracked down on an electronic money laundering case said to involve $5.5 billion. 94 criminal suspects are in police custody awaiting trial. Additionally, the police destroyed over 10 money laundering and running dens and seized over 100 mobile phones and computers. They also retrieved funds and economic assets for the victims. The criminal gang allegedly laundered as much as the equivalent to over $5.5 billion, via cryptocurrency.
On 26 September, EU Observer reported that a draft EU Council decision would add the 3 Caribbean countries because they facilitate “offshore structures and arrangements aimed at attracting profits without real economic substance”.
On 26 September, HM Treasury advised that 92 entries have been added to the consolidated list and are now subject to an asset freeze. In addition, the entries for Ihor Vladymyrovych KOSTENOK; Serhiy Vitalyovych KURCHENKO; and Igor Vladimirovich LEBEDEV amended, and that for OOO “VO TECHNOPROMEXPORT” has been corrected.
On 26 September, OFAC announced that it had designated Diana Kajmakovic, a state prosecutor in Bosnia and Herzegovina (BiH) for being responsible for or complicit in corruption or the undermining of democratic processes or institutions in the Western Balkans.
On 26 September, EU Sanctions blog reported that the Council of State had blocked an amendment. Under the current legislation, Switzerland may only impose sanctions that have already been adopted by the UN, the Organisation for Security and Cooperation in Europe (OCSE) or the EU.
On 26 September, OFAC announced a settlement with CA Indosuez Switzerland S.A. (CAIS), an indirect subsidiary of Credit Agricole Corporate and Investment Bank located in Switzerland that specialises in wealth management and corporate and investment banking; and with CFM Indosuez Wealth (CFM), another indirect subsidiary of Credit Agricole Corporate and Investment Bank located in Monaco that also specialises in wealth management and corporate and investment banking. The settlements are concerned with apparent violations of sanctions against Cuba, Ukraine-related, Iran, Sudan, and Syria. CAIS agreed to remit $720,258 to settle its potential civil liability and CFM agreed to remit $401,039 to settle its potential civil liability for apparent violations.
An anniversary – on 25 September 1513, Vasco Núñez de Balboa glimpses the Pacific Ocean, which he named it the South Sea.
It is reported that Panama has reinforced security in different communities in the border areas due to the volume of migrants who are passing through the Darien Province. To date, more than 134,000 migrants have entered Panama and this exceeds the figure for 2021, which was 133,726. In July, August and so far in September, there has been a marked increase in migrants, most of whom are people of Venezuela, África and Haití. Separately, the problems for the migrants crossing the Darien include the difficult conditions and dangers of the jungle, as well as the actions of armed groups and criminal organisations on both sides of the border.
In other news, the Ministry of Public Security reported that to date it has seized 91,650 packages of drugs and, of these, 23 tons was seized in ports in the Pacific and the Caribbean.
25 SEPTEMBER 2022
JAPAN PUBLISHES GUIDELINES ON CORPORATE HUMAN RIGHTS DUE DILIGENCE
On 20 September, Herbert Smith Freehills reported that on 13 September the Japanese government published its Guidelines on Respecting Human Rights in Responsible Supply Chains. The Guidelines set out how businesses active in Japan should address the human rights risks arising in their operations and supply chains. It is said that the Guidelines are broad in scope and provide detailed guidance on the elements of an effective human rights due diligence process. Although the Guidelines are not legally binding, they clearly set out the Government’s expectations in relation to business and human rights.
ACCOUNT FREEZING AND FORFEITURE ORDERS: IS THE FCA WAKING UP TO ITS INVESTIGATIVE POWERS?
On 21 September, the National Law review posed this question about the UK Financial Conduct Authority, which secured its first Account Forfeiture Order (AFO) under POCA in April. Until now, these powers, granted by the Criminal Finances Act 2017, have mainly been used by the NCA, regional police forces, and HMRC. It explains that law enforcement agencies can apply to the Magistrates’ Court for an Account Freezing Orders (AFrO), without notice, to freeze funds in bank and building society accounts where the balance exceeds £1,000. Then, at any point while the AFrO is in force, the authorities may apply for an AFO for the relevant sums to be forfeited to law enforcement. To grant an AFO, the court must be satisfied that the money is obtained through unlawful conduct (“recoverable property”) or it is intended for use in unlawful conduct. It is said that AFrO and AFO are increasingly being used by law enforcement agencies as an asset recovery tool, now including the FCA.
BIG DATA MONITORING TOOL AIMS TO CATCH UP TO INDONESIA’S BOOMING ONLINE BIRD TRADE
On 16 September, Mongabay reported that a web-trawling tool developed by researchers in Indonesia has identified more than a quarter of a million songbirds in online listings from a single e-commerce site between April 2020 and September 2021. Researchers have proposed the adoption of a tool by Indonesian authorities to monitor the online bird trade, given the absence of any other platform to crack down on trafficking.
INDONESIANS WAIT FOR UK FARM JOBS AFTER PAYING DEPOSITS OF UP TO £2,500
On 25 September, the Observer reported that Indonesians dreaming of working in Britain are understood to have paid deposits of up to £2,500 to a Jakarta agency to “guarantee” jobs on UK farms that have not yet materialised. Such a deposit is considered a work-finding fee, which is illegal in the UK and Indonesia.
A PONZI SCHEME BY ANY OTHER NAME: THE BURSTING OF CHINA’S PROPERTY BUBBLE
On 25 September, The Observer carried an article which starts with the company, China Evergrande Group, all too well known as the poster child of the country’s economic woes. It then points out that nearly a third of all property loans are now classed as bad debts – 29.1%, up from 24.3% at the end of last year. The market is experiencing a total collapse in confidence, analysts say, and only government intervention can save the day.
On 21 September, the Argentinian Government announced the approval of the first National Risk Assessment of Money Laundering and, the update of the National Risk Assessment of financing terrorism and the Proliferation of Weapons of Mass Destruction. Although it was decided that the information contained in the reports should be reserved, the production of versions without sensitive information authorised and would be disseminated within the following 30 working days.