Panama Covid-19 update – the Minister of Health has admitted that the country has entered the “third wave”, but says that the important thing is to prevent it from having strong effects on the health system and the economy. He says, “Let’s make the effect of this third wave mild [and] gradual.
He also referred to the case of the only person so far who, after being vaccinated, had nevertheless become infected and later died, stating that this patient had suffered from an immunodeficiency disease.
Meanwhile, numbers of new and active cases remain high-ish, with those in non-ICU wards rising again. There were 976 new cases reported, with now 10,214 active cases and 6 more fatalities. 76 people are in ICU and 468 in other wards.
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18 JUNE 2021
US SUPREME COURT RULES CARGILL, NESTLE CAN’T BE SUED IN IVORY COAST CHILD LABOUR CASE
On 17 June, the Wall Street Journal reported that the Supreme Court has ruled that Nestlé USA and Cargill Inc cannot be sued in US courts for abuses allegedly committed in Ivory Coast, where plaintiffs accused the food-processing giants of obtaining cocoa from plantations that relied on the forced labour of children. The decision was the latest in a series of cases curbing the reach of the Alien Tort Statute 1789 which authorises foreign citizens to sue in federal court over violations of international law.
UKRAINE: COMPANIES MUST UPDATE INFORMATION ABOUT THEIR BENEFICIAL OWNERS
On 14 June, Golaw reported that a new Order sets forth the requirements re the ownership structure of legal entities was published. The Order shall become effective in a month from the date of its official publication of 11 June. The ownership structure is an official document which has to be filed to a state registrar in order to determine the beneficial owner of a legal entity.
ECONOMIC SUBSTANCE REQUIREMENTS FOR JERSEY PARTNERSHIPS
On 17 June, an article from Ogier says that a new law, if passed, is expected to come into effect from 1 July (with a 6-month transition period to 1 January 2022 for partnerships established before 1 July). The existing economic substance legislation applies to companies which are tax resident in Jersey. The extension of the rules to partnerships is part of Jersey’s ongoing political commitment to the EU Code of Conduct Group.
PROPOSED MODERNISATION OF THE IRISH CRIMINAL JUSTICE SYSTEM – WILL THE PROMISED EFFICIENCIES BE REALISED?
On 16 June, A&L Goodbody published an article saying that reform of the Irish criminal justice system, through the actions outlined in the Government’s Action Plan to tackle White Collar Crime and the Justice Plan 2021, has gathered pace in recent weeks with the announcement 2 significant changes to the investigation and prosecution of criminal offences. The article takes a look at these developments, and whether their promise of a more effective and efficient criminal justice system, particularly in the context of white collar crime, will be realised.
POACHERS, CORRUPTION AND CASH: INSIDE SOUTH AFRICA’S NEW RHINO CRISIS
On 17 June, The Independent reported that poachers masquerading as rangers, magistrates allegedly taking bribes from kingpins and lenient sentences handed out to ruthless criminals – this is the current state of the country’s rhino crisis, according to campaigners and statements from head of the environmental charity, Saving the Wild. Numbers killed fell during the pandemic South Africa is home to 80% of Africa’s rhino population, but there are only about 25,000 rhinos left and roughly 1,000 are killed every year for their horn.
LATVIAN BANK RIETUMU FINED €5.85 MILLION FOR MONEY LAUNDERING FAILURES
On 17 June, Reuters reported that Rietumu Banka has been fined for failure to vet its clients and monitor them for money laundering and terrorist financing. The fine is a result of inspections in 2019 and 2020.
HUMAN RIGHTS: MEP WANT TO EXTEND THE EU SANCTIONS REGIME TO COVER CORRUPTION
On 16 June, a news release from the EU advised that the Foreign Affairs Committee adopted a resolution welcoming the EU Global Human Rights Sanctions Regime while calling for corruption to be included as a punishable offence. MEPs urged the European Commission to come forward with a legislative proposal that extends the scope of the sanctions Regulation to cover corruption crimes.
NEW EU DUAL-USE GOODS REGULATION PRESENTS A HEADACHE FOR EXPORTERS
An article from Global Trade Review on 16 June says that a new Regulations on the regime for export controls of dual-use goods mark the first major reform to the structure of the EU’s export control regime since 2009. The recast EU Regulation, which is the result of years of negotiation, will enter into force on 9 September. The article contains warnings that that the rule changes involved are a “missed opportunity”, and will result in greater uncertainty for exporters. It is said that because the Regulation recognises that each and every individual EU Member State may start to control items that are not on the uniform EU dual-use control list, it makes matters more complicated – for example, a company in France may be permitted to export an item that its competitor in another Member State cannot.
AUSTRIA BLOCKING EU SANCTIONS ON BELARUS BANKS
On 18 June, EU Observer reported that Austria has been blocking new EU sanctions on loans to Belarusian banks and that Austrian diplomats upheld their objections in the latest round of talks in the EU Council in Brussels on 17 June.
https://euobserver.com/world/152182
ONE-MAN CRUSADES AGAINST CORRUPTION IN LATIN AMERICA AREN’T WORKING
On 14 June, an article in Americas Quarterly says that a new index shows continued backsliding in the anti-corruption fight, and highlights the importance of institutions. It says that the presidents of Mexico and Brazil have very different ideologies, but they are united by at least one belief: that they have eradicated corruption in their governments. The article considers the 3rd annual edition of the Capacity to Combat Corruption (CCC) Index, which draws on publicly available data as well as a proprietary survey that asks in-region experts to assess a variety of factors including the independence of courts, the strength of democratic institutions and the freedom of investigative journalists. Unfortunately, the 2021 edition of the CCC Index shows a decline in the anti-corruption environment in the majority of the countries surveyed. Brazil and Mexico were among the countries that saw their scores fall the most compared to 2020.
https://www.statista.com/chart/25052/countries-based-on-land-area
STREAMLINING AUSTRALIA’S AML/CFT REGIME
An article from King & Wood Mallesons on 18 June says that from 18 June certain amendments to the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 and Anti-Money Laundering and Counter-Terrorism Financing Rules 2006 will come into force, streamlining the previous due diligence obligations and introducing new obligations for those entities which are regulated by the regime. The article briefly examines the new provisions.
https://www.kwm.com/en/au/knowledge/insights/streamlining-australia-anti-money-laundering-and-counter-terrorism-financing-regime-20210618
VOLUNTARY PARTNERSHIP AGREEMENT BETWEEN THE EU AND HONDURAS ON FOREST LAW ENFORCEMENT, GOVERNANCE AND TRADE (FLEGT) IN TIMBER PRODUCTS
On 18 June, the EU published a Council Decision and Agreement. The objective of this Agreement is to provide a legal framework to ensure that all imports into the EU of the timber products from Honduras covered by this Agreement have been legally produced and, in so doing, to promote the trade in said timber products. It provides a basis for dialogue and cooperation between the Parties aimed at facilitating and promoting its full implementation and at strengthening the enforcement of forest law and governance.
US: 4,000 SUSPECTED FRAUD CASES IN IRAQ REFUGEE PROGRAMME
On 18 June, the Middle East Monitor reported that US authorities pursuing a fraud investigation suspect that some 4,000 Iraqis of filing fraudulent applications for resettlement in the US as refugees, and they are re-examining cases involving more than 104,000 others, according to the State Department. Officials have built a “master list” of “companies and cases with suspected fraud as identified by the investigation. The alleged fraud ran from February 2016 until at least April 2019, according to the indictment. The investigation began in February 2019.
A KEY ROLE FOR ENGLISH COURTS IN INTERNATIONAL FRAUD CASES
An article in Lawyer Monthly says that cases of international fraud are often complex and difficult to resolve but the English courts remain an important forum for cases of this kind. The article is concerned with a law firm’s victory in an international fraud case that saw the freezing of fraudulent assets in Ukraine. The case has many implications for the British courts and demonstrates the unyielding international influence of UK courts in spite of Brexit. It says that the case serves as a reminder of the authority of the English courts in an international context.
https://www.lawyer-monthly.com/2021/06/a-key-role-for-english-courts-in-international-fraud-cases/
BRIEFING: MAGNITSKY SANCTIONS
On 18 June, the House of Lords Library published a briefing paper saying that, on 24 June, the House of Lords is due to discuss a question for short debate to ask the Government “what assessment they have made of the effectiveness of the Magnitsky-style sanctions issued under the Global Human Rights Sanctions Regulations 2020”.
https://lordslibrary.parliament.uk/magnitsky-sanctions/
FRANCE CRACKS DOWN ON BENEFIT FRAUD WITH NEW ‘SUPER CHECKER’ TASKFORCE
On 18 June, The Connexion carried an article saying that the team will include ex-private detectives and former tax agents and will be authorised to chase down serious fraudsters across department lines. It is cracking down on serious benefit fraud with the new nationwide team of ‘super checkers’ who will track down intentionally fraudulent claimants.
UN EXPERTS “EXTREMELY ALARMED” BY ALLEGED ORGAN HARVESTING IN CHINA
On 18 June, OCCRP reported that human rights experts from the UN have expressed their “extreme alarm” over alleged organ harvesting in China, targeting minorities like Falun Gong practitioners, Uyghurs, Tibetans, Muslims and Christians while they were held in detention.
https://www.ohchr.org/EN/NewsEvents/Pages/DisplayNews.aspx?NewsID=27167&LangID=E
NEW YORK ATTORNEY GENERAL SUES COMMODITY BROKER OVER ALLEGED PRECIOUS METALS AND COINS SCAM TARGETING RETIREMENT FUNDS
On 18 June, a release on Mondo Visione reported allegations that California-based Lear Capital, Inc persuaded investors — including many elderly residents of Western New York who were seeking to safeguard their retirement savings — to invest tens of millions in precious metals, primarily coins. Lear did this while fraudulently charging undisclosed commissions — up to 33% — on more than $43 million in sales.
https://ag.ny.gov/sites/default/files/petition_6.17.2021.pdf
COMMON MONEY LAUNDERING RISKS WITH THIRD PARTY PAYMENTS
On 26 March, an article in ACFE Insights says that e-payment through third-party channels or platforms — like Venmo, Cash App, Alipay or WeChat Pay — is widely used in our daily life, especially as COVID-19 spread and stay-at-home restrictions fuelled the growth of third-party payments. The article focuses on apps that function independently yet connect consumers, merchants and banks to mould a payment loop. The article says that, to understand these risks, the article takes a look at the third-party payment flow and bring out the iterated AML measures as well as the major difficulties to implement them. It highlights recommended actions and difficulties.
https://www.acfeinsights.com/acfe-insights/money-laundering-risks-third-party-payments
US: “GHOST CATTLE” SCAM
On 17 May, an article in ACFE Insight about a recent case involving a $244 million loss incurred by major American meat company Tyson Foods and another unnamed organisation. Investigators discovered that a rancher used his company to defraud Tyson and the unnamed company by agreeing to accept funds in advance to purchase and feed cattle, eventually slaughter and sell them at market price, then repay the advanced costs plus interest and other costs. Unfortunately, for the victims of this scheme, they were paying for purchasing and growing hundreds of thousands of cattle that did not actually exist.
https://www.acfeinsights.com/acfe-insights/ghost-cattle-scam-results-244-million-loss-no-bull
TRACKING AN IRAN-DPRK GOLD SMUGGLING SCHEME WITH PUBLIC RECORDS
On 17 June, an article from Sayari says that several Iranian and North Korean nationals are suspected of smuggling gold and cash to DPRK via the UAE; and research on the scheme revealed unnamed exchange houses tied to the Iranian nationals as well as their Dubai residence, based on Iranian and Emirati public records.
https://sayari.com/resources/tracking-an-iran-dprk-gold-smuggling-scheme-with-public-records/
GUIDELINES FOR DIGITAL FORENSICS FIRST RESPONDERS
In March, Interpol published these guidelines, prepared as technical guidelines to provide information and advice on digital forensic approaches that may be adopted when seizing and analysing different kinds of devices. The Guidelines are solely for the use of law enforcement professionals having the necessary legal basis or authorisation to perform the actions described herein. The Guidelines also include mentions of open source, proprietary and publicly available tools and services that offer various functionalities. They may be viewed, downloaded and/or used at the discretion of the user.
DRUG SMUGGLING ON BULK CARRIERS OUT OF BRAZIL ON THE RISE
On 18 June, Hellenic Shipping News reported that local correspondents in Brazil have reported a surge of drug smuggling incidents, particularly on bulk carriers out of Brazil.
https://www.hellenicshippingnews.com/drug-smuggling-on-bulk-carriers-out-of-brazil-on-the-rise/
BELGIUM LAUNCHES AML INITIATIVE
On 18 June, the Brussels Times reported that a consultation platform to fight money laundering has been officially launched. It brings together various public and private partners to combat financial crime to exchange information and expertise on developments, trends and new risks related to money laundering, and will propose guidelines and provide feedback on the application of legal obligations.
NORTH KOREA MAY HAVE CONTINUED NAMIBIAN AIR FORCE WORK IN VIOLATION OF SANCTIONS
On 18 June, NK Pro reported that analysis of newly revealed documents suggests North Korean involvement in several projects inside Namibia; and that documents recently discovered at an abandoned North Korean construction company show that North Koreans helped build new hangars at an air base in Namibia in 2017, in what appears to be a clear violation of UN sanctions.
CRYPTOCURRENCY FRAUD: 5 KEY QUESTIONS ANSWERED
On 17 June, Field Fisher published an article providing the firm’s answers to –
- Why has cryptocurrency fraud become such a problem?
- Who typically falls victim to these scams?
- What are the most common types of cryptocurrency fraud to watch out for and how do they work?
- What role should authorities and regulators play in addressing the issue?
- How can companies and investors mitigate against the risk of cryptocurrency fraud?
https://www.fieldfisher.com/en/insights/cryptocurrency-fraud-five-key-questions-answered
CHINA SANCTIONS BELGIAN MP OVER UYGHUR GENOCIDE RESOLUTION
On 18 June, the EU sanctions blog reported that the Chinese Ministry of Foreign Affairs had announced the designation of Samuel Cogolati, a Member of the Belgian Chamber of Representatives. He authored a resolution calling on the Belgian government to “recognise the crime of genocide perpetrated by the Government of China against the Uyghurs”.
UK: AMENDMENTS OF PROCEEDS OF CRIME ACT
On 17 June, the Criminal Finances Act 2017 (Commencement No. 5) Regulations 2021 were made. They apply to all of the UK and make various amendments to POCA 2002. These include a new investigatory order (the unexplained wealth order) and a new procedure by which money in certain types of account can be frozen and forfeited (this includes a power to forfeit funds without court order, by giving a forfeiture notice), gives the SFO greater access to powers in POCA 2002, and creates new criminal offences concerning assault or obstruction in relation to the execution of search and seizure warrants, and when SFO and immigration officers are carrying out functions under POCA 2002. The Regulations also make technical amendments to the confiscation procedure and to the definition of cash, and introduce a new procedure to seize, detain and forfeit certain listed items of property which derives from, or is intended for use in, unlawful conduct. Also introduced was a new power for a senior officer to apply to the court for an order extending the period in which an entity is prohibited from carrying out a transaction which is the subject of an authorised disclosure made by that entity. The definition of “unlawful conduct” in Part 5 of the Proceeds of Crime Act 2002 is also expanded to include gross human rights abuses or violations.
https://www.legislation.gov.uk/uksi/2021/724/pdfs/uksi_20210724_en.pdf
See also –
PROCEEDS OF CRIME ACT 2002 (CASH SEARCHES: CODE OF PRACTICE) ORDER 2021
From 28 June, this Order provides for a revised code of practice in connection with the exercise of the powers conferred by virtue of section 289 of the 2002 Act; as revisions to the code of practice are necessitated by the commencement in Northern Ireland of amendments made to the 2002 Act by the Criminal Finances Act 2017. It replaces the 2018 Code.
https://www.legislation.gov.uk/uksi/2021/728/pdfs/uksi_20210728_en.pdf
PROCEEDS OF CRIME ACT 2002 (RECOVERY OF LISTED ASSETS: CODE OF PRACTICE) REGULATIONS 2021
These Regulations come into force on 28 June and provide for a revised code of practice made under section 303G of the Proceeds of Crime Act 2002. Section 303C of POCA 2002 permits HMRC officers, constables, SFO officers, and accredited financial investigators to search persons, vehicles and premises for certain listed assets which derive from, or are intended for use in, unlawful conduct. The “listed assets” are defined in the 2002 Act and include precious metals and precious stones, watches, artistic works, face-value vouchers and postage stamps.
https://www.legislation.gov.uk/uksi/2021/727/pdfs/uksi_20210727_en.pdf
PROCEEDS OF CRIME ACT 2002 (INVESTIGATIONS: CODE OF PRACTICE) ORDER 2021
This Order, from 28 June, introduces a revised code of practice prepared by the Secretary of State under section 377 of POCA 2002. The revised code of practice relates to the exercise of functions under Chapter 2 of Part 8 of the 2002 Act, which relate to the conduct by appropriate officers of certain types of investigations concerning the recovery of the proceeds of criminal conduct. It replaces a 2018 Code.
https://www.legislation.gov.uk/uksi/2021/726/pdfs/uksi_20210726_en.pdf
IRELAND: CORK BUSINESSMAN MAKES €300,000 INCOME TAX SETTLEMENT
On 18 June, Cork Beo reported that a County Cork landlord and boatyard owner has made a €304,527 settlement with the Revenue Commissioners, according to the latest list of tax defaulters.
https://www.corkbeo.ie/news/local-news/cork-businessman-makes-300k-income-20826026
UK: REMOVAL COMPANIES BRACE FOR THEIR BUSIEST WEEK EVER AS HOMEBUYERS RUSH TO BEAT STAMP DUTY RISES
On 18 June, the i newspaper reported that removal companies are braced for their busiest week ever as the Government’s Stamp Duty holiday comes to a close at the end of the month and homebuyers race to get their purchases finalised before the tax break ends.
CORRUPTION ENDEMIC IN CENTRAL AMERICA AND MEXICO
On 6 June, the Council on Foreign relations in the US published an article saying that the US should partner with NGO, civil society, and private businesses in delivering aid. The article represents the testimony of the Vice President, Deputy Director of Studies, and Nelson and David Rockefeller Senior Fellow for Latin America Studies Council on Foreign Relations before the US Congress Subcommittee on Oversight, Management, and Accountability.
https://cdn.cfr.org/sites/default/files/report_pdf/6-11-oneil-corruption.pdf
UKRAINE: NATIONAL SECURITY COUNCIL IMPOSES SANCTIONS ON OLIGARCH DMYTRO FIRTASH
On 18 June, the Kyiv Post reported that the National Security and Defense Council had imposed sanctions on Dmytro Firtash, one of Ukraine’s most powerful oligarchs – a powerful tycoon indicted by the US for corruption. Firtash is currently living in Vienna and fighting extradition to the US.
https://www.rferl.org/a/ukraine-sanctions-firtash-zelenskiy-washington-trip/31315218.html
SHELL COMPANY HIJACK: SUSPECTS ALLEGEDLY USED SEC FILINGS, FAKE PRESS RELEASES FOR STOCK PUMP-AND-DUMP SCAM
On 18 June, CNBC reported that 3 men have been indicted in a scheme to “surreptitiously hijack” 4 dormant shell companies, whose stock they then fraudulently inflated to dump to unwitting investors. They are charged with securities fraud, conspiracy to commit securities fraud and wire fraud in 2017-19.
POLITICALLY SANCTIONED CORRUPTION AND BARRIERS TO REFORM IN IRAQ
A Research Paper from Chatham House on 17 June explores the pernicious effects of politically sanctioned corruption on governance in Iraq. It says that this type of corruption is more consequential for the coherence of the state, and for its everyday functioning, than petty or personal corruption. It is the key barrier to reform. The post-2003 ethno-sectarian power-sharing arrangement, designed to ensure communal stability, instead sustained an elite pact in which political parties captured and compromised formal institutions of state.
https://www.chathamhouse.org/2021/06/politically-sanctioned-corruption-and-barriers-reform-iraq
FORMER GARUDA INDONESIA AIRLINE CEO GOING TO JAIL FOR SMUGGLING
On 18 June, One Mile at a Time website reported that Garuda Indonesia’s former CEO has been fined and sentenced to jail for smuggling (not to be confused, it says, with the former Garuda Indonesia CEO who was fined and sentenced to jail last year for bribery and money laundering). He was sacked for illegally smuggling a Harley Davidson motorcycle and 2 Brompton bicycles on an Airbus A330-900neo delivery flight from Toulouse, France. He had been CEO of the airline since 2018.
https://onemileatatime.com/news/garuda-indonesia-ceo-jail/
THE COSTS OF WEAPONISING RUSSIAN AND WESTERN DIPLOMATIC EXPULSIONS
On 10 June, an article from the Center for Strategic and International Studies says that the number of Russian diplomat expulsions has significantly increased over the past several years, with some surprisingly occurring in NATO countries that have strong cultural, religious, and historical affinities with Russia. It says that a dramatic uptick in Russian malign activities in several NATO countries over the last decade has compelled many NATO governments to resort to expulsions as a policy tool, similar to their use of sanctions, in order to impose costs on Russian malign behaviour. It is not one-way traffic, and Russia has declared persona non-grata and expelled at least 70 US diplomats since 2018 — many of them actual diplomats; and the US has been forced to close all of its Russia-based consulates (in Saint Petersburg, Vladivostok, and Yekaterinburg). However, the article warns that if one weaponises diplomatic expulsions excessively, diplomacy itself ceases. Additional channels of communication to avoid miscalculation are gone; there are few personnel to alert when an incident occurs. Misunderstanding and miscalculation grow.
https://www.csis.org/analysis/costs-weaponizing-russian-and-western-diplomatic-expulsions
INVISIBLE AND VITAL: UNDERSEA CABLES AND TRANSATLANTIC SECURITY
On 11 June, an article from the Center for Strategic and International Studies was concerned with the “world’s information super-highways” – the undersea cables which carry over 95% of international data. In comparison with satellites, subsea cables provide high capacity, cost-effective, and reliable connections that are critical for our daily lives. In October, a NATO meeting addressed the need to monitor and protect this critical infrastructure. However, despite the proliferation of public statements underlining the importance of protecting them, collective action to enhance their security has so far been lacking. A number of measures could be taken by allies to effectively protect subsea cables harnessing the full potential of their bilateral cooperation, NATO, and the EU, in close coordination with the private sector. The article examines the extent and role of the cables and the threats to them – including cyber or network attacks, not just severing or tapping them.
https://www.csis.org/analysis/invisible-and-vital-undersea-cables-and-transatlantic-security
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