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OTHER THINGS YOU MAU HAVE MISSED – 19 JUNE

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.

https://www.wsj.com/articles/supreme-court-rules-cargill-nestle-cant-be-sued-in-u-s-for-abuses-in-ivory-coast-11623947396

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.

https://golaw.ua/insights/news/vsi-kompaniyi-zobovyazani-onoviti-informacziyu-pro-beneficziarnih-vlasnikiv/

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.

https://www.internationallawoffice.com/Newsletters/Private-Client-Offshore-Services/Jersey/Ogier/Economic-substance-requirements-for-Jersey-partnerships

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.

https://www.algoodbody.com/insights-publications/white-collar-crime-proposed-modernisation-of-the-irish-criminal-justice-system-will-the-promised-efficiencies-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.

https://www.independent.co.uk/stop-the-illegal-wildlife-trade/south-africa-rhino-poaching-corruption-b1867674.html

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.

https://www.reuters.com/article/latvia-banking/latvian-bank-rietumu-fined-585-mln-for-money-laundering-failures-idUSL5N2NZ54T

https://www.fktk.lv/en/news/press-releases/fcmc-imposes-a-fine-and-legal-obligations-on-as-rietumu-banka/

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.

https://www.europarl.europa.eu/news/en/press-room/20210615IPR06212/human-rights-meps-want-to-extend-the-eu-sanctions-regime-to-cover-corruption

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.

https://www.gtreview.com/news/europe/analysis-new-eu-dual-use-goods-regulations-present-headache-for-exporters/

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.americasquarterly.org/article/one-man-crusades-against-corruption-in-latin-america-arent-working/

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.

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv%3AOJ.L_.2021.217.01.0003.01.ENG&toc=OJ%3AL%3A2021%3A217%3ATOC

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv%3AOJ.L_.2021.217.01.0001.01.ENG&toc=OJ%3AL%3A2021%3A217%3ATOC

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.

https://www.middleeastmonitor.com/20210618-4000-suspected-fraud-cases-in-iraq-refugee-programme-us-believes/

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.

https://www.connexionfrance.com/French-news/France-cracks-down-on-benefit-fraud-with-new-super-checker-nationwide-taskforce

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.occrp.org/en/daily/14667-un-experts-extremely-alarmed-by-alleged-organ-harvesting-in-china

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://mondovisione.com/media-and-resources/news/new-york-attorney-general-james-sues-lear-capital-and-founder-for-defrauding-new/

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.

https://www.interpol.int/content/download/16243/file/Guidelines%20to%20Digital%20Forensics%20First%20Responders_V7.pdf#:~:text=These%20%E2%80%9CGuidelines%20for%20Digital%20Forensics%20First%20Responders%E2%80%9D%20%28the,seizing%20and%20analys%20ing%20different%20kinds%20of%20devices

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.

https://www.brusselstimes.com/news/business/174403/felbin-assuralia-ctif-fsma-nbb-belgium-launches-anti-money-laundering-initiative/

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.

https://www.nknews.org/pro/north-korea-may-have-continued-namibian-air-force-job-in-violation-of-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”.

https://www.europeansanctions.com/2021/06/china-sanctions-belgian-politician-for-uyghur-genocide-resolution/

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.

https://inews.co.uk/inews-lifestyle/money/property-and-mortgages/removal-firms-brace-for-their-busiest-week-ever-as-homebuyers-rush-to-beat-stamp-duty-rises-1052709

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.kyivpost.com/ukraine-politics/national-security-council-imposes-sanctions-on-oligarch-dmytro-firtash.html

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.

https://www.cnbc.com/2021/06/18/men-charged-in-shell-company-stock-fraud-scheme-used-sec-filings.html

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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US: AIR CARGO PROGRAM AIMS TO MITIGATE COSTS OF COMPLIANCE WITH NEW SCREENING REQUIREMENT

On 18 June, Sandler Travis Rosenberg reported that the air cargo industry may be able to mitigate the costs of compliance with a screening requirement that takes effect on 30 June under a new programme from the Transportation Security Administration.  From 30 June, International Civil Aviation Organization member states must ensure that 100% of international outbound air cargo transported on all-cargo aircraft is either screened to a level intended to identify and/or detect the presence of concealed explosive devices or transported under appropriate security controls throughout the cargo supply chain to prevent the introduction of concealed explosive devices.

https://www.strtrade.com/trade-news-resources/str-trade-report/trade-report/june/air-cargo-program-aims-to-mitigate-costs-of-compliance-with-new-screening-requirement

https://www.govinfo.gov/content/pkg/FR-2021-06-14/pdf/2021-12372.pdf

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REPORT: TURKEY’S EXPLOITATION OF TERRORISM FINANCING ASSESSMENT TO TARGET CIVIL SOCIETY

On 18 June, Amnesty International reported that it had published a report and says that measures by Turkey to prevent terrorism financing abusively target civil society and set dangerous international precedent, and that its shameless exploitation of the findings of FATF to rush through a draconian new law targeting civil society organisations is a warning to the world that must be challenged,  It says that Law No 7262 on the Prevention of the Financing of the Proliferation of Weapons of Mass Destruction introduces new measures that violate the rights to freedom of association and expression, as well as internationally recognized fair trial guarantees.

https://bianet.org/english/world/245909-measures-to-prevent-terrorism-financing-abusively-target-civil-society

The report is at –

https://www.amnesty.org/en/documents/eur44/4269/2021/en/

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UN AND UK ADD 1 NAME TO ISIL/AL-QAIDA SANCTIONS LIST

On 17 June, HM Treasury added Mohammad Ali AL HABBO to its sanctions lists.  He is a Syrian, Turkey-based facilitator who provides financial services to, or in support of, terrorism. This followed his listing by the UN, also on 17 June.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/994890/Notice_ISIL__Da_esh__and_Al-Qaida_180621.pdf

https://www.un.org/press/en/2021/sc14555.doc.htm

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OTHER THINGS YOU MAY HAVE MISSED – JUNE 17

Panama Covid-19 update – yesterday’s data arrived late, but showed new cases figures over 1,000 for the first time since February. However, noticed today that, while face shields and face masks now both mandatory for use of public transport, authorities have removed the stickers on some seats, allowing people to sir closer to one another – although people still tend to leave space between one another.

Meanwhile, the CSS, which runs hospitals etc, reports that 156 staff members have contracted Covid-19 despite having received at least 1 dose of vaccine – 44 of them after having had both doses (and time had passed since the second dose).

Today, active cases exceed 10,000 for first time since February, at 10,029, with another 969 new cases reported today and 1 more fatality. Numbers of those in hospital have risen, but only slightly – with 79 in ICU, 457 in other wards; with another 423 in so-called “hospital hotel rooms”.

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17 JUNE 2021

GLOBAL TAX DEAL HOLDOUTS FACE SQUEEZE UNDER BIDEN ADMINISTRATION PLAN

On 16 June, the Wall Street Journal reported that some countries might try to stay outside the emerging agreement to impose a global minimum tax on corporations so those nations can use low tax rates to attract businesses. The Biden administration aims to deflect those attempts with the Stopping Harmful Inversions and Ending Low-Tax Developments (SHIELD) rule.  It says that Shield faces some significant potential hurdles in Congress, along with likely resistance from foreign governments and multinational businesses.

https://www.wsj.com/articles/global-tax-deal-holdouts-face-squeeze-under-biden-administration-plan-11623841201

SWISS REGULATORS EXPAND ONLINE GAMBLING BLACKLISTS

On 16 June, iGB reported that Swiss regulatory bodies have added a host of new domains to their blacklists of unlicensed online gambling operators.  The latest version of one of 2 blacklists features 18 new domains and the other an additional 61.  More than 250 websites have now been blacklisted between the 2 regulators since the system was introduced at the start of 2019.

https://igamingbusiness.com/swiss-regulators-expand-online-gambling-blacklists-2

UKRAINE POLICE SEIZE CASH IN RAIDS ON MAJOR RANSOMWARE GANG

On 16 June, AP reported that Ukrainian police have carried out nearly 2 dozen raids targeting alleged associates of a Russian-speaking ransomware gang affiliated with the Clop ransomware syndicate in Kyiv and elsewhere, and blamed for a half billion dollars in cyberattacks and extortion that hit the US and South Korea especially hard.  Clop is among the more prolific ransomware gangs, known for extorting victims by threatening to publish data stolen from them. It has published the names of 65 victims to its dark web extortion site since August.

https://apnews.com/article/europe-ukraine-technology-hacking-a56fc6b3d1cd79ffd987e721bf558985

INDIA: FORMER MAHARASHTRA MEMBER OF THE LEGISLATIVE ASSEMBLY IN MONEY LAUNDERING CASE

On 16 June, the Economic Times reported that the Enforcement Directorate had arrested former Maharashtra MLA Vivekanand S Patil in a money laundering case linked to an alleged fraud involving the Karnala Nagari Sahakari (cooperative) Bank.

https://economictimes.indiatimes.com/news/politics-and-nation/ed-arrests-former-maharashtra-mla-in-money-laundering-case/articleshow/83565724.cms

MYANMAR: THE LEGAL EFFECT OF US SANCTIONS ON BUSINESSES

On 16 June, a Client Alert from Baker McKenzie reported that on 17 May OFAC issued an additional round of sanctions pursuant to Executive Order 14014 “Blocking Property with Respect to the Situation in Burma”.  This client alert discusses some of the legal implications of the latest round of measures and their impact on businesses’ day-to-day operations in the country, including their dealings with ministries or government agencies that are headed by a Specially Designated National (SDN).  It also warns that non-US persons should be mindful that they can be directly liable for causing violations by US Persons involving the SDN (for example, by involving US banks or US dollars in a transaction with an SDN).  Non-US persons also face the “secondary sanctions” risk of designation as an SDN themselves if found to have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, another SDN.

https://www.globalcompliancenews.com/2021/06/16/myanmar-the-legal-effect-of-the-17-may-2021-us-sanctions-on-businesses010621/#page=1

THE FORECAST FOR THE EU WHISTLEBLOWING DIRECTIVE IN MEMBER STATES: CLOUDY WITH A CHANCE OF IMPLEMENTATION

A post on the Compliance & Enforcement blog from the Program on Corporate Compliance & Enforcement at the New York University School of Law says that although the implementation deadline of 17 December appears quite far away for now, this is deceptive — especially for multinational organisations that have to start preparing to comply with likely varying local implementation requirements in multiple countries.  The post reviews the important deadlines and the status of various EU Member States’ implementation.

https://wp.nyu.edu/compliance_enforcement/2021/06/16/the-forecast-for-the-eu-whistleblowing-directive-in-member-states-cloudy-with-a-chance-of-implementation/

UK: SURVEY ON MANDATORY REPORTING OF FRAUD

On 16 June, Security Matters reported that a research company had been commissioned by the Association of Certified Fraud Examiners and the Fraud Advisory Panel to conduct a survey aimed at fashioning a better understanding of fraud reporting by organisations in England and Wales in order to ascertain whether or not there is a case for the mandatory reporting of fraud.  The research aims to help fill a gap in the knowledge around this area in a changing world by exploring the exact impediments to reporting fraud and how they might be overcome. 

https://securitymattersmagazine.com/perpetuity-research-launches-survey-on-mandatory-reporting-of-fraud

https://www.statista.com/chart/25084/missing-or-stolen-us-military-weapons

JAPAN: RESEARCH SECURITY TIGHTENED WITH CHINA THREAT IN MIND

On 16 June, University World News reported that Japan is enacting new measures to guard against theft of advanced technologies by foreign countries like China, including a system for Japanese and foreign researchers to seek government approval before they can access civil-military or so-called dual-use research and technologies. The system is said to be aimed at strengthening national security.  However, some Japanese academics have said increased monitoring could hamper legitimate and fruitful research collaboration.  It also reports that G7 leaders have said that they would “work together to promote stronger collaboration on research and development, and promote principles of research security and integrity and open science”.

https://www.universityworldnews.com/post.php?story=20210616090608803

BULGARIAN PROSECUTORS ASK US FOR INFORMATION ON WHICH SANCTIONS DECISION WAS BASED

On 16 June, Sofia Globe reported that the Supreme Cassation Prosecutor’s Office has sent letters US DoJ requesting the information on which the decision to sanction 6 Bulgarian citizens and related companies was based, saying that information would help to clarify the subject of the initiated inspections and possible future criminal investigation.

https://sofiaglobe.com/2021/06/17/bulgarian-prosecutors-ask-us-for-information-on-which-sanctions-decision-was-based/

INDIA: CUSTOMS SEIZES AROUND 8 KG PEACOCK FEATHERS BEING SMUGGLED TO HONG KONG

On 16 June, Devdiscourse reported that around 8 kg peacock feathers which were being smuggled to Hong Kong were seized at the Foreign Post Office here, the Delhi customs zone.  The peacock is the national bird of India and it is protected from hunting.

https://www.devdiscourse.com/article/law-order/1615980-customs-seizes-around-8-kg-peacock-feathers-being-smuggled-to-hong-kong

BELGIUM INVESTIGATES FUNDING TO PALESTINIAN NGO WITH LINKS TO TERRORIST GROUP

On 8 June, EU Reporter reported that the Minister of Development has told a Committee of the Belgian federal parliament that an investigation is underway into whether Belgian development aid may have been used to finance terrorist activities of the Popular Front for the Liberation of Palestine (PFLP).  It named 4 Palestinian NGO with active links to Belgium.  The investigation comes as a result of reports sent to the Belgian government by the Israeli government and reports which highlighted the close links between several Palestinian NGO and the PFLP.

https://www.eureporter.co/eu-2/belgium/2021/06/08/belgium-investigates-funding-to-palestinian-ngos-with-links-to-terrorist-group/

UK: POST-LEGISLATIVE SCRUTINY OF THE COUNTER-TERRORISM AND SECURITY ACT 2015

On 16 June, the Home Office published this report on the Act which was intended to strengthen the legal powers and capabilities of law enforcement and intelligence agencies to disrupt terrorism and prevent individuals from being radicalised.  Provisions included amendment of existing terrorism legislation to clarify the law in relation to insurance payments made in response to terrorist demands and the power to examine goods under the Terrorism Act 2000; and the enhancement of law enforcement agencies’ ability to investigate terrorism and serious crime by extending the retention of relevant communications data.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/994074/CCS207_CCS0621700320-001_CP_455_Web_Accessible.pdf

12 DETAINED IN POLAND IN GUN SMUGGLING CRACKDOWN

On 17 June, a news release from Europol reported that the Polish Border Guard, together with the Internal Security Agency and the National Police has seized close to a hundred firearms in raids tackling a gun-smuggling gang.  The organised crime gang under investigation smuggled weapons illegally from Slovakia to Poland, Russia and Ukraine.  The action is part of the framework of a much larger 2-year long investigation led by the Polish Border Guard which, besides this action day, has resulted so far in the seizure of close to 200 firearms.

https://www.europol.europa.eu/newsroom/news/12-detained-in-poland-in-gun-smuggling-crackdown

UK: DIGITAL SERVICES TAX BRIEFING     

On 16 June, a briefing paper from the House of Commons Library discusses the background to proposals announced in 2020, in the context of wider concerns re taxing of digital businesses.

https://researchbriefings.files.parliament.uk/documents/CBP-8719/CBP-8719.pdf

UK: REGULATORY REFORM GROUP RECOMMENDS REPLACEMENT OF GDPR

On 16 June, the Law Society Gazette reported that the GDPR would be replaced by common-law based UK legislation under a list of proposals for a ‘bold new’ post-Brexit framework proposed by a working party set up by the prime minister.  The task force says that exit from the EU ‘creates a one-off opportunity to set a bold new UK regulatory framework, based on a set of principles embedded in UK common law’.

https://www.lawgazette.co.uk/law/replace-gdpr-says-prime-ministers-regulatory-hit-squad/5108876.article

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/994125/FINAL_TIGRR_REPORT__1_.pdf

UK: SHARING DATA WITH CRIME REDUCTION PARTNERSHIPS

On 15 June, a post on the UK Police Law Blog is concerned with an important decision from the Court of Appeal regarding an information sharing agreement between a police force and a local business crime reduction partnership.  The agreement was held not to breach the Data Protection Act 2018 and the sharing of information that revealed a vulnerability to child sexual exploitation was held not to be in breach of data protection rights.  It is said that the case indicates the approach that the courts may take when asked to scrutinise information sharing agreements and policy documents where the police seek to share data with other organisations for the purpose of reducing crime and disorder.

https://ukpolicelawblog.com/index.php/9-blog/294-information-sharing-agreement-with-business-crime-reduction-partnership-did-not-breach-the-data-protection-act

THE UNKNOWN DANGER OF WOOD PACKING MATERIALS

A news release from US Customs & Border Protection on 16 June was concerned with the seizure in New Orleans of 2 separate non-compliant cargo shipments from South America.  What these shipments had in common was their wood packing materials lacked International Plant Protection Convention (IPPC) 15 stamps. The IPPC has an international standard for wood packaging material to certify that it has been subjected to an approved treatment measure. This treatment is required due to the significant pest risk associated with untreated packing materials. Dangerous insects and their larvae can be burrowed into the wood materials and can escape the ship or port and invade the nearby environment. The IPCC 15 stamp must be visible and meet an approved design standard. The non-compliant wood packing materials and lumber with bark were placed in containers to be re-exported back to Brazil and Suriname.

https://www.cbp.gov/newsroom/local-media-release/unknown-danger-wood-packing-materials-two-may-seizures-port-new-orleans

COLOMBIA DRUG TRAFFICKING MONEY LAUNDERED THROUGH MODIFIED GOLD

On 17 June, an article from Insight Crime says that a criminal group in Colombia is turning dirty money into adulterated gold, being adulterated with other metals to the point where it yields double the weight, according to an unnamed judicial source who spoke about the scheme.  It is sold or is fashioned into jewellery locally, with would-be buyers unaware that it is not pure.  While the gold sales primarily serve to launder drug trafficking money, the adulterated gold has proven to be profitable on its own, and by creating the alloys, it is claimed that the crime group earns “twice the price”.

https://insightcrime.org/news/urabenos-gold-launder-drug-money-colombia/

ATTRACTED TO MONEY AND RISK: THE PERSONALITY OF FINANCE PROFESSIONALS

On 16 June, a post on the LSE Business blog says that finance professionals have higher risk preferences and monetary motivation than the population as a whole. This conclusion is based on data concerning 465 bankers in Germany surveyed over 2,000 times between 2000 and 2017.  The results indicate a business norm in the financial sector that attracts professionals who think in a riskier and more income-focused manner. 

https://blogs.lse.ac.uk/businessreview/2021/06/16/attracted-to-money-and-risk-the-personality-of-finance-professionals/

ITALIAN MAN CAUGHT SMUGGLING GOLD BARS AT SCHIPHOL AIRPORT

On 17 June, NL Times reported that a 60-year-old Italian man was arrested at Schiphol Airport on suspicion of money laundering after authorities found several gold bars valued at €365,000 in his luggage.  The suspect had arrived from a location in the Caribbean and had recently made trips to several other countries.

https://nltimes.nl/2021/06/17/italian-man-caught-smuggling-gold-bars-schiphol

NIGERIA: REAL ESTATE SECTOR MAJOR CONDUIT FOR MONEY LAUNDERING

On 17 June, This Day Live reported that the Chairman of the Economic and Financial Crimes Commission (EFCC) has declared that the real estate sector of the economy served as a major conduit for money laundering in the country.

https://www.thisdaylive.com/index.php/2021/06/17/efcc-chair-real-estate-sector-major-conduit-for-money-laundering/

HONG KONG FINALISES PRINCIPLES FOR REGULATING VIRTUAL ASSET SERVICE PROVIDERS AND OTHER AML/CFT REGULATORY ENHANCEMENTS

On 17 June, Herbert Smith Freehills reported that the Financial Services and the Treasury Bureau (FSTB) had published conclusions following a consultation on proposals to enhance AML/CFT regulation in Hong Kong, via amendments to the Anti-Money Laundering and Counter-Terrorist Financing Ordinance.

https://hsfnotes.com/fintech/2021/06/17/hong-kong-fstb-finalises-principles-for-regulating-virtual-asset-service-providers-and-other-aml-cft-regulatory-enhancements/

CANADA: FINTRAC SEES RISING THREAT FROM FAR-RIGHT TERRORISTS

On 15 June, The Advisor reported that banks and investment dealers should be aware of these groups’ financing behaviour, the agency had said in a bulletin.  FINTRAC is said to be keeping tabs on transactions involving ideologically motivated violent extremist (IMVE) groups. 

https://www.advisor.ca/news/industry-news/fintrac-sees-rising-threat-from-far-right-terrorists/

HMRC CLAMPS DOWN ON TAX AVOIDANCE VIA PENSION SCHEMES

On 15 June, FT Advisor reported that HMRC is targeting tax avoidance schemes which are attempting to avoid corporation tax, income tax and national insurance contributions by using unfunded pension schemes. It said it was aware that some companies and directors were using a tax avoidance scheme, which involved setting up pensions, and warned it would challenge anyone promoting or using these methods.

https://www.ftadviser.com/pensions/2021/06/15/hmrc-clamps-down-on-tax-avoidance-in-pension-schemes/

TACKLING CORRUPTION AS AN ENABLER FOR ENVIRONMENTAL CRIME

On 16 June, an article from the Global Initiative on Transnational Organised Crime asks if the international community met the challenges of tackling the broad range of manifestations of corruption, and its links with organised crime?

https://globalinitiative.net/analysis/corruption-environmental-crime-ungass/

US AND EU AGREE ON FRAMEWORK TO RESOLVE AIRBUS/BOEING LARGE CIVIL AIRCRAFT DISPUTE

On 16 June, a post from Crowell Moring explained the outline announced to resolve the 20 year long large civil aircraft dispute between the US and the EU and to suspend tariffs on $115 billion in related products for a period of 5 years. 

https://www.cmtradelaw.com/2021/06/u-s-and-eu-agree-on-framework-to-resolve-large-civil-aircraft-dispute/

https://www.visualcapitalist.com/how-powerful-is-your-passport-in-a-post-pandemic-world/

HOUTHIS LAY SEA MINES IN RED SEA

On 14 June, Breaking Defense reported that Middle Eastern sources say most of the naval mines are floating mines the Houthis release into the open sea in the northern side of the Red Sea. They are supplemented by networks of mines laid at a depth of 16 meters. They are triggered by the passage of ships above them.  The US Navy has a force of ageing minesweepers and lacks a robust response to sea mines.

https://breakingdefense.com/2021/06/houthis-lay-sea-mines-in-red-sea-coalition-boasts-few-minesweepers/

PERCEIVED CORRUPTION LESS AN ISSUE IN IRELAND THAN OTHER EU STATES

On 17 June, the Irish Examiner reported that levels of perceived corruption among members of the public are lower in Ireland than in other EU countries, a new survey by Transparency International (TI) has found.  Across the EU countries surveyed, 32% of people thought corruption had worsened in their country over the past year and 62% said government corruption was a big problem.  By comparison, just 23% of Irish respondents believed corruption levels had increased, with half saying levels remained unchanged, and 35% saying Government corruption was a big problem.

https://www.irishexaminer.com/news/courtandcrime/arid-40316411.html

UK: FREEPORT DOUBTS DESPITE NATIONAL INSURANCE CONTRIBUTIONS BILL PASSING SECOND READING UNOPPOSED

On 16 June, the Chartered Institute of Taxation reported that the Bill passed its important 2nd Reading despite concerns about how the new freeports will operate.  The Bill provides for employer’s national insurance contributions relief for employees in freeports (employers with premises in a freeport in GB will be exempt from employer’s NIC on up to £25,000 of a new worker’s wages); employer’s NICs relief for employers of veterans. 

https://www.tax.org.uk/freeport-doubts-despite-nics-bill-passing-second-reading-unopposed

RUSSIA HAS SECOND PLACE IN GLOBAL MARKET FOR GUNSHIP HELICOPTERS

On 17 June, Air Recognition reported that the Rynki Vooruzheniy (Arms Markets) Russian analytical monthly journal published an article about the global market of helicopter gunships in June. It said Russia retained the second place.  The global market of helicopter gunships is estimated at $32.15 billion in the coming years 2021-2030.  US producers dominate the market with 62% followed by Russia (29%), France (4%), Italy (2%), the UK (2%), and Turkey (1%).

https://www.airrecognition.com/index.php/news/defense-aviation-news/2021/june-2021/7394-russian-scores-second-on-global-market-of-gunship-helicopters.html

US FEDERAL COURTS UPHOLDS TERRORISM WATCHLIST DATABASE

On 17 June, an article in Lawfare reported that, in March, the US Court of Appeals for the Fourth Circuit upheld the constitutionality of the Terrorism Screening Database (TSDB), a watchlist maintained by the FBI that currently contains the names of more than 1 million “known or suspected terrorists”.  TSDB is the central terrorist watchlist maintained by the executive branch and serves as the foundation for other, more narrow lists like the No Fly List.  It is maintained by the FBI’s Terrorist Screening Center (TSC); and agents and analysts from different federal agencies nominate individuals for inclusion in the TSDB, but those individuals are placed on the list only after the nominations are reviewed and approved by staffers at the TSC and the National Counterterrorism Center (NCTC). 

https://www.lawfareblog.com/case-summary-fourth-circuit-upholds-terrorism-watchlist-database

SEC ASSET FREEZE, EMERGENCY RELIEF FRAUD CHARGES AGAINST A MIAMI-BASED INVESTMENT PROFESSIONAL AND 2 INVESTMENT FIRMS FOR ALLEGED “CHERRY-PICKING” SCHEME IN WHICH THEY CHANNELLED MILLIONS OF DOLLARS IN TRADING PROFITS TO PREFERRED ACCOUNTS

A release on Mondo Visione on 17 June reported that the SEC alleges that defendants Ramiro Jose Sugranes, UCB Financial Advisers Inc, and UCB Financial Services Limited engaged in a scheme since at least September 2015 to divert profitable trades to 2 accounts believed to be held by Sugranes’ relatives and saddle other clients with losing trades. 

https://mondovisione.com/media-and-resources/news/sec-charges-investment-advisers-with-cherry-picking-obtains-asset-freeze/

KING’S COLLEGE LONDON AND US CUSTOMS SIGN INTERNATIONAL ACADEMIC PARTNERSHIP AGREEMENT TO COMBAT GLOBAL IP INFRINGEMENT

A news release from US Immigration and Customs Enforcement on 9 June advised that the National Intellectual Property Rights Coordination Center had announced a new academic partnership with the Dickson Poon School of Law at King’s College London to expand the Center’s research efforts into counterfeiting, anti-counterfeiting strategies and intellectual property. This marks the first international academic agreement in the battle against misinformation and illicit trade with the goal to keep the public safe.  In addition, the IPR Center and the Dickson Poon School of Law will coordinate with the City of London Police, the EU Intellectual Property Office, World Intellectual Property Organization, and many other international organisations focused on the enforcement of intellectual property.

https://www.ice.gov/news/releases/ipr-center-kings-college-london-sign-international-academic-partnership-agreement#

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US BLACKLISTS GUATEMALAN LAWMAKER FOR CORRUPTION

On 17 June, Reuters reported that the US State Department has banned Guatemalan lawmaker Boris España Cáceres and his immediate family from entering the US due to “his involvement in significant corruption”. 

https://www.reuters.com/world/americas/us-blacklists-guatemalan-lawmaker-corruption-2021-06-17/

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OFAC: NEW SANCTIONS GENERAL LICENSES AND FAQ

On 17 June, OFAC announced 3 new General Licenses – Syria General License 21, Venezuela General License 39, and Iran General License N, “Authorizing Certain Activities to Respond to the Coronavirus Disease 2019 (COVID-19) Pandemic”.  It also issued associated FAQ 906 to 911.  The new General Licenses are time-limited and are designed to provide broad authorisations for certain COVID-19-related transactions and activities.  

https://content.govdelivery.com/accounts/USTREAS/bulletins/2e471ab

 

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CHINA’S MILITARY-INDUSTRIAL COMPLEX – HOW NEW US REGULATIONS IMPACT MILITARY END-USE MANAGEMENT

This White Paper, available to download from Kharon, says that MEU regulations targeting US exports to businesses associated with China’s military, intelligence, and law enforcement have created new legal and compliance challenges for many multinational corporates that export to China.  New regulations include tightened export controls of certain items meant for military end users in China and items intended for military end-uses in the country, as well as restrictions on financial investments in certain Chinese military-linked companies.

https://info.kharon.com/whitepapers/2021/meu

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HAMAS SEEKS FOREIGN FUNDS TO REPLENISH COFFERS FOLLOWING CONFLICT WITH ISRAEL

On 16 June, Kharon published an article saying that Hamas has turned to aligned charities, successors to sanctioned organizations and shell companies based abroad to raise funds following the recent conflict with Israel.  Hamas is sanctioned by the US and EU but has turned to its various pre-existing networks in Asia, Europe and the Middle East to raise funds.  The article mentions some of the foreign charities affiliated with Hamas are also engaged in post-conflict fundraising on behalf of the group. 

https://brief.kharon.com/updates/hamas-seeks-foreign-funds-to-replenish-coffers-following-conflict-with-israel/

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CANADA – SPECIAL BULLETIN ON IDEOLOGICALLY MOTIVATED VIOLENT EXTREMISM: A TERRORIST ACTIVITY FINANCING PROFILE

FINTRAC in Canada has produced this profile as a s Special Bulletin which presents the results of FINTRAC’s analysis of IMVE-related transaction reporting, supplemented by information from media reports and academic research.

https://www.fintrac-canafe.gc.ca/intel/bulletins/imve-eng.pdf

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WORLD BANK DEBARS ZHEJIANG FIRST HYDRO & POWER CONSTRUCTION GROUP CO FOR BRIBERY

On 16 June, a post on the FCPA Blog advised that the World Bank had debarred for 2 years the company after a de facto agent and subcontractor offered and paid bribes to government officials in exchange for a contract on a project in China – the $127 million World Bank-funded Guangxi Laibin Water Environment Project.

https://fcpablog.com/2021/06/16/world-bank-debars-chinese-company-for-bribery/

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MISSING TRADER INTRA-COMMUNITY (MTIC) FRAUD

On 17 June, the EU Parliament Research Service published a briefing paper on MTIC fraud.  It provides an overview of the existing rules concerning VAT, an explanation of MTIC and possible solutions to the problem.  It explains that MTIC fraud and “carousel fraud” are forms of fraud in which a business disappears without paying the VAT due to the tax authorities or requesting a VAT refund from the government. In both cases the VAT can be seen as a profit for the ‘missing trader’ who disappears with the money. For MTIC and carousel fraud cross[1]border trade is important as intra-community trade has a zero-rate VAT taxation. There are many different and complex versions of MTIC.

http://www.europarl.europa.eu/RegData/etudes/BRIE/2021/690462/IPOL_BRI(2021)690462_EN.pdf

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HOW A VAST NETWORK ALLOWED VENEZUELA TO EVADE US OIL SANCTIONS

El Pais on 16 June reported that an investigation has unveiled the inner workings of a scheme involving dozens of individuals and companies that illicitly sold crude and transferred the money through tax havens in a shady multi-million-dollar business.  The report reveals how this scheme involving dozens of people and companies across 30 different countries moves money through tax havens.  The origins of the scheme stretch back to the sanctions imposed on Venezuela since 2014, mostly by the US.  A network was created involving dozens of companies interwoven with financial partners from 30 countries including Bangladesh, China, Curaçao, Greece, Luxembourg, Malta, Malaysia, Mexico, Norway, Singapore, Sweden, Switzerland, UK and US, among other countries across 3 continents.  Tax havens such as the Isle of Man and the BVI were also used. 

https://english.elpais.com/usa/2021-06-16/how-a-vast-network-allowed-venezuela-to-evade-us-oil-sanctions.html

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OTHER THINGS YOU MAY HAVE MISSED – JUNE 16

Panama Covid-19 update – the media reports that more than 50 health care workers from the Rafael Hernández de David regional hospital, Chiriquí, who more than 2 weeks ago received the second dose of the Pfizer vaccine , are infected with Covid-19. Meanwhile, more areas are facing the 10 pm curfew, including the Colon district, with a few (including the Chiriqui province, badly affected recently by an upsurge in infections) are to have a total lockdown on Sundays from this coming weekend.

https://panatimes.com/new-restrictive-measures-implemented-in-various-sectors-of-the-country

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16 JUNE 2021

CHINESE DREDGERS ARE STEALING TAIWAN, BIT BY BIT

On 16 June, Nikkei Asia reported that sand dredgers spend hours pumping up tons of sand from the ocean floor around the Matsu archipelago, which is just 20 km from the mainland Chinese coast, but is administered by Taiwan.  It is part of China’s “grey zone” tactic, hybrid warfare aimed at wearing down, intimidating or provoking the enemy without firing a single shot.

https://asia.nikkei.com/Spotlight/The-Big-Story/Line-in-the-sand-Chinese-dredgers-are-stealing-Taiwan-bit-by-bit

FOR YEARS, US ARMY HID AND DOWNPLAYED EXTENT OF FIREARMS LOSS

On 16 June, Military.com reported that the US Army has hidden or downplayed the extent to which its firearms disappear, significantly understating losses and thefts even as some weapons are used in street crimes. The pattern of secrecy and suppression dates back nearly a decade.  Army officials cited information that suggests only a couple of hundred firearms vanished during the 2010s, but internal memos that AP obtained show losses many times higher.

https://www.military.com/daily-news/2021/06/16/years-us-army-hid-downplayed-extent-of-firearms-loss.html

THE COLLAPSE OF THE SFO’S PROSECUTION OF FORMER SERCO EXECUTIVES: LESSONS FOR CORPORATES

On 15 June, an article from Herbert Smith Freehills LLP says that in April the SFO fraud prosecution of 2 former directors of Serco Geografix Limited collapsed.  It offered no evidence against the defendants, after it became apparent that the SFO had failed to disclose to the defendants certain relevant materials, rendering it unsafe for the prosecution to proceed.  The article says that this is an example of the challenges with disclosure in complex fraud cases such as this, which will typically involve the production of hundreds of thousands of documents.  However, the case also provides some interesting lessons for corporates and their directors when considering whether to enter into Deferred Prosecution Agreement negotiations with prosecuting authorities.  The article details the lessons to be learned.  These include the tension between the statement of facts agreed between a corporate and the prosecutor as part of a DPA on the one hand, and the indictments subsequently preferred in respect of individuals on the other, and reignites the debate over whether DPA are an appropriate means of penalising corporates in circumstances where the SFO has not obtained convictions against individuals in respect of the same events. 

https://hsfnotes.com/fsrandcorpcrime/2021/06/15/the-collapse-of-the-sfos-prosecution-of-former-serco-executives-lessons-for-corporates/#page=1

EU SANCTIONS: GUIDANCE RE NON-DESIGNATED ENTITIES THAT ARE CONTROLLED BY DESIGNATED INDIVIDUALS OR ENTITIES AND PROVIDES USEFUL GUIDANCE ON RELATED DUE DILIGENCE REQUIREMENTS

On 11 June, an article from Mayer Brown is concerned with an Opinion from the European Commission on 8 June which followed requests received from a National Competent Authority.  While based on the EU restrictive measures in view of the situation in Ukraine, it is relevant for all asset freeze measures imposed by the EU.  The Opinion provides welcome clarifications on the scope of application of the EU’s asset freeze measures and the expected due diligence requirements for EU operators, including banks – and economic operators subject to EU sanctions laws should stand ready to reinforce, where needed, their due diligence and compliance processes.

https://www.mayerbrown.com/en/perspectives-events/publications/2021/06/financial-sanctions-due-diligence-requirements-stressed-by-european-commission

But –

DESIGNATION OF AN ORGANISATION OR INDIVIDUAL AS A SANCTIONS TARGET SHOULD AVOID IMPINGING ON A THIRD PARTY’S RIGHTS AS MUCH AS POSSIBLE

An article from Out-Law on 16 April is about an EU Commission Opinion of 2 June regarding the sanctions regime that targets individuals and entities in the Central African Republic (CAR).  It stressed that a third party still has rights relating to pre-designation contracts and the commission said it was for this reason that exceptions and derogations are normally made when assets are frozen. Provided that all the conditions in the derogation are met, the consent of the sanctions target is not required to release the funds and consent is not a prequalification to the grant of that derogation.

https://www.pinsentmasons.com/out-law/news/sanctions-designations-not-affect-enforcement-pre-existing-third-party-rights

https://ec.europa.eu/info/sites/default/files/business_economy_euro/banking_and_finance/documents/210602-frozen-funds-features-central-african-republic-opinion_en.pdf

CHINESE-CANADIAN BUSINESSMAN’S $70 MILLION DEAL WITH NEW ZEALAND POLICE OVER FROZEN ASSETS

On 15 June, the New Zealand Herald reported that wealthy Canadian businessman Edward Gong has agreed to pay millions of dollars to the New Zealand government in the largest ever settlement made under the Criminal Proceeds (Recovery) Act since the law came into effect in 2009.  3 years ago, the bank accounts of Xiao Hua Gong in New Zealand were frozen as part of a global investigation into his finances. He had denied his success and influence was gained from an alleged $202 million pyramid scheme selling medicines in China, and he was arrested in Canada and charged with fraud and money laundering in December 2017.   9 months before his arrest in Canada, a High Court judge in New Zealand granted freezing orders over his assets in New Zealand.

https://www.nzherald.co.nz/nz/chinese-canadian-businessman-xiao-hua-gong-cuts-record-breaking-70m-deal-with-new-zealand-police-over-frozen-assets/NWKJI4TEPYMI5CGR3J37XJZGPI/

EU CORRUPTION MONITOR 2021

Transparency International says that from conflicts of interest in awarding government contracts to undue influence by business on politics, from bribes to the use of personal connections when accessing public services, corruption takes many forms across the EU. Its new survey shows that 62% of over 40,000 survey participants believe that government corruption is a big problem in their country.

https://www.transparency.org/en/gcb/eu/european-union-2021

and

CENTRAL AND EASTERN EUROPE CITIZENS BELIEVE CORRUPTION IS GROWING

On 15 June, Balkan Insight reported that a new report by Transparency International says that almost a third of EU citizens “think corruption is getting worse in their country and almost half say their government is doing a bad job at tackling corruption”.  In the countries surveyed in Central and South-East Europe, the percentages are even higher. 

https://balkaninsight.com/2021/06/15/central-eastern-europe-citizens-believe-corruption-is-growing-report/

AUSTRAC SEEKS INPUT TO DEVELOP NEW REPORTING SYSTEMS

On 15 June, Regulation Asia reported that AUSTRAC says it will be undertaking a systems transformation programme over the next 4 years to replace ‘AUSTRAC Online’ and transform the way regulated businesses interact and report to the Australian AML/CFT regulator.  It has asked reporting entities to submit comments on any system or reporting issues that can be improved to help it develop its new systems.

https://www.regulationasia.com/austrac-seeks-input-to-develop-new-reporting-systems/

REDFOXTROT – CYBER ESPIONAGE ACTIVITY ATTRIBUTED TO A SUSPECTED CHINESE STATE-SPONSORED THREAT ACTIVITY GROUP

A report says that Recorded Future’s Insikt Group has identified ties between a suspected Chinese state-sponsored threat activity group tracked as RedFoxtrot and the Chinese military intelligence apparatus, People’s Liberation Army (PLA) Unit 69010, located in Ürümqi, Xinjiang.  The report is said to provides a rare glimpse into PLA cyber espionage operations.

https://go.recordedfuture.com/redfoxtrot-insikt-report

DATA PROTECTION: EUROPEAN COMMISSION LAUNCHES PROCESS FOR ADOPTION OF GDPR ADEQUACY DECISION FOR SOUTH KOREA

On 16 June, a news release from the EU advised on the adoption of a decision that the data protection framework in South Korea meets the requirements of GDPR for the purposes of transfers of personal data.

https://ec.europa.eu/commission/presscorner/detail/en/ip_21_2964

EUROPEAN COMMISSION WELCOMES PROVISIONAL AGREEMENT ON EU ROAD CHARGING RULES

On 16 June, the Commission welcomes agreement on new road-charging rules (the Eurovignette Directive). The revised rules introduce CO2 emission-based tolling for heavy-duty vehicles across the EU, a key pillar of the EU commitment to reaching climate neutrality by 2050.  Once the provisional agreement is formally approved by Parliament and Council, the Directive will enter into force on the 20th day after its publication.

https://ec.europa.eu/commission/presscorner/detail/en/MEX_21_3026

SOUTH AFRICA: MAHATMA GANDHI’S GREAT-GRANDDAUGHTER SENTENCED TO 7 YEARS IN PRISON IN CONNECTION WITH A FORGERY CASE

On 16 June, Logically reported that Ashish Lata Ramgobin has been sentenced to 7 years in prison for fraud, forgery, and fabrication. 

https://www.logically.ai/factchecks/library/6e496cbc

ARMS TRAFFICKER VIKTOR BOUT MAY BE SWAPPED FOR AMERICAN IN JAIL IN RUSSIA

In his blog on 15 June, Kenneth Rijock reproduced a release from a US law firm stating that the judge who presided over the trial of Viktor Bout in 2010 has said it would be appropriate to swap Bout for Paul Whelan, a US citizen arrested in Russia in 2018 for alleged espionage.

https://rijock.blogspot.com/2021/06/will-there-be-russo-american-prisoner.html

CHINA–UKRAINE–US TUG OF WAR OVER UKRAINIAN AERO-ENGINE COMPANY

On 16 June, an article from RUSI was concerned with Motor Sich, a leading Ukrainian company is being drawn into the global confrontation between China and the US.  China was attempting to purchase one of the ‘crown jewels’ of Ukraine’s military-industrial complex inherited from the former USSR – Motor Sich, the biggest manufacturer of aircraft engines in Eurasia.  Since 2014 Motor Sich was banned from trading with Russia and sought new markets, including China.  The US became concerned about China’s interest in Motor Sich in 2015.  Motor Sich had taken out a $100 million, 10-year loan from the China Development Bank and default on the loan would have led to China acquiring Motor Sich.  The prospects of Motor Sich technology falling into Beijing’s hands became a concern to the US in 2017.  Ukraine had little choice but to give in to US pressure to overturn the sale of Motor Sich to China because of the need for US diplomatic and security support, and in January this year the Ukraine government imposed sanctions on Chinese and BVI-registered persons and entities alleged to have been seeking to purchase Motor Sich, effectively banning the sale.

https://rusi.org/commentary/china-ukraine-us-and-tug-war-ukrainian-crown-jewel

EU COMMISSION AND OLAF HAVE DEVELOPED A NEW ANTI-FRAUD KNOWLEDGE AND RESOURCE CENTRE

On 16 June, EU Neighbours reported a new tool designed to prevent fraud and any other illegal activities affecting the EU’s financial interests and to ensure that EU Funds are spent well to achieve the best impact on citizens’ lives. The website gives concrete examples from EU Member States, presents tools that have proven to be effective, explains how to reproduce and apply good practices and share knowledge, and connects practitioners.

https://www.euneighbours.eu/en/east/stay-informed/news/eu-funds-anti-fraud-knowledge-and-resource-centre

https://ec.europa.eu/antifraud-knowledge-centre/index_en 

GREEK CAPTAGON BUST LEADS TO A CRIMINAL GANG AND THE PORT AT THE HEART OF SYRIA’S BOOMING NEW DRUG TRADE

On 16 June, an article from OCCRP says that, in late 2018, Greek authorities busted a freighter carrying over $100 million worth of cannabis and Captagon, evidence of a booming Mediterranean drug trade fuelled by Syria’s civil war.  It says that an investigation into the vessel revealed a network of criminals associated with the shipment — with connections to the Assad family, a gang in Libya, and UK-registered shell companies.  It is said that the shipment was allegedly destined for a smuggling gang in eastern Libya.  The owner of the vessel has connections to a cousin of Bashar Al-Assad and convictions in Italy for smuggling stolen cars and yachts.

https://www.occrp.org/en/investigations/greek-captagon-bust-leads-to-a-criminal-gang-and-the-port-at-the-heart-of-syrias-booming-new-drug-trade

ITALIAN CUSTOMS AND DINOSAUR EGG TRAFFICKERS

On 15 June, the AV Club reported that Customs agents at Milan Bergamo Airport recently discovered a fossilised Shunosaurus egg that was being illegally shipped from Malaysia with “a certification of origin of dubious authenticity, issued by a body which subsequently [was found to be] non-existent”.  Authorities believe the egg was en route from China.

https://www.avclub.com/italian-customs-refuse-to-let-dinosaur-egg-traffickers-1847100876

EU COURT CONFIRMS DATA PROTECTION REGULATOR CAN INVESTIGATE IF NOT ITS LEAD SUPERVISORY AUTHORITY

On 16 June, an article from Out-Law says that EU data protection law provides scope for national regulators to act unilaterally to address concerns they have about the cross-border personal data processing undertaken by multinational businesses, and there are circumstances in which data protection regulators that are not the “lead supervisory authority” for a business can legitimately pursue legal action against those companies under the GDPR – despite the GDPR ‘one stop shop’ mechanism of regulation and enforcement.

https://www.pinsentmasons.com/out-law/news/ruling-confirms-possibility-of-parallel-gdpr-investigations

CUBA ADMITS TO WILDLIFE TRAFFICKING PROBLEM

On 15 June, Insight Crime reported a new wildlife trafficking law which covers “mammals, birds, bees, reptiles, fish, mollusks, crustaceans and amphibians”, but with warnings that penalties are too light.  It appears that the majority of wildlife trafficked from the island are birds, including parrots, and snails. Cuban grassquits, endemic birds with a swirl of bright yellow around their necks and backs, have been smuggled to the US.

https://insightcrime.org/news/cuba-quietly-admits-to-wildlife-trafficking-problem/

WORLD ELDER ABUSE AWARENESS DAY – NEW US RESOURCE INTENDED TO ASSIST SECURITIES FIRMS IN IMPLEMENTING THE TRAINING REQUIREMENTS OF THE SENIOR SAFE ACT

On 16 June, a release on Mondo Visione advised that, in recognition of World Elder Abuse Awareness Day, the SEC, the North American Securities Administrators Association (NASAA), and the Financial Industry Regulatory Authority (FINRA) announced a new resource intended to assist securities firms in implementing the training requirements of the Senior Safe Act.  The training programme, “Addressing and Reporting Financial Exploitation of Senior and Vulnerable Adult Investors,” can be used by firms to train associated persons on how to detect, prevent, and report financial exploitation of senior and vulnerable adult investors.

https://www.nasaa.org/industry-resources/senior-issues

https://mondovisione.com/media-and-resources/news/sec-nasaa-and-finra-offer-free-resource-to-securities-firms-to-assist-in-detec/

ADVISER TO COSTA RICA PRESIDENT RESIGNS AMID GROWING BRIBERY SCANDAL

On 15 June, Thomson Reuters reported that a top adviser to Costa Rican President Carlos Alvarado resigned after judicial officials said he was under investigation for his alleged role in a bribery scheme that has ensnared officials and top businessmen.

https://news.trust.org/item/20210614233315-b5et0/

THE ROLE AND RESPONSIBILITIES OF GATEKEEPERS IN THE FIGHT AGAINST ILLICIT FINANCIAL FLOWS: A UNIFYING FRAMEWORK

The World Economic Forum has issued this briefing saying that the Unifying Framework is a value‑based self‑regulatory framework for private sector intermediaries who are strategically positioned to prevent or interrupt illicit financial flows – collectively referred to as “gatekeepers”. The framework consists of 5 core practices and is intended to realize 3 fundamental principles.  It explains who the gatekeepers are, as well as the details of the framework.

https://www3.weforum.org/docs/WEF_Gatekeepers_A_Unifying_Framework_2021.pdf 

PODCAST: USING UNIVERSITIES TO LAUNDER REPUTATIONS

In the latest TRACE podcast, John Heathershaw of the University of Exeter discusses the working paper he co-authored for the National Endowment for Democracy: “Paying for a World Class Affiliation: Reputation Laundering in the University Sector of Open Societies”.  He shows how vulnerable universities are to abuse by kleptocrats seeking to shape the conversation, often quite subtly, about their governments and their legacies. This research was undertaken for NED and under the Global Integrity Anti-Corruption Evidence project.

https://www.traceinternational.org/resources-podcast

UK: LOOTED ARTEFACTS WITHDRAWN FROM AUCTION AFTER APPEAL BY ETHIOPIA 

On 16 June, the Guardian reported that Busby auctioneers in Bridport, Dorset, had withdrawn a leather-bound Coptic bible and a set of horn beakers from a sale on 17 June after the Ethiopian embassy in London discovered the items – which were taken during the Battle of Maqdala in 1868 – and wrote to the auction house.

https://www.theguardian.com/world/2021/jun/16/looted-artefacts-withdrawn-from-uk-auction-after-ethiopia-appeal

US: INVESTIGATION RESULTS IN GUILTY PLEAS IN MAIL FRAUD, AGGRAVATED IDENTITY THEFT SCHEME CASE

On 7 June, a news release from US Immigration and Customs Enforcement advised that 2 Dominican Republic citizens have pleaded guilty to using stolen personal identification information to obtain high-end electronic devices, such as cell phones, laptop computers, tablets and watches.

https://www.ice.gov/news/releases/hsi-el-paso-investigation-results-guilty-pleas-mail-fraud-aggravated-identity-theft

G7 NEW GLOBAL INFRASTRUCTURE INITIATIVE

On 15 June, an article from the Center for International and Strategic Studies said that G7 leaders meeting in the UK England, on 11-13 June agreed on a new initiative to support global infrastructure investment, launched as global needs rise and China’s Belt and Road Initiative (BRI) pulls back.  It says that the White House has issued a detailed factsheet dubbing the initiative “Build Back Better World (B3W)”. 

https://www.csis.org/analysis/g7s-new-global-infrastructure-initiative

https://www.whitehouse.gov/briefing-room/statements-releases/2021/06/12/fact-sheet-president-biden-and-g7-leaders-launch-build-back-better-world-b3w-partnership/

https://www.consilium.europa.eu/media/50443/eu-us-summit-joint-statement-15-june-final-final.pdf

WHITE HOUSE UNVEILS PLAN TO FIGHT DOMESTIC TERRORISM

On 15 June, TeleSur carried an article saying that the National Strategy for Countering Domestic Terrorism plan outlines steps recommended by national security officials and advisers into one blueprint on how to more effectively identify domestic extremists in the country after years of heightened focus on foreign terrorists. 

https://www.telesurenglish.net/news/White-House-Unveils-Plan-to-Fight-Domestic-Terrorism-20210615-0020.html

https://www.lawfareblog.com/sea-change-counterterrorism

CHINA’S ECONOMY: 40 YEARS OF SOARING EXPORTS

https://www.visualcapitalist.com/chinas-economy-40-years-of-soaring-exports/

NIGERIA: FORMER BANK MANAGING DIRECTOR JAILED FOR FRAUD

On 16 June, the People’s Gazette reported that Francis Atuche, former MD of Bank PHB (now the Keystone Bank), has been sentenced to 6 years in prison.  The bank’s former CFO, Ugo Anyanwu, was also sentenced to 4 years imprisonment.

https://gazettengr.com/just-in-ex-bank-md-atuche-sentenced-to-six-years-in-jail

US CONVICTS RUSSIAN FOR MALWARE ‘CRYPTING’ SERVICES

On 16 June, Rferl reported that Russian national Oleg Koshkin has been found guilty with operating a “crypting” service that helped hackers infect computers around the world with malware.  Koshkin, 41 and formerly of Estonia, reportedly operated websites that offered to make intrusive software like “botnets, remote-access trojans, keyloggers, credential stealers and cryptocurrency miners” virtually undetectable.

https://www.rferl.org/a/us-convicts-russian-malware-crypting-services/31311450.html

SOUTH TEXAS MAN INDICTED FOR MANUFACTURING ‘GHOST GUNS’ DESTINED FOR MEXICAN DRUG CARTEL

On 15 June, a news release from US Immigration & Customs Enforcement advised that a federal grand jury had returned a 3-count indictment charging a South Texas man for selling illegally manufactured and unregistered firearms suppressors destined for a Mexican drug cartel.  William Scotts Simms, 73, was indicted for aiding and abetting the attempt to illegally export a silencer, possession of 11 unregistered machine guns and possession of an unregistered silencer. 

https://www.ice.gov/news/releases/south-texas-man-indicted-manufacturing-ghost-guns-destined-mexican-drug-cartel

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EMBATTLED SOUTH SUDANESE MINISTER THREATENS LAWSUIT AGAINST KENYA OVER SEIZURE OF $460,000

On 16 June, the Sudan Post reported that South Sudan minister of Cabinet Affairs, Martin Elia Lomuro, has threatened to sue the Asset Recovery Agency of Kenya over fraud and money laundering allegation after his bank account was frozen. The High Court of Kenya has frozen the bank accounts of the South Sudanese minister over the transfer of more than $460,000 2016-2020.

https://www.sudanspost.com/embattled-minister-lomuro-threatens-lawsuit-against-kenya-over-seizure-of-460000/

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ITALY SAYS IT HAS BUSTED CHINA MONEY LAUNDERING, EUROPEAN METALS SCAM

On 16 June, Yahoo News reported that Italian police said that they had broken up a complex money laundering operation and an illegal metal recycling business that had enabled criminals to transfer huge amounts of illicit cash between Italy and China.  The 3-year investigation, coordinated by the anti-mafia prosecutor’s office in the city of Trieste, showed the enormous lengths gangs were having to go to in order to clean ill-gotten gains, police said.  The case unveiled a network of companies that between 2013 and 2021 sold around 150,000 tonnes of scrap metal, including copper, brass and aluminium, that came from various sources, circumventing environmental norms and evading taxes on deals estimated to be worth some €300 million.

https://uk.news.yahoo.com/italy-says-busts-china-money-171654276.html

https://www.scmp.com/news/world/europe/article/3137574/italy-says-it-has-broken-china-money-laundering-operation-and

Any modest contributions for my time and ongoing expenses are welcomed!  I have a page, where contributions start as low as $3, at https://www.buymeacoffee.com/KoIvM842y

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OFAC: NON-SDN CHINESE MILITARY-INDUSTRIAL COMPLEX COMPANIES (NS-CMIC) LIST UPDATES

On 16 June, OFAC advised of changes made to the entries relating to AVIATION INDUSTRY CORPORATION OF CHINA LTD (aka AVIC) and CNOOC LIMITED.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20210616

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OTHER THINGS YOU MAY HAVE MISSED – JUNE 15

Panama Covid-19 update – the pandemic rumbles on, with numbers in ICU and other wards showing jumps – 9 more in ICU and 20 more in other wards. 848 new cases were reported, giving us 9,651 active cases, and 1 more fatality.

Any modest contributions for my time and ongoing expenses are welcomed!  I have a page, where contributions start as low as $3, at https://www.buymeacoffee.com/KoIvM842y

15 JUNE 2021

TRIAL OF SCIENTIST ACCUSED OF HIDING CHINA WORK

On 14 July, the Wall Street Journal reported that the case highlights federal law enforcement’s difficulties relying on universities to police cross-border research.  Aformer University of Tennessee scientist, Anming Hu, 52, is a China-born naturalised Canadian, and is accused of concealing his work in China.  The defendant specialises in nanotechnology and is charged with wire fraud and lying to the government about his work in China when he sought and received 2 grants from NASA.

https://www.wsj.com/articles/trial-of-scientist-accused-of-hiding-china-work-goes-to-jury-11623696796

PHILIPPINES: REGULATOR FREEZES BANK ACCOUNTS OF RED-FLAGGED FARMERS’ GROUP

On 15 June, the Inquirer reported that the Anti-Money Laundering Council (AMLC) has frozen the bank accounts of another organisation allegedly linked to communist rebels, saying that Amihan, an organisation of peasant women, was a “terrorist fronts”.  The report also says that freezing orders were imposed on the bank accounts of the Catholic Church-based Rural Missionaries of the Philippines in 2019, also for alleged funding of terrorist activities, and earlier this year, the bank accounts of United Church of Christs in the Philippines-Haran Center in Davao City also were frozen.

https://newsinfo.inquirer.net/1445038/amlc-freezes-bank-accounts-of-red-tagged-farmers-group

BETTING OPERATORS WON £1.3 MILLION IN STOLEN MONEY FROM GAMBLING ADDICT

On 14 June, the Guardian reported that betting companies won £1.3 million in stolen money from a gambling addict without establishing where the funds came from, it has emerged, reigniting concern about whether operators do sufficient due diligence on punters who lose large sums.  The punter has admitted siphoning funds from the clothing company where he was a senior manager earning more than £50,000 a year.  He had placed thousands of bets, some with stakes of more than £50,000, with companies including Betfair, Betway, and BoyleSports; and ompanies gave him incentives such as free bets and tickets to race meets, football and rugby matches, but did little to check he could afford his habit, or find out where the money came from, until he had racked up huge losses.

https://www.theguardian.com/society/2021/jun/14/betting-firms-won-13m-in-stolen-money-from-gambling-addict

BANKS IN SOUTH KOREA MUST TREAT CRYPTO EXCHANGES AS HIGH-RISK CLIENTS

On 13 June, the Korea Times reported that banks will be required to impose strengthened financial transaction monitoring and user ID verification, according to the FSC.  Currently, operators can set up exchanges without major regulatory hurdles including user ID verification responsibilities and real name-based exchange accounts.

https://www.koreatimes.co.kr/www/biz/2021/06/367_310406.html

TURKEY: FINANCIAL CRIMES GUIDE FOR CRYPTO ASSET SERVICE PROVIDERS

On 10 June, Cetinkaya produced a translation into English of the Turkish Financial Crimes Investigation Board (MASAK) guide for Crypto Asset Service Providers, which aims to prevent money laundering and the financing of terrorism through crypto asset transactions. 

https://www.cetinkaya.com/insights/masak-financial-crimes-guide-crypto-asset-service-providers

The translation is at –

https://panel.cetinkaya.com/dcdc07d0-3637-461c-b59a-c68460d5bb20_Masak%20Guide%20Translation%20PDF.pdf

https://www.statista.com/chart/25056/waste-items-polluting-oceans

GDPR: EU COURT SPECIFIES THE CONDITIONS FOR THE EXERCISE OF THE NATIONAL SUPERVISORY AUTHORITIES’ POWERS WITH RESPECT TO THE CROSS-BORDER PROCESSING OF DATA

On 15 June, a news release from the Court of Justice of the European Union says that, under certain conditions, a national supervisory authority may exercise its power to bring any alleged infringement of the GDPR before a court of a Member State, even though that authority is not the lead supervisory authority with regard to that processing.  The decision applies to a 2015 case involving the Belgian authorities and Facebook Ireland, Facebook Inc and Facebook Belgium.

https://curia.europa.eu/jcms/upload/docs/application/pdf/2021-06/cp210103en.pdf

EU AND US TAKE DECISIVE STEPS TO END AIRLINER SUBSIDY DISPUTE

On 15 June, an EU news release advised that the European Commission and the US Trade Representative have reached an understanding relating to large civil aircraft, transforming almost 17 years of disputes into a forward-looking, collaborative platform to address bilateral issues as well as global challenges.

https://ec.europa.eu/commission/presscorner/detail/en/IP_21_3001

SOUTH AFRICA: 40% OF ILLEGALLY ACQUIRED CUBAN COVID-19 DRUG REPORTEDLY UNUSABLE

On 15 June, Defence Web reported on the apparent illegal acquisition of an unregistered Cuban drug to treat COVID-19 by the Defence Force.  The Auditor General has said that “at least 40% of the (Cuban) medicine was handled outside the prescribed temperature range” and this made it unusable, meaning that it has to be destroyed.

https://www.defenceweb.co.za/featured/forty-percent-of-illegally-acquired-cuban-covid-19-drug-reportedly-unusable/

WILDLIFE TRAFFICKING: A NEW FRONTIER FOR ORGANISED FINANCIAL CRIME

On 15 June, Global Trade Review carried an article saying that pressure is growing on financial institutions to toughen their approach to environmental crime, with G7 leaders vowing to crack down on the illicit fund flows supporting wildlife trafficking and campaign groups warning that the activity has morphed from a conservation issue to a financial crime concern.  The problem has grown much more severe in recent years, with Traffic – a campaign group tackling wildlife crime – saying that the illegal wildlife trade is now believed to be the fourth-largest illicit transnational activity in the world.

https://www.gtreview.com/news/global/wildlife-trafficking-a-new-frontier-for-organised-financial-crime/

PANDEMIC HAS FUELLED SENSE OF CORRUPTION AMONG EU CITIZENS

On 15 June, the Brussels Times and others reported that a survey has found that the coronavirus crisis has fuelled a sense of corruption among citizens in the EU, and in Belgium, 27% of people believe corruption increased in the previous 12 months.  Less than half of the people believed the crisis has been handled “transparently” by the authorities.  In some countries, people said they believed politicians used the crisis as an excuse to undermine democracy, while others said they would see it as a chance to make a profit.

https://www.brusselstimes.com/news/belgium-all-news/173916/pandemic-coronavirus-crisis-corruption-bribery-survey-transparency-international-european-union-citizens/

https://www.euronews.com/2021/06/15/majority-of-europeans-believe-corruption-in-an-issue-in-their-country-report-finds

BULGARIANS ARE HOPING THAT THE EU’S NEW CHIEF PROSECUTOR WILL HELP THEM FIGHT CORRUPTION

On 15 June, Emerging Europe reported that a visit to the country by the EU chief prosecutor, Laura Codruța Kövesi, has been viewed by many anti-corruption campaigners as a signal that the EU is about to finally get tough on what is often portrayed as the most corrupt country in the EU.  She is said to have highlighted the role of the European Public Prosecutor’s Office (EPPO) which officially began operations on 1 June. 

https://emerging-europe.com/news/bulgarians-look-to-romanias-kovesi-to-fight-high-level-corruption

BULGARIAN FINANCE MINISTRY PUBLISHES EXTENSIVE LIST OF US SANCTIONS’ POSSIBLE TARGETS

On 15 June, Novinite reported that the ministry had published a list of the persons who fall, or could potentially fall, within the scope of sanctions imposed by OFAC. The list includes 21 natural persons, among them Irena Krasteva, mother of controversial businessman and former MP, Delyan Peevski, and the brothers Stefan and Tsvetomir Naidenov, former partners of fugitive businessman Vassil Bozhkov.  The list said to be available on the Finance Ministry website.

https://www.novinite.com/articles/210052/Bulgarian+Finance+Ministry+Publishes+Extensive+List+of+US+Sanctions’+Possible+Targets

IRELAND: OVER 1,300 TONNES OF COUNTERFEIT PESTICIDES SEIZED IN EU IN 2020

On 15 June, the Irish Examiner reported that nearly 14% of all pesticides sold in the EU are counterfeit, according to OLAF.  Such products are regarded as “posing a major risk to public health and the environment if they ever reach the open market”.  Operation Silver Axe targeting counterfeits is now in its fifth year, and during that time has seized 2,568 tons of illegal pesticides.

https://www.irishexaminer.com/farming/arid-40314116.html

GLOBAL MEAT SUPPLIER JBS SAID IT PAID $11 MILLION IN BITCOIN IN RESPONSE TO THE CYBERATTACK WHICH SHUT DOWN THE COMPANY’S NORTH AMERICAN AND AUSTRALIAN SYSTEMS

On 14 June, OCCRP reported that the company, which is the world’s largest meat supplier, had paused operations in its North America and Australia plants briefly before returning to full production on 3 June.  The hacking software REvil, also called Sodinokibi, is a ransomware cyber-operation believed to be based in Russia. 

https://www.occrp.org/en/daily/14625-jbs-paid-11-million-ransom-to-russian-hackers

MARKETPLACE FOR STOLEN ONLINE CREDENTIALS SHUT DOWN

On 14 June, OCCRP reported that authorities from 4 countries shut down an online marketplace called Slilpp Marketplace has been active since 2012, and where vendors sold more than 80 million stolen login credentials to buyers, who frequently used them to make unauthorized transactions, including wire transfers.

https://www.occrp.org/en/daily/14624-marketplace-for-stolen-online-credentials-shut-down

US: IMPORT RESTRICTIONS ON SYNTHESISED CANNABINOIDS

On 15 June, Sandler Travis Rosenberg reported that the DEA has issued a final rule that places certain synthetic cannabinoids, in Schedule I of the Controlled Substances Act.

https://www.strtrade.com/trade-news-resources/str-trade-report/trade-report/june/import-export-restrictions-finalized-on-synthetic-cannabinoids

UAE CUSTOMS SEIZED 923,724 COUNTERFEIT GOODS IN 2020

On 15 June, Gulf Business reported that 70.73% were intercepted from sea routes, 19.51% through air transport and 4.88% via land routes.

https://gulfbusiness.com/uae-customs-seized-923724-counterfeit-goods-in-2020/

EU: €22 IMPORT EXEMPTION THRESHOLD SCRAPPED FROM THE BEGINNING OF JULY

On 14 June, Market Screener reported that the covid pandemic has accelerated the already dynamic increase in online shopping further still.  Up until now no import duty has been levied on packages with a value of under €22 – but this has resulted in evasion attempts on an unprecedented scale, as senders deliberately understate the value of the goods. 

https://www.marketscreener.com/news/latest/EU-customs-regulations-22-euro-exemption-threshold-scrapped-from-the-beginning-of-July–35601204/

SOUTH AFRICA: NEWLY ENACTED CYBERCRIMES ACT

On 15 June, an article from Eversheds Sutherland looks at what the new Act means for South Africans.  It says that the Act not only creates offences but also codifies and imposes penalties on cybercrimes and defines cybercrime as including, but not limited to, acts such as: the unlawful access to a computer or device such as a USB drive or an external hard drive; the illegal interception of data; the unlawful acquisition, possession, receipt or use of a password; and forgery, fraud, and extortion online.  It criminalises the disclosure of data messages which are harmful and the disclosure of data messages that contain intimate images and seeks to implement an integrated cybersecurity legislative framework. 

https://www.eversheds-sutherland.com/global/en/what/articles/index.page?ArticleID=en/global/South-africa/The-newly-enacted-cybercrimes-act-and-what-it-means-for-South-Africans

UK: COSTS ORDER AGAINST A THIRD-PARTY LITIGATION FUNDER WHICH EXERCISED A “MASSIVE” DEGREE OF CONTROL OVER THE CASE IT WAS FUNDING

On 15 June, an article from Out-Law reported that the decision of the High Court showed that businesses which fund litigation to which they are not a party are potentially exposed to adverse costs orders, and that the costs which they may be ordered to pay to the other side in the litigation may exceed the level of their investment in funding the proceedings.

https://www.pinsentmasons.com/out-law/news/significant-control-proceedings-costs-risk-litigation-funders

UYGHUR BILLIONAIRE JAILED FOR 20 YEARS OVER CHARITABLE DONATIONS

On 14 June, RFA reported that Iminjan Rahmitulla had built major shopping bazaars and opened markets in Central Asia, but he now is one of 4 ethnic Uyghur billionaires tried and sentenced in China.

https://www.rfa.org/english/news/uyghur/iminjan-rahmitulla-06142021191341.html

GAMBLING EXEC DETAINED IN LITHUANIA AS PART OF CORRUPTION PROBE

On 11 June, LRT reported that Samoilas Kacas, owner of casino chain Tete-A-Tete and one of the executives of the National Gambling and Gaming Business Association, has been detained as part of an ongoing corruption probe.  Kacas was detained as part of an ongoing investigation into an alleged attempt to bribe MP Matas Maldeikis with €50,000 by Kestutis Motiečius, an assistant to MP Mindaugas Puidokas, in connection with an initiative to suspend or postpone indefinitely the adoption of amendments to the Law on Lottery and Gaming Tax.

https://www.lrt.lt/en/news-in-english/19/1429823/gambling-exec-detained-in-lithuania-as-part-of-corruption-probe

UK: NUMBER OF BUSINESSES STRUCK OFF COMPANIES HOUSE UP BY 743%

On 14 June, City AM reported that number of companies closing down after being struck off the Companies House register increased by 743% during the first quarter of 2021 compared to the same period in 2020.  They increased to 39,601 in the first 3 months of 2021 compared to just 4,695 in the same period in 2020. 

https://www.cityam.com/covid-loan-fraud-fears-as-number-of-businesses-struck-off-companies-house-up-by-743-per-cent/

IRAQ ARRESTS 2 GENERALS ON SUSPICION OF BRIBERY AT KEY PORT

On 12 June, France 24 reported that 2 generals had been arrested on suspicion of taking bribes to waive customs duties, a practice estimated to cost the state $6.3 billion a year in lost revenues.  Both men worked at the Gulf port of Umm Qasr, a key entry point for imports of foodstuffs and medicines and which is reputed to be the most corrupt in Iraq.  In Umm Qasr, it is mainly pro-Iranian armed groups who dominate through their nominees in the customs department and the security forces, officials say.

https://www.france24.com/en/live-news/20210612-iraq-arrests-two-generals-on-suspicion-of-bribery-at-key-port

NCA SARs IN ACTION

The NCA in the UK has published the latest edition of this newsletter.  It includes articles on how SAR are used to tackle intellectual property crime and the work that Trading Standards does to combat the fraudulent sale of counterfeit goods and pirated content, and on the revised CPA money laundering offences guidance. 

https://www.nationalcrimeagency.gov.uk/who-we-are/publications/534-sars-in-action-issue-5-june-2021/file

IRS TARGETING ILLICIT BITCOIN TRADING ON TELEGRAM

On 14 June, Decrypt reported that the IRS says over-the-counter chats on Telegram might be the preferred way for some criminals to move around dirty funds. 

https://decrypt.co/73599/irs-bitcoin-trading-crypto-telegram-money-laundering

USE BY MYANMAR’S SECURITY FORCES OF A DIGITAL FORENSIC TOOL FROM A SWEDISH COMPANY

On 14 June, an article in The Intercept says that Europe is developing phone-cracking technology with a company that has exported to authoritarian regimes.  It considers one of the products currently in the possession of Myanmar’s security forces – a digital forensic tool from the Swedish company MSAB. MSAB’s technology is able to break mobile phone encryption and extract call, contact, GPS, and other records, as well as messages sent and received via SMS, WhatsApp, Signal, and other apps. MSAB’s products can also extract passwords and login tokens from mobile devices, allowing authorities to remotely enter someone’s online services, including Google, Facebook, cloud storage, and others.  MSAB confirmed that it sold its forensic tools to Myanmar police in 2019, 2 years after security forces targeted the Rohingya in what the UN said could amount to crimes against humanity.  The article points out that EU research money has developed technology that feeds into the same products that MSAB sold to Myanmar in 2019.  MSAB is one of several European companies on the receiving end of public EU funding whose products appear in the leaked budget documents from Myanmar.  The article says that critics say that the EU should be doing more to regulate what new technology is created and where it can be exported, and to make those transactions transparent.

https://theintercept.com/2021/06/14/myanmar-msab-eu-technology-regulation/

AS RANSOMWARE DEMANDS BOOM, INSURANCE COMPANIES KEEP PAYING OUT

On 12 June, Wired reported that, in May, AXA announced that it would stop covering ransom payments under its cyberinsurance policies in France and, around the same time, the Swiss Re CEO said that “overall the problem [of cybersecurity] is so big it’s not insurable”.  However, it is said that anyone hoping that insurance companies might be the ones to break the cycle of million-dollar ransom payments will likely end up disappointed.  It is claimed that paying a ransom claim is often more appealing to insurers than having to cover all of the costs associated with restoring compromised systems and any resulting downtime or lost business their policyholders suffer.  It is said that those in the insurance industry are sceptical that a ban on ransom payments would necessarily drive down the prevalence of ransomware – fearing that, instead, a ban could potentially mean that insurers would have to pay out more claims for business interruption and data restoration services.

https://www.wired.com/story/ransomware-insurance-payments/

G7 ANNOUNCES JOINT ACTIONS ON FORCED LABOUR IN GLOBAL SUPPLY CHAINS

On 14 June, Crowell Moring reported that the G7 leaders had announced their joint actions to support and strengthen free and fair trade. The joint actions emphasised efforts to combat forced labour in global supply chains as well as other initiatives to review trade policies to further women’s economic empowerment, increase sustainability by aligning trade practices with the Paris agreement, and modernise the WTO.  The G7 included the removal of forced labour from global supply chains as a major concern in their communiqué.

https://www.cmtradelaw.com/2021/06/g7-announces-joint-actions-on-forced-labor-in-global-supply-chains

https://www.whitehouse.gov/briefing-room/statements-releases/2021/06/13/carbis-bay-g7-summit-communique/

https://www.visualcapitalist.com/mapping-the-worlds-key-maritime-choke-points/

https://www.visualcapitalist.com/the-biggest-business-risks-around-the-world/

CONFLICT MINERALS FAQ

On 15 June, Field Fisher published these FAQ, as importers adjust to the enhanced due diligence requirements of the EU’s Conflict Minerals Regulation that came into force on 1 January, the firm has collected some common queries from downstream supply chain companies to help one understand and comply with the new legislation.

https://www.fieldfisher.com/en/insights/conflict-minerals-faqs

BIDEN: THE FIGHT AGAINST FOREIGN AND TRANSNATIONAL CORRUPTION IS A NATIONAL SECURITY INTEREST

On 15 June, a post from the Compliance & Enforcement blog from the Program on Corporate Compliance & Enforcement at the New York University School of Law is concerned with the National Security Memorandum issued on 3 June and establishing the fight against corruption both at home and abroad as a core US national security interest and directing the development of a 200-day interagency review.  It provides an overview of the memorandum, context and takeaways.

https://wp.nyu.edu/compliance_enforcement/2021/06/15/biden-the-fight-against-foreign-and-transnational-corruption-is-a-national-security-interest/

IRISH TAX DEFAULTERS LIST: MOTOR DEALER HIT WITH €11.7 MILLION BILL

On 15 June, the Irish Independent reported that a motor dealer from Co Offaly has been hit with an €11.7 million settlement with the Revenue Commissioners linked to the non-declaration of income tax and VAT.  It features on the latest tax defaulters’ list from the Revenue Commissioners and it was the largest settlement made during the first quarter of this year.

https://www.independent.ie/business/irish/tax-defaulters-list-motor-dealer-hit-with-117m-bill-from-revenue-40543716.html

LORD ADVOCATE TO CHALLENGE EX-RANGERS CEO CHARLES GREEN’S £20 MILLION CLAIM FOR WRONGFUL PROSECUTION

On 15 June, The Herald reported that the former Rangers FC chief executive faces a challenge from the Lord Advocate over his claim of £20 million for being wrongfully prosecuted in the club fraud case.  The former finance chief CEO are engaged in a court battle with the Lord Advocate and the Chief Constable over how much they will receive in connection with the wrongful arrests.

https://www.heraldscotland.com/news/19374342.lord-advocate-challenge-ex-rangers-ceo-charles-greens-20m-claim-wrongful-prosecution/

INDIA DROPS CASE AGAINST ITALIAN MARINES ENGAGED IN ANTI-PIRACY MISSION WHO KILLED FISHERMEN

On 15 June, the Guardian reported that the Indian Supreme Court has dismissed the long-running proceedings against 2 Italian marines who shot dead 2 fishermen off Kerala in 2012, but said the soldiers should now be tried in their own country.  The Italians shot the fishermen in international waters while protecting an Italian oil tanker as part of an anti-piracy mission.

https://www.theguardian.com/world/2021/jun/15/india-drops-case-against-italian-marines-who-killed-fishermen

SOUTH KOREAN REGULATOR DELAYS CRYPTO AML RULES UNTIL THE END OF THE YEAR

On 15 June, Finance Magnates reported that the Financial Services Commission (FSC) has decided to extend the deadline for implementing the AML protocols in cryptocurrency exchanges until the end of 2021.  Originally, crypto trading platforms were given until early July under the legislation enacted in March. 

https://www.financemagnates.com/cryptocurrency/regulation/south-korean-regulator-extends-aml-rules-adoption-until-the-end-of-the-year

ROMANIAN PROSECUTORS PROBING MASSIVE BRIBERY IN EU-FUNDED RAILWAY CONTRACT

On 15 June, Universul in Romania reported that Romanian prosecutors are investigating suspicions of bribery in an EU-financed railway contract involving the modernisation of a 128 km stretch of railway.  The EU has allocated €1.1 billion for the rehabilitation of the line which connects Brașov to Sighișoara in the north-west Transylvania region.  Romania contributed €140 million to the project from the state budget.

https://universul.net/romanian-prosecutors-probing-massive-bribery-in-eu-funded-railway-contract-report/

SEC INSIDER TRADING CHARGES AGAINST A 6-PERSON SILICON VALLEY TRADING RING WHOSE MEMBERS

On 15 June, a release on Mondo Visione reported that the SEC had announced insider trading charges against a trading ring whose members generated nearly $1.7 million in illegal profits and losses avoided by trading on the confidential earnings information of 2 local technology companies.  

https://mondovisione.com/media-and-resources/news/sec-six-charged-in-silicon-valley-insider-trading-ring/

Meanwhile –

A FORMER TEXAS ENERGY BROKER PLEADED GUILTY TO CONSPIRACY TO COMMIT COMMODITIES FRAUD AND WIRE FRAUD AS WELL AS INSIDER TRADING AND KICKBACKS 

Another release on Mondo Visione on 15 June reported that Mathew Webb, 51, has admitted he conspired with others to misappropriate material, non-public information and to use that information to engage in fraudulent, pre-arranged trades in natural gas futures contracts. He shared the net profit from these fraudulent trades with others involved in the fraudulent trading scheme.

https://mondovisione.com/media-and-resources/news/us-department-of-justice-former-energy-broker-pleads-guilty-to-insider-trading/

MONACO: MONEY LAUNDERER ESCAPES WITH €150,000 FINE

On 15 June, News MC reported that an Italian described as a restaurateur has been found guilty of money laundering over a period of several years.  A court heard that the man in his fifties had hidden more than a million euros from the Italian tax authorities by moving modest amounts on a regular basis into Monaco bank accounts.

https://news.mc/2021/06/15/money-launderer-escapes-with-150000-euros-fine/

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FATF: CONSOLIDATED AML/CFT ASSESSMENTS SCHEDULE

On 15 June, FATF published an updated version of the consolidated AML/CFT schedule of all ratings, following published of the follow-up report on Mexico.

https://www.fatf-gafi.org/media/fatf/documents/4th-Round-Ratings.pdf

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FATF: MEXICO THIRD ENHANCED FOLLOW-UP REPORT

On 15 June, FATF published the 3rd enhanced follow-up report following the mutual evaluation review of Mexico’s AML/CFT framework in 2018. 

Mexico has been in an enhanced follow-up process since 2018 and has been uprated for a number of FATF Recommendations: 8 – Non-profit organisations, from partially compliant to largely compliant; 10 – CDD, from partially compliant to largely compliant; 12 – PEP, from partially compliant to compliant; 16 – Wire transfers, from partially compliant to compliant;
17 – Reliance on third parties, from partially compliant to compliant. 

The report also looks at whether Mexico’s measures meet the requirements of FATF Recommendations 2, 7, 15, 18 and 21, which changed since their mutual evaluation and FATF has agreed to upgrade the rating of Recommendation 15 (New technologies), to largely compliant. 

Therefore, Mexico is compliant on 8 of the 40 FATF Recommendations and largely compliant on 22.  It remains partially compliant on 9 Recommendations, and non-compliant on 1 Recommendation.  Mexico will continue to report back to the FATF on its progress.

https://www.fatf-gafi.org/media/fatf/content/images/FUR-Mexico-2021.pdf

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AML RISKS OF VIRTUAL ASSETS? (PART I)

On 15 June, a post on Lexblog sets out to explore the AML risks associated with virtual assets and provides a glance at the current international regulatory and legal framework governing the virtual asset industry.

https://www.lexblog.com/2021/06/15/into-the-web-aml-risks-of-virtual-assets-part-i/

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LEGAL ADVICE PRIVILEGE (LAP) AND INTERNAL INVESTIGATIONS

On 14 June, a briefing from Eversheds Sutherland says that a recent High Court case highlights the issue of legal privilege in the context of investigations.  It says that there is a growing trend for financial institutions to commission external law firms to conduct internal investigations into complex issues.  Maintaining privilege over documents produced during the course of an investigation is imperative to avoid disclosure of potentially damaging investigatory materials.  It explains that to establish LAP, the communication must be between lawyer and client and for the dominant purpose of seeking and receiving legal advice in a relevant legal context. Gathering information in order to advise on an investigation, for example, in the form of an interview note, will not be covered by LAP. Recent case law has taken a narrow view when considering what is the ‘dominant purpose’ of an investigation.  The briefing includes 6 steps one can take to protect your position.

https://www.eversheds-sutherland.com/global/en/what/articles/index.page?ArticleID=en/Financial-services-and-dispute-investigation/Legal_Advice_Privilege_and_internal_investigations

 

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PUBLIC DESIGNATION BY US OF FORMER NAMIBIAN PUBLIC OFFICIALS

On 15 June, the US State Department issued a news release announcing the public designation of former Namibian government officials Bernhardt Esau and Sakeus Shanghala, due to their involvement in significant corruption in their official capacities as Minister of Fisheries and Marine Resources (Esau) and Minister of Justice (Shanghala).  This action renders Esau and Sanghala ineligible for entry into the US.

https://www.state.gov/public-designation-of-former-namibian-public-officials-for-involvement-in-significant-corruption

 

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ASSESSING FATF IMPACT ON DIGITAL FINANCIAL INCLUSION

An Occasional Paper from RUSI on 15 June assesses the extent to which the FATF framework has impacted digital financial inclusion.  It finds that the FATF framework has several effects on digital financial inclusion and financial inclusion more generally.  It says that that the FATF framework could be used to better support financial inclusion. However, without appropriate recognition, committed action and proper incentives to do so, financial inclusion will continue to be overlooked. 

https://www.rusi.org/sites/default/files/267_op_gates_financial_inclusion.pdf

 

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MALTA: WHO IS A PEP? FIAU LISTS ALL GOVERNMENT ROLES

On 15 June, Malta Today reported that the Government has published a list of all government jobs whose authority and control on vast amounts of money and influence, qualifies them as political exposed persons (PEP).  Such PEP have to undergo a more rigorous assessment when their business relations are being process by bankers or notaries, among other professionals.

https://www.maltatoday.com.mt/business/business_news/110269/who_is_a_pep_financial_intelligence_unit_lists_all_government_roles

 

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OTHER THINGS YOU MAY HAVE MISSED – JUNE 14

Panama Covid-19 update – the voluntary vaccination programme using the AstraZeneca vaccine, involving open-door sessions without the need for appointment or registration is continuing (my wife took advantage of such a session in our district last week).

Meanwhile, active cases have exceeded 9,500 for the first time since February, at 9.533, of whom 66 are in ICU and 426 in other wards. 483 new cases have been reported today, and 6 new fatalities.

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14 JUNE 2021

GERMANY SHUTS DOOR ON PATENT TROLLS

On 11 June, the Wall Street Journal reported that Germany has removed a legislative quirk that had made it a prime destination for patent litigators who increasingly target fast-growing tech companies.  The report says that patent owners were able to obtain temporary bans from courts on the sale of products accused of patent infringement.  That and a network of fast, specialized courts, had made Germany a popular venue for legal patent claims targeting international companies such as Apple, Samsung Electronics and Google.

https://www.wsj.com/articles/germany-shuts-door-on-patent-trolls-11623397397

IRELAND: EMPLOYEES AT 3 MAJOR FINANCIAL INSTITUTIONS UNDER INVESTIGATION OVER SUSPECTED LINKS TO CRIME GANGS INVOLVED IN CYBER FRAUDS AND MONEY LAUNDERING

On 13 June, the Irish Independent reported that the 3 are unconnected, but all have third-level qualifications and are currently working as junior employees in 3 different financial institutions, say sources close to the investigation.  All 3 would have access to sensitive customer data, but garda sources say it is not known whether any confidential information was actually shared.

https://www.independent.ie/irish-news/crime/the-new-breed-of-criminals-bank-staff-probed-over-links-to-cyber-fraud-40532185.html

HONG KONG: BANKERS AND LAWYERS WIN RIGHT TO APPLY FOR ACCESS TO CORPORATE REGISTRY

On 14 June, KYC 360 reported that Hong Kong bankers and lawyers will be able to search the city’s companies registry under proposed exemptions to plans to tighten public access to the database.

https://www.riskscreen.com/kyc360/news/hk-bankers-and-lawyers-win-right-to-apply-for-access-to-corporate-registry

GERMAN TAX HAVEN LAW PASSES LOWER HOUSE

On 10 June, Deutsche Welle reported that Germany’s new Tax Haven Countermeasure Act passed by the Bundestag targets investors who sidestep an EU “blacklist” of offending territories, but sceptics say the omission of key tax havens renders it toothless.  The law is still subject to a vote in the upper house, the Bundesrat. 

https://www.dw.com/en/german-tax-haven-law-passes-lower-house/a-57850325

NEW BODY CREATED TO TACKLE FINANCIAL CRIME IN GUERNSEY

On 14 June, ITV News reported that a new body – the Economic Financial Crime Bureau (EFCB) – has been set up by in Guernsey to investigate money laundering, financial crime and to recover proceeds of unlawful conduct.  It plans to use a range of methods – including the law and intelligence – to identify criminal activity.

https://www.itv.com/news/channel/2021-06-14/new-body-created-to-tackle-financial-crime-in-guernsey

https://www.gov.gg/Economic-Financial-Crime-Bureau-launch

INDIA: HAWALA RACKET BUSTED WITH 4 FOREIGN NATIONALS AMONG 10 ARRESTED

On 12 June, The Hindu reported that officials with the Criminal Investigation Department have busted a money laundering scam linked to a hawala racket.  10 people — including 2 from China and 2 from Tibet — have been arrested. However, the kingpin and prime accused, Anas Ahmed, has yet to be arrested.  According to the police, the accused opened shell companies to route the funds and these were allegedly being managed by people from China. 

https://www.thehindu.com/news/national/karnataka/hawala-racket-busted-4-foreign-nationals-among-10-arrested/article34800175.ece

UK: EXTRADITION OF ROMANIAN BUSINESSMAN BLOCKED

On 14 June, Joshua Rozenberg, in his blog, reported that Gabriel Popoviciu, 61, a businessman, was convicted of bribery and abuse of power in his native Romania in 2016.  In 2017, he was arrested in England and a district judge ordered his return to Romania.  Now the Court of Appeal has blocked his extradition because of what it found to have been an unfair trial in Romania.

https://www.romania-insider.com/index.php/uk-court-rejects-puiu-popoviciu-extradition

A PRIMER ON US SANCTIONS AND EXPORT CONTROLS – PART II

On 14 June, Braumiller Law Group PLLC published the second part of its primer which provides a simple overview of the current state- of- affairs with respect to some of the major theatres in US sanctions and export controls policy, including with respect to Iran, Cuba, China, Russia, and Venezuela.

https://www.mondaq.com/unitedstates/export-controls-trade-investment-sanctions/1078916/a-primer-on-us-sanctions-and-export-controls-part-ii

RARE EARTH METALS AT THE HEART OF CHINA’S RIVALRY WITH US, EUROPE

On 14 June, EurActiv reported that, in 2019, the US imported 80% of its rare earth minerals from China, the US Geological Survey says.  The EU gets 98% of its supply from China.  It says that amid the transition to green energy in which rare earth minerals are sure to play a role, China’s market dominance is enough to sound an alarm in western capitals.

https://www.euractiv.com/section/circular-economy/news/rare-earth-metals-at-the-heart-of-chinas-rivalry-with-us-europe/

UK RIGHT TO WORK CHECKS: EMPLOYING EU, EEA AND SWISS CITIZENS

On 14 June, the Home Office issued updated guidance for employers on checking EU, EEA and Swiss citizens’ right to work from 1 July.  First published on 10 June it now contains added information about employers not needing to retrospectively check the status of any EU, EEA, or Swiss citizens employed before 1 July.

https://www.gov.uk/guidance/right-to-work-checks-employing-eu-eea-and-swiss-citizens#history

SAUDI ARRESTS 136 EMPLOYEES ON CORRUPTION CHARGES

On 14 June, the Middle East Monitor reported that Saudi Arabia’s Oversight and Anti-Corruption Authority (Nazaha) has announced the arrest of 136 citizens and expatriates for their “alleged” involvement in corruption.  It includes employees in the ministries of defence, interior, National Guard, health, justice, municipal and rural affairs, and housing and education, and they face charges related to bribery, abuse of power, and forgery.

https://www.middleeastmonitor.com/20210614-saudi-arrests-136-employees-on-corruption-charges

THE COMPREHENSIVE AND PROGRESSIVE AGREEMENT FOR TRANS-PACIFIC PARTNERSHIP (CPTPP)

On 14 June, the House of Commons Library published a briefing paper on the CPTPP – a free trade agreement between 11 countries around the Pacific Rim. CPTPP members are Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.  On 1 February, the UK Government formally applied to join.

https://researchbriefings.files.parliament.uk/documents/CBP-9121/CBP-9121.pdf

UK: MoJ ANALYSIS CONFIRMS THAT DISPUTED JUDICIAL REVIEW DATA IS WRONG

On 14 June, the Law Society Gazette reported that government analysis has shown that disputed data used to justify restricting a particular avenue for legal challenges to government decisions may be wrong.  Nevertheless, the Ministry of Justice looks set to press ahead with its controversial reform.  A statistics regulator has taken the unusual step of criticising the use of data in the Independent Review of Administrative Law.

https://www.lawgazette.co.uk/news/moj-analysis-confirms-that-disputed-judicial-review-data-is-wrong/5108840.article

REPORT: AMIDST PANDEMIC, DRUG DEALERS MOVED ONLINE

On 13 June, OCCRP reported that, just as the legitimate business world has moved its activities online amidst the global coronavirus pandemic, so have Europe’s drug traffickers and drug dealers, according to the European Monitoring Centre for Drugs and Drug Addiction’s (EMCDDA).  It says that drug production and trafficking appears to have adapted rapidly to pandemic-related restrictions, and it says that it has seen little evidence of any major disruptions in supply.  European criminal organizations have been intensifying drug production on the continent, in part to avoid new anti-trafficking measures, according to the EMCDDA.

https://www.occrp.org/en/daily/14616-report-amidst-pandemic-drug-dealers-moved-online

MONTENEGRIN TYCOON’S LAWSUIT AGAINST MEDIA HIGHLIGHTS A TRAIL OF CONTROVERSIAL DEALS

A report from OCCRP on 11 June involved Zoran Bećirović who is suing Montenegro’s two biggest newspapers and a civil society organisation for years of reporting “baseless claims” against him in their coverage of his high-profile land deals and connections to political elites.  However, leaked bank records and other documents are said to reveal a decade-and-a-half long trail of suspicious business –– including transactions with a company and 2 banks involved in Russian money laundering operations.

https://www.occrp.org/en/investigations/montenegrin-tycoons-lawsuit-against-media-highlights-a-trail-of-controversial-deals

US: EXPORT REGULATIONS AMENDED TO REFLECT END OF UAE PARTICIPATION IN ISRAEL BOYCOTT

On 14 June, Sandler Travis Rosenberg reported that the Bureau of Industry and Security has issued a final rule that has amended the Export Administration Regulations to reflect the formal termination by the UAE of its participation in the Arab League boycott of Israel.

https://www.strtrade.com/trade-news-resources/str-trade-report/trade-report/june/export-regulations-amended-to-reflect-termination-of-uae-participation-in-israel-boycott

DISRUPTION CAUSED BY THE PARTIAL CLOSURE OF THE KEY SOUTH CHINA PORT OF YANTIAN IS SET TO EXCEED THAT OF THE SUEZ CANAL BLOCKAGE IN LATE MARCH AND APRIL

On 11 June, Lloyds Loading List reported that shipping and logistics insiders say the proportion of vessels affected is already greater than during the blockage of the Suez Canal in March and April, warning cargo owners to examine their contingency plans and that just-in-time supply chains may not work in the current environment.

https://www.lloydsloadinglist.com/freight-directory/news/Impact-of-Yantian-disruption-‘exceeds-the-Suez-incident’/79276.htm#.YMdVofKSmM8

https://theloadstar.com/ripples-from-yantian-port-delays-building-to-unprecedented-supply-chain-disruption/

IMF WORKING PAPER: SANCTIONS AND CIVIL CONFLICT

On 1 May, the IMF published this Working Paper which analyses how sanctions imposed on the contestants in civil conflict affect the welfare of these contestants and the allocation of resources to conflict.  It is shown that weak sanctions can hurt the contestant they are supposed to help, while strong sanctions augment the expected welfare of their intended beneficiaries.  Moreover, sanctions are more likely to be successful if the contestant who is subject to sanctions can expect to derive a positive income in case of compliance.  The likelihood of success rises as this income increases.  It suggests that sanctions are more likely to work when the income that the incumbent collects in case of defeat is large.  This finding helps to explain the significance of sanctions associated with the apartheid regime in South Africa and in Rhodesia under white minority government, as well as inability of sanctions to induce surrender of the incumbent Castro government in Cuba.

https://www.elibrary.imf.org/downloadpdf/journals/001/2001/066/001.2001.issue-066-en.xml

SOUTH AFRICA: CRIMINAL SYNDICATE WORKING TO DEFRAUD MTN AND ITS CUSTOMERS

On 12 June, My Broadband reported that the telecoms company MTN worked with the Directorate for Priority Crime Investigation (the Hawks) in a covert investigation to identify the criminals.  To date, the investigation has uncovered 1,914 MTN subscriber accounts compromised by the cybercriminals.  MTN believes the illegal access was gained using compromised credentials, including usernames and passwords, of some MTN employees and a limited number of MTN partners.

https://mybroadband.co.za/news/security/401453-mtn-hit-by-crime-syndicate.html

AUSTRALIA’S “OPERATION JAWLINE” INTERCEPTS 19 INDONESIAN VESSELS SUSPECTED OF IUU FISHING

On 11 June, SeafoodSource reported that Australian maritime operatives intercepted 19 Indonesian vessels in a 2-week period in May.  The vessels were all believed to be illegally fishing in Australia’s Northern waters. 

https://www.seafoodsource.com/news/environment-sustainability/australia-s-operation-jawline-intercepts-19-indonesian-vessels-illegally-fishing

ITALY INVESTIGATES BOOKING.COM FOR ‘COLOSSAL’ TAX EVASION

On 11 June, EurActiv reported that online booking platform Booking.com is suspected for alleged tax evasion worth over €153 million.  It is said that, according to the investigation which began in 2018, the company issued invoices without VAT, applying the so-called “reverse charge” mechanism even in cases where the accommodation facility was without a VAT number.  This resulted in VAT not being declared or paid in Italy.

https://www.euractiv.com/section/politics/short_news/italy-investigates-booking-com-for-colossal-tax-evasion/

BP MILLIONS ALLEGEDLY PROMISED TO OFFSHORE COMPANY RUN BY ANGOLAN TYCOON ACCUSED OF CORRUPTION

On 4 June, an article from Finance Uncovered claimed that BP paid $100 million to cancel a shipyard construction project in Angola only for a third of the money to be promised to a Panamanian company run by a powerful and allegedly corrupt Angolan official, Baptista Sumbe.  Documents are said to shine new light on the enormous influence of oil executives at the top of Angola’s state-owned oil company Sonangol, who have for decades acted as gatekeepers to Sub-Saharan Africa’s second-largest hydrocarbon reserves.  Baptista Sumbe, who was then a top executive at Sonangol, and was also president, chief executive, secretary and treasurer of a Panamanian company called Sonangol International Inc (SII), as well as being the sole signatory for at least one of its bank accounts, according to filings on the Panama corporate register.

https://www.financeuncovered.org/investigations/bp-millions-promised-to-offshore-firm-run-by-angolan-tycoon-accused-of-corruption/

3 REASONS WHY FCPA CORPORATE ENFORCEMENT HAS STALLED

On 14 June, a post on the FCPA Blog addresses the question of why there has not yet been any DoJ or SEC corporate enforcement of the FCPA under the current administration; and provides 3 possible reasons –

  • With every change of administration, there is a changing of the guard;
  • The focus of criminal and civil enforcement evolves over time; and
  • The after-effect of the hugh Goldman Sachs 1MDB settlement.

https://fcpablog.com/2021/06/14/three-reasons-why-fcpa-corporate-enforcement-has-stalled/

WHAT ARE ‘GHOST GUNS’?

https://theconversation.com/what-are-ghost-guns-a-target-of-bidens-anti-crime-effort-162327 

FRANCE SUSPENDS AID AND MILITARY SUPPORT FOR CENTRAL AFRICAN REPUBLIC

On 9 June, Defence Web reported that France has suspended aid and military cooperation in Central African Republic because of what it says is the government’s failure to stop “massive disinformation campaigns” against France that have targeted its officials.

https://www.defenceweb.co.za/joint/diplomacy-a-peace/france-suspends-aid-military-support-for-central-african-republic/ 

CHINESE ANTI-FOREIGN SANCTIONS LAW IN FORCE

On 11 June, China announced the coming into force of this new law which aims to counter foreign sanctions measures targeting China.  Countermeasures that might be used in response include banning entry into China, invalidating visas, and deportation; seizing and freezing movable, immovable and other types of property in China; and bans on conducting related transactions with Chinese domestic organisations or individuals.

https://www.npc.gov.cn/englishnpc/c23934/202106/469e4015f8df41c881d69ab86cbd4aaa.shtml

WHY STRONG ARTIFICIAL INTELLIGENCE WEAPONS SHOULD BE CONSIDERED WMD

On 8 June, an article in Homeland Security Today says that it is becoming increasingly important that we have a real conversation about strong AI before it becomes an existential issue, particularly within the context of decision making for kinetic autonomous weapons and other military systems that can result in a lethal outcome – and to fully examine the implications of strong AI, we need to understand how it differs from current AI technologies.  The article proposes that strong AI-based lethal autonomous weapons should be considered a WMD. This may be the best way to prevent the complex, unpredictable destruction that could arise from multiple strong AI systems intent on killing the enemy or unnecessarily wreaking havoc on critical infrastructure, which may have negative secondary and tertiary effects impacting countless innocent non-combatants.

https://www.hstoday.us/subject-matter-areas/infrastructure-security/perspective-why-strong-artificial-intelligence-weapons-should-be-considered-wmd/

ASSESSING THE WHITE HOUSE 100-DAY SUPPLY CHAIN REVIEW

The Center for Strategic and International Studies has produced a briefing saying that, on 8 June, the Biden administration released the findings of its 100-day review of US supply chain vulnerabilities.  The report includes wide-ranging recommendations to strengthen the resilience of supply chains in –

  • Semiconductor manufacturing and advanced packaging
  • Large capacity batteries
  • Critical minerals and materials
  • Pharmaceuticals and advanced pharmaceutical ingredients (API)

In the briefing CSIS experts discuss the findings of the supply chain review and its implications for US economic policy and national security.

https://pardot.csis.org/webmail/906722/121494797/9775dc179c1efaf4fb26772bb0aee380788820b67735ffa1c168eca40e35823f

CONSEQUENCES OF WIRECARD SCANDAL: NEW REQUIREMENTS FOR CORPORATE GOVERNANCE AND AUDIT OF GERMAN LISTED COMPANIES

On 14 June, a post from the Program on Corporate Compliance & Enforcement at the New York University School of Law is concerned with the Act on Strengthening the Financial Market Integrity (Finanzmarktintegritätsstärkungsgesetz – FISG).   It enters into effect on 1 July, with a transitional period for certain provisions.  The Act establishes new requirements for the corporate governance and the audit of listed companies as well as other public-interest entities.  The post details the new requirements.

https://wp.nyu.edu/compliance_enforcement/2021/06/14/consequences-of-wirecard-scandal-new-requirements-for-corporate-governance-and-audit-of-german-listed-companies/

UK: FINANCE ACT 2021 INCLUDING FREEPORT PROVISIONS

On 14 June, the Finance Act 2021 was published, Part 4 of which is concerned with the plans for new free zones in the UK.  It provides for regulations to designate the freeport sites, and for capital gains and stamp duty taxes allowances and relief.  Schedules 22 and 23 to the Act provide details of the taxes provisions.

https://www.legislation.gov.uk/ukpga/2021/26/pdfs/ukpga_20210026_en.pdf

IRELAND: KINAHAN CARTEL’S ‘MR NOBODY’, HIS WIFE AND MISTRESS SAID TO HAVE LAUNDERED €1.3 MILLION

On 14 June, the Irish Examiner reported that a court has been told that senior Kinahan Cartel lieutenant Declan Brady, his wife and his mistress laundered over €1.3 million in crime cash through transfers that included mortgage payments on a Spanish holiday property, a wedding and transfers to other gang members.

https://www.irishexaminer.com/news/courtandcrime/arid-40313504.html

https://carlow-nationalist.ie/2021/06/14/senior-kinahan-cartel-figure-his-wife-and-his-mistress-laundered-about-e1-3m-in-crime-cash

US DESIGNATES FORMER ALBANIAN POLITICIAN FOR CORRUPTION

On 14 June, VoA reported that the US State Department had designated Sali Berisha, who served as the second President of Albania from 1992 to 1997, as the country’s Prime Minister from 2005 to 2013, and over the past 30 years, as a member of Albania’s Parliament.

https://editorials.voa.gov/a/u-s-designates-former-albanian-politician-for-corruption/5928111.html

COSTA RICA MOVES ON MASSIVE PUBLIC CORRUPTION INVESTIGATION

On 14 June, AP reported that Costa Rican authorities had executed dozens of searches and arrests as part of a sprawling public corruption investigation centred on the awarding of road construction and maintenance contracts.  The investigation was described as one of the most impactful public corruption investigations ever.  It is said that bribes ranging from vehicles to properties, cash and personal favours, a group of private companies ensured that public officials helped them win and pad government contracts.

https://apnews.com/article/caribbean-costa-rica-business-0da8240b936cc5fc0222de3c1c3353ba

UK TO HIRE SECRET SCIENTISTS TO HELP COUNTER OVERSEAS THREATS AND CYBER CRIME

On 14 June, the Belfast Telegraph reported that the UK is hiring more top secret scientists as part of its efforts to counter threats from China and Russia.  Wanted are around 300 defence scientists to work for the Defence Science and Technology Laboratory (Dstl), part of the MoD.  This is said to be part of a bid to make the UK a “science and tech superpower” by 2030, with the ability to “monitor, protect and defend” the country’s interests. 

https://www.belfasttelegraph.co.uk/news/uk/uk-to-hire-secret-scientists-to-help-counter-overseas-threats-and-cyber-crime-40537486.html

THE RISE OF CYBERCRIME AND NEW ZEALAND’S FRAGMENTED RESPONSE

On 14 June, an article from Radio New Zealand, in the wake of the Waikato District Health Board ransomware attack, an article asks how one can better help and protect cybercrime victims.  It is said that the myriad agencies dealing with cybercrimes and security issues are a complex network, and the complexity means it’s difficult to tackle the problem, especially if there’s no one looking at the big picture. 

https://www.rnz.co.nz/news/in-depth/444735/the-rise-of-cybercrime-and-nz-s-fragmented-response

US: FORMER UNIVERSITY FINANCIAL ADVISOR FACING FEDERAL CHARGES FOR WIRE FRAUD INVOLVING FINANCIAL AID FRAUD AT MULTIPLE UNIVERSITIES

A news release from US DoJ on 11 June advised that an affidavit alleges that Randolph Stanley, 42, of Clinton, Maryland, between 2005 and 2021, fraudulently obtained federal student aid on behalf of Student Participants, who enrolled in at least 8 universities.

https://media.defense.gov/2021/Jun/14/2002741301/-1/-1/1/210611_FORMER%20UNIVERSITY%20FINANCIAL%20ADVISOR%20FAC._.PDF

COUNTERFEITING – THE UNDERWORLD THREAT TO BEATING COVID-19

An article in The Conversation on 14 June said a recent Interpol operation revealed counterfeit networks in China and South Africa and the production of fake vaccines from simple, widely available ingredients such as saline solution and mineral water.  It is said that the fight against COVID-19 is being undermined by a booming trade in counterfeit PPE, COVID-19 testing kits, vaccines, vaccine passports and other products that are contributing to the spread of the virus.  It is also said that counterfeiters present a shifting threat, and by nature of operating digitally can be difficult to detect. There are, however, potential countermeasures for dealing with the threat they pose.  In many countries, the vaccine rollout is heavily orchestrated and regulated, meaning it should be relatively straightforward to avoid counterfeit vaccines at the point of consumption by sticking to authorised channels, providing they do not infiltrate the genuine supply chain, such as at distribution centre level. 

https://theconversation.com/counterfeiting-the-underworld-threat-to-beating-covid-19-162627

[Personal note – in Panama, at least one, perhaps 2, unauthorised vaccination centres have been discovered in recent days.  So far, it is unclear if the centres, which charged large sums for treatment, were using genuine vaccine acquired in some way, or counterfeit product]

SEC: AGGREGATE AWARD OF APPROXIMATELY $3 MILLION TO 2 WHISTLEBLOWERS

On 14 June, a release on Mondo Visione advised that the SEC had made the awards to those whose information and assistance led to a successful SEC enforcement action.  The whistleblowers separately and independently provided SEC staff with valuable information and ongoing assistance, which included participating in multiple interviews with the staff and providing helpful documents. As is usual, no details of the whistleblowers were revealed.

https://mondovisione.com/media-and-resources/news/sec-awards-approximately-3-million-to-two-whistleblowers/

GHOSN “WAS THE MASTERMIND BEHIND HIS ESCAPE FROM JAPAN IN A BOX”

In its 15 June edition, Nikkei Asia reported that Carlos Ghosn came up with the idea of smuggling himself out of Japan in a box, Tokyo prosecutors said at a hearing for 2 Americans charged with aiding his 2019 escape, arguing that the former Nissan Motor chairman was actively planning for months to leave the country in violation of his bail conditions.  The box was used to slip past the authorities at Kansai International Airport, Tokyo.  Prosecutors say Ghosn was actively involved in planning his elaborate escape for at least 6 months before he left, a clear violation of his bail terms for financial misconduct charges.

https://asia.nikkei.com/Spotlight/Society/Ghosn-was-mastermind-behind-his-escape-in-box-prosecutors-say

 

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RUSSIAN BILLIONAIRE OLEG DERIPASKA LOSES COURT CASE AGAINST US TREASURY TO LIFT SANCTIONS

On 14 June, UA Wire in Ukraine reported that a US court has decided to reject billionaire Oleg Deripaska’s lawsuit against the US Treasury to lift personal sanctions imposed in 2018.  Deripaska, formerly Russia’s richest person, will remain on the OFAC blacklist.  The businessman had claimed that his rights guaranteed by the Fifth Amendment to the US Constitution, which prohibits being tried twice for the same crime and seizing property without fair reparation, were violated.  The US Treasury cited examples showing his apparent connection to the Russian regime.

https://uawire.org/russian-billionaire-deripaska-loses-court-case-against-u-s-treasury-department-to-lift-sanctions

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LATIN AMERICAN NATIONS’ CAPACITY TO FIGHT CORRUPTION WEAKENED IN 2020

On 14 June, the Rio Times reported that an annual survey of 15 Latin American countries, compiled by the Americas Society/Council of the Americas and Control Risks, found a decline in the efficiency and independence of anti-corruption agencies in almost all of those countries.

https://riotimesonline.com/brazil-news/brazil/latin-american-nations-capacity-to-fight-corruption-weakened-report/

The report is at –

https://www.as-coa.org/events/2021-capacity-combat-corruption-index-launch

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INTERNATIONAL GUIDE TO COMPANY INSOLVENCY

Eversheds Sutherland has published a leaflet purpose of which is to provide a quick reference guide to company insolvency laws and procedures in a range of jurisdictions.  It summarises the law relating to corporate insolvency and restructuring on a country-by-country basis and answers some of the questions most likely to be asked by distressed companies or their creditors.  It only considers the rules that apply to general company insolvency and does not address the insolvency procedures that apply to individuals or special insolvency regimes (for example, those applicable to credit institutions, investment banks or insurers).

https://www.eversheds-sutherland.com/documents/services/financial/insolvency-guide.pdf

 

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NEW BODY CREATED TO TACKLE FINANCIAL CRIME IN GUERNSEY

On 14 June, ITV News reported that a new body – the Economic Financial Crime Bureau (EFCB) – has been set up by in Guernsey to investigate money laundering, financial crime and to recover proceeds of unlawful conduct.  It plans to use a range of methods – including the law and intelligence – to identify criminal activity.

https://www.itv.com/news/channel/2021-06-14/new-body-created-to-tackle-financial-crime-in-guernsey

https://www.gov.gg/Economic-Financial-Crime-Bureau-launch

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RUSSIA’S SANCTIONS SOFT UNDERBELLY: PRECISION MACHINE TOOLS

On 13 June, an article in BNE Intellinews says that there is one place that Russia is truly vulnerable.  It imports almost all of its precision machine tools and the majority of them come from Western Europe and the US, as its own once legendary machine tool sector was destroyed in 1991 and never rebuilt.  Russia is planning to revive the sector.

https://www.intellinews.com/long-read-russia-s-sanctions-soft-underbelly-precision-machine-tools-213024/

 

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OTHER THINGS YOU MAY HAVE MISSED – JUNE 13

Panama Covid-19 update – active case numbers continue to rise, although fatalities and hospitalisations have not leapt by the same degree. Today, 715 new cases and 5 new fatalities were reported, with there now being 6,444 active cases. There are 63 in ICU and 416 in other wards (i.e. 7.4% of active cases).

Just to add to things, another tropical depression in the Caribbean is bringing dull skies and heavy rain – even to us on the Pacific coast…at least for a couple of days.

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13 JUNE 2021

ITALIAN MAN EXTRADITED TO MALTA OVER SMUGGLING CHARGES

On 13 June, Malta Today reported that a 55-year-old Italian man wanted by authorities on smuggling and possession charges has been extradited back to Malta following issue of a European arrest warrant by Maltese authorities.

https://www.maltatoday.com.mt/news/court_and_police/110217/italian_man_extradited_to_malta_over_smuggling_charges__#.YMX1S_KSmM8

INDIA: CHINESE MAN CONFESSES TO SMUGGLING 1,300 INDIAN SIM CARDS TO CHINA – FOR HACKING AND FINANCIAL FRAUD

On 12 June, Op India reported that the man who was wanted India, has reportedly confessed smuggling as many as 1,300 Indian SIM cards, procured using forging documents, to China in the last 2 years.  They were to hide the SIM cards in their undergarments to smuggle them out of India.  They were subsequently used by a gang to hack accounts and commit financial frauds.

https://www.opindia.com/2021/06/chinese-spy-arrested-malda-confess-smuggling-1300-indian-sim-cards-to-china/

SOUTH AFRICA WORKING GROUP RELEASES NEW POSITION PAPER CALLING FOR REGULATION OF CRYPTO ASSET PROVIDERS

On 13 June, Bitcoin.com reported that the Intergovernmental Fintech Working Group (IFWG) has a released new position paper that calls for the regulation of the country’s cryptocurrency ecosystem.  IFWG, which is a creation of the South Africa Reserve Bank (SARB), recommends “a staged approach to bring crypto-assets within the regulatory remit through the regulation of crypto asset service providers (CASP)”. 

https://www.ifwg.co.za/wp-content/uploads/IFWG_CAR_WG_Position_Paper_on_crypto_assets.pdf

https://news.bitcoin.com/south-africa-working-group-releases-new-position-paper-regulation-crypto-assets-providers/

PAPUA NEW GUINEA: HIGH PROFILE LAWYER FACES FRESH FRAUD, MONEY LAUNDERING CHARGES 

On 13 June, Asia Pacific Report reported that a prominent Australian lawyer, Greg Sheppard, 65, a principal of Young & Williams Lawyers, has been arrested by Papua New Guinean police and is facing a range of fraud charges.  Police say the charges relate to Sheppard’s alleged involvement in the transfer of funds amounting to $14.5 million in 2018.  To date he has been charged with a total of 8 offences.

https://asiapacificreport.nz/2021/06/13/high-profile-lawyer-faces-fresh-fraud-money-laundering-charges-in-png/

IS THE G7 TAX AGREEMENT A THREAT TO CYPRUS’S FOREIGN DIRECT INVESTMENT?

On 13 June, the Cyprus Mail produced an article posing this question.  It asks, and attempts to answer, what does the tax reform agreement mean for Cyprus and should Cyprus feel threated by this change if and when implemented?

https://cyprus-mail.com/2021/06/13/is-the-g7-tax-agreement-a-threat-to-cypruss-foreign-direct-investment/

8 MALAWI LAWYERS FACE BAN

On 13 June, the Nyasa Times reported that at least 8 legal practitioners face being disbarred over fraud and embezzlement allegations. 

https://www.nyasatimes.com/8-malawian-crooked-lawyers-face-ban-over-fraud

UK: SUPERVISORY NOTICE FROM FCA FOR UAB FINOLITA UNIO, AN ELECTRONIC MONEY INSTITUTION THAT WAS AUTHORISED BY THE BANK OF LITHUANIA

On 10 June, the FCA in the UK issued a Supervisory Notice imposing restrictions on UAB Finolita Unio, and following the decision of the Bank of Lithuania to suspend the licence of UAB Finolita Unio on 8 June for severe AML/CFT failings.  It also failed to inform the FCA of the investigation by the Bank of Lithuania into its AML/CFT systems and controls and to inform the FCA of the departure of its Chief Compliance and Risk Officer.  The Notice imposed restrictions including a ban on the issue any electronic money or accept any funds in consideration for the issue of electronic money, nor can it carry out any payment services.  UAB Finolita Unio had an e-money institution licence, which was issued by the Bank of Lithuania, the Lithuanian central bank and financial services regulator. It is a subsidiary of Senjo Group Pte Ltd, a Singaporean company.  It provided e-money and payment services to customers in the UK pursuant to passporting arrangements and currently provides services to customers in the UK under the Temporary Permissions Regime, which applied from 11pm on 31 December 2020, i.e. at the end of the Brexit transitional period.

https://www.fca.org.uk/publication/supervisory-notices/first-supervisory-notice-uab-finolita-unio-2021.pdf

THE DEPUTY DIRECTOR OF THE UK’S CYBER CRIME UNIT AT THE NCA WARNS ABOUT RISKS OF EXPLOITATION BY CRIME GANGS WHEN ALLOWING BITCOIN TO PURCHASE LUXURY PROPERTY AND PRIVATE JETS

On 12 June, AML Intelligence reported that the Deputy Director had said that he has significant concerns about bitcoin or other cryptocurrencies being used for large purchases such as homes and private jets and there were not usually enough safeguards for such purchases.  This was after a UK developer said he would take offers in bitcoin and ethereum for an 18,000 sq ft 5-bedroom penthouse on sale for £175 million in a development in upmarket Knightsbridge in London.  Some private jet operators have also been reporting that a growing number of their flights are paid for in bitcoin – one operator reported that 1 in 10 of its flights were paid for in bitcoin in January, representing 20% of its sales.

https://www.amlintelligence.com/2021/06/insight-top-cyber-police-chief-warns-about-risks-of-exploitation-by-crime-gangs-when-allowing-bitcoin-to-purchase-luxury-property-and-private-jets/

STANDARDS FOR RENEWABLE HYDROGEN RISK TURNING THIS SUPPOSEDLY GREEN FUEL INTO A POLLUTING ONE

On 11 June, a report from Global Witness criticised the lobbying in the EU of Hydrogen Europe, which is said to be pushing for loopholes in an EU law that would allow energy companies to use large amounts of fossil electricity to produce hydrogen, and still have it labelled as renewable.  It says that hydrogen made from fossil electricity has a huge carbon footprint – up to 130 times bigger than hydrogen made from renewable electricity.  The European Commission is currently finalising its implementing rules for the Renewable Energy Directive, which include requirements for sourcing renewable electricity and building new renewable energy installations for hydrogen production.

https://www.globalwitness.org/documents/20152/Greenwashed_Hydrogen_-_June_2021.pdf

ISRAEL: HOW WILL NEW GOVERNMENT IMPACT THE NETANYAHU TRIAL?

On 13 June, the Jerusalem Post published an analysis saying that, aslong as he was prime minister, he had a variety of potential extra-legal exits from the trial to avoid prison even if the verdict went against him. All of those exits are now gone.  It says that, if he loses the trial, he will go to jail as surely as Ehud Olmert did when he was a former prime minister.  As long as he was prime minister, he could negotiate with the president for a pardon.

https://www.jpost.com/israel-news/politics-and-diplomacy/how-will-new-govt-impact-bibi-trial-analysis-670908

KENYA: STATE INTENSIFIES WAR ON RECOVERY OF PROCEEDS OF CRIME

On 13 June, The Star reported on use of the Proceeds of Crime and Anti-Money Laundering Act, 2009 (PROCAMLA) used together with the Anti-Corruption and Economics Crimes Act (ACECA).  It says that the most visible use of this Act has been in the war on graft especially stolen public funds where it has successfully been used to recover proceeds of corruption.  Now, the Asset Recovery Agency (ARA) has successfully used it to recover money in a case involving smuggling of goods from Uganda without paying taxes.  The newspaper says that this smuggling case could have significant impact on the illicit import of goods that is costing the Kenya Revenue Authority billions in un-taxed illicit goods. 

https://www.the-star.co.ke/opinion/2021-06-13-state-intensifies-war-on-recovery-of-proceeds-of-crime/

NICARAGUA: PROSECUTOR THREATENS JOURNALISTS WITH CYBERCRIME LAW

On 13 June, Confidencial in Nicaragua reported that the Nicaraguan Prosecutor’s Office has used its “interviews” with independent journalists, cited as witnesses in the case of alleged money laundering against the Violeta Barrios de Chamorro Foundation, to question the work of the journalists, indicating they infringed the Special Cybercrime Law 2020, which it describes as known as the “Gag Law”.  An editor of La Presna is quoted as saying that he believes the type of questioning used by prosecutors during the interviews is done to “intimidate and frighten” the journalist, because “it has absolutely nothing to do with what they are investigating”.

https://www.confidencial.com.ni/english/prosecutor-threatens-journalists-with-cybercrime-law/

 

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DIRTY MONEY IN REAL ESTATE: IT’S A CANADIAN THING

On 12 June, an article from MacLeans (described as Canada’s premier current affairs magazine) says that Canada’s housing markets are rife with shadowy buyers and greasy cash, and that the scandal in British Columbia was just the beginning.  It refers to 2 reports on money laundering in the province that sought to estimate the scale of its dirty money problem, and detail how it tightened its grip on the housing market and other industries.  It is said that an expert panel has “conservatively” estimated in its report that $46.7 billion was laundered in Canada last year. The report also found that Alberta and Ontario have even higher levels of money laundering activity than British Columbia, and the chair of the panel, acknowledges the limitations of any model to put a dollar figure on a crime that by its nature lurks in the shadows, butr says that the report should be a wake-up call for other provinces, and that, “it’s clear that this is a problem facing all of Canada”.  The article asks how bad is Canada at stopping money launderers, and a member of Transparency International’s Canada working group on AML and beneficial ownership transparency says it a 99.9% failure rate – adding that the most important thing Canada can do to improve its performance is to adopt a national registry of who owns what residential property.

https://www.macleans.ca/economy/realestateeconomy/b-c-s-money-laundering-crisis-goes-national/amp/

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MALTA VETO ON SPORTS BETTING RULES STUMBLING BLOCK IN FATF REVIEW

On 13 June, Malta Today reported that Malta could have to withdraw its veto on an European sports betting convention if it is to finally get the all-clear from FATF in the coming days on its Moneyval AML/CFT review.  The Macolin Convention is a Council of Europe treaty aimed at tackling the manipulation of sport.  FATF is expected to take its first decision on 15 June.  Since 2014, Malta has contested a definition in the Convention which could affect its lucrative gambling revenues.  It has objected to the definition of “illegal sports betting”, because the provision in question will make illegal any sports betting activity in one state, if the law of the jurisdiction of the consumer of the betting service considers it to be so.  7 Council of Europe member states have ratified the Convention – just enough for it to enter into force – and 19 have signed it, and Malta’s veto also prevented the European Commission signing it on behalf of all of its EU Member States.

https://www.maltatoday.com.mt/news/national/110215/malta_veto_on_sports_betting_rules_stumbling_block_in_financial_action_task_force_review#.YMX1ufKSmM8

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THINGS YOU MAY HAVE MISSED – JUNE 12

Panama Covid-19 update – a notable victim reported today, as the Director General of the Penitentiary System has died due to Covid-19, the Government Ministry said. He was 54 years old. Also, to underline that other things continue to be present although overshadowed by Covid, a programme for school-age children in a part of the city saw vaccines given against the human papillomavirus, influenza, TDAP (tetanus, diphtheria and pertussis), MMR (measles, mumps and rubella).

No TV news report in its usual teatime slot today, as the TV showing the Panama-Curacao football match live…so much for priorities.

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12 JUNE 2021

RECAST EU DUAL USE REGULATION – A MISSED OPPORTUNITY

On 11 June, Akin Gump published an article saying that on 11 June the EU published EU Regulation 2021/821, which will enter into force on 9 September.  It notes that it omits the more substantive provisions relating to cyber surveillance and human rights, which proved controversial both with EU decision-makers and industry.  Notable changes including 2 new EU General Export Authorisations (UGEA), amended controls on cyber surveillance and technical assistance, and certain broader definitions.  However, the article says that the new Regulation can at best be viewed as a modest update that has arguably skirted around some of the biggest issues and challenges facing the control of sensitive dual use items both now and in the future. 

https://www.jdsupra.com/legalnews/the-recast-dual-use-regulation-a-missed-6356768/

US SANCTIONS FOR CAMEROON ANGLOPHONE CRISIS DESCRIBED AS ‘COSMETIC’

In its 13 June edition, the Crux reported that a Catholic bishop in Cameroon has said that the US State Department’s sanctions on those responsible for undermining the country’s peace process as merely “cosmetic”.  Anglophone protests were violently suppressed by the majority French-speaking central government, leading to a separatist insurgency intent on establishing an independent country called “Ambazonia”.  Bishop George Nkuo of Kumbo has questioned the relevance of the visa restrictions.

https://cruxnow.com/church-in-africa/2021/06/u-s-sanctions-for-cameroon-anglophone-crisis-are-cosmetic-bishop-says/

FRANCE BREAKS UP EEL SMUGGLING RING SERVING ASIA AND HEADING FOR CHINA AND THAILAND

On 12 June, The Star in Malaysia reported that French officials said they had broken up a smuggling operation that shipped millions of baby eels to Asia where they are a prized delicacy that can command up to $5,000 per kg.  The inquiry began in 2017 when customs officers seized nearly 800 kg of the silvery eels near Bordeaux destined for China, as well as 200 kg near Charles de Gaulle airport, headed for Thailand.  Investigators uncovered a network in France and Spain that exported 46 million tons of the eels — considered a threatened species since the early 2000s.

https://www.thestar.com.my/aseanplus/aseanplus-news/2021/06/12/france-breaks-up-eel-smuggling-ring-serving-asia-and-heading-for-china-and-thailand

US: 27 SMUGGLED ART OBJECTS VALUED AT $3.8 MILLION HANDED OVER TO CAMBODIA

On 11 June, the Art Newspaper reported that New York and US federal authorities have returned 27 relics to Cambodia valued at $3.8 million that were stolen by antiquities traffickers, among them important Buddhist and Hindu statues.  Most of the items were seized as a result of an investigation of Subhash Kapoor, a New York-based antiquities dealer – currently in prison in India and indicted in New York in 2019 on smuggling charges – described as one of the world’s most prolific art smugglers, and the New York antiquities dealer Nancy Wiener. Kapoor, who is currently in prison in India, was indicted in New York in 2019 on smuggling charges, and the DA office filed paperwork for his extradition to the US last July.

https://www.theartnewspaper.com/news/new-york-investigators-hand-over-27-smuggled-art-objects-valued-at-usd3-8m-to-cambodia

https://news.artnet.com/art-world/3-8m-looted-antiquities-to-cambodia-1979478

CENTRAL BANK OF THE UAE HAS ISSUED NEW GUIDANCE ON AML/CFT FOR ITS LICENSED FINANCIAL INSTITUTIONS (LFI)

On 12 June, the Emirates News Agency reported that 2 new sets of guidance covered suspicious transaction reporting and legal persons/arrangements. 

https://wam.ae/en/details/1395302942885

https://www.centralbank.ae/en/cbuae-amlcft

https://gulfnews.com/business/banking/central-bank-of-uae-issues-guidances-for-financial-institutions-on-anti-money-laundering-and-combatting-financing-of-terrorism-1.1623484253428

COMPROMISE EU DIRECTIVE ON PUBLIC COUNTRY-BY-COUNTRY REPORTING

On 11 June, an article from Irish law firm Matheson said that, on 4 June, the Council of the EU published the terms of a draft EU Directive on a new public country-by-country reporting regime.   The Directive amends the Accounting Directive 2013/34/EU, represents the compromise position agreed between negotiating teams of the European Parliament and Council on 1 June.  It will require certain multinational enterprises (whether headquartered in the EU or outside) and standalone undertakings with a total consolidated revenue of more than €750 million in each of the last 2 consecutive financial years to publicly disclose certain information in respect of its activities in each EU Member State, as well as in certain third countries.

https://www.matheson.com/insights/detail/compromise-directive-on-public-country-by-country-reporting

MEXICO AUTHORITIES ON ALERT AFTER MILLIONS OF ROUNDS OF AMMUNITION STOLEN

On 11 June, Insight Crime reported that gunmen had hijacked 2 trucks hauling more than 7 million rounds of ammunition in central Mexico, a massive heist that could escalate fighting in one of the country’s most violent areas.  While most of the ammunition was for small firearms, such as .22- and .40-calibre pistols, a significant proportion of the bullets were for high-powered weapons, including AR15 and M16 rifles.

https://insightcrime.org/news/mexico-authorities-on-alert-after-millions-of-rounds-of-ammunition-stolen/

PHILIP MORRIS HAS LAUNCHED A PUBLIC EDUCATION INITIATIVE ENTITLED UNITED TO SAFEGUARD AMERICA FROM ILLEGAL TRADE (USA-IT) TO COMBAT BLACK MARKET TRADE

On 10 June, TJI reported that the campaign will provide local officials, law enforcement, and thought leaders with information and training programs to help tackle illegal trade and raise public awareness of the depth of the problem as well as the severe consequences inflicted on states and municipalities by black market profiteers.

https://www.tobaccojournal.com/PMI_launches_campaign_to_combat_black_market_trade.56444.0.html

US EXPORT CONTROLS NEED TO BE PART OF YOUR PRE-FLIGHT CHECKLIST FOR COMMERCIAL AIRCRAFT TRANSFERS

On 3 June, an article from Clifford Chance says that the US Government has significantly tightened US export control laws and related enforcement efforts.  These measures remain in place with the current Administration and have exacerbated the pre-existing export control risks for global aviation companies and strained compliance systems.

https://www.cliffordchance.com/content/dam/cliffordchance/briefings/2021/06/US-Export-Controls-Need-to-Be-Part-of-Your-Pre-Flight-Checklist-for-Commercial-Aircraft-Transfers.pdf

COUNTERFEIT FOOTBALL SHIRTS SEIZED AHEAD OF THE START OF EURO 2020

On 11 June, Police Professional reported that tens of thousands of pounds worth of counterfeit football shirts have been seized by officers from the City of London Police’s Police Intellectual Property Crime Unit (PIPCU) just ahead of the start of the Euro 2020 football tournament.

https://www.policeprofessional.com/news/counterfeit-football-shirts-seized-ahead-of-the-start-of-euro-2020/

SWITZERLAND: RUSSIAN BUSINESSMAN SUSPECTED OF INSIDER TRADING FACING POSSIBLE EXTRADITION TO THE US

On 9 June, Swissinfo reported that Vladislav Klyushin was arrested on 21 March.  The US embassy has requested his extradition, accusing him of “running insider trading in the tens of millions (of dollars) with several accomplices”.

https://www.swissinfo.ch/eng/kremlin-linked-businessman-held-in-switzerland/46691252

AUSTRALIA: MAN ARRESTED TRYING TO BOARD FLIGHT TO DUBAI OVER $7 MILLION IN CASH FOUND UNDER FLOOR

On 11 June, ABC News reported that a man has been charged after allegedly trying to flee to Dubai, following the police seizure of $7 million found under flooring in Sydney. 

https://www.abc.net.au/news/2021-06-11/man-arrested-over-millions-in-cash-found-under-floor/100208588

NEW YORK REGULATOR WARNS CRYPTOCURRENCY FIRMS: BUILD AML PROGRAMS

On 9 June, ACAMS reported that the New York State Department of Financial Services has warned start-up firms that provide cryptocurrency-related services, including swaps of US dollars for bitcoins, to show they have the full range of AML controls in place if they want to operate in the state.

https://www.moneylaundering.com/news/new-york-imposes-aml-program-requirements-on-cryptocurrency-industry/

GETAX AUSTRALIA FACING BRIBERY CHARGE OVER DECADE-OLD DEALINGS WITH NAURU OFFICIALS

On 10 June, ABC News reported that Australian Federal Police (AFP) have charged an Australian company with bribery over its conduct on the Pacific nation of Nauru a decade ago.  The charge comes after a long-running AFP investigation into allegations Getax bribed Nauruan politicians to further its phosphate export business.

https://www.abc.net.au/news/2021-06-10/nauru-getax-australia-bribery-corruption-charges/100201344

MOLDOVA LAUNCHES NEW ANTI-CORRUPTION BODY

On 10 June, OCCRP reported that a new corruption monitoring body – the new “Anticorruption Independent Consultative Committee” – has been launched, the government arguing that the current anti-corruption institutions move “much slower than the corrupt groups which are stealing from this country”.    Moldova ranks 115th out of the 180 countries in Transparency International’s 2020 Corruption Perception Index. 

https://www.occrp.org/en/daily/14608-moldova-launches-new-anti-corruption-body-says-old-ones-are-slow

4 INCIDENTS OF PIRACY AND ARMED ROBBERY AGAINST SHIPS IN ASIA IN MAY 2021

On 12 June, Hellenic Shipping News reported that during May 2021, 4 incidents of armed robbery against ships were reported in Asia.  No piracy incident was reported. Of the 4 incidents, 3 were actual incidents³ and one was an attempted incident. 

https://www.hellenicshippingnews.com/four-incidents-of-piracy-and-armed-robbery-against-ships-in-asia-in-may-2021/

BIDEN ADMINISTRATION ISSUES 100-DAY SUPPLY CHAIN REPORT TARGETING 4 CRITICAL PRODUCTS

On 11 June, a Client Alert from King & Spalding was concerned with the Biden Administration having published 4 reports consolidated into a single 100-Day Report that also includes a summary of key takeaways for all 4 designated critical supply chains.  This will be followed by 6 additional sector-specific supply chain assessments that are due by 24 February 2022.  The Client Alert focuses on semiconductor manufacturing and advanced packaging.  It is said that the report highlights current shortcomings and potential opportunities in the domestic supply chain.  The report details a critical need for public and private investment in semiconductors and advanced packaging manufacturing.

https://www.kslaw.com/news-and-insights/biden-administration-issues-100-day-supply-chain-report

5 PRACTICES TO PREVENT AND DISRUPT ILLICIT FINANCIAL FLOWS (IFF)

On 2 June, the World Economic Forum published an article containing a framework of 5 practices to unite gatekeepers against illicit financial flows (IFF) –

  • Establish clear, concrete, and up-to-date policies;
  • Promote effective due diligence;
  • Centre a culture of integrity through training and incentives;
  • Foster a “speak-up” culture; and
  • Collaborate across industries and sectors.

The article also mentions a number of organisations that have implemented the practices.

https://www.weforum.org/agenda/2021/06/5-practices-to-prevent-and-disrupt-illicit-financial-flows

HOW ORGANISED CRIME INFILTRATES THE TRANSPORT INDUSTRY

On 9 June, the Global Initiative Against Transnational Organised Crime published a report called “Tow Truck Wars”, a policy brief which focuses on a small but especially vulnerable type of transportation business that has been prone to infiltration by organized crime groups through violence, intimidation and corruption: the vehicle-towing services industry.  It says that, in many parts of the world, the lucrative towing-services business has been targeted by organised crime and this has led to violent confrontations.  It calls for effective information exchange between administrative authorities and law enforcement agencies as a prerequisite for a coordinated response to the criminal infiltration of any segment of the transport industry; and says that a proactive and systematic approach to criminal investigation and intelligence gathering is required to mitigate the effects of the criminal exposure of various aspects of the transportation industry.

https://globalinitiative.net/wp-content/uploads/2021/06/Tow-Truck-Wars-How-organized-crime-infiltrates-the-transport-industry-GITOC.pdf

https://www.visualcapitalist.com/visualizing-earths-global-ice-loss-between-1994-2017/

GERMANY BUYS DUBAI DATA TO TRACK POSSIBLE TAX EVASION

On 12 June, the Cyprus Mail reported that Germany has bought a trove of data that could help treasury officials track down possible tax evasion by wealthy German citizens – with the purchase of a CD containing details of assets in Dubai such as tracts of land and real estate owned by German nationals.

https://cyprus-mail.com/2021/06/12/germany-buys-dubai-data-to-track-possible-tax-evasion/

THE IMPACT OF BREXIT ON EU AND UK FOREIGN AFFAIRS

On 11 June, the EU Institute for Security Studies published a paper “Fog in the Channel” saying that the UK rejection of any institutionalised relationship with the EU in foreign, security and defence policy (FSDP) is arguably the most noteworthy feature of the post-Brexit arrangements.  The UK abandoned pledges to ‘establish structured consultation and regular thematic dialogues [that] could contribute to the attainment of common objectives’, including on the Common Foreign and Security Policy (CFSP) and the Common Security and Defence Policy (CSDP).  This gap was intensified by the absence of any reference to foreign affairs in the EU-UK Trade and Cooperation Agreement (TCA) or the UK’s Integrated Review of Security, Defence, Development and Foreign Policy.  The paper offers an innovative thematic analysis focused on 4 ‘Rs’ – reputation, responsibility, resources and relevance.

https://www.iss.europa.eu/sites/default/files/EUISSFiles/Brief_13_2021_web.pdf

DRONES AND HELICOPTERS DEPLOY TO COMBAT PIRACY IN GULF OFF NIGERIA

On 10 June, Bloomberg reported that Nigeria has unveiled $195 million worth of boats, vehicles and aircraft to spearhead the government’s fight against piracy in the Gulf of Guinea and to enable security forces to patrol the waters off the country’s coast more effectively and restore confidence to vessels operating in the area. Nigeria borders on an expanse of the Atlantic Ocean that’s become the most perilous part of the world for sailors, accounting for almost all kidnappings at sea in recent years.  The Gulf of Guinea, which stretches from Senegal to Angola, accounted for 95% of the 135 seafarers kidnapped in 2020 and all 40 crew members that were abducted in the first 3 months of this year.

https://www.bloomberg.com/news/articles/2021-06-10/nigeria-deploys-drones-choppers-to-combat-rampant-sea-piracy

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OTHER THINGS YOU MAY HAVE MISSED – JUNE 11

Panama Covid-19 update – after missing the statistics yesterday, today shows a continued rise in new cases and hospitalisations. Today there were 916 new cases (841 yesterday) and 7 new fatalities (6 yesterday). There are now 8,827 active cases, with 64 in ICU (down 2 on yesterday) and 402 in other wards (5 more than yesterday).

Incidentally, my wife (despite some qualms – she reads too much social media, I think) volunteered to have the Astra Zeneca vaccination, and had her first jab today, with no side-effects…

Any modest contributions for my time and ongoing expenses are welcomed!  I have a page, where contributions start as low as $3, at https://www.buymeacoffee.com/KoIvM842y

11 JUNE 2021

LICENCE APPLICATIONS OPEN FOR ISLE OF MAN MEDICINAL CANNABIS EXPORT SECTOR

A news release on 11 June advised that licence applications are open and the accompanying guidance completed, for the production, distribution and export of medicinal cannabis products from the Island.  Regulations have created a comprehensive framework for a medicinal cannabis export sector on the Island and appointed the Gambling Supervision Commission as the regulator for the sector.

https://www.gov.im/news/2021/jun/11/licence-applications-open-for-islands-medicinal-cannabis-export-sector/

US: JUDGE DISMISSES AML CHARGES AGAINST MoneyGram

The Wall Street Journal has reported that a court order concludes a settlement agreement the company entered into in 2012 for failing to prevent mass-marketing and consumer-fraud phishing schemes.  Charges were dismissed after prosecutors said the money-transfer company had complied with the terms of a long-running settlement agreement, and they had asked the court to dismiss a court filing from 2012 that charged the Dallas-based company with aiding and abetting wire fraud and violating the Bank Secrecy Act.

https://www.wsj.com/articles/judge-dismisses-anti-money-laundering-charges-against-moneygram-11623350297

EXPANDING THE TOOLKIT TO TACKLE ORGANISED ENVIRONMENTAL CRIME

The Global Initiative against Transnational Organized Crime has published a report that sets out 4 specific action points that the G7 states could consider as critical elements of a toolkit that would tackle illicit environmental markets more efficiently and curtail the wide-ranging threat that environmental crimes pose worldwide: focus on shrinking the consumer base by tackling online markets; reconsider policy responses at the source by engaging local communities; improve targeted law enforcement within a governance and rule of law agenda; and consider sanctions as a part of the toolkit against high-level impunity.

https://globalinitiative.net/wp-content/uploads/2021/06/Expanding-the-toolkit-to-tackle-organized-environmental-crime-Recommendations-for-the-G7-ministers-GITOC.pdf

UK: AMENDMENT OF EXPORT LICENCES FOR STRATEGICALLY CONTROLLED ITEMS

On 11 June, the Department for International Trade published this Notice saying that HMRC has found that exporters are experiencing delays at UK borders with some shipments of controlled dual-use items that require strategic export authorisation. The delays relate to incorrect licence references on commercial documentation.  It provides advice, lists new Open General Export Licences (OGEL), explains where one can find the new UK Retained General Export Authorisations for the specified exports, and explains what to do if an OGEL does not allow export of your goods.

https://www.gov.uk/government/publications/notice-to-exporters-202107-licences-for-strategically-controlled-items/nte-202107-licences-for-strategically-controlled-items

ATLANTIC ENTRANCE TO PANAMA CANAL AWASH WITH COCAINE

On 10 June, Insight Crime reported that Panama’s northern province of Colón, sitting at the Atlantic entrance to the Panama Canal, is seeing a staggering increase in drug seizures.  In May alone, 22 tons of drugs were intercepted in Colón, taking seizures from January to May 2021 to almost 50 tons – in comparison, Panama seized just under 85 tons of drugs nationally in 2020, mostly cocaine.  The Caribbean route has become more popular for drug traffickers, bringing in increasing amounts from Colombia straight to Panama and onward; Panama’s own gangs are growing in sophistication and capacity with its largest criminal group (Baghdad) has evolved from a network of loosely affiliated gangs hired to move drugs through Panama into a more sophisticated unit; and due to Panama’s ability to dispatch drugs to Europe, European drug groups have moved in.

https://insightcrime.org/news/atlantic-entrance-to-panama-canal-awash-with-cocaine/

ASIA-PACIFIC DRUG TRADE THRIVING AS GANGS MAKE BILLIONS IN PROFITS

On 10 June, VoA reported that Asia’s drug lords have established new manufacturing hubs and maritime trafficking routes to ramp up the supply of methamphetamine across the Asia-Pacific, UNODC said, with the value of the drug trade in the region is estimated between $30.3 billion and $61.4 billion.  Authorities across Asia seized a record of 170 tons of meth last year, up nearly 20% from 2019.  However, as meth labs push out ever-increasing volumes of drugs, the price of the highly addictive ice has plummeted. 

https://www.voanews.com/east-asia-pacific/asia-pacific-drug-trade-thriving-gangs-make-billions-profits-un-says

HIZBOLLAH LEADER NASRALLAH DEFIES LEBANESE STATE AND SAYS HE WILL IMPORT IRANIAN OIL

On 9 June, Arab News reported that Hezbollah leader Hassan Nasrallah has insisted that Lebanon should be “negotiating with Iran to buy gasoline and diesel with the Lebanese currency if Lebanon’s shortages persist”. 

https://www.arabnews.com/node/1873691/middle-east

GUERNSEY’S COMPANIES LAW

Mourant has published an updated guide to the Companies (Guernsey) Law, 2008 as amended, which modernised Guernsey’s companies regime, and consolidated all company legislation, including relating to cell companies, financial assistance, share buybacks, amalgamations and migrations, into one place.  The Companies Law is intended to be flexible to ensure that Guernsey companies remain appealing when compared to their offshore competitors.

https://www.mourant.com/file-library/media—2021/guernsey-s-companies-law.pdf

SPAIN NOT SEEKING EXTRADITION OF SOUTH KOREANS INVOLVED IN DPRK EMBASSY BREAK-IN

On 11 June, NK News reported that Spanish authorities have not sought the extradition of any South Korean nationals involved in the 2019 raid of the North Korean Embassy in Madrid – despite ongoing efforts to extradite several US nationals involved in the case. 

https://www.nknews.org/2021/06/spain-not-seeking-extradition-of-south-koreans-involved-in-dprk-embassy-break-in/

CHIEF MATE GETS 7 YEARS IN JAIL FOR SMUGGLING $1.3 BILLION WORTH OF COCAINE ON MSC CARGO SHIP

On 11 June, Splash 247 reported that the chief mate of a container ship detained in Philadelphia in 2019 with a record haul of cocaine worth $1.3 billion aboard has been sentenced to 7 years in US prison.  He was promised $1 million to lead the smuggling effort and was responsible for recruiting some of the 7 crew members who have also been found guilty of taking part in the operation.  He was recruited in the Balkans to oversee the smuggling operation, like some of the other crewmembers 

https://splash247.com/chief-mate-gets-seven-years-in-jail-for-smuggling-1-3bn-worth-of-cocaine-on-msc-ship/

AIR INDIA FIRES CABIN CREW FOR ATTEMPED GOLD SMUGGLING

On 11 June, Simple Flying reported that an Air India crew member was fired this week for attempting to smuggle 2 gold bars from London Heathrow on 8 June.  In India, over 11,000 kg of gold has been seized at airports in the last 5 years, with smuggling having peaked in 2018-19, with over 2,900 kg seized.

https://simpleflying.com/air-india-crew-smuggling-fired-london/

INDIA’S LARGEST CRYPTOCURRENCY EXCHANGE WazirX IN A MONEY LAUNDERING WRANGLE

On 11 June, TechPluto and others reported that WazirX has been served a notice by the Enforcement Directorate (ED) on serious charges of facilitating money laundering and helping Chinese nationals in laundering money.  It is alleged that claimed that owners of Chinese betting app converted money into cryptocurrency and then transferring these cryptos to a Binance account based in the Cayman Islands. 

https://www.techpluto.com/wazirx-gets-caught-in-a-money-laundering-wrangle-ed-issues-showcase-notice/

US: 21 CHINESE NATIONALS INDICTED IN COLORADO FOLLOWING INVESTIGATION INTO LARGE MONEY LAUNDERING CONSPIRACY

On 10 June, Eminetra reported that 21 Chinese citizens in Colorado have been charged in connection with a year-long investigation into a large-scale money laundering conspiracy.  It is said that they illegally cultivated marijuana and laundered drug revenues through China’s social media apps, QR codes, and a sophisticated system of illegal money brokers.

https://eminetra.com/21-chinese-nationals-indicted-in-colorado-following-investigation-into-large-money-laundering-conspiracy-denver-colorado/590095/

US NEEDS A NEW LICENSING POLICY FOR CHINESE COMPANIES

A post on Lawfare on 11 June says that the Biden Administration grapples with how to distinguish low-risk business activities from those that threaten US national security.  It says that the Administration appears to have taken up the sugegstion that it should use a little-known Commerce Department rule to embark on a new path that would separate activity that poses a risk to US national security from activity that benefits US tech users and US strategic interests.  However, the post puts forward an additional recommendation that would serve the same overarching objective – a fair and transparent licensing regime for the Securing the Information and Communications Technology and Services Supply Chain (ICTS) Rule. 

https://www.lawfareblog.com/us-needs-new-licensing-policy-chinese-companies

GERMAN BUNDESTAG PASSES NEW LAW ON SUPPLY CHAIN ETHICS

On 11 June, Deutsche Welle reported that the law will require German companies to report human rights or environmental abuses by suppliers – but while supporters say it is a milestone, rights groups say it falls short.  The law, which seeks to stamp out abuses such as child labour will go into effect in 2023 for roughly 600 large companies with 3,000 or more employees, and in 2024 for another 3,000 companies with 1,000 or more employees. 

https://www.dw.com/en/german-bundestag-passes-new-law-on-supply-chain-ethics/a-57855174

SCHOLARS AND EXPERTS FROM BELGIUM HAVE CALLED ON THE COUNTRY’S GOVERNMENT TO REPATRIATE COLONIAL-ERA ACQUISITIONS

On 11 June, a post from Boodle Hatfield says that a panel of experts panel has urged authorities to consider their guidelines for dealing with the nation’s colonial collections, which resemble those adopted in 2019 by Germany.   A report urges Belgian authorities to create a neutral commission to evaluate restitution requests and a provenance research institute. 

https://artlawandmore.com/2021/06/11/experts-frustrated-by-belgiums-government-issue-new-restitution-report/

EU ANTI-FRAUD AGENCY CRACKED DOWN ON FAKE PANDEMIC SUPPLIES

On 11 June, EU Observer reported that OLAF has helped seized millions of counterfeit masks, testing-kits, and hand-sanitisers over the past year, as the pandemic opened up a major business opportunity for fraudsters.  A report found that EU imports of Chinese healthcare products grew by 900% in the second quarter of 2020, compared with 2019.

https://euobserver.com/coronavirus/152110

EU: NORWAY ADDED TO LIST OF THIRD COUNTRIES FOR MUTUAL ASSISTANCE IN VAT RECOVERY

EU Regulation 2021/942/EU adds Norway to the list of non-EU states with which the EU has concluded a VAT mutual assistance/mutual recovery agreement.

https://eur-lex.europa.eu/legal-content/EN/AUTO/?uri=uriserv:OJ.L_.2021.205.01.0080.01.ENG&toc=OJ:L:2021:205:TOC

MEXICO IS GOING TO GIVE AWAY THE MANSIONS OF 2 ONCE-POWERFUL DRUG KINGPINS

On 11 June, Business Insider reported that the President recently a “mega raffle” with 22 prizes valued at $12.5 million, the proceeds of which will be used for COVID-19 vaccine, and prizes include mansions that belonged to 2 of Mexico’s most well-known cartel bosses: Joaquín “El Chapo” Guzmán and Amado Carrillo Fuentes.

https://www.businessinsider.com/mexico-raffling-drug-kingpins-mansions-to-pay-for-covid-vaccines-2021-6

RECAST OF EU REGIME FOR THE CONTROL OF EXPORTS, BROKERING, TECHNICAL ASSISTANCE, TRANSIT AND TRANSFER OF DUAL-USE ITEMS

EU Regulation 2021/821/EU of 20 May is a recast of former EU Regulation 428/2009/EC.  As the 2009 Regulation has been substantially amended several times, and further amendments are to be made, it was decided that the Regulation should be recast in the interests of clarity, effectiveness and efficiency.

https://eur-lex.europa.eu/legal-content/EN/AUTO/?uri=uriserv:OJ.L_.2021.206.01.0001.01.ENG&toc=OJ:L:2021:206:TOC

UK: POST OFFICE HORIZON IT INQUIRY 2020

On 11 June, a news release from the Department for Business, Energy and Industrial Strategy involved updated information on the official inquiry into the Post Office scandal, pointing out that the inquiry is now a statutory inquiry.  It details the conversion into a statutory inquiry, the terms of reference updated to reflect that, the core participants and timetable.

https://www.gov.uk/government/publications/post-office-horizon-it-inquiry-2020#history

https://www.jdsupra.com/legalnews/explaining-cryptocurrency-s-ransomware-7909324/

THE BIDEN ADMINISTRATION HAS ANNOUNCED A NUMBER OF ACTIONS AIMED AT STRENGTHENING SUPPLY CHAIN RESILIENCE AND REVITALIZING DOMESTIC COMPETITIVENESS

On 11 June, Sandler Travis Rosenberg reported that the actions stem from recently completed reviews of the supply chains of 4 sectors (drugs, critical minerals, semiconductors, and batteries) and ongoing reviews of supply chains for defence, public health and biological preparedness, information and communications technology, energy, transportation, and agricultural commodities and food production.

https://www.strtrade.com/trade-news-resources/str-trade-report/trade-report/june/new-strike-force-enforcement-measures-planned-to-strengthen-supply-chains

US CUSTOMS SEIZES 6.2 TONS OF KHAT IN 2 SEPARATE SHIPMENTS

On 11 June, a news release from US Customs & Border Protection advised that khat is a green, leafy plant typically grown in the Arabian Peninsula and many parts of Africa.  It is chewed for its stimulant effect.  The WHO classified khat as a drug of abuse in 1980.  The DEA classifies khat as a Schedule 1 narcotic – the most restrictive category used by the DEA – when the leaves are freshly picked. Its principal components, cathine and cathinone, are considered controlled substances in the US.

https://www.cbp.gov/newsroom/local-media-release/cbp-seizes-62-tons-khat-two-separate-shipments

SARDINIAN SAND HEIST THWARTED BY CUSTOMS POLICE

On 10 June. AV Club reported that 41 sand thieves face fines of as much as $3,600 each.  They were tourists who had tried to make off with 100 kg “of sand, seashells, and beach rocks” before being caught by customs while trying to leave the island.  In 2017, Sardinia established penalties for sand removal in order to protect the island’s beaches from being ruined by tourists.

https://www.avclub.com/great-sardinian-sand-heist-thwarted-by-customs-police-1847072472

THE ILLEGAL TV CONNECTIONS BANKROLLING MILITIAS IN RIO

On 10 June, an article in Insight Crime reported that militias in Brazil are providing illegal TV services to millions of households at a fraction of the price of legal streaming apps – another example of how these groups earn a fortune by subverting legitimate markets.  Police have stepped up raids against militia groups, and they have seized staggering amounts of equipment related to gatonet.  Gatonet connections are highly lucrative for militias and devastating for the media industry. 

https://insightcrime.org/news/clandestine-tv-connections-new-criminal-economy-brazil/

RUSSIAN AND SWISS CUSTOMS SIGN COOPERATION MEMORANDUM

On 11 June, the Russian customs service advised that the 2 countries had signed the agreement allowing for bilateral cooperation.

https://eng.customs.gov.ru/news/document/290703

WORLD DAY AGAINST CHILD LABOUR

The 12 June is the World Day Against Child Labour, and the EU Parliament Research Service published a briefing paper saying that this year the focus is on the 2021 International Year for the Elimination of Child Labour.  It is also an opportunity to consider measures taken at international and EU level.

  https://www.europarl.europa.eu/RegData/etudes/ATAG/2021/690665/EPRS_ATA(2021)690665_EN.pdf

https://theconversation.com/shipping-is-tough-on-the-climate-and-hard-to-clean-up-these-innovations-can-help-cut-emissions-162513

SLILPP ONLINE MARKETPLACE DISRUPTED IN INTERNATIONAL CYBER OPERATION

A news release from US DoJ on 10 June advised that the DoJ had participated in a multinational operation involving actions in the US, Germany, the Netherlands, and Romania to disrupt and take down the infrastructure of the online marketplace known as Slilpp.  It is alleged that since 2012 the Slilpp marketplace has been selling stolen login credentials, including usernames and passwords for bank accounts, online payment accounts, mobile phone accounts, retailer accounts, and other online accounts. 

https://www.justice.gov/opa/pr/slilpp-marketplace-disrupted-international-cyber-operation

CASE STUDY: THE NUN – CONFISCATING $1 MILLION ASSETS OF THE SHINING PATH TERRORIST ORGANISATION USING NON-CONVICTION BASED CONFISCATION 

The Basel Institute on Governance has published this case study (also available in Spanish) which describes the background, legal strategy and conclusion of a landmark case of non-conviction based confiscation in Peru that has enabled the successful confiscation of around $1 million linked to terrorist financing.  It involves a British-Peruvian woman known popularly as “The Nun”.  The study also discusses the Peruvian law on non-conviction based confiscation of illicit assets, extinción de dominio.

https://baselgovernance.org/sites/default/files/2021-06/Case%20Study%20The%20Nun_EN.pdf

EU SANCTIONS IMPOSED IN 2019 ON FORMER PRESIDENT OF UKRAINE VIKTOR FEDOROVYCH YANUKOVYCH AND HIS SON, OLEKSANDR VIKTOROVYCH YANUKOVYCH, HAVE BEEN ANNULLED 

On 11 June, the EU Sanctions blog reported that the EU General Court had annulled the 2019 sanctions designations because the EU Council had not satisfied itself that the applicants’ right to defence and effective judicial protection were respected by the Ukrainian authorities.  Despite annulling of these earlier sanctions, the two remain designated under EU Regulation 2021/391/EU.

https://www.europeansanctions.com/2021/06/sanctions-against-former-president-yanukovych-and-son-annulled/

https://advisor.visualcapitalist.com/inflation-over-last-100-years/

CHINA’S ANTI-SANCTIONS LAW

On 11 June, Wilmer Hale issued a Client Alert about the new law  which is effective immediately and as a blocking statute serves to both expand and coordinate China’s efforts to respond to sanctions against Chinese entities and individuals.  Explaining the measure and who is at risk, the Alert says that it creates new vectors of risk for those who have been attempting to delicately balance compliance requirements under conflicting bodies of law.

https://www.wilmerhale.com/en/insights/client-alerts/20210611-china-enacts-anti-sanctions-law

HOW ILLEGAL FISHING HARMS NIGERIA AND WHAT TO DO ABOUT IT

On 1 June, The Conversation published an article saying that, like most countries in West Africa, Nigeria’s coastal waters contain diverse species of fish, and small-scale fishing operations contribute 80% of locally-produced fish and support the livelihoods of 24 million Nigerians, and forms up to 1.09% of national GDP.  The article says that there is a need to understand the scale and complexity of illegal fishing and associated crime, and why it is happening, saying it is worth up to $800 million a year, with vessels from China, the EU and Belize heavily involved.  It says that solving the problem of illegal fishing in Nigeria requires that the Federal Department of Fisheries is supported to operate effectively, and fisheries regulations must also be updated to reflect the current realities and impacts of fisheries crime.

https://theconversation.com/how-illegal-fishing-harms-nigeria-and-what-to-do-about-it-160553

UK: CPS CRACKS DOWN ON “FAILURE TO DISCLOSE” IN MONEY LAUNDERING; BUT TO WHAT EFFECT?

An article from Bryan Cave Leighton Paisner on 11 June posed this question saying that in June the CPS updated its Money Laundering Offences guidance on prosecuting ‘failure to disclose’ offences under section 330 of the Proceeds of Crime Act 2002.  Under the new updated guidance, the CPS will consider bringing a prosecution of an offence of failure to disclose even if there is insufficient evidence to establish that money laundering was planned or undertaken.

https://www.bclplaw.com/en-US/insights/the-cps-cracks-down-on-money-laundering-but-to-what-effect.html

JHO LOW HIT WITH ILLEGAL LOBBYING CHARGES IN US

On 11 June, Politico reported that the DoJ had announced that a federal grand jury had added charges of illegal lobbying and money laundering to existing campaign finance charges against Malaysian businessperson Jho Lowand rapper Pras Michel, accusing the pair of orchestrating a back-channel effort to lobby the Trump administration.

https://www.politico.com/newsletters/politico-influence/2021/06/11/jho-low-hit-with-illegal-lobbying-charges-795909

https://mondovisione.com/media-and-resources/news/us-department-of-justice-us-entertainerbusinessman-and-malaysian-national-ch/

SPACs AND SANCTIONS: DUE DILIGENCE CONSIDERATIONS

On 11 June, an article from K2 Integrity looked at Special Purpose Acquisition Companies used in takeover operations.  The article warns that SPAC sponsors should consider conducting sanctions-related due diligence on foreign investors and potential target companies to ensure that the individuals or entities are not sanctioned themselves and do not have ties to sanctioned jurisdictions or their governments. 

https://www.jdsupra.com/legalnews/spacs-and-sanctions-due-diligence-7583868/

FORMER GILLINGHAM FC VICE-CHAIRMAN MICHAEL ANDERSON FACES EXTRADITION OVER US FRAUD ALLEGATIONS

On 11 June, Kent Online reported that the former vice chairman of Gillingham Football Club is facing extradition to the US where he has been charged with a multi-million pound fraud.  The businessman appeared via videolink before Westminster Magistrates’ Court after being arrested at Heathrow Airport when returning from a holiday in Portugal. 

https://www.kentonline.co.uk/medway/news/football-boss-in-court-over-4m-fraud-claims-248889/

DUAL-QUALIFIED LAWYER BASED IN JERSEY DISBARRED AFTER RECEIVING A PRISON SENTENCE FOR FRAUDULENT ACTIVITY AT HIS SOLICITORS’ PRACTICE

On 11 June, the Law Society Gazette reported that barrister Kevin Robert Manning had pleaded guilty to 20 counts of fraudulent conversion and 1 count of fraudulent conversion by a trustee in 2018, and was sentenced to 3½ years in prison.  He was also found to have failed to keep accurate client records over a 6-year period.

https://www.lawgazette.co.uk/news/jersey-lawyer-disbarred-after-fraud-conviction-/5108837.article

US: CHINESE IMMIGRANT IN MONEY LAUNDERING RING “DIDN’T KNOW…$24 MILLION I PICKED UP WAS FROM CARTELS”

On 11 June, the Chicago Sun-Times reported that Sui Yuet Kong got 40 months in prison for her role in a Chinese operation moving US drug proceeds to China, then to the Mexican cartels that sold the drugs in Chicago and New York.  The Chinese immigrant told federal investigators she never suspected she was helping launder drug proceeds.

https://chicago.suntimes.com/2021/6/11/22529643/chinese-money-laundering-mexican-drug-cartels-sui-yuet-kong

AMENDMENT OF RUSSIAN AML/CFT LAW

On 11 June, a news release from the President of Russia advised that President Putin had signed a Federal Law On Amendments to the Federal Law On Countering the Legalisation of Criminal Proceeds (Money Laundering) and the Financing of Terrorism.  Amongst other things, the new law introduces the notion of “the national assessment of risk involved in transactions aimed at legalising criminal proceeds and financing of terrorism”.  It determines that such an assessment be based on recommendations by authorised bodies.

https://en.kremlin.ru/acts/news/65816

SURVEY OF CENTRAL BANKS AND CENTRAL BANK DIGITAL CURRENCIES (CBDC) 

A release on Mondo Visione on 11 June advised that CBDC could ease current frictions in cross-border payments – and particularly so if central banks factor an international dimension into CBDC design from the outset. Based on a survey of 50 central banks in the first quarter of 2021, this paper explores initial thinking on the cross-border use of CBDC. 

https://www.bis.org/publ/bppdf/bispap116.pdf

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US FEDERAL HUMAN TRAFFICKING REPORT 2020

This report from the Human Trafficking Institute in the US sets out to provide the only exhaustive review of human trafficking prosecutions in US federal courts. The Report presents data from both sex trafficking and forced labour prosecutions and supplements its analysis with information from civil human trafficking lawsuits.  To mark the 20th anniversary of the Trafficking Victims Protection Act (TVPA), which made human trafficking a federal crime, this year’s edition of the Report also highlights data and trends spanning 2 decades of anti-trafficking enforcement in the US.  One thing it highlights is that human trafficking does not necessarily involve cross-border movement. In fact, it says, fewer than half of active sex trafficking cases involved schemes spanning more than one state. Moreover, of foreign national victims, 17% were not trafficked across the border into the US; rather, they were exploited abroad or after entering the country.

https://www.traffickinginstitute.org/wp-content/uploads/2021/06/2020-Federal-Human-Trafficking-Report-Low-Res.pdf

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CLAIM: ORGANISED CRIME IS GOING UNIVESTIGATED AS UK POLICE ‘HIDE’ BEHIND ACTION FRAUD

On 11 June, the i newspaper in the UK said that a report by an academic at the University of Portsmouth claims that organised crime is going uninvestigated by police who are “hiding behind the veil” of the Action Fraud national crime reporting agency – this being useful for concealing an “inadequate” police response.  Figures from Action Fraud, the arm of the police responsible for recording scams and fraud, show that between 2019 and 2020, over 800,000 people reported being a victim of fraud, with £2.3 billion finding its way into criminal hands.  The report argues radical change is required to address the investigative gap through either regionalization or a national solution, through a National Economic Crime Agency.  It considers some of the arguments for against such approaches and calls for a debate to commence on the future structures for policing economic crime.

https://inews.co.uk/inews-lifestyle/money/saving-and-banking/organised-crime-is-going-univestigated-as-police-hide-behind-derided-action-fraud-academic-claims-1041883

https://academic.oup.com/policing/advance-article-abstract/doi/10.1093/police/paab022/6273115

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SOUTH KOREAN MARITIME COMPANY UNDER INVESTIGATION OWNS VESSELS TIED TO SUSPICIOUS OPERATIONS

On 19 June, a report from Kharon says that vessels owned by a South Korean company – oung Sung Global Co Ltd – reportedly under investigation for violating UN sanctions against North Korea have disabled their location transponders in waters known to be hotspots for illicit sanctions evasion activity.  A South Korean official told Yonhap News that Young Sung Global is under investigation due to the alleged transfer of a vessel to North Korean ownership.

https://brief.kharon.com/updates/maritime-firm-under-investigation-owns-vessels-tied-to-suspicious-operations

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JERSEY GOVERNMENT BEGINS INDUSTRY DIALOGUE OVER STRATEGY FOR TACKLING FINANCIAL CRIME

On 11 June, a news release from the Government of Jersey says that it has begun to engage the financial services industry in discussions about amendments to the Island’s financial crime strategy – designed to ensure that Jersey meets international standards set by FATF.  A minister is quoted as saying that over the next 18 months there will be a great deal of work, encompassing policy, legislation and procedures, where there will be a lot of change, particularly in the areas of risk understanding, supervision, enforcement action, criminal prosecution and confiscation.  A launch event organised through Jersey Finance involved the Government, the States of Jersey Police (SoJP), and the Jersey FSC presented the actions that should be expected by the industry in order to ensure that Jersey continues to meet international standards.

https://www.gov.je/News/2021/Pages/FinancialServicesCrimeStrategy.aspx

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EU SANCTIONS: COMMISSION PUBLISHES OPINIONS ON APPLICATION OF SPECIFIC PROVISIONS CONCERNING SYRIA, LIBYA, THE CENTRAL AFRICAN REPUBLIC AND UKRAINE

On 11 June, the EU advised that the Opinions involve –

  • changes to 2 specific features of frozen funds: their character (re Libya) and their location (re Syria);
  • the release of frozen funds by way of enforcing a financial guarantee (re CAR); and
  • the prohibition to make funds or economic resources available to listed persons (re Ukraine).

While not binding, the Opinions offer valuable guidance to those who have to apply and follow EU sanctions and support the uniform implementation of sanctions across the EU. 

https://ec.europa.eu/commission/presscorner/detail/en/MEX_21_2962

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UK: UPDATED MUTUAL LEGAL ASSISTANCE GUIDANCE FOR FOREIGN AUTHORITIES

On 11 June, the Home Office published updated guidance, amended to take account of confiscation and freezing measures provided for in the EU-UK Trade and Cooperation Agreement (TCA).

https://www.gov.uk/government/publications/mla-guidelines-for-foreign-authorities-2012#history

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SAN MARINO: MONEYVAL AML/CFT EVALUATION REPORT

On 11 June, the Council of Europe published this 5th Round Mutual Evaluation Report which calls on authorities to improve the regulatory framework and to strengthen the practical application of measures to combat money laundering and financing of terrorism.  However, it praises the overall framework and practical actions in place for international co-operation, which enables San Marino to provide generally timely and constructive mutual legal assistance, but finds that further improvements are needed in enhancing supervision, preventative measures related to transparency of legal persons and legal arrangements, money laundering investigation and prosecution and financial sanctions for terrorist financing.  Interestingly, San Marino will be subject to MONEYVAL’s regular follow-up reporting process 9i.e. not the enhanced follow-up procedure) as a result of the positive report, thus becoming one of only 5 member-jurisdictions with this outcome so far.

https://rm.coe.int/moneyval-2021-3-mer-san-marino/1680a2ce2a

https://search.coe.int/directorate_of_communications/Pages/result_details.aspx?ObjectId=0900001680a2ce54

Effectiveness ratings can be either a High- HE, Substantial- SE, Moderate- ME, or Low – LE, level of effectiveness.

Technical compliance ratings can be either a C – compliant, LC – largely compliant, PC – partially compliant or NC – non-compliant.

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OTHER THINGS YOU MAY HAVE MISSED – JUNE 10

Panama Covid-19 update – in the news today, 95 of the Cuban doctors on loan to Panama are to remain for a further 2 months due to the upturn in cases recently.

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10 JUNE 2021

UK: ACCOUNT FORFEITURE ORDER TO SEIZE PROCEEDS OF CRIME 13 YEARS AFTER CONVICTION

On 8 June, an article from Keystone Law said that the SFO has recovered a significant sum for the UK taxpayer after securing an Account Forfeiture Order against an account linked to one of the architects of a transatlantic securitised finance fraud with global losses of around £494 million 13 years after he was convicted of conspiracy to defraud in 2008.  The article looks at the significance of the SFO’s latest Account Forfeiture Order and how the original case had a long-term impact on the criminal justice system.

https://www.keystonelaw.com/keynotes/account-forfeiture-order-to-seize-proceeds-of-crime-13-years-after-conviction

SOUTH AFRICA: MINISTER PUT ON LEAVE OVER CORRUPTION ALLEGATIONS

On 8 June, Al Jazeera reported that the health minister Zweli Mkhize placed on special leave amid claims over the ministry’s award of COVID-19-related contracts.  This was the latest in a series of corruption allegations linked to coronavirus-related tenders that have caused public outrage.  The Special Investigating Unit (SIU) is probing the case, one of over 4,000 coronavirus-linked contracts suspiciously awarded since the start of the pandemic, and 63 government officials had so far been handed over for prosecution, while 87 companies will be blacklisted.

https://www.aljazeera.com/news/2021/6/8/south-africa-health-minister-put-on-leave-over-corruption-allegations

SWITZERLAND: BURKINA FASO BUSINESSMAN DENIED COMPENSATION FOR FROZEN ACCOUNTS

On 9 June, Swissinfo reported that Inoussa Kanazoé claims he lost up to €30 million when his Swiss account was frozen for 2½ years while he was being investigated on fraud and corruption suspicions. A court has rejected his appeal for compensation in a case which was dismissed and then reinstated.  He is a businessman with close links to the brother of Burkina Faso’s former president Blaise Compaoré, made his fortune through the import and export of foodstuffs, petrol, and cement. 

https://www.swissinfo.ch/eng/burkinabe-businessman-denied-compensation-after-accounts-frozen/46684274

EUROPEAN BUSINESSES EXPRESS ALARM OVER CHINA’S ANTI-SANCTIONS LAW 

On 9 June, the South China Morning Post reported that the EU Chamber of Commerce in China has expressed concern at lack of transparency and says the measures are ‘not conducive to attracting investment’.  Chinese state media has said it will provide a legal basis for retaliation against sanctions.

https://www.scmp.com/news/china/diplomacy/article/3136626/european-businesses-express-alarm-over-chinas-anti-sanctions

https://www.wsj.com/articles/china-passes-law-to-counter-foreign-sanctions-11623327432

EU COMMISSION ISSUES AN OPINION ON THE TERM “MAKING AVAILABLE” IN RUSSIA/UKRAINE SANCTIONS

On 8 June, an Opinion issued by the EU Commission said that it was the relevant national authority to determine whether a legal entity is controlled by a designated person and identified criteria to help with the determination, and the term “making available” funds includes making them indirectly available, to the extent that the entity involved is controlled by the designated person – including where a designated person controls a non-designated entity. Paying a third-country intermediary for goods produced by an entity controlled by a listed person amounts to making funds indirectly available to that person.

https://ec.europa.eu/info/sites/default/files/business_economy_euro/banking_and_finance/documents/210608-ukraine-opinion_en_0.pdf

https://www.statista.com/chart/25034/wealth-growth-and-taxes-paid-by-americas-wealthiest-individuals

US: NAVIGATING THE EXPORT CONTROLS ON SEMICONDUCTORS

On 10 June, an article from Braumiller Law Group PLLC says that determining what US export controls apply to semiconductor devices can be a challenging task.  The relevant That Export Commodity Classification Number (ECCN) 3A001 has nearly 16 pages of detailed controls on many types of semiconductors.  Classifying articles in that category and determining what licenses or exceptions may apply is not easy.  It says that determining whether semiconductors are subject to export controls is not an easy process.  It can be very complex and will require collaboration between the export compliance and engineering personnel to be compliant and successful.

https://www.braumillerlaw.com/navigating-the-export-controls-on-semiconductors

HONG KONG SPEEDBOAT SMUGGLING BUST NETS LUXURY GOODS TROVE

On 10 June, the Straits Times reported that Hong Kong Customs announced its biggest-ever bust of a speedboat gang smuggling luxury goods into the mainland, unveiling a haul that included watches, handbags and shoes, endangered animal parts, cosmetics, wines, whiskey and cigars.  The article says that this is a window into the thriving smuggling networks that operate along the border between Hong Kong and China.  Hong Kong has no sales tax, making it one of the cheapest places in the world to buy luxury goods, but China has punitive taxes and luxury items are up to double the price, providing a powerful smuggling incentive.

https://www.straitstimes.com/asia/east-asia/hong-kong-speedboat-smuggling-bust-nets-luxury-goods-trove

https://gbcode.rthk.hk/TuniS/news.rthk.hk/rthk/en/component/k2/1595241-20210610.htm

GHANA COMPLETES ACTION PLAN TO EXIT FATF GREY LIST

On 10 June, Graphic Online reported that Ghana completed in February the implementation of an action plan required by FATF to enhance internal structures and systems against money laundering and terrorist financing.

https://www.graphic.com.gh/news/general-news/ghana-completes-action-plan-to-exit-money-laundering-grey-list.html

CHINA ARRESTS 1,100 SUSPECTS IN CRACKDOWN ON CRYPTO-RELATED MONEY LAUNDERING

On 10 June, Channel News Asia reported that police in China arrested more than 1,100 people suspected of using cryptocurrencies to launder illegal proceeds from telephone and Internet scams in a recent crackdown, as authorities in China step up a crackdown on cryptocurrency trading.  It was said that more than 170 criminal groups were involved in using cryptocurrencies to launder money.

https://www.channelnewsasia.com/news/asia/china-arrests-1-100-suspects-in-crackdown-on-crypto-related-14984978

EU COMMISSION RAMPS UP LEGAL ACTION AGAINST CYPRUS, MALTA OVER ‘GOLDEN PASSPORTS’

On 10 June, EurActiv reported that the Commission has stepped up legal action against Cyprus and Malta over their cash-for-passports schemes in a move that may eventually see the islands end up in court and face fines.  It began the legal process in October when it sent letters of formal notice to the two countries, giving them 2 months to respond.  The Commission has now sent a reasoned opinion to Cyprus for failing to address its concerns and the country has 2 months to inform the Commission of measures taken to comply with EU laws or faced being taken to court.  The Commission also issued an additional letter of formal notice to Malta, expanding on its concerns last year and giving the island 2 months to respond – again the next step would be a reasoned opinion from the Commission

https://www.euractiv.com/section/global-europe/news/eu-commission-ramps-up-legal-action-against-cyprus-malta-over-golden-passports/

1.6 TONNES OF COCAINE AND €16.5 MILLION CONFISCATED IN LARGEST CASH SEIZURE FROM A CRIMINAL ORGANISATION IN SPAIN

A news release from Europol on 10 June advised that the authorities had dismantled a criminal network that trafficked cocaine from South America to the Port of Algeciras in Spain. The network was capable of controlling the maritime traffic of containers coming from South America.  It included different employees who worked in various areas at the Port of Algeciras. These employees included a worker from a port container terminal, 2 workers from the Border Inspection Post, 4 from Auxiliary Maritime Services (SAM), and several stevedores, freight forwarders, consignees and carriers.

https://www.europol.europa.eu/newsroom/news/operation-jumita-16-tonnes-of-cocaine-and-€-165-million-confiscated-in-largest-cash-seizure-criminal-organisation-in-spain

MALTA UPDATES ANTI-CORRUPTION STRATEGY

On 10 June, GRC World reported that the government has refreshed its national strategy to fight fraud and corruption, 2 years after a report by the Council of Europe’s anti-corruption body Greco highlighted how a promised update had never materialised.  The new strategy sets out 7 broad policy goals, including constant updating relevant legislation, a new national risk assessment by next year, transparency and accuracy of beneficial ownership information, and ensuring investigations and prosecutions of money-laundering offences increase between now and 2023. Public relations is also mentioned as a weapon in the fight against irregularities, fraud and corruption.

https://www.grcworldforums.com/threats/malta-updates-anti-corruption-strategy/1945.article

MINECRAFT: KASPERSKY DISCOVERS MALICIOUS APPS DISGUISED AS BESTSELLING GAME

On 10 June, PCR Online reported that Kaspersky researchers analysed various apps, including those which are available for download on the Google Play store and claimed to be modpacks (user-created packages with additional gameplay elements) for the game. As a result, the company’s experts found various malicious apps spreading adware or stealing social media credentials.

https://www.pcr-online.biz/2021/06/10/kaspersky-discovers-malicious-apps-disguised-as-bestselling-game/

RIGHT TO RENT IMMIGRATION CHECKS: LANDLORDS’ CODE OF PRACTICE – UPDATED FOR EEA CITIZENS

On 10 June, the Home Office issued updated guidance, reflecting the fact that, from 1 July, EEA citizens and their family members require immigration status in the UK, in the same way as other foreign nationals.  Landlords of properties in England need to check that someone has the right to rent before letting them a property.

https://www.gov.uk/government/publications/right-to-rent-landlords-code-of-practice#history

WHY SMALL MODULAR REACTORS WILL SHAPE THE FUTURE OF NUCLEAR DEBATE

On 8 June, an article from White & Case says that small modular reactors (SMR) are gaining the attention of governments and power providers across the world because of the optionality they offer. But the champions of the SMR will have to work hard to ensure its potential can be fully unlocked.  President Biden has signalled that they have a key role to play in the $2 trillion investment in clean energy, while Prime Minister Boris Johnson has also said he’ll pour money into the concept; and it’s not just governments; companies including EDF—the world’s biggest operator of atomic plants— and Rolls -Royce are championing the future role of the SMR.

https://www.whitecase.com/sites/default/files/2021-06/why-small-modular-reactors-will-shape-future-nuclear-debate-final-web.pdf

UK: FREEZING ORDERS – 2-YEAR SENTENCE FOR CONTEMPT OF COURT

On 10 June, an article from Eversheds Sutherland reported that, in a recent judgment, the Commercial Court has demonstrated that repeated and serious breaches of a freezing injunction (endorsed with a penal notice) – previously known as a Mareva injunction – can be punished with an immediate custodial sentence.  It is said that the  judgment makes clear that the Court is prepared to impose strict criminal sentences in respect of serious and continued breaches of freezing injunctions, and further confirms their status as an extremely powerful tool to assist victims of fraud to recover losses.  

https://www.eversheds-sutherland.com/global/en/what/articles/index.page?ArticleID=en/Commercial_dispute_resolution/Freezing_orders_with_bite

QUARTERLY FINANCIAL CRIME HORIZON SCANNING – US AND UK

On 10 June, law firm Eversheds Sutherland published its latest documents which summarise key financial crime related legal and regulatory changes expected over the next 18 months to 2 years, as well as providing electronic links to key resources.

https://www.eversheds-sutherland.com/global/en/what/articles/index.page?ArticleID=en/Fraud_and_financial_crime/Financial_Crime_Horizon_Scanner_Q2_2021

STABLECOINS: WHAT’S OLD IS NEW AGAIN

On 10 June, the Bank of England published a speech by the Executive Director of its Financial Market Infrastructure Directorate who looks at how they could be regulated, if they are used as a form of payment.  She says, that with the right regulation, digital money like stablecoins could have benefits – including cheaper payments with more functionality. And they could potentially have benefits for financial stability.  But that requires regulation to hold new forms of money to the same standards we expect of the money we use today.

https://www.bankofengland.co.uk/-/media/boe/files/speech/2021/june/stablecoins-whats-old-is-new-again-speech-by-christina-segal-knowles.pdf?la=en&hash=E1D88DB050EB92BA8C581A9C8A967BE7191F776A

HOW RUSSIAN BANKS ANTICIPATED AND DEALT WITH GLOBAL FINANCIAL SANCTIONS

On 10 June, a paper from VOX, the website of the Centre for Economic Policy Research, says that financial sanctions against Russia’s state-owned and controlled banks were imposed consecutively between 2014 and 2019, allowing banks that would potentially be targeted in the future to adjust their international and domestic exposures.  It explores the informational effects of financial sanctions, showing that compared to similar private banks, ‘not yet sanctioned’ financial institutions immediately reduced their foreign assets while, rather unexpectedly, expanding their foreign liabilities.  These informational effects crucially depend on geography, with targeted banks located further from Moscow decreasing their foreign assets by more and raising foreign liabilities by less than those located near the Kremlin.

https://voxeu.org/article/how-russian-banks-anticipated-and-dealt-global-financial-sanctions

EUROPEAN DRUG REPORT: TRENDS & DEVELOPMENTS

On 10 June, the European Monitoring Centre for Drugs and Drug Addiction (EMCDDA) published its latest report which identifies the continued and escalating challenges to both public health and security created by the trafficking of drugs into Europe and the production of illicit drugs within its borders.  The resilience of organised crime groups involved in the drug trade is highlighted by the preliminary finding that the availability of drugs in Europe has not been seriously affected by the current pandemic.  Despite interdiction efforts, all routine indicators suggest that at the beginning of 2020 the European drug market was characterised by the widespread availability of a diverse range of drugs of increasingly high purity or potency.  Trends identified include the misuse of benzodiazepines diverted from therapeutic use or appearing as new benzodiazepines on the new psychoactive substances market.  These substances can be harmful in themselves but when combined with opioids or alcohol they also increase the risk of overdose, though their role may go undetected.  This kind of polydrug use, and more generally the growing importance of synthetic substances, highlights the urgent need to further develop forensic and toxicological resources if we are to better understand and respond to the increasingly complex drug problems.  It also remarks that the agency recently had to release public health alerts warning of the presence on the market of natural cannabis products adulterated with highly potent synthetic cannabinoids.

https://www.emcdda.europa.eu/system/files/publications/13838/TDAT21001ENN.pdf

EU COUNTRIES STRUGGLE TO COMPLY WITH NEW WHISTLEBLOWER RULES

On 7 June, the Whistleblower Network News reported that the Directive requires all Member States to pass laws to protect employees from reprisals, compensate them if they are victimised, allow them to report crime and corruption directly to the public, and punish people who retaliate against whistleblowers.  Many countries are now working to transpose the Directive into their national laws, but the article says that a review of proposed laws reveals major shortcomings.

https://whistleblowersblog.org/2021/06/articles/opinion/lost-in-transposition-eu-countries-struggle-to-comply-with-new-whistleblower-rules/amp/

7 NICARAGUAN OPPOSITION LEADERS DETAINED AHEAD OF ELECTION

On 9 June, CNN reported that, a few months ahead of a crucial election, Nicaraguan police have detained 7 high-profile opposition leaders, and that the latest – the leader of Coalición Nacional party – was detained for acting “against the independence, sovereignty and auto-determination” of the country.

https://edition.cnn.com/2021/06/09/americas/nicaragua-opposition-leaders-detained-intl/index.html

NETHERLANDS: 39-YEAR-OLD MAN ARRESTED ON SUSPICION OF LARGE-SCALE FRAUD WITH SELF-MADE CRYPTOCURRENCY COINS

On 8 June, NL Times reported that he is suspected of running online trading platform Coinhouse.eu and clients of the site claim they were victims of a scam.  Police allege this was part of a pump and dump scheme.  Police also spoke of potential electricity theft which can happen when computers used to mine cryptocurrencies are powered without permission.

https://nltimes.nl/2021/06/08/deventer-man-arrested-bitcoin-scam

ACTIVISTS SAY FACEBOOK IS A WILDLIFE TRAFFICKING CONDUIT

On 9 June, OCCRP reported that according to the ATHAR project, an NGO which monitors the illegal antiquities trade online, a recent case is emblematic of the social media giants’ failure to police the entire illegal economies which have sprung up on its pages.  It is sai that it is not just wildlife. Facebook groups have served as a hub for illicit trade in everything from looted antiquities to drugs. 

https://www.occrp.org/en/daily/14599-activists-say-facebook-is-a-wildlife-trafficking-conduit

UK: HM UK’S TREASURY GREEN TECHNICAL ADVISORY GROUP (GTAG) TO ADVISE AND ASSIST THE UK GOVERNMENT IN TACKLING ‘GREENWASHING’

On 10 June, an article from Wilmer Hale reported that HM Treasury announced the appointment of a Green Technical Advisory Group (GTAG), set up to advise and assist the UK Government in its development and implementation of a Green Taxonomy, aimed at tackling ‘greenwashing’.

https://www.wilmerhale.com/en/insights/client-alerts/20210610-uk-government-tackles-greenwashing

US: EXECUTIVE ORDER PROTECTING AMERICANS’ SENSITIVE DATA FROM FOREIGN ADVERSARIES

On 9 June, a new Executive Order with respect to the threat posed to the US information and communications technology and services (ICTS) supply chain.  It revokes and replaces 3 earlier Executive Orders that aimed to prohibit transactions with TikTok, WeChat, and eight other communications and financial technology software applications.  The new EO provides criteria for identifying software applications that may pose unacceptable risk and develops further options to protect sensitive personal data and address the potential threat from certain connected software applications.

https://www.whitehouse.gov/briefing-room/statements-releases/2021/06/09/fact-sheet-executive-order-protecting-americans-sensitive-data-from-foreign-adversaries/

EU COURT HAS ANNULLED THE 2019 SANCTIONS ON FORMER DEPUTY HEAD OF THE ATOMIC ENERGY ORGANISATION OF IRAN (AEOI) 

The EU General Court has annulled the sanctions imposed in 2019 on Sayed Shamsuddin Borborudi who had been involved in Iran’s nuclear programme since 2002.  Borborudi stopped working for the AEOI in 2013 and the EU Council had not demonstrated any continuing involvement in Iran’s nuclear programme or that his past role justified his continued listing.

https://curia.europa.eu/juris/document/document.jsf?text=&docid=242421&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=12631645

US ATTORNEY GENERAL ANNOUNCES INITIATIVES TO COMBAT HUMAN SMUGGLING AND TRAFFICKING AND TO FIGHT CORRUPTION IN CENTRAL AMERICA

On 8 June, Homeland Security Today reported that Attorney General Merrick B. Garland had announced a series of steps that the DoJ is taking to address the threats posed by both corruption and by transnational human smuggling and trafficking networks.

https://www.hstoday.us/subject-matter-areas/border-security/attorney-general-announces-initiatives-to-combat-human-smuggling-and-trafficking-and-to-fight-corruption-in-central-america/

https://www.justice.gov/opa/pr/attorney-general-announces-initiatives-combat-human-smuggling-and-trafficking-and-fight

TELLTALE SIGNS A FLAG IS GOING BAD: AN ANALYSIS OF THE CAMEROONIAN FLAG FLEET

On 21 April, Windward published an article saying that, in recent months, the flag of Cameroon had been starting to show up in the news leading the company to take a deeper look into how monitoring flag registries and vessel flags can pre-emptively minimise risk and aid governments, flag and port authorities, and even commercial organizations identify flag weaknesses that illicit players and sanctioned regimes are exploiting.  It looks at potential red flags – such as the Cameroon fleet rising from 18 in 2018, with 2020 marking an 435% jump in 2 years for this relatively small flag registry, with a skewed make-up of the fleet.

https://www.wnwd.com/blog/telltale-signs-a-flag-is-going-bad-an-analysis-of-the-cameroonian-flag-fleet

ARREST MADE OVER MULTI-MILLION-DOLLAR BEC SCAM

On 10 June, Info Security reported that Texas law enforcement officers have made an arrest in connection with a multi-million-dollar wire fraud and money laundering scheme involving Business Email Compromise (BEC).

https://www.infosecurity-magazine.com/news/arrest-made-over/

US: 36 DEFENDANTS SENTENCED FOR THEIR ROLES IN INTERNATIONAL THAI SEX TRAFFICKING ORGANISATION

A news release from US DoJ on 10 June advised that 36 defendants have been sentenced in federal court for their roles in operating a massive international sex trafficking organization that was responsible for coercing hundreds of Thai women to engage in commercial sex acts across the US.  The criminal organisation compelled hundreds of women from Bangkok, Thailand, to engage in commercial sex acts in various cities across the US.  The trafficking victims were often from impoverished backgrounds and spoke little or no English. They were coerced to participate in the criminal scheme through misleading promises of a better life in the US and the ability to provide money to their families in Thailand.

https://www.justice.gov/usao-mn/pr/thirty-six-defendants-sentenced-their-roles-international-thai-sex-trafficking

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OFAC: IRAN AND SYRIA SANCTIONS NEW DESIGNATIONS AND REMOVALS – IRANIAN SMUGGLING NETWORK TARGETED

On 10 June, OFAC announced that 7 individuals, 4 entities and 1 vessel have been added to its SDN List.  At the same time 10 names (individuals and entities) have been removed, and 2 other existing entries have been amended.  The new sanctions designate members of a smuggling network that helps fund Iran’s Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) and the Houthis in Yemen.   Led by Iran-based Houthi financier Sa’id al-Jamal, this network is said to generate tens of millions of dollars in revenue from the sale of commodities, like Iranian petroleum, a significant portion of which is then directed through a complex network of intermediaries and exchange houses in multiple countries to the Houthis in Yemen.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20210610

https://home.treasury.gov/news/press-releases/jy0221

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ILLICIT ENRICHMENT: A GUIDE TO LAWS TARGETING UNEXPLAINED WEALTH

On 9 June, the Basel Institute on Governance published a free e-book which explores the rapid growth of illicit enrichment legislation around the world and its use to target corruption and recover illicitly obtained assets.  The free-to-download book also includes as annexes a database of unjust enrichment laws in 103 jurisdictions, and guidance for practitioners on how to conduct source and application analysis to support illicit enrichment cases.

https://learn.baselgovernance.org/course/view.php?id=65

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UK: LAW COMMISSION SEEK VIEWS ON CORPORATE CRIMINAL LIABILITY

On 9 June, the Law Commission, which advises on legislative changes in England & Wales, issued a Discussion Paper on whether, and how, the law relating to corporate criminal liability can be improved so that they appropriately capture and punish criminal offences committed by corporations, and their directors or senior management.  It says that it is clear that there are issues across a range of offences that undermine the ability to effectively hold organisations to account for crimes committed.  One major factor identified is the requisite guilty state of mind – known as the “identification principle”.  For example, it explains, if the sole director of a company were fraudulently to increase the value of an invoice sent by the company, the company, as well as the director, could be found guilty of fraud.  However, there are concerns that the identification principle does not adequately deal with misconduct carried out by and on behalf of companies – especially larger organisations – with complex decision-making structures.  This leads to it being easier to identify and prosecute those in charge of smaller companies.  The Discussion Paper also mentioned “failure to prevent” offences, and which further offences might be covered by any new corporate failure to prevent offence, and what costs the introduction of such a new offence or offences would have for law-abiding businesses.  Responses to the Discussion Paper will inform the Law Commission’s options paper that will be provided to the Government towards the end of 2021.  Responses are necessary by 31 August.

https://www.lawcom.gov.uk/project/corporate-criminal-liability/

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FREE 3,000-WORD COMPREHENSIVE INTRODUCTION TO TRANSPORT AND LOGISTICS

On 10 June, the International Chamber of Commerce released a new guide which explains key differences between these 2 terms, which are often used interchangeably, the  pros and cons of the different transportation methods available to logistics professionals, key terminology, and the impact COVID-19 pandemic has had on the transport and logistics industries.

https://icc.academy/wp-content/uploads/2021/06/A-Comprehensive-Introduction-to-Transport-and-Logistics-Supply-Chain-Brief.pdf

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OTHER THINGS YOU MAY HAVE MISSED – JUNE 9

Panama Covid-19 update – well, yesterday police and officials raided an illegal vaccination centre in Panama City…though it is not known if the “vaccine” being employed was real, fake or from refilled bottles.

https://www.prensa.com/sociedad/minsa-aun-desconoce-lo-que-se-le-estaba-aplicando-a-quienes-se-vacunaron-en-centro-clandestino/

Today’s figures show another big rise in active cases, to 8,242; with 779 new cases added today and 3 new fatalities. 66 people are in ICU and (another big rise) 397 in other wards.

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9 JUNE 2021

DHL ITALIAN SUBSIDIARY INVESTIGATED FOR TAX FRAUD

On 9 June, Reuters reported that Italian tax police have seized assets worth more than €20 million from the local unit of logistics giant Deutsche Post DHL as part of a fraud investigation.  It allegedly failed to pay VAT and pension contributions due for staff by relying on contractors instead of hired workers.

https://www.reuters.com/business/dhls-italian-subsidiary-investigated-tax-fraud-2021-06-07/

GERMAN POLICE RAIDS TIED TO WELFARE FRAUD, ILLEGAL GAMBLING

On 8 June, ABC News reported that aAround 600 investigators searched 31 buildings in the western German state of North Rhine-Westphalia and police arrested a family of 4 in connection with alleged money laundering, organised crime and welfare fraud.

https://abcnews.go.com/International/wireStory/german-police-raids-tied-money-laundering-crime-gangs-78144987

HAMAS APPARENTLY USED BINANCE AND LOCALBITCOINS TO LAUNDER BITCOIN DONATIONS

On 8 June, Coindesk reported that, according to analysis, Izz ad-Din al-Qassam Brigades, the militant wing of Hamas, received up to $100,000 in bitcoin since the beginning of 2021 – with a spike in donations in May, when Israel and Hamas exchanged multiple rocket attacks, resulting in hundreds of casualties.  For the past several years, Hamas has been using accounts on exchanges including Coinbase, Binance, Bittrex, Poloniex, Bitstamp, Huobi and CEX.io, as well as wallet provide Xapo, according to Crystal’s data. However, until May the donations were not too large. 

https://www.coindesk.com/hamas-binance-localbitcoins-bitcoin-donations

LITHUANIA REVOKES LICENCE OF FINTECH TIED TO WIRECARD SCANDAL

On 9 June, KYC 360 reported that Lithuania’s central bank has revoked the license of UAB Finolita Unio over alleged AML compliance failures linked to the Wirecard scandal.  The Bank determined that Finolita had treated its AML/CFT obligations “irresponsibly” by failing to assess the compliance risks of its customers and inadequately vetting their identities and beneficial owners.  Prosecutors believe that the Vilnius-based fintech firm was used to steal more than €100 million from Wirecard before the German payments company collapsed.

https://www.riskscreen.com/kyc360/news/lithuania-revokes-license-of-fintech-tied-to-wirecard-scandal-report

UN LIBYA SANCTIONS HAS GRANTED HUMANITARIAN TRAVEL EXEMPTIONS TO 3 PERSONS

On 9 June, the EU Sanctions blog reported that the relevant UN sanctions committee has granted travel exemptions to Safia Farkash Al-Barassi, Aisha Muammar Muhammad Abu Minyar Qadhafi and Mohammed Muammar Qadhafi – allowing them to undertake unlimited travel for humanitarian purposes for 6 months.

https://www.europeansanctions.com/2021/06/unsc-committee-concerning-libya-grants-humanitarian-travel-exemptions/

https://www.un.org/press/en/2021/sc14543.doc.htm

NEW US TREASURY LIST SUPERSEDES DOD COMMUNIST CHINESE MILITARY COMPANIES LIST FOR PURPOSES OF SECURITIES TRADING BAN

On 7 June, Squire Patton Boggs published an article saying that Executive Order 14032 replaces the CCMC list administered by the DOD under EO 13959.  The new list, the Non-SDN Chinese MilitaryIndustrial Complex Companies List (the NS-CMIC List), is administered by OFAC.  A summary chart included as an appendix to the article shows the entities designated on the CCMC list by the DOD and those included in the new NS-CMIC List.  It is said that any listed organisation would likely also be viewed by exporters and re-exporters of items subject to the Export Administration Regulations as military end-users. 

https://www.squirepattonboggs.com/-/media/files/insights/publications/2021/06/new-treasury-list-supersedes-dod-communist-chinese-military/new_treasury_list.pdf

UK: NEW DIRECTORS’ DISQUALIFICATION BILL TAKES AIM AT DIRECTORS OF DISSOLVED UK COMPANIES

On 7 June, an article from Freshfields Bruckhaus Deringer reported that a Bill introduced to Parliament on 12 May seeks to extend the existing directors’ disqualification regime to the directors of dissolved companies.  Currently, if the Insolvency Service wishes to investigate the conduct of the directors of a company which has been dissolved, that company must first be restored to the register, but the Bill would allow investigations of, and disqualification proceedings to be brought against, such directors.

https://transactions.freshfields.com/post/102gzwk/new-directors-disqualification-bill-takes-aim-at-directors-of-dissolved-uk-compa

THE BONGO FAMILY’S ASSETS AND BNP PARIBAS

On 7 June, an article from Rahman Ravelli was concerned with assessing the bank’s indictment and its options under French law, it having been indicted on counts of “laundering of corruption and of embezzlement of public funds” in relation to the ongoing judicial investigation into assets in France owned by the family of the deceased former Gabon President, Omar Bongo.  It is said to be the first time that a bank has been indicted on a laundering offence related to the decade-long investigation into so-called “ill-gotten assets” acquired in France by foreign public officials.

https://www.rahmanravelli.co.uk/articles/the-bongo-familys-assets-and-bnp-paribas/

US CUSTOMS ACCUSES OREGON HEMP COMPANY OF INTERNATIONAL DRUG SMUGGLING

On 8 June, Hemp Industry Daily reported that federal customs officials say an Oregon hemp company was flying marijuana, not hemp, to Switzerland last year and that the biomass should be destroyed.  However, the company is suing for the return of more than 3,000 lb of hemp.  Material that tested above THC limits was seized and destroyed in March, but the remaining hemp plants are still in prosecutors’ possession – and the company wants it back.

https://hempindustrydaily.com/customs-accuses-oregon-hemp-company-of-international-drug-smuggling/

NEW UAE ULTIMATE BENEFICIAL OWNER LAW

On 9 June, Arabian Business carried an article saying that new regulations are intended to ensure financial transparency around business ownership to better combat money laundering and terrorist financing.  The Regulations apply to mainland (or onshore) companies and companies incorporated in non-financial free zones such as Dubai Multi Commodities Centre, Jebel Ali Free Zone, Ajman Free Zone, etc. The financial free zones of Abu Dhabi Global Markets (ADGM) and Dubai International Financial Centre (DIFC) have their own set of legal frameworks on UBO.  Thus, companies incorporated in ADGM and DIFC are not affected by the UBO Regulations. However, such companies are required to comply with the separate UBO requirements that are in place in ADGM and DIFC.

https://www.arabianbusiness.com/politics-economics/464498-new-uae-ultimate-beneficial-owner-law-looks-to-crack-down-on-money-laundering

CROWN DEPENDENCIES ‘SHOULDER TO SHOULDER’ ON PROPOSED INTERNATIONAL TAX CHANGES

On 9 June, Guernsey Press reported that Guernsey, Jersey and the Isle of Man are standing ‘shoulder to shoulder’ on a global tax overhaul and will move together if changes are needed locally.  All have what is termed a “zero-10” corporate tax regime, which could be affected by plans discussed by the G7.

https://guernseypress.com/news/2021/06/09/crown-dependencies-shoulder-to-shoulder-on-tax-changes/

WEBINAR: LEGAL PRIVILEGE IN INVESTIGATIONS (PART 1) – HOW DOES IT DIFFER ACROSS JURISDICTIONS

On 3 June, Bird & Bird hosted an international panel of experts who conducted a lively panel discussion assessing the differences in the rules of legal privilege between jurisdictions around the world in the context of an investigation.  Key discussion points included why exactly legal privilege is so important; the different types of privilege; the public enforcement perspective; the key differences between civil and common law countries; and what legal professional privilege (LPP) means to you in practice.

https://www.twobirds.com/en/news/articles/2021/global/legal-privilege-in-investigations

EU COURT ANNULS THE 2019 ACTS EXTENDING THE FUND-FREEZING MEASURES IMPOSED ON VIKTOR YANUKOVYCH, FORMER PRESIDENT OF UKRAINE, AND HIS SON

A news release from the CJEU on 9 June advised that the EU General Court ruled that the EU Council had failed to demonstrate that the rights of the defence and the right to effective judicial protection were respected in the criminal proceedings in Ukraine underlying that extension. 

https://curia.europa.eu/jcms/upload/docs/application/pdf/2021-06/cp210096en.pdf

POST-BREXIT LUGANO DISCUSSIONS GRIND TO A HALT

On 9 June, the Law Society Gazette reported that discussions about whether the UK should be allowed to join a key international agreement appear to have stalled, sparking concerns that the EU has kicked the issue into the long grass.  In May, the European Commission recommended that the EU should block the UK’s accession to the 2007 Lugano Convention, an agreement setting out which country’s courts may hear cross-border disputes and which decisions can be enforced.  However, in order for a final decision to be made, the commission must make a formal proposal to be voted on by the European Council.

https://www.lawgazette.co.uk/news/lugano-discussions-grind-to-a-halt/5108769.article

UK: DOCUMENTS PRIVILEGED DESPITE ‘ELEMENT OF DECEPTION’

On 9 June, the Law Society Gazette reported that the High Court in London has ruled that a litigant’s legal documents must remain privileged despite it being accepted they were part of an information-gathering deception.

https://www.lawgazette.co.uk/law/documents-privileged-despite-element-of-deception/5108774.article

BRITISH JUDGE ORDERS DANISH TAX AUTHORITY TO PAY £46 MILLION LEGAL BILLS IN FAILED CUM-EX LITIGATION

On 9 June, City AM reported that the Danish authority had put a £1.5 billion fraud claim through the UK courts against Sanjay Shah and more than 100 other individuals and companies accusing them of fraudulently claiming tax rebates as part of the so-called cum-ex scandal.  Shah, accused of masterminding the Cum-Ex scheme, denies any wrongdoing and insists his trades were legitimate.

https://www.cityam.com/judge-orders-danish-tax-authority-to-foot-46m-legal-bills-in-failed-litigation/

LAND LAW: FAQ (ENGLAND & WALES) 

On 8 June, the House of Commons Library issued a research paper which provides an overview of land law in England & Wales.  It says that land law can be a difficult subject, often statutory provisions overlay ancient principles of common law and uses. The fact that land law has its own, rather archaic, vocabulary does not help.  The paper gives an overview of some commonly raised issues about land law, including how to trace ownership of registered and unregistered land; how to resolve boundary disputes; how to enforce or discharge a restrictive covenant on freehold land; and private rights of way.  It also signposts to sources of further information and relevant case law. 

https://commonslibrary.parliament.uk/research-briefings/sn06989/

MINING MAGNATE LIKENS CONGO TO 1950s SAUDI ARABIA

On 9 June, Rigzone reported that Canadian billionaire Robert Friedland, whose Kamoa-Kakula venture just started producing copper in DRC, says DRC has the world’s best deposits of the metal used in everything from electric cars to solar panels and power grids.  The article takes a brief overview of the situation in the country.  It says that while more established copper jurisdictions such as Chile and Peru still command a greater share of mining investment, project development is accelerating faster in Congo.  Friedland is said to liken Congo to Saudi Arabia in the 1950s when the giant Ghawar oil field started, with a government focused on fighting corruption and poverty, money from China, the Middle East and Europe is coming into a nation whose young, skilled population is anxious to lift up the country, he said.

https://www.rigzone.com/news/wire/mining_magnate_likens_congo_to_1950s_saudi_arabia-09-jun-2021-165638-article

INDIAN MONEY LAUNDERING SUSPECTS EXPAND THEIR NETWORK FURTHER INTO ALBANIA

On 9 June, Exit News carried a report following the OCCRP report on the Sandesara family, and saying that SEEMCO, which is owned by an Indian family involved in an ongoing money laundering case with links to Nigeria, has incorporated a company in Albania.  In September, a Nigerian special court declared the owners of SEEMCO, Nitin Sandesara, Chetan Sandesara, and Hiteshkumar Patel as fugitive economic offenders. 

https://exit.al/en/2021/06/09/indian-money-laundering-suspects-expand-their-network-further-into-albania

UK FURLOUGH FRAUD TASKFORCE AIMS TO SALVAGE $1.4 BILLION

On 9 June, BNN Bloomberg reported that HMRC says that it expects to recover about £1 billion of fraudulently or mistakenly claimed furlough cash over the next 2 years.  It is said that companies may have submitted as much as £3.5 billion of fraudulent or mistaken claims for furlough cash, and that officials had planned on the assumption of between 5% and 10% of claims being wrongfully submitted.

https://www.bnnbloomberg.ca/u-k-furlough-fraud-taskforce-aims-to-salvage-1-4-billion-1.1614647

SWEDISH BOMBARDIER EXECUTIVE CHARGED FOR AZERBAIJAN BRIBERY

On 9 June, OCCRP reported that a former manager at the Swedish branch of Bombardier Transportation, a major engineering company, has been indicted on charges of aggravated bribery in what is one of Sweden’s biggest ever corruption scandals.  He will now face trial for his role in the allegedly corrupt tender that Bombardier won in Azerbaijan in 2013.  Prosecutors argue the $350 million contract to install signalling systems for a section of Azeri railway involved Bombardier paying a $100 million bribe to at least one mid-ranking railway executive.  The allegedly bribed Azeri railway executive also represented a local business, Trans-Signal-Rabita (TSR), which won the tender together with the Swedish company.

https://www.occrp.org/en/daily/14593-swedish-bombardier-executive-charged-for-azerbaijan-bribery

SUCCESSOR TO KYRGYZSTAN’S DISGRACED CUSTOMS CHIEF ALSO ENJOYED THE HIGH LIFE

On 9 June, OCCRP reported on the successor to Raimbek Matraimov, the former deputy head of Kyrgyzstan’s customs service, saying that there have been no visible reforms since his dismissal.  It is said that a new investigation into his most prominent successor, Zamirbek Karashev, shows that the network reaches to the top of the customs service and that social media posts suggest that the Karashev and Matraimov families are close, even vacationing together at an expensive Thai resort.  The Karashevs also resemble the Matraimovs in their high-flying lifestyle. 

https://www.occrp.org/en/the-matraimov-kingdom/a-successor-to-raimbek-matraimov-kyrgyzstans-disgraced-customs-chief-also-enjoyed-the-high-life

MALAYSIA: CUSTOMS DEPT CRIPPLES SYNDICATE SMUGGLING CHEWING TOBACCO

On 9 June, the Sun Daily reported that the Royal Malaysian Customs Department has busted a syndicate smuggling chewing tobacco, believed for the local market.  On 6 June, the department had confiscated 3,371.86 kg of chewing tobacco; and also confiscated several machines believed to be used to process and pack the chewing tobacco.

https://www.thesundaily.my/home/customs-dept-cripples-syndicate-smuggling-chewing-tobacco-in-ipoh-AG7945882

US CUSTOMS PARTNERSHIP WITH THE NATIONAL INSURANCE CRIME BUREAU (NICB) TO PREVENT COMPANIES ASSOCIATED WITH SMUGGLING MIGRANTS FROM SECURING INSURANCE FOR THEIR COMMERCIAL ENTERPRISES

A news release from US Customs & Border Protection advised that the 2 bodies had launched Operation Sentinel targeting hundreds of criminal organisation members, their affiliates and their associated businesses, and investigating whether to exclude from Federal Programs, through actions such as suspension and/or debarment, any such persons who are not presently responsible. 

https://www.cbp.gov/newsroom/national-media-release/cbp-and-nicb-partner-target-criminal-smuggling-organizations

FLORIDA’S GUN TRAFFICKERS SUPPLYING BRAZIL’S LARGEST GANG

On 8 June, an article in Insight Crime says that Florida has been unable to shake its reputation as a go-to destination for Latin American criminals to secure guns and ammunition, with Brazil’s most powerful gang the latest recipient.  In the latest case, a trafficking ring sent by mail disguised shipments of weapons and ammunition from the Florida cities of Orlando and Kissimmee – as well as Tucson, Arizona – to Rio de Janeiro and São Paulo.

https://insightcrime.org/news/floridas-gun-traffickers-supplying-brazils-largest-gang/

PROPERTY BUSINESSES AT RISK OF BREACHING GDPR

On 9 June, The Negotiator and others reported that many businesses may be at risk of being in breach of GDPR rules, and that brokers, lenders and conveyancers are amongst the main offenders.  It is said that the property industry lags behind other sectors and many businesses are still reliant on physical copies of personal documents and do not have procedures in place to protect customer details, a situation exacerbated with the disruption caused by the Coronavirus outbreak.

https://thenegotiator.co.uk/property-businesses-at-risk-of-breaching-gdpr/

HOW TO START DISRUPTING CRYPTOCURRENCIES: “MINING” IS MONEY TRANSMISSION

On 9 June, an article in Lawfare says that, in the light of ransomware, it is time to explore different methods that different governments, including the US and others, can use to disrupt the Bitcoin and larger cryptocurrency ecosystem.  It argues that there are a lot of things that can throw sand in the gears, degrading Bitcoin and other systems into “unusability”.  It says that directly attacking cryptocurrency mining as incompatible with the US Bank Secrecy Act is one potentially powerful tool and treating mining as money transfer.

https://www.lawfareblog.com/how-start-disrupting-cryptocurrencies-mining-money-transmission

PODCAST: PROFITING FROM HUMAN RIGHTS ATROCITIES IN SYRIAN PRISONS

In the latest TRACE podcast, Omar Alshogre, refugee, political activist with the Syrian Emergency Task Force, and first year Georgetown University student, shares the wrenching story of his 3 years as a political prisoner in the worst of Syria’s prisons. He discusses the role that extortion plays there, simultaneously delegitimizing the regime further and propping it up financially.

https://www.traceinternational.org/resources-podcast

THIS IS HOW TO FIX TAX EVASION

On 9 June, an Op Ed article in the New York Times is by 5 former Secretaries of the US Treasury who served under 3 Presidents, both Republican and Democrat, representing 17 years of experience at the helm of the Department.  They say that they are convinced that more can be done to pursue evasion in the ways outlined by President Biden’s recent proposal to increase the resources and information available to the IRS. 

https://www.nytimes.com/2021/06/09/opinion/politics/irs-tax-evasion-geithner-lew-paulson-summers-rubin.html

SINGAPORE COURT DENIES BP ATTEMPTS TO STRIKE OFF HIN LEONG FRAUD ALLEGATIONS

On 9 June, Global Trade Review reported that a Singapore court has rejected an appeal by BP to strike off fraud accusations levelled by Bank of China, which was left out of pocket after failed circular oil sales involving disgraced trader Hin Leong.  The Bank accuses BP of knowingly engaging in fake oil trades with Hin Leong – an independent trading house that has since collapsed into insolvency.  BP had applied to have several charges struck out and while some of the claims were initially dismissed, the High Court has reversed that decision, concluding that the bank “does have an arguable case” against the trading giant.

https://www.gtreview.com/news/asia/singapore-court-denies-bp-attempts-to-strike-off-hin-leong-fraud-allegations/

SARDINIA CHARITY LINKED TO OUSTED VATICAN CARDINAL SEARCHED

On 9 June, the Mail Online reported that Italian police searched the offices of a Sardinian charity and diocese on behalf of Vatican prosecutors.  Cardinal Angelo Becciu was sacked as head of the Vatican´s saint-making office and stripped him of his rights and privileges as a cardinal in September, amid a crackdown on financial mismanagement and corruption in the Holy See.

https://www.dailymail.co.uk/wires/ap/article-9669839/Sardinia-charity-linked-ousted-Vatican-cardinal-searched.html

UK: FCA STILL ASSESSING HUNDREDS OF WHISTLEBLOWING REPORTS FROM 2019, WITH HUNDREDS MORE FROM 2020

On 9 June, an article from Thomson Reuters said that almost 1,000 whistle-blowing reports are still being assessed by the Financial Conduct Authority (FCA) in the UK, months — and in 316 cases, years — after they were brought to its attention, an FoI request has revealed.  FCA received 1,179 reports in 2019, containing 2,747 allegations. In 2020, it received 1,075 reports, containing 2,798 allegations.  The article notes that a review ordered by the FCA board in 2019 of the regulator’s treatment of whistleblowers is expected to report later this year; having delayed by the COVID-19 pandemic.

https://www.jdsupra.com/legalnews/uk-fca-still-assessing-hundreds-of-2394024/

EU TAKES LUXEMBOURG TO COURT OVER AML RULES

On 9 June, the Luxembourg Times reported that the European Commission is asking the European Court of Justice to impose a daily penalty on the country for failing to put new EU rules to stop money laundering into law.  Luxembourg conceded it was late with the implementation of the rules although deadline for EU Member States to introduce the measures into national law was October 2016. The Commission launched an infringement procedure against Luxembourg in November 2016. To date, Luxembourg had still not notified the Commission the transposition was complete.

https://www.luxtimes.lu/en/luxembourg/ruling-eu-takes-luxembourg-to-court-over-money-laundering-rules-60c0d2cede135b92367c7242

UK: ARTISTS FALL OUTSIDE THE SCOPE NEW AML RULES, BUT AMBIGUITIES REMAIN

An article from Mishcon de Reya on 9 June says that, as the deadline for Art Market Participants (AMP) to register with HMRC under the recently introduced AML regulations, HMRC has confirmed that artists fall outside the scope of AMP. However, it says, certain ambiguities remain.

https://www.mishcon.com/news/artists-exempt-from-anti-money-laundering-regulations

SHIP ABANDONMENTS SOARED IN 2020

On 9 June, Insurance Marine News reported that there were 85 ship abandonments reported in 2020, compared with 40 in 2019 and just 34 in 2018.  High-profile cases include that of Mohammad Aisha, a Syrian seafarer who was made legal guardian of the Bahrain-flagged 4,028 gross tons ship; and was forced to live on the abandoned vessel for 4 years while Egyptian authorities tried to sell the ship to pay the owners’ debts.  Human Rights at Sea and global law firm Reed Smith have published legal advice for crew who become stranded.

https://insurancemarinenews.com/insurance-marine-news/ship-abandonments-soared-in-2020/

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OFAC NICARAGUA SANCTIONS – NEW NAMES

On 9 June, OFAC advised that 4 new names had been added to its SDN List in connection with Nicaragua.  They are said to have been designated for supporting the Ortega regime’s efforts to undermine democracy, human rights, and the economy.  They are are –

·         Camila Antonia Ortega Murillo, the Coordinator of the Creative Economy Commission and daughter of Nicaraguan President Daniel Ortega;

·         Leonardo Ovidio Reyes Ramirez, President of the Central Bank of Nicaragua (BCN);

·                  Edwin Ramon Castro Rivera, a deputy of the Nicaraguan National Assembly (NNA); and

·                  Julio Modesto Rodriguez Balladares, a Brigadier General of the Nicaraguan Army and Executive Director of the Military Social Welfare Institute (IPSM).

https://home.treasury.gov/news/press-releases/jl0400

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20210609

Any modest contributions for my time and ongoing expenses are welcomed!  I have a page, where contributions start as low as $3, at https://www.buymeacoffee.com/KoIvM842y