15 February 2020
PANAMA: PROBE CONTINUES INTO FORMER AMBASSADOR’S LINKS TO ODEBRECHT SCANDAL
On 14 February, Newsroom Panama reported that the Special Anti-Corruption Prosecutor’s questioning of Jaime Lasso, Panama’s former ambassador to South Korea, over links to the Odebrecht bribery scandal, is continuing. It is said that the investigation has found payments, including large sums reportedly paid to the Panamaniztan Party through various companies.
BRAZIL’S “CAR WASH” OPERATION PROBES BANKS FOR EMPLOYEES’ MONEY LAUNDERING SCHEME
On 14 February, an article from Dechert said that Brazilian authorities are investigating foreign and local banks for failure to prevent money-laundering transactions that would have led to bribery of officials of Petrobras, the state-owned oil company. It is reported that employees of 5 major banks were actively involved in a scheme between 2011 and 2014, and prosecutors are considering the banks’ potential negligence for weak internal controls. The investigation has included police raiding the homes of senior managers of Banco do Brasil—a state-controlled bank, with 4 branch managers accused. Authorities are said to have tracked a total of R$1.3 billion in bribes that may have gone through irregular accounts at various banks.
AUSTRALIA: FAKE POLYNESIAN “PRINCE” WHO STOLE $16 MILLION RELEASED FROM JAIL
On 15 February, the Daily Mail reported that New Zealander Joseph Hohepa Morehu-Barlow, 45, a fraudster who pretended to be a Tahitian prince and stole $16 million from taxpayers is set to be released from jail after serving just half of his 14-year prison sentence. The money came from his employer Queensland Health over 4 years where he was employed as a finance officer. The article says that, despite having recovered about $11.88 million, he still owes the state an increased amount of $11.6 million – due to more than $50,000 of interest accumulating each month.
AUSTRALIA: THE $650 MILLION SEASIDE DEVELOPMENT DRAGGED INTO CORRUPTION SCANDAL
In its 16 February edition, the Sydney Morning Herald carried an article about the $650 million Martha Cove development at Safety Beach, Melbourne, saying that it could be dragged further into the corruption scandal engulfing Casey Council and controversial developer John Woodman. The local council has announced an independent legal review of the Martha Cove development process which began in the 90s, because of its vast size and the many planning decisions that led to its construction.
A UKRAINIAN OLIGARCH BOUGHT THE MOST INFAMOUS MANSION ON THE MEDITERRANEAN
On 15 February, the Daily Beast reported that Rinat Akhmetov, the richest man in Ukraine, purchased a villa associated with an African genocide and triggered a lot of questions. Villa les Cèdres was bought and built up in 1904 by Belgium’s King Leopold II, who had amassed an enormous fortune through the brutal colonisation of the Congo. Amongst other things, Akhmetov was criticised for spending $250 million on the villa, rather than cleaning up his dirty factories in Mariupol.
MALTA FSA APPOINTS UK FINANCIAL SERVICES VETERANS TO SENIOR SUPERVISORY POSITIONS
On 15 February, Malta Today reported that 3 UK nationals, said to have vast experience in the British financial services market, are set to take up senior positions within the MFSA supervisory sector. It is part of the MFSA plan to improve it and the island’s image, by improving controls and supervision.
US DoJ REVISES VOLUNTARY SELF-DISCLOSURE POLICY FOR REPORTING SANCTIONS AND EXPORT CONTROL VIOLATIONS
On 12 February, Greenberg Traurig published an article about the DoJ encouraging companies to self-report wilful economic sanctions and export control violations by providing concrete incentives that significantly increase transparency. The revised policy bolsters incentives for voluntary disclosures in at least 2 key respects, it says. It does this by providing greater clarity and predictability on the benefits of disclosure, including a presumption that reporting companies will be given a non-prosecution agreement; and by expanding the class of companies that can avail themselves of these benefits, to include financial institutions and corporate successors-in-interest. The article makes the point that self-disclosure may reveal irregularities that investigators may not have uncovered. It also notes that the revised policy removes the exemption which previously excluded financial institutions from its coverage, in light of their “unique reporting obligations” – at least for sanctions and export violations being reported, and not to reports made to any other parts of the DoJ, for example for reporting money laundering. The article stresses that early planning is crucial to taking advantage of the new policy.
US-BASED GHANAIAN DOCTOR INDICTED FOR MORE THAN $23 MILLION IN HEALTHCARE FRAUD
On 15 February, Graphic Online reported that the surgeon is facing 58 counts of indictment has been accused of performing unnecessary procedures on patients, billing health care companies millions for surgeries he never performed and “poaching” patients at local hospitals. He owned and operated the Heart and Vascular Institute of North Florida since September 2015, and his office manager there was also indicted. It is believed that there were more than 3,600 surgeries billed over the last 5 years, with 85% to 90% of them being fraudulent.
THE US HAS PUBLISHED ITS QUARTERLY LIST OF COUNTRIES THAT REQUIRE OR MAY REQUIRE PARTICIPATION IN, OR COOPERATION WITH, AN INTERNATIONAL BOYCOTT
On 14 February, Sandler Travis Rosenberg reported that the latest quarterly list from US Treasury comprises Iraq, Kuwait, Lebanon, Libya, Qatar, Saudi Arabia, Syria, UAE, and Yemen and is unchanged from the previous list. The Arab League embargo on Israel is one of the foreign boycotts that are covered by the US law which prohibits US companies and their foreign affiliates from participating in foreign boycotts that the U.S. does not sanction.
SWEDISH MATCH TO INCREASE PRODUCTION CAPACITY FOR ITS SUCCESSFUL SNUS-LIKE TOBACCO-FREE NICOTINE POUCHES
On 13 February, TJI reported that Swedish Match has started distributing its non-tobacco pouch product ZYN across the US and now has decided to expand its US plant beyond its latest projection in order to support sales growth.
THE IAEA INCIDENT AND TRAFFICKING DATABASE (ITDB) – COMBATING ILLICIT TRAFFICKING OF RADIOACTIVE MATERIALS FOR 25 YEARS
In the February edition of the IAEA Bulletin, one article is about the ITDB – and says that if radioactive material is lost or stolen, the ITDB can help authorities improve the chances of the material’s recovery, reducing the risk that it will fall into the wrong hands. The article says that for the past 25 years, it has played an important role in fostering international cooperation and information sharing towards enhancing nuclear security globally. It catalogues voluntarily reported information related to lost or stolen nuclear and other radioactive material – from smuggling and sale of nuclear material, to the unauthorised disposal and the discovery of lost radioactive sources. It says that over 3,500 incidents have been reported since the iTDB came into being in 1995, and around 10% of which have been confirmed as acts related to trafficking or malicious use. The rest have been incidents of undetermined intent or unconnected with trafficking or malice. The article says that one of the key functions of the ITDB is to encourage information sharing on relevant nuclear security events among the 139 participating countries, and sharing information with other international bodies like Interpol. Users can review incidents in the database to identify common threats, trends and patterns, which can shed light on criminal activities involving radioactive material and help countries identify areas for strengthening nuclear security – such as revealing that thefts were most likely during the transport phase. The article also says how the ITDB helped authorities identify which systems and measures to strengthen regarding radioactive sources in scrap metal; preventing it being unknowingly melted and contaminate scrap metal. [Note: I recall a talk at a Multimodal exhibition a few years ago, about the risks of such contaminated scrap metal being imported from the Far East]
PROPOSED US ACTION TO COMBAT ILLICIT FISHING INDUSTRY’S SECURITY THREATS
A slightly older article, from the Stimson Center in the US on 11 December, said that the National Defense Authorization Act for FY 2020 includes 6 Stimson Center policy recommendations to combat the security threats posed by illegal, unregulated, and unreported (IUU) fishing, saying that this represents several years of work to fight IUU fishing and expand transparency across the seafood supply chain. It says that illegal fishing networks are closely linked to national security threats including transnational crime, human and drug trafficking, and piracy. It undermines the economic and food security of coastal communities across the globe and hurts honest fishers who follow the rules. The article provides background information on the development including, for example, explaining what IUU fishing is and why it is a threat and referred to a recently-published report on deep sea fishing.
WILL FOREIGN COMPANIES START DITCHING US DUAL-USE TECH?
An opinion piece, originally published in Defense News and reproduced by the Stimson Center, poses this question, noting that since the 90s European space and defence manufacturers have been “designing out” US technology, for fear of restrictions or being caught up in US sanctions etc.
CHEMICAL SECURITY RISK REDUCTION
The Stimson Center says that chemical weapons remain an enduring and real challenge to international peace and security and has launched a programme to promote the development of international standards for chemical security, increase implementation of national measures to secure chemical weapons related materials as required under international law, and identify the national legal infrastructures for chemical weapons non-proliferation security worldwide. It includes an index which serves as a tool for stakeholders to find real, open source examples of laws and regulations on chemical security – with the intention of increasing the relatively low levels of implementation of national measures to secure chemical weapons related materials in support of the objectives of the Chemical Weapons Convention (CWC) and the obligations of UN SCR 1540.
REFORM OF THE CFA FRANC IN WEST AFRICA – INTRODUCING THE “ECO”
Clifford Chance has produced a briefing saying that, on 21 December, the French Minister of Economy and Finance and the President of the Council of Ministers of the West African Economic and Monetary Union signed an agreement which provides for a reform of the CFA Franc used in the 8 countries of the WAEMU zone (Benin, Burkina Faso, Guinea-Bissau, Côte d’Ivoire, Mali, Niger, Senegal, and Togo), and replace it in 2020 with a new currency, the eco. This followed a decision of the Economic Community of West African States (ECOWAS) – which is composed of the WAEMU countries as well as Nigeria, Ghana, Gambia, Liberia, Guinea, Cape Verde and Sierra Leone – to create a monetary union with a single currency called the “eco”, to be introduced gradually. The briefing examines the background and impact of the changes proposed, the involvement of France.
HOW RUSSIANS AND UKRAINIANS SEE EACH OTHER
PYRAMID SCHEMES STILL A BANE IN RUSSIAN HINTERLAND
On 15 February, Rferl said in an article that pyramid schemes, or Ponzi schemes – in which investors are attracted by promises of outlandish returns which are then paid out from funds taken in from additional investors — were a hallmark of the so-called “wild 1990s” following the collapse of the Soviet Union and the introduction of economic shock therapy. It says that such frauds were an unsavoury aspect of Russian life that Vladimir Putin vowed to put an end to when he rose to power in 1999, but it appears pyramid schemes never went away – and their numbers may be rising, with the Central Bank having identified 200 suspicious organisations, up from 168 the previous year.