Month: March 2020

On 31 March, OCCRP reported that the DoJ has issued injunctions barring 2 telecom carriers from facilitating robocalls that led to people paying millions to fraudsters for solving made-up legal predicaments.  They follow the first-ever DoJ complaints against robocall companies.  It is said that, through the voice over internet protocol (Voip) services offered by the companies involved, international call centres were able to forward robocalls to victims in the US.

https://www.occrp.org/en/daily/11965-us-blocks-telecom-companies-from-facilitating-robocall-fraud

 

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On 31 March, FATF issued the 3^rd follow-up report following the 2016 mutual evaluation report on the AML/CFT systems of the US.  As a result of improvements, FATF has decided to upgrade its rating for FATF Recommendation 10 (Customer Due Diligence) – from Partially Compliant to Largely Compliant.  Like many other countries, the US has been in the enhanced follow-up process since 2016.  The new report also looks at whether the United States’ measures meet the requirements of FATF Recommendations that have changed since the 2016 mutual evaluation.  The US is now compliant on 9 of the 40 FATF Recommendations and largely compliant on 22 of them.  It remains partially compliant on 5 and not compliant on 4 of them. The US remains in enhanced follow-up and will report back to the FATF on progress to strengthen its systems.  As with such follow-up reports, only the technical compliance ratings are considered – not the effectiveness ratings.

http://www.fatf-gafi.org/media/fatf/documents/reports/fur/Follow-Up-Report-United-States-March-2020.pdf

 

 

 

 

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In the UK, the Office for Financial Sanctions Implementation reports that it has imposed combined penalties of £20,471,809.83 on the bank.  The decision to impose the penalties was upheld by Economic Secretary to HM Treasury on 18 February.  The 2 penalties are imposed for breaches of the Ukraine (European Union Financial Sanctions) (No.3) Regulations 2014.  The penalties take into account a 30% reduction for voluntary disclosure.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/876971/200331_-_SCB_Penalty_Report.pdf

 

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In its Spotlight 54, HMRC reports on tax avoidance schemes being used to target workers returning to the NHS to help respond to the coronavirus (COVID-19) outbreak.  It says that is aware that unscrupulous promoters of tax avoidance schemes are targeting workers returning to the NHS.  It cautions that you to be very careful not to sign up to these schemes, which HMRC considers to be tax avoidance.

https://www.gov.uk/guidance/tax-avoidance-promoters-targeting-returning-nhs-workers-spotlight-54

 

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On 29 March, the Irish Independent reported that the ECJ has held that proceeds of crime legislation, used to confiscate illegally obtained assets, is lawful.  In Ireland, the measure was brought in after the brutal murder of Sunday Independent investigative journalist Veronica Guerin in 1996.  The matter was referred to the Court by Bulgaria, which asked if EU law precluded Member States from providing for civil proceedings for confiscation, which were unrelated to a finding of a criminal offence, and arose from a case in which a Bulgarian banker is the subject of criminal proceedings for allegedly having incited others, between December 2011 and June 2014, to misappropriate funds belonging to the bank.

https://www.independent.ie/irish-news/news/crime-assets-confiscation-is-lawful-eu-court-rules-39084611.html

 

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On 28 March, a post on the Compliance & Enforcement blog of the New York University School of Law sets out to explain how the SEC is coping and on what its Enforcement Division will be concentrating during the crisis.  It is said, as one might expect, that it will be focusing on things and people seeking to take advantage of the crisis to carry out scams and frauds etc.  However, it is said that the majority of SEC staff have begun teleworking, and the agency has “transitioned to a full telework posture with limited exceptions”.  The post lists the types of investigations it expects the Enforcement Division to undertake.

https://wp.nyu.edu/compliance_enforcement/2020/03/27/how-the-sec-enforcement-division-responds-to-a-crisis/

 

 

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On 12 March, Pole Star published an article saying that Deputy Assistant Secretary of State for Counter Threat Finance and Sanctions, had outlined details relating to a forthcoming advisory that will see the US State Department and OFAC now focusing on all areas of maritime trade and shipping.  It is said that the scrutiny included flag registries, ship owners and operators, ships (in particular ship types carrying specific cargoes under strategic sanctions programmes), chartering, insurance, ports, shipping service providers and the maritime supply chain as a whole.  It was emphasised that –

• no organisation is too large or too safe to elude sanctions;
• OFAC is focusing on sanctions that have an impact beyond the designated target itself;
• knowledge of where a vessel has been operating including ports, regions, and jurisdictions is necessary;
• the screening process must investigate all associated companies commercially and operationally engaged with the ship, including the ship’s beneficial ownership, registered owner, operator, and managers, its flag registry, and the associated companies’ country of registration, domicile, and control;
• any suspicion of the use or presence of false documents must be reported to the appropriate authorities; and
• one must be vigilant about, and investigate any suspicions of, ship-to-ship transfers.

https://www.polestarglobal.com/keep-up-to-date/news/us-regulators-place-shipping-industry-under-the-regulatory-microscope/

 

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On 27 March, a news release from the World Customs Organisation advised the publication of the “Customs – FIU Cooperation Handbook,” the result of a collaborative effort between the Egmont Group of FIU and the WCO.  Its main objective is said to be to further promote cooperation between FIU and Customs services to effectively disrupt cross-border money laundering and terrorism financing activities.  It highlights common AML challenges and provides recommendations to Customs services and FIUs on topics including –

• smuggling and concealment of currency, currency equivalents, gems and precious metals;
• trade-based money laundering; and
• money or value transfer systems and alternative remittance systems.

A public version of the Handbook is available –

http://www.wcoomd.org/-/media/wco/public/global/pdf/topics/enforcement-and-compliance/report/wco_fiu_handbook_sanitised-public-version_wco_en.pdf?la=en

 

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On 27 March, The Shift News reported that Malta’s lack of enforcement in the highly-controversial Individual Investor Programme (IIP) was put under a microscope by international anti-corruption NGO Global Witness who repeatedly called for an end to such a scheme in EU countries.  A report from Global Witness looked at passport schemes offered by Malta, Cyprus and Portugal – and criticised Malta’s response to revelations on shady passport buyers as being “weak”.  The document went on to list numerous reports linking Maltese passport holders with money laundering, fraud or tax-dodging crimes that emerged throughout 2019.

https://theshiftnews.com/2020/03/27/report-slams-weak-response-by-identity-malta-on-shady-passport-clients/

The report is at –

https://www.globalwitness.org/documents/19881/Europes_Golden_Doors.pdf

The report says, amongst other things, that –

• Serious concerns remain over changes Cyprus introduced to its scheme being only a tokenistic response to public scandals;
• Malta has failed to introduce any changes to address money laundering and corruption risks associated with its scheme; and
• Proposed reforms in Portugal, which have been delayed until 2021, concentrate only on dissuading investment into the local property market, rather than reducing money laundering risks; and
• No EU Member State has ended its investor citizenship or investor residence schemes – in fact, some have hit new highs in terms of the number of applications approved.

https://www.euractiv.com/section/justice-home-affairs/news/golden-passports-still-widespread-in-europe-study-finds/

 

 

 

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On 26 March, the Open Democracy website carried an article in its Dark Money series about the involvement of a Northern Ireland-registered limited partnership used to hire crew for flags of convenience shipping.  It says there were no such limited partnerships in Northern Ireland in 2013, but there were 289 by 2017.  This rapid increase followed attempts to limit the use of Scottish limited partnerships, which had become notorious as the secrecy vehicle of choice in money-laundering scandals around the world.  The article says that the limited partnerships are attracting official attention, with raids in January linked to a £215 million money laundering case.  The article says that Northern Ireland limited partnerships have been used in secretive transactions around the world, one featured in a secret lobbying row in Ukraine.  Another was linked to massive theft in Moldova.

https://www.opendemocracy.net/en/dark-money-investigations/northern-irish-ghost-companies-mask-crime-worldwide/

 

 

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