6 March 2020
PANAMA: EX- PRESIDENT VARELA AND BROTHER “KNEW OF ODEBRECHT MULTI-MILLION DOLLAR BACKDOOR PAYMENTS TO CAMPAIGNS”
On 6 March, Newsroom Panama reported claims that Juan Carlos Varela, former president 2009-2014, and his brother and deputy, José Luis Varela, were aware of the contributions made by the Odebrecht company to the Panamenista in Party, in which both had been president. This is a claim by the former ambassador to South Korea, Jaime Lasso. Odebrecht is said to have transferred approximately $ 6.7 million to accounts related to the Panamanian Party or its members through Lasso, who served as a fundraiser for the collective’s campaigns in 2009.
PIRATES BOARD CHEMICAL TANKER OFF BENIN
On 6 March, Seatrade Maritime News reported that a Greek-flagged chemical tanker carrying 22 crew members has been boarded by pirates in the Gulf of Guinea, the 51,000-dwt Minerva Virgo being boarded by 5 to 6 pirates off Benin.
FORMER CHAIRMAN OF THE INTERNATIONAL BANK OF AZERBAIJAN ALLEGEDLY USED A CHAIN OF TRUSTS AND SHELL COMPANIES STRETCHING FROM CYPRUS TO THE CHANNEL ISLANDS TO MOVE TENS OF MILLIONS OF DOLLARS
On 6 March, KYC 360 reported that court papers in London claimed that the scheme of Jahangir Hajiyev financed a life of luxury when he earned a salary of only $70,650 in 2008: with 4 mansions in the English countryside, a $42.5 million Gulfstream jet, a $13 million golf club outside London and a villa in Sardinia. There were adjoining Knightsbridge townhouses, $20 million of diamonds, designer handbags and other baubles from nearby Harrods. Hajiyev’s fortune — believed by law enforcement officials to have once exceeded $100 million — has become the focus of a ground-breaking money laundering case in the UK, with the NCA obtaining an unexplained wealth order against the wife.
MALTA TAX ADVISORS NAMED IN SPANISH MONEY LAUNDERING PROBE
On 5 March, Malta Today reported that Malta-resident company, Lian Sports, is implicated in the investigation of Spanish police into alleged football corruption, with football agent Abdilgafar Fali Ramadani and his associates with money laundering. The name of the tax advisors in Malta, said to have been involved in the scheme, has not been made public by the investigation.
ALBANIA OFFERS AMNESTY TO CURB SHADOW ECONOMY AND REVIVE GROWTH
On 3 March, Reuters reported that the government plans to offer an amnesty to businesses that have failed to disclose funds or made illegal gains, in an effort to formalise and revive the economy, open access to capital markets, and plug a budget shortfall. It is said that Albania’s informal economy equals 50% of Albania’s GDP, with 1 million Albanians living abroad (with only 2.8 million in the country) and $30 billion taken out of the Balkan country illegally.
US: REVISITING CONFLICT MINERALS COMPLIANCE – DEVELOPMENTS, TRENDS AND ACTION ITEMS FOR THE CURRENT REPORTING YEAR AND BEYOND
On 4 March, Ropes & Gray LLP published an article as the 7th year of filings under the US Conflict Minerals Rule will be due in slightly under 3 months. The article says that it is time for many companies to take a fresh look at their conflict minerals disclosure and compliance programme – in some cases, disclosures have become outdated and compliance programmes have not kept pace with market developments. In addition, over the last few years, the global regulatory landscape has continued to evolve. It also warns that investor expectations concerning supply chains continue to increase. It also points out that, although often lumped together with the US Conflict Minerals Rule, the EU Regulation is very different than its US counterpart. While only a small number of US-based companies that file under the US Rule will also be subject to the EU Regulation, the conflict minerals compliance programmes of a large number of US-based (and foreign) companies will be impacted by the EU Regulation, as discussed in the article. The article says that the global focus of the EU Regulation will soon start to draw more attention to other areas beyond the Democratic Republic of the Congo region. The article calls for businesses to revisit and review their compliance programmes, and the guidelines and red flags issued by the EU.
SWISS FREE PORTS: STILL A SAFE HOUSE FOR PRIVATE CLIENTS’ TROPHY ASSETS?
On 5 March, LALIVE in Switzerland published an article which says that Geneva is host to one of the largest free ports in the world, which is home to billions of Swiss francs’ worth of fine art and other high-value collectables, such as precious stones, wine and antiques. In recent years, however, critics have highlighted the risk of money laundering and tax evasion, as well as the reputational risk for customs warehouses. The article examines the legal situation of the Swiss free ports, which were the subject of a recent Swiss Federal Audit Office report following an evaluation of the supervisory activities carried out by the Federal Customs Administration (FCA) at free ports and open customs warehouses. It also considers how the evolution of customs warehouse and AML regulations will affect the attractiveness of Swiss free ports for private clients. The article warns that private clients who want to resort to the services of Swiss free ports are facing greater transparency, and they should be aware of the AML obligations imposed on the dealers and financial intermediaries with which they trade, particularly regarding due diligence enquiries to which they could be subject.
£53 MILLION WORTH OF LIVE EELS SMUGGLED OUT OF UK BY SEAFOOD SALESMAN
On 6 March, ITV News reported that Gilbert Khoo, 67, a seafood salesman has been given a 2-year suspended jail sentence after smuggling more than £53 million worth of endangered live eels out of the UK. He transported the rare elvers from London to Hong Kong, hidden underneath chilled fish, between 2015 and 2017. Hearings under the proceeds of crime legislation will take place in the future.
UK: FRAUD BY FORMER ONLINE ESTATE AGENT EMPLOYEE, AND MONEY LAUNDERING BY HIS WIFE
On 6 March, Property Industry Eye reported that Sofina Sarwar, the wife of Haroon Cassim, a former employee of online estate agent Yopa who had been convicted of a £1.5 million fraud, has herself been found guilty of money laundering. He had defrauded £505,000 from Yopa, and £960,000 from Camelot.
MARITIME SECURITY: NIGERIA ACQUIRES SPECIAL MISSION VESSELS
On 5 March, Homeland Security Today reported that the vessels which arrived the country recently are equipped with sophisticated intelligence gathering capability for timely detection and response to illegal activities in the maritime domain. The Gulf of Guinea is one of a handful of maritime piracy hotspots worldwide.
RANSOMWARE AGAINST THE MACHINE: HOW ADVERSARIES ARE LEARNING TO DISRUPT INDUSTRIAL PRODUCTION BY TARGETING IT AND OT
On 2 March, Homeland Security Today reported that since at least 2017, there has been a significant increase in public disclosures of ransomware incidents impacting industrial production and critical infrastructure organisations. Incidents have also resulted in significant disruptions and delays to the physical processes that enable organisations to produce and deliver goods and services. As financial crime actors have evolved their tactics from opportunistic to post-compromise ransomware deployment, we have observed an increase in adversaries’ internal reconnaissance that enables them to target systems that are vital to support the chain of production. It refers one to an article on Fireeye which says that truly understanding the unique nuances of industrial sector ransomware distribution operations requires a combination of skillsets and visibility across both IT and OT systems. Then, using examples derived from its consulting engagements and threat research, it sets out to explain how the shift to post-compromise ransomware operations is fuelling adversaries’ ability to disrupt industrial operations.
OFAC ISSUES NEW FAQ RELATING TO HUMANITARIAN ASSISTANCE EXEMPTIONS FOR IRAN
On 6 March, OFAC released a new FAQ related to the manner in which humanitarian goods or assistance can be provided to the Iranian people in response to the COVID-19 outbreak in Iran, consistent with the Iran-related sanctions administered by OFAC.
UK: GOVERNMENT ALLOWS BULK IMPORT AND STORAGE OF MEDICAL CANNABIS
On 2 March, the Pharmaceutical Journal reported that licensed wholesalers can now import larger quantities of cannabis-based products and hold supplies for future use by patients with prescriptions. Previously, medical cannabis could not be imported in bulk to be held as reserve stock — only the amounts that were required for individual prescriptions could be imported.
SEVERAL COUNTRIES HAVE BANNED OR RESTRICTED THE EXPORT OF MEDICAL EQUIPMENT IN THE FACE OF THE CORONAVIRUS CRISIS
On 6 March, the EU Sanctions Blog reported that countries, including Germany, France, Czech Republic, Turkey, Russia and China have restricted the export of medical protective items such as masks, gloves, gowns and goggles under domestic export control powers.
DRUG TRAFFICKING RING TAKEN DOWN IN NORWAY AND GERMANY
On 6 March, a news release from Eurojust advised that German and Norwegian authorities have taken down an organised criminal group, involved in the trafficking of illicit drugs between the 2 countries. An Albanian criminal network was trafficking drugs from Germany to Norway.
UK REVOKES MALDIVES AND ERITREA SANCTIONS REGULATIONS
The Republic of Maldives (Asset-Freezing) (Revocation) Regulations 2020 revoke, with effect from 27 March,the Republic of Maldives (Asset-Freezing) Regulations 2018 as the EU Regulation on which they are based has been repealed.
The Eritrea (Asset-Freezing) (Revocation) Regulations 2020 revoke, with effect from 27 March, the Eritrea (Asset-Freezing) Regulations 2012 as the EU Regulation on which they are based has been repealed.
GREECE INTRODUCES NEW VAT RULES FOR CHARTER VESSELS
On 6 March, Superyacht News reported that confusion remains over how Greece will implement the system and whether it will be operational by Summer 2020. The new VAT rules are in accordance with the EU Directive and are the same rules that have been applied in both France and Italy (but with what are described as “subtle” differences. The new rules are based on the principle that VAT is charged at the full rate for the time that the yacht is in EU waters, and no VAT is applicable while in international waters or non-EU waters. VAT will be applicable in the country where the charter begins.
RUSSIAN BUSINESSMAN OLEG TINKOV, CHARGED IN US WITH FILING FALSE TAX RETURNS AND EXTRADITION SOUGHT
On 6 March, Reuters reported that the Russian businessman, the founder of TCS Group – the parent company of Tinkoff Bank, a pioneer of online banking technology with more than 10 million customers in Russia and the country’s second-largest credit card issuer – said that he was battling acute leukaemia, a day after the US DoJ said it was charging him with filing false tax returns.
UK: PIRATE STREAMING SCAM COULD HAVE COST MOVIE INDUSTRY £200 MILLION
On 6 March, the Telegraph & Argus reported that Malik Luqman Farooq, 31, from Yorkshire has been jailed for 27 months after pleading guilty to conspiracy to defraud between September 2014 and April 2015. A City of London Police investigation revealed he had been making blockbuster movies available to download online.
IRELAND: WIFE OF SUICIDE CHARITY FOUNDER TO STAND TRIAL ACCUSED OF FRAUDULENT TRADING AND CONCEALING CRIME PROCEEDS
On 6 March, The Journal reported that Patricia Kelly, 58, the wife of Console Suicide Bereavement founder Paul Kelly is to stand trial accused of fraudulent trading and concealing crime proceeds of the suicide prevention charity. Paul Kelly, the former CEO took his own life before he could be charged with financial irregularities at Console.
US: FORMER ACTING INSPECTOR GENERAL FOR DEPARTMENT OF HOMELAND SECURITY INDICTED FOR FRAUD AND THEFT
On 6 March, The Epoch Times reported that Charles Edwards, 59, served as the acting Inspector General for the DHS between 2011 and 2013 as part the Obama Administration. He and Murali Yamazula Venkata, 54, were both charged with wire fraud conspiracy to commit theft of government property, conspiracy to defraud the US, aggravated identity theft, and theft of government property. Venkata, a former subordinate of Edwards, is accused of destroying records. The indictment is said to relate to stealing confidential and proprietary software from DHS.
IRELAND: MALE MODEL FACING INTERNATIONAL MONEY LAUNDERING CHARGES ARRESTED ON EXTRADITION WARRANT
On 6 March, The Journal reported that a male model facing international money laundering charges has been arrested and taken to the High Court on an extradition warrant. Mark Adams, 40, is accused of being a cash courier making dozens of flights over 4 years, and was stopped at Belfast Airport on 9 May 2018 travelling with only hand luggage, and with €180,000 in 2 brown envelopes.
INDIA: YES BANK FOUNDER HAS HOUSE SEARCHED BY AUTHORITIES IN MONEY LAUNDERING PROBE
On 6 March, the Times of India reported that the Enforcement Directorate has raided the Mumbai residence of Rana Kapoor under the Prevention of Money Laundering Act (PMLA).
SRI LANKA: 10 ARREST WARRANTS REPORTEDLY ISSUED OVER BOND SCAM INCLUDES FORMER MINISTER
On 6 March, the ColomboPage website claimed that a Sri Lankan court has issued warrants to arrest former Finance Minister Ravi Karunanayake and 9 others who are accused of the Central Bank Treasury bonds fraud in respect of bond auctions held in 2016. It is reported that the Magistrate also ordered to impose a travel ban on former minister Ravi Karunanayake and others.
UK GOVERNMENT RESPONSE TO DISGUISED REMUNERATION LOAN CHARGE INDEPENDENT REVIEW
On 6 March, a news release from HM Treasury advised that the independent review (commissioned in September 2019) of the disguised remuneration loan charge has now concluded and the government has published its response. The review was to consider whether the policy is an appropriate response to the tax avoidance behaviour in question, and whether the changes the government has announced to support individuals to meet their tax liabilities have addressed any legitimate concerns raised. It is noted that HMRC have updated its guidance with some additional information. The Loan Charge mechanism is designed to tackle disguised remuneration tax avoidance schemes where a person’s income is paid as a loan which is not repaid.
KIEV-BASED FRAUD CALL CENTRE LINKED TO OPERATIONS IN ALBANIA AND GEORGIA
On 6 March, OCCRP followed up its claims about the “Milton Group” in Kiev (or Kyiv in Ukrainian), claiming that it is part of a web of similar operations across several countries that employ an army of salespeople to hawk dubious investments to victims around the world.
€7.9 MILLION OF ILLEGAL PRODUCTS SEIZED IN HIT AGAINST MEDICINE TRAFFICKERS
A news release from Europol on 6 March advised that it had supported a pan-European operation targeting the illicit online and offline trafficking of misused and counterfeit medicines. The operation, led by the French National Gendarmerie and Finnish Customs, involved law enforcement authorities from 11 EU Member States, Bosnia and Herzegovina, Ukraine, the UK and US. The operation was carried out between July and October 2019. 165 arrests were made and 12 organised crime groups dismantled in Europe-wide operation.
MARSHALL ISLANDS SHIPPING REGISTRY COMPARES IT AND COUNTRY’S COMPLIANCE RECORDS TO RIVALS
On 6 March, Hellenic Shipping News published an article saying that International Registries Inc (its agent) and the Republic of the Marshall Islands (RMI) have issued what it describes as a compliance update. It notes its results in OECD, FATF, EU and French evaluations. It compares its performance to that of the Bahamas, Cayman Islands, Liberia and Panama.
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