Panama Covid-19 update – 86 confirmed cases, and 1 death (out of around 4.5 million population), so the controls seem to be working in at least slowing the spread, though numbers slowly creeping up. You can’t get into the country unless you are a Panamanian or a resident (and even then face a 14-day quarantine), and it is very quiet out and about. However, good news for my family here is that our daughter is out of self-isolation, her suspect contact proving to have only a cold, and an initial test proving to be a “false positive” – perhaps indicating the difficulty in identifying early potential Covid-19 symptoms.
17 March 2020
BEC SCAMMERS LAUNCH CORONAVIRUS-THEMED ATTACK
The Bleeping Computer website on 13 March reported that a Business Email Compromise (BEC) cybercrime group has started using coronavirus-themed scam emails that advantage of the COVID-19 global outbreak to convince potential victims to send payments to attacker-controlled accounts.
THE ELUSIVE ‘DIRECTING MIND AND WILL’ – THE BARCLAYS CASE ACQUITTAL
On 13 March, Steptoe & Johnson LLP published an article about the acquittal of 3 former Barclays executives of criminal fraud charges brought by the SFO on charges based on allegations that they had conspired to make secret payments to Qatar in exchange for the state’s provision of financial assistance to Barclays during 2008. The case foundered on the so-called “identification principle”, a central feature of English corporate law which requires that a successful prosecution of a business needs to demonstrate that the “controlling minds” of the business (usually the board of directors) were aware of the criminal actions, and possessed the necessary mens rea (“guilty mind”). The article says that successive directors of the SFO have long argued that the identification doctrine has set too high a threshold for the establishment of corporate criminal liability and does not take into account the reality of increasingly complex and often global corporate structures. It also says that full details of the Barclays judgments will do nothing to silence critics of the identification principle and the chilling effect it apparently has on successfully prosecuting companies for certain crimes.
US SUPPLY CHAINS THREATENED BY HEIGHTENED SCRUTINY OF IMPORTS AFTER REPORTS OF FORCED LABOUR IN CHINA
On 6 March, Mayer Brown published an article saying that media reports that a factory in Nanchang, China, which produces components for electronics products sold by global technology companies, is allegedly using forced labour. It says that these reports threaten to further increase US Customs & Border Protection’s scrutiny of articles imported into the US that are thought to be produced using forced labour. The article highlights recent enforcement activity in this area by CBP, and heightened scrutiny in this area has significant implications for businesses with global supply chains.
THE ILLICIT WILDLIFE TRADE IN CHINA AND THE STATE RESPONSE FOLLOWING THE CORONAVIRUS OUTBREAK
On 16 March, the Jamestown Foundation in the US published an article saying that since the outbreak of COVID-19 in China, wildlife trade and consumption have become a top issue in the country, with a possible point of origin in the Huanan Seafood Market in Wuhan, Hubei Province. It says that experts have warned that governments should take measures to regulate (or ban outright) the trade and consumption of many wildlife species, and the Chinese government has taken several measures to reduce the spread of COVID-19, including a ban on the trade in wild animals. The article examines the Chinese government’s policy response towards the wildlife trade in the wake of the COVID-19 epidemic, and what this might portend for the future. It points out that black market wildlife trafficking is a major illicit business sector in China.
RUSSIA HAS DESIGNATED THE EUROPEAN ENDOWMENT FOR DEMOCRACY (EED) AS AN “UNDESIRABLE ORGANISATION”
On 17 March, the EU Sanctions Blog reported that, on 11 March, Russia had listed the European Endowment for Democracy (EED) – a Brussels-based organisation which supports democracy and independent media in Eastern Europe, North Africa and Turkey – under federal law. The post explains that fines may be imposed on designated organisations operating in Russia, and those working for the organisation may be imprisoned.
The EED is at –
US: SHIPPERS, FREIGHT FORWARDERS AND OTHER LINER INDUSTRY STAKEHOLDERS URGE THE FEDERAL MARITIME COMMISSION TO OUTLAW UNFAIR FEES CHARGED BY CONTAINER LINES
On 17 March, Loadstar reported that shippers, freight forwarders and other liner industry stakeholders have urged the FMC to pass into law the interpretive rule it drew up last year on demurrage and detention practices in the US. The claim was D&D fees were a “punitive” measure on customers and suppliers.
MORE AIRLINES USING PASSENGER AIRCRAFT AS MAKESHIFT FREIGHTERS, AS FORWARDERS EMPHASISE BORDERS “REMAIN OPEN” FOR CARGO
On 17 March, Loadstar reported comments from a person in the logistics industry saying that airlines in Europe, the US and Middle East were planning to introduce freighter services utilising grounded passenger fleets – although it was emphasised that freight is still moving despite the quarantines and lockdowns spreading around the world. It should be remembered that much airfreight moves (or moved) as cargo in the bellies of large passenger aircraft, rather than in dedicated cargo-only freighters.
THE NEXT CALIPHATE WOULD EMERGE IN WEST AFRICA, WARNS US GENERAL
On 17 March. Homeland Security Today reported that the next caliphate may be poised to emerge in a region long suffering from a lack of capacity or capability to combat terrorist groups, according to the leader of US Africa Command as he appeared before the House Armed Services Committee.
US COURT BLOCKS RULE CHANGE FOR EXPORTS OF 3D-PRINTED FIREARMS
On 17 March, EU Sanctions Blog reported that a US District Court had issued a preliminary injunction blocking the State Department from enforcing a final rule revising the munitions list (USML) categories relating to 3D-printed firearms.
EU AMENDS CENTRAL AFRICAN REPUBLIC SANCTIONS ARM EMBARGO
EU Council Decision 2020/408/CFSP amends the 2013 Council Decision extending the exemption to the arms embargo imposed on the Central African Republic, in line with and following the decision of the UN Security Council in Resolution 2507. The exemption allows the export of small arms and components, as well as unarmed ground military vehicles and ground military vehicles mounted with weapons with a calibre of 14.5 mm or less.
UK: HOME SECRETARY PUBLICLY CONFIRMS EXISTENCE OF THE JOINT STATE THREATS ASSESSMENT TEAM
On 17 March, the Home Office published a news release which publicly confirmed the existence of an organisation established to better understand the threat of hostile state activity and inform the government’s response. JSTAT was created in 2017 in response to the increased and evolving threat the UK faces from hostile states. The Director General of MI5 has ultimate responsibility for the organisation.
MAN PLEADS GUILTY IN $10 MILLION MONTANA COAL MINE FRAUD SCHEME
On 17 March, Associated Press reported that James Howard Boothe Jr from Virginia has pleaded guilty to fraud involving a central Montana coal mine over 5 years. He admitted his part in overbilling Signal Peak Energy for mining repairs and equipment.
SWISS FRAUD TRIAL OF GERMAN SOCCER OFFICIALS ON BRINK OF COLLAPSE
On 17 March, Reuters reported that the fraud trial of 3 former senior German soccer officials and a Swiss over a suspect payment linked to the 2006 World Cup hosted by Germany looked on the verge of collapse as the court ordered a weeks-long halt because of Covid-19.
DO MORE RULES LEAD TO MORE CORRUPTION, ASKS THE WORLD BANK
On 17 March, a post from the World Bank posed this question in referring to a new study which attempts to address some of these problems in estimating the corruption-regulation nexus. The study uses company-level survey data for 132 mostly developing countries collected by the World Bank’s Enterprise Surveys (ES) on the actual regulatory burden and corruption experienced by the businesses. To assess regulatory burden, the study looks at the percentage of a firm’s senior management’s time that is spent dealing with business regulations. The study finds that greater regulatory burden does indeed lead to higher overall and petty corruption. However, the post also says that the study is a starting point and there is much left to explore.
CORRUPTION FUELS WATER SHORTAGE IN SOUTH AFRICA
On 17 March, OCCRP said that a joint report released by Corruption Watch and Water Integrity Network says that drought is not the only cause but that water shortages across the country are aggravated by corruption. It is said that the state auditor found that the country’s Water and Sanitation Department had spent over $384 million irregularly in 2018 alone.
The report can be found at –
IDENTIFYING AND COMBATING SYNTHETIC IDENTITY FRAUD IN FINANCIAL SERVICES
Financier Worldwide reported in its April edition says that synthetic identity fraud is nascent but increasingly common, claimed to be the fastest-growing form of financial crime in the US. Furthermore, according to LexisNexis Risk Solutions, 61% of fraud losses for large banks stem from identity fraud. It says that, in July 2019, the US Federal Reserve published a white paper detailing its causes, and saying that synthetic identity fraud is a serious and growing problem for the US payments ecosystem that can only be addressed by a collaborative effort among all payments industry stakeholders. The article highlights the differences between traditional identity fraud and the new version, saying that various forms of synthetic fraud can impact victims in different ways – being described as one of the more serious forms of identity crime because it is difficult to detect and relatively easy to commit using readily available information. The article then identifies the main drivers behind synthetic identity fraud, a key factor being the vast amount of data sloshing about in companies’ systems. It is also said to have grown due to a lack of effective identity validation and verification tools, alongside efforts to reduce friction in all transactions. On countering it, the article says that technology such as machine learning (ML) and artificial intelligence (AI) are emerging as important tools to combat synthetic identity theft, and that efforts are ongoing to make it even harder for criminals to stitch together fraudulent identities. It says that, to prevent or minimise the impact of synthetic identity fraud, companies should revamp their internal processes to carry out effective verification, with the right tools to frustrate criminal attempts to defraud companies. It also proposes that companies should also consider incorporating non-traditional, third party data into their verification processes.
UK GAMBLING COMMISSION SUSPENDS LICENCE OF ISLE OF MAN-BASED LOTTERY OPERATOR
On 17 March, e-Gaming Review reported that the Gambling Commission had suspended the operating licence of International Multi-Media Entertainments Limited (aka The Lottery Centre) over failings in its social responsibility and AML policies.
UK: UNAOIL BRIBERY TRIAL SUSPENDED AMID CORONAVIRUS CONCERNS
On 17 March, City AM reported that the UK’s biggest corruption trial, in which 3 Unaoil executives, Ziad Akle, Paul Bond and Stephen Whiteley, have been accused by the SFO of conspiring to make corrupt payments in relation to oil contracts in Iraq.
SWITZERLAND: LATEST UPDATE OF ITS BLACKLIST OF INTERNATIONALLY-LICENSED ONLINE GAMBLING SITES
On 17 March, Calvin Ayre reported that the Swiss had released the latest update of its blacklist, as part of its purge of unauthorised gambling sites as they attempt to steer local gamblers to sites operated by the country’s brick-and-mortar casinos. It has added 27 new names, bringing the total number of blacklisted sites that local ISP are to block to 172. Most of the new names are described as”sketchy” Curacao-licensed online casinos, although one is a mirror of UK online betting giant Bet365.
US CONGRESS VOTES ON CARGO SCANNING LEGISLATION
On 17 March, Sandler Travis Rosenberg reported that the US Senate had approved a Bill, already approved by the House of Representatives, which would require the Department of Homeland Security to develop a plan to increase to 100% the rate of scanning commercial and passenger vehicles entering the US at land border ports of entry using large-scale non-intrusive inspection systems.
WHY A “MEASLY” 5 TONS OF COCAINE HAS COSTA RICA DEEPLY WORRIED
An article in Insight Crime on 17 March is concerned with the threats that Costa Rica is facing, saying that the seizure confirmed what has been increasingly evident in recent years: Costa Rica is now a major exporter of cocaine to Europe — and the shipments it sends are being handled by ever more sophisticated national networks.
UK: COURT SETS OUT GUIDELINES FOR INJUNCTIONS AGAINST ‘PERSONS UNKNOWN’
On 17 March, an article from Out-Law said that the Court of Appeal dismissed an effort by a clothing company to enforce an injunction against unnamed animal rights protestors, on the grounds that the claim had not been properly served and because the grounds for the injunction being brought were too broad. In doing so, the Court set out 7 procedural guidelines which it said were applicable to proceedings for interim relief against ‘persons unknown’ in protester cases.
MAN INDICTED FOR FRAUD AND MONEY LAUNDERING IN MULTI-MILLION-DOLLAR CATTLE PONZI SCHEME
A news release on 17 March from the US Attorney in South Dakota announced that Robert Blom, 58, has been indicted by a federal grand jury for 9 counts of wire fraud, 6 counts of mail fraud, and 17 counts of money laundering. Blom operated a custom cattle-feeding business in the Corsica area. As part of his business, Blom solicited investors for groups of cattle. It is alleged, however, that Blom sold the same groups of cattle to multiple different investors.
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