Panama Covid-19 update – less confirmed cases added today than recently, though still over 100, and only 1 more fatality reported. A “woman” day here today, with only those women allowed out 2 hours – though presume the 50% of taxi drivers allowed to operate must be mostly men… More worrying is that the number of arrests for lockdown violators probably greater than the number of virus cases. Life goes on, however, even after panic when laptop stopped working this morning. New desktop not due until next week, but managed to find a place that could supply a new laptop in 2 days (but then the “broken” laptop decided to start working again…ho hum).
6 April 2020
NEW SAFETY GUIDE ON SAFETY OF RADIATION SOURCES USED FOR INSPECTION AND NON-MEDICAL HUMAN IMAGING
On 31 March, the International Atomic Energy Agency advised that non-medical human imaging is the use of radiation to screen people for purposes other than medical diagnosis, medical treatment or biomedical research. Ensuring its safe use is the focus of the recently issued IAEA Safety Guide on this subject. Such imaging includes screening of people to detect concealed objects, for instance prior to boarding an aircraft or when visiting a prison or to determine the presence of drugs in the bodies of suspected drug couriers. It provides detailed guidance, based on the experience of national authorities, on how to safely use X-ray generators and other types of radiation sources for inspection purposes and for non-medical human imaging.
UK: NO VICARIOUS LIABILITY FOR ROGUE EMPLOYEE’S DATA PROTECTION BREACH
Gowling WLG has produced a briefing about the recent Supreme Court decision in the Morrison case, in which it was found that the company was not responsible for a rogue employee’s disclosure of the workforce’s payroll data.
EU STRESSES HUMANITARIAN EXEMPTIONS IN SANCTIONS ALLOW FOR COVID-19 SUPPORT
A Declaration on 3 April from the EU has echoed that of the UN Secretary General that while both have called for an end to armed conflicts during the crisis, and that the terrorist threat has not gone away, the EU also stresses that sanctions should not impede the delivery of essential equipment and supplies necessary to fight the coronavirus and limit its spread worldwide. It underlines that UN and EU sanctions provide for humanitarian exceptions.
SUPPLY-CHAIN FINANCE IS NEW RISK IN CRISIS
In an article on 4 April, the Wall Street Journal is concerned about supply chain finance, which took off after the 2008 financial crisis, and allows companies to borrow money to pay their bills. It gives them flexibility with their cash for a low cost, but can paint a favourable picture of their liquidity because the deals effectively boost working capital but do not count as borrowing and do not need to be disclosed. It says that the lack of reporting makes it impossible to know the scale of the lending, but estimates put it at hundreds of billions of dollars globally. It is widely used in sectors such as consumer packaged goods, telecommunications, chemicals, retail and aerospace. The 3 biggest ratings companies have each issued reports last month highlighting the dangers of supply-chain financing, a fast-growing, opaque technique for delaying payments to suppliers to improve cash flow.
COMPANIES ARE FAILING TO DEPLOY KEY SOLUTION FOR EMAIL SECURITY
On 2 April, Dark Reading published an article claiming that a single — albeit complex-to-deploy — technology could stop the most expensive form of fraud – BEC or “business email compromise”. In 2019, it is reported that the FBI received nearly 24,000 complaints of BEC fraud totalling $1.8 billion in losses. It is said that Domain-based Message Authentication, Reporting, and Conformance, or DMARC, significantly reduces attackers’ abilities to spoof targeted domains and business executives by validating the path from the sending server to the receiver’s inbox. In addition, the technology gives an organisation’s email administrator visibility into how their domain is being abused in emails.
UK: HIGH COURT UPHOLDS CONVICTION OF 2 MEN FOR CARRYING A FLAG OF THE KURDISTAN WORKERS PARTY, AN ORGANISATION PROSCRIBED UNDER THE TERRORISM ACT 2000
In its update on 5 April, 6KBW College Hill reported on the unsuccessful appeal by 2 men who had been convicted of taking part in a demonstration in which each carried a flag of the Kurdistan Workers Party, an organisation proscribed under the Terrorism Act 2000. The appeal was concerned with whether the offence was one of strict liability, and if it were compatible with the ECHR.
IF YOUR FORCE MAJEURE CLAUSE DOES NOT COVER COVID-19 ISSUES – CONSIDER THE ENGLISH LAW DOCTRINE OF FRUSTRATION
On 1 April, law firm HFW issued an article, saying that it does so after receiving numerous queries from clients as to whether the force majeure clauses in their contracts will protect them from any issues caused by delays and/or defaults arising from COVID-19. It suggests that one possible option open to parties may be to rely on the English law doctrine of frustration.
WHAT CORONAVIRUS MEANS FOR ONLINE FRAUD, FORCED SEX, DRUG SMUGGLING AND WILDLIFE CRIME
On 3 April, an article from the Brookings Institute in the US says that COVID-19 is influencing crime and illicit economies around the world. Some of the immediate effects are likely to be ephemeral; others will take longer to emerge but are likely to be lasting. For example, street crimes in the US and Europe has reduced, for obvious reasons, and with people at home, burglaries and home invasions have become more difficult. However, with more people working and operating from home, expect a rise in online frauds, and countries that provide economic relief to those unemployed as a result of coronavirus can expect a rise in scams, with online thieves pretending to represent social security agencies and seek to obtain confidential information. It remarks that border closures and the shutdown of much international air traffic means that smuggling illicit drugs long distances has become harder, and it is reported that Mexican drug-trafficking organisations said to be facing shortages of precursor agents for the production of fentanyl, as traffic from China and India — which normally provide supply — has been disrupted.
ISLE OF MAN CONFIRMS REMOVAL OF 1 NAME FROM SANCTIONS LISTS
A news release on 6 April confirmed that Ibrahim MOHAMED KHALIL had been removed from the list of those subject to sanctions connected with ISIL/Al-Qaida.
US PROSECUTORS CHARGE FORMER FOX EXECUTIVES AND OTHERS IN FIFA CORRUPTION PROBE
On 6 April, Reuters reported new criminal charges against 2 former executives of 21st Century Fox Inc and a former co-CEO of Spanish media company Imagina Media Audiovisual SL, and Full Play Group SA, a Uruguayan sports marketing company. The charges arise from a long-running investigation of corruption surrounding FIFA, soccer’s world governing body.
LAW SOCIETY OF ENGLAND AND WALES REQUESTS FURTHER POSTPONEMENT OF TRUST REGISTRATION DATE UNDER EU 5th MONEY LAUNDERING DIRECTIVE
STEP on 6 April reported that the Society has asked HMRC to consider deferring the commencement dates of the new Trust Registration Service (TRS) rules based on 5AMLD, and to defer the commencement date of the EU’s DAC6 Directive. The current plan requires unregistered trusts already in existence to be registered by 31 March 2021. The DAC6 disclosure and reporting rules for intermediaries involved in designing and promoting cross-border tax planning schemes are due to take effect in July.
COLOMBIA: VICE-PRESIDENT “TIED TO SENIOR NARCO”
Colombia Reports on 6 April carried a claim that Vice President Marta Lucia Ramirez and her husband were in business with a senior drug trafficker. It is reported that they worked together with a former Medellin Cartel narco in the development of a real estate project in Bogota.
TAX AVOIDANCE PROMOTERS TARGET RETURNING NHS WORKERS
Website Taxation on 6 April reported that HMRC is concerned that promoters of tax avoidance schemes are targeting workers returning to the NHS to help respond to the coronavirus outbreak.
POLICE IN AUSTRALIA ARREST 2 MEN IN CONNECTION WITH A $2.6 MILLION BEC SCAM INVOLVING PHONEY INVOICES
Infosecurity on 6 April reported that police in Australia have arrested 2 men in connection with a BEC (business email compromise) scam involving phoney invoices. They are believed to part of a larger syndicate.
UK: DEPARTMENT FOR INTERNATIONAL TRADE OUTLINES SUPPORT AVAILABLE TO 160,000 EXPORTERS AND INTERNATIONAL INVESTORS DUE TO COVID-19
On 6 April, a news release from DIT advised that guidance on how to help secure export finance to keep trading during the coronavirus outbreak has been set out by government in direct communication to 160,000 exporters and investors.
DUE DILIGENCE IN THE AGE OF CORONAVIRUS
On 6 April, Cadwalader Wickersham and Taft LLP published an article – one of very, very many concerned with the coronavirus and its effect on business and business activities – saying that, in the context of COVID-19, there are significant challenges involved in conducting due diligence: hard-copy documents are inaccessible, in-person meetings have moved online, and on-site visits may be impossible. It provides advice on how companies can and should nonetheless continue to comply with the law by adjusting policies and procedures, mitigating new risks that arise through the use of alternative diligence methods, and by staying abreast of changing regulatory expectations.
DEFENCE SECTOR CORRUPTION, AN UNDERESTIMATED FOE IN TIMES OF CRISIS
On 6 April, a Commentary from RUSI says that, as states look to militaries to help combat the coronavirus outbreak, they risk empowering forces weakened by corruption and poor governance. It refers to Transparency International’s research which shows that in many developing and fragile states, defence sectors tend to be poorly governed, with high levels of secrecy and dysfunctional oversight structures often enable fraud, corruption and a wide range of abuses. The coronavirus crisis, like others before, has the potential to exacerbate these vulnerabilities, weakening militaries when they are needed most. The article warns that, in the longer term and as the crisis recedes, it is key that attention to oversight and control of the defence sector becomes a priority, especially in fragile and conflict-affected states.
$1 MILLION PENALTY FOR MISLEADING “MADE IN USA” CLAIMS
On 6 April, Sandler Travis Rosenberg reported that the Federal Trade Commission reports that a home products company has agreed to pay $1 million as part of a proposed settlement of charges that it made false, misleading, or unsubstantiated claims that certain of its products are all or virtually all made in the US.
DARKNET MARKET BANS SNAKE OIL CORONA “CURES”
On 6 April, OCCRP reported that Tor-hosted darknet site Monopoly Market has banned vendors seeking to use the platform to promote fraudulent coronavirus vaccines and cures.
CYBERCRIMINALS TARGETING CRITICAL HEALTHCARE INSTITUTIONS WITH RANSOMWARE
A news release from Interpol on 6 April advised that INTERPOL has issued a warning to organisations at the forefront of the global response to the COVID-19 outbreak that have also become targets of ransomware attacks, which are designed to lock them out of their critical systems in an attempt to extort payments. INTERPOL has issued a Purple Notice alerting police in all its 194 member countries to the heightened ransomware threat.
US CUSTOMS SEIZES $150,000 IN COUNTERFEIT DESIGNER BRAND CHARMS FROM HONG KONG
A news release from US Customs & Border Protection on 6 April announced that officers in Pittsburgh recently seized a shipment of 645 designer brand name charms shipped from Hong Kong in an express courier parcel. If authentic, the charms would have had a manufacturer’s suggested retail price of $150,150.
WRONGFUL TRADING: THE LEGAL POSITION IN JERSEY
On 6 April, Appleby published an article following the recent announcement of a temporary suspension of wrongful trading rules in the UK, meaning that company directors would not be personally liable for their decisions during the COVID-19 pandemic. The article explains the current situation in Jersey, saying that the legal position in Jersey remains that a director has a duty not to allow the company to trade if they know (or is reckless as to whether) the company will not avoid insolvency.
CORONAVIRUS: IRISH REVENUE RELAXES CORPORATION TAX PRESENCE RULES
On 6 April, Out-Law published an article saying that the Irish Revenue has issued new guidance for companies, saying that it is prepared to disregard an individual’s presence or absence from Ireland for corporation tax purposes if it is due to travel restrictions related to coronavirus.
US: MORE THAN HALF A MILLION MEDICAL SUPPLIES SEIZED FROM PRICE GOUGERS TO BE REDISTRIBUTED
On 6 April, Homeland Preparedness reported that the federal government has seized hundreds of thousands of personal protective equipment (PPE) from price gougers with the intent of redistributing them to front line workers working amid the COVID-19 crisis in New York and New Jersey. The items included around 192,000 N95 respirator masks, 598,000 medical grade gloves, and 130,000 surgical masks, hand sanitiser, disinfectant, among other items.
ADAPTATION OF FRENCH BANKRUPTCY LAW TO THE CORONAVIRUS CRISIS
On 6 April, Dentons published an article saying that to help protect companies, employees and managers from the cash flow consequences of the current health crisis, the French Government, has made temporary changes to its bankruptcy law.
NEW ZEALAND: FORMAL PUBLIC WARNING TO BROKER FIRM OVER AML FAILINGS, WITH PRIVATE WARNINGS TO 6 OTHERS
On 6 March, a release on Mondo Visione advised that the Financial Markets Authority (FMA) has issued a formal warning to NZX-accredited broker Tiger Brokers (NZ) Limited for failing to have several adequate AML protections in place. The regulator has also privately warned 6 other businesses over their AML practices, mainly due to late auditing of their systems and controls.
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