Panama covid-19 update – I am getting ready for being locked down for the next 4 days. Tomorrow (Friday) is a “woman” day, with only women allowed out, then no-one at all is to be allowed out for the Easter weekend of Saturday and Sunday, followed by another women-only day on Monday. Meanwhile, newly reported cases have shown an increase in daily numbers – 279 and 244 for the last 2 days (though boosted by some overlooked cases, apparently!), with now a total of 2,752 and 66 fatalities. To put things into some proportion, the population of the country is 4 to 4.5 million.
9 April 2020
GERMANY SHARPENS CURBS ON FOREIGN TAKEOVERS AFTER US VACCINE MOVE
On 8 April, Barrons reported that German ministers have approved a draft law to tighten controls on foreign takeovers of domestic companies. This move was hastened following an alleged US bid for a German biotech company’s cutting-edge vaccine research. The new law would serve “essential German security interests, including the provision of vital goods such as vaccines” and follows a case where biotech business CureVac was forced to deny newspaper reports that the US had offered to pay “a billion dollars” for exclusive rights to its research into a coronavirus vaccine.
ANOTHER ACCOUNTING SCANDAL IN CHINA
On 7 April, BNN Bloomberg reported that, hard on the heels of the Luckin Coffee case comes another apparent scandal that raises concern over lax corporate governance at some of the country’s fastest-growing companies. The TAL Education Group, a tutoring business whose founder Zhang Bangxin is one of China’s richest people, announced that a routine internal audit found an employee had inflated sales by forging contracts.
US PROSECUTORS CLOSE INQUIRY INTO PAYMENTS BY AGRIBUSINESS IN MEXICO
On 8 April, the Wall Street Journal reported that prosecutors would not take enforcement action against CHS Inc. for a number of payments it made to Mexican customs officials. The company had disclosed in 2018 to US authorities that payments that were made to officials in connection with inspections of grain shipments.
UNDERSTANDING DIRECTORS’ DUTIES, AND RISKS, IN AN INSOLVENCY SITUATION
On 7 April, Gowling WLG published an article following a recent High Court case in London saying that directors owe a range of statutory, regulatory and common law duties to their company and, in an insolvency situation, to the creditors of a company. It is important that those duties are satisfied as far as possible, as a failure to comply can bring severe penalties. However, it says, understanding what the law requires is not always straightforward, as proven by the volume of litigation in this field. The article says that the case has highlighted the need for directors (or any person qualifying as a shadow director) to consider the need for specialist advice when putting their company through a dissolution or striking off procedure.
ALERTS FOR SUSPICIOUS BETTING PATTERNS IN TENNIS INCREASED DURING THE FIRST QUARTER OF 2020
On 9 April, KYC 360 reported that corrupt elements are targeted lower level tours as the sport headed towards a shutdown due to the coronavirus outbreak, the Tennis Integrity Unit (TIU) said. The TIU, which is tasked with tackling corruption in the game, said it received 38 match alerts from the regulated betting industry between January and 22 March, compared to 21 alerts for the same period last year.
SOUTH KOREAN VENDOR OF NORTH KOREAN PRODUCTS NOT VIOLATING SANCTIONS
On 9 April, NK Pro reported that Hwaibo, a South Korean e-Commerce platform selling North Korean goods including alcohol, antiques, and rare mushrooms has not breached sanctions, its owners and the South Korean Ministry of Unification have said. It is said that the goods involved were all imported prior to the 2010 imposition of the unilateral sanctions.
AI FOR USE IN AML/CFT AND HUMAN RIGHTS CONSIDERATIONS
A blog post from the Compliance & Enforcement blog from the New York University School of Law examines a recent court case in the Netherlands concluding that AML/CFT measures must also satisfy the EU principle of proportionality. The case was concerned with welfare fraud and the use of AI to detect it. The court held that the Dutch arrangements violated European human rights because the system lacked sufficient transparency and explainability. The post says that the court’s decision may give a signal as to how AI-based AML/CFT measures could be evaluated under EU law. It says that, like the Netherlands’ welfare fraud detection system, AML/CFT transaction monitoring systems generate alerts that may ultimately result in SAR being sent to the government for investigation and enforcement. One of the conclusions of the post is that, before asking the question of whether the use of AI tools for AML/CFT purposes would be compatible with human rights and GDPR constraints, we need first to understand how the human rights and GDPR frameworks apply to current AML/CFT processes.
SYRIAN AIR FORCE BEHIND CHEMICAL ATTACKS, INVESTIGATION TEAM FINDS
The Algemeiner on 8 April reported that a special investigative unit was established by members of the Organisation for the Prohibition of Chemical Weapons (OPCW) in 2018 to identify perpetrators of illegal attacks in Syria has reported that the Syrian Government was to blame.
UK EXPORT OF PPE PRODUCTS: IMPORTANT UPDATE ON CUSTOMS DECLARATIONS
On 8 April, the Institute of Export & international Trade provided updated information on new export regulations regarding personal protective equipment (PPE). It says that new, temporary rules have been introduced in response to the ever-increasing demand for this essential, life-saving equipment. It also says that, in these trying and uncertain times, classifying your PPE products correctly is a responsibility that cannot be taken lightly. It’s vital to limit errors and financial burdens, not only for business reasons, but the reputation of your company with your clients, Customs and HMRC.
JAMAICA FSC TO EXPAND ITS REGULATORY FUNCTIONS
On 8 April, the Jamaica Observer reported that the Financial Services Commission plans to expand its regulatory functions this year, to include domestic and international trust service providers and virtual asset service providers; and to enhance the regulations, guidelines, and practices under the AML/CFT framework over the period, for the non-banking sector.
LATVIA UNCOVERS ALLEGED INTERNATIONAL PLASTIC GRANULE MONEY LAUNDERING SCHEME
LSM in Latvia on 9 April reported that Criminal proceedings have been brought against a group of persons who are accused of attempting to launder more than €7 million of illicit funds using several companies and shady transactions. The scheme allegedly involved several fictitious businesses in Latvia, Belarus, Russia and Austria selling overpriced biopolymer granules to launder the illicit funds from August 2019 to April 2020.
COVID-19 RELIEF ON PROCEDURES FROM FinCEN
An article from Crowell Moring on 8 April provided details of relief from reporting and regulatory requirements announced by FinCEN. The relief included limited relief from undertaking beneficial ownership checks for depository institutions and federally insured credit unions that offer Paycheck Protection Program (PPP) loans to existing customers under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). There is also a temporary suspension of a February ruling on cash transaction report (CTR) reporting obligations for sole proprietors and entities operating under a “doing business as” (i.e. “trading as”) name. The article also comments on the practical considerations of the foregoing.
FATF PLENARY DELAYED – CORONAVIRUS LIKELY TO DELAY PAKISTAN EXIT FROM FATF GREY LIST
On 24 March, Voice of America reported that, despite FATF being due to consider Pakistan’s grey listing once more in June, the adverse effects of the Covid-19 virus are likely to delay the outcome. The article says that, in February, FATF said Pakistan had made progress in fulfilling 14 of the 27 action items required for removal from the list. Pakistan has to submit its progress report by April 15, ahead of a planned meeting in Bangkok during the second week of May, and the FATF plenary meeting scheduled for the first week of June in Paris. It was then reported that the FATF Plenary had been postponed until October.
UK CONFIRMS AMENDMENT OF 82 NAMES ON IRAN SANCTIONS LIST
On 9 April, HM Treasury issued a Notice confirming the amendment of the details of 82 entries subject to sanctions re Iran and on the UK’s Consolidated List, following publication of EU Regulation 2020/510/EU.
OFAC PUBLISHES AMENDED NORTH KOREA SANCTIONS REGULATIONS
On 9 April, OFAC released new regulations to take effect on 10 April. The new, amending regulations are concerned with incorporating blocking and correspondent account sanctions provisions, adding a new prohibition that is applicable for persons that are owned or controlled by a US financial institution and established or maintained outside the US, adding new statutory exemptions relevant to certain newly-added prohibitions, making technical and conforming edits to 3 definitions, revising an interpretive provision, and updating the authorities and delegation sections of the regulations. The changes also amend the definition of luxury goods.
US TREASURY UNDERSCORES COMMITMENT TO GLOBAL FLOW OF HUMANITARIAN AID IN FACE OF COVID-19 PANDEMIC
A news release from the US Treasury on 9 April echoed statements from the UN and EU in saying that the US is committed to ensuring the international flow of humanitarian aid continues through legitimate and transparent channels, despite the existing sanctions regimes. It says that it supports the critical work of governments, international organisations, non-profit organisations, and individuals delivering medical supplies and humanitarian assistance to areas affected by COVID-19, including Iran, Venezuela, Syria, and North Korea. It says that OFAC continues to maintain broad exemptions and authorisations, across its sanctions programmes including Iran, Venezuela, Syria, and DPRK, to ensure that US sanctions do not hamper the transfer and delivery of humanitarian aid – but that additional, specific licences can also be granted, and OFAC stands prepared to issue additional guidance related to humanitarian exemptions as appropriate.
ALGORITHMS AND AUTOMATION: NEW COUNCIL OF EUROPE GUIDELINES TO PREVENT HUMAN RIGHTS BREACHES
On 9 April, the Council of Europe published an article in which it called on its 47 Member States to take a precautionary approach to the development and use of algorithmic systems and adopt legislation, policies and practices that fully respect human rights. It warns of significant challenges to human rights related to the use of algorithmic systems, mostly concerning the right to a fair trial; privacy and data protection; freedom of thought, conscience and religion; the freedoms of expression and assembly; the right to equal treatment; and economic and social rights.
UK: BORDER FORCE PRIORITISING CHECKS ON MEDICAL EQUIPMENT
A news release from HMRC on 9 April announced that, to make sure medical equipment reaches the NHS front line quicker, Border Force will be prioritising checks on their shipments; with a new process for prioritising such checks on medical equipment.
HMRC MONEY LAUNDERING REGISTRATION GUIDANCE UPDATED
On 9 April, Accountancy Daily reported that HMRC had updated its guidance to clarify that a money service business or TCSP must wait until registration has been confirmed as successful before trading.
FCA BANS FINANCIAL ADVISER INVOLVED IN £4.5 MILLION FRAUD
On 9 April, International Adviser reported that the Financial Conduct Authority has banned Neil Bartlett after he was jailed for 8 years for his involvement in a multi-million-pound investment fraud. He reportedly “took over £740,000 from friends he had known since school, together with his friend’s parents and his own family” and also “took advantage of being the power of attorney for a vulnerable elderly victim and defrauded her”.
AUSTRALIA: A PORSCHE, A MERCEDES-BENZ AND PROPERTY PURCHASED WITH THE PROCEEDS OF A MILLION-DOLLAR FRAUD AGAINST THE NATIONAL DISABILITY INSURANCE SCHEME
On 9 April, The Age reported that the cars and property purchased using the proceeds have been forfeited to the government. Alaedine Rifai, 41, and Amal Hilmi, 36, had pleaded guilty to defrauding the federal scheme of $1.5 million through a criminal syndicate that earned some members upwards of $50,000 a day. The pair operated “providers” which offered services such as nursing, cleaning, transport and home fit-outs. Under the conspiracy the couple lodged over-inflated invoices for such services and falsely drew from victims’ disability plans, leaving them unable to make further claims.
UK: UPDATED GUIDANCE ON COMPLIANCE CHECKS FOR OPEN EXPORT LICENCES
On 9 April, the Department for International Trade published Notice to Exporters 2020/09 containing details of changes and further clarification on compliance checks for open licences. It provides further clarification on remote compliance checks by the Export Control Joint Unit.
US: EXPORTS OF SOME PERSONAL PROTECTIVE EQUIPMENT TO REQUIRE DHS APPROVAL
On 9 April, Sandler Travis Rosenberg reported that, with effect from 7 April, and until (at least 8 August) a new Department of Homeland Security temporary rule prohibits exports of the various types of personal protective equipment being used to treat COVID-19 (detailed in the article) without explicit approval by the Federal Emergency Management Agency (FEMA).
US CUSTOMS SEIZES A HALF-TON OF KHAT IN 2 SHIPMENTS FROM ETHIOPIA
A news release from US Customs & Border Protection on 8 April was concerned with the seizures made at Washington DC’s Dulles Airport, together with links to information on khat.
MORE ON THE ALLEGATIONS AGAINST COLOMBIA’S VICE-PRESIDENT
On 9 April, Insight Crime published a follow-up, including a radio interview and transcript, to its investigation allegedly linking the Colombian Vice-President Marta Lucía Ramírez and her husband, Álvaro Rincón, to an investment which also involved Guillermo Acevedo, aka “Memo Fantasma”, an alleged former drug lord and paramilitary commander.
JOINT WCO/WHO HS CLASSIFICATION LIST FOR COVID-19 MEDICAL SUPPLIES ISSUED
On 9 April, a news release from the World Customs Organisation saying that the HS Classification Reference for COVID-19 Medical Supplies has been updated, in a more structured and user-friendly format, to reflect more of the products that would be required in the professional opinion and experience of the WHO in public health. The updated edition expands the list of items to cover a greater range of medical equipment and supplies that are required as critical items by the WHO, such as oxygen concentrators and sample collection sets.
AUSTRALIA: WHO MAY BE CONSIDERED AN OFFICER OR OFFICE-HOLDER – HIGH COURT PROVIDES CLARIFICATION ON TEST
On 9 April, an article from Dentons was concerned with a recent High Court case which has provided clarification that even if a person does not have a formal title of an “office holder”, or if they do not have a function role or position within the management of the company, they may still be considered to be an officer of a company and have corresponding duties and responsibilities.
GAFILAT: COVID-19 AND AML/CFT – RISKS AND MITIGATION
On 8 April, FATF-style regional body for Latin American, GAFILAT, issued a communique setting out identified risks associated with the coronavirus crisis, as well as measures authorities and business could adopt to mitigate the risks. The mitigation measures included increased use of digital identity, as appropriate, to assist financial and virtual asset transactions, seeking to implement ALA/CFT measures with a risk-based approach, and strengthened monitoring of operations carried out by Non-Profit Organisations to ensure that donors reach their intended beneficiaries.
US COAST GUARD SAYS THAT 93,000 CREW MEMBERS ARE STILL ON CRUISE SHIPS OFF US
On 8 April, Insurance Marine News reported that the USCG has processed more than 120 vessels over a 3-week period to 5 April, collectively disembarking 250,000 passengers onto US soil. Despite this, the number of crew members who still remain stuck on board these ships was becoming a matter of increasing concern.
2 HISTORIC KHMER STATUES RETURNED TO CAMBODIA BY US CUSTOMS
A news release from US Immigration and Customs Enforcement on 9 April advised that the first item is an 11th Century sandstone Khmer statue torso of the Khleang style wearing a Khmer sampot, a traditional garment of Cambodia seized in San Francisco in 2017. The second item, dated between the early 10th to late 10th Century, is a large grey sandstone Khmer statue torso of an unidentified deity. The item was a part of a criminal seizure in September 2005 in Los Angeles. Cambodia had signed an MoU with the US on the restoration of archaeological material in 2018. The news release also mentions that ICE has recovered and returned approximately 12,500 artefacts to more than 30 countries since 2007, including paintings from France, Germany, Poland and Austria; cultural artefacts from China and Cambodia; dinosaur fossils from Mongolia; and illuminated manuscript left from Italy; a pair of royal Korean seals, ancient Peruvian ceramics, an ancient gold coffin repatriated to Egypt, and most recently, more than 500-year-old copy of Christopher Columbus’ letter describing his discoveries in the Americas to the Government of Italy.
DEA TO ALLOW INCREASED PRODUCTION OF CONTROLLED SUBSTANCES USED IN COVID-19 CARE
On 7 April, Homeland Security Today reported that the DEA is increasing Aggregate Production Quotas available to pharmaceutical manufacturers for the production of controlled substance medications that are in high demand due to the coronavirus (COVID-19) pandemic. DEA will also approve increases in imports of medications necessary for patients on ventilators.
ISLE OF MAN FOLLOWS UK AND EU WITH AMENDMENT OF 82 ENTRIES ON IRAN SANCTIONS LIST
On 9 April, a news release announced the amendments of the details of 82 entries on the Iran sanctions list, following publication of EU Regulation 2020/510/EU.
ISLE OF MAN AMENDED YEMEN SANCTIONS REGULATIONS
A news release on 9 April advised that the European Union (Yemen Sanctions) (Amendment) Order 2020 and Yemen Sanctions (Amendment) Regulations 2020 came into operation on 9 April, bringing Island law into line with that in the UK.
US: DARKNET VENDOR ARRESTED ON DISTRIBUTION AND MONEY LAUNDERING CHARGES
A DoJ news release on 9 April announced that a Maryland man, William Anderson Burgamy IV, 32, had been arrested on charges related to his alleged unlawful distribution of medications through the Darknet, and money laundering involving Bitcoin. He allegedly illegally operated as the Darknet vendor NeverPressedRX (NPRX) since at least August 2019. The NPRX vendor store claimed to sell authentic medications, including prescription opioids, sourced from US pharmacies.
UPDATED EU VAT COMMITTEE GUIDELINES
On 8 April, the EU published the latest updated version of the guidelines produced by the Committee established under the VAT Directive to promote the uniform application of the provisions of the VAT Directive. The Committee examines questions concerning the application of EU VAT provisions raised by the Commission or a Member State, and may agree guidelines on specific matters. The guidelines include the text of all the guidelines issued since the VAT Committee was set up in 1977.
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