Panama Covid-19 update – 194 new cases added in the previous 24 hours, bringing the total up to 4,210, with 116 fatalities. There were also 553 arrests in the last 24 hours for breaking the curfew/isolation rules. Motorists who are caught have their cars towed away and lose both their car and driving licence for 3 months (in addition to any fine or jail term). Today (Friday) the last day to go out shopping etc until Monday (if a woman) or Tuesday (if a man), as the weekend is another total lockdown.
17 April 2020
SOUTH KOREAN HUMANITARIAN AID TO IRAN
On 17 April, the EU Sanctions Blog reported that South Korea had begun shipping humanitarian aid to Iran, under an OFAC licence. It is also said that work on the Korean Humanitarian Trade Arrangement (KHTA), for humanitarian transactions is progressing involving an Iranian bank which is not subject to US sanctions.
US PAYCHECK PROTECTION PROGRAM POSES AML COMPLIANCE CHALLENGES
On 17 April, KYC 360 reported that the $350 billion Paycheck Protection Program established by the Coronavirus Aid, Relief, and Economic Security Act means that many lenders releasing funds now face a substantial compliance burden: establishing an AML system that will pass regulatory scrutiny – especially for non-bank lenders not familiar with the rigors of AML compliance.
PAKISTAN: MUSLIM LEAGUE PRESIDENT IN MONEY LAUNDERING CASE
On 17 April, Pakistan Muslim League-Nawaz (PML-N) President and National Assembly Opposition Leader Shehbaz Sharif has been summonsed in a money laundering case. The National Accountability Bureau alleges that assets had been identified as illegally accumulated by Shehbaz and both his sons — Punjab Assembly Opposition Leader Hamza Shahbaz and Suleman Shehbaz. In December, NAB froze 23 properties of Shahbaz Sharif, his sons and other family members in connection with an investigation involving them in the income beyond means and money laundering case.
AUSTRALIA: BITCOIN ENTREPRENEUR WHOSE WIFE WENT MISSING FACES MONEY LAUNDERING PROBE
On 17 April, KYC 360 reported that John Louis Anthony Bigatton is being investigated for money laundering during his time as Australian director of Bitconnect, a failed cryptocurrency trading platform. Just a few months after Bitconnect’s collapse, Mr Bigatton’s wife Madeline vanished and is presumed dead. There is no suggestion Mr Bigatton had any involvement in his wife’s disappearance.
THE LAW OF E-SIGNATURES IN THE US AND CANADA
On 30 March, Baker McKenzie published an article saying that, in both the US and Canada, statutes have been enacted at the federal and state or provincial/territorial levels that allow e-signatures and electronic records to have the same legal effect as physical (or wet ink) signatures and physical records; and ensure that a contract is not invalid solely because it is in electronic form. It provides a brief introduction to the law in both countries.
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION SUSPENDS PLACING OF MONITORS IN BANKS
On 17 April, KYC 360 reported that the ASIC had suspended its programme, launched in 2018, of embedding agents inside banks as the COVID-19 crisis forced tens of thousands of bank staff into working from home. ASIC described the programme as one of the more powerful elements of its regulatory toolkit designed to “quickly identify and respond to conduct that produces unfair outcomes” while describing it as a “key example of our supervisory focus on early intervention and harm minimisation”.
US FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL UPDATES BSA/AML EXAMINATION MANUAL
On 15 April, the ABA Banking Journal reported that the Council has released long-awaited updates to its Bank Secrecy Act/Anti-Money Laundering examination manual. The updates — which do not establish new requirements — are intended to provide additional transparency and emphasize a risk-based approach to BSA/AML supervision. The manual was last updated in 2014.
COVID-19: DEVELOPMENTS IN EXTRADITION
A post from 6KBW College Hill on 7 April was concerned with how extradition hearings in the UK are being handled in the light of the crisis, referring to the rapid deployment of video link technology in the court system following the coronavirus (COVID-19) pandemic and consequent reduction of in-person hearings. The post considers the developments applicable to extradition proceedings; the current arrangements for hearings, appeals and removal; and the potential impact of the pandemic on the bars to extradition and bail applications.
IS GERMANY A HOTSPOT FOR THE ILLEGAL ANTIQUITIES MARKET?
ArtNet News has published an opinion (by the Secretary General of the Confédération Internationale des Négociants en Œuvres d’Art (CINOA), a trade organisation for art and antiques dealers) piece saying that a new report which claimed that Germany is a hotspot for the illegal antiques market is wrong and identifies what are claimed to be flaws in the report. It says that the report, following a 3-year study, identified no trafficked items or any evidence whatsoever that the sale of antiquities helped finance terrorism, but that the study nevertheless recommended that the German government clamp down on the German art market. The article says that the most reliable figures relating specifically to illicit trade currently available come from the WCO, whose latest Illicit Trade Report for 2018, published in December 2019, stated that cultural property (including all art and antiques, not just antiquities) accounted for 0.08% of trafficking seizures reported through its network. In 2018, a total of 314 trafficked archaeological items were seized globally and reported via the network, down from 703 in 2017.
MALAYSIA: ATTEMPT TO SMUGGLE IN 4,000 KG OF LIVE CRABS FOILED
On 17 April, the Daily Express of East Malaysia reported that marine police had foiled an attempt to smuggle in 4,000 kg of live crabs from a neighbouring country. 2 boats led by a local, 21, and a foreigner, 39, were detained.
MEXICO’S ANTI-CORRUPTION AND COMPLIANCE DEVELOPMENTS DESPITE COVID-19
On 17 April, a post on the FCPA Blog says that there have been important anti-corruption and compliance developments, that must not go unnoticed amidst the crisis. These include the first annual report of the Prosecution Bureau Specialized in the Combat of Corruption, which forms part of the Federal Prosecution Office (FGR). The post argues that compliance programmes must not be abandoned as they are essential to protect and defend the company in a potentially more adverse environment of heightened enforcement.
UK POLICE POWERS: PRE-CHARGE BAIL PUBLIC CONSULTATION
On 16 April, the Home Office reminded one of a public consultation to 29 May (launched in February). To address concerns about individuals being placed on pre-charge bail for long periods, the Policing and Crime Act 2017 introduced a presumption against pre-charge bail unless its application is considered both necessary and proportionate in all the circumstances. However, the government says it is concerned that pre-charge bail is not being used in cases where it may be necessary to prevent an individual from failing to surrender to custody, to prevent the individual from committing an offence whilst on bail or to prevent the individual from interfering with witnesses or otherwise obstructing the course of justice.
UK – TAX AVOIDANCE: A GENERAL ANTI-ABUSE RULE
On 17 April, the House of Commons Library produced an updated briefing paper which looks at the case that has been made recently for a GAAR, and the Coalition Government’s introduction of a ‘narrower’ General Anti-Abuse Rule in 2013. This paper looks at the introduction of the new GAAR, while a second paper looks at earlier debates over the case for a GAAR over the last 20 years. Other developments in the Government’s efforts in recent years to tackle both tax avoidance and tax evasion are discussed in a third Library paper.
TARGETED SANCTIONS AND AML MEASURES IN SUPPORT OF PEACE IN SOUTH SUDAN
The Wilson Center in the US published this brief saying that sanctions and other financial pressure instruments have been a primary foreign policy tool in addressing the crisis in South Sudan, but their efficacy has spawned debate among policymakers and stakeholders. The brief sets out to correct the record on the efficacy of sanctions and summarise work which has helped lay the groundwork for many recent policy actions, which the authors believe have contributed to forward movement in peace efforts. The brief recounts the history of sanctions involving South Sudan. It says that sanctions were just one part of a comprehensive diplomatic and financial pressure strategy to realise peace, protect human rights, and fight corruption. They demonstrate what a reasonably consistent and escalating approach looks like when coupled with enforcement and diplomacy, and they illustrate the integrated role that sanctions can play moving forward.
GAMBLER WINS APPEAL AGAINST HMRC OVER YAX ON HIS GAMBLING PROFITS
On 17 April, Accountancy Daily reported that an appeal tribunal had quashed assessments and penalties, finding that the taxpayer’s income was derived from his gambling activities and was not taxable trading income. The taxpayer had not filed a tax return for the years in question, but bank statements revealed frequent and regular deposits into his bank accounts, which suggested that trading had occurred. The taxpayer produced no evidence to support his claim that he was a successful gambler, and that in any event it was thought by HMRC to be improbable that he would have consistently beaten the odds.
THE REPUTATIONAL IMPACT OF THE LUANDA LEAKS
On 17 April, Control Risks published an article about the fallout from allegations that Angolan businesswoman Isabel dos Santos, daughter of former president José Eduardo dos Santos (1979-2017), had embezzled millions of dollars from the Angolan state. It concludes that the allegations will also result in greater scrutiny of companies operating in Angola, particularly those with a local partner, to uncover potential links to Isabel. Given the breadth of her business empire in the country, reputational risks for businesses will remain high over the coming year.
CORONAVIRUS STOKES COLOMBIA’S BLACK MARKET MEDICINE TRADE
On 16 April, Insight Crime carried an article saying that failures in Colombia’s healthcare system make it easy to cover up the illegal sales of medicine as it is highly difficult to track such shipments; and that the smuggling of medicine into Colombia is common – highlighting that, in August 2019, Colombian prosecutors dismantled a medicine contraband ring in the cities of Medellín, Cartagena and Santa Marta, which allegedly brought in expired medicine from Venezuela and Ecuador. This black market is, it argues, primed to take effect of the new crisis.
SURVEY ON THE PERCEPTION OF CUSTOMS INTEGRITY CONDUCTED IN 10 COUNTRIES
A news release from the WCO on 17 April advised that a survey aimed at assessing the perception of Customs integrity by Customs officers as well as private sector stakeholders has been conducted in 10 countries – Afghanistan, Ethiopia, Ghana, Liberia, Mali, Mozambique, Nepal, Sierra Leone, Tunisia and Tanzania. The survey was conducted in the 10 participating countries between January and February 2020 by Ernst & Young. The news releases says that, although the WCO Secretariat cannot publish the full results of the survey, it is worth noting that, across the countries surveyed, both Customs officers and private sector stakeholders generally feel that achieving a high level of integrity is a priority within their respective administrations. Additionally, more than half the private sector stakeholders surveyed do not comply with the rules set by administrations because they consider these rules to be overly complex.
KENYA: ABSA BANK RESUMES TRADING ON SECURITIES EXCHANGE AFTER ONE-WEEK SUSPENSION
All Africa on 17 April reported that ABSA Bank Kenya has resumed trading at the Nairobi Securities Exchange, after it was suspended over failing to observe AML rules last month.
HMRC LOSES LATEST APPEAL IN MULTI-MILLION POUND FOBT BATTLE WITH BETFRED
On 17 April, the Racing Post reported that the Upper Tribunal had upheld the decision of a lower appeal tribunal that the bookmaker should not have paid VAT on the takings from its fixed-odds betting terminals 2005-2013. This being on the grounds of “fiscal neutrality”, as similar machines did not bear VAT. HMRC is to appeal to the courts. The newspaper says that 2 years ago there had been estimates the retail bookmaking industry could receive as much as £1 billion if HMRC is ultimately unsuccessful in its appeal
ENGLAND CRICKET WORLD CUP WINNER ADIL RASHID IS FINED £36,000 FOR TAX AVOIDANCE
On 17 April, the Daily Mail reported that England’s World Cup winning cricket star Adil Rashid has been ‘named and shamed’ by HMRC as a tax evader.
NEW YORK COMPANY FRAUDULENTLY SOLICITED MORE THAN $680,000 FROM 18 CLIENTS TO OPEN INDIVIDUALLY MANAGED OFF-EXCHANGE FOREX ACCOUNTS AND MISAPPROPRIATED CLIENT FUNDS
On 17 April, a release on Mondo Visione advised that the CFTC had obtained a court order against Jason Amada and his company Amada Capital Management LLC.
THE OIL HEIST OF THE CENTURY
On 14 April, Global Witness published an article and video saying that Global Witness and partners had took an online audience on a virtual journey around the world – from an oil field off the Nigerian coast via Abuja and London to a courtroom in Italy – to tell the story of one of the biggest corporate corruption cases in history and the search for truth and accountability. It involved Shell and the Italian oil company Eni and Nigeria’s valuable OPL 245 oil block.
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