Panama Covid-19 update – big day tomorrow, first Saturday for around a month which is not a lockdown day – so that, as a “man” day one (i.e. me) can venture out. Having said that apparently closest supermarket closing down for a month for a deep clean… So an excuse to wander further perhaps. The 150 new cases today takes us to 9,268 total (of whom 6, 080 said to have recovered so far), with 6 fatalities (around the usual daily average lately), taking us to a total 266 to date. Oh, and the international flight ban has been extended to 22 June…
15 May 2020
RANSOMWARE NOW DEMANDS EXTRA PAYMENT TO DELETE STOLEN FILES
On 13 May, the Bleeping Computer website reported that a ransomware group has taken a new direction, demanding ransom for decryption and demanding a second ransom not to publish the files they have stolen. Now, it says, almost all network-targeting groups now are following suit, creating leak sites where they publish the stolen data of companies that fail to pay this second ransom.
FBI PROBES MEXICAN AND EUROPEAN FIRMS OVER VENEZUELA OIL TRADING
Reuters on 13 May reported that sources said that said the FBI was gathering information on 2 Europe-based oil trading companies that do have a track record of dealing in Venezuelan oil or selling fuel to PDVSA: Elemento Ltd and Swissoil Trading SA. Views were divided on whether any action against the Mexican and European companies could be postponed or cancelled if the firms halted trade with Venezuela, or that the probe by the US Treasury and State Departments could potentially lead to action in the coming weeks.
EUROPEAN COURT CONSIDERS BLOCK ON GERMAN TELECOMS CONTRACT AND EU BLOCKING STATUTE
On 13 May, the EU Sanctions Blog reported that a German court has made a request to the European Court of Justice for preliminary ruling on the meaning of the EU Blocking Regulation (Council Regulation (EC) No 2271/96). The dispute arose after Telekom Deutschland terminated Bank Melli Iran’s telephone and internet access in November 2018 (the month the US re-imposed secondary sanctions on Iran). The Blocking Regulation is designed to prohibit EU companies of having to comply with certain US sanctions and does not recognise any verdicts by courts that enforce US penalties.
ARE SANCTIONS HINDERING COUNTRIES LIKE IRAN IN THEIR EFFORTS TO TACKLE THE CORONAVIRUS PANDEMIC?
On 13 May, the House of Commons Library published a briefing paper posing this question in the light of calls for sanctions to be eased, claiming that medical work in Cuba, Iran, North Korea, Sudan, Syria and Venezuela is being hindered. It points out that both trade sanctions and sanctions targeted at individuals now usually provide for humanitarian exemptions.
AUSTRALIA: AML IDENTIFICATION RULES LOOSENED TO ASSIST THOSE IN ISOLATION OR COMPANIES IN SHUT DOWN MODE
A Client Alert from Baker McKenzie in Australia says that the relevant AML-CFT rules have been amended to provide greater legal certainty around the use of alternative identity proofing and verification processes during the current COVID-19 Pandemic.
TO WHAT EXTENT DOES THE UAE LAW RECOGNISE THE SEPARATE LEGAL PERSONALITY OF AN LLC AND CAN THE CORPORATE VEIL CAN BE PIERCED?
Horizon / Co in the UAE on 4 May published an article asking this question, explaining that piercing the corporate veil occurs when a Court holds a LLC’s shareholders, managers and directors personally liable for the debts of the LLC. It says that shareholders and managers of an LLC are given a certain degree of protection. Under ordinary circumstances, the debts of a company are attributable to its shareholder and managers only to the value of their shareholding in the LLC ‘ in other words, creditors cannot generally pursue shareholders and managers beyond their shareholding in the LLC (such as their personal assets).
DRAFT LAW ON COUNTERING WMD PROLIFERATION FINANCING APPROVED BY CABINET
On 15 May, the Khmer Times reported that a draft law on countering the financing of proliferation of WMD was approved in a cabinet meeting.
GERMAN FEDERAL FINANCIAL SUPERVISORY AUTHORITY (BAFIN) ORDERS NOTICE OF ALL IRAN AND NORTH KOREAN BUSINESS
An article from Bird & Bird said that, from 14 May, all “obliged entities” and all insurance businesses supervised by BaFin must immediately provide such a notice for which BaFin encloses a standardised form. The notice must include an indication of an existing business relationship or a past transaction in connection with legal or natural persons.
NEW ZEALAND: NEW LAW CRACKING DOWN ON TOBACCO SMUGGLING RUSHED THROUGH PARLIAMENT
The New Zealand Herald on 15 May reported that the Government hopes a new law cracking down on tobacco smugglers will see a loophole costing $10.8 million closed. The changes will deem tobacco a “prohibited import” and require importers to have a permit so Customs can act more quickly on suspicious parcels.
MALTA: FORMER FISHERIES OFFICIAL HAS MONEY LAUNDERING SENTENCE REDUCED TO PROBATION
On 15 May, the Times of Malta reported that Frank Caruana, 60, a former senior official at the Fisheries Department who admitted to money-laundering and fraud charges laid in 2014, had his 4-year effective jail term converted to a 3-year probation term. The case was linked to fees payable to the department on the release of imported fish, with officials being entitled to a commission on release forms signed in relation to inspections carried out after office hours and Caruana had effectively pocketed some €32,000.
AUSTRALIAN WOMAN ARRESTED IN ‘CASH FOR BITCOIN’ MONEY LAUNDERING
On 15 May the Coin Telegraph reported that Sydney police have arrested an Australian woman for allegedly running a crime syndicate using Bitcoin to launder $3.23 million since 2017.
LATVIAN GAMBLING INDUSTRY HAS ALSO BEEN USED FOR MONEY LAUNDERING
The Baltic Times on 15 May reported that Latvian gambling industry has also been used for money laundering, Ilze Znotina, the head of the FIU has said.
MAN CAUGHT AFTER 3 YEARS ON THE RUN OVER £9 MILLION MONEY LAUNDERING RACKET
The Express & Star in the UK on 15 May reported that Jagdish Brar from Wolverhampton had been convicted in February 2018, and was sentenced to for 4½ years in jail.
SOUTH AFRICA: SUBTLE CHANGE TO ARMS EXPORT RULES COULD UNLOCK WEAPONS SALES TO COUNTRIES INCLUDING SAUDI ARABIA AND UAE
On 15 May, Defence Web reported that a government notice alters the circumstances under which South African officials can perform inspections to verify that customers are not transferring weapons to third parties. Some of the main buyers of South African arms, including governments in the Gulf and North Africa, had refused to agree to the inspections because they considered them a violation of their sovereignty. It is said that the government was planning to change the inspection clause in an arms export document following months of lobbying by defence businesses and trade unions who said thousands of jobs were at stake. Defence sources have told Reuters that countries including the UAE are more comfortable with the new wording, which should unlock the stalled weapons exports.
DOPING TRAFFICKING RING WITH PROFESSIONAL ATHLETES DISMANTLED IN ITALY
A news release from Europol on 15 May announced that the Italian Carabinieri, supported by Europol, targeted a criminal network trafficking illegal medicines and doping substances. It said that law enforcement authorities arrested 4 suspected traffickers. The Carabinieri carried out 210 house searches targeting 74 competitive athletes registered to sports federations, 11 gym owners and 4 owners of food supplement stores, located all over Italy. Italian authorities are investigating another 64 individuals for their suspected involvement in the criminal activities; 30 others have been charged with less serious crimes. The operation was a follow-up of a previous investigation into bodybuilders from Turin who were found in possession of a large amount of anabolic drugs, which were advertised on mobile apps.
SYNTHETIC DRUGS IN EAST AND SOUTH-EAST ASIA: LATEST DEVELOPMENTS AND CHALLENGES – UNODC REPORT – CONTINUED GROWTH IN THE SUPPLY OF METHAMPHETAMINE WHILE SYNTHETIC OPIOIDS SPREAD
The UN Office on Drugs and Crime has produced a report which presents the most current information available on synthetic drug manufacture, trafficking and demand in East and South-east Asia with data from 2019 and in some cases up to the first quarter of 2020, when COVID-19 became a pandemic. It says that the region has experienced a massive expansion of illicit drug supply in recent years as illicit manufacturing has become more sophisticated and the scale of facilities has expanded, the purity of drugs has increased, and prices have dropped – a worrisome scenario in a region where drug treatment has not always been available or affordable for those who need it. It includes detail of the ongoing expansion of the methamphetamine market in East and South-east Asia – saying that countries in the region have collectively witnessed sustained increases in seizures of methamphetamine over the last decade, more than any other part of the world. It also says that while MDMA manufacture does not appear to be significant in East and South-east Asia, there are strong indications of increased production in parts of the region and trafficking of the drug originating in other regions, in particular from Europe. The number of new psychotropic substances (NPS), including potent synthetic opioids, reported from the region has increased steadily and, by the end of 2019, a total of 461 different NPS were reported by countries in East and South-east Asia. As with methamphetamine, seizures of ketamine have increased significantly in South-east Asia since 2015. The steep surge in seizures of ketamine in South-east Asia has been primarily driven by substantial quantities of the drug being illicitly manufactured in, and trafficked from, Myanmar.
IRELAND: CUSTOMS HAD TO CUT THROUGH STEEL TO GET AT 168,000 CIGARETTES HIDDEN IN BIG AIR CONDITIONER UNITS
On 14 May, the Leinster Leader reported that officers seized over 168,500 cigarettes at Dublin Port, with the smuggled cigarettes, discovered in a container carrying a mixed consignment of goods, concealed behind air conditioning fan fittings that were destined for an address in Dublin.
THE IMPACT OF COVID-19 ON KIDNAPPING AND EXTORTION RISKS
On 15 May, Control Risks published an article which says that while special Risks like kidnap and extortion may be a small subset of many companies’ concerns right now, but they are still present and evolving during the crisis. It says that the impact on the kidnapping and extortive environment are differ in heavily affected areas from those still awaiting an uptick in infections. The article assesses the special risks trends businesses need to be aware of now, and what scenarios they should consider for the future. To aid understanding, the article looks at how kidnapping and extortion risks were affected by the political and economic crisis which began in Venezuela in 2012, and kidnapping in the DRC during the Ebola crisis.
JERSEY: WRONGFUL TRADING – UPDATE
On 15 May, Ogier published an article saying that the Law Society in Jersey had published an update in a practice statement which seeks to clarify the circumstances in which a wrongful trading claim may be brought against directors under Jersey law and emphasises certain matters by way of reassurance to directors.
INTERNATIONAL MONEY LAUNDERING SCHEMES FALL VICTIM TO CORONAVIRUS
An article in Insight Crime on 15 May says that dirty cash from the illicit drug trade is piling up in major US cities as the coronavirus hobbles yet another fundamental component of the operations of Latin America’s criminal organizations: international money laundering schemes. It says that recent seizures are the clearest manifestation yet of how the virus has impacted certain money laundering systems that organised crime groups rely on to clean up their illicit proceeds.
IS THERE A POWER OF ARREST FOR A SUSPECT RELEASED UNDER INVESTIGATION WHO FAILS TO ATTEND FOR VOLUNTARY INTERVIEW?
On 13 May, PNLD in the UK asked the question: if a suspect has been released under investigation prior to an interview due to a medical episode, and the individual has persistently avoided attending the station for a voluntary interview., without new evidence is there anything set in law to allow arrest under a power?
AUSTRALIA: WESTPAC DISCLOSES AML BREACHES AND DUE DILIGENCE FAILURES
On 15 May, Fintech Futures reported that Australian bank Westpac has admitted to a series of AML/CFT breaches in a Federal Court filing. This followed the Australian watchdog AUSTRAC filing a civil lawsuit against the bank in November 2019, accusing it of looking the other way while 23 million payments were made violating AML laws. The bank has already set aside A$900 million for an expected fine.
HONG KONG: ADVICE ON IMPACT OF US EXPORT CONTROL CHANGES
On 12 May, the Hong Kong Trade & Industry Department issued a Circular providing advice to traders on the US changes that would affect the exports, re-exports and transfers of certain US-origin electronics, computers and telecommunications products from 29 June.It emphasises that there is no change to Hong Kong’s import and export licensing control on strategic commodities, but that traders importing/exporting the US-origin products concerned are advised to liaise and check with their US exporters/manufacturers, particularly to obtain the necessary and applicable US export authorisation.
US: FURTHER RESTRICTIONS ON HUAWEI ANNOUNCED
2 news releases from the US Department of Commerce on 15 May advised on changes, saying that its Bureau of Industry and Security is amending its longstanding foreign-produced direct product rule and the Entity List to narrowly and strategically target Huawei’s acquisition of semiconductors that are the direct product of certain US software and technology. It says that, since 2019 when BIS added Huawei Technologies and 114 of its overseas-related affiliates to the Entity List, companies wishing to export US items were required to obtain an export licence. However, it says, Huawei has continued to use US software and technology obtained indirectly to design semiconductors. A targeted rule change will make the certain foreign-produced items subject to the Export Administration Regulations (EAR). BIS has also extended a Temporary General Licence (TGL) to Huawei and its non-US affiliates to 13 August to allow users of Huawei devices and telecommunication providers to continue operating whilst transitioning to alternative suppliers.
FASCINATING ANIMATION SHOWING THE DECLINE IN AVIATION MOVEMENTS IN EUROPE
Blue Sky has made available a link to a report from EUROCONTROL which provides an comprehensive overview of the situation of air traffic across Europe, showing a very slight upward move in the number of flights. There is also a link to a fascinating animation that clearly illustrates the decline.
The report is at –
The animation is at –
US SENATE VOTES TO REINSTATE EXPIRED FBI SURVEILLANCE TOOLS USED FOR COUNTERINTELLIGENCE AND COUNTERTERRORISM INVESTIGATIONS
On 15 May, Jurist reported that the Senate had approved an Bill that would restore the ability of the government to obtain secret court orders requiring third parties to hand over any “tangible thing” that is deemed relevant to national security investigations and which expired in March. The Bill must now go to the House of Representatives to be approved.
PAPER OUTLINING OFFICIAL RESPONSES TO THE INCREASING LEVELS OF FINANCIAL CRIME DURING THE GLOBAL LOCKDOWN AND HIGHLIGHTS THE FINANCIAL CRIME SEEN SO FAR DURING THE CURRENT CRISIS
The Financial Stability Institute (FSI) of the Bank for International Settlements (BIS) has published a paper which sets out to outline official responses to the increasing levels of financial crime during the global lockdown. Section 2 of the paper highlights the financial crime seen so far during the current crisis; while Section 3 summarises official approaches to strengthening financial institutions’ cyber resilience. Section 4 describes the main AML measures taken by selected authorities worldwide. It concludes that the official guidance underscores the trade-offs between expecting financial institutions to enhance or adjust their cyber resilience and AML frameworks and, on the other hand, avoiding imposing an excessive burden that could hinder financial institutions in delivering key financial services.
If you’d like to help to contribute to the cost of the new laptop and desktop I have had to acquire, now that I am 5,000 miles away from my originals – https://www.buymeacoffee.com/KoIvM842y