Panama Covid-19 update – “only” 110 new cases reported today, making the approach to the 10,000 mark slower than one might have expected – we are now at 9,977, with 6 more fatalities (taking us to 287 to date) and 68 people in the ICU. However, neighbour Costa Rica has closed its land border with Panama (an unneighbourly thing to do, you would have thought) – it also closed its border with Nicaragua. This apparently causes difficulty with the movement and sourcing of some medicines and foodstuffs.
20 May 2020
RAIDS REVEAL MASSIVE FENTANYL PRODUCTION IN MYANMAR
An article in the New York Times on 19 May says that China’s crackdown on makers of the drug, which has fuelled the US opioid crisis, may have simply created opportunities for crime syndicates elsewhere. A series of raids in Myanmar have resulted in the largest synthetic drug seizure on record in SE Asia including large quantities of fentanyl. It says that 44 raids conducted by the Myanmar military and police between February and April netted nearly 200 million tablets of methamphetamine, 1,120 lb of crystal methamphetamine, 630 lb of heroin, almost 300 lb of raw opium, 640 lb of opium poppy and 990 gallons of methyl fentanyl. The drugs were worth more than $200 million — far more if measured by street value in the West.
AT&T ANNOUNCES CLOSING OF DIRECTV LATIN AMERICA OPERATIONS IN VENEZUELA
On 19 May, a statement from AT&T in the US announced that the US sanctions on Venezuela have prohibited the broadcast of Globovision and PDVSA’s channels, both of which are required under DIRECTV’s license to provide pay-TV service in Venezuela. It says that AT&T was forced to close its pay TV operations in Venezuela, a decision that was made by the company’s US leadership team without any involvement or prior knowledge of the DIRECTV Venezuela team.
SFO CLOSES PROBE INTO ABB’S DEALINGS WITH UNAOIL
On 19 May, the Wall Street journal reported that the SFO began investigating ABB after it disclosed the results of an internal investigation into its business with Monaco-based Unaoil in 2017, which included allegations of improper payments to third parties. SFO said its preliminary probe didn’t meet certain tests for pursuing a full-fledged prosecution.
UK: THE CRIMINAL DISHONESTY TEST – A SEISMIC CHANGE OR A MERE TREMOR?
On 19 May, Bryan Cave Leighton Paisner LLP published a briefing about a recent Court of Appeal case which emphatically endorsed the Ivey test for dishonesty, firmly dismissing the previous two-stage test in Ghosh and, in respect of a charge of conspiracy to defraud, there needs to be no requirement of an “aggravating feature” over and above a dishonest agreement which includes some unlawfulness in its object or means; and does not fall foul of Article 7 of the ECHR. It starts by explaining that dishonesty is a key element in every offence under the Fraud Act 2006 and a myriad of other offences, including the common law offence of conspiracy to defraud, and that the previous test had applied from 1982.
PODCAST: THE CROOK ACT: TACKLING DEMAND-SIDE BRIBERY
In the latest TRACE podcast, Abigail Bellows with the Carnegie Endowment for International Peace describes how a $5 million surcharge could be levied on FCPA enforcement actions and then deployed quickly to support incipient anti-corruption efforts worldwide. This would address, in part, concerns that the victims of corruption rarely benefit from the substantial sums involved in settlements.
NIGERIA: CUSTOMS IMPOUNDS TRUCKLOAD OF CODEINE SYRUP
On 20 May, TVC News reported that a Nigeria Customs Service strike force has impounded a truck loaded with 74,000 bottles of codeine cough syrup concealed in 374 cartons. Other seizures also revealed the interception of foreign rice, vegetable oil and second-hand clothing. Codeine is an opiate used to treat pain, coughing, and diarrhoea.
SWEDEN: NEW TEMPLATE FOR EXPORT END-USER STATEMENTS
On 12 May, Baker McKenzie reported that the Inspectorate of Strategic Products in Sweden introduced a new template for end-user statements. From 1 September only end-user certificates based on the new template will be approved. The new template will be used for both civilian and military end-users/end-uses and can be found on the ISP website. It explains that exporters of dual-use products are required to obtain information on their customers and to make an assessment regarding the possible risk diversion of exports. Moreover, it is mandatory for exporters of dual-use items to obtain end-user certificates from the end-user when applying for an individual export licence. The end-user statement certifies that the exported products will only be used for certain specified purposes and that the products will not be re-exported. ISP provides templates which exporters are required to use in order to meet the requirements for these certificates.
WILLIAM HILL SET FOR £150 MILLION VAT REFUND WINDFALL FROM HMRC
On 20 May, various media sources reported that bookmaker William Hill is expected to net a tax refund of between £125 million to – £150 million after HMRC confirmed it would not appeal a court ruling which concluded fixed-odds betting terminals (FOBT) should be exempt from VAT. HMRC has been fighting the betting industry for years after another bookmaker (Betfred) said it had been overpaying VAT on winnings on FOBT between 2005 and 2013. It then successfully argued this was wrong because the very same games were exempt if played in casinos or online.
PRESERVING THE JCPOA
An article from ETH Zurich explains why the next 6 months are critical for the survival of the Joint Comprehensive Plan of Action (JCPOA) on Iran’s nuclear programme. The author highlights how the corona crisis has presented Europe an opportunity to carry out a role in preserving the agreement.
CROATIA: FORMER POLITICAL LEADER’S WIFE AMONG MONEY SIPHONING SUSPECTS
On 20 May, Total Croatia News reported that police and the USKOK anti-corruption office have targeted a number of companies and about 30 persons for siphoning money via fictitious invoices – and these are said to include Ana Karamarko, wife of former HDZ president Tomislav Karamarko. It is alleged that those involved are suspected of charging non-existent services via fictitious invoices and tax fraud from 2017 until 2019. Tomislav Karamarko stepped down as deputy prime minister and HDZ president in 2016.
RUSSIAN BARRIERS AGAINST COUNTERFEITERS ALONG THE NEW SILK ROADS
An article from law firm Gowling WLG published in IAM Media on 20 May says that a recent analysis of infringing shipments entering Russia identified important intermediary transit countries. Kazakhstan, Kyrgyzstan, Mongolia, Tajikistan, Turkmenistan and Uzbekistan are hubs for illegal trade for Russia. The article explains the routes by which goods get into Russia, saying that the multipoint transit routes and their new directions create challenges for Russian customs control. However, the article says that Russian Customs can now create special mobile groups that have the authority to stop and check any vehicles that have entered Russia (even those that have already been checked at the border) and over the last 3 years, these have managed to increase the amount of identified and suspended counterfeits several times over. The article also notes that up to 90% of all international packages and parcels coming into Russia originate from Asia. China, Hong Kong and Singapore using the trading platforms AliExpress, eBay, JD.com and Amazon – with e-commerce boosting considerably the flow.
MOLDOVA CHARGES FUGITIVE OLIGARCH WITH FRAUD
On 20 May, New Europe reported that Moldovan prosecutors have charged tycoon Vlad Plahotniuc, former head of the Democratic Party and one of the country’s richest people, for his role in a massive bank theft. He fled Moldova last year, denied all charges against him and blamed Russia for the investigation. He is currently in the US and faces extradition procedures, but Moldova does not have extradition agreements the US – and he also has Romanian and Russian citizenship, and may choose not to return to Moldova.
UK: COUNTER-TERRORISM AND SENTENCING BILL
On 20 May, a news release from the MoJ claims that this Bill will ensure that the sentences served by terrorists reflects the severity of offending and will strengthen the tools for monitoring them in the community. It has released a factsheet explaining the Bill. One element of the Bill sets out to close a gap in existing legislation by enabling the courts to find any offence with a maximum penalty of more than 2 years to have a terrorist connection (i.e. identifying it as an “aggravating factor”). This may result in a higher sentence than would otherwise be the case
US: IMPORT DETENTION ORDER TARGETS SEAFOOD FROM TAIWANESE VESSEL ON FORCED LABOUR GROUNDS
On 20 May, Sandler Travis Rosenberg reported that US Customs and Border Protection has issued a new withhold release order against imported goods made wholly or in part with seafood harvested by the Yu Long No. 2, a Taiwanese-flagged fishing vessel.
US: DEPARTMENT OF LABOR AMENDED GUIDELINES FOR DEVELOPMENT AND MAINTENANCE OF A LIST OF FOREIGN-MADE GOODS IT HAS REASON TO BELIEVE ARE PRODUCED BY CHILD LABOUR OR FORCED LABOUR
On 20 May, Sandler Travis Rosenberg reported that the Bureau of International Labor Affairs is required to take steps to ensure that the goods on this list are not imported into the US if they are made with forced or child labour, including working with producers to help set standards to eliminate the use of such labour. Legislation requires the production of an updated list every 2 years.
THE ALTERNATIVE ROUTES FOR COCAINE FROM SOUTH AMERICA IN THE LIGHT OF COVID-19
On 20 May, an article from OCCRP examined the alternative routes traffickers of South American cocaine have adopted, as restrictions on usual sea and air routes resulting from the covid-19 crisis have affected the more usual routing methods. The alternatives include use of Colombia’s banana exports (that industry being exempt from lockdown), and even human porters carrying the drugs across the Darien mountains and jungle into Panama for onward despatch.
COLOMBIA’S COCA ERADICATORS SPARED FROM CORONAVIRUS LOCKDOWN
On 20 May, Insight crime reported that, while it has imposed a stringent coronavirus lockdown, the Colombian government has come under fire for allowing coca eradication campaigns to continue largely unabated, with squads of troops responsible for eradicating coca spared much of the restrictions. In fact, it says, eradication efforts appear to have increased since the lockdown began.
14 COUNTRIES FROM WEST AND CENTRAL AFRICAN (WCA) REGION IN WCO-COORDINATED EXERCISE TARGETING COMMODITIES MISUSED BY TERRORISTS, IN PARTICULAR FOR THE MANUFACTURE OF IED
On 20 May, a news release from WCO advised that ALAMBA 2020 took place from 7 to 17 March with the participation of 14 Member countries from West and Central African (WCA) region. The Customs administrations targeted commodities that were misused by terrorists, in particular those diverted for the manufacture of Improvised Explosive Devices (IED) for use in attacks in the region. A total of 119 seizures were recorded, including: approximately 39 tons of cyanide; 7.8 tons of explosive components; 5,200 metres of detonating cords; 1,052 litres of nitric acid, 660 parts of igniters; and 220 litres of hydrogen peroxide.
CAMBODIA’S AIR CARGO CONTROL UNIT SUCCESSFULLY TARGETS FALSELY DECLARED COVID-19 TEST KITS ON 8 OCCASIONS
On 20 May, a WCO news release advised that the Air Cargo Control Unit in Phnom Penh airport, established in the framework of the UNODC-WCO Container Control Program (CCP), detected a shipment containing around 100 COVID-19 test kits from Hong Kong, with the shipment was falsely declared as ‘Test Paper Sample’. This was the the eighth shipment of suspected fraudulent COVID-19 test kits that were detained by this Unit. The shipments came from different countries in the Asia-Pacific region.
US COMMODITY FUTURES TRADING COMMISSION (CFTC): NEW GUIDANCE OUTLINING FACTORS CONSIDERED IN RECOMMENDING CIVIL MONETARY PENALTIES
A release on Mondo Visione on 20 May advised that the CFTC has announced that its Division of Enforcement has issued new guidance outlining factors the Division considers in recommending civil monetary penalties (CMP). This is the first Division CMP guidance issued publicly since the Commission published its penalty guidelines in 1994. The staff guidance provides a 3-pronged approach to evaluate the appropriate penalty to recommend to the Commission.
ROSNEFT – CAN YOU DEAL WITH IT?
On 20 May, a short blog post from an analyst on sanctions policy at UK Finance says that recent developments around Rosneft, the Russian state-backed oil giant and its ventures in Venezuela have shed new light on the company; and she says that Rosneft makes for an ideal case study of the eco-system of US sanctions – and reminds one of the nuances between Sectoral Sanctions Identifications (SSI) and Specifically Designated Nationals (SDN). She points out that while Rosneft itself has not been designated, 2 subsidiaries have been added to the SDN List – being Rosneft Trading SA and TNK Trading International SA, Swiss-based subsidiaries.
AUSTRALIA: SHIPPER RELIEF AS BIOSECURITY LEVY DROPPED
On 20 May, Loadstar reported on the scrapping of the controversial plan for a biosecurity import levy following industry consultation. The government had claimed it needed the funds to combat increased bio-threats, entering the country via supply chains. The levy would have been collected by stevedores and passed down through the supply chain to importers.
AS CONFLICT ESCALATES IN LIBYA, THE ECONOMY VEERS TOWARDS CHAOS
On 19 May, a Commentary from US website War on the Rocks says that while Libya’s intensifying civil war and the coronavirus crisis occupy the few headlines the country garners, coverage is scant on the country’s economy, which is in increasing peril. It says that the issues that the bankers and the politicians are fighting over are complex, representing the extent of dysfunction in Libya’s bifurcated system of governance, but they may well play a decisive role in the trajectory of the conflict.
FinCEN DIRECTOR IDENTIFIES VIRTUAL CURRENCY COMPLIANCE RISKS AND COVID-19 RELATED ISSUES
A Client alert from Crowell Moring on 20 May reported that, on 13 May, the Director of FinCEN, Kenneth Blanco, delivered remarks during the first virtual Consensus Blockchain Conference. He is said to have called for continued cooperation between the government and the virtual currency industry, cautioning that cybercriminals predominantly use virtual currencies to launder the proceeds of their criminal activities and to purchase the tools needed to conduct them. He also highlighted 2 specific areas for consideration in the virtual currency space; appropriate AML/CFT controls in place for anonymity-enhanced cryptocurrencies, or privacy coins; and businesses located outside the US complying with BSA rules on AML etc. The Alert says that the remarks suggest practical issues that virtual currency firms may wish to consider, including the AML/CFT compliance mentioned by Blanco and mechanisms to comply with the Travel Rule.
MATALAN CHIEF SUES PWC CLAIMING IT GAVE HIM BAD ADVICE OVER MONACO TAX HAVEN BILL
On 20 May, the Daily Mail reported that Matalan tycoon John Hargreaves, 76, is suing PwC over claims the accounting firm gave him bad advice before he relocated to Monaco over how he would be able to avoid tax. He thought he could avoid paying capital gain and income taxes when he sold £237 million worth of shares in the retailer almost 20 years ago. However, it is said that Hargreaves paid £35 million to HMRC 2 years ago but faces demands for another £135 million.
MALAWI SEEKS EXTRADITION OF “CASHGATE” FUGITIVE FROM SOUTH AFRICA
In its 21 May edition, the Nyasa Times reported that the country’s DPP has said that he will seek extradition of the fugitive, Limumbu Karim. In the cash gate scandal, civil servants and contractors are accused of theft and money laundering in the country’s biggest corruption scandal in 2013.
SWISS PROSECUTOR FACES IMPEACHMENT PROCEEDINGS OVER FIFA PROBE
On 20 May, Swissinfo reported that Swiss Attorney General Michael Lauber faces impeachment proceedings over his handling of a FIFA corruption probe – a first in the history of the federal public prosecutor’s office. He has come under scrutiny over how his office handled the FIFA corruption investigation and for holding undocumented meetings with FIFA President Gianni Infantino.
ONE OF RUSSIA’S MOST ADVANCED MISSILE SYSTEMS CAPTURED IN LIBYA
On 19 May, Forbes reported that Turkish-backed Libyan government forces have captured an advanced Pantsir-S1 air-defence system. The Russian-made system was not supplied by Russia but is believed to have come from the UAE. The airbase where it was found is controlled by the Libyan National Army (LNA), commanded by Khalifa Haftar. The Pantsir-S1, known to NATO as the SA-22 Greyhound, combines both guns and missiles. It is reputed to be able to intercept cruise missiles and has been extensively used by Assad’s forces in Syria.
US ARRESTS EX-GREEN BERET AND SON ACCUSED OF AIDING GHOSN’S ESCAPE FROM JAPAN
On 20 May, Nikkei Asian Review reported that the 2 men are suspected of smuggling former Nissan chairman out of Japan in box. Michael Taylor and his son, Peter, are 2 of the 3 men accused of orchestrating an elaborate plot to help former Nissan Motor Chairman Carlos Ghosn escape from house arrest in Japan.
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