TOP 10 OPERATIONAL RISKS 2020

Baker McKenzie on 28 May published a report co-produced with Risk.net providing a ranking of the top operational risks for 2020.  The report is based on a survey of operational risk practitioners across the globe and in-depth interview with respondents.  It focuses on a range of issues, including digitalization, business resilience, organisational change, and geopolitical risks.

https://www.bakermckenzie.com/-/media/files/insight/publications/2020/05/bakermckenzie_top-10-op-risks-2020.pdf?la=en

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COCAINE AND GUINEA-BISSAU: HOW AFRICA’S ‘NARCO-STATE’ IS TRYING TO KICK ITS HABIT

On 28 May, an article from the BBC which says that concern is mounting that Guinea-Bissau’s efforts to stem the flow of drugs to Europe and the US have suffered a setback after a military-backed president took office.  It mentions Operation Navara, in which the seizure culminated in 12 men – of Bissau-Guinean, Colombian, Mexican and Portuguese nationalities – being sentenced to between 4 and 16 years in prison last month.

https://www.bbc.com/news/amp/world-africa-52569130?__twitter_impression=true

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EU DRUG MARKETS: IMPACT OF COVID-19

On 29 May, a news release from Europol posed the question: what effect is COVID-19 having on the largest criminal market in the EU? A new report has been released reports higher prices, local shortages and reduced purity for some drugs, while noting continued violence among suppliers and distributors. It also shows how organised crime groups remain active and resilient, by ‘adapting transportation models, trafficking routes and concealment methods’, even during the pandemic.

https://www.europol.europa.eu/newsroom/news/eu-drug-markets-impact-of-covid-19

The report is at –

https://www.europol.europa.eu/publications-documents/eu-drug-markets-impact-of-covid-19

 

 

 

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NIGERIA: BVI-BASED FIRM ALLEGEDLY PAID MORE THAN $390,000 IN BRIBES TO LAND A NATURAL GAS PROCESSING PLANT CONSTRUCTION CONTRACT IN 2009

On 29 May, OCCRP reported that this was according to what Nigeria’s attorney general has said in a statement obtained by OCCRP.  Nigeria’s Attorney General, Abubakar Malami, submitted in January what he termed a “witness statement” to the Business and Property Courts of England and the Wales Commercial Court, summarizing the case as he sees it.

https://www.occrp.org/en/investigations/nigeria-traces-9-6-bilion-hit-back-to-390000-in-alleged-bribes

 

 

 

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ONLINE GAMBLING MYSTERY AS ASIAN-FACING 138.COM SHUTS

On 28 May, Calvin Ayre reported that the reason(s) behind the closure remains a mystery, and some Asian affiliates claimed that the site had shut only temporarily due to its support services in the Philippines being closed as a result of Covid-19 – but that, it says, seems unlikely, given that the site is completely offline.  The site was run by the Isle of Man-based Xela Holdings Ltd/TGP Europe and the UK-facing 138.co.uk continues to operate under a Fesuge Ltd licence.  In July 2019, as Suncity it found itself in the crosshairs of Chinese state media, which accused the company of being the single largest online gambling operator targeting customers on the Chinese mainland, where gambling of any form other than the state-run lotteries is strictly illegal.

https://calvinayre.com/2020/05/28/business/online-gambling-mystery-138-com-shuts-down/

 

 

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CRUZ AZUL FOOTBALL CLUB OWNERS “BEING INVESTIGATED FOR MONEY LAUNDERING AND LINKS TO ORGANISED CRIME”

On 29 May, FM State of Mind in Mexico reported claims that Cruz Azul, one of the Mexico’s biggest teams, and the highest-ranked club before the 2020 league was suspended has seen its owner and executives had their bank accounts frozen in the middle of a criminal investigation. It says that the Cooperativa La Cruz Azul cement company and it is its owner — Guillermo Alvarez Cuevas — along with other higher-ups — Jose Alfredo Alvarez and Victor Manuel Garces — who are being investigated by Mexican authorities for suspicion of money laundering and possible links to organised crime.

https://www.fmfstateofmind.com/2020/5/29/21274314/cruz-azul-owners-being-investigated-for-money-laundering-links-to-organized-crime-liga-mx-narcos

 

 

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CURRENCY WORTH MILLIONS FOUND UNDER PIA PLANE CRASH DEBRIS

On 28 May, Geo.tv in Pakistan reported that illegal currency was allegedly being smuggled in the plane crash that took place on 22 May, according to a PIA spokesperson.  The Pakistan International Airlines Airbus A320 was travelling from Lahore to Karachi.

https://www.geo.tv/latest/290302-illegal-currency-worth-millions-of-rupees-was-being-smuggled-in-pias-pk-8303

 

 

 

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OTHER THINGS YOU MAY HAVE MISSED – MAY 28

Panama Covid-10 update – from Monday, 1 June the current total lockdown, which only allows non-essential people out for 2 hours every other day (depending on gender) ends.  The nightly curfew will remain in force, and there will be various sanitary cordons preventing travel across the county to various places.  Strict rules will apply to those businesses which are allowed to open.  I have mixed views on this, as new infection figures have actually been higher than average the last few days, and the move could trigger a further surge.  Up until yesterday Panama had seemingly done well to squash the infection, with a death-rate per 100,000 of only around 7.5, compared to France (58), UK (56), Italy (55), France (43), US (30) and even Germany (10).

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https://www.bbc.com/news/world-us-canada-52771783

Meanwhile, the high spot of my day is a new, comfy office chair!

As mentioned above, new cases remain on the high side at 232 today, taking us to exactly 12,000 total to date.  There were 5 more fatalities, meaning that 320 people are now known to have succumbed to the virus.

28 May 2020

CENTRAL BANK OF KENYA ORDERS BANKS TO LOOK FOR DIRTY MONEY IN SAFE DEPOSIT BOXES

On 28 May, The Standard reported that banks have until end of this year to verify contents of their customers’ safes and report suspicious ones in new push to stamp out money laundering.  In a circular to all chief executives of all regulated financial institutions, it asked lenders to verify contents of the boxes and review their current policies and procedures to minimise the risk of these services being used for illegal activities, including money laundering.  The article says that safe boxes, not just in banks but in other places such as hotels as well, have become safe havens for illegally acquired wealth which includes cash and precious metals such as gold and silver.

https://www.standardmedia.co.ke/article/2001372988/sniff-out-dirty-cash-in-safe-boxes-cbk-orders-lenders

UK: CORPORATE INSOLVENCY AND GOVERNANCE BILL – WHAT DOES IT CONTAIN?

On 22 May, an article from Gowling WLG says that this Bill is set to be fast tracked into legislation and will likely be law by 10 June.  The article says that whilst some of its measures are designed to provide temporary relief during the COVID-19 crisis, it also includes provisions which will have a lasting impact on insolvency law and the ability of creditors to enforce payments, and it will have a significant impact on all those who trade with them, including customers, suppliers and landlords.  The article discusses the Bill, what it includes and what it means for businesses.

https://gowlingwlg.com/en/insights-resources/articles/2020/corporate-insolvency-and-governance-bill/

VIDEO: FRAUDULENT TRADING, CORPORATE RESTRUCTURING AND THE INTERSECTION WITH MONEY LAUNDERING

On 25 May, Bright Line Law published a video presentation by Jonathan Fisher QC in which he discusses the law on fraudulent trading, corporate restructuring and the intersection with money laundering as areas of tension presenting new challenges for professionals in the wake of COVID-19

the law on fraudulent trading, corporate restructuring and the intersection with money laundering as areas of tension presenting new challenges for professionals in the wake of COVID-19.

https://brightlinelaw.co.uk/insolvency-bankruptcy-and-money-laundering/#page=1

ISRAELI START-UP ALLEGEDLY HELPED CORRUPT MALASIA LEADER SPY ON OPPOSITION

On 28 May, CTech carried a report saying that Israeli court documents claims about the company’s methods of operation and its ties to questionable regimes, including its $1.5 million deal to supply Malaysia’s intelligence agency with surveillance tools to be used on civilians.

https://www.calcalistech.com/ctech/articles/0,7340,L-3828013,00.html

US THREATENS SANCTIONS TO DETER TANKERS CARRYING FUEL TO VENEZUELA

On 28 May, the Wall Street Journal reported that the 2 Liberian-flagged, Greek-owned vessels loaded with Iran oil products and headed to Venezuela are said to have halted their deliveries after the sanctions threat.

https://www.wsj.com/articles/u-s-threatens-sanctions-to-deter-tankers-carrying-fuel-to-venezuela-11590669831

GAZPROM CALLS WASHINGTON’S BLUFF ON NORD STREAM 2 SANCTIONS

On 27 May, an article in the Financial Times reported that Gazprom has dared the US to place sanctions directly on it – the supplier of 40% of Europe’s gas and raised €4.5 billion from European energy companies.  It seems that Gazprom is set to complete the pipeline.

https://www.ft.com/content/f526d6ae-6b04-422d-a98c-0e7da56c93a6

RUSSIA SEIZES 40 TONNES OF EMBARGOED EUROPEAN CHEESES

On 28 May, Chinese news source CGTN reported that Russia had seized 40 tonnes of European cheeses smuggled into the country in breach of an embargo on EU food imports.  It is said to have been found in St Petersburg in 4 containers labelled as containing a component used to produce rubber.  It is said that Russian Customs released a video of a sniffer dog eagerly running up to piles of boxes, with an officer opening them to reveal round packaged cheeses.  The containers are also said to have contained instant coffee, chocolate biscuits and washing-up liquid.  Russia in 2014 banned wholesale imports from the European Union of most types of fresh foods, in response to EU sanctions over Russia’s actions in Ukraine including the annexation of Crimea.

https://newsaf.cgtn.com/news/2020-05-28/Russia-seizes-40-tonnes-of-embargoed-European-cheeses-QQvyjYff5C/index.html

US: UIGHUR HUMAN RIGHTS SANCTIONS BILL GOES TO PRESIDENT TRUMP FOR SIGNING

On 28 May, the EU Sanctions Blog reported that the US House of Representatives as joined the Senate in approving this Bill which would provide for asset freezes and travel bans on officials responsible for human rights abuses on the Uighur and other Muslim minority populations in the Xinjiang Uighur region (XAR) in China.  It now passes to President Trump, who will make the final decision on whether to sign it into law.

https://www.europeansanctions.com/2020/05/us-house-of-representatives-approves-uighur-human-rights-policy-bill/

DEFORESTATION SCANDAL SPARKS CALL FOR TOUGHER BANK DUE DILIGENCE

On 28 May, Global Trade Review reported that governments are being urged to introduce stricter due diligence requirements for financial institutions involved in timber trading, following a detailed investigation into a deforestation scandal in SE Asia.  Global Witness is accusing a Malaysia-headquartered company, Maxland, of carrying out illegal logging activity in Papua New Guinea.  Maxland is owned by Malaysian conglomerate Joinland Group, which in turn holds financial relationships with three Malaysian banks: Maybank, CIMB and United Overseas Bank, and shareholders in those banks include major international financiers such as JP Morgan Asset Management in Singapore and New York-headquartered BlackRock. Other financial backers include the Vanguard Group, T. Rowe Price Associates, Dimensional Fund Advisors and CalPERS, as well as Norway’s Government Pension Fund Global.

https://www.gtreview.com/news/sustainability/deforestation-scandal-sparks-calls-for-tougher-bank-due-diligence

MALTA STILL DEEMED AS ‘TOOTHLESS’ IN FIGHT AGAINST MONEY LAUNDERING, SAYS FORMER PM

An article in the Malta Independent on 28 May said that, in a post on Facebook, the Labour MEP Alfred Sant said that Malta has a lot more to do to gain credibility in its fight against money laundering. Malta is considered as a country with weak monitoring and institutions, they are like toothless dogs, he said.

https://www.independent.com.mt/articles/2020-05-28/local-news/Malta-still-deemed-as-toothless-in-fight-against-money-laundering-Alfred-Sant-6736223597

AUSTRALIA FLAGS A CONTRIVED TAX AVOIDANCE ARRANGEMENT

On 28 May, Tax News reported that the Australian Taxation Office (ATO) has issued a Taxpayer Alert on mischaracterised arrangements and schemes connected with direct foreign investment into Australian businesses. – and arrangements are deliberately structured to avoid Australian tax that is payable on the return to the foreign investor, or to obtain a tax deduction for the Australian entity.

https://www.tax-news.com/news/Australia_Flags_Contrived_Tax_Avoidance_Arrangement____97702.html

WHY AFRICAN GOVERNMENTS STILL HIRE MERCENARIES

In its 30 May edition, The Economist published an article given as a recent example that President Filipe Nyusi wanted help last year to tackle a jihadist insurgency in northern Mozambique, various private military firms were keen to oblige.  He chose Russia’s Wagner Group, which vowed to make short work of the rebels – but after a number of its men were killed, it pulled out, humiliated.  However, they have been replaced by others.  The article says that, despite a UN treaty banning mercenaries, their day is far from over and some analysts think there are now more of them in Africa than ever.  It points out that Wagner has been hired to prop up a number of shaky African regimes – Guinea, South Sudan, Central African Republic.  And in Libya, despite a UN arms embargo, Wagner is reported to have deployed 800-1,200 operatives in support of a rebel general.

https://www.economist.com/middle-east-and-africa/2020/05/30/why-african-governments-still-hire-mercenaries

US COURT FREEZES ASSETS LINKED TO ALLEGED $9 MILLION ICO SCAM

On 28 May, Coindesk reported that a federal court has frozen all funds raised in a $9 million ICO token sale – Meta 1 Coin initial coin offering – that the SEC has accused of being fraudulent.

https://www.coindesk.com/us-court-freezes-assets-linked-to-alleged-9m-ico-scam

SEC CHARGES BLOCKCHAIN SERVICES COMPANY FOR CONDUCTING AN UNREGISTERED ICO OF DIGITAL ASSET SECURITIES

On 28 May, a release on Mondo Visione advised that charges had been laid by the SEC against blockchain services company BitClave PTE Ltd. headquartered in San Jose, California, for conducting an unregistered initial coin offering of digital asset securities.  The SEC says that BitClave raised over $25 million by selling its Consumer Activity Tokens (CAT) to approximately 9,500 investors, including investors in the US.

https://mondovisione.com/media-and-resources/news/sec-unregistered-255-million-ico-issuer-to-return-money-for-distribution-to-i/

SINGAPORE POLICE FORCE AND REGULATORY AUTHORITIES BLOCK THE WEBSITE OF AN UNREGULATED TRADING PLATFORM, AROTRADE.

A release on Mondo Visione on 28 May reports that the Singapore Police Force, the Infocomm Media Development Authority (IMDA) and the Monetary Authority of Singapore (MAS), have taken action to block the website of an unregulated trading platform, Arotrade.  This came after the police received complaints from at least 40 Singapore residents about an online platform allegedly registered in Belize purporting to offer trading in contracts for difference (CFD) for different asset classes such as stocks, foreign exchange, commodities, cryptocurrency and indices via its website.

https://mondovisione.com/media-and-resources/news/singapore-police-force-infocomm-media-development-authority-and-monetary-author/

NEW REPORT HIGHLIGHTS RISK OF MONEY LAUNDERING FOR LAND-BASED CASINOS IN LITHUANIA

On 28 May, iGB reported that Lithuania’s land-based casino industry faces a “very high” risk from money laundering, while the remote gambling sector faces a high risk, according to a new National Money Laundering and Terrorist Financing Risk Assessment.

https://www.igamingbusiness.com/news/new-report-highlights-risk-money-laundering-lithuania

A PRACTICAL GUIDE TO PERSONAL DATA BREACH NOTIFICATIONS UNDER THE GDPR

The Irish Data Protection Commission has published a helpful guide to give data controllers some practical advice on how to handle data breaches and navigate the mandatory data breach notification regime.  The Commission says that it was produced following an analysis of the trends and statistics observed by the Commission during the first year of the GDPR mandatory breach reporting regime.

https://www.dataprotection.ie/sites/default/files/uploads/2019-10/Data%20Breach%20Notification_Practical%20Guidance_Oct19.pdf

 

 

 

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US INDICTS CHINESE AND NORTH KOREANS AND ACCUSES STATE-OWNED BANK OF EVADING SANCTIONS

On 28 May, Reuters reported that the US DoJ has accused North Korea’s state-owned bank, the Foreign Trade Bank, of evading US sanctions laws and charged 28 North Korean and 5 Chinese citizens with committing money laundering, bank fraud and other crimes. The bank is accused of processing at least $2.5 billion in illegal payments using over 250 front companies.

https://uk.reuters.com/article/usa-northkorea-sanctions/u-s-indicts-north-koreans-accuses-state-owned-bank-of-evading-sanctions-idUKL1N2DA1Y7?rpc=401&

 

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LEBANON REMOVES DECADES-OLD BANKING SECRECY RULES IN BID TO BETTER FIGHT CORRUPTION

On 28 May, the Globe & Mail reported that Lebanon’s parliament has approved a law to remove decades-old banking secrecy rules in order to better fight rampant corruption that has pushed the country to the edge of economic collapse.  It says that the change opens the way for investigations into bank accounts of current and former officials such as Cabinet ministers, legislators and civil servants.  The new law gives powers to National Anti-corruption Commission and a Special Investigative Committee at the central bank to investigate bank account of officials.

https://www.theglobeandmail.com/world/article-lebanon-removes-decades-old-banking-secrecy-rules-in-bid-to-better

 

 

 

 

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