OTHER THINGS YOU MAY HAVE MISSED – JUNE 5

Panama Covid-19 update – “Si la población no sigue las instrucciones, nos van a hacer retrotraer las medidas“, to quote the Minister of Health (“If the populace don’t follow the instructions, they’re going to make us roll back the measures”).  hence Panama and Panama West start a reinstated weekend total curfew/lockdown from 1700 tomorrow (Saturday) until 0500 Monday…in the rest of the country there remains the “normal” nightly curfew from 1900 to 0500 – isn’t it odd how quickly one adapts to a new normal?

Meanwhile, another high figure, of 419 new cases, takes us to a total to date of 15,463, with 7 more fatalities (now 370 in total).

5 June 2020

UNICEF GRANTED 1 YEAR EXEMPTION FROM NORTH KOREAN SANCTIONS

On 3 June, the UN granted UNICEF an exemption from UN sanctions to allow for shipments of items necessary for UNICEF’s North Korea humanitarian programmes in areas including health, nutrition, sanitation, hygiene, safe water supply and hospital treatment.

https://www.un.org/securitycouncil/sites/www.un.org.securitycouncil/files/1718_to_unicef_reply_exemption_request_3jun20_website_upload.pdf

CRIMINAL LIFESTYLE IN CONFISCATION

On 3 June, Bartfields Forensic Accountants released a webinar about ‘Criminal lifestyle’ – which allows for higher confiscation orders under the Proceeds of Crime Act 2002. What does it mean? What are the implications?  The topics covered include what is a ‘criminal lifestyle’; and the implications for ‘benefit’, ‘available amount’ and a second ‘criminal lifestyle’ confiscation.

https://bartfieldsforensic.co.uk/insights/news/sedulo-events/criminal-lifestyle-in-confiscation/

US: DOJ INTRODUCES A NEW PRIVILEGE TEAM

Hogan Lovells has published a brief saying that the DoJ Criminal Division Fraud Section began posting job opportunities in 2018 for a privilege team dedicated to assisting prosecutors in resolving legal privilege matters.  Previous practice was for prosecuting attorneys and agents not involved in an underlying investigation to be called in to review materials seized during the investigation for privilege before handing them off to the prosecuting attorneys.  However, these “taint teams” have been criticised as not adequately protecting legal privilege.

https://www.hoganlovells.com/~/media/hogan-lovells/pdf/2020-pdfs/2020_05_31_the_doj_introduces_new_privilege_team.pdf

DISCLOSURE AND PRIVILEGE: DOES IT HELP TO COPY OUTSIDE COUNSEL INTO COMMUNICATIONS?

On 29 May, Osborne Clarke published an article which emphasises that drafts and emails sent to the non-lawyers were disclosable where the dominant purpose was not to give or receive legal advice.  It refers to a recent case in which a key takeaway is to separate out communications between the client and lawyers (including in-house lawyers) where legal advice is, broadly, being sought or given. Where communications need to take place internally within the business in order to discuss commercial matters, those communications should, so far as possible, be conducted orally. Interposing a lawyer in those communications will not result in them becoming privileged.  Just because a lawyer is a recipient of the email (and even if legal advice is being sought), it does not mean that the same email sent to a non-lawyer will also be privileged if the dominant purpose of sending it to the non-lawyer, for example, was not to obtain instructions or disseminate legal advice.

https://www.osborneclarke.com/insights/disclosure-privilege-help-copy-outside-counsel-communications/

PANAMA: FORMER PRESIDENT MARTINELLI SUES FORMER SUPREME COURT JUDGE FOR $10 MILLION

On 4 June, Newsroom Panama reported that the legal team of Ex-president Ricardo Martinelli has filed a criminal complaint against a former Supreme Court Judge for collusion and demands a payment of $10 million for alleged damages.  The judge served as a prosecuting magistrate in the investigation of Martinelli for alleged political espionage and embezzlement.  Martinelli was arrested and extradited from the US at the request of the judge, but the case left the jurisdiction of the Supreme Court when Martinelli resigned as a parliamentarian and, in August 2019, a panel of judges declared him “not guilty”, a decision that is being appealed.

https://www.newsroompanama.com/news/martinelli-applies-10-million-screw-to-former-judge

SOME TEQUILA BRANDS ARE NARCOS’ ALLY FOR LAUNDERING DRUG MONEY

On 4 June, Mexico News Daily reported that the tequila industry and some of Mexico’s notorious drug cartels have a criminal association dating back at least 14 years, saying that links between the tequila industry and the underworld date back to at least 2006.

https://mexiconewsdaily.com/news/some-tequila-brands-are-narcos-ally/

NEW COVID-19 FRAUD UNIT ESTABLISHED AT EUROPOL

On 5 June, Europol has set up a unit of investigators to tackle an expected surge in financial crime in the economic downturn triggered by the Covid-19 pandemic and crack down on defrauding of state subsidies.  The European Financial and Economic Crime Centre will employ 65 analysts to gather and share intelligence.

https://www.irishexaminer.com/breakingnews/business/–1003616.html

https://www.dw.com/en/eu-sets-up-financial-crime-unit-in-pandemic-hit-economy/a-53694895

https://www.europol.europa.eu/newsroom/news/europol-launches-european-financial-and-economic-crime-centre

UK: GUIDANCE ON DEFERRING MONEY LAUNDERING SUPERVISION PAYMENTS UPDATED

On 5 June, Accountancy Daily reported that HMRC has updated their guidance on deferring or deregistering from money laundering supervision due to COVID-19.

https://www.gov.uk/guidance/get-a-payment-deferral-or-deregister-from-money-laundering-supervision-due-to-coronavirus-covid-19

DUBAI STATE SECURITY ARREST NOTORIOUS INTERNATIONAL CRIME BOSS

On 5 June, the Emirates News Agency reported that Dubai’s security officials have arrested Amir Faten Mekky, a Danish national, who is said to be the leader of one of the most dangerous international crime rings involved in murder, drug trafficking and money laundering.

http://wam.ae/en/details/1395302846481

SWISS PROSECUTORS OPEN MOZAMBIQUE LOAN SCANDAL INVESTIGATION

On 5 June, Reuters reported that Swiss prosecutors have opened an investigation into the $2 billion loan scandal which tipped Mozambique into a debt crisis.  The investigation involves suspicion of money laundering in connection with the granting of loans to state-owned companies in Mozambique.  Credit Suisse was one of the lenders that helped arrange government-guaranteed loans between 2013 and 2016 to develop Mozambique’s coastal defences, shipping fleet and tuna fishing industry.

https://www.reuters.com/article/mozambique-credit-suisse-gp/update-1-swiss-prosecutors-open-mozambique-loan-scandal-investigation-idUSL8N2DI2Q0

MODIFIED IMPORT DETENTION ORDER ON GOLD FROM DRC FOR SUSPECTED CHILD LABOUR USE

On 5 June, Sandler Travis Rosenberg reported that US Customs and Border Protection has modified its withhold release order on gold from the Democratic Republic of the Congo to specify that gold imported from the DRC by the Chambers Federation is permitted with effect from 28 May.

https://www.strtrade.com/news-publications-gold-Congo-import-withhold-release-CBP-060520.html

HONG KONG AIR CARGO DRUG SEIZURES JUMP 165% IN FIRST 5 MONTHS AS COVID-19 RESTRICTIONS PREVENT COURIERS FROM FLYING INTO CITY

On 5 June, Yahoo News reported that early US$41 million worth of illegal drugs had been seized from air cargo mailed into and out of Hong Kong so far this year.  1.19 tonnes of illicit narcotics was confiscated from 259 shipments intercepted by customs officers at the airport’s cargo terminal in the first 5 months of the year.  A spokesman is quoted as saying that, because of Covid-19 restrictions, trafficking activities involving drug mules have died down. No drug couriers have come to Hong Kong since mid-March.

https://sg.news.yahoo.com/hong-kong-air-cargo-drug-153009804.html

FINANCIAL CRIME, BUSINESS CRIME AND INVESTIGATIONS IN BERMUDA

On 5 June, Appleby published 2 separate briefings in the form of Q&A guides.  One on financial crime in Bermuda provides what it describes as a high-level review of matters relating to corporate fraud, bribery, corruption, insider dealing, market abuse, money laundering and terrorist financing, financial record-keeping, due diligence, corporate liability, immunity and leniency and whistleblowing.  The second on business crime and investigations covers corporate manslaughter, and environmental and health and safety offences.

https://www.applebyglobal.com/publications/financial-crime-in-bermuda-overview/

https://www.applebyglobal.com/publications/business-crime-and-investigations-in-bermuda/

GUATEMALA COURTS AT RENEWED RISK OF INFILTRATION BY CRIMINAL GROUPS

On 4 June, Insight Crime reported that, as Guatemala is completing a selection process to appoint judges to 2 senior courts, an investigation has revealed a familiar scheme involving criminal groups trying to influence these decisions.  It is reported that potential judicial nominees and other officials linked to the selection process had held meetings and phone calls with Gustavo Alejos Cámbara, a political operator who has tried to influence the appointments despite having been jailed for corruption.  Alejos was once the private secretary of former president Alvaro Colom (2008-2012).

https://www.insightcrime.org/news/analysis/guatemala-courts-infiltration/

UK: CONSTRUCTION VAT REVERSE CHARGE DELAYED AGAIN TO MARCH 2021

On 5 June, Out-Law reported that the introduction in the UK of a VAT ‘reverse charge’ for construction services will be delayed until 1 March 2021 due to the impact of coronavirus.  It is explained that, when it is introduced, a customer within the construction industry receiving the supply of construction services will have to pay the VAT direct to HMRC rather than paying it to the supplier. It will have a significant impact on VAT compliance and cash flow.

https://www.pinsentmasons.com/out-law/news/construction-vat-reverse-charge-delayed-march-2021

UK: PUBLIC INTEREST DEFENCE TO DEFAMATION CLARIFIED

On 5 June, an article from Out-Law says that a recent Supreme Court judgment provides useful clarification regarding the defence under section 4 of the Defamation Act 2013. In particular, it warns against treating the Reynolds factors under the previous common law defence as a checklist, or alluding to any one particular factor as a ‘requirement’ in order to benefit from the statutory defence under section.  It explains that section 4 provides publishers of journalism with a defence against such claims where the statement complained of was, or formed part of, a statement on a matter of public interest; and the person accused of defamation reasonably believed that publishing the statement complained of was in the public interest.

https://www.pinsentmasons.com/out-law/news/public-interest-defence-defamation

DATA PROTECTION: DATA RETENTION LEGITIMATE INTERESTS GUIDANCE – GDPR (VERSION 2.0)

Available free online is this guide from the Data Protection Network.  Published in April 2018, it includes several case studies and an example of a legitimate interests assessment.  It is intended as a practical tool aimed at helping commercial and NPO to assess whether or not they can rely on Legitimate Interests as a lawful basis for processing personal data under the GDPR.

https://dpnetwork.org.uk/dpn-legitimate-interests-guidance/

ISLE OF MAN FOLLOWS UK/EU LEAD ON AMENDMENTS TO NORTH KOREA AND SYRIA SANCTIONS LISTS

On 5 June, 2 news releases from the Isle of Man advised that the amendment of 335 entries on the list of those affected by Syrian sanctions, and the entry relating to Yuk Tung Energy Pte Ltd in the North Korea sanctions lists has been amended.

https://www.gov.im/news/2020/jun/05/financial-sanctions-democratic-peoples-republic-of-korea-north-korea/

https://www.gov.im/news/2020/jun/05/financial-sanctions-syria/

NORTH KOREAN-MADE FALSE LASHES CONTINUE TO RAISE EYEBROWS

On 21 May, Kharon carried an article saying that Months after settling a case in January 2019 with the US Government involving North Korea sanctions violations, US retailer e.l.f. Cosmetics Inc. imported nearly 7,000 kg of fake eyelashes in a series of shipments from a Chinese company that sources its materials from North Korea.  Kharon claims to have found that, according to trade data, e.l.f. continued to source material with a North Korean nexus, Qingdao Diefei Daily Necessities, as recently as 2 months ago.

https://brief.kharon.com/updates/north-korean-made-false-lashes-continue-to-raise-eyebrows/

INDUSTRIAL PARKS IN XINJIANG SUPPLYING GLOBAL RETAILERS PROMPT HUMAN RIGHTS CONCERNS

On 28 May, Kharon reported on companies conintuing to use businesses supplying materials while operating from industrial parks in China that have raised concerns about potential human rights violations through their surveillance and re-education programmes.

https://brief.kharon.com/updates/industrial-parks-in-xinjiang-supplying-global-retailers-prompt-human-rights-concerns/

ANTI-PIRACY ORGANISATION WARNS ABU SAYYAF GROUP IS TARGETING MALAYSIAN WATERS

On 3 June, Homeland Security Today reported that ReCAAP has warned that a group of approximately 5 Abu Sayyaf Group (ASG) members armed with assorted firearms was planning to conduct kidnapping activities in undisclosed areas in Sabah, Malaysia. They are said to be targeting wealthy businessmen or crew of fishing boats and other slow-moving ships plying within the waters off Sabah.  In June 2017, the group renewed its campaign to establish an Islamic state in the Philippines when it gained control of parts of Marawi, a city in the south.

https://www.hstoday.us/subject-matter-areas/maritime-security/anti-piracy-organization-warns-abu-sayyaf-group-is-targeting-malaysia-waters/

NIGERIAN NAVY RESCUES 18 CREW MEMBERS ONBOARD CHINESE VESSEL

A news release from the Nigerian Navy on 19 May announced that the Navy had rescued 18 crew members on board a Chinese vessel, MV HAILUFANG II, from pirates’ attack – the crew members comprising Chinese, Ghanaians and Ivoirians.  The 10 pirates were arrested.  It says that when intercepted, the ship was 140 nm south of the Lagos Fairway Buoy.

http://www.navy.mil.ng/2020/05/19/navy-rescues-18-crew-members-onboard-chinese-vessel-arrests-10/

VATICAN ARRESTS BUSINESSMAN IN SHADY LONDON REAL ESTATE DEAL

On 5 June, the Daily Mail reported that Vatican police have arrested Gianluigi Torz, an Italian businessman involved in a controversial London real estate deal, on suspicion of extortion, fraud and money laundering – the first arrest in a nearly yearlong investigation into the deal.  It is said that Torzi was the Vatican’s intermediary in the deal and also took strategic decisions for the property, located in London’s Chelsea.

https://www.dailymail.co.uk/wires/ap/article-8393439/Vatican-arrests-businessman-shady-London-real-estate-deal.html

SEC MOVES TO FREEZE ASSETS OF ALLEGED $12 MILLION CRYPTO INVESTMENT SCAM

On 5 June, Coindesk reported that an unsealed indictment claimed that Utah resident Daniel F Putnam, his businesses MMT Distributions and R & D Global and associates Angel A. Rodriguez of Utah and Jean Paul Ramirez Rico of Colombia, the SEC had lied to investors and misappropriated their funds.  The “Modern Money Team,” (MMT) is said to have invested in crypto mining equipment from at least July 2017 and eventually pivoted to offering investors “cryptocurrency trading packages” that would exploit crypto “arbitrage” opportunities at Bitfinex.

https://www.coindesk.com/sec-moves-to-freeze-assets-of-alleged-12m-crypto-investment-scam

GAMES SUPPLIER GANAPATI SURRENDERED ITS MALTA GAMING LICENCE AMID RUMOURS OF AN ALLEGED INVESTMENT SCAM AND MOUNTING DEBTS

On 5 June, Casino Beats reported that the B2B games supplier had “quietly” surrendered its licence amid continuing rumours of an alleged investment scam and mounting debts.  It is said that the MGA required surrender of the licence.

https://www.casinobeats.com/2020/06/05/ganapati-surrenders-malta-licence-as-rumours-grow/

TEAR GAS IS WAY MORE DANGEROUS THAN POLICE LET ON — ESPECIALLY DURING THE PANDEMIC

An article in Rolling Stone on 4 June, contained cautionary information about the effects of riot control agents (known colloquially as “tear gas”), and more particularly the possible effect of it making those affected more susceptible to the effects of Covid-19.  It focuses on the lung damage it can cause, which of course has implications for Covid-19.  Pointedly, it says that scientists know little about how CS affects the general public. The most comprehensive studies were conducted by the US military on thousands of recruits who were exposed to tear gas during training exercises. Afterward, it left them at higher risk for contracting influenza, pneumonia, bronchitis and other respiratory illnesses – and these were people who can be expected to be younger, healthier and stronger than the average.  It is not a “safe” agent, the CDC is said to warn that severe tear gas poisoning, particularly if the gas was released in an enclosed space — can blind or kill people through chemical burns and respiratory failure. Prisoners with respiratory conditions have died after inhaling tear gas in poorly ventilated areas.

https://www.rollingstone.com/culture/culture-features/tear-gas-protests-dangerous-police-coronavirus-1010359/

 

 

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UN SECURITY COUNCIL EXTENDS AUTHORISATION TO INSPECT VESSELS SUSPECTED OF VIOLATING LIBYA ARMS EMBARGO

On 5 June, a news release from the UN advised that the Security Council had extended authorisation to inspect vessels suspected of violating Libya arms embargo, unanimously adopting UN SCR 2526 (2020).  It extends for 1 year a series of authorisations for Member States to inspect vessels on the high seas off the coast of Libya suspected of violating that country’s arms embargo.

https://www.un.org/press/en/2020/sc14206.doc.htm

 

 

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ARMENIA’S GOLDEN PALACES: OFFSHORE MILLIONS EVADED INVESTIGATORS

On 5 June, OCCRP published a report about the Golden Palace Hotel Resort & Spa which has stood empty ever since the family of Armen Avetisyan, the country’s former head of customs, gave it to the state in 2019.  Avetisyan was being investigated for alleged money laundering and amassing part of his $90 million hotel portfolio during his time as a public official, despite laws forbidding him from business dealings while in office.  It says that new documents shed light on his family’s assets, with records and emails from Cayman National Bank on the Isle of Man.  Armen Avetisyan’s company, Golden Group Limited, an Isle of Man company incorporated in 2012, was flagged as a high-risk client from the time it opened an account at Cayman National in 2012.  He was dismissed from his position as head of customs without explanation in 2008, but went on to secretly build the new (second) hotel.

https://www.occrp.org/en/investigations/armenias-golden-palace-offshore-millions-evaded-investigators

 

 

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OFAC ISSUES VENEZUELAN SANCTIONS FAQ

On 5 June, OFAC issued 2 new FAQ re Executive Order 13902, “Imposing Sanctions With Respect to Additional Sectors of Iran“.  FAQ 830 and 831 asks will target Iranian manufacturers of medicines, medical devices, or products used for sanitation or hygiene or as personal protective equipment for use in Iran pursuant to Executive Order (EO) 13902 for continuing to manufacture these items?; and how will OFAC define the sectors of the Iranian economy specified in Executive Order (EO) 13902?

https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_iran.aspx#830

 

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QUICK GUIDES TO DIRECTORS’ DUTIES ACROSS EUROPE – OVERVIEW OF CONSIDERATIONS FOR DIRECTORS WHEN A COMPANY IS IN FINANCIAL DIFFICULTY

On 29 May, Squire Patton Boggs published a pdf guide saying that different countries frame the exact description of the role of directors of a company in different terms. One feature is common to all – the obligation not to continue trading if a company is insolvent. Again, the detailed implications of doing so vary from one jurisdiction to another. However, this obligation not to continue wrongful trading is at the heart of trust in a market-based economic system.  It covers Belgium, Czech Republic, France, Germany, Italy, Poland, Slovakia, Spain and England & Wales.

https://www.squirepattonboggs.com/-/media/files/insights/publications/2020/04/quick-guides-to-directors-duties-across-europe-overview-of-considerations-for-directors-when-a-company-is-in-financial-difficulty/quick-guides-to-directors-duties-across-europe.pdf

 

 

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WEBINAR: CRIMINAL LIFESTYLE IN CONFISCATION

On 3 June, Bartfields Forensic Accountants released a webinar about ‘Criminal lifestyle’ – which allows for higher consifcation orders under the Proceeds of Crime Act 2002. What does it mean? What are the implications?  The topics covered include what is a ‘criminal lifestyle’; and the implications for ‘benefit’, ‘available amount’ and a second ‘criminal lifestyle’ confiscation.

https://bartfieldsforensic.co.uk/insights/news/sedulo-events/criminal-lifestyle-in-confiscation/

 

 

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OTHER THINGS YOU MAY HAVE MISSED – JUNE 4

Panama Covid-19 update – well, it seems non-compliance with control measures means we (in Panama and Panama West, which includes where I am) face a total lockdown curfew this weekend, from 1700 on Saturday until 0500 on the following Monday.  Some areas of the interior are still cut off by sanitary cordons to restrict movement and protect vulnerable areas, including indigenous peoples.  Out today, whilst people seemed to be adhering to rules on face masks, use of hand cleansers etc, it almost seemed as busy as normal – except for queues outside the most popular shops, and the fact that the shopping malls remained closed and boarded up.

Meanwhile, 435 new cases (still too high for my liking or peace of minds), taking the total to over 15,000 (15,044), with 6 more fatalities, meaning 363 deaths to date.

4 June 2020

ISIS IS NOT USING BITCOIN TO HIDE $300 MILLION

On 23 May, Forbes carried an article refuting claims that ISIS is holding a multi-million dollar war chest in Bitcoin, made by Hans-Jakob Schindler, director of the Counter Extremism Project.  It says that there is no evidence in Shindler’s comments or his think tank’s research to suggest that ISIS has a significant (let alone a majority) of its funds in bitcoin.

https://www.forbes.com/sites/colinharper/2020/05/23/no-isis-is-not-using-bitcoin-to-hide-300-million/#5793e38e79ee

PUTIN APPROVES DRAFT OF NEW CIS TREATY ON COMBATING TERRORISM FINANCING

On 25 May, Russian news agency TASS reported that President Vladimir Putin has approved a draft of a new CIS treaty on combating legalisation of criminal incomes, financing terrorism and sponsoring proliferation of WMD.  The new document will supersede the current CIS treaty on combating legalisation of criminal proceeds and financing terrorism of 2007.

https://tass.com/politics/1160065

RESEARCHERS IN PHILIPPINES TRACK CRYPTO USE BY TERRORISTS

On 26 May, Coin 360 reported that the Philippine Institute for Peace, Violence and Terrorism Research has been tracking transactions made by local terror groups.  It reveals that terrorist groups related to Islamic State in SE Asia have recently made their first transactions using cryptocurrencies.

https://cointelegraph.com/news/researchers-in-philippines-track-crypto-use-by-terrorists

AUSTRIAN LAWMAKERS CALL FOR ACTION AGAINST LEBANESE HIZBULLAH

On 1 June, the Middle East Monitor reported that the Austrian Parliament has passed a resolution calling to designate Lebanon’s Hezbollah a “terrorist organisation” – a move already undertaken in Germany – to change its policy that distinguishes between the military and political arms of the movement.

https://www.middleeastmonitor.com/20200601-austria-lawmakers-call-for-action-against-lebanese-hezbollah/

BANK OF ENGLAND URGES LENDERS TO BOLSTER NO-DEAL BREXIT PLANS

On 3 June, the Guardian reported that the governor held a conference call on Tuesday with Britain’s biggest lenders in which he emphasised that they needed to step up their plans for Britain failing to secure a post-Brexit trade deal with the EU before a deadline at the end of 2020.

https://www.theguardian.com/business/2020/jun/03/bank-of-england-no-deal-brexit-plans-britain-deadline

HACKERS STEAL SECRETS FROM US NUCLEAR MISSILE CONTRACTOR

On 3 June, Sky News reported that, after gaining access to Westech International’s computer network, the criminals encrypted the company’s machines and began to leak documents online to pressure the company to pay extortion. The company is involved with the nuclear deterrent as a sub-contractor, providing engineering and maintenance support for the Minuteman III intercontinental ballistic missiles.

https://news.sky.com/story/hackers-steal-secrets-from-us-nuclear-missile-contractor-11999442

AUSTRALIA: WESTPAC SAYS MONEY LAUNDERING BREACHES DUE TO TECHNOLOGY, HUMAN ERROR

On 3 June, the Wall Street Journal reported that Westpac has said that millions of breaches of AML finance laws were caused by technology shortcomings and human mistakes, but an internal investigation had not found intentional wrongdoing by any of its staff.

https://www.wsj.com/articles/westpac-says-money-laundering-breaches-due-to-technology-human-error-11591268386

https://www.riskscreen.com/kyc360/news/sins-of-omission-at-heart-of-westpac-laundering-breaches/

ROMANIA: CLEANING DIRTY MONEY FOR THE RIVIERA MAYA GANG

On 3 June, OCCRP published an article about a Romanian crime gang, an organisation which specialised in stealing banking information from rigged ATM and withdrawing cash from the accounts of victims.  They ran their scheme in countries including Indonesia, Mexico, and the Caribbean island nations of Barbados and Grenada.  It is said that the scam brought in an estimated $240 million a year from early 2014 until spring 2019 — totalling around $1.2 billion, according to one former gang member.  The gang transferred relatively small amounts of cash, and used different people to do so, thus avoiding scrutiny for money laundering. The gang also hid cash in packages sent via DHL, or simply carried the money on international flights hidden in their clothes.  The gang then invested in property, though it is claimed that part of the money is hidden, buried in backyards of the houses of the members of the group.

https://www.occrp.org/en/how-a-crew-of-romanian-criminals-conquered-the-world-of-atm-skimming/from-bank-machines-to-real-estate-cleaning-the-dirty-money

PODCAST: DISHONEST ASSISTANCE BY PROFESSIONALS

On 2 June, 4 New Square Chambers published a podcast about dishonest assistance and unlawful means conspiracy claims after Group 7 and Stobart/The Racing Partnership.  A look, too, at insurers’ recovery options in the event that the insured is engaged in ‘naughty conduct’.  It identifies 2 particular types of claim, founded on bad faith, to which professional persons are vulnerable: dishonest assistance and unlawful means conspiracy.  It says that claims against professionals for bad faith are on the rise; and we hope that this podcast will serve as a helpful guide of risks and rewards on both sides of the litigation divide.

https://www.4newsquare.com/podcast/fraud-and-all-that-professionals-who-know-too-much/

FREEZING INJUNCTIONS: RISK OF DISSIPATION OR JUST A BAD CHARACTER?

On 2 June, an post from MacFarlanes reminds one that to obtain a freezing injunction, one of the factors an applicant must prove is that there is a real risk that the respondent will dissipate assets to make enforcement of any award or judgment more difficult.  However, the Court will not continue a freezing injunction where the evidence of risk of dissipation relied upon by the applicant is speculative and is pegged primarily to the respondent’s character rather than the likelihood of dissipation.

https://blog.macfarlanes.com/post/102g8lq/freezing-injunctions-risk-of-dissipation-or-just-a-bad-character

WHY THE US IS DRIVING ALLIES TO BUY CHINESE UAV

On 3 June, an article in the Air Force Magazine says that the US military remains hamstrung in its ability to collaborate with foreign partners on new systems or even to help sell most UAV to America’s closest allies. It discusses a new report which asks why is it easier for America’s allies to buy unmanned aircraft from China than it is from the United States?  This says that the US is prisoner to a non-binding voluntary, informal agreement to limit the proliferation of missiles and missile technology. The Missile Technology Control Regime (MTCR) defines unmanned systems as missiles. The article argues that this is wrong, and that they should be treated as aircraft.

https://www.airforcemag.com/why-the-u-s-is-driving-allies-to-buy-chinese-uavs/

https://breakingdefense.com/2020/06/us-should-pull-drones-from-missile-control-regime-mitchell-institute/

SWITZERLAND PRESIDENCY OF THE HAGUE CODE OF CONDUCT: AN INTERNATIONAL MECHANISM ESTABLISHED IN 2002 TO CONTROL THE SPREAD OF WMD

On 3 June, Swissinfo reported that the non-binding agreement, formally known as The International Code of Conduct against Ballistic Missile Proliferation, has 143 state signatories.  countries are required to provide information annually on their national ballistic missile programmes and their space activities. They must also provide advance notice of any missile launches.

https://www.swissinfo.ch/eng/switzerland-takes-helm-of-hague-code-of-conduct/45804580

SOUTH AUSTRALIAN GRAIN DEALER JAILED FOR ILLEGALLY EXPORTING CROP SEEDS TO SAUDI ARABIA

ABC News on 3 June reported that a South Australian grain dealer who falsely labelled seed worth about $5.7 million has been jailed for more than 4 years.  He is described as a well-known member of the community and former managing director of the liquidated Keith Seeds. The case involved lucerne seed, a prescribed good under the Export Control Act. He was also charged with using an unregistered business to sort and bag the seeds before they were shipped overseas.

https://www.abc.net.au/news/2020-06-04/keith-man-jailed-over-saudi-arabia-crop-export/12320578

HOW TO FIX AMERICA’S FAILING SANCTIONS POLICY

An article from Lawfare on 4 June says that, just like with airpower in the 1920s, the advent of financial warfare over the past decade has reshaped how America seeks to advance its interests in the world. It outlines how US sanctions have expanded but bemoans their growing ineffectiveness.  It says that US sanctions are failing. They rarely achieve discernible policy goals, and far too often they are counterproductive. But the problem is not the tool itself; it is the execution.  However, it says that there is still time to right the ship before it veers irreversibly off-course.

https://www.lawfareblog.com/how-fix-americas-failing-sanctions-policy

BRAZIL SMUGGLES IN HYDROXYCHLOROQUINE

On 4 June, Insight Crime published an article saying that smugglers in Brazil wasted no time in moving an anti-malarial drug touted by President Jair Bolsonaro as a potential treatment for the coronavirus, bringing more than 3,000 doses illegally into the country days after health authorities approved its use.  It says that, on 27 May, police in Brazil seized 120 boxes of hydroxychloroquine and arrested 4 people on charges of smuggling the medicine from neighbouring Paraguay.  Meanwhile, it also reports that Peruvian authorities seized 20,000 flasks of the anti-parasite drug ivermectin, which has been promoted as a coronavirus treatment despite contradictory studies.  The flasks, intended for resale at local pharmacies, were in fact filled with veterinary ivermectin — a version of the drug not fit for human consumption.

https://www.insightcrime.org/news/brief/brazil-coronavirus-hydroxychloroquine/

NEW ZEALAND: CIGARETTE SMUGGLING CASE DESCRIBED AS ‘UNPRECEDENTED LARGE-SCALE TAX EVASION’

On 4 June, the New Zealand Herald reported that an Auckland businessman has been jailed for what has been described as “unprecedented large-scale tax evasion” after he and his company avoided $18.73 million in state payments by smuggling nearly 20 million cigarettes into New Zealand.  He was arrested in 2018 after a 6-month Customs investigation, code-named Operation Whitethorn, began following a tip-off about a company suspected of smuggling cigarettes inside sea containers.

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12337125

TRAVEL RULE REQUIREMENTS NEED NOT BLOCK PRIVATE BITCOIN WALLETS

On 3 June, Forbes magazine carried an article which focuses on the FATF Recommendation that is receiving the highest degree of attention around the globe — Recommendation 16, known as the Travel Rule.  This requires the collection, disclosure, and transfer of information such as names, addresses, and account numbers to establish the identities of the originators and beneficiaries of financial transactions and to enable an audit trail.  In 2019, FATF updated the Travel Rule to cryptocurrency exchanges and wallet providers, along with other Virtual Asset Service Providers (VASP), including conventional institutions or non-bank entities experimenting with virtual assets.  It points out that June 2020 is a significant threshold as FATF member jurisdictions must demonstrate progress on implementing Travel Rule solutions by June 2020, when their efforts will be reviewed at FATF’s plenary meeting, to be conducted virtually on 24 June.

https://www.forbes.com/sites/pawelkuskowski/2020/06/03/travel-rule-requirements-need-not-block-unhosted-wallets/#5c8e7a286a42

EBA REPORT ON THE CUM-EX DIVIDEND ARBITRAGE CONTROVERSY

On 3 June, an article from A&L Goodbody in Ireland is concerned with a report that includes a 10-point action plan.  The scandal involved investors participating in various dividend arbitrage trading schemes which would produce 2 refunds of withholding tax paid by the issuer in respect of a single dividend payment to shareholders.  Participants appear to have considered that the transactions were not illegal due to careful tax planning.  Germany is generally understood to have been the country most affected, with a reported cost of over $30 billion in tax revenues.  The article says that while the investigation focuses on alleged tax fraud and tax evasion, financial services regulatory issues arise because of the alleged involvement of banks, brokers and private wealth managers in the structuring and execution of the transactions.  The EBA report shows that there is no harmonised understanding of dividend arbitrage trading schemes, or relevant transactions in the EU, due to differences in Member States’ tax laws.  The action plan focuses on amendments to the existing regulatory framework to implement stronger controls and prevent illegal dividend arbitrage practices.

https://www.algoodbody.com/insights-publications/eba-report-on-the-cum-ex-dividend-arbitrage-controversy

ALASKA MAN ACCUSED OF LAUNDERING $1 BILLION FOR IRAN IN ELABORATE SCHEME

i24 on 4 June reported that a US citizen is suspected of laundering more than $1 billion for the Iranian regime by funnelling nearly all the money through the UAE using the South Korean banking system.  Kenneth Zong is suspected of holding the money in South Korea and then creating fake invoices to help Iran incrementally siphon the money off in lieu of payment for oil shipments.  He was arrested in South Korea.  US authorities are seeking to extradite Zong, whose residence is listed in Alaska, arguing that he should stand trial and face the US judicial system.

https://www.i24news.tv/en/news/international/1591279225-alaska-man-accused-of-laundering-1-billion-for-iran-in-elaborate-scheme

https://www.justice.gov/opa/pr/justice-department-seeks-forfeiture-more-20-million-assets-relating-unlawful-use-us-financial

SWISS LEGAL AUTHORITIES FORCED INTO A CLIMBDOWN OVER ONE OF THE COUNTRY’S HIGHEST-PROFILE MONEY LAUNDERING CASES, AN ALLEGED THEFT OF $176 MILLION FROM RUSSIA’S OTKRITIE BANK

On 4 June, EU Reporter reported that 3 defendants have been offered 4- and 5-month suspended sentences by prosecutors and a SF3,000 fine, but this proposed settlement has reportedly been rejected by lawyers representing the individuals accused.

https://www.eureporter.co/frontpage/2020/06/04/latest-retreat-by-swiss-prosecutors-in-high-profile-money-laundering-case-raises-key-administration-of-justice-questions-are-they-up-to-the-job

EASTERN AND SOUTHERN AFRICAN RISK BULLETIN FOCUSES ON THE MOZAMBIQUE CRISIS

On 7 May, the Global Initiative Against Transnational Crime published issue 7 of its Risk Bulletin and the first of 3 articles on the subject describes the recent shift in insurgent tactics and how comparisons may be drawn to tactics used by al-Shabaab a decade ago.  The second looks at the political response to the crisis.  The third discusses how major trafficking networks are adjusting to the conflict and how far the insurgents may be implicated in these illicit markets.  The Bulletin also looks at the emergence of Addis Ababa’s Bole airport as a transit hub for trafficking routes, and the dark implications of the attempted assassination of a prominent attorney in Cape Town.  Finally, it considers a Global Initiative report with an in-depth look at how trafficking connects disparate locations across the eastern African seaboard, and the political and security risks this carries.

https://globalinitiative.net/esaobs-risk-bulletin-7/

TACKLING SERIOUS AND ORGANISED CRIME IN THE WESTERN BALKANS

On 18 May, the Global Initiative Against Transnational Crime provided a report on a recent conference on this subject.  Participants included representatives of civil society from the Western Balkans (including from the media, NGO and academia), a small number of government representatives, members of the donor community, as well as partnering organizations.  The biggest challenges in terms of tackling organised crime and corruption in the Balkans, as well as how governments and criminal-justice systems are responding to the threat, were presented through a series of interactive discussions.

https://globalinitiative.net/wp-content/uploads/2020/05/GIATOC-Wilton-Park-conference-report-4May1125-Web.pdf

US: PUBLICATION OF SYRIA-RELATED SANCTIONS REGULATIONS

On 4 June, OFAC is issuing regulations to implement Executive Order 13894 (“Blocking Property and Suspending Entry of Certain Persons Contributing to the Situation in Syria”) to implement the Executive Order.  It is said that OFAC intends to supplement these regulations with a more comprehensive set of regulations, which may include additional interpretive and definitional guidance, general licenses, and statements of licensing policy

https://content.govdelivery.com/accounts/USTREAS/bulletins/28f098b

https://www.treasury.gov/resource-center/sanctions/Programs/Documents/20200604_syria_related_reg.pdf

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20200604.aspx

ROSNEFT REPLACES SANCTIONED TRADING ARM WITH NEW ONE

On 4 June, EurActiv reported that Russia’s Rosneft, which closed its oil trading arm after sanctions were imposed by US authorities in February, has set up a new Geneva-based trading business.  Energopole SA, will take on the main functions previously carried out by Rosneft Trading of supplying Russian oil giant Rosneft’s refineries in Germany and some trading operations in Europe.

https://www.euractiv.com/section/global-europe/news/rosneft-replaces-sanctioned-trading-arm-with-new-one/

6 COMMON BARRIERS TO EFFECTIVE KYC CLIENT ONBOARDING

On 4 June, Finextra reported that, after working with several regulated firms to help manage their KYC client onboarding and monitoring processes, the author of the article says he has created a list of the 6 most common barriers to effective KYC onboarding.

https://www.finextra.com/blogposting/18837/6-common-barriers-to-effective-kyc-client-onboarding

NORTHERN IRELAND’S ‘BIGGEST EVER’ DRUGS BUST AS £12 MILLION CANNABIS FOUND IN LORRY

On 4 June, the Belfast Telegraph reported that the NCA  and PSNI found around 600 kg of herbal cannabis hidden in a load of vegetables on a lorry.  It is understood the lorry had come through Larne port to get into Northern Ireland.

https://www.belfasttelegraph.co.uk/news/northern-ireland/nis-biggest-ever-drugs-bust-as-12m-cannabis-found-in-lorry-39259759.html

https://www.bbc.com/news/uk-northern-ireland-52922087

https://www.nationalcrimeagency.gov.uk/news/three-arrested-as-nca-makes-record-breaking-drug-seizure-in-northern-ireland

A “CONFIDENTIAL ISSUE” DELAYS VIJAY MALLYA’S EXTRADITION FROM UK TO INDIA

On 4 June, the Hindustan Times reported that Indian businessman Vijay Mallya’s extradition to India will have to wait till the resolution of a new (unspecified) legal issue that has surfaced.

https://www.hindustantimes.com/india-news/vijay-mallya-s-extradition-hits-another-wall-in-the-backdrop-of-asylum-talks/story-IXBeLCeMOjas3IiQjqe9CP.html

MOST RECENT FISHING SEASON SEES 108 SMUGGLERS ARRESTED AND OVER 2 TONNES OF GLASS EELS SEIZED IN EUROPE

On 4 June, a news release from Europol highlight the annual Operation Lake, which aims to combat trafficking of endangered species in the EU and to dismantle violent organised crime groups involved in associated illegal activities, such as environmental crime, smuggling, money laundering, tax evasion and document counterfeiting.  Concentraing on glass eel smuggling, it says that this year’s operation became more challenging for the police officers as the fishing season took place during the COVID-19 lockdown in China, and this made the links between the EU and the Asian country more complicated and had an impact on all transactions including illegal ones.

https://www.europol.europa.eu/newsroom/news/most-recent-fishing-season-sees-108-smugglers-arrested-and-over-2-tonnes-of-glass-eels-seized-in-europe

CAN THE US SLOW THE FLOW OF DIRTY MONEY FROM THE FORMER USSR?

On 4 June, Rferl reported on 2 new Bills now on their way through the US Congress could make it easier for US law enforcement agencies to immediately identify owners of shell companies, speeding up investigations.  It says that lax registration rules in states such as Delaware, Wyoming, and New Mexico — which require less information to create a company than to get a library card — have helped turn the US into a leading offshore haven for criminals and corrupt officials the world over, including from the former Soviet Union.  Both Bills require beneficial owners of corporations and LLC with 20 or fewer employees and $5 million or less in annual revenue to submit their full name, date of birth, current home or work address, and the identification number on their valid US or foreign identity document to FinCEN.  However, it is said that some experts believe the effects of the legislation may be underwhelming.

https://www.rferl.org/a/can-the-u-s-slow-the-flow-of-dirty-money-from-the-ex-u-s-s-r-/30651938.html

FBI WARNS COMPANIES TO BE VIGILANT AS COVID-19-THEMED BEC SCAMS CONTINUE TO GROW

On 4 June, an article from Blank Rome LLP says that the frequency of COVID-19 business e-mail compromise (BEC) schemes has risen significantly since the onset of the global health emergency.  It reports that the FBI has issued 2 alerts warning businesses of the growing threat. As such, it says, businesses must take appropriate measures to effectively mitigate the enhanced risk posed by BEC fraud, which is expected to increase even further in the coming weeks and months.

https://www.jdsupra.com/legalnews/fbi-warns-companies-to-be-vigilant-as-53073/

PORT OF ANTWERP IS A EUROPEAN HUB FOR ILLEGAL PESTICIDES

On 4 June, the Brussels Times reported that, according to an investigation by an international consortium of journalists, the port is also becoming a vital link in the chain of traffic of illegal pesticides.  The trade in all pesticides is estimated at €11 billion a year in Europe, of which 10% is thought to be illegal.  It is said that Antwerp is the second most important port for the import of pesticides for all of Europe, after Rotterdam.  According to Europol, the illegal trade is divided between organised crime groups and opportunistic amateurs.

https://www.brusselstimes.com/all-news/belgium-all-news/115114/port-of-antwerp-is-a-european-hub-for-illegal-pesticides/

WHEN A CONTRACT SPECIFIES THE JURISDICTION OF LAW IT MUST ALSO SPECIFY THE CHOICE OF LAW TO APPLY

An article from Appleby on 4 June considers a recent High Court case in London involving foreign companies and international trade.  It says that a contract typically contains 2 clauses – one for the jurisdiction, the forum in which any dispute it to be heard, and the other the choice of law that is to apply.  It says that in the case in question, the contract specified its choice of jurisdiction as England but regrettably failed to specify its choice of law.  One side argued English law should apply, the other opted for Canadian law (the latter had a time limit provision that would stop the action).  The article concludes that a clear choice of law and choice of jurisdiction clauses are a necessity.

https://www.applebyglobal.com/publications/choices-of-law-jurisdiction-must-be-clear/

THE IMPACT OF THE 2015 UK MODERN SLAVERY ACT

On 4 June, BBC Radio 3 broadcasted a discussion, talking to researchers Katarina Schwarz and Alicia Kidd who are trying to measure and improve its effectiveness.  It points out that over the past 5 years, over 75% of people identified as potential victims of modern slavery in the UK represent only 10 nationalities. The top 20 nationalities make up over 90% of referrals to the authorities.

https://www.bbc.co.uk/programmes/p08fh0w3

NEW STUDY ON BLOCKCHAIN FOR SUPPLY CHAINS AND INTERNATIONAL TRADE

On 3 June, the EU Parliament Research Service announced a study into the use of blockchain technologies could benefit supply chain management and international trade processes. The study looks at potential use cases and their impacts.  It has been undertaken by the Scientific Foresight Unit (STOA).  The study sets out the key features of blockchain technology and how it could be used to support various aspects of supply chains and international trade, before examining the potential impacts of 8 specific use cases. It then sets out some key challenges and 20 policy options organised into 6 themes.  There is also an options brief which sets out the key challenges and 20 policy options.

https://epthinktank.eu/2020/06/03/new-stoa-study-on-blockchain-for-supply-chains-and-international-trade/

The full report is at –

https://www.europarl.europa.eu/RegData/etudes/STUD/2020/641544/EPRS_STU(2020)641544_EN.pdf

The options brief is at –

https://www.europarl.europa.eu/RegData/etudes/STUD/2020/641544/EPRS_BRIE(2020)641544(ANN)_EN.pdf

CANADA: RECENT DEVELOPMENTS FOR FINTRAC REPORTING AND THE PROCEEDS OF CRIME LAW

An article from Blake, Cassels & Graydon LLP on 4 June considers changes implemented in May and from 1 June, with amended regulations and revised FINTRAC guidance on suspicious transaction reporting and on its approach to compliance in the time of COVID-19.

https://www.jdsupra.com/legalnews/recent-developments-fintrac-and-the-20300/

EX-ECUADOR PRESIDENT ABDALÁ BUCARAM DETAINED IN COVID-19 CORRUPTION RAID

The Buenos Aires Times on 4 June reported that prosecutors in Ecuador carried out 37 raids in Guayaquil and the capital of Quito, detaining 17 people suspected of overcharging for supplies, influence peddling and criminal organisation.  Those detained included Abdalá Bucaram, 68, who was elected president in 1996 and ousted by Congress less than 6 months later for “mental incapacity”.  He was accused of corruption and nepotism during his brief time in office.

https://www.batimes.com.ar/news/latin-america/ex-ecuador-president-detained-in-covid-19-corruption-raid.phtml

FORMER POLISARIO MEMBER DENOUNCES THE SEPARATIST FRONT’S CORRUPTION

On 4 June, Morocco World News reported that a former Polisario member Hamada Elbaihi has shared a video testimony describing the living conditions of the Sahrawi population in camps and the corruption of the separatist Polisario Front’s leadership.  He did this during a debate show about the Western Sahara issue, broadcasted on social media.

https://www.moroccoworldnews.com/2020/06/304893/former-polisario-member-denounces-separatist-fronts-corruption

INDIA: OVER 13,000 MOBILE PHONES FOUND RUNNING ON SAME IMEI

In its 5 June edition, the New Indian Express reported charges of fraud against the mobile phone manufacturing company and its service centre.  Police claims that around 13,500 mobile phones in the country are running on the same IMEI, the number used to identify the device.  A spokesman is quoted as saying that it appears to be negligence on part of the mobile phone company and criminals can use it to their advantage.

https://www.newindianexpress.com/nation/2020/jun/05/over-13000-mobile-phones-found-running-on-same-imei-manufacturer-booked-2152408.html

 DUTCH AMBASSADOR “LEAKED INFORMATION TO SHELL ON INVESTIGATION INTO COMPANY’S OPERATIONS IN NIGERIA”

On 4 June, Sahara Reporters claimed that a Dutch ambassador to Nigeria has been found to have leaked confidential information about an extensive corruption investigation into the operation of Shell in Nigeria.

http://saharareporters.com/2020/06/04/dutch-ambassador-leaked-information-shell-investigation-company’s-operations-nigeria

HONG KONG: COURT CONVICTS FORMER DIRECTOR AND SHAREHOLDER OF WONDERFUL WEALTH GROUP LIMITED (WWGL) OF HOLDING OUT AS CARRYING ON A BUSINESS OF DEALING IN FUTURES CONTRACTS AND ASSET MANAGEMENT WITHOUT A LICENCE

A release on Mondo Visione on 4 June reported that the Eastern Magistrates’ Court has convicted Mr Chong Kin Ting, former director and shareholder of Wonderful Wealth Group Limited (WWGL), of holding out as carrying on a business of dealing in futures contracts and asset management without a licence in a criminal prosecution brought by the Securities and Futures Commission (SFC).  He was fined $8,000 and ordered to pay the SFC’s investigation costs.  WWGL was dissolved in 2017.

https://mondovisione.com/media-and-resources/news/hong-kong-securities-and-futures-commission-court-convicts-and-fines-former-dir/

 

 

 

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