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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
The full report is at –
The options brief is at –
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.
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.
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.
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.
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.
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.
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