Panama Covid-19 update – no sign of slow up in new cases…another 1,065 today – taking the total to 65,256, of which 24,669 are active. There have been 24 more fatalities, taking the total to date to 1,421.
31 July 2020
SFO CHARGES AIRBUS SUBSIDIARY WITH FRAUD RELATING TO UK CONTRACT WITH SAUDI NATIONAL GUARD
On 30 July, the Financial Times and others reported that the SFO has charged an Airbus subsidiary, GPT, which ceased operations in April, over a contract with the Saudi National Guard. GPT former MD Jeffrey Cook and John Mason, a finance officer at 2 of the company’s subcontractors were charged. A third individual, former Ministry of Defense official Terence Dorothy, was charged with aiding and abetting Cook. Part of the probe investigated allegations that GPT executives had bribed Saudi military officials with unexplained payments to Cayman Island bank accounts and luxury items. Airbus acquired GPT from Ericsson of Sweden in 2007 on the recommendation of the UK MoD and the Saudi contract was struct as the result of a government to government deal. The MoD was GPT’s sole customer.
THE COMMITTEE ON FOREIGN INVESTMENT IN THE US (CFIUS) ANNUAL REPORT
On 30 July, the Wall Street Journal reported on the CFIUS annual report, which reveals that it has reviewed 325 business transactions that involved foreign money, topping the number of deals the panel has reviewed each year since 2010. By comparison, in 2018 it reviewed 249 transactions. The national-security review panel has taken a higher profile in recent years on heightened concerns that China has been trying to acquire US technology.
UK COMPANIES HOUSE REGISTRAR RULES
On 31 July, Companies House published updated rules outlining the form, manner of delivery and method of authentication for documents delivered in electronic or paper format. The Registrar of Companies is given authority to make rules governing certain areas in relation to the filing of documents at Companies House. They came into force on 1 October 2009 and have been amended several times since this date.
GERMAN FAR-RIGHT BUYS LAND FOR MILITARY TRAINING, MONEY LAUNDERING AND MONEY-MAKING
On 31 July, KYC 360 reported that right-wing extremists are moving into property to set up bases for their activities and anchor themselves in local communities, German intelligence services have warned. Neo-Nazis are seeking land and buildings in rural parts of eastern states, officials said. Funding was generated by a “far-right economy” based on publishing, merchandise and hosting rock concerts.
AUSTRALIA: CROWN RESORTS DUE DILIGENCE OF JUNKET PARTNERS CARRIED OUT WITHIN THE MARKETING TEAM TASKED WITH LURING WEALTHY HIGH-ROLLERS – A CONFLICT OF INTEREST?
On 31 July, KYC 360 relayed an article from The Age saying that Crown Resorts conducts its due diligence of junket partners to check for potential criminal links from within the marketing team tasked with luring wealthy high-rollers to its casinos, creating what the group’s legal chief concedes could be a conflict of interest. This emerged during testimony before the New South Wales Independent Liquor and Gaming Authority inquiry into Crown how the group decides whether to do business with junket operators, which bring wealthy Chinese gamblers to its casinos. The Inquiry is concerned with the group’s licence and concerns that some of Crown’s junket partners had links to organised crime and money launderers. Separately, it was also claimed that Crown Resorts opened accounts with the Commonwealth Bank using “misleading” names that masked their use for gambling and accepted high-risk cash deposits, despite ANZ shutting down similar accounts over money laundering concerns.
OVERVIEW OF JERSEY COMPANY LAW
On 27 July, Ogier published a brief guide produced to provide an at-a-glance summary of company law in Jersey and to provide a broad overview of the laws applicable in the jurisdiction.
NEW ZEALAND: RESERVE BANK FINALISING ENFORCEMENT ACTION AGAINST TSB OVER ALLEGED NON-COMPLIANCE WITH AML/CFT ACT
On 31 July, Interest in New Zealand reported that the bank says it’s “actively remediating” problems with its programme to comply with the AML/CFT Act that were identified by the Reserve Bank. TSB says civil legal proceedings could stem from discussions with its regulator, and it has made a provision to cover a potential liability.
MARYLAND MAN WAS SENTENCED FOR HIS USE OF AT LEAST 2 FALSE PASSPORTS TO OPEN “DROP ACCOUNTS” FOR A MONEY LAUNDERING CONSPIRACY
On 31 July, WTOP News reported that a Maryland man, Arinze Michael Ozor, 37, a dual citizen of the US and Nigeria, has been sentenced to 18 months in federal prison for his use of at least 2 false passports to open 8 “drop accounts” for a money laundering conspiracy involving nearly $1 million.
EU COMMISSION PUBLISHES STUDY ON DIRECTORS’ DUTIES AND SUSTAINABLE CORPORATE GOVERNANCE
On 31 July, the EU reported that the Commission had published the findings of its study on directors’ duties and sustainable corporate governance. The study shows that listed companies within the EU still tend to focus on short-term benefits of shareholders rather than on the long-term interests of companies.
THE UK DRUG SITUATION
On 31 July, the Home Office published updated information in the Focal Point containing the annual report and data tables from the UK Focal Point on Drugs on the national prevalence, impact, prevention and treatment of drug use. The report covers the prevalence of illegal drug use, national and regional policy and legal framework, prevention and treatment of drug use, the drug situation in prisons, drug-related deaths, disease and other harm and the illegal drug market.
TAIWAN PROSECUTORS RAID LEGISLATIVE OFFICES OVER BRIBERY ALLEGATIONS
On 31 July, Taiwan News reported that prosecutors have raided the offices of 4 legislators and 2 former lawmakers, reportedly in connection with bribery allegations related to a past struggle for control over the Sogo department stores. More than 65 homes and offices across the country were raided. Sogo became the focus of a power struggle when the original manager, the Pacific Group, encountered financial difficulties, with ownership changing hands in 2002 in a procedure which became the focus of litigation for years afterward.
DATA PROTECTION IN ONLINE GAMBLING
On 31 July, Taylor Wessing published a briefing saying that operators based in the EU or offering services to individuals in the EU will be caught by the GDPR and, potentially, national data protection laws. Online gambling businesses also have to comply with laws in other areas, including in relation to AML and fraud prevention. This can lead to confusion about which requirements take precedence. It looks at the European Gaming and Betting Association (EGBA) code of conduct.
UK: JUDGMENT IN CHINESE FRAUD AND TORTURE CASE DUE
On 31 July, Scottish Legal News reported that judgment in a case concerning alleged fraud and torture will be handed down in the next week by the UK Supreme Court via video link. The appellant and respondent are both based in China. In August 2008, a charterparty was concluded and the defendant provided a guarantee for payment obligations under the charterparty in 2008. In December 2010, the appellant made a demand under the guarantee, after the shipping company defaulted. The defendant declined to pay and the charterparty was terminated. The defences claimed are fraudulent non-disclosure and illegality, with alleged bribery involved, and that confession evidence involved was obtained by torture and was therefore inadmissible.
SFO CONFISCATES MILLIONS FROM EX-AFREN EXECUTIVES
Energy Voice on 31 July reported that the SFO has won court orders confiscating £5.45 million from former Afren executives following convictions for fraud and money laundering in October 2018 over a Nigerian oil deal.
EU TAX POLICY REPORT 2020: PART 1
On 29 July, CFE Tax Advisers Europe, a Brussels-based association of European tax advisers, has published this report which provides a detailed analysis of primary tax policy developments at EU level of interest to European tax advisers. It also includes an overview of relevant CJEU case-law European Commission decisions covering the first half of 2020 – noting the effects of covid-19.
SUMMARY LIST OF COUNTRIES INDICATING MEMBERSHIP TO ONE OR MORE OF THE INTERNATIONAL EXPORT CONTROL REGIMES
On 31 July, the UK Department for International Trade provided an updated listing of countries belonging to each of the following international export control regimes – Australia Group; Missile Technology Control Regime (MTCR); Nuclear Technology Group (NSG); and Wassenaar Arrangement.
UK GOVERNMENT LAUNCHES INDEPENDENT PANEL TO LOOK AT JUDICIAL REVIEW
On 31 July, the MoJ announced that a panel of experts will examine if there is a need to reform the judicial review process after an independent review has been launched.
EU REACTION TO THE FALL OF PRIVACY SHIELD: THE RISE OF STANDARD CONTRACTUAL CLAUSES?
On 31 July, an article from Sheppard Mullin says that companies which transfer data from the EU to the US are struggling to determine the appropriate basis under which they can make these transfers, following the European court decision rejecting use of the so-called Privacy Shield. One of the alternate mechanisms for data transfers are Standard Contractual Clauses (SCC). While the court concluded that SCC remained valid, it outlined restrictions that have been giving companies pause.
US REJECTS EU CLAIMS OF WTO CASE COMPLIANCE AS LAWMAKERS SEEK TARIFF CHANGES
On 31 July, Sandler Travis Rosenberg reported that additional tariffs on billions of dollars’ worth of imports from the EU appear set to remain in effect after the US rejected an EU claim that it is now in compliance with a WTO ruling against subsidies provided to aircraft manufacturer Airbus
EX-COUTTS & CO BANKER LINKED TO $700 MILLION 1MDB TRANSFER FOUND GUILTY BY SWISS COURT
On 31 July, Malay Mail reported that a former banker from Coutts & Co was found guilty for his failure to flag money laundering activities of a $700 million transfer into an account controlled by fugitive financier Low Taek Jho. Only identified as A, he was fined CHF50,000 by the Swiss Federal Criminal Court.
MALTESE BANKS TOLD TO KEEP EYES OPEN FOR SUSPICIOUS TERROR FUNDING PATTERNS
On 30 July, Malta Today reported that a report by the FIAU has revealed various cases in which Maltese credit institutions were used for the funding of terror organisations, as well as for illegal activities of human smuggling inside the African continent. According to a risk assessment from the National Co-ordinating Committee on Combating Money Laundering and Funding of Terrorism Malta is vulnerable at any stage of raising, movement or the use of terrorist funding. The article quotes examples, including a case where a total of 4,418 airline ticket purchases were identified, of which 600 were conducted by the same individual who was later arrested due to his links with a terrorist organisation recruiter and his involvement in a migrant trafficking ring.
THE ROLE OF THE MONEY LAUNDERING REPORTING OFFICER (MLRO)
An article from DQ in the Isle of Man on 28 July says that, in 2019, the Jersey FSC undertook a themed examination of licence-holders focusing on the role of the MLRO which detailed the expectations of an MLRO and also highlighted areas where the expected standards or regulatory obligations were not being achieved. The article links to the report and says that MLRO should review the detail of the report for indicators as to how their own policies and procedures might be enhanced – and the article highlights some particularly relevant parts of the report.
PODCAST: HOW TO PREVENT IRAN FROM EVADING SANCTIONS AT SEA
On 30 July, the Iran Watch website published a podcast involving a discussion of deceptive shipping practices used by Iran to evade US sanctions, and US efforts to counter these practices, with 2 experts from the US State Department.
US SANCTIONS: GLOBAL MAGNITSKY GENERAL LICENSE AND FAQ
On 31 July, OFAC announced the issue of General License 2 “Authorizing Certain Wind Down and Divestment Transactions and Activities Related to Blocked Subsidiaries of the Xinjiang Production and Construction Corps (XPCC)”, as well as a new FAQ 835 explaining the purpose and use of the General License. The General License runs to 30 September and the FAQ warns that, after the expiration of the general authorisation it contains, US persons will be prohibited from engaging in or facilitating transactions with Blocked XPCC Subsidiaries unless exempt or authorised by OFAC.
THE QAnon CONSPIRACY THEORY: A SECURITY THREAT IN THE MAKING?
An article in the latest edition of the CTC Sentinel for July 2020 is concerned with the QAnon conspiracy theory, which emerged in 2017, has quickly risen to prominence in the US. It says that a survey of cases of individuals who have allegedly or apparently been radicalised to criminal acts with a nexus to violence by QAnon, including one case that saw a guilty plea on a terrorism charge, makes clear that QAnon represents a public security threat with the potential in the future to become a more impactful domestic terror threat. This, it says, is true especially given that conspiracy theories have a track record of propelling terrorist violence elsewhere in the West as well as QAnon’s more recent influence on mainstream political discourse. It says that, at first sight, QAnon, the bizarre assemblage of far-right conspiracy theories that holds that President Trump is waging a secret war against an international cabal of satanic paedophiles seems to present a far lesser threat to public security. However, the authors argue that QAnon represents a novel challenge to public security.
HOW IRAN’S OIL INDUSTRY GETS AMERICAN MACHINERY
An article from Iran Watch at the Wisconsin Project on 30 July considers the case of Ohio resident Behrooz Behroozian, sentenced to 20 months in prison in October 2019, and the export of industrial equipment illegally and for the benefit of Iran’s gas and petrochemical industries. Behroozian and his associates followed a well-known playbook used by Iranian smugglers: shipping US-made goods through intermediaries in third countries to obscure the final destination in Iran.
ASSESSING RUSSIAN INFLUENCE IN GERMANY
On 31 July, the Center for Strategic and International Studies published the latest in a series of reports on Russian influence activities in the UK and Germany and Chinese influence activities in Australia and Japan. It examines the nature and tactics of Russian influence operations in Germany, which characteristics have made Germany vulnerable and resistant to Russian influence, and what lessons the German experience offers for other democratic states in countering malign influence activities.
A podcast interview with the author is also available –
OECD RELEASES NEW ACTION 14 PEER REVIEW REPORTS
On 31 July, Tax News reported that the OECD has released peer review reports reviewing 9 territories’ progress towards implementing the BEPS Action 14 standard, on improving cross-border tax dispute resolution – Andorra, Bahamas, Bermuda, BVI, Cayman Islands, Faroe Islands, Macau, Morocco, and Tunisia.
MALWARE AUTHOR PLEADS GUILTY FOR ROLE IN TRANSNATIONAL CYBERCRIME ORGANISATION RESPONSIBLE FOR MORE THAN $568 MILLION IN LOSSES
A news release from the US DoJ on 31 July advised that Valerian Chiochiu, aka “Onassis,” “Flagler,” “Socrate,” and “Eclessiastes”, 30, the author of malicious computer software and a member of the Infraud Organization has pleaded guilty today to RICO conspiracy. This was just over a month after the co-founder and administrator of Infraud, Sergey Medvedev of Russia, separately pleaded guilty. Infraud was an Internet-based cybercriminal enterprise engaged in the large-scale acquisition, sale, and dissemination of stolen identities, compromised debit and credit cards, personally identifiable information, financial and banking information, computer malware, and other contraband.
CALIFORNIA POLICE OFFICER CHARGED WITH $18 MILLION MONEY LAUNDERING AND TAX EVASION SCHEME
The San Francisco Chronicle on 31 July reported claims that a San Jose police officer used a private security company to evade taxes, steal wages, commit insurance fraud and launder more than $18 million.
SEC HAS ANNOUNCED THAT BAUSCH HEALTH, FORMERLY CANADA-BASED VALEANT PHARMACEUTICALS, AND 3 EXECUTIVES HAVE AGREED TO PAY PENALTIES TO SETTLE CHARGES OF IMPROPER REVENUE RECOGNITION AND MISLEADING DISCLOSURES IN FILINGS AND EARNINGS PRESENTATIONS
A release on Mondon Visione on 31 July reported that Bausch Health, formerly Quebec, Canada-based Valeant Pharmaceuticals, had agreed to pay a $45 million penalty to settle charges of improper revenue recognition and misleading disclosures in SEC filings and earnings presentations. 3 former executives – the CEO, CFO, and controller – also agreed to pay penalties to settle charges against them.
US SANCTIONS IN RESPECT OF NORD STREAM 2 AND TURK STREAM GAS PROJECTS
On 31 July, Hellenic Shipping News carried an article saying that the US Government has for some time applied sanctions in respect of certain European energy programmes in which Russia plays a significant role. Those sanctions are targeted at limiting Russia’s influence over Europe’s energy requirements, in particular the development of the Nord Stream 2 pipeline between Russia and Germany via the Baltic Sea, and the Turk Stream pipeline connecting Russia with Turkey via the Black Sea. The article provides a brief summary of the sanctions, saying that they target the provision of cable-laying and other ships used in such projects, and a number of related services which could include the provision of P&I insurance. In recent weeks, it warns, the scope of those sanctions has been widened.