Panama Covid-19 update – had to wander out a bit further today, to visit the immigration office, which busy (though not as hectic as previously) and traffic on one of the main roads (Tumba Muerta – “Tomb of the Dead“, don’t know why) seemed almost as busy as normal (i.e. pre Covid-19). Still better off than the 1,000 or so Nicaraguans trying to get home by road, via Costa Rica, but only allowed (by the Costa Rican authorities I understand) to transit 69 at a time – so it’s going to take some time.
“Only” 774 new cases reported today (although I notice the number of new tests was also down), giving us 35,237 to date, but fatalities remain higher than they were a few weeks ago – 22 today (667 to date). 149 people remain in ICU and 795 in other hospital wards, but 500 more people are said to have recovered.
2 July 2020
US: GERMAN BUSINESSMAN ARRESTED ON CHARGES LINKED TO ALLEGED SCHEME TO TRICK BANKS INTO PROCESSING MORE THAN $100 MILLION IN MARIJUANA SALES
On 2 July, the Wall Street Journal reported that a German businessman named Ruben Weigand was arrested in Los Angeles in March, while en route to Costa Rica. An indictment alleges that Weigand was involved in conspiracy to commit bank fraud, linked to an alleged scheme to trick banks into processing more than $100 million in marijuana sales. The newspaper says that the case doesn’t appear to be focused on the drugs themselves—the underlying sales seem to have been legal under state laws. Prosecutors referred to a multinational “criminal network” at work in the international financial system.
WIRECARD: MAURITIUS INVESTIGATION
On 2 July, the Wall Street Journal reported that the central bank of Mauritius and its financial regulator said they were jointly investigating a 2015 deal between Wirecard and a Mauritius-based fund. The probe was launched as a result of allegations that Wirecard could have been linked to a probable case of round-tripping, they said in a statement, where the money Wirecard paid the fund in the deal is alleged to have been paid back into Wirecard as revenue.
BITCOIN AND HEZBOLLAH IN LEBANON
On 17 June, Coindesk published an article which examined how US sanctions could be pushing Hezbollah to use cryptocurrencies, although it also says that one study estimates most campaigns by terror groups like ISIS have raised “less than $10,000” worth of cryptocurrency – but says that Hezbollah in southern Lebanon is arguably the most likely to benefit from using crypto. This is while the Lebanese banking system is said to be on the verge of collapse.
UK – INSOLVENCY: HOW SUPPLY CONTRACTS HAVE BECOME A LOT HARDER TO TERMINATE
On 2 July, Gowling WLG produced a briefing paper after the Corporate Insolvency and Governance Act has come into force. It says that the Act has significant implications for supply contracts as it will prevent many suppliers ending existing contracts once a business is insolvent. The Act will make a big impact on existing supply contracts and will also affect the drafting and negotiation of new contracts. The briefing paper on how the new protection of supplies of goods and services provisions work examines the measures in the Act dealing with the new provisions to protect supplies of goods and services and provide more information on how they work. It also provides some practical considerations in relation to new and existing supply contracts.
CREW KIDNAP WARNING FOR SHIPS IN SOUTHERN PHILIPPINES/EAST MALAYSIA
On 2 July, Seatrade Maritime News reported a repeated warning that members of the Abu Sayyaf group looking to kidnap crew from ships in waters in the southern Philippines and East Malaysia has been repeated.
SANCTIONED BILLIONAIRE FINDS A HAVEN IN TINY CONGOLESE BANK
On 1 July, Bloomberg carried a report about Israeli billionaire, Dan Gertler, from Paris-based anti-corruption group Platform to Protect Whistleblowers in Africa (Pplaaf), and shared with Bloomberg News. It also involved a bank that was the Congolese subsidiary of Cameroon’s Afriland First Bank Group.
NORTH KOREA NAMED 39th MOST DANGEROUS COUNTRY IN WORLD
On 2 July, the Korea Herald reported that North Korea has been named the 39th most dangerous country in the world, according to a risk management report published by the European Commission – the Index for Risk Management 2020 report.
US: 11,000 ASSAULT WEAPONS PARTS SMUGGLED IN FROM CHINA
On 1 July, the Desert Review reported that US Border authorities seized nearly 11,000 assault weapons’ parts smuggled into the US from China in Kentucky. The $130,000 shipment originated from Shenzen, China and was intended for a residence in Florida.
MALTA: WHY MONEYVAL’S VERDICT MATTERS
An editorial in the Times of Malta on 2 July says that Moneyval is expected to decide on whether to place Malta on its grey list and the government has until October to address AML shortcomings if it is to avoid becoming the first EU country to be placed on the list. This would be the most severe blow to the country’s reputation and economic model.
MONEYVAL HOLDS VIRTUAL WORKING MEETINGS
On 2 July, the Council of Europe reported that from 30 June to 3 July MONEYVAL is holding working meetings on strategic, procedural issues, as well as matters related to typologies and risk monitoring.
MAURITIUS GOVERNMENT FURTHER STRENGTHENS AML/CFT LAWS
On 30 June, an article from Appleby says that the Mauritius government is continuing its efforts to further strengthen its AML/CFT laws by tabling the Anti-Money Laundering and Combatting the Financing of Terrorism (Miscellaneous Provisions) Bill 2020 before the National Assembly. The Bill amends many pieces of existing legislation. Changes are also proposed in order to reinforce the concept of beneficial ownership, including identification and record keeping. Changes are also being proposed to the Financial Services Act, one of which concerns the factors on which the Financial Services Commission of Mauritius will rely in order to carry out onsite inspections. The government is also suggesting amendments to the Financial Intelligence and Anti-Money Laundering Act to include new provisions on the obligations and manner in which STR are filed.
SWEDISH GAMBLING AUTHORITY GUIDELINES FOR LICENCE-HOLDERS ON ‘COMMON RISKS’ AND SUGGESTIONS HOW SOME ONLINE GAMES CAN BE USED FOR MONEY LAUNDERING AND TERRORIST FUNDING
An article on Inkedin reported that Spelinspektionen also provided some of its own comments on the measures previously taken by operators to counter money laundering, stressing that when they first open an account, operators must allocate a risk level to customers. The guidance and articles are in a report was developed and drawn up by Spelinspektionen in cooperation with the Swedish FIU and the Anti-Money Laundering and Countering Financing of Terrorism Coordinating Body.
SOLICITOR JAILED OVER MONEY LAUNDERING LINKS IS NOW STRUCK OFF
On 2 July, the Law Society Gazette reported that a solicitor jailed last year for 3 money laundering offences has been struck off. Ross Ian McKay accepted he should be banned after he was jailed for 7 years for helping fraudsters develop a multi-million-pound property portfolio.
REPORT: EUROPE’S IMPORTED USED COOKING OIL MAINLY COMES FROM CHINA AND PALM OIL PRODUCER COUNTRIES
On 2 July, EurActiv reported that a new report has found that more than half the Used Cooking Oil (UCO) used in Europe for biodiesel in 2019 was imported and the biggest share comes from China (34%) and about 20% comes from Malaysia and Indonesia, the world’s biggest producers of palm oil. It also says that the use of UCO for biodiesel in the EU27 and the UK grew again in 2019, from 2.6 million tonnes in 2018 to 2.8 last year. An NGO has reported that it seems suspicious to see large supplies of UCO coming from Malaysia (12%) and Indonesia (7%), the world’s biggest palm oil producers, and from China (34%).
OECD SAYS $11.3 TRILLION IN OFFSHORE ACCOUNTS
On 2 July, OCCRP said that, due to an increase in the exchange of banking information throughout 2019, nearly 100 cooperating countries have found $11.3 trillion kept by its residents in 84 million offshore accounts.
UK LAW COMMISSION SETS OUT ITS PRIORITIES FOR 2020-21
On 30 June, the Law Commission, which reviews and advises on changes (or new) legislation in the UK, set out its plans for the current financial year in a new business plan. It lists upcoming publications including consultation on confiscation of the proceeds of crime; and reports on misconduct in public office, search warrants, confiscation of the proceeds of crime, review of the communications offences, leasehold and commonhold property
46 MEMBERS OF THE SICILIAN MAFIA COSA NOSTRA ARRESTED
A news release from Europol on 2 July advised that Europol coordinated the international police operation which resulted in the dismantlement of the Sicilian Mafia Cosa Nostra crime syndicate of Barrafranca. Suspects were involved in drug trafficking, the use of firearms, as well as extortion and corruption in public tenders. Operations Ultra is the second phase of an operation involving connections of the Mafia crime family of Barrafranca (Sicily) with Germany.
JERSEY TO IMPLEMENT DAC 6 CROSS-BORDER TAX DISCLOSURE REGIME THROUGH ITS OWN SYSTEM
An article from Appleby on 2 July (previously published in the STEP Journal) is concerned with a new regime being established in Jersey targeting any structure designed to circumvent the Common Reporting Standard, that does not have economic substance or that conceals beneficial ownership. This is to be reported to the tax authorities within 30 days of implementation. It says that some intermediaries will be required to report retrospectively as from October 2014 and both civil and criminal penalties will apply for failing to comply. The regime mirrors EU Council Directive 2018/822 (aka DAC6) imposing mandatory disclosure requirements for certain arrangements with an EU cross-border element to detect potentially aggressive tax arrangements. DAC6 incorporates the model rules published by the OECD.
UZBEKISTAN ESTABLISHES NEW ANTI-CORRUPTION AGENCY
On 2 July, Dentons published an article saying that the Uzbek President has approved the Decree No. UP-6013 “On Additional Measures to Improve the Anti-Corruption System in the Republic of Uzbekistan”. It establishes the Anti-Corruption Agency of the Republic of Uzbekistan, responsible for the formation and implementation of state policy to prevent and combat corruption within the country. It reports to the President and is accountable to the Chambers of the Oliy Majlis (the parliament). The article explains what the agency is required to do, but notes that, according to the Corruption Perception Index for 2019, Uzbekistan ranks 153rd (out of 180) – 5 positions higher than in 2018.
SEC CHARGES ALEXION PHARMACEUTICALS INC WITH FCPA OFFENCES
On 2 July, a release on Mondo Visione advised that the SEC has announced that Boston-based pharmaceutical company Alexion Pharmaceuticals Inc has agreed to pay more than $21 million to resolve charges that it violated the books and records and internal accounting controls provisions of the Foreign Corrupt Practices Act (FCPA). Involved were subsidiaries in Turkey and Russia.
IRISH REVENUE COMMISSIONERS PUBLISH 2019 ANNUAL REPORT
On 25 June, the tax and customs authority in Ireland published its annual report. While the main focus of the Annual Report is on Revenue’s key achievements and performance for last year, it also provides an overview of the challenges that have dominated the first half of 2020. Amongst the things mentioned are –
- Continued extensive and detailed Brexit preparedness and contingency planning, actively engaging across all relevant Government Departments and Agencies, and with more than 100,000 businesses;
- Completing over 566,000 compliance interventions, yielding €548 million in tax interest and penalties;
- Settling 127 tax avoidance cases with a yield of €129 million in tax, interest and penalties; and
- Continued action against fiscal fraud and smuggling evidenced by the seizure of illegal drugs valued at over €23.5 million and illicit tobacco products valued at over €10.6 million.
SOUTH AFRICA: 2 SUSPECTS ARRESTED OVER $14 MILLION MONEY LAUNDERING ALLEGATIONS
On 2 July, the South African reported that the National Head of the Directorate for Priority Crime Investigations (the “Hawks”), has welcomed the arrest of 2 suspects for corruption, fraud and money laundering of over $14 million during an operation on 2 July. The allegations relate to the company known as Superior Quality Trading which also trades as Rekgonne Community Projects. In 2014, Rekgonne Community Projects entered into an agreement with the Free State Department of Agriculture and Rural Development to implement all projects on behalf of the department for a period of 2 years.
MANAGING EMERGING TRADE-BASED MONEY LAUNDERING (TBML) RISKS
On 2 July, Compliance Week published an article which said that TBML is no longer solely a concern for banks and its scale and scope is massively underestimated. The typical country-to-country movement of products is no longer the norm, it is said, and it is far from unusual for trade within borders to be abused for money laundering purposes. Measures taken to combat the coronavirus are likely to boost the movement of goods and products within borders. It says that if we know the risks, we need to understand how to spot and combat them, and we can start with the list of key considerations provided by the article.
SLOVENIA REPRIMANDED BY EU OVER MONEY LAUNDERING LEGISLATION
On 2 July, STA reported that the EU Commission issued several reprimands to Slovenia for its failure to transpose EU legislation, including for delays in the implementation of rules on the prevention of money laundering.
CREW CRISIS IS TRIGGERING SHIP DETENTIONS AND DIVERSIONS
On 2 July, American Shipper reported that around 200,000 seafarers still cannot return home due to Covid-19 restrictions. Expired and extended crew contracts are piling up. Now, some port inspectors are beginning to detain arriving vessels. The article says that more port detentions — and voyage diversions to facilitate crew changes and avoid detentions — reduce effective ship capacity. Lower capacity curtails shippers’ ability to move cargo across the globe. It asks which countries’ port-state control (PSC) authorities will strictly enforce minimum manning standards and detain ships? It seems that PSC inspectors in Australia are now taking the lead.
CANADIAN AUTHORITIES CHARGE TEENAGER WITH TERRORISM OVER INCEL-BASED VIOLENCE
On 30 June, Lawfare reported that Canadian authorities have charged a 17-year-old teenager with terrorist activity in what could prove to be a landmark case. He is said to have been inspired by the Ideologically Motivated Violent Extremist (IMVE) movement commonly known as INCEL (involuntarily celibate) – and this is only the second time in Canada that terrorist activity charges have been brought for activities not connected to al-Qaeda or inspired by the Islamic State.
GUIDE TO TRADE FINANCE AND CREDIT INSURANCE
The Institute of Chartered Accountants in England & Wales has produced this guide on trade finance, which includes such common elements of trade finance as letters of credit, forfaiting and project finance. It also covers credit insurance, saying that whereas the majority of international trade is conducted on ‘open account’ (whereby the exporter accepts payment after the goods or services have been received by the buyer), exporters face greater risks than sellers, because they may have no previous experience of dealing with their buyers or because of political or economic uncertainties – or disasters – in the buyer’s country. It is therefore usual to have insurance to cover against non-payment or other unforeseen events outside the exporter’s control.
PORTUGAL TO TAKE THEN SELL ISABEL DOS SANTOS MAJORITY STAKE IN EFACEC COMPANY OF ANGOLA
On 2 July, Reuters reported that Portugal will nationalise and then sell the majority stake in engineering company Efacec Power Solutions that had been controlled by Angolan businesswoman and ex-first daughter Isabel dos Santos.
IRAN, TURKEY, AND VENEZUELA’S SUPER FACILITATOR: WHO IS ALEX SAAB?
On 30 June, the Center for a Secure Free Society published a feature on Alex Nain Saab Morán, a Colombian businessman of Lebanese descent, recently arrested in Cape Verde and facing extradition to face charges in the US.
US: MAN SENTENCED TO MORE THAN 21 YEARS IN PRISON FOR RUNNING $3.3 MILLION SCHEME THAT USED STOLEN IDENTITIES OF CHILDREN
A news release from US Immigration & Customs Enforcement on 2 July advised that a Los Angeles area man, Turhan Lemont Armstrong, 50, has been sentenced today to 259 months in federal prison for overseeing a long-running $3.3 million credit card, loan and real estate fraud scheme using stolen identities — primarily those of children. He was also ordered him to pay $3,305,609 in restitution. He used stolen identities and Social Security numbers to obtain credit cards, open bank accounts, set up shell companies, apply for loans, and purchase homes and cars. Armstrong and his co-defendants favoured using the Social Security numbers of children and people who had left the US because they would be less likely to monitor their credit.
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