Panama Covid-19 update – an interesting item on last night’s news conference, that a brand of hand cleanser had been banned as it didn’t provide sufficient protection against Covid-19 – checked the various we had and we didn’t have any… And a news story today concerned a pregnant woman who went out before her test results had been received and (in theory at least) now faces a $50,000 fine (that’s for a first offence, it’s $100, 000 for a second offence)! I am guessing that in her case it’s a notional $50K, it does seem a bit over the top… Mind you, I worry about the $100 fine for not wearing a mask (I set out early this morning and had to hurry back because I forgot!).
For the daily statistics – new case figures remain high at 965 (42,216 to date), with 20,940 currently active – 159 in ICU, 890 in other hospital wards, 709 in hotels and 19,182 at home. There were 20 more fatalities, taking the total to 839; but now 20,437 people are said to have recovered from knowingly having the virus.
9 July 2020
US: NYDFS AND OCC ANNOUNCE MAJOR OVERHAULS IMPORTANT FOR VIRTUAL CURRENCY BUSINESSES
On 8 July, Crowell Moring reported that the Office of the Comptroller of the Currency (OCC) and the New York Department of Financial Services (NYDFS) each recently took significant steps to address the key impediments for virtual currency companies in the US. NYDFS announced significant updates to its approach on Bitlicenses, New York’s business license for such activities, which has traditionally been considered difficult to obtain. On 25 June, the former Chief Legal Officer of Coinbase Inc, and current Chief Operating Officer and First Deputy Comptroller at the OCC, announced that the OCC is planning to unveil a “payments charter” later this year which is intended to serve as a “national version of a state money transmission license”.
NIGERIAN SCAMMER ARRESTED BY FBI COULD BE BEHIND €13 MILLION BANK OF VALETTA CYBERATTACK IN 2019
On 8 July, Malta Today reported that the criminal complaint against Ramoni Igbalode Abbas (aka “Hushpuppi”) contains details of his alleged crimes that appear to suggest that he was behind the scam perpetrated on the Bank of Valetta in February 2019.
BILLIONAIRE GERTLER THREATENS NGO OVER CONGO INVESTIGATION INTO EVADING US SANCTIONS
On 7 July, RFI reported that 2 NGO that ran an investigation into Israeli businessman Dan Gertler – saying that he appeared to have avoided US sanctions for “corrupt mining and oil deals” in DRC by using a suspected money laundering network – say they have been targeted by a “vexatious” lawsuit in France. He is accused by the US Treasury of having “amassed his fortune through hundreds of millions of dollars’ worth of opaque and corrupt mining and oil deals in the Democratic Republic of the Congo (DRC)”.
SCREENING FAILURES BUY AMAZON A SANCTIONS PENALTY
On 8 July, Kharon reported that deficiencies related to Amazon.com Inc’s screening processes led the online retailer to sell goods to sanctioned parties and to people located in embargoed jurisdictions. In hundreds of instances, the screening processes failed to flag the names and addresses of parties on the US sanctions list, the notice said. Orders specifically referencing common alternative spellings of Crimea were not flagged, nor were purchases shipped to Iranian embassies in third countries, according to OFAC.
RUSSIA WANTS ITS CIVIL AND MILITARY SECTORS TO COOPERATE
On 9 July, Defense One said that the Russian government has ordered its energy sector and its defence industry (OPK, for short) to combine efforts in R&D and production. The Russian government has revised its approach, aiming to foster collaboration between the energy sector, with its lavish research funding, and its tech-heavy defence sector – but the Kremlin also has reduced defence spending, gradually since 2015 and with plans for more drastic cuts through 2027. The article then says officials are now ordering defence companies to devote an increasing share of their production capacity to civilian and dual-use products, with official goals have been set: 30% in 2030; up to half by 2050. The article describes the plans as the “Chinese model”.
CHINA COAST GUARD BUSTS SMUGGLING SHIP CARRYING 10,000 TONS OF COAL
On 9 July, Shine in China reported that the Chinese Coast Guard discovered a coal smuggling ship off Shanghai – a suspicious ship with its name whitewashed over. There were said to be about 10,000 tons of coal on the ship but no freight records.
INDIA: ‘GOLD SMUGGLING CARGO’ BELONGED TO UAE CONSUL GENERAL
The Times of India reported on 9 July that the woman who is wanted for allegedly aiding smuggling of 30 kg of gold in Kerala through diplomatic channels is to claim that the gold belonged to the UAE Consul General and that she is entitled to diplomatic immunity, saying that she has been working with the consulate general office of UAE sing 2016.
PHILIPPINES PROBES ONLINE SALE OF SMUGGLED FROZEN PIGEONS FROM HONG KONG
On 9 July, The Inquirer reported that the Department of Agriculture (DA) is currently investigating reports of smuggled frozen pigeons from Hong Kong being sold online as illegal traders switch to it to evade being apprehended.
BAHRAIN CONVICTS 5 OFFICIALS AND 4 BANKS IN MONEY LAUNDERING CASE
On 9 July, the Middle East Monitor reported that Bahrain’s High Criminal Court has convicted 5 officials in a Bahraini bank and 3 Iranian banks in a major money laundering case.
GUERNSEY NATIONAL RISK ASSESSMENT: IMPLICATIONS FOR BUSINESSES
On 9 July, Ogier published an article saying that following the MONEYVAL evaluation in 2016, the island’s AML/CFT legislation was fully overhauled. It also undertook a national risk assessment (NRA) to identify jurisdiction-wide and systemic risks to which its financial system is deemed particularly vulnerable, which was published in January 2020. Individual specified businesses were initially given until the end of May 2020 to update their business risk assessments (BRA), but in response to the impact of the COVID-19 pandemic, the FSC extended some of the timeframes contained in FSC handbook. The article examines the contents of the NRA and the implications for specified businesses in Guernsey. It also provides some practical considerations for businesses.
UAE: FATF MUTUAL EVALUATION REPORT 2020 – TIME TO PLAY BALL FOR BUSINESSES IN THE UAE
An article from AL Tamini on 8 July looked at conclusions of the UAE’s Mutual Evaluation Report, released on 30 April which says that the UAE is required to make “fundamental and major improvements” to ensure its systems are more effective in the fight against money laundering. Of the 11 key areas rated for effectiveness by the FATF, the UAE is considered to have a “substantial level of effectiveness” in only one: the investigation and prosecution of terrorist financing offences. In the remaining 10 areas, it is deemed to have only moderate or low levels of efficacy. As such, all businesses and persons operating in the UAE, regardless of their sector, have a collective responsibility to ensure they are doing their bit to win this fight. The article says that FATF identified that the UAE has a number of key risk areas, and particular sectors, including financial services and notably, Designated Non-Financial Businesses and Professions (DNFBP), were highlighted as areas of heightened concern due to the systematic use of large cash transactions and potential to facilitate financial crime offences.
US: BOOKMAKER MUST FORFEIT MORE THAN $600,000 FOUND IN HOME AS PROCEEDS FROM GAMBLING RING
On 9 July, Cleveland.com reported that Ryan Driscoll, 46, a bookmaker, must forfeit more than $600,000 that authorities found in his home, proceeds that they say came from a large-scale gambling ring. He was also ordered him to pay $208,693 in restitution. Driscoll ran a bookmaking ring from 2015 to 2019 that provided his clients with access to offshore gambling websites to bet on sports.
5 DUTCH BANKS TEAM UP TO COMBAT MONEY LAUNDERING
On 9 July, Retail Banking reported that ING, ABN Amro, Rabobank, Triodos Bank and Volksbank have joined forces to establish Transaction Monitoring Netherlands (TMNL) initiative in the fight against money laundering and terrorism financing – as an addition to the individual transaction monitoring activities of the 5 Dutch banks.
KUWAIT ISSUES ARREST WARRANT FOR EX-PREMIER’S SON
On 9 July, the Anadolu Agency in Turkey reported that Kuwaiti prosecutors have issued an arrest warrant for the son of a former prime minister and his partner amid a corruption probe of the so-called “Malaysian Sovereign Fund” case and following the arrest of Sheikh Sabah Jaber al-Mubarak al-Sabah and businessman Hamad al-Wazzan.
BANGLADESH BLACKLISTS 14 MEDICAL CONTRACTORS AFTER MASK AND PPE SCAMS
On 9 July, bd24 News reported that the Directorate General of Health Services has blacklisted 14 contractors for their alleged involvement with corruption in the purchase of machinery for medical colleges and hospitals, a move which follows an Anti-Corruption Commission investigation.
UK COURT ORDERS CONFISCATION OF THOUSANDS OF DOLLARS IN DRUG-DEALING PROFITS FROM 2 SONS OF BERMUDA MP.
On 9 July, the Royal Gazette reported that Marcus Weeks and Dalji Waldron — sons of Progressive Labour Party backbencher Michael Weeks — were jailed in 2018 after they admitted running a “mobile drug shop” that sold cocaine, ecstasy and cannabis.
HMRC ARREST MAN SUSPECTED OF £495,000 FURLOUGH FRAUD – THE FIRST SUCH CASE IN THE UK
On 9 July, the Daily Mail reported that HMRC officers executed a search warrant in the Solihull area of Birmingham, seizing computers and other digital devices. Funds held in a bank account relating to his business have also been frozen. The man has also been linked to a suspected multi-million pound tax fraud and alleged money laundering.
IRELAND: GARDA RAID IRISH OFFICE OF FAILED GERMAN PAYMENTS GROUP WIRECARD
On 9 July, the Irish Times reported that the garda raided the Irish office of failed Munich-based electronic payments provider Wirecard, as it seeks to assist German authorities in their fraud investigation into the once high-flying group, according to sources.
UK: GOVERNMENT PLAN FOR NEW CHANGES TO CRIMINAL RECORDS DISCLOSURE REGIME
A news release from the MoJ and Home Office on 9 July advised that the Government intends to make changes to the criminal records disclosure rules, which it says are to ensure the right balance is struck between rehabilitating offenders and protecting the public. It plans to amend the filtering rules that govern what is automatically disclosed through standard and enhanced criminal records certificates issued by the Disclosure and Barring Service (DBS). The changes will remove the requirement for automatic disclosure of youth cautions, reprimands and warnings and remove the ‘multiple conviction’ rule, which requires the automatic disclosure of all convictions where a person has more than one conviction, regardless of the nature of their offence or sentence.
BOSNIA AND HERZEGOVINA ARRESTS 26 SUSPECTED TOBACCO TRAFFICKERS
On 9 July, OCCRP reported that police in Bosnia and Herzegovina said they arrested 26 people suspected of being members of an organised crime group that illegally trafficked tobacco and laundered money. The group was producing and selling smoking tobacco and cigarettes without marking them with the country’s excise stamps.
FINANCIAL CRIME OVERVIEWS – SEYCHELLES AND MAURITIUS
On 9 July, Appleby published 2 articles providing a Q&A guide for each jurisdiction to provide a high-level overview of matters relating to corporate fraud, bribery and corruption, insider dealing, market abuse, money laundering and terrorist financing, financial record-keeping, due diligence, corporate liability, immunity and leniency, and whistleblowing.
BUSINESS CRIME AND INVESTIGATIONS GUIDE – BERMUDA
On 9 July, Appleby published a Q&A guide that provides a high-level overview of matters relating to corporate manslaughter, environmental and health and safety offences.
ANNUAL REPORT OF THE ISLE OF MAN SURVEILLANCE COMMISSIONER
The Order Paper for the Isle of Man’s parliament for 26 July included this report dated March 2020. It says that there were no uses of intrusive surveillance authorised during 2019, but that there were 35 authorisations for directed surveillance.
HONG KONG: FORMER OFFICER OF WONDERFUL WEALTH GROUP LIMITED (WWGL) CONVICTED OF HOLDING OUT AS CARRYING ON A BUSINESS OF DEALING IN FUTURES CONTRACTS AND ASSET MANAGEMENT WITHOUT A LICENCE
On 9 July, a release on Mondo Visione advised that the Eastern Magistrates’ Court has convicted Simon Chan Ying Ming in a criminal prosecution brought by the Securities and Futures Commission (SFC). Chan pleaded guilty to all 4 charges relating to activities in 2012, was fined $20,000 and ordered to pay the SFC’s investigation costs.
PNB CASE: UK EXTRADITION HEARING FOR NIRAV MODI TO RECOMMENCE IN SEPTEMBER
On 9 July, Business Today in India on 9 July reported that Nirav Modi had been remanded until at least 6 August, pending the resumed planned extradition hearing in September.
ONLY A TINY FRACTION OF CONTAINERS LOST AT SEA
On 9 July, American Shipper reported that the latest World Shipping Council report shows average trending downward to 779 containers lost annually. It says that, at any given point in time, more than 6,000 vessels carrying containers are sailing the world’s seas. While ship fires and capsizes make international headlines, container losses actually are few and far between. In fact, an average of only 1,382 containers were lost at sea per year between 2008 and 2019, the WSC said in a report.
NEW UK RESTRUCTURING TOOL: A POTENTIAL GAME CHANGER FOR THE MARITIME SECTOR
In the Ince Shipping e-Brief for July it was reported that the Corporate Insolvency and Governance Act 2020, which came into force on 26 June provides for a new restructuring tool. It says that the Restructuring Plan largely mirrors the English Scheme of Arrangement, but does have a number of additional features which will make it an even more effective restructuring tool in many circumstances and the only restriction is that the proposed plan must address a company’s actual or likely financial difficulties. The Plan provides for a mechanism to impose a restructuring solution on all creditors and shareholders where a restructuring proposal has the support of the requisite majority of those stakeholders. Stakeholders whose legal rights are sufficiently similar to allow them to vote together with a view to their common interest are grouped together into classes for voting purposes
THE INITIATIVE TO COMBAT CORRUPTION IN CONSTRUCTION IN MALAWI
On 9 July, the Basel Institute on Governance carried an article about the success of the Construction Transparency Initiative (CoST) in Malawi which shows the impact Collective Action can have on addressing corruption and levelling the playing field even in difficult environments.
UNDER COVER OF CORONAVIRUS LOCKDOWN, A BOOMING TRADE IN CONGO CONFLICT GOLD
On 9 July, the Wall Street Journal carried an article saying that about $100 million of Congolese conflict gold is trafficked through Uganda monthly, according to the UN, with much of it piggy-backing Covid-19 aid transports. It starts by relating the story of $5 million in gold found when Ugandan police searched 2 cardboard boxes in a white pickup truck that were due to be loaded onto a cargo flight at Entebbe Airport.
US DoJ ANNOUNCES $42 MILLION TO COMBAT ILLEGAL MANUFACTURE AND DISTRIBUTION OF METH AND OPIOIDS
On 29 June, an article in Homeland Security Today reported that the DoJ Office of Community Oriented Policing Services (COPS Office) has announced nearly $42 million in funding to support state-level law enforcement agencies in combating the illegal manufacturing and distribution of methamphetamine, heroin, fentanyl, carfentanil, and prescription opioids.
THE AMAZON CASE: WHY CONDITIONS OF USE MUST BE ACCOMPANIED BY RISK-BASED CONTROLS TO ACHIEVE EFFECTIVE COMPLIANCE WITH OFAC-ADMINISTERED SANCTIONS AND EMBARGO REGULATIONS
An article from Arnall Golden Gregory LLP on 9 July, in the light of the fine paid by Amazon.com, reproduces the “strong” conditions of use from the Amazon website but then discusses why such a strong statement in a conditions of use must be accompanied by risk-based controls to achieve effective compliance with OFAC-administered sanction and embargo regulations. OFAC explicitly noted in its announcement of the settlement that the case “demonstrates the importance of implementing and maintaining effective, risk-based sanctions compliance controls” especially for e-commerce and other “large, sophisticated” businesses operating on a global scale. The article advises that, despite the global economic slow-down, now may be the right time to review a businesses’ export compliance programme.
AUSTRALIA SUSPENDS EXTRADITION WITH HONG KONG AND OFFERS PATH TO CITIZENSHIP FOR CITY’S RESIDENTS
On 9 July, CNN reported that Australia has also updated its travel advisory for Hong Kong, warning Australians of the possibility of detention in the city under its “vague” law. It says that current students or skilled visa holders in Australia from Hong Kong will be afforded an extra five years on their visa, with a pathway to permanent residency, he said, adding that future students or skilled visa applicants will also be granted those 5 extra years should their applications be successful.
MULTINATIONALS SHIFT $1.3 TRILLION INTO TAX HAVENS EVERY YEAR
On 9 July, The Independent reported analysis by the Tax Justice Network of new data and says that the UK is a key part of an “axis of tax avoidance“, along with the Netherlands, Switzerland and Luxembourg, that facilitates 72% of corporate tax dodging. This costs governments $330 billion in lost revenues, deepens inequality and benefits a minority of wealthy individuals and large corporations at the expense of ordinary people and public services. The analysis is of data collected by the OECD, which breaks down, for the first time, where businesses make their profits, rather than simply where their accountants choose to say those profits are made.
LUXURY CARS AND $15 MILLION IN CRYPTO SEIZED IN CHINESE ARBITRAGE SCAM BUST
On 9 July, Cryptoglobe reported that Chinese authorities have reportedly seized more than $15 million in crypto-assets and $2 million in supercars after busting up an arbitrage scam selling counterfeit tokens. Police arrested 10 individuals connected to operating a fraudulent cryptocurrency scheme, with claims that the arbitrage group was scamming victims using blockchain smart contracts to generate fake cryptocurrencies.
BITCLUB PROGRAMMER ADMITS MINING SCHEME STOLE $722 MILLION IN BITCOIN
On 9 July, Coindesk reported that the programmer, Silviu Catalin Balaci, a 35-year-old Romanian who was recently arrested in Germany, has admitted the economic damage that prosecutors accused the mining pool’s principals of committing: $722 million in stolen bitcoin over 5 years. Balaci said he assisted Matthew Brent Goettsche (arrested in December) and Russ Albert Medlin (arrested in June in Indonesia) in setting up the network as its programmer.
SWITZERLAND: SHIPOWNER GETS 5 YEARS IN PRISON FOR FRAUDULENT STATE CREDIT CLAIMS
On 9 July, Swissinfo reported that Hans-Jürg Grunder, 66, a former shipowner, has been sentenced to 5 years in prison for having falsified claims about his fleet in order to receive credit guarantees from the Swiss government. Until 2017 had operated a dozen ships and is said to have mislead authorities into believing his companies were in a worse financial situation than they actually were, in order to benefit from more state credit guarantees. Switzerland maintains a form of merchant marine (and has done since after WW2), to guarantee supplies for the landlocked country.
MEXICAN COMPANIES FACE RISK OF SECONDARY SANCTIONS FROM MEXICAN PRESIDENT’S OFFER TO SELL GASOLINE TO VENEZUELA
On 8 July, an article from Morgan Lewis said that the President recently announced that Mexico is willing to ship gasoline to Venezuela notwithstanding the threat of US sanctions against such activity. It says that this issue is likely to be on the agenda of the current summit with President Trump, which includes the US-Mexico-Canada Agreement and a number of other trade related topics.
THE RISE OF DRONES IN LOGISTICS AND TRANSPORTATION
An article in the Global Trade Magazine on 6 July is concerned with the tremendous rise in the use of drones (or UAV or UAS, though there are also drones that operate on, or under, the water), and the rapid increase in the industry developing, manufacturing and operating them. It refers to a recent report from Transparency Market Research (TMR), which decoded some of the leading factors pertaining to the growth of UAV use. That review is not confined solely to logistics and transportation, as it also delves into the relevance of drones across military, aviation, construction and entertainment sectors.
RESEARCHER CHARGED WITH ILLEGALLY USING US GRANT FUNDS TO DEVELOP SCIENTIFIC EXPERTISE FOR CHINA
A DoJ news release on 9 July advised that Song Guo Zheng, 57, who was arrested in May, is a rheumatology professor and researcher with strong ties to China has been charged with grant fraud for not disclosing that he was engaged in a sophisticated scheme to use approximately $4.1 million in grants from the National Institutes of Health (NIH) to develop China’s expertise in the areas of rheumatology and immunology. He is also charged with making false statements about maintaining employment in China at the same time he was employed at universities in the US, including The Ohio State University.
DANSKE BANK AND DEUTSCHE BANK IGNORED ESTONIA RISKS IN LUCRATIVE SET-UP
On 8 July, an article from Bloomberg says that the banks ignored years of warnings that money flowing from Russia through an Estonian branch was suspicious and that Deutsche bank only pulled out more than half a decade after its own staff pointed to the risk of money laundering at Danske’s Estonian unit, for which Deutsche was a correspondent bank. Almost 60% of payments that the Estonian unit cleared through Deutsche were from Russia and other former Soviet states. The unit cleared more than $267 billion through Deutsche over 8 years; of that, $150 billion was from Russia and other former Soviet states.
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