OTHER THINGS YOU MAY HAVE MISSED – JULY 22

Panama Covid-19 update – reported new cases down to “only” 753 today (total to date now 55,906) with 21 more fatalities (taking that total to 1,180) – with an apparent death-rate of 2.1%.  158 people remain in ICU and 1,155 in other hospital wards.

22 July 2020

AUSTRALIA: WIFE OF DRUG KINGPIN ARRESTED WITH BANKRUPT CONSTRUCTION LABOUR HIRE KINGPIN GEORGE ALEX

On 21 July, the Sydney Morning Herald reported that construction industry identity George Alex, his son Arthur and the wife of jailed drug kingpin Michael Ibrahim are allegedly among members of a major crime syndicate who have been arrested over their involvement in tax fraud and money laundering. George Alex, 49, who was arrested with his son Arthur, 22, has been an undischarged bankrupt since 2011 – notwithstanding a corruption inquiry in 2015 being told that Alex controlled a number of labour-hire companies which were paying money to the Construction, Forestry, Maritime, Mining and Energy Union for favourable construction deals. Michael Ibrahim is currently serving a 30-year sentence for conspiring to import more than 1.7 tonnes of MDMA, 136 kg of cocaine and 15 kg of methylamphetamine.

https://www.smh.com.au/national/wife-of-drug-kingpin-michael-ibrahim-arrested-with-bankrupt-george-alex-20200720-p55dtw.html

https://mondovisione.com/media-and-resources/news/asic-australian-federal-police-and-australian-taxation-office-organised-crime/

EIGHTH DEFERRED PROSECUTION AGREEMENT APPROVED IN THE UK

On 20 July, an article from Ropes & Gray LLP said that another DPA has been approved, concluding an investigation commenced by the SFO in 2013. It says that the settlement with G4S Care & Justice (UK) Ltd provides some further clarity on the SFO’s approach to when DPA will be agreed and the terms to which it will expect co-operating corporate organisations (and their parent entities) to commit.

https://www.ropesgray.com/en/newsroom/alerts/2020/07/Eighth-deferred-prosecution-agreement-approved-in-the-UK?utm_source=alert&utm_medium=email&utm_campaign=Eighth-deferred-prosecution-agreement-approved-in-the-UK

THE LLC IS COMING TO JERSEY

On 17 July, an article from Cadwalader Wickersham & Taft LLP says that the introduction of the limited liability company (LLC) under Jersey law is designed with the US market in mind and is seen as a means to enable Jersey to continue to grow the amount of in-bound business from North America. A Jersey LLC should be treated in the same way as any other non-US LLC, and we expect the Jersey LLC to become an increasingly prevalent part of the fund (and therefore fund finance) landscape. The article lists the characteristics of an LLC, saying that an LLC provides a very flexible structure, and LLCs can differ from one to the next.

https://www.cadwalader.com/fund-finance-friday/index.php?eid=705&nid=94

fintech

DNA TECHNOLOGY FIGHTS FISH FRAUD

On 16 July, an article from HKTDC in Hong Kong says that mislabelled seafood threatens consumers and the environment – a Hong Kong start-up offers a rapid species identifier to combat the problem.

https://hkmb.hktdc.com/en/1x0ako4w/venture-hong-kong/dna-technology-fights-fish-fraud?utm_source=enews&utm_medium=email&utm_campaign=hkmb-edm

TOBACCO BLACK MARKET SYNDICATES EXPLOITING WEAK MALAYSIAN BORDERS

On 22 July, the Straits Times reported that organised criminal syndicates are taking advantage of Malaysia’s weak border security to smuggle illicit tobacco into the country as well as ‘re-exporting’ these contraband products to other countries in the region, including Australia. This is according to the Retail and Trade Brands Advocacy (RTBA), an international non-government organisation that aims to safeguard supply chains and brands from criminal conduct. The article says that a report in April, Illicit Tobacco in the Asia Pacific Region: Causes and Solutions, indicated that Malaysia’s borders are vulnerable to criminal exploitation as key smuggling routes for illicit tobacco inflows and outflows. The report also cited that transshipment remains a serious concern for the movement of illicit tobacco through Malaysia, both domestically and regionally.

tobacco

https://www.nst.com.my/business/2020/07/610688/tobacco-black-market-syndicates-exploiting-weak-malaysian-borders-says-rtba

The RTBA report is at –

https://rtbacommerce.com/assets/reports/illicit-tobacco-in-the-asia-pacific-region.pdf

phishing

ILLEGAL DRUGS WORTH US$70 MILLION SEIZED AT HONG KONG AIRPORT CARGO TERMINAL IN 6 MONTHS AS CORONAVIRUS PANDEMIC FORCES SMUGGLERS TO CHANGE TACTICS

On 22 July, the South China Morning Post reported that 1.47 tonnes of illegal drugs were found in air cargo packages mailed into and out of the city in the first 6 months of the year – as coronavirus travel restrictions forced international syndicates to use alternative smuggling methods, customs said. It is said that there has been a dramatic surge in the detection of illegal drugs from express parcels mailed into Hong Kong in recent months. Nearly 80% of the 206 kg of cocaine came from Europe and Africa, while Europe also accounted for 85% of the 118 kg of ketamine. Of the 152 kg of crystal meth, 70% came from SE Asian countries while 87% of the 122 kg of cannabis was mailed from North America.

https://www.scmp.com/news/hong-kong/law-and-crime/article/3094259/illegal-drugs-worth-us70-million-seized-hong-kong

SINGAPORE: MAS FINES TRUST FIRM FOR MONEY LAUNDERING BREACHES

On 22 July, Singapore Business Review reported that the Monetary Authority of Singapore (MAS) has imposed a $1.1 million penalty on trust firm Asiaciti Trust for failure to comply with AML requirements between 2007 and 2018. The failings are said to have hindered the trust’s ability to detect and mitigate money laundering risks associated with its higher-risk customers. Established in 1978, the family-owned and independent Asiaciti Trust is said to be an international trust and corporate services provider that has operated here since 1980.

https://sbr.com.sg/financial-services/news/mas-fines-trust-firm-money-laundering-breaches

https://www.theedgesingapore.com/news/singapore-economy/family-owned-trust-asiaciti-fined-11-mil-mas-breaching-anti-money-laundering

https://mondovisione.com/media-and-resources/news/monetary-authority-of-singapore-imposes-composition-penalty-of-1100000-on-asi/

TRANSACTION LAUNDERING: FAKE BUSINESSES ARE FOOLING REAL BANKS INTO PROCESSING ONLINE DRUG PURCHASES

On 22 July, the Wall Street Journal carried an article about “companies” being used as fronts to process payments for marijuana or designer drugs.  It reports that the US DoJ and Federal Trade Commission (FTC) have recently brought a string of criminal and civil cases accusing individuals and companies of using legitimate-looking websites to deceive financial firms into processing unsavoury purchases. Such schemes are often called credit-card laundering or transaction laundering.

https://www.wsj.com/articles/fake-businesses-are-fooling-real-banks-into-processing-online-drug-purchases-11595415601

HIGH-PROFILE NEW ZEALAND BUSINESSMAN ARRESTED IN AUSTRALIA OVER MONEY LAUNDERING INVESTIGATION

On 22 July, the Technology 19 website reported that a high-profile New Zealand businessman has been caught up in multimillion-dollar tax fraud and money laundering allegations in Australia, with Mark Bryers being one of 12 people arrested by Australia’s Federal Police. TVNZ reports that Bryers is banned from operating a company in New Zealand until 2022.

https://techtoday19.com/nz/high-profile-kiwi-businessman-arrested-in-australia-over-money-laundering-investigation/

https://www.tvnz.co.nz/one-news/new-zealand/high-profile-kiwi-businessman-arrested-in-australia-over-money-laundering-investigation

SEIZED FLORIDA HOME OF ALLEGED FRONTMAN FOR DRUG LAUNDERER SELLS FOR $12 MILLION

On 21 July, The Real Deal website reported that, 4 years after its seizure, a white palatial estate in Coral Gables bought in 2015 and  owned by Samark Jose Lopez Bello has been sold. Lopez Bello is a high-profile fugitive and is the alleged frontman for Tareck Zaidan El Aissami, a former vice-president of Venezuela and alleged drug trafficker.

https://therealdeal.com/miami/2020/07/21/seized-home-of-alleged-frontman-for-drug-launderer-sells-for-12m/

PODCAST: PRIMER ON MONEY LAUNDERING: JOHN MADINGER

In the latest TRACE podcast, a 22-year veteran of Treasury and consultant to the US DoJ, John Madinger, sheds light on some of the money laundering schemes he has uncovered and why the Breaking Bad car wash scheme probably wouldn’t have worked.

https://traceinternational.org/resources-podcast

THE NEW GLOBAL HUMAN RIGHTS SANCTIONS REGIME IN THE UK – COMPARISON

A blog post from UK Finance on 14 July considers the new “Magnitsky” human rights-based sanctions regime recently introduced in the UK, and includes the following comparison –

SANCTIONS

https://www.ukfinance.org.uk/news-and-insight/blogs/global-human-rights-sanction-regime-in-UK

LATEST FIRE ON AIR CARGO FLIGHT PROMPTS NEW QUESTIONS ON LITHIUM BATTERY SAFETY

On 22 July, Loadtsra reported that a fire onboard an Ethiopian Airlines 777 freighter at Shanghai Pudong has again triggered questions on the safety of lithium batteries and cargo misdeclaration. A source is said to have said that there were 3 pallets of lithium batteries listed on the manifest, for loading in China for export. Lithium ion and lithium metal batteries are prohibited on passenger aircraft, and there are strict rules on their carriage on freighters – but there have been problems with undeclared counterfeit batteries, poor packaging and misdeclared batteries.

https://theloadstar.com/latest-freighter-fire-prompts-new-questions-on-lithium-battery-safety/

EU: 320 TONNES OF POTENTIALLY DANGEROUS DAIRY PRODUCTS TAKEN OFF THE MARKET

On 22 July, a news release from the EUIPO was about Operation Opson IX, coordinated by Europol and INTERPOL, which targeted trafficking of counterfeit and substandard food and beverages, ran from December 2019 to June 2020 and involved law enforcement authorities from 83 countries. It led to the dismantling of 19 organised crime groups involved in food fraud and the arrests of 406 suspects. Seizures included 320 tonnes of smuggled or substandard dairy products in Bulgaria, Italy, France, Greece, Portugal and Switzerland. However, animal feed was the most seized product, followed by alcoholic beverages (more than 2 000 tonnes), cereals, grains and derived products, coffee and tea and condiments.

https://euipo.europa.eu/ohimportal/en/web/guest/news/-/action/view/5896264

https://www.interpol.int/News-and-Events/News/2020/Food-fraud-in-times-of-COVID-19

2025 UK BORDER STRATEGY PUBLIC CONSULTATION

On 22 July, the cabinet Office and others launched a consultation document which seeks the views and expertise of stakeholders to help develop the 2025 UK Border Strategy and ensure that the Government and industry are able to work in partnership together to deliver a world class border. The consultation closes on 28 August. It is not seeking views from individual commercial or leisure travellers who move across the border, but welcomes responses from groups representing them. It is not seeking views on the Border Operating Model or arrangements for the border at the end of the transition period, but is rather focussed on the long-term ambition for the UK’s border.

https://www.gov.uk/government/consultations/2025-uk-border-strategy-public-consultation

LARGE-SCALE TAX FRAUD IN ITALY DISMANTLED WITH EUROJUST SUPPORT

A news release from Eurojust on 17 July advised that Eurojust supported the Italian national authorities in cracking down on an organised crime group involved in large-scale tax fraud concerning diesel fuel and other financial crimes. The organised crime group, headed by Italian nationals and mainly composed of Italian citizens, was suspected of introducing and selling diesel fuel in Italy, evading the payment of production, excise tax and VAT. The fuel was transported in oil tankers from Germany via Austria to the North of Italy, entering the country with documentation falsely attesting to the merchandise as lubricant oil.

http://www.eurojust.europa.eu/press/PressReleases/Pages/2020/2020-07-17.aspx

UK ANTI-CORRUPTION STRATEGY: YEAR 2 UPDATE

On 22 July, a news release from the Home Office highlights the action taken since the launch of the UK anti-corruption strategy 2017 to 2022 and covers the period up to and including 31 December 2019. Highlights claimed by the report include –

  • securing long-term funding for the Anti-Corruption Strategy for prisons and probation and the extensive work in the defence sector, for example on getting access to the right kind of data and analysis to help tackle the threat posed by corrupt insiders;
  • using Unexplained Wealth Orders and Account Freezing Orders, to highlight and seize property and bank accounts from people suspected to have obtained them corruptly while;
  • for the first time, the new Office of Financial Sanctions Implementation (OFSI) has punished companies for breaching sanctions;
  • publishing an Asset Recovery Action Plan including how to recover and return assets stolen through corruption;
  • reviewing the arrangements with Overseas Territories and Crown Dependencies which allow respective tax and law enforcement authorities to quickly, safely and securely receive information on who ultimately owns the companies they are investigating (known as beneficial ownership);
  • using expertise to help other countries to transform their public procurement services; and
  • using the Prosperity Fund on a global programme to help countries combat corruption.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/902020/6.6451_Anti-Corruption_Strategy_Year_2_Update.pdf

NEW UK BUSINESS SUPPORT MEASURES: CORPORATE INSOLVENCY AND GOVERNANCE ACT 2020

On 22 July, the House of Commons Library published a briefing paper which provides an outline of the main measures of the new Corporate Insolvency and Governance Act 2020. The Act introduces permanent measures to update the UK insolvency regime, and temporary measures to give struggling businesses a lifeline during the current coronavirus crisis.

http://researchbriefings.files.parliament.uk/documents/CBP-8971/CBP-8971.pdf

US STATE DEPARTMENT OFFERS REWARDS FOR ARREST/CONVICTION OF 2 UKRAINIANS

2 news releases from the US State Department on 22 July said that the Department was offering a reward of $1 million each for information leading to the arrest and/or conviction of Oleksandr Vitalyevich Ieremenko or Artem Viacheslavovich Radchenko for participating in transnational organised crime. It is said that Artem Viacheslavovich Radchenko and Oleksandr Vitalyevich Ieremenko and other hackers in Ukraine undertook criminal efforts to enrich themselves through a sophisticated securities fraud scheme.

https://www.state.gov/artem-viacheslavovich-radchenko

https://www.state.gov/oleksandr-vitalyevich-ieremenko

https://www.rferl.org/a/u-s-offers-2-million-reward-in-global-search-for-ukrainians-accused-of-hacking-sec-database/30741867.html

CONVICTED MONEY LAUNDERER PLEADS GUILTY TO DEFRAUDING BANK WHILE HE WAS SERVING TERM OF SUPERVISED RELEASE

A news release from the US DoJ on 21 July advised that Deallto McQuil Key Davis, 25, of Maryland, had pleaded guilty to conspiring to defraud Wells Fargo Bank out of hundreds of thousands of dollars.  In 2015, Davis was convicted of conspiracy to commit money laundering in federal court in Virginia. He was sentenced to 6 months in prison and 3 years of supervised release for that offence. The new offences were carried out whilst on that supervised release.

https://www.justice.gov/usao-dc/pr/convicted-money-launderer-pleads-guilty-defrauding-bank-while-he-was-serving-term

COINSQUARE EXECUTIVES RESIGN AFTER “WASH TRADING” SCANDAL

On 22 July, INVEZZ reported that Coinsquare, a Canada-based crypto exchange has agreed to settle with Ontario Securities Commission (OSC) following a “wash trading” scandal. It is reported that the exchange’s senior executives instructed employees to make fake trades on the platform and, from July 2018 to December 2019, where 90% of its volume was fake. Cole Diamond, Coinsquare’s CEO, Virgile Rostand, the exchange’s founder, have resigned per the agreement – as well as paying penalties and costs. The OSC also banned Diamond and Rostand from becoming registrants, directors, or officers of a registrant for 3 years. The agency also prohibited them from acting as directors or officers of other market participants for 3 years and 2 years respectively.  Felix Mazer, the exchange’s chief compliance officer, is said to have knowingly authorised, permitted, and acquiesced the activity. He stepped down from his position and made a £39,400 voluntary payment to the OSC and has been made subject to a 1-year ban from acting as a director or officer of a registrant, and is prohibited from holding a position the requires registration.

https://invezz.com/news/2020/07/22/coinsquares-executives-resign-following-wash-trading-scandal/

INDIA: FORMER DELOITTE CEO BANNED FOR 7 YEARS FROM AUDITING AND FINED

On 22 July, Business Today reported that Udayan Sen is the former CEO of Deloitte India and the action is a result of his role in the audit of scam-hit IL&FS Financial Services (IFIN).

https://www.businesstoday.in/current/corporate/ilfs-fraud-former-deloitte-ceo-banned-for-7-years-from-auditing-fined-rs-25-lakh/story/410740.html

MANY MYANMAR MINING BUSINESSES FAIL TO NAME POLITICALLY CONNECTED OWNERS

On 22 July, The Irrawaddy website said that A Global Watch report claims that at least 10 companies in Myanmar have failed to identify “politically exposed persons” (PEP) —those with links to high-ranking present or former military officials and ethnic armed groups — among their owners. The NGO based its findings on an analysis of the first batch of beneficial ownership information disclosures submitted by companies in the country’s troubled extractives sector. It is said that, in Myanmar, a lack of transparency in the extraction of natural resources in resource-rich ethnic regions helps perpetuate and finance violent conflict in these areas.

https://www.irrawaddy.com/news/burma/many-myanmar-mining-firms-fail-name-politically-connected-owners-global-witness.html

ESTONIAN MINISTRY OF JUSTICE IS PREPARING TO DEVELOP A BILL TO PROTECT WHISTLEBLOWERS

On 22 July, ERR reported that, by the end of 2021, Estonia must transpose the EU Directive on the Protection of Whistleblowers into law. When the law enters into force, it will be prohibited to use coercive measures against the whistleblower in the future, such as harassment, reduction of wages, or dismissal or threats.

https://news.err.ee/1115523/state-developing-bill-to-protect-whistleblowers

THE MAYOR OF ZIMBABWE’S CAPITAL HARARE ARRESTED OVER CORRUPTION CHARGES

On 22 July, the Tukish-based Anadolu Agency reported that Herbert Gomba had been taken into custody by the Anti-Corruption Commission.  He is allegedly facing charges of criminal abuse of office in connection with a massive land scam that has led to the arrest of several public officials over recent weeks, including city council officials, police officers, and a prosecutor.

https://www.aa.com.tr/en/africa/zimbabwe-capitals-mayor-arrested-in-corruption-probe/1918750

UK ECONOMIC CRIME LEVY TO COLLECT £100 MILLION A YEAR

On 22 July, the Law Society Gazette published an article about the consultation underway on the Levy, saying that the Government had “slipped out” proposals to collect £100 million a year from business to fight economic crime, as parliament winds down for the summer.

https://www.lawgazette.co.uk/news/economic-crime-levy-to-collect-100m-a-year/5105114.article

LEGAL PROFESSION ‘VIGILANT’ AGAINST MONEY LAUNDERING, SAYS LAW SOCIETY OF ENGLAND & WALES

An article in the Law Society Gazette on 22 July reported that solicitors are ‘all too aware’ of the threat of money laundering, the Law Society has said in response to the just-released report into Russian influence in the UK.  The report warns that lawyers are part of an ‘industry of enablers’ which has helped ‘wittingly or unwittingly, in the extension of Russian influence which is often linked to promoting the nefarious interests of the Russian state’.

https://www.lawgazette.co.uk/practice/legal-profession-vigilant-against-money-laundering-law-society/5105102.article

On the other hand –

LAWYERS HAVE BECOME “DE FACTO AGENTS OF RUSSIAN STATE”

On 22 July, an article in Legal Futures says that lawyers have become “de facto agents of the Russian state” by helping to smooth the way of Russian money entering the UK, according to Parliament’s Intelligence and Security Committee in its just-released report.  The report also said that lawyers, accountants, estate agents and PR professionals have played a role, wittingly or unwittingly, in the extension of Russian influence which is often linked to promoting the nefarious interests of the Russian state.

https://www.legalfutures.co.uk/latest-news/lawyers-have-become-de-facto-agents-of-russian-state

GERMAN PROSECUTORS NOW SUSPECT ORGANISED CRIMINAL ENTERPRISE AT WIRECARD

On 22 July, Reuters reported that the CEO of Wirecard had been rearrested, along with other former top executives, as prosecutors say that they now suspect them of an organised criminal enterprise to bilk creditors of billions of euros based on faked accounts.

https://uk.reuters.com/article/uk-wirecard-accounts/prosecutors-now-suspect-wirecard-executives-of-criminal-fraud-arrest-three-idUKKCN24N203

10 LEGAL CONSIDERATIONS WHEN STARTING A HEMP BUSINESS IN THE US

On 22 July, an article from Bradley Arant Boult Cummings LLP provides the 10 things the firm thinks you should consider when starting a hemp business.

https://www.jdsupra.com/legalnews/ten-legal-considerations-when-starting-97670/

UK: AVOIDANCE SCHEMES – CHARTERED INSTITUTE OF TAXATION WELCOMES ROBUST APPROACH ON PROMOTERS

A news release from CIOT on 21 July commented on the publication of draft legislation and a consultation document on tackling promoters and enablers of tax avoidance schemes. It says that the UK Government is right to be taking a robust approach to those who continue to devise, promote or sell tax avoidance schemes. There should be no place for such people and their schemes in the tax services market.

https://www.tax.org.uk/media-centre/press-releases/avoidance-schemes-ciot-welcomes-robust-approach-promoters

ESTONIA PUBLISHES ITS LIST OF WHO IT REGARDS AS PEP

On 20 July, ERR reported that the Ministry of Finance has provided guidance for compliance officers on what government positions the Government of Estonia considers to be Politically Exposed Persons (PEP).

https://www.err.ee/1114932/riik-teeb-loetelu-rahapesu-tokestamisel-eritahelepanu-vajavatest-ametitest

MIDDLE EAST AND NORTH AFRICAN AUTHORITIES SEIZE FAKE MEDICAL PRODUCTS

On 22 July, OCCRP reported that an operation across the Middle East and North Africa, coordinated by Interpol, seized thousands of counterfeit medical masks and drugs. Between February and April, authorities from Iraq, Jordan, Kuwait, Lebanon, Libya, Morocco, Qatar and Saudi Arabia carried out inspections on their land, water and air borders, targeting pharmaceutical crimes. Seizures included 61,000 respiratory masks, 63,418 face masks and 85,000 other medical products such as gloves, thermometers, medical glasses, in addition to a variety of illicit medicine ranging from antimalarial drugs to sexual stimulants.

https://www.occrp.org/en/daily/12818-middle-east-north-african-authorities-seize-fake-medical-products

END OF THE ROAD FOR KEYLESS CAR THIEVES IN GERMANY AND POLAND

On 22 July, a news release from Europol says that German and Polish law enforcement authorities, supported by Europol, have dismantled a network of thieves stealing expensive cars equipped with KEYLESS GO systems. The group is suspected of stealing at least 34 vehicles worth more than €1.4 million. The cars were primarily stolen in the German region of Heilbronn.

https://www.europol.europa.eu/newsroom/news/end-of-road-for-keyless-car-thieves-in-germany-and-poland

MARITIME BUSINESSES FACE CHALLENGING CYBER THREATS AS GEOPOLITICAL TENSIONS RISE IN THE MEDITERRANEAN

An article from Control Risks says that it has  identified a range of threats both to organisational assets, such as shipping and operational technology, and to personnel, driven by the geopolitical flashpoints between key actors in the region – mentioning Syria, Libya and (the waters around) Cyprus.

https://www.controlrisks.com/our-thinking/insights/maritime-businesses-face-challenging-cyber-threats

US HAS, FOR THE FIRST TIME, LEVIED TERRORISM CHARGES AGAINST A MS13 GANG LEADER AND DRUGS TRAFFICKER

An article on 22 July from Insight Crime says that the US government has for the first time levied terrorism charges against a little known MS13 gang leader, but the indictment comes off more like a political ploy than a genuine effort to go after the group. The 8 “terrorism-related offenses” ranged from participating in a racketeering conspiracy and providing support to terrorists, to narco-terrorism and conspiracy to finance terrorism. The article argues that the details of the indictment do not justify the US Government’s argument to charge the leader with terrorism, and that it is a serious stretch to label it a terrorist group with the likes of Hezbollah or Al Qaeda.

https://www.insightcrime.org/news/analysis/us-indictment-ms13-leader/

GERMANY TIGHTENS FOREIGN INVESTMENT REGIME DUE TO THE EU SCREENING REGULATION

On 22 July, an article from Out-Law claims that more transactions can become subject to governmental screening and closing restrictions under the latest amendments to German foreign trade law. It also says that the EU Regulation provides for a uniform approach to investment screening throughout Europe and a cooperation mechanism between the member states and the EU Commission.

https://www.pinsentmasons.com/out-law/news/investitionskontrolle-anlaesslich-der-eu-screening-verordnung-verschaerft

FRENCH TRIAL SOUGHT FOR ALLEGED RUSSIAN BITCOIN CRIMINAL ALEXANDER VINNIK

On 22 July, Security Week reported that prosecutors in Paris have asked investigating judges to order a criminal trial for the Russian suspected of money laundering on the bitcoin exchange BTC-e, and who is also wanted by the US and Russia. He was extradited in January from Greece, where he was arrested on an US warrant in 2017. Vinnik has denied the charges and has sought an extradition to Russia, where he is wanted on lesser fraud charges. On 22 June, the media site had reported that New Zealand police said that they had frozen NZ$140 million (US$90 million) in assets linked to Vinnik.

https://www.securityweek.com/french-trial-sought-alleged-russian-bitcoin-criminal

3 ARRESTED FOR STATE SECRETS THEFT IN HANOI MONEY LAUNDERING SCANDAL

On 22 July, VN Express reported that 3 people linked to the government and police have been arrested for stealing classified documents in a money laundering scandal involving a tech business and are are under criminal investigation for “appropriating documents containing state secrets”. The tech company was set up in 2001 and was involved in electronic and telecom equipment and components, mobile phone manufacturing, pawnbroking and as a travel agency services.  To date, 26 people have been arrested and investigated for involvement in the case.

https://e.vnexpress.net/news/news/three-arrested-for-state-secrets-theft-in-hanoi-money-laundering-scandal-4134478.html

SOME CHINESE PORTS BECOMING CLOGGED BECAUSE OF RENEWED INTENSIVE TESTING

On 21 July, Insurance Maritime News reported that the testing of imported foods for Covid-19 has been stretching the processing capacity at some major Chinese seaports.  Shippers have warned of the possibility of additional fees and perhaps even diversions to other ports. China increased its number of inspections of imported food in June after an outbreak of Covid-19 among people working at and visiting a major food market in Beijing.

https://insurancemarinenews.com/insurance-marine-news/some-chinese-ports-becoming-clogged-because-of-renewed-intensive-testing/

INDIA AMENDS EXPORT CONTROLS – ADDITIONAL GOODS SUBJECT TO CONTROL

On 11 July, changes were made to the list of goods affecting such things as certain nuclear materials, toxic chemical agents listed by the Organisation for the Prohibition of Chemical Weapons (as well as related technology and software), aero-engines and certain aircraft engine technology.  Updated descriptions etc include the entries in the nuclear, munitions and telecommunications lists.

https://content.dgft.gov.in/Website/Noti%2010%20dated%2011.06.2020%20-%20SCOMET%20update_0.pdf

AMERICAN BUSINESS CONFIDENCE IN HONG KONG SINKS

On 22 July, an article from CSIS reflects on a new membership survey from the American Chamber of Commerce in Hong Kong (AmCham HK). It says that the most important result is the survey shows that over 35% of foreign businesses are considering relocating their capital, asset, or operations. 5.5% of those businesses are planning to relocate in the short-run and 30.1% in the medium-to-long run.

https://www.csis.org/blogs/trustee-china-hand/american-business-confidence-hong-kong-sinks

ASSESSING RUSSIAN INFLUENCE IN THE UK

This report from CSIS on 20 July the UK case study of an ambitious year-long CSIS initiative to analyse Russian influence activities in the UK and Germany and Chinese influence activities in Japan and Australia. It concludes that, for the past 15 years, Russia has sought to weaken the UK internally and diminish its position in the world by exploiting minority grievances, encouraging separatist movements, amplifying anti-EU sentiments, and trying to inflict reputational damage upon the UK role in NATO and the value of its relationship with the US.

https://csis-website-prod.s3.amazonaws.com/s3fs-public/publication/20720_Ellehuus_GEC_FullReport_FINAL.pdf

AMENDED UKRAINE- AND RUSSIA-RELATED FAQ

On 22 July, OFAC issued 9 amended Ukraine-/Russia-related FAQ to reflect the issue of General Licenses 130 (Authorizing Certain Transactions Necessary to Divest or Transfer Debt, Equity, or Other Holdings in GAZ Group) and 151 (Authorizing Certain Activities Involving GAZ Group).

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20200722.aspx

SINGAPORE OIL TRADER HONTOP FACES FRAUD CLAIMS: WHAT WENT WRONG?

On 22 July, an article in Global Trade Review reports that Singapore’s Hontop Energy has becomes the latest oil trader to be embroiled in a fraud scandal, accused of creating elaborate fake trades and forging documents in order to obtain finance.  The article examines what went wrong in a sector already under intense pressure. It follows recent collapses of other traders Agritrade, Hin Leong and ZenRock – also amid allegations of fraud.

https://www.gtreview.com/news/asia/singapore-oil-trader-hontop-faces-fraud-claims-what-went-wrong

DANSKE BANKS IMPROVES AML MEASURES IN NORWAY AFTER FSA INSPECTION

On 22 July, Reuters reported that Danske Bank will strengthen its AML measures in its Norwegian branch following an inspection by the country’s regulator.

https://www.reuters.com/article/danske-bank-compliance-norway/danske-ups-anti-money-laundering-measures-in-norway-after-fsa-inspection-idUSC7N2B2028

US CHARGES 2 CHINESE NATIONALS WITH COVID-RELATED HACKING

On 22 July, Lawfare reported that the US DoJ has announced the indictments against 2 Chinese private citizens for unauthorised infiltration of computers and the theft of terabytes of COVID-19 research data.  Charges include conspiracy to access without authorization and damage computers, conspiracy to commit theft of trade secrets, unauthorized access to computers, conspiracy to commit wire fraud, along with 7 counts of aggravated identity theft. The indictment outlines the pair’s alleged history, beginning in 2009, of hacking private companies’ across an array of sectors in Europe, Japan, South Korea and the US, along with the computers belonging to the Department of Energy.

https://www.lawfareblog.com/justice-department-charges-two-chinese-nationals-covid-related-hacking

FBI INVESTIGATION SHOWS OHIO’S ENERGY LAW WAS FUELED BY CORRUPTION

On 22 July, an article in Vox is concerned with corruption in the energy sector in Ohio, in the light of charges and arrests including of the Ohio Speaker of the House of Representatives Larry Householder.

https://www.vox.com/2020/7/22/21334366/larry-householder-affidavit-ohio-bribery-firstenergy

CALIFORNIA RESIDENT PLEADS GUILTY TO LAUNDERING MILLIONS USING ILLEGAL BITCOIN ATM

On 22 July, Coindesk reported that Kais Mohammad, aka “Superman29,” has agreed to plead guilty to federal charges he ran an unlicensed Bitcoin ATM network that laundered up to $25 million, including funds that originated in criminal activity. He is said to have pleaded guilty to money laundering, operating an unlicensed money transmitting business and failure to maintain an effective AML programme.

https://www.coindesk.com/superman29-to-do-time-california-resident-pleads-guilty-to-laundering-millions-using-illegal-bitcoin-atms

CFTC POSTPONES PROSECUTION OF US COIN BULLION DUE TO CORONAVIRUS

On 22 July, Finance Magnates reported that the US Commodity Futures Trading Commission has sought to postpone the trial of 2 brothers who defrauded some 150 customers of more than $8 million due to precautions over the novel coronavirus. Salvatore and Joseph Esposito, the owners of precious metals investment firm U.S. Coin Bullion pleaded guilty in October 2019 on charges of conspiracy to commit wire fraud and mail fraud.  CFTC also filed a civil enforcement action charging US Coin Bullion and its operatives with misappropriating customer funds and engaging in fraudulent solicitations.

https://www.financemagnates.com/forex/brokers/cftc-postpones-prosecution-of-us-coin-bullion-due-to-coronavirus

US PROSECUTORS SAY SAN FRANCISCO CONSULATE IS HARBOURING CHINESE MILITARY RESEARCHER WANTED BY FBI

On 22 July, Axios reported that Tang Juan, a researcher who lied about her affiliation with a Chinese military university, entered the Chinese consulate in San Francisco after being interviewed by the FBI on about alleged visa fraud and has remained there, according to the FBI.

https://www.axios.com/san-francisco-consulate-harboring-chinese-military-researcher-fbi-17325706-7983-4b17-aa6f-f19a450b646b.html

HUMAN RIGHTS DUE DILIGENCE: INCREASING REGULATORY PRESSURE FOR CLEAN SUPPLY CHAINS

On 22 July, an article from Akin Gump says that there is increasing regulatory, commercial and media attention in the UK and the EU regarding the role of human rights in company supply chains. The UK and the EU are also introducing specific measures around human rights, of which companies and investors should be aware.  Businesses should focus on what is expected and/or required of them in terms of identifying and mitigating modern slavery and human rights related risks in their supply chains or portfolios.

https://www.jdsupra.com/legalnews/human-rights-due-diligence-increasing-98309/

EXTENSION OF UK TRUST REGISTER LIMITED FOR NON-UK RESIDENT TRUSTS WITH NO UK TAX LIABILITY

On 22 July, an article from Bryan Cave Leighton Paisner says that non-UK resident trusts where all the trustees are non-UK resident and where the trust has no UK tax liability or directly-held UK assets will not have to register on the UK trust register simply because they enter into a business relationship with UK lawyers, banks, estate agents or accountants. This, it says, is confirmed by the release of draft regulations to extend the scope of the register.

https://www.jdsupra.com/legalnews/extension-of-uk-trust-register-limited-43249/

CONTROLLING OPIOID SUPPLY FROM MEXICO

One of a cluster of reports from the Brookings Institute on 22 July included this one which explores policy options for responding to the supply of heroin and synthetic opioids from Mexico to the US.

https://www.brookings.edu/wp-content/uploads/2020/07/9_Felbab-Brown_Mexico_final.pdf

CONTROLLING OPIOID SUPPLY FROM CHINA

Another paper from the Brookings Institute on 22 July says that, since 2013, China has been the principal source of the fentanyl flooding the US illicit drug market — or of the precursor agents from which fentanyl is produced, often in Mexico — fuelling the deadliest drug epidemic in US history. China finally announcing in April 2019 that the production, sales, and export of all fentanyl-class drugs are prohibited, except by authorised firms which the Chinese government has granted special licences. This policy paper draws on lessons from several sets of regulatory domains in China to identify the conditions under which China enforces its regulations.

https://www.brookings.edu/wp-content/uploads/2020/07/8_Felbab-Brown_China_final.pdf

ZIMBABWE COURT SUSPENDS POLICE SEARCH WARRANT AGAINST ECONET PHONE OPERATOR

On 22 July, VoA reported that Zimbabwe’s High Court has suspended a police search warrant against mobile telecoms company Econet Wireless which sought to force it to turn over details of subscribers and transactions as part of a money laundering probe. The government says black market foreign currency traders are using Econet’s mobile money platform to undermine the local currency and launder money.

https://www.voazimbabwe.com/a/zimbabwe-court-suspends-police-search-warrant-against-econet/5513514.html

PARCELS MAINTAIN GROWTH OF POSTS GLOBALLY

On 16 July, Parcel and Post Technology reported that a report by the IPC (International Post Corporation) has found that parcels remained the key driver of growth in the postal industry in 2019. The report identified worldwide growth of 4.2% for posts, buoyed by e-commerce and despite a continued decline in mail volume.

https://www.parcelandpostaltechnologyinternational.com/news/operations/parcels-maintain-growth-of-posts-globally.html

MALAWI: CHINESE TRAFFICKERS JAILED IN BLOW TO ANIMAL PARTS TRADE

On 22 July, The Times reported that one of Africa’s most prolific wildlife smuggling rings, which included 7 Chinese, has been put out of business after 9 traffickers were given hefty jail terms by a Malawian court. Quinhua Zhang, 43, regarded as the matriarch of the Lin-Zhang gang, was jailed for 11 years for illegally possessing rhino horn and an unlicensed firearm.

https://www.thetimes.co.uk/article/chinese-traffickers-jailed-in-blow-to-animal-parts-trade-28snf0c7h

POLAND DETAINS FORMER HEAD OF UKRAINE ROAD AGENCY ON MONEY LAUNDERING CHARGES

On 22 July, Euromaidan Press from Ukraine reported that Poland’s Central Anti-Corruption Bureau had detained Sławomir Nowak, the country’s former transport minister and former head of the Ukrainian automobile road agency, and 2 other people.

http://euromaidanpress.com/2020/07/22/poland-detains-ex-ukrainian-road-agency-chief-on-money-laundering-charges/

AMENDED UKRAINE- AND RUSSIA-RELATED FAQ

On 22 July, OFAC issued 9 amended Ukraine-/Russia-related FAQ to reflect the issue of General Licenses 130 (Authorizing Certain Transactions Necessary to Divest or Transfer Debt, Equity, or Other Holdings in GAZ Group) and 151 (Authorizing Certain Activities Involving GAZ Group).

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20200722.aspx

EXTREME CORRUPTION PERSISTS IN SOUTH AFRICA’S AILING HEALTH SECTOR

On 22 July, an article in Business Day in South Africa says that public health facilities are crippled by a variety of corrupt employment and procurement practices as well as misappropriation of scarce resources. It refers to a just-published report from watchdog Corruption Watch and saying that it had received almost 700 reports of corruption relating to the health sector. It refers to absenteeism, allegations of nepotism and favouritism as well as the appointment of unsuitable candidates with no accountability for employment decisions.

https://www.businesslive.co.za/bd/national/2020-07-22-extreme-corruption-persists-in-sas-ailing-health-sector

the report can be accessed at –

https://www.polity.org.za/article/x-ray-the-critical-state-of-the-health-sector-in-sa-2020-07-22

UK EXTENDS NEW GLOBAL HUMAN RIGHTS SANCTIONS TO ISLE OF MAN AND OVERSEAS TERRITORIES

On 22 July, 2 new Orders were published.  I have inserted a new slide in the presentation I previously prepared.

https://www.legislation.gov.uk/uksi/2020/774/contents/made

https://www.legislation.gov.uk/uksi/2020/773/contents/made

https://www.gov.im/news/2020/jul/22/financial-sanctions-global-human-rights-regime/

IOM BOT

THE NEW UK HUMAN RIGHTS SANCTIONS REGIME

CANADA CHANGES ITS EXPORT POLICY TOWARD HONG KONG – ARE ECONOMIC SANCTIONS NEXT?

On 20 July, McCarthy Tetrault published a post saying that Canada will treat exports and transfers of sensitive goods and technology to Hong Kong the same as those destined for mainland China, and will prohibit exports of sensitive military items to Hong Kong.

https://www.mccarthy.ca/en/insights/blogs/terms-trade/canada-changes-its-export-policy-toward-hong-kong-are-economic-sanctions-next#page=1

EXPORT OF ITEMS LISTED ON THE EXPORT CONTROL LIST TO HONG KONG

A Notice to Exporters on 7 July is concerned with the change of export control policy involving Hong Kong.

https://www.international.gc.ca/trade-commerce/controls-controles/notices-avis/1003.aspx?lang=eng

THE UK WILL EXTEND THE ARMS EMBARGO THAT APPLIES TO CHINA TO HONG KONG

On 20 July, the Foreign Secretary announced that change and clarified that the extension of the embargo means there will be no exports from the UK to Hong Kong, of potentially lethal weapons, their components or ammunition. It will also mean a prohibition on the export of any equipment not already banned, which might be used for internal repression, such as shackles, intercept equipment, firearms and smoke grenades.

Notice to Exporters 2020/12 advised that open general licences that include Hong Kong will be changed or amended to bring them in line with restrictions on China from 20 July.

https://www.gov.uk/government/speeches/hong-kong-and-china-foreign-secretarys-statement-in-parliament

https://www.gov.uk/government/publications/notice-to-exporters-202012-the-extension-of-the-china-arms-embargo-to-hong-kong

LONDON PROPERTY, OLIGARCHS AND CRIME

Following yesterday’s report of a judge allowing the seizure of a £5 million London apartment linked to the Petrobas Operation Car Wash case come the following –

BELGRAVIA PROPERTY LINKED TO JUAN CARLOS INQUIRY

On 22 July, KYC 360 reported a story from The Times saying that a Swiss prosecutor leading a money laundering inquiry into secret offshore accounts linked to the former king of Spain is investigating the source of funds used by his former lover to buy a £5.5 million house in Eaton Square, London.

https://www.thetimes.co.uk/article/belgravia-property-linked-to-juan-carlos-inquiry-fn970q6lh

RUSSIA BLAZED A TRAIL FOR CHINESE OLIGARCHS TO NAB LONDON PROPERTY

On 22 July, Wired, commenting on the just-released (and long delayed) Parliamentary report on Russian interference/influence in the UK, quotes the report saying that the UK welcomed Russian money, and few questions – if any – were asked about the provenance of this considerable wealth. It says that now that Russia has created a well-trodden path, China is marching in – and the UK can’t afford to be as complacent this time. It is said that Hong Kong buyers have overtaken purchasers from Russia and India to become the largest group of overseas buyers investing in residential and commercial property in London, and 15% of homes bought for more than £1 million by international buyers in prime central London are now bought by those from China or Hong Kong. The investment was, in fact, the second wave of Chinese cash washing into the UK, according to an academic quoted in the article.

https://www.wired.co.uk/article/russia-report-real-estate

HOW LONDON BECAME RUSSIANS’ LAUNDROMAT, NO QUESTIONS ASKED

On 22 July, another article from The Times comments on the Russian influence report, saying that Britain has left it too late to untangle the web of Russian influence that permeates the upper ranks of the political and business establishment.

https://www.thetimes.co.uk/article/how-london-became-russians-laundromat-no-questions-asked-52vhnm9vw

 

OTHER THINGS YOU MAY HAVE MISSED – JULY 21

Panama Covid-19 update – more rumours of even tighter controls…though the authorities have ruled out (for now?) use of drones in one rural province (Cocle) to seek out people with high temperatures… then maybe a bit of relatively good news, as the Rt infection rate drops to 1.23, and “only” 727 new cases, but 32 more fatalities.  Day 135 of the crisis sees 164 in ICU, 1,156 in other wards, 698 in the hotels and 25,599 isolated at home.

21 July 2020

CHINA MAY RETALIATE AGAINST NOKIA AND ERICSSON IF EU COUNTRIES MOVE TO BAN HUAWEI

On 20 July, the Wall Street Journal reported that China is considering retaliating against the Chinese operations of the major European telecommunication-equipment manufacturers should EU states follow the lead of the US and UK in barring China’s Huawei Technologies from 5G networks, according to people familiar with the matter.  It says that the Ministry of Commerce is mulling export controls that would prevent Nokia and Ericsson from sending products it makes in China to other countries, it has been suggested.

https://www.wsj.com/articles/china-may-retaliate-against-nokia-and-ericsson-if-eu-countries-move-to-ban-huawei-11595250557

NORTH KOREA USES 8 FAKE SHIP IDENTITIES FOR POST-COVID QUARANTINE SMUGGLING

On 21 July, NK Pro reported that false identities are providing cover for DPRK ships to smuggle coal, despite sanctions. It says that the false identities include AM, KH, KS1, MT, PK, TM, TR and Pu He, and are said to constitute a class of “throwaway” identities.

https://www.nknews.org/pro/north-korea-uses-eight-fake-ship-identities-for-post-covid-quarantine-smuggling/

THE L3HARRIS LESSON: WHY MEETING ITAR AGREEMENTS COMPLIANCE REQUIREMENTS MUST BE PART OF EVERY DEFENCE INDUSTRY COMPANY’S COMPLIANCE PROGRAMME

An article from Torres Law on 17 July says that the US International Traffic in Arms Regulations (ITAR) provide for 3 types of agreement which serve as a licensing tool for the transfer of defence articles, technical data, manufacturing know-how, and defence services between a US and a foreign party.  However, it says that most companies are not as familiar or often neglect the compliance requirements applicable to ITAR Agreements and managing them can be a difficult task.  The article says that compliance requirements of ITAR Agreements are extensive and complex. and provides details of the “often forgotten” compliance requirements for ITAR Agreements.  The article refers to a recent case in which leading US defence technology company  L3Harris faced a $13 million civil penalty for ITAR violations, and the subsequent Consent Agreement made it clear that the Directorate of Defense Trade Controls (DDTC) will not hesitate to enforce the compliance requirements for ITAR Agreements.

https://www.torrestradelaw.com/posts/The-L3Harris-Lesson%3A-Why-Meeting-ITAR-Agreements-Compliance-Requirements–Must-Be-Part-of-Every-Defense-Industry-Company%27s-Compliance-Program/212

IRANIAN-AMERICAN MAN SENTENCED TO 46 MONTHS FOR SMUGGLING GOODS FROM THE US TO IRAN

A news release from the DoJ on 16 July advised that Aiden Davidson, aka Hamed Aliabadi, 32, of Brighton, Massachusetts, was sentenced to 46 months in federal prison for smuggling goods from the US to Iran in violation of the US embargo on trade with Iran.  Davidson is a citizen of Iran and a naturalized citizen and resident of the US. He was involved in smuggling goods from Savannah, Georgia, to Iran.  The goods included motors, pumps, valves, and other items, falsely identified as destined for Turkey.

https://www.justice.gov/usao-nh/pr/massachusetts-man-sentenced-46-months-smuggling-goods-united-states-iran

EUROPEAN BANKING REGULATOR TO PROBE “LUANDA LEAKS” ALLEGATIONS

On 21 July, KYC 360 carried an article about an ICIJ report saying that the European Banking Authority is to probe revelations in an investigation led by the International Consortium of Investigative Journalists into how billionaire businesswoman Isabel dos Santos made her fortune in Angola.

https://www.riskscreen.com/kyc360/news/european-banking-regulator-to-probe-luanda-leaks-allegations

FAQ AND NOTICE RE NEW US MEASURES AFFECTING HONG KONG

On 15 July, the US Directorate of Defense Trade Controls has published a new Notice and a set of FAQ on the changes, effectively treating Hong Kong as if part of Mainland China.  However, it is said that the DDTC has clarified that current licences naming Hong Kong as a transfer territory are not affected by the Executive Order changing the export licensing sitauion, and that previously approved authorisations to export defence articles or services to Hong Kong have not been revoked or rescinded.

https://www.pmddtc.state.gov/ddtc_public?id=ddtc_public_portal_news_and_events

SHIPOWNERS FACE RECYCLING CONSTRAINTS AS EU REGULATIONS LIMIT OPTIONS

On 17 July, Seatrade Maritime News reported that EU ship recycling regulations are limiting shipowners’ recycling options, particularly for large vessels.

https://www.seatrade-maritime.com/regulation/owners-face-recycling-constraints-eu-regulations-limit-options

UK: DEPORTATION BLOCKED WHERE GROUNDS GIVEN ONLY IN A CLOSED JUDGMENT

In its 20 July Digest, 6KBW College Hill Chambers reported on a case before the Court of Appeal involving the deportation of a foreign national on the ground that he was the head of an organised crime group and thus represented a serious threat to public security.  The decision to deport was overturned on the grounds given only in a closed judgment.

https://blog.6kbw.com/posts/digest-20-july-2020

CHINA IS SPEEDING UP ITS PLUTONIUM RECYCLING PROGRAMMES

On 20 July, the Bulletin of the Atomic Scientists carried an article saying that, since 1983, China has had the objective of developing breeder reactors to run on recycled plutonium.  Despite setbacks, the programme continues, and the China National Nuclear Corporation is said to be negotiating with France’s nuclear fuel cycle company Orano (formerly Areva) over the purchase of a large commercial reprocessing plant, and has proposed construction of large commercial fast-neutron reactors by 2028.

https://thebulletin.org/2020/07/china-is-speeding-up-its-plutonium-recycling-programs

HOW NOVEL TECHNOLOGIES DISRUPT THE NUCLEAR BALANCE

On 21 July, Foreign Affairs carried an article saying that to understand the unprecedented nature of the challenges, it is important to understand the logic that governed classic strategic stability — a logic driven by the imperative of discouraging escalation between nuclear-armed superpowers.  The factors that underpinned long-standing logic has been upended by new technologies and the spread of competition to new domains, and that there is now a broader array of capabilities that can be considered “strategic”.  The developments include hypersonic delivery systems, and novel weapons delivery capabilities, such as a nuclear-powered, nuclear-armed underwater drones.  Then there is cyberspace, and risks to vital infrastructure, including defence systems. Biotechnology is another area with potentially strategic implications. The article says that the development and interplay of these new capabilities present significant challenges, labelled the “instability of complexity”.

https://www.foreignaffairs.com/articles/russia-fsu/2020-07-21/age-strategic-instability

KENYA: CONCERN OVER PROLIFERATION OF COUNTERFEIT GOODS

On 21 July, the Kenya News Agency referred to concerns that corrupt and greedy business operatives are taking advantage of the Covid-19 pandemic to flood the country with low quality masks, sanitisers, and soaps which were presenting fresh risks to Kenyans. It says that the construction industry is also affected by counterfeit electrical goods, cement and other materials.  It is claimed that  local industries were losing more than 40% of their potential annual sales to counterfeits.

https://www.kenyanews.go.ke/concern-over-proliferation-of-counterfeit-goods/

HOW SMUGGLERS ARE SHIFTING STAGGERING AMOUNTS OF ILLEGAL DRUGS DESPITE THE PANDEMIC

On 21 July, an article in EconoTimes reported that , to some extent, illicit traffic will be more visible to authorities because legal trade flows have shrunk and there is additional checking at national borders.  The large seizures are also a sign of criminals taking greater risks because they can make higher returns on scarce goods.  With travel restrictions smuggling of drugs in bulk, it is suggested, takes place because it’s harder to smuggle lots of smaller shipments.

https://www.econotimes.com/How-smugglers-are-shifting-staggering-amounts-of-contraband-despite-the-pandemic-1587791

SINGAPORE: MAS PROPOSES ENHANCED POWERS TO ADDRESS FINANCIAL RISKS

On 21 July, the Singapore Business Review and others reported that the Monetary Authority of Singapore has issued a consultation paper proposing enhanced powers to address financial sector risks, such as issuing prohibition orders, expanding regulations on digital token issuers, improving technology risk management and strengthening dispute resolutions. The proposals include additional powers to prohibit unsuitable individuals from working in the financial industry, expand the scope of AML/CFT requirements to persons in Singapore who provide digital token services overseas, strengthen the framework for technology risk management, and enhance the effectiveness of dispute resolution.

https://sbr.com.sg/financial-services/news/mas-proposes-enhanced-powers-address-financial-risks

The consultation is at –

https://www.mas.gov.sg/publications/consultations/2020/consultation-paper-on-the-new-omnibus-act-for-the-financial-sector

NEW ZEALAND: TOTAL PENALTY OF $7.585 MILLION AGAINST 2 MONEY REMITTERS

On 21 July, Scoop reported that the Department of Internal Affairs had obtained the orders in civil proceedings under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 against the 2 operators. It follows restraint orders in May 2020 against 3 individuals associated with the companies.  The penalties relate to activities between May 2014 and April 2019 and reflect aggravating conduct, including failing to cooperate with the Department in its investigation and attempts to mislead the Department, including trying to disguise the status of one of the companies as a reporting entity.

https://www.scoop.co.nz/stories/BU2007/S00334/civil-proceedings-result-in-a-total-penalty-of-7585m-against-two-money-remitters.htm

THE IMPORTANCE OF WHISTLEBLOWERS IN COMBATING WILDLIFE TRAFFICKING

On 21 July, an article in The National Law Review in the US follows the recent publication of the UN report on wildlife trafficking.  It says that due to the secretive and sophisticated nature of wildlife crime, detection and prosecution of these underground networks is challenging without inside knowledge. Whistleblowers are therefore a crucial source of information to combating wildlife trafficking. It lists the US legislation providing rewards for whistleblowers.

https://www.natlawreview.com/article/importance-whistleblowers-combatting-wildlife-trafficking-0

sarawak

https://www.sarawakreport.org/2020/07/tony-pua-calls-on-china-to-investigate-1mdb-corruption/

CENTRAL BANK OF KUWAIT FREEZES ACCOUNTS OF MONEY LAUNDERING GANG LEADER

On 21 July, Gulf News reported that the Central Bank of Kuwait has circulated orders to all Kuwaiti and foreign banks to freeze the funds of the Iranian mastermind of a money laundering gang.

https://gulfnews.com/world/gulf/kuwait/central-bank-of-kuwait-freezes-accounts-of-money-laundering-gang-leader-1.72711008

PARIS DEALER WHO SOLD A GOLDEN SARCOPHAGUS CHARGED WITH MONEY LAUNDERING

On 20 July, the National Law Review reported that French art dealer and Mediterranean archaeology expert Christophe Kunicki has been charged with fraud and money laundering in Paris following an investigation that began after the sale of a golden sarcophagus to New York’s Metropolitan Museum for €3.5 million in 2017.

https://www.theartnewspaper.com/news/paris-dealer-who-sold-golden-sarcophagus-to-new-york-s-metropolitan-museum-charged-with-fraud-and-money-laundering

https://www.natlawreview.com/article/paris-dealer-who-sold-golden-sarcophagus-to-met-charged-money-laundering-other

OWNERS OF AN NEW YORK APARTMENT ARE BEING INVESTIGATED FOR BRIBERY AND MONEY LAUNDERING IN NAURU

On 20 July, the I Love The Upper West Side website in the US reported claims that the investigation is centred on the owners, for allegedly bribing a government official of Nauru “in exchange for access to its raw materials” (i.e. phosphates).

https://ilovetheupperwestside.com/bribery-and-money-laundering-charges-against-uws-condo-owner/

UK: ECONOMIC CRIME LEVY CONSULTATION

On 21 July, the Home Office launched a consultation on a proposal included in Budget 2020 whereby the UK government announced its intention to introduce an economic crime levy. This consultation invites views on the design principles of the levy, and how this levy could operate in practice, to ensure that it is proportionate and effective. The consultation seeks views on what the levy will pay for, how it should be calculated and distributed across the AML-regulated sector, and how the levy should be collected. The consultation closes on 14 October.

https://www.gov.uk/government/consultations/economic-crime-levy-consultation

ITALIAN AND SWISS AUTHORITIES HAVE ARRESTED 75 PEOPLE IN A JOINT RAID AGAINST ITALY’S ’NDRANGHETA MAFIA

On 21 July, Swissinfo reported that the 75 arrested are accused of mafia association, international drug trafficking, money laundering, false registration of assets, and corruption.  Authorities also seized assets worth €169 million and placed under investigation – but did not arrest – a further 83 suspects.

https://www.swissinfo.ch/eng/swiss-italo-police-operation-nets-75-mafia-suspects/45917276

RUSSIAN TYCOON WHO BOUGHT HIGHLAND CASTLE ADMITS £8 MILLION FRAUD IN MOSCOW

On 21 July, the daily Mail reported that Sergey Fedotov, 43, a Russian tycoon who bought former Rangers FC owner Craig Whyte’s Highland castle has admitted carrying out an £8 million fraud by means of a massive embezzlement while he was head of the Russian Authors’ Society, which collects royalty payments on behalf of writers.  He has already served a prison sentence for a £3.6 million property fraud which he committed while running the organisation.

https://www.dailymail.co.uk/news/article-8544479/Russian-tycoon-bought-ex-Rangers-owner-Craig-Whytes-Highland-castle-admits-8m-fraud-Moscow.html

SWISS-BASED ORGANISATION “A GEOPOLITICAL TOOL OF RUSSIA” WITH MONEY CHANNELED INTO HUMANITARIAN PROJECTS “ALMOST EXCLUSIVELY” RUN BY RUSSIAN OPERATORS

On 21 July, Swissinfo reported claims about Russian dominance of the Geneva-based International Civil Defence Organisation (ICDO).  It is claimed that $147 million of funding arrived in the organisation’s coffers from Moscow 2014-18, with money then channelled into humanitarian projects “almost exclusively” run by Russian operators.  This included sending fire engines to North Korea and Nicaragua, rescue material to Cuba, as well as projects in pro-Russia separatist regions such as Abkhazia and Ossetia.  The article notes that the ICDO was granted the legal status of an intergovernmental organisation in Switzerland in 1976 and has some 59 countries are full members, mostly states from Africa and Eurasia.

https://www.swissinfo.ch/eng/geneva-based-organisation-a-geopolitical-tool-of-russia–says-report/45917742

gold

US: A BANKRUPTCY PROBE PRIMER FOR WHITE COLLAR ATTORNEYS

Lowenstein Sandler LLP produced an article dated 28 May which is now freely available online.  It says (perhaps somewhat optimistically) that, as the US reopens, white collar defence practitioners will need to become experts in an unfamiliar area of the law: bankruptcy, warning that there will be an unprecedented number of bankruptcy filings across all sectors of the economy.  The article goes on to provide a primer on conducting investigations of pre- and post-petition conduct in bankruptcy cases and highlights certain factors that are unique in the restructuring space.

https://www.jdsupra.com/legalnews/a-bankruptcy-probe-primer-for-white-71406/

OECD PRESENTS INTERNATIONAL TAX UPDATE TO G20 FINANCE MINISTERS

On 18 July, OECD announced a report updating finance ministers on ongoing negotiations to address the tax challenges of digitalisation and on recent international tax developments.

http://www.oecd.org/tax/oecd-secretary-general-tax-report-g20-finance-ministers-july-2020.pdf

KYRGYZ COMPANIES RIGGING PUBLIC CONTRACT AUCTIONS

On 21 July, OCCRP reported that a recent investigation has found that private companies in Kyrgyzstan are illegally obtaining lucrative public procurement contracts by rigging auctions online, in some cases suggesting possible collusion with government agencies. It is said that it has been found that of the almost 17,000 entities that participate in auctions for public contracts via the Kyrgyz government’s electronic portal, more than 280 have the same founders or directors.

https://www.occrp.org/en/daily/12811-kyrgyz-companies-rigging-public-contract-auctions

THE INDIAN BAN ON CHINESE APPS: DOES IT BREACH WTO RULES?

On 21 July, Jurist carried an article asking whether the Indian ban on Chinese-developed apps violates WTO rules.

https://www.jurist.org/commentary/2020/07/raza-shekhar-india-wto-apps/

US CUSTOMS SEIZES COUNTERFEIT PROFESSIONAL SPORTS CHAMPIONSHIP RINGS

A news release from US Customs & Border Protection on 20 July advised that officers had seized 2 separate shipments of counterfeit major league sports championship rings. The seizure at JFK airport would have had a combined value of $216,000 if they were actually legitimate.

https://www.cbp.gov/newsroom/local-media-release/cbp-jfk-seizes-counterfeit-professional-sports-championship-rings

IS GUATEMALA’S NEW ANTI-CORRUPTION BODY A MERE SMOKESCREEN?

An article from Insight Crime on 21 July saying that the creation of a new anti-corruption office in Guatemala – the Secretariat against Corruption – has raised questions about whether the body will have any teeth, with former prosecutors saying that it merely hinders high-level investigations by creating more red tape.  Insight Crime’s view is that the new anti-corruption entity in Guatemala is likely to serve as a smokescreen, one that will only tie up and siphon resources away from prosecutors and judges already battered after years of fighting high-level graft. The new body follows the ousting of the successful (too successful for its own good) UN-back CICIG which helped send powerful businessmen, organised crime figures, politicians, and even presidents to jail.

https://www.insightcrime.org/news/analysis/guatemala-corruption-secretariat/

NICARAGUA POLICE SEIZING RECORD DRUG MONEY WHILE COCAINE SEIZURES FALL

On 21 July, Insight Crime reported the situation, asking how the struggling force is finding the money and where it is going after being recovered. Between 2017 and the end of June 2020, Nicaragua’s police force seized $38 million in drug money, appearing to become more efficient in doing so.  However, the police have been dogged by controversy and OFAC imposed sanctions on the entire force in March for its role in “serious human rights abuses”. Where all of the money has gone as the cash-strapped force adjusts to US sanctions also remains a mystery.

https://www.insightcrime.org/news/brief/nicaragua-police-seizing-drug-money-cocaine-seizures-fall/

SEC CHARGES CALIFORNIA-BASED TECHNOLOGY START-UP AND CEO WITH DEFRAUDING INVESTORS

A release on Mondo Visione on 21 July reported that the SEC has charged a California-based technology start-up and CEO with defrauding investors by making false and misleading statements about the company’s finances and sources of revenue. The SEC alleges that alleges that, from 2018 to 2019, Shaukat Shamim, the founder and CEO of YouPlus, a private company that purported to have developed a machine-learning tool to analyse videos on the internet, raised funds from investors while repeatedly misrepresenting the company’s financial condition.

https://mondovisione.com/media-and-resources/news/sec-charges-silicon-valley-start-up-and-ceo-with-defrauding-investors/

HOW CAN THE US RESPOND TO SCHREMS II?

On 21 July, an article in Lawfare reacts to the recent ECJ decision to overturn the EU/US Privacy Shield for data exchanges. Despite the apparent ability to rely on contract clauses, the article says that this decision, in theory, this means that the US is a privacy-inadequate nation, and any company sending personal data here may be fined under the GDPR up to 4% of gross global income. The article suggests a few potential retaliatory steps the US could take.

https://www.lawfareblog.com/how-can-us-respond-schrems-ii

DRONE VESSELS TO PATROL AUSTRALIAN WATERS

On 9 July, Drone DJ reported that Australia will soon use drones to patrol parts of its waters along the coast of New South Wales, Australia. These will be used to detect and investigate unauthorised vessels along with capturing weather data. They are equipped with sensors and radar equipment to autonomously detect illegal vessels which then relays the information back to the operating centre, when an operator takes control and moves the drone to check it out.  While out patrolling, the drones will also be used to collect data on major weather systems, specifically to identify the possibility of a cyclone, earthquake, or tsunami happening at an earlier stage.

https://dronedj.com/2020/07/09/drones-to-patrol-australian-waters-keeping-illegal-vessels-out/

REPORT IDENTIFIES STEPS TO ENHANCE CROSS-BORDER PAYMENTS

On 13 July, a news release from the Committee on Payments and Markets Infrastructure (CPMI) at the Bank for International Settlements advised that CPMI had release a report which, it says, comprehensively sets out the necessary elements to improve cross-border payments to make them faster, cheaper, more transparent and inclusive. The report sets out 19 building blocks for a global roadmap to improve cross-border payments. It forms part of a 3-stage process initiated by the G20. While improvements to technology are one piece of the puzzle, international cooperation and collaboration will be crucial to reduce cross-border frictions. The G20 has made enhancing cross-border payments a priority during the 2020 Saudi Arabian Presidency.

https://www.bis.org/press/p200713.htm

The report is at –

https://www.bis.org/cpmi/publ/d193.pdf

roadmap

US: $5 MILLION REWARD OFFERED FOR INFORMATION LEADING TO ARREST/CONVICTION OF VENEZUELAN OFFICIAL

A news release from US Immigration & Customs Enforcement on 21 July advised a $5 million reward for information leading to the arrest and/or conviction of Venezuelan national Maikel Jose Moreno Perez, 54, current Chief Justice of the Venezuelan Supreme Court. He has been charged with conspiracy to commit money laundering and money laundering in connection with the alleged corrupt receipt or intended receipt of tens of millions of dollars and bribes to illegally fix dozens of civil and criminal cases in Venezuela.

https://www.ice.gov/news/releases/5m-reward-offered-information-leading-arrest-conviction-venezuelan-official

OHIO SPEAKER ARRESTED IN $60 MILLION BRIBERY CASE

On 21 July, various media reported that the Ohio House Speaker Larry Householder had been arrested and arraigned in connection with a $60 million bribery scheme related to the $1 billion bailout of 2 nuclear power plants.  4 others arrested included his adviser Jeffrey Longstreth, lobbyist Neil Clark, former Ohio Republican Party Chairman Matthew Borges and Juan Cespedes of the Columbus consulting firm The Oxley Group.

https://www.courthousenews.com/ohio-speaker-arrested-in-60-million-bribery-case

https://www.bnnbloomberg.ca/u-s-plans-charges-in-60-million-public-corruption-in-ohio-1.1468578

FORMER GUATEMALA HEALTH MINISTER JAILED ON CORRUPTION CHARGES HAS DIED OF COMPLICATIONS RELATED TO COVID-19

On 21 July, AP reported that Jorge Villavicencio, who was arrested in December, was health minister during the administration of President Otto Pérez Molina from 2012 to 2015.

https://apnews.com/bfc033b372d0e2b43a78a201bc74d655

CALIFORNIA COMPANY AND IT CEO FACING CHARGES FOR ALLEGEDLY ATTEMPTING TO ILLEGALLY EXPORT CHEMICALS TO A CHINESE COMPANY WITH MILITARY TIES

On 21 July, AP reported that Tao Jiang, president and CEO of Broad Tech System In., has been indicted by a federal grand jury along with his company and Bohr Winn-Shih, a company equipment engineer, in connection with an alleged scheme to ship chemicals used in microchip manufacturing from Rhode Island to a company in China.

https://apnews.com/d1d3063df89c827cbf86d55b5da5b711

CANADA: COINSQUARE PENALTIES FOR MISLEADING STATEMENTS TO INVESTORS AND A REPRISAL AGAINST AN INTERNAL WHISTLEBLOWER

A release on Mondo Visione on 21 July announced that a a Panel of the Ontario Securities Commission (OSC) has approved a settlement agreement with Coinsquare Ltd, Cole Diamond, Virgile Rostand and Felix Mazer. The settlement relates to market manipulation on the Coinsquare platform, misleading statements to investors and a reprisal against an internal whistleblower.

https://mondovisione.com/media-and-resources/news/ontario-securities-commission-panel-approves-settlement-with-coinsquare-cole-di/

EXTRADITION LAW IN SELECTED COUNTRIES

Available online from Global Investigation Review is a tool that answers a selection of standard questions about a country’s extradition law and process – covering Australia, England & Wales, Germany, S Korea, India, Greece, Romania, Brazil and Switzerland.

https://globalinvestigationsreview.com/know-how/topics/1000484/extradition

 

 

 

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