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.
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.
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.
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.
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.
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.
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.
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.
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.
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”.
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.
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.
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.
The consultation is at –
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.
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.
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.
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.
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).
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
The report is at –
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.
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.
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.
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.
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.
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.
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