OTHER THINGS YOU MAY HAVE MISSED – AUGUST 26

Panama Covid-19 update – despite the announcement yesterday that restrictions are to be gradually reduced, to end effectively by 12 October (which seems in line with the reduced effect of the virus in terms of infections etc reported in the press today), the business community has called for the opening up to be speeded up…

Meanwhile, the latest daily statistics show the continuing, if gradual reductions – 701 new cases, with 23,555 currently active, of which 157 in ICU, 1,381 in others wards, 421 in hotels and the rest at home.

26 August 2020

US: THE NEW MILITARY END USE AND END USER REGULATIONS: A GUIDE FOR IDENTIFYING RISK

Kharon offers a new White paper about the US Department of Commerce Bureau of Industry and Security’s (BIS) expanded licence requirements on exports, re-exports, and transfers of items intended for military end use or military end users in China, Russia, or Venezuela. The new rule broadens the list of items covered by military end use licensing requirements and expands the definition of “military end use” to cover broader categories of activity. The rule also establishes new restrictions on exports to military end users in China. Requirements for end use and end users have been in effect since 2014 for both Russia and Venezuela, but the restrictions on China, in place since 2007, only covered end use.

end use

https://info.kharon.com/whitepapers/2020/meu

SHIPPING – INSECURITY IS ON THE RISE IN THE SOUTH CHINA SEA

An article from Windward on 5 August says that South Asian countries face piracy, and sea-borne crimes are increasing at an alarming rate.  To further complicate matters, COVID-19 has impacted the ability of companies and agencies in the maritime space to transfer crews, enter ports, perform inspections on-site, and manage routine operation.   It says that the month of May alone saw a drastic surge in organised crime in all the South Asian countries in the area; .

https://wnwd.com/blog/troubled-waters

US WON’T SEND AID TO LEBANESE GOVERNMENT OVER TERROR-FINANCE CONCERNS

The Wall Street Journal reports that the Trump administration is said to be worried humanitarian aid for Lebanon will end up in the hands of US-designated terror group Hezbollah if routed through the government in Beirut. The US shipped emergency food and medical supplies to Beirut in the wake of the blast but officials in Washington are adamant about using alternative channels for further aid to ensure its contributions aren’t used by the group.

https://www.wsj.com/articles/u-s-wont-send-aid-to-lebanese-government-over-terror-finance-concerns-11598434202

THIRD COUNTRIES ALIGN WITH EU SANCTIONS RE CRIMEA AND SEVASTOPOL

On 24 August, a news release advised that Montenegro, Albania, Iceland, Norway, Ukraine and Georgia have aligned with Council Decision 2020/850/CFSP which extends sanctions to 23 June 2021.

https://www.consilium.europa.eu/en/press/press-releases/2020/08/24/declaration-by-the-high-representative-on-behalf-of-the-eu-on-the-alignment-of-certain-countries-concerning-restrictive-measures-in-response-to-the-illegal-annexation-of-crimea-and-sevastopol/

SHIPPING: CARGO THEFT AND LIABILITY FOR THEFT PERPETRATED BY THEIR EMPLOYEES

An article from Bowmans on 26 August was concerned with a South African court case, saying that it raises interesting questions regarding the scope of liability and the degree to which carriers and logistics operators can exclude liability for theft perpetrated by their employees.  It says that many in the industry will no doubt need to revisit their own standard trading terms and conditions in light of this judgment.  In the meantime, it says that it will be interesting to see whether this case will be taken on appeal given its implications for the industry as a whole.

https://www.internationallawoffice.com/Newsletters/Shipping-Transport/South-Africa/Bowmans/Cargo-theft-and-liability-Fujitsu-v-Schenker

UK: NCA SEIZES HOUSES, FLATS AND GYM FROM GANG

On 26 August, KYC 360 reported that the NCA has seized 59 properties worth a total of £17 million from an organised crime group with links to the drug trade.  It is said that the investigation took more than 8 years, dismantling the network of properties, the majority of which are in Birmingham and were used for money laundering and to hide criminal funds.

https://www.riskscreen.com/kyc360/news/uk-national-crime-agency-seizes-houses-flats-and-gym-from-gang

https://www.nationalcrimeagency.gov.uk/news/eight-year-nca-investigation-denies-organised-crime-group-17-million-property-portfolio?src=ilaw

TURKEY’S NATURAL GAS STRATEGY

On 26 August, War on the Rocks published a Commentary saying that looking at how Turkey reacts to the gas policies of Russia and the US might just help analysts better understand its gas strategy and wider foreign policy.  It refers to the incomplete TurkStream 2, liable like Nordstream 2 to US sanctions, which seeks to send Russian gas to south-eastern Europe. (TurkStream 1, which sends Russian gas to Turkey and minor flows to Bulgaria, Greece, and North Macedonia.  There is also the Trans-Anatolian Pipeline, which brings Azeri gas through Turkey to the Trans-Adriatic Pipeline in Greece and could be expanded to include supplies from other countries, including Iraqi Kurdistan, Israel, and Turkmenistan, and Canal Istanbul  between the Sea of Marmara and the Black Sea, as well as the activity off Cyprus.

https://warontherocks.com/2020/08/pulling-back-the-curtain-on-turkeys-natural-gas-strategy

TAIWAN: OVER 5 MILLION PACKS OF SMUGGLED CIGARETTES SEIZED IN TAICHUNG HARBOR

On 26 August, the Taiwan Times reported that Taiwan’s Coast Guard has seized 5,525,000 packs of smuggled cigarettes with a market value of more than US$16.7 million from a foreign cargo ship in Taichung Harbor, the largest seizure of its kind in the port’s history. It is also said that that there were more than 20 Indonesian and Chinese crew members on the ship, and apparently 8 of the Indonesians wanted to disembark after they found out they had been working aboard a smuggling vessel. However, the captain, who is Taiwanese, forbade them, withholding 2 months’ wages.

https://www.taiwannews.com.tw/en/news/3995552

CHINESE CUSTOMS SEIZE OVER 10,000 SMUGGLED GEMSTONES

On 26 August, Xinhua reported that Customs seized over 10,000 smuggled gemstones in an inbound flight from Bangkok, including sapphire, ruby and garnet, hidden in the suitcase of a passenger and weighing more than 13.5 kg.

http://www.xinhuanet.com/english/2020-08/26/c_139319580.htm

RUSSIA: COMPANIES FROM OVERSEAS INVITED TO RELOCATE TO SPECIAL ZONES IN THE COUNTRY

On 26 August, Pledge Times reported that the Russian Ministry of Economic Development has offered foreign businesses in “unreliable” countries on international blacklists to relocate to special administrative regions of the so-called Russian offshores – on the Russky and Oktyabrsky islands, the department told Izvestia. The Special Administrative Regions are territories with preferential tax treatment for investors, created in 2018 to repatriate capital and protect businesses from sanctions.

https://pledgetimes.com/very-nice-cap-companies-from-questionable-jurisdictions-have-been-invited-to-russia/

US FLIRTATION WITH ‘TECHNONATIONALISM’ MEANS TROUBLE FOR THE WORLD

A commentary from the Japan Times on 26 August is concerned with the modification of US export controls and the Trump administration’s equation of national security with economic security.  It says that the Trump administration has embraced technology controls with a “worrying” enthusiasm, especially in its escalating conflict with China. It has imposed sanctions against Chinese tech companies, like telecommunications giant Huawei, denying them access to US markets and technology, and demanding that US allies and partners do the same.  The article says that it looks like sanctions are the cure for most of the country’s economic problems. Job losses? Sanctions. Intellectual property theft? Sanctions. Persistent trade imbalances? Sanctions. Richard Haas, president of the US Council on Foreign Relations, calls it “sanctions madness”.  The Trump administration is guided by the belief that “economic security is national security” and has dispensed with the previous military focus of technology controls and is now intent on denying access to technology that it considers important to economic development, regardless of its application. This, it is said, is a radical reorientation of US policy and a foundational shift in thinking about national security.

https://www.japantimes.co.jp/opinion/2020/08/26/commentary/japan-commentary/us-technonationalism-trade/#.X0ZkkX6SmM8

AUSTRALIA: COMMONWEALTH BANK SAYS AUSTRAC WON’T TAKE ACTION OVER MONEY LAUNDERING CASE

On 26 August, NASDAQ reported that the Commonwealth Bank of Australia says that the country’s corporate regulator will not take any action against the bank or its directors over a high-profile 2017 case of breaches of AML laws.  The bank paid a A$700 million penalty in 2018 but it is said that no further enforcement action would be taken against the bank or its directors and officers over disclosures or their conduct following a board shake-up and retirement of the CEO.

https://www.nasdaq.com/articles/australias-commonwealth-bank-says-regulator-wont-take-action-over-money-laundering-case

NEW MAJOR CRACKDOWN ON ONE OF THE BIGGEST ONLINE PIRACY GROUPS IN THE WORLD

A news release from Eurojust announced that an alleged criminal network of copyright infringing hackers, mainly responsible for pirating movies and hosting illegal digital contents worldwide, was dismantled yesterday in a coordinated action between US authorities and their counterparts in 18 countries around the world, with Eurojust and Europol support. Over 60 servers were taken down in North America, Europe and Asia and several of the main suspects were arrested.  The ‘Sparks Group’ dismantled yesterday was one of the biggest ones in the world responsible for online piracy. By deceiving the legal distributors with fraudulent reasoning, they obtained legal copies of DVD and Blu-Ray disks of blockbuster movies, TV shows, and other content.

http://www.eurojust.europa.eu/press/PressReleases/Pages/2020/2020-08-26.aspx

BANK OF MAURITIUS REVOKES BANKING LICENCE OF CENTURY BANKING CORPORATION (CBC)

On 26 August, Africa Business Communities reported that, despite numerous warnings from the Bank, CBC has failed to remedy several breaches of the banking laws relating to capital requirement, internal control systems, compliance with AML/CFT requirements and record-keeping obligations.

https://africabusinesscommunities.com/news/bank-of-mauritius-revokes-banking-licence-of-century-banking-corporation

BELARUS LEADER AMONG 118 ON LITHUANIA’S SANCTIONS LIST

On 26 August, ABC News reported that Lithuania proposed its own sanctions list of those it holds responsible for vote-rigging and violence against peaceful protesters. It has listed 118 individuals suspected of involvement in brutal crackdowns on protesters demanding Lukashenko’s resignation – 30 of them are suspected of vote-rigging in Belarus.

https://abcnews.go.com/International/wireStory/belarus-leader-118-lithuanias-sanctions-list-72620665

BULGARIAN JUSTICE MINISTER RESIGNS AMID ANTI-GRAFT PROTESTS

On 26 August, Reuters reported that Bulgaria’s Justice Minister Danail Kirilov has tendered his resignation amid criticism of his efforts to stem corruption. Bulgaria ranked as the most corrupt state in the EU according to anti-graft think-tank Transparency International.

https://uk.reuters.com/article/uk-bulgaria-government-minister/bulgarian-justice-minister-resigns-amid-anti-graft-protests-idUKKBN25M1L0

GHANAIAN CITIZEN EXTRADITED TO USIN CONNECTION WITH PROSECUTION OF AFRICA-BASED CYBERCRIME AND BUSINESS EMAIL COMPROMISE (BEC) CONSPIRACY

On 26 August, a news release from US DoJ advised that Maxwell Peter, 27, (aka Maxwell Atugba Abayeta), and others allegedly conspired to commit wire fraud, wire fraud, conspiracy to commit money laundering, conspiracy to commit computer fraud and aggravated identity theft.  The indictment alleges that various Africa-based co-conspirators committed, or caused to be committed, a series of intrusions into the servers and email systems of a Memphis-based real estate company in June and July 2016, using sophisticated anonymization techniques, including the use of spoofed email addresses and VPN, and then redirected closing funds through a network of US-based money mules to final destinations in Africa.

https://www.justice.gov/opa/pr/ghanaian-citizen-extradited-connection-prosecution-africa-based-cybercrime-and-business-email

EDINBURGH BUSINESSMAN ON FBI’S MOST WANTED LIST ADMITS LUXURY CAR SCAM

On 26 August, Edinburgh Live reported that Afzal Khan, 38, a Scots-born businessman who was on the FBI’s Most Wanted list after going on the run for 5 years has admitted carrying out a £420,000 luxury car scam. He handed himself into authorities in the UAE in February and extradited to the US and has now admitted a massive fraud involving super cars including Lamborghinis, Porsches and Rolls Royce.

https://www.edinburghlive.co.uk/news/edinburgh-news/edinburgh-businessman-fbis-most-wanted-18829860

NEW DEA RULE CREATES MORE UNCERTAINTY FOR LEGALITY OF CBD EXTRACTS

An article from Wilson Elser on 26 August was concerned with an interim final rule that may have far-reaching consequences for the entire hemp and CBD industry and which has already been the subject of criticism from the industry.  It says that although seemingly innocuous at first glance, this clarification involved may potentially create a profound practical obstacle to the legal manufacturing of most hemp-derived CBD products.

https://www.jdsupra.com/legalnews/new-dea-rule-creates-more-uncertainty-47851/

CHINA ANNOUNCES TRAVEL BLACKLIST TO STOP OVERSEAS GAMBLING TRIPS

On 26 August, Calvin Ayre reported that the Ministry of Culture and Tourism has announced a “blacklist” of overseas tourist destinations, focused on countries that promote gambling tourism for Chinese nationals.  The blacklist seeks to impose travel restrictions on Chinese citizens, potentially blocking their ability to travel to casino destinations.

https://calvinayre.com/2020/08/26/business/lovell-walker-takes-us-behind-the-esports-curtain-video/

UKRAINE’S RICHEST OLIGARCH RECEIVED $21 MILLION IN US BUSINESS LOANS

On 26 August, OCCRP reported that an independent government watchdog revealed that businesses belonging to Rinat Akhmetov, a Ukrainian billionaire linked to Russian interference in US elections, received a total of $21 million in small business loans from the US government through the CARES Act stimulus Bill to help small businesses maintain their payrolls and other costs

https://www.occrp.org/en/daily/13014-ukraine-s-richest-oligarch-received-21-million-in-us-business-loans

MASTERMINDS RUNNING ONE OF GERMANY’S LARGEST ILLEGAL TOBACCO FACTORY ARRESTED

On 26 August, a news release from Europol advised that 12 individuals who ran one of Germany’s largest illegal tobacco factory have been arrested in Kranenburg located near the border with the Netherlands. The illegal factory could produce 10 million cigarettes per week. This is only the fourth such illicit production facility uncovered on the German territory and undoubtedly one of the largest. The estimated tax loss to the German state revenue for the illegal production alone stands at approximately €1.5 million per week.

https://www.europol.europa.eu/newsroom/news/masterminds-running-one-of-germany%E2%80%99s-largest-illegal-tobacco-factory-arrested

A NEW ERA FOR THE TENNIS INTEGRITY UNIT

On 26 August, Control Risks published a podcast about the Tennis Integrity Unit (TIU), the anti-corruption body for all professional tennis played around the world.  This is following a review in 2016, which included over 200 recommendations aimed primarily at preventing and sanctioning corruption in response to an increase in online betting that has recharged incentives for foul play in sport.

https://www.controlrisks.com/our-thinking/podcasts/in-focus-channel/a-new-era-for-the-tennis-integrity-unit

CORRUPTION CHARGES AT VENEZUELA’S US OIL SUBSIDIARY FUEL TENSIONS

On 25 August, Insight Crime reported that both Venezuela and the US are advancing legal cases against former officials from Citgo, a subsidiary of Venezuelan state oil company PdVSA, signalling that longstanding accusations of corruption at the company may finally be coming to a head.  The US investigation implicates US companies, Venezuelan officials and even a former Florida congressman.  The article provides a primer on the cross-cutting corruption investigations against the company’s senior executives.

https://www.insightcrime.org/news/analysis/corruption-charges-venezuela-oil-subsidiary-fuel-tensions/

DO YOU KNOW IF ANY PRODUCTS SUPPLIED TO EU/EEA CONTAIN ANY “SUBSTANCE OF VERY HIGH CONCERN”?

An article from Eversheds Sutherland on 26 August posed this question following the most recent update of the list of such substances on 25 June.  It is described as a timely reminder for EU/EEA suppliers of products (such as shoes, furniture, clothing etc.) of their obligations where a Substance of Very High Concern (SVHC) is present in any product above 0.1% weight by weight.  The list is generally updated in June/July and in December/January so it is important to monitor the list to ensure that all relevant substances are identified. The list currently comprises 209 SVHC.  An SVHC is a chemical substance (or part of a group of chemical substances) subject to authorisation under the EU’s REACH Regulation and listed by the European Chemicals Agency (ECHA)

https://www.eversheds-sutherland.com/global/en/what/articles/index.page?ArticleID=en/Diversified-industrials/Do_you_supply_products_into_the_EU_EEA

HONG KONG: SFC HAS BANNED TS’O JING, A FORMER RELATIONSHIP MANAGER OF CITIC, FROM RE-ENTERING THE INDUSTRY FOR LIFE FOLLOWING HIS CONVICTION FOR FRAUD 

A release on Mondo Visione on 26 August advised that the Securities and Futures Commission has banned Mr TS’O Jing, a former relationship manager of China Citic Bank International Limited (CITIC), from re-entering the industry for life following his conviction for fraud.

https://mondovisione.com/media-and-resources/news/hong-kong-securities-and-futures-commission-bans-tso-jing-for-life/

BEIRUT BLAST ECHOES TEXAS CITY CATASTROPHE

On 26 August, American Shipper carried an article reflecting on the 1947 explosion involving ammonium nitrate, with the blast felt 150 miles away and earthquake seismograph needles jumped more than 1,000 miles away.  More than 600 people died and thousands were injured.

https://www.freightwaves.com/news/maritime-history-notes-beirut-blast-echoes-texas-city-catastrophe

US: EMPLOYEE PLEADS GUILTY TO STEALING $7 MILLION FROM MARINE CARGO COMPANY

On 26 August, American Shipper reported that an employee responsible for overseeing the finances of a US Gulf Coast shipping company specialising in heavy-lift cargo pleaded guilty to embezzling over $7 million and making false statements on a federal income tax return.  He admitted he used his authority to pay himself excessive salaries and benefits from 2009 through early 2019.

https://www.freightwaves.com/news/employee-pleads-guilty-to-stealing-7m-from-marine-cargo-company

GLOBAL COALITION TO FIGHT FINANCIAL CRIME STRONGLY WELCOMES THE EUROPEAN COMMISSION ACTION PLAN TO FIGHT MONEY LAUNDERING AND TERRORIST FINANCING

On 26 August, a news release from the Coalition said that, in particular, it welcomes the Action Plan’s recognition of the role of public private partnerships and the value of information-sharing which the Coalition has been promoting in recent years.

https://www.gcffc.org/press-release-statement-on-the-european-commission-aml-action-plan/

CONTINUED DETERIORATION OF US-CHINA ECONOMIC RELATIONS: AN UPDATE

On 25 August, Veneable.com published a briefing article which says that there are 2 main takeaways – the current administration is implementing a full-court press on China and tapping all pressure points at its disposal as part of the effort — and it is showing no signs of fatigue (if anything, it is increasing the pressure); and, these actions have a wide-ranging impact on business that likely will influence the relationship for decades to come.

https://www.venable.com/-/media/files/publications/2020/08/continued-deterioration-of-us-china-economic-relat.pdf

PODCAST: LAUNDERING LOOTED FUNDS THROUGH AFRICAN REAL ESTATE

In the latest TRACE podcast, Hilary Mossberg, Director of Illicit Finance Policy at The Sentry, discusses the relatively new trend of African kleptocrats and war criminals laundering money through real estate in African cities, rather than some of the more traditional choices like London, Miami and New York.

https://traceinternational.org/resources-podcast

3 TEXANS AND 1 NEW YORKER INDICTED FOR CONSPIRACY TO SELL SANCTIONED IRANIAN PETROLEUM TO REFINERY IN CHINA

A news release from the US DoJ on 26 August announced charges against 4 men for violating the International Emergency Economic Powers Act (IEEPA), and money laundering conspiracy based on their attempt to transact in sanctioned Iranian petroleum.  It is alleged that  the defendants conspired to arrange for the purchase of petroleum from Iran, in violation of US economic sanctions imposed on Iran, for sale to a refinery in the People’s Republic of China.  They also allegedly conspired to launder the proceeds of the sale through shell entities and offshore financial accounts to disguise the nature of the transaction.

https://www.justice.gov/opa/pr/three-texans-one-new-yorker-indicted-conspiracy-sell-sanctioned-iranian-petroleum-refinery

US: GAO PUBLISHES REPORT ON EFFECTIVENESS OF REAL ESTATE GTO ISSUED BY FinCEN

On 26 August, a post from Ballard Spahr was concerned with  the US Government Accountability Office having issued a report on the status and effectiveness of the Geographic Targeting Orders issued by FinCEN since 2016.  The post focuses on how law enforcement using the information culled from filings received by FinCEN as a result of the GTO; and whether the information obtained from GTO fillings may fuel legislation or regulations that will permanently subject portions of the real estate industry to AML reporting requirements.  The post reminds one of the background and purpose of GTO.

GTO1

GTO2

https://www.jdsupra.com/legalnews/gao-publishes-report-on-effectiveness-16121/

courier

https://www.cityoflondon.police.uk/news/city-of-london/news/2020/august/press-releases/uk-police-forces-reach-100-criminals-arrested-for-evil-fraud-targeting-the-elderly/

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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