Panama Covid-19 update – took a lovely close-up photo of a locust this morning as I went for a walk – that would be just great, I thought, on top of everything, a plague of locusts…meanwhile, the news on the coronavirus front remains cautiously optimistic; although 570 new cases take the grand total to date to 93,552 – but with the great majority now recovered. There were 16 additional fatalities, giving a total of 2,018 to date, but far less than in past weeks. Slightly worrying is that ICU occupancy has crept up, and currently stands at 168.
1 September 2020
IMPORTATION AND LOCAL USE OF ENCRYPTION-BASED PRODUCTS IN RUSSIA AND THE EURASIAN ECONOMIC UNION
Baker McKenzie has published a brief which features FAQ on importation and local use of encryption-based products in Russia and the Eurasian Economic Union. The importation and exportation of encryption-based products in Russia is subject to import/export encryption clearance requirements set at the supranational level of the Eurasian Economic Union (EAEU).
MINSK VOWS PROPORTIONAL RESPONSE TO BALTIC COUNTRIES’ SANCTIONS
On 1 September, ERR in Estonia reported that the Belarus foreign ministry said that the Belarusian government will take appropriate measures in response to the sanctions imposed on a number of high-ranking Belarusian officials by the Baltic countries.
US: 4 EMPLOYEES OF FAILED BANK CHARGED WITH $29 MILLION EMBEZZLEMENT CONSPIRACY
The Chicago Sun Times on 28 August reported that the bank president was found hanged in the home of a customer, and now 4 employees have been charged with helping Chicago attorney Robert M. Kowalski and “higher-ranking bank officials” embezzle at least $29 million before federal regulators closed the Washington Federal Bank for Savings.
CHINA MUST REFORM FINANCIAL MARKETS TO WARD OFF US FINANCIAL SANCTIONS
An article in the South China Morning Post on 1 September reported that a think tank, China Finance 40 Forum group of senior Chinese regulatory officials and financial experts, called for more cooperation with US to avoid escalation of bilateral conflict. China should make its own financial markets big enough and open enough to foil any attempt by the US to decouple financially, according to a semi-official Chinese research group.
COVID CORRUPTION IS RIFE IN SOUTH AFRICA – NEW £470 MILLION CORRUPTION SCANDAL
On 1 September, KYC 360 reported that a fresh corruption scandal linked to the allocation of at least half of the £470 million earmarked for emergency Covid relief has sparked a wave of anger among South Africans who are still punch-drunk after years of state-sponsored looting. Under suspicion are government departments, municipalities and figures connected to the senior ranks of the ruling ANC.
PODCAST: RUSSIA IN THE MIDDLE EAST: PART 1
On 1 September, the Center for Strategic and International Studies released a podcast, the first episode of a new narrative podcast miniseries, Russia in the Middle East. Jon Alterman gives an overview of Russian policy in the Middle East and how the Middle East fits into Russia’s worldview. He covers Russia’s return to the Middle East and looks at how Russian foreign policy has changed since the fall of the Soviet Union. He also sits down with Dmitri Trenin, director of Carnegie’s Moscow Center, and Celeste Wallander, president and CEO of the U.S.-Russia Foundation, for their insight into Russia’s foreign policy decisions.
UAE BECOMES THE FIRST ARAB COUNTRY TO OPERATE A NUCLEAR POWER PLANT
On 1 September, the Arms Control Association reported that, on 1 August, the UAE became the first Arab country to operate a nuclear power plant when officials announced that the first of 4 planned reactors at the Barakah nuclear power station achieved criticality by completing a sustained fission reaction. Once all 4 units at the Barakah plant are operational, nuclear power will account for a quarter of the country’s electricity and reduce the nation’s reliance on oil and gas.
US REINTERPRETS MTCR EXPORT RULES TO BOOST EXPORTS
On 1 September, the Arms Control Association reported on the 24 July announcement that the US would unilaterally reinterpret how it will implement the 35-nation Missile Technology Control Regime (MTCR) in order to expedite sales of unmanned aerial vehicles (UAV) to other countries. The move, which has been widely expected for some time, follows years of lobbying from major US weapons manufacturers to allow more rapid export of large drones to a wider array of potential buyers.
CHINA PUTS A SPANNER IN TIKTOK SALE NEGOTIATIONS BY IMPOSING AI EXPORT RESTRICTIONS
On 1 September, Computing and others reported that China government has introduced new rules on the export of AI technologies, making it mandatory for ByteDance to receive approval before selling the US operations of its TikTok app to a US company.
THE ISRAEL-AZERBAIJAN PARTNERSHIP
On 1 September, Eurasia Review carried an article which examined the relationship between Israel and Azerbaijan, as the latter is engaged in further conflict with neighbouring Armenia, while noting that Israel is not a direct participant, but it enjoys close relations with both combatants. Israel is a major arms supplier to Azerbaijan, including UAV. It mentions a hiccup when an export licence was cancelled after an Israeli “suicide” drone attacked an Armenian target. After recent fighting in July, Armenia showcased alleged Israeli-made drones that it presumably shot down during the fighting. It also notes that there are also weaknesses to the bilateral relations. As Azerbaijan experiences geopolitical pressure from Russia and Iran.
NORTH KOREAN SANCTIONS ENFORCEMENT IN SUB-SAHARAN AFRICA
On 1 September, Just Security carried an article which starts with recent reports of North Korean evading sanctions with bank accounts in DRC, remarking on North Korean agents seeming to have an ever-evolving ability to come up with sanctions-busting tactics. Despite multinational banks efforts, at the regional and local level in sub-Saharan Africa, active compliance in the banking sector is constrained by the lack of capacity and regulatory support, as well as by meddling from corrupt political leaders and their associates – even if local regulation, while poorly enforced, does require banks to ask for incorporation and identity documents from companies and individuals looking to create accounts. It calls on international organisations like the UN, FATF, IMF etc to play a stronger role in building capacity and assisting countries in sub-Saharan Africa in creating a more robust and independent regulatory and compliance environment. It suggests providing technical assistance to regulatory bodies, sharing intelligence and information where appropriate, and providing guidance on how to create adequate frameworks that close money laundering and sanctions-evasion loopholes and allow for empowered, independent regulatory bodies – while preventing the latter from being reduced to paper tigers, beset by meddling from corrupt actors, with little operational funding or support for existing technocrats.
HONG KONG POLICE ARREST 3 MORE IN LATEST SWOOP LINKED TO PET-SMUGGLING RACKET
On 1 September, the South China Morning Post reported that police have swooped on animal facilities in Kowloon and New Territories during operation targeting those illegally transporting animals, this coming after crates of dead cats and dogs found washed up on Hong Kong beaches. It is thought that pet owners had entrusted agents to ship their animals from overseas to the China mainland via the entrepot of Hong Kong after completing studies or postings abroad.
SRI LANKA: NAVY SEIZES MORE TURMERIC SMUGGLED FROM INDIA
On 1 September, The Island Online reported that naval operations 29 August had led to the recovery of about 1,428 kg of dried turmeric smuggled into the country by sea. It says that naval operations since 28 July have led to recovery of 12,270 kg of dried turmeric smuggled into the country, with 25 suspects involved in turmeric rackets have also been detained during these operations.
BERMUDA TO LAUNCH NEW STABLECOIN
On 1 September, Cryptonews reported that the government of Bermuda has teamed up with a stablecoin platform to launch a test pilot programme for a stablecoin, which the territory calls a “digital stimulus token”, allowing purchases of food and other essential products, as well as services from participating merchants and retailers. Local authorities hope the initiative could help remove some of the challenges and costs associated with local payment options.
CENTURY BANKING CORPORATION (CBC) ISLAMIC BANK IN MAURITIUS LOSES LICENCE OVER 1MDB LINK
On 1 September, Free Malaysia Today reported that Mauritius’ first Islamic bank was reported to have had its licence revoked by the country’s central bank after FBI investigations pointed to links to money laundering involving 1MDB funds.
MAURITIUS EAGER TO REMOVE THE COUNTRY FROM THE EUROPEAN COMMISSION BLACKLIST
On 1 September, CAJ News Africa reported that the government is eager to remove the country from the EU blacklist as well as create highly effective AML/CFT regime. It says that recently, the Financial Services Institute, the Global Finance Mauritius and the Human Resource Development Council recently organised a training initiative focused on a risk-based approach to AML/CFT. The EU placed Mauritius on its list of high-risk countries with strategic deficiencies in their AML/CFT frameworks in May.
EU TO LAUNCH RAW MATERIALS INDUSTRY ALLIANCE
On 1 September, EurActiv reported that the European Commission is to announce the launch of a new industry alliance, with a view to building a complete EU supply chain for raw materials like lithium, which are seen as critical for the bloc’s digital and green transitions. The industry alliance will focus on metals and rare earths which are used to build magnets for batteries and all kinds of electric and electronic devices.
UK: DISGUISED REMUNERATION: TAX AVOIDANCE BY OWNER MANAGED COMPANIES USING REMUNERATION TRUSTS
On 1 September, HMRC issued Spotlight 56 concerned with an opinion on a case involving disguised remuneration, where a company rewarded its director using loans made through a remuneration trust. The company claimed a tax deduction for its contributions to the trust and both the company and its director claimed that the loans were tax-free. The opinion said that HMRC’s view was correct in considering that entering into and carrying out such arrangements was not a reasonable course of action. HMRC views these arrangements as tax avoidance and will challenge anyone operating such arrangements and investigate the tax affairs of all users.
SAUDI ARABIA SACKS MILITARY LEADER AMID CORRUPTION PROBE
On 1 September, Deutsche Welle reported that a probe into corruption at the Defense Ministry has led to the sacking of a senior military commander and his son. The Saudi military commander leading the kingdom’s war in Yemen was removed from his position and placed under investigation along with his son and other ministry officers.
SEVERAL ARRESTS MADE IN ARMENIA RACKETEERING TRAVEL FRAUD INVOLVING 50 IRANIANS
Armenpress on 1 September reported that several members of an organised crime syndicate consisting of Armenians and Iranians are under arrest for racketeering and defrauding around 50 citizens of Iran in a travel fraud. It is said that 2 Iranian citizens recruited their 50 countrymen and transported them to Armenia under the pretext of organizing their further travel to European countries.
SEYCHELLES GOVERNMENT HAS LAUNCHED A 3-YEAR PROGRAMME TO TIGHTEN UP ITS AML LEGISLATION
STEP reported on 1 September that the National Anti-Money Laundering and Countering the Financing of Terrorism Strategy 2020-23 aims to ‘address deficiencies highlighted by international bodies and jurisdictions in recent times’. The first set of reforms, namely the new AML/CFT Act 2020 (the AML Act) and the Beneficial Ownership Act 2020 (BOA), were enacted in March this year and have now come into force.
US: 6 INDICTED IN MONEY LAUNDERING SCHEMES TIED TO NIGERIAN SCAMS
A news release from the US DoJ on 31 August advised the charging of 6 individuals with allegedly laundering millions of dollars gained through multi-faceted fraud schemes run out of Nigeria, primarily targeting elderly US citizens. It is alleged that dozens of victims were befriended by scammers feigning romantic intentions through online social media platforms and dating sites. Scammers used the relationships and trust they built to convince victims to provide them with money to assist with business ventures or debt. Other victims were allegedly convinced by Nigerian scammers that they had won a sweepstakes.
UK CONFORMITY ASSESSMENT BODIES: CHANGE OF STATUS FROM 1 JANUARY
Another news release from the Department of Business, Energy and Industrial Strategy on 1 September advised that from 1 January any mandatory third-party conformity assessment for the EU market will need to be carried out by an EU-recognised conformity assessment body. This includes both EU based bodies and bodies in countries with which the EU has concluded a mutual recognition agreement. UK conformity assessment bodies will no longer be able to carry out mandatory conformity assessment for products being placed on the EU market unless agreed in negotiations. In addition, there will be a domestic legal framework that will allow UK conformity assessment bodies to continue operating for most products being placed on the GB market. Note the use of “GB”, not “UK”, as goods placed on the market in Northern Ireland will not qualify for UK-only markings, such as the new “UKCA”.
NEXT STEPS OUTLINED FOR UK’S USE OF DIGITAL IDENTITY
A news release from the Department of Digital, Culture, Media and Sport on 1 September is concerned with ongoing plans to enable the use of digital identity across the UK, with plans to update existing laws and a new set of guiding principles for policy development. It says that, increasingly people are required to prove their identity to access services, whether it is to buy age-restricted items on and offline or make it easier to register at a new GP surgery, and the UK government plans to update existing laws on identity checking to enable digital identity to be used as widely as possible. A new government Digital Identity Strategy Board has also developed 6 principles to strengthen digital identity delivery and policy in the UK.
UK: HOW TO COMPLY WITH REACH CHEMICAL REGULATIONS FROM 1 JANUARY
A further news release concerned with changes brought about as a result of Brexit has been published by the Department for Environment, Food and Rural Affairs on 1 September. It says that UK REACH, the UK’s independent chemicals regulatory framework, starts on 1 January, and that anyone making, selling or distributing chemicals in the UK and the EU needs to follow UK REACH and/or EU REACH rules. Needless to say, this seems like another case of regulation duplication brought about by Brexit, with many (if not all) users likely to have to comply with EU rules regardless, even if (as seems possible, if unlikely) UK-only rules diverge.
INTERPOL BLUE NOTICES
On 1 September, Estlund Law published an article explaining the purpose of an Interpol Blue Notice, which are notices to locate people who have not been charged with a crime. Member countries might request a Blue Notice, for example, in hopes of locating a witness to a crime, or people related to an alleged offender.
DUE DILIGENCE FOR POTENTIAL INVESTORS IN US CANNABIS BUSINESSES
On 1 September, an article from Rivkin Radler, Attorneys at Law, is concerned with what a potential investor needs to know about conducting due diligence in respect of a cannabis business, including understanding how the bankruptcy law applies to cannabis companies. It says that the need for due diligence is no less important for investors seeking to get involved in a cannabis company and those seeking to create one – and may, in fact, be even more necessary – than when examining a more traditional entity for investment purposes.
MACAU’S VIP GAMBLING CRUNCH PROVIDES NEW OPPORTUNITIES FOR SCAMMERS
On 1 September, Calvin Ayre reported that the struggling VIP casino gambling market is still providing opportunities for criminal scammers. There were a total of 4,691 criminal investigations opened during the first half of 2020, nearly one-third fewer than the first half of 2019. However, it says that fraud remains an ever-present threat, such as in the arrest of 4 individuals suspected of purchasing US$1.37 million worth of casino chips from a local resident using ‘practice’ bank notes that are used to train bank tellers and cashiers but are worthless.
US CUSTOMS SEIZES 440 lb OF KHAT HEADED TO CANADA
A news release from US Customs & Border Protection on 1 September advised that officers seized more than 440 lb of Khat during evening operations at the Ambassador Bridge into Canada, in removal boxes in a commercial truck.
AN OVERVIEW OF THE COUNTERFEIT COSMETICS INDUSTRY
On 31 August, Sayari published an article which says that the rapid expansion of counterfeit cosmetics internationally and in the US poses a public health risk for consumers and threatens the bottom lines of countless make-up companies. The value of the cosmetics industry is expected to reach $805 billion by 2022. Looking at recent cases, it says that counterfeit make-up seizures in the US and abroad are becoming alarmingly common. It says that the counterfeit side continues to grow, and since 2013, the international counterfeit make-up trade has steadily increased and was estimated to be worth $5.4 billion in 2016, according to the OECD. As well as the economic effects, fraudulent cosmetics have been found to contain known carcinogens such as arsenic, beryllium, and cadmium; others have exhibited high levels of toxic heavy metals like lead and mercury. It says that he growth in counterfeit make-up products is further exacerbated by the proliferation of online third-party marketplaces.
UAE MAKES IT MANDATORY FOR HAWALA SERVICE PROVIDERS TO REGISTER
On 1 September, the Khaleej Times reported that the UAE has made it mandatory for Hawala service providers in the country to register, as the country strengthens its AML/CFT framework. It explains that Hawala, or hundi, is an unofficial and informal channel to transfer money mainly used among South Asians.
COVID-19 AND COCAINE
A paper from Dr Anna Sergi of the University of Essex says that early data suggests that the cocaine trade appears to have weathered the Covid-19 pandemic. She examined trends in cocaine trafficking under lockdown for Jane’s Intelligence Review, HIS. It seems that the pre-Covid trend for increased numbers of postal deliveries has increased further, and that the post-Covid economic situation could lead more farmers to produce coca plants.
CREW KIDNAPPED OFF BENIN IN JULY ARE RELEASED
On 1 September, Insurance Marine News reported that 13 crew members (7 Russian, 6 Ukrainian) kidnapped from a chemical/oil products tanker in the Gulf of Guinea in July, have been released. All are said to be safe and well.
NEW RULES AND TOOLS FOR “AGGRESSIVE” ENFORCEMENT OF ANTI-DUMPING AND COUNTERVEILING DUTY PROPOSED IN US
On 1 September, Venables published an article reporting that a revamped framework for anti-dumping duty (ADD) and countervailing duty (CVD) investigations is in the works at the Department of Commerce. Comments on the proposed Rule involved are due by 14 September.
AN INSIDE LOOK AT THE MODUS OPERANDI OF HEZBOLLAH’S ISLAMIC JIHAD ORGANIZATION
This paper from the Washington Institute on 1 September says that many details regarding the modus operandi of the group’s external terrorist operations wing are being made public for the first time, including communications techniques, travel patterns, training programs, pay scale, and more. It says that revelations from recent — along with those involving operatives in Thailand and Peru — illustrate Hezbollah’s external operations modus operandi, senior handlers, communications techniques, travel patterns, terrorist training, and even limited information about the pay scale for operatives.
UNDERSTANDING CUSTOMS BONDS
On 27 August, Global Trade Magazine published an article asking what does such a bond in the US actually entail? Why must you even have a customs bond? And which one should you get? The article sets out to answer these questions.