Panama Covid-19 update – the charity lottery will return on 18 October (I wonder how many of the ladies who sold the tickets succumbed to the virus?). More good news is that a report from the Pan American Health Organization (PAHO) that Panama is entering a phase of deceleration of infections.
Infections may be decelerating, but there were still 673 new cases reported today, and 11 new fatalities (2,127 to date). 25,385 active cases include 135 in ICU, 1,142 in other wards and 398 in the hotel rooms.
10 September 2020
WEBINAR: CLOUD COMPUTING AND EXPORT CONTROLS
On 9 September, another training webinar from the UK Customs Academy on the subject of software and technology stored or accessed using cloud services (a form of “intangible exports”) which are subject to export controls and those using or providing these services have various potential licensing obligations to be aware of. The webinar covers the controls and licences that apply to users of the cloud, including –
An overview of Cloud Computing: what it is, how it is structured, what does it offer?
Which export control regulations apply – US, UK, EU?
What requirements and constraints do the regulations place upon users?
What are the best practices that should be applied when using Cloud Computing solutions?
CREDIT SUISSE WINS BID TO KEEP MONEY LAUNDERING REPORT SECRET
On 10 September, KYC 360 reported that a Swiss court had issued a suspension order late last month to temporarily keep the 2-year-old report by Switzerland’s financial regulator under wraps. The report is into how it failed to prevent fraud and money laundering by one of its former star bankers, Patrice Lescaudron. Lescaudron was arrested in 2015 and subsequently convicted in 2018.
JIHADISTS NET $140 MILLION FROM BURKINA GOLD MINE RAIDS
On 5 September, Barron carried an AFP report that jihadists have made $140 million from attacks on gold mines in Burkina Faso since 2016, equivalent to roughly one third of the state’s entire revenue.
FIGHTING ORGANISED CRIME IN SPORTS
On 21 august, Refinitiv published an article in the wake of a recent Europol report and saying that corruption, especially match-fixing, is often of poly-criminal nature. This means that criminals frequently exploit the sector for both sports corruption and money laundering purposes. The Europol report noted that technology had become a significant enabler for crime involving sports.
PACTIV EVERGREEN DISCLOSES POTENTIAL FCPA VIOLATIONS IN IPO FILING
The Wall Street Journal has reported that the packaging-maker says a China unit occasionally gave gift cards to Chinese regulators or employees of state-owned companies, a possible violation of US anti-bribery laws. Pactiv is seeking to go public and said in an amended prospectus that it reported the potential violations to the DoJ and SEC.
HOW BULGARIA BECAME THE EU’S MAFIA STATE
A Politico “Explainer” on 9 September says that, in the EU’s poorest state, a mafia elite acts above the law and has a stranglehold over the economy, and 80% of Bulgarians see corruption as widespread. Today’s oligarchs and mafia have their origins in the communist-era spy service that filled a power vacuum amid bloody turf wars in the 1990s. They snapped up prize national industries and smuggled arms and narcotics. The article also says that the EU keeps pouring in cash, much of which fuels the mafia, without demanding rule of law. The article then goes on to look at the recent protests in the country.
NEW ZEALAND: TRAVEL AGENTS REIMBURSING CUSTOMERS HELD UP BY AML LAWS
On 9 September, Radio New Zealand reported that hundreds of millions of dollars in cancelled holiday trips are said to be locked up overseas because of strict AML laws; and the government has announced a support package was being established for travel agents, incentivising them to recover the money of cancelled overseas trips for New Zealand customers. Under the $47 million scheme, travel agencies will be paid 7.5% of the value of cash refunds and 5% of the value of credits successfully secured on behalf of consumers. The government estimated that almost $700 million in travel expenditure was locked up overseas because of trips cancelled since the novel coronavirus outbreak.
REGULATORS INVESTIGATE ELITE LONDON LAW FIRM MISHCON DE REYA
On 9 September, the Guardian reported that the firm is being investigated by the SRA who have spent at least 2 years examining it, sending investigators into its central London offices. The investigation was launched after the SRA received separate reports between 2017 and 2018 that relayed a series of allegations.
ISLE OF MAN: SANCTIONS UPDATES
On 10 September, the Isle of Man issued 2 news releases, following the corresponding releases from the UK, advising a correction to one entry in the Guinea-Bissau sanctions list and the renewal of 2 terrorism sanctions designations.
NAMIBIA: FINANCIAL INTELLIGENCE CENTRE FLAGS POTENTIAL PROCEEDS OF CRIME
On 10 September, New Era Live in Namibia reported that N$10 billion in Fishrot-linked funds have been red-flagged by one of the country’s top financial watchdogs, in its annual report, as suspected proceeds of illegal activities. It says that the scandal linked to to fishing industry has led to the arrest and incarceration of former ministers, the former Investec Asset Management Namibia managing director, and former Fischor CEO Mike Nghipunya as well as 2 others. Another person implicated in the scandal is former senior manager at Investec Asset Management Namibia.
DESPITE SANCTIONS, ISRAELI FIRM CELLEBRITE SOLD PHONE-HACKING TECH TO VENEZUELA
On 10 September, Haaretz reported that Israeli company Cellebrite sold its phone-hacking technology to Nicolás Maduro’s regime in Venezuela, despite US sanctions which ban exports to the country.
CANADA: SILENCER SMUGGLED FROM US LEADS TO ILLEGAL WEAPONS MANUFACTURING BUST
On 10 September, CBC reported that an attempted smuggling of a gun silencer from the US into Canada set off an investigation that led to two weapons busts in northern Manitoba. Investigators seized 2 handguns, 2 long guns, 8 silencers and supressors, 3 3D printers, ammunition, and parts used in manufacturing firearms.
US: HALF A MILLION DOLLARS FOUND BEING SMUGGLED IN CUSHION CHAIR
On 9 September, Local 10 News and others reported that US Custom and Border Protection officers say they seized $491,280 being smuggled out of the US in the bottom of a cushion chair that was part of a crate containing furniture to be shipped to the Dominican Republic.
LIBERIA: LONESTAR CELL MTN MOBILE MONEY REINSTATES INTERNATIONAL REMITTANCE SERVICE AFTER FIU-REQUIRED CLOSURE
On 10 September, the Daily Observer reported that, in August, with the approval of the Central Bank of Liberia (CBL), Lonestar Cell MTN, one of Liberia’s leading GSM and Mobile Financial Services companies, launched its international remittances service. This followed the FIU having asked it to temporarily halt international remittance service pending FIU’s review of the compliance of the service with AML/CFT regulations.
ILLEGAL WEAPONS FUELLING YEMEN WAR CRIMES
Defence Web on 10 September reported that a UN report says that weapons provided by Western powers and Iran to warring sides in Yemen are fuelling the 6-year-old conflict, marked by deadly Saudi-led coalition air strikes and Houthi shelling. It was the third successive year the panel of independent experts found all parties violated international law.
UK: ASSET RECOVERY STATISTICS
On 10 September, the Home Office produced updated statistics with data on asset recovery, using Proceeds of Crime Act Powers and data on the use of Asset Recovery Incentivisation Scheme. Data is provided back to 2012. Separately, there is provided a 6-year data snapshot of asset recovery, using Proceeds of Crime Act 2002 powers, as amended by the Criminal Finances Act 2017, and includes data on the use of the Asset Recovery Incentivisation Scheme.
BRAZIL’S ‘CAR WASH’ PROBE TARGETS PETROBRAS FOREX TRANSACTIONS
On 10 September, Reuters reported that Brazil’s federal police were serving 25 search warrants as part of an investigation regarding foreign-exchange transactions done by state-controlled oil company Petroleo Brasileiro SA between 2008 and 2011.
OLAF: ROMANIA RANKS FIRST ON NUMBER OF EU FUND EMBEZZLEMENT CASES IN 2019
On 10 September, Romania Journal reported that Romania is the country where OLAF concluded the greatest number of investigations on EU fund embezzlement last year. More than 10% of the files refers to frauds with EU money in the country, according to the 2019 OLAF report.
VAT GAP: EU COUNTRIES LOST €140 BILLION IN 2018, WITH POTENTIAL INCREASE IN 2020 DUE TO CORONAVIRUS
A news release from the EU on 10 September advised that, while still extremely high, the overall ‘VAT Gap’ – the difference between expected revenues in EU Member States and the revenues actually collected – has improved marginally in recent years. However, figures for 2020 forecast a reversal of this trend, with a potential loss of €164 billion in 2020 due to the effects of the coronavirus pandemic on the economy.
The EU has also issued a set of FAQ –
BRAZIL: FORMER PRESIDENT OF THE LOWER HOUSE SENTENCED TO 15 YEARS IN PRISON FOR PASSIVE CORRUPTION AND MONEY LAUNDERING IN RELATION TO THE CAR WASH OPERATION
On 10 September, Telesur reported that the former president of the Lower House of Brazil, Eduardo Cunha, who promoted the impeachment against former President Dilma Rousseff in 2016, was sentenced to 15 years and 11 months in prison for passive corruption and money laundering in relation to the Car Wash operation. It is alleged that Cunha demanded bribes for $5 million in contracts for the construction of drill ships by Petrobras, which implied diverting some $10 million from public coffers.
WHAT RADIOACTIVE WASTE ACTUALLY LOOKS LIKE
On 10 September, a blog post from the Nuclear Decommissioning Authority and others in the UK says that radioactive waste actually comes in many different shapes and sizes. It says that then it’s created, low-level radioactive waste (LLW) can look like many things, including soil, rubble, scrap metal, paper and clothing. Some intermediate level radioactive waste (ILW) takes the form of graphite bricks, and some looks like dismantled machinery, but most Intermediate Level Waste is material from inside a nuclear reactor, which means it has been in close contact with highly radioactive nuclear fuel over a long period. When many of the nuclear fuel rods have been used, they go to be recycled, or reprocessed and so become High Level Waste (HLW).
UK GOVERNMENT RESPONSE TO DISCLOSURE CONSULTATION PUBLISHED
On 10 September, the Attorney General’s Office published a news release saying that responses to the public consultation on the Attorney General’s revised Disclosure Guidelines agreed that they provide further clarity on modern disclosure issues and are a step in the right direction of improving practices. It says that the new Code and Guidelines will not come into effect earlier than 31 December.
LUXEMBOURG: CUSTOMS DOGS SNIFF OUT €2 MILLION IN CASH AT FINDEL AIRPORT
On 10 September, Delano reported that the cash was caught over the course of 3 different days and was carried by different passengers.
ENGLAND RELAXES PLANNING RULES FOR BREXIT BORDER INFRASTRUCTURE
On 10 September, Out-Law published an article about the new Special Development Order and a fast-tracked planning process for new infrastructure and facilities needed at and around UK ports to accommodate increased border processing that might occur as a result of the end of the Brexit transition period. Only named government ‘border departments’, including HMRC and the Department for Transport (DfT), will be able to apply for approval from the secretary of state to make use of the permission.
On 10 September, Appleby published a brief about the uses of an LLC under Bermuda law. It is said that the LLC Act was modelled closely on Delaware’s popular limited liability statute and includes many of the same features that have made LLC a prevalent, and comfortable, corporate vehicle in the US.
ARE RECENT COCAINE BUSTS EVIDENCE OF REVIVED JAMAICA-UK DRUG ROUTE?
On 10 September, Insight Crime reported that drug mules in Jamaica once made a habit of exploiting weak controls on commercial flights to move cocaine into the UK before a crackdown significantly deterred such criminal activity – but a string of recent seizures has raised fears of this route’s potential revitalisation.
THE NEW UK IMMIGRATION SYSTEM: GETTING READY AND REVIEWING RISK
On 10 September, an article from Eversheds Sutherland says that from 31 December 2020 having a sponsor licence will become essential for organisations who recruit both from outside of the EU and from within it. It mentions in particular businesses who employ EEA nationals given that this will, in most cases, involve the employer being a sponsor under Tier 2.
COSTA RICA: NEW REGULATION RULES THE ADOPTION OF ANTI-CORRUPTION AND ANTI-BRIBERY PROGRAMMES
An article from Dentons on 10 September was concerned with new regulation published by executive decree a year after the entry into force of the Law for Criminal Liability of Legal Entities on Domestic Bribery, Transnational Bribery, and other Crimes. The regulation aims to promote the establishment of the “Optional model for the organization, crime prevention, management, and control” and offer the regulatory framework for its adoption, both in private companies and in public entities.
EBA CALLS FOR SINGLE EU RULEBOOK ON FIGHTING MONEY LAUNDERING AND TERRORIST FINANCING
A release on Mondo Visione on 10 September said that the European Banking Authority (EBA) had published its response to a European Commission’s call for advice on how to strengthen the EU legal framework on AML/CFT. The Commission had issued this call for advice to the EBA to take advantage of its technical expertise across all areas of financial services regulation and because the EBA has a legal duty to lead, coordinate and monitor the EU financial sector’s fight against money laundering and terrorist financing.
PIRATES KIDNAP 2 RUSSIANS FROM REFRIGERATOR SHIP IN GULF OF GUINEA
On 10 September, Hellenic Shipping News reported that pirates have kidnapped 2 Russians from the refrigerator ship Water Phoenix 30 km from Lagos on 8 September. It is said that the pirates seized the ship’s captain and another crewmember, while the other 16 sailors managed to lock themselves in a special compartment.
JERSEY FSC CONCLUSIONS FROM ITS INVESTIGATION INTO LUMIERE WEALTH LIMITED – “A SERIOUS CATALOGUE OF FAILURES”
On 9 September, the Jersey FSC published a news release saying that it had found that the Jersey-based financial services business, which went into liquidation in October 2016, committed a serious catalogue of failures, breaching Jersey’s legal and regulatory regime. The failures included Lumiere not providing clients with suitable investment advice, not adequately assessing the suitability of a particular fund it recommended to clients, not having adequate insurance cover in place, and giving the JFSC false and misleading information.
WEBINAR: THE CUM-EX FILES: EUROPE’S BIGGEST-EVER TAX INVESTIGATION UNDER THE SPOTLIGHT
On 30 September, law firm Rahman Ravelli is to hold a free-to-attend webinar about the large-scale practice of selling shares to exploit a loophole on dividend payments led to a number of parties claiming the same tax refund – and left governments across Europe tens of billions of euros out of pocket. The firm says that Cum-Ex is something that could have serious and long-lasting implications for the financial services industry – and those working in it – in many countries. Being aware of the issues surrounding Cum-Ex, the scope of the investigations and the possible consequences is, therefore, vitally important.
US: FINAL RULE CONCERNING DUAL-USE GOODS AND TECHNOLOGIES, MUNITIONS
On 10 September, KPMG reported that the Bureau of Industry and Security (BIS) of the Commerce Department has released for publication in the Federal Register a final rule to implement changes and to harmonise the Commerce Control List (CCL) – part of the Export Administration Regulations (EAR), and which identifies certain items subject to the export control jurisdiction of the Commerce Department – with regard to dual-use goods and technologies and munitions. It implements changes made with regard to the Wassenaar Arrangement List of Dual-Use Goods and Technologies and Munitions List.
UK: CRIMINAL PROCEDURE AND INVESTIGATIONS ACT 1996 (CODE OF PRACTICE) ORDER 2020
This Order will bring into force a revised Code of Practice under Part II of the Criminal Procedure and Investigations Act 1996 on 31 December (or the day after) and applies to England & Wales. It made a number of recommendations aimed at encouraging earlier and more comprehensive performance by investigators and prosecutors of their disclosure obligations under the CPIA 1996 and follows a 2018 report by the Justice Select Committee.
US: MEXICAN DRUG TRAFFICKERS CHARGED WITH DRUG TRAFFICKING CRIME BASED ON SEIZURE OF ALMOST 3 TONS OF COCAINE
A news release from the DEA on 9 September advised that the charges arises from a seizure by the Mexican Navy of approximately 2,960 kg of cocaine off the coast of the Mexican state of Quintana Roo earlier this month.
ALONGSIDE SANCTIONS, US CHARGES OPERATORS OF RUSSIAN TROLL FARM WITH FRAUD FOR USING US ID TO START CRYPTO ACCOUNTS
On 10 September, Coin Telegraph reported that the charges against Russian national Artem Lifshits are in connection with his management of an affiliate of the infamous Internet Research Agency, which US authorities accuse of interfering in the 2016 election. A complaint alleges that he has managed the translator department of Project Lakhta since 2017, in which capacity he illegally obtained US identification documents in order to use “the means of identification of United States persons to open bank accounts, PayPal accounts, and cryptocurrency accounts”. The charge is conspiracy to commit wire fraud.
NFL PLAYER CHARGED FOR ROLE IN $24 MILLION COVID-RELIEF FRAUD SCHEME
A news release from US DoJ on 10 September advised that a National Football League (NFL) player has been charged for his alleged participation in a scheme to file fraudulent loan applications seeking more than $24 million in forgivable Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
COSTA RICA: DRUG TRAFFICKING RING CONNECTED TO EL CHAPO’S SINALOA CARTEL DISBANDED AND $19.9 MILLION WORTH OF COCAINE SEIZED
On 10 September, the Daily Mail reported that Costa Rica authorities brought down a drug trafficking ring linked to Joaquín Guzmán’s old Sinaloa Cartel. Agents arrested 2 women and 9 men during a series of 11 raids.
UNPACKING US-CHINA SANCTIONS AND EXPORT CONTROL REGULATIONS: HUAWEI
On 10 September, Global Trade Magazine carried an article, the first of a series setting out to explain the legal and regulatory impacts of certain recent US sanctions and export control actions targeting various Chinese entities. Each article will focus on a different aspect of a recent US sanctions or export control regulatory action targeting China and explains in-depth the regulatory context. This first article looks at the situation involving Huawei.