Panama Covid-19 update – Day 201 of the Crisis – another 705 new cases and 14 new fatalities, seem to show the crisis continuing to roll on regardless. There are now 20,962 active cases, 121 in ICU (which is a lower figure), 712 in other wards (ditto). But there have been 2,311 deaths to date, and it seems far from over yet.
25 September 2020
PAKISTAN GOVERNMENT FILES MONEY LAUNDERING CASE AGAINST SHAHBAZ SHARIF AND FAMILY
On 24 September, the Economic Times in India reported that Shahbaz, 69, is the younger brother of former premier Nawaz Sharif. He served as chief minister of Punjab from 2008 to 2018. It is alleged that Shahbaz and his sons Hamza and Salman were involved in money laundering through fake accounts. The NAB has filed a case, accusing Shahbaz Sharif and his children of money laundering.
THE EUROPEAN SECURITIES AND MARKETS AUTHORITY (ESMA) CALLS FOR TAX DATA-SHARING POWERS TO COMBAT FRAUD
On 24 September, Reuters reported that ESMA has said that securities and tax regulators should have new powers to share information for cracking down on fraudulent tax reclaim schemes. It made the recommendation in its final report to the European Parliament into frauds whereby investors engineer share trades to make bogus tax reclaims from phantom dividends, such as in the huge “Cum-Ex” fraud scandal centred on Germany.
VATICAN: POWERFUL CARDINAL RESIGNS AMID FINANCIAL SCANDAL
On 24 September, the Wall Street Journal reported that Cardinal Giovanni Becciu,an Italian cardinal whose former office has been embroiled in a financial scandal resigned suddenly from his Vatican post and renounced his rights as a cardinal, a surprise escalation of an affair that has overshadowed that Holy See for the last year.
US TREASURY “EMBEDS” ADVISOR IN LATVIAN FINANCE MINISTRY
On 25 September, LSM reported on a new agreement between Latvia and the US prescribing the provision of technical assistance of the US Treasury in the field of AML/CFT. The US Treasury’s Office of Technical Assistance will ensure a full-time expert in Latvia “for provision of qualified support to institutions involved in anti-money laundering, attracting also additional experts from the US institutions, based on the needs of the relevant authorities”.
5 THINGS YOU NEED TO KNOW ABOUT FDI CONTROLS IN THE UK
On 25 September, an article from White & Case said that since the UK merger regime was last reformed, in 2002, no UK deal has been blocked on public interest grounds to date and, prior to 2019, there had, on average, been less than one public interest intervention notice issued by the Government on the grounds of national security per year. This is one of 5 interesting facts or comments about the UK regime, observing that 2019 saw an increase in interventionist policy in the UK, with several public interest intervention notices issued on grounds of national security.
IRAN STEEL AND OIL PRODUCTION INCREASES DESPITE US SANCTIONS
On 25 September, Radio Farda reported that the latest monthly report from the World Steel Association (WSA) says that Iran’s crude steel production in the first 8 months of 2020 grew by more than 11% to 18.6 million tons. It also reported that MIMT, Iran’s Ministry of Industry, Mines, and Trade, had released a monthly report showing that the country’s crude steel production in the first 5 months of the Iranian Calendar year (beginning March 20) increased by 8% compared with the same period last year and reached 11.4 million tons. The manufacturing of steel products also increased by nearly 7% to about 9.5 million tons.
Meanwhile, the Globe & Mail in Canada reported that Iranian oil exports have risen sharply in September in defiance of US sanctions, 3 assessments based on tanker tracking showed. It says that while the country’s exports have shrunk since the US withdrew from the JCPOA nuclear deal with Iran and reimposed sanctions on its energy and banking sectors in 2018; but data from TankerTrackers and 2 other tracking companies indicated exports are rising.
ANGOLA AND BOTSWANA TOP IN AFRICA IN ARMS SMUGGLING
On 25 September, the Southern Times reported that Angola and Botswana are among countries most affected by the illegal arms trade in Africa, according to a new report by the UN Office on Drugs and Crime (UNODC). Around 12,000 illicit firearms were seized in Angola this year alone, while the figure for Botswana was in the region of 1,000. Apart from Angola and Botswana, no other Southern African country appears on a 9-country list that is dominated by East and West African states, with Kenya as the second most affected African country. It is noted that most of the firearms are trafficked via maritime routes.
BAHAMAS FACES EU BLACKLISTING, BUT HAS ALREADY APPLIED FOR CFATF RE-RATING
On 25 September, Eyewitness News reported that while The Bahamas faces the immediate imposition of blacklisting by the EU, announced in May but postponed until 1 October, the Attorney General has said the government, based on its level of financial compliance, has already applied for a re-rating by the FATF-style regional body that would result in delisting. The article says that, in 2019, The Bahamas improved its compliance with the FATF 40 recommendations from 18 ‘compliant or largely compliant’ in 2015 to 30 ‘compliant or largely compliant’ in December 2019.
[n.b. FATF 40 applies only to technical compliance, whilst the effectiveness of the measures is determined separately, and ratings for such effectiveness can only be amended following a full re-evaluation).
HONG KONG: HKMA ISSUES GUIDANCE ON REMOTE ONBOARDING OF CORPORATE CLIENTS
On 25 September, Regulation Asia reported that the new guidance requires that onboarding processes should be designed reflecting the principle that CDD is not merely a document collection exercise. The HKMA has written to banks outlining key principles for remote onboarding of corporate customers, based on use cases and proposals gathered from the industry and highlights that CDD is more extensive for onboarding corporate customer than for retail customers, and that it typically involves a number of steps – banks should differentiate the money laundering/terrorism financing risks of corporate customers in order to apply CDD measures and ongoing monitoring in a proportionate manner.
The Circular containing the guidance is at –
UK: MONEY LAUNDERING BUSINESSMAN SMUGGLED CLASS A DRUGS INTO IRELAND
The Liverpool Echo on 25 September reported that haulage company boss Thomas Maher tried to move around £800,000 into Ireland. He has admitted 4 drug trafficking and money laundering offences.
ETHIOPIAN ARMY CRACKDOWN ON MONEY LAUNDERING ACTIVITIES AT BORDERS
Geeska Afrika Online has reported that the tightening of controls follows the country’s introduction of new banknotes to stop illegal circulation of money outside financial institutions.
IRELAND: 4,000 TV SET TOP BOXES SEIZED BY GARDAÍ DURING EUROPEAN-WIDE OPERATION
On 25 September, The Journal reported that over 6,300 suspected counterfeit or copyrighted items and materials have been seized by An Garda Síochána during a European-wide operation. 20 European countries undertook operational activity targeting intellectual property rights infringement.
CORRUPTION-RELATED CHARGES STAYED AGAINST FORMER QUEBEC DEPUTY PREMIER
ON 25 September, City News reported that a Quebec court judge has ordered a stay of proceedings in the case against former Quebec deputy premier Nathalie Normandeau on corruption-related charges. Normandeau and her co-accused had argued that delays in the case were unreasonable.
UK: EXPORTING ROUGH DIAMONDS – SPECIAL RULES
On 25 September, a news release from the Foreign, Commonwealth and Development Office contained updated information saying that you need a certificate to export rough diamonds under the Kimberley Process. It says that while you can export jewels, gold and precious metals without a licence or certificate, except for uncut (rough) diamonds. However, there is a ban on exporting precious and semi-precious stones, gold and silver items and other luxury goods to North Korea and Syria.
UK WEBINARS FOR THE EXPORT OF LIVE ANIMALS AND PRODUCTS OF ANIMAL ORIGIN (POAO)
On 25 September, DEFRA provided a list of free webinars to learn more about what you need to do to export animals, fish and high-risk foods not of animal origin from 1 January.
ITALIAN INVESTIGATIONS SAID TO IMPLICATE CARIBBEAN AND MALTA PRIME MINISTERS
In his always interesting blog on 24 September, Kenneth Rijock reported that a money laundering investigation in Italy is said to have at least 2 of the suspects are “Present or former Heads of State in the Caribbean”, and that Italy’s FIU has opened a criminal probe into the activities of the former Prime Minister of Malta, Joseph Muscat.
PANAMA’S BOCAS DEL TORO ARCHIPELAGO NEW COCAINE SEIZURE HOTSPOT
On 25 September, Insight Crime reported that authorities in Panama’s north-western province of Bocas del Toro have intercepted a string of vessels carrying large amounts of cocaine, a sign that traffickers are using the archipelago as part of long-range Caribbean Sea routes as pandemic border closures hamper overland movement. Between January and July 2020, 10.5 tons of cocaine were seized in waters off Bocas del Toro, a third of the nearly 35 tons registered nationally. It says that border closures with Colombia and restrictions since the beginning of the coronavirus pandemic have seemingly forced traffickers to make heavier use of the Caribbean.
WHISTLEBLOWING LEGISLATION IN SOUTH AFRICA
On 25 September, Out-Law reported that businesses that operate in South Africa need to ensure their internal whistleblowing procedures are in line with a range of legislation relevant to whistleblowing.
EU CYBER SANCTIONS
On 25 September, the EU Parliament Research Service published a briefing paper said that in July, EU Member States decided for the first time to use the ‘teeth’ rooted in the EU cyber-diplomacy framework and to ‘bite cyber perpetrators back’ by placing sanctions on them. This precedent, it says, has helped reinforce the EU’s cyber policy action.
CFTS AND 30 STATE REGULATORS ANNOUNCED A JOINT CIVIL ENFORCEMENT ACTION AGAINST 2 PRECIOUS METALS DEALERS AND THEIR COMPANIES FOR PERPETRATING A $185 MILLION FRAUDULENT SCHEME TARGETING ELDERLY PERSONS IN US
On 25 September, a release from Mondo Visione advised that the Commodity Futures Trading Commission and 30 state regulators that are members of the North American Securities Administrators Association (NASAA) announced the filing of a joint civil enforcement action in Texas against 2 precious metals dealers and their companies for perpetrating a $185 million fraudulent scheme targeting elderly persons nationwide. The filing refers to TMTE Inc. Metals.com, Chase Metals LLC, Chase Metals Inc – collectively “Metals.com”, Barrick Capital Inc, as well as Lucas Asher aka Lucas Thomas Erb, aka Luke Asher, and Simon Batashvili – alleging an ongoing nationwide fraud that solicited and received more than $185 million in investor funds to purchase fraudulently overpriced gold and silver bullion. Tower Equity LLC is also charged as a relief defendant. The defendants and relief defendant are all located in Los Angeles.
PODCAST: WHAT HAVE “MAXIMUM PRESSURE” SANCTIONS AGAINST IRAN ACCOMPLISHED?
A podcast from the Brookings Institute on 24 September in which Suzanne Maloney, Vice-President and Director – Foreign Policy at the Institute, who points out how the Trump administration’s rejection of multilateral diplomacy has not stopped Iran from expanding its nuclear program nor reduced its regional influence. She also looks ahead to how a Biden administration might seek to re-establish negotiations toward a broader agreement.
SWITZERLAND WANTS GOLD SEGREGATION BETWEEN MINED AND BANK GOLD BY CUSTOMS FOR MORE TRANSPARENCY
On 24 September, Swissinfo reported that Switzerland had submitted a proposal to the WCO to amend the current classification of gold for international customs duty. Currently the WCO’s Harmonised System has a single customs code for unwrought gold (i.e. impure gold that needs further processing). This means that it is not possible for the system to differentiate if the gold imported into a country was refined or unrefined.
PODCAST: HOW SAR CAN HELP COMBAT MODERN SLAVERY AND HUMAN TRAFFICKING
In its second podcast, the UK FIU looks at modern slavery and human trafficking (MSHT) and the importance of SAR information in this, arguing that reporters are in a unique position to help combat this crime. Panellists from the FIU and the NCA Modern Slavery Human Trafficking Unit discuss what assists law enforcement and helps to safeguard victims.
UK: 5AMLD AND LETTING AGENTS
On 25 September, an article from law firm Ince looks at letting agents and their AML/CFT requirements. Letting agents who deal in a rental property (residential or commercial) with a monthly rent of or equivalent to €10,000 or above, are required to carry out CDD checks and comply with other AML requirements. CDD checks have been required to have been carried out on any new tenants and landlords from 10 January. Also, if an existing tenancy has been renewed after this date, letting agents will need to carry out appropriate checks at that point on both parties. Letting agents are supervised by HMRC.
UK STEPS UP SANCTIONS REGIME AND SHIPPING MUST NAVIGATE CAREFULLY
On 23 September, law firm Ince published an article saying that, following the UK’s departure from the EU, there have been some recent developments with regard to the approach of the UK to sanctions, including the issuance of guidance to the shipping industry on financial sanctions. The article summarises some of these recent developments.
CHANGE TO DoJ FORMS TO WARN OF SELF-INCRIMINATION AND RISK OF “SPIN OFF” PROSECUTIONS
On 25 September, a post from the Compliance & Enforcement Blog from the Program on Corporate Compliance & Enforcement at the New York University School of Law says that changes being made to Civil Investigative Demand (“CID”) forms and deposition procedures used by the Antitrust Division are being updated to provide clear notice to CID recipients and deponents that the evidence they provide during the course of an investigation may be used by the DoJ in “unrelated” cases or proceedings. It is said that this highlights the risk of “spin off” investigations — including criminal investigations — if a party produces evidence of other violations (such as communications or coordination among competitors) during an investigation.
NIGERIA STEPS UP MARITIME SECURITY EFFORTS WITH DRONES
On 19 September, Homeland Security Today reported that air assets acquired under the Deep Blue Project (aka the Integrated National Security and Waterways Protection Infrastructure) and the Nigerian Maritime Administration and Safety Agency (NIMASA) are set for deployment by the Nigerian Air Force in support of the Nigerian government’s maritime security effort. It is said that 17 fast interceptor boats, 15 armoured vehicles, and 2 special mission vessels were some of the land and marine assets already on the ground; and the air force is working towards establishing UAV wings in Lagos, Calabar, and Port Harcourt to support other security agencies in maintaining the security of the maritime environment.
SOMALI PIRACY: LAST 3 HOSTAGES FREED ALTHOUGH THREAT STILL EXISTS
The International Chamber of Commerce has reported that Somalia pirates have freed the last 3 of the 3,639 hostages held in captivity over the past 5 years. They had been working on an Iranian fishing vessel, FV Siraj, when it was hijacked off the coast of Hobyo, Somalia in March 2015. However, the International Maritime Bureau (IMB) welcomes the good news. However, it warns that ships still need to be alert and remain vigilant and not get complacent when transiting Somalia waters as the threat of attacks still exists.
BIZARRE VIRTUAL KIDNAPPING IN AUSTRALIA HIGHLIGHTS RISK TO CHINESE STUDENTS
On 25 September, the Guardian reported that virtual kidnappings targeting young Chinese adults are estimated to have netted billions of dollars worldwide. In a bizarre recent case, a 22-year-old man was convinced by the scammers that he had to take a female high-school student – a complete stranger – into witness protection at his apartment; and the 18-year-old student meanwhile had been conned into believing by the same scammers, who claimed they were Chinese police, that she had to go into hiding with the man.
US: MAN JAILED FOR $4.7 MILLION INSURANCE FRAUD, INCLUDING PULLING OUT OWN TEETH
On 25 September, the Mail Online reported that a Mexican man in the US illegally has been sentenced to 5 years in prison for his role in a massive insurance fraud scheme where he and others secured $4.7million by filing falsified bodily injury claims. He was an integral member of an extensive scheme that staged automobile, boating and slip and fall accidents in various states throughout the western states.
US: EX-DEUTSCHE BANK GOLD TRADERS FOUND GUILTY IN SPOOFING TRIAL
On 25 September, BNN Bloomberg reported that Federal prosecutors behind a sweeping crackdown on market “spoofing” scored a big win after a Chicago jury convicted former Deutsche Bank AG traders Cedric Chanu and James Vorley of fraud for manipulating gold and silver prices. The jury decided they had made multiple bogus trade orders between 2008 and 2013 to illegally influence precious-metals prices.
Spoofing occurs when a trader enters buy or sell orders and then cancels them before they are executed, creating a false market indicator that can generate profit by taking the opposite position. While cancelling orders isn’t prohibited, the 2010 Dodd-Frank Act made it illegal to place orders with no intention of executing them.
SEC HAS ANNOUNCED 2 SEPARATE WHISTLEBLOWER AWARDS FOR TOTAL PAYMENTS OF OVER $2.5 MILLION
A release on Mondo Visione on 25 September advised that one whistleblower was awarded over $1.8 million for taking both personal and professional risks in reporting information through the internal compliance system at a company. The tip revealed overseas conduct that would otherwise have been hard to detect. In the second case, a whistleblower was awarded $750,000 for reporting securities violations occurring abroad to the SEC, which caused the SEC staff to open an investigation that resulted in a successful enforcement action. The whistleblower also reported the concerns internally.
UK: NEW ACT INTRODUCES A CORPORATE RESTRUCTURING PROCESS TO ENHANCE THE FLEXIBILITY OF THE ENGLISH SCHEME OF ARRANGEMENT
On 25 September, a briefing from White & Case says that the new UK Corporate Insolvency and Governance Act (CIGA), which took effect in June 2020, ushers in permanent changes to the English insolvency and restructuring landscape as well as temporary, and largely retrospective, measures to help mitigate the economic impact of the COVID-19 pandemic. This article looks at some key features of the Restructuring Plan, explores when it might be used and whether it might one day replace the much-lauded scheme.