Panama Covid-19 update – another 677 new cases and 12 fatalities added today; with 116 patients in ICU, 705 in other wards and 364 in requisitioned hotel rooms.
26 September 2020
FinCEN FILES UPDATE –
What the FinCEN files leaks reveal about the ongoing war on dirty money
On 25 September, the Brookings Institute published an article saying that these leaks differ from previous bank leaks such as the Panama Papers in a crucial way: they are a snapshot into financial crime that banks are openly reporting to the authorities. This means, on a basic level, the reporting system is functioning. But the same leaks also show that banks frequently filed a SAR months after the transaction had taken place, and sometimes multiple times on the same client without anyone seemingly taking any action. It argues that tt is also possible that, in some ways, recent efforts to clamp down on money laundering might have made FinCEN’s job a lot harder than it used to be. For example, the rise in the number of SAR wouldn’t be a problem if FinCEN’s resources were rising commensurate with the increase in its paperwork, it argues. This problem is exacerbated by the agency attempting to monitor worldwide transactions, at least those caught by use of US dollars, and not just domestic ones. It makes a number of recommendations, and not just the obvious ones re resources, but also by improving its position on exchanging information and on beneficial ownership.
The Russian oligarchs of the FinCEN Files
On 26 September, Deutsche Welle says that the names of powerful Russians often feature in revelations about secret payments. The FinCEN Files are no exception — some of them are President Vladimir Putin’s closest friends.
FinCEN Files: data protection concerns
On 24 September, law firm Simmons & Simmons published an article saying that the leak has raised GDPR and data protection issues, among other concerns.
European lawmakers and regulators react to FinCEN Files
On 25 September, ICIJ said that the leaks prompted action in the UK, Belgium, and Portugal.
US GOVERNMENT MADE A POWERFUL NEW KIND OF NUCLEAR FUEL – PART URANIUM, PART THORIUM
On 24 September, Popular Mechanics carried an article saying that scientists at the Department of Energy’s Idaho National Laboratory have a new fuel called Advanced Nuclear Energy for Enriched Life, or ANEEL. It’s a proprietary mix of thorium and low-enriched uranium (LEU) as an alternative nuclear fuel. It is claimed that it is prohibitively difficult to make into a weapon, and that it would reduce the waste by over 80% and end up with much less plutonium – and less spent fuel means less refuelling, less cost, less fuel handling and less volume to dispose.
NEW EU RULES ON FOREIGN DIRECT INVESTMENT
An article from Irish law firm, LK Shields, on 23 September is concerned with the EU FDI Regulation which applies from 11 October. It establishes a framework for the screening of foreign direct investments into the EU and was the final stage of the legislative process that began with a EU Commission proposal in 2017. The FDI Regulation aims to better scrutinise direct investments coming from third countries on the grounds of security or public order. The article says that each Member State will remain firmly in charge of its own FDI controls and it is not anticipated that the FDI Regulation will affect the attractiveness of Ireland as an FDI destination.
MALAYSIA WILL NOT FOLLOW US SANCTIONS AGAINST 24 CHINESE COMPANIES
On 26 September, the Straits Times reported that the Malaysian Ambassador to China has said that Malaysia will not take sides and follow the US and impose sanctions on 24 Chinese companies, including subsidiaries of the China Communications Construction Company, the latter accuses of advancing China’s militarisation of the South China Sea.
MALAYSIA: POLICE SEIZE 1.3 TONNES OF SMUGGLED KETUM LEAVES
On 26 September, Malay Mail reported that police have seized more than 1.3 tonnes of ketum leaves in an operation in Sungai Badak forest reserve. Used in traditional medicines since at least the 19th Century. Kratom has opioid properties and some stimulant-like effects, it has uses in tackling opiate withdrawal syndrome and as a recreational drug. In 2003, ketum was placed under the Poisons Act 1952 in Malaysia, and in Thailand, Myanmar and Australia it is classified under their respective Narcotics Acts.
ALBANIAN BORDER POLICE SEIZE £67,000 IN BRITISH CURRENCY FROM TUNISIAN
On 26 September, Albanian Daily News reported that Border Police had seized £67,850 from a 63-year-old Tunisian.
TAIWAN CUSTOMS SEIZES 8 TONS OF SMUGGLED GARLIC FROM CHINA
On 26 September, Taiwan News reported that Taiwanese customs seized a container of garlic weighing 8,000 kg which was believed to have been smuggled out of Qingdao, China in a container filled with buckwheat pillows, each stuffed with garlic. Taiwan has seen a spike in garlic prices as well as surging demand for the plant ahead of the Mid-Autumn Festival.
TANZANIA: CRACKDOWN ON ALLEGED BRIBERY INVOLVING MINERAL DEALERS AND SMUGGLED TANZANITE
On 26 September, IPP Media reported that the Prevention and Combating Corruption Bureau (PCCB) has detailed 7 businessmen and miners, including 2 mineral dealers, for alleged bribery of government officials in connection with smuggling of tanzanite. Only found in Tanzania, is the blue and violet variety gemstone of the mineral zoisite (a calcium aluminium hydroxyl sorosilicate), caused by small amounts of vanadium, first discovered by Masai tribesmen in 1967.
ARMENIA DETAINS MAIN OPPOSITION LEADER IN VOTE-BUYING CASE
On 26 September, Rferl reported that an Armenian court late has put Gagik Tsarukian, a wealthy businessman and leader of the Prosperous Armenia Party (BHK), and the leader of the country’s main opposition party in 2 months of pretrial detention as part of a vote-buying case he calls politically motivated.
US: OPERATOR OF BLACK DIAMOND FOREX AND ADVANTA FX ARRESTED
On 26 September, Finance Feeds reported that Michael Salerno had been charged with 23 counts of wire fraud and 6 counts of mail fraud in connection with multiple, elaborate fraud schemes. It is claimed that 2016-18 he operated several businesses which claimed to be involved in forex. He induced victims to pay advance fees and allegedly collected more than $300,000 in advance fees and used the money for his own benefit.
ANGOLA: ONE BY ONE, THE BIT-PART PLAYERS IN THE DOS SANTOS KLEPTOCRACY ARE BEING TAKEN DOWN
An article in All Africa on 23 September says that Angola’s first President, Dr Agostinho Neto, must be spinning in his grave. None other than his own daughter and son-in-law’s names have been added to the long, list of “illustrious” Angolan politicians and officials accused of corruption, embezzlement and money laundering. Angola’s much-pillaged national petroleum giant provided both the lucre and the means for embezzlement, illegal diversion of funds and money laundering.
FAKE OFFICIALS CON MAN OUT OF HK$7 MILLION
On 26 September, The Standard reported that police say a 27-year-old mainland Chinese man who lives and works in Hong Kong was coaxed into paying more than HK$7 million to a gang of scammers claiming to be officials, who also conned a young woman into helping with their scheme.
US DEMANDS EXTRADITION OF SERBIAN NATIONALS OVER ALLEGED INTERNET FRAUD
On 26 September, N1 in Serbia reported that the US has officially asked for the extradition of 11 persons with the place of residence in Serbian southern city Nis, who were arrested in July over suspicion of taking part in large-scale online frauds that caused damage of $70 million. If agreed to, it would be the first extradition case after Serbia signed a deal on extradition with the US last year.
DESIGNATION BY THE US OF 2 LEBANESE FORMER MINISTERS
On 26 September, VoA reported that, on 8 September, the US designated Yusuf Finyanus and Ali Hassan Khalil, 2 former government ministers, for providing material support to Hezbollah, pursuant to Executive Order 13224. Yusuf Finyanus is a former minister of transportation while Ali Hassan Khalil is a former minister of finance, health, and agriculture. Both men are accused of having abused their positions to direct public funds to the terrorist group.
ANTI-MONEY LAUNDERING: THE BASICS – PART 1 – INTRODUCTION TO ANTI-MONEY LAUNDERING FOR PROFESSIONAL ACCOUNTANTS
In the UK, ICAEW and the International Federation of Accountants have teamed up to produce a series of basic guides to improve AML understanding for chartered accountants.
UK: MONEY LAUNDERING RESTAURANT BOSS TOLD TO PAY BACK £1.2 MILLION OR FACE ANOTHER 7 YEARS IN JAIL
On 26 September, Hampshire Live reported that Yong Hong Lu and Huey Jun Khoo used the stolen money from their 4-year card machine fraud to pay for school fees, designer clothes and holidays. Yong Hong Lu, 52, must hand over £1.2 million within 3 months or face an extra 7½ years in jail.
CAN YOU CLAIM LEGAL ADVICE PRIVILEGE FOR YOUR COMMUNICATION WITH FOREIGN IN-HOUSE LAWYERS IN AN ENGLISH LITIGATION OR ENGLISH-SEATED ARBITRATION?
On 25 September, an article from Bryan Cave Leighton Paisner says that a recent English judgment discussed whether communications with an in-house counsel or with external foreign lawyers are protected by legal advice privilege, including whether the type and seniority of qualification of the foreign lawyers makes any difference.
AVOID THE BREXIT IMPORT VAT TRAP
On 23 September, VAT Live reported that after 31 December, anyone selling goods to consumers or businesses between the UK and EU will face import VAT, potential tariff charges and customs declarations for the first time. It advises picking the correct Incoterm – suggesting Delivered Duty Paid (DDP) and on how to avoid the VAT import trap.
ADAPTING ENGLISH LAW FOR THE DIGITAL REVOLUTION
On 21 September, the Law Commission, which advises on new and amended law in England & Wales, said that it had begun work on 2 new projects to ensure that English law can accommodate 2 emerging technologies that could revolutionise commerce: smart contracts and digital assets. It will –
- analyse the law relating to smart contracts, to find any gaps in the law and identify reforms to ensure that the law can meet the growth in the use of this technology – with a view to publishing a call for evidence in late 2020; and
- its work on digital assets will ensure that the law is capable of accommodating electronic documents, cryptoassets and other digital assets in a way which allows the possibilities of technology to flourish – its intention is to publish a consultation paper in the first half of 2021.
VODAFONE HAS REPORTEDLY WON A CONTROVERSIAL $2 BILLION TAX CASE AGAINST THE INDIAN GOVERNMENT AT THE PERMANENT COURT OF ARBITRATION AT THE HAGUE
On 26 September, Jurist reported that Vodafone Grup PLC has apparently won itsa tax case against the Indian government after the Permanent Court of Arbitration at The Hague found that India breached its Bilateral Investment Treaty with The Netherlands by imposing tax liability on Vodafone. India is believed to have claimed as much as $3.79 billion from Vodafone, including $2 billion in tax and interest penalties. The international tribunal held that India’s demands breached “fair and equitable treatment” and ordered India to cease collecting fees from Vodafone.
VOLKSWAGEN AGREES TO PAY OUT ABOUT $6.5 MILLION TO VICTIMS OF HUMAN RIGHTS VIOLATIONS DURING THE BRAZILIAN MILITARY RULE
On 26 September, Jurist reported that Volkswagen do Brasil, a subsidiary of the German Volkswagen Group has signed an agreement to pay the money to victims of human rights violations during the Brazilian military rule 1964-85. Volkswagen had hired a historian to conduct research to determine whether the company had cooperated with the military regime in committing human rights abuses.
FRENCH PROSECUTORS OPEN A FORMAL INVESTIGATION OF BNP PARIBAS OVER ITS ALLEGED COMPLICITY IN CRIMES AGAINST HUMANITY, GENOCIDE AND TORTURE IN SUDAN
On 26 September, Jurist reported that the decision to investigate the banking giant comes nearly a year after 9 Sudanese victims filed a complaint against BNP Paribas for its involvement in the atrocities committed in Sudan between 2002 and 2008. Although the 2019 complaint was the first attempt to hold BNP Paribas criminally responsible for its alleged complicity, it was not the first time the bank had to answer for its involvement with the Sudanese government.
TOP ARMS SUPPLIERS TO THE MIDDLE EAST AND NORTH AFRICA 2015-19
The Center for International Policy has published a report which says that, as the world’s leading arms exporter, the US holds a dominating presence in the global arms market, at 36% of total arms deliveries worldwide. This leading US role is even more pronounced when it comes to the MENA region. The next 4 top suppliers were Russia (17%), France (11%), the UK (5%), and Germany (5%).
UK PROPOSALS TO AMEND MODERN SLAVERY STATEMENTS FROM COMPANIES
An article from Simmons & Simmons on 25 September was concerned with changes that will impact organisations that must prepare a modern slavery statement under section 54 of the Modern Slavery Act 2015 – namely commercial organisations that supply goods or services, carry on business in the UK and (together with their subsidiaries) meet the annual turnover threshold of £36 million or more. They will also impact public sector supply chains as the Government will extend section 54 to public bodies with a budget threshold of £36 million or more.
RUSSIAN EXPORT CONTROL OF DUAL-USE ITEMS 2020 FAQ
In an article dated 27 September, Baker McKenzie produced this document which summarises the statutory requirements on the exportation of dual-use items from Russia, and does not contain information on the exportation of military items.
IMPORTATION AND LOCAL USE OF ENCRYPTION-BASED PRODUCTS IN RUSSIA AND THE EURASIAN ECONOMIC UNION
On 26 September, Baker McKenzie published an article consisting of FAQ on the importation and local use of encryption-based products in Russia and the Eurasian Economic Union.
REFORM OF THE ENGLISH COURTS – THE CHALLENGES
On 23 September, an article from Clyde & Co examined the problems facing the courts, including Covid-19, Brexit and the outcome of the civil disclosure pilot. It looks at how well some of the measures that have been introduced have worked and at their likely long-term impact. It also notes that English courts face strong competition from new international commercial courts set up in Singapore, China and elsewhere, as well as from international arbitration. It is no coincidence that the London Court of International Arbitration has just published new rules (effective from 1 October) emphasising the primacy of electronic communication, facilitating remote hearings, and introducing a form of summary judgment (‘early determination’) that was once the preserve of the courts. With such fierce global competition for commercial disputes, the article argues, the changes outlined are welcome and should ensure that England retains its place as the pre-eminent choice of law and jurisdiction in international disputes.
AUSTRALIA: HOW THE COMMONWEALTH BANK HELPED A BITCOIN FRAUD SUSPECT ACCUSED OF LAUNDERING BILLIONS
On 25 September, ABC News reported that the Australian Federal Police are investigating claims that Alexander Vinnik, currently in prison in France, allegedly transferred nearly $100 million through Australia with the help of the Commonwealth Bank, to potentially launder the proceeds of crime. Vinnik allegedly operated one of the world’s most popular digital currency exchange sites, known as BTC-e. US prosecutors argue BTC-e was a breeding ground for hackers, fraudsters, identity-theft scams, public corruption and drug trafficking.
FRENCH PROSECUTORS ARE INVESTIGATING TOKYO OLYMPICS BID FOR POSSIBLE BRIBERY
On 25 September, NBC News reported that the Tokyo Olympics postponed to next summer because of the Covid-19 pandemic, are facing renewed scrutiny over allegations that the city’s bid to host the games was secured by millions of dollars in bribes laundered through the international banking system.
OFAC IMPOSES FURTHER TRAVEL-RELATED RESTRICTIONS ON CUBA
On 25 September, an article from Kelley Drye about OFAC changes to the Cuban Assets Control Regulations (CACR) to further limit the ability of US persons to book lodging in Cuba, import certain goods from Cuba, and participate in professional meetings or artistic and athletic events in Cuba. The changes include a prohibition on US persons from staying at, paying for, or arranging for lodging at hotels and other properties that have been identified by the State Department as being owned or controlled by the Cuban government – a list of properties subject to the restrictions, called the Cuba Prohibited Accommodations List (CPA List).
NEW OECD STUDY ON HOW TO IMPLEMENT A CORRUPTION REPORTING MECHANISM IN PUBLIC PROJECTS
On 24 September, the Basel Institute on Governance reported on a new study from the OECD on the ingredients for a successful High-Level Reporting Mechanism (HLRM), a mechanism which originated with the Institute in 2012. To be used to resolve allegations of misconduct in government-funded projects, it is described as a flexible, non-legal tool which allows the private sector to report issues to a high-level office that is external to the public entity where the problem has occurred. To date, HLRM have been successfully deployed in Argentina and Colombia, with several other governments expressing interest. The study is based on analyses and papers produced by the OECD and the Institute, publicly available information from the authorities that have implemented HLRMs in Colombia and Argentina, as well as personal interviews with relevant stakeholders.
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