OTHER THINGS YOU MAY HAVE MISSED – OCTOBER 1

Panama Covid-19 update – on Day 207 of the crisis in Panama, despite the relaxation of some rules, 747 new cases giving 21,052 active cases, of whom 107 in ICU, 676 in other wards and 349 in hotel rooms. 15 more fatalities (2,387 since March).

1 October 2020

FinCEN FILES UPDATE –

Reaction of the Superintendent of the New York State Department of Financial Services

On 1 October, KYC 360 referred to a Law 360 op-ed article by the Superintendent of NYDFS who acknowledged that “insiders” have long known that the financial system is “awash with trillions of dollars in dirty money” and that SAR have “become a free pass for banks”.  She says that she is concerned that a lack of accountability can distort the risk-reward equation within banks.  “Individual bankers are rarely held accountable, so money laundering becomes a source of profits and bank fines become a cost of doing business”, she wrote. “When the profits exceed the fines, the business choice is easily corrupted”. 

https://www.riskscreen.com/kyc360/news/dirty-money-has-metastasized-within-global-banking-system-top-regulator-says/

Classified files shed light on JP Morgan role in ‘corrupt’ oil deal payout

On 1 October, Finance Uncovered carried an article saying that documents from the UK SOCA have revealed how it allowed JP Morgan to pay $875 million of suspicious funds to a Nigerian politician widely alleged to be a convicted money launderer.  They raise concerns about huge payments it was being asked to make by the Nigerian government to Dan Etete, the country’s former petroleum minister. The reports were filed in 2011 and 2013 to the UK FIU, then in SOCA (now NCA).

REFORMED OR JUST RETOUCHED? UZBEKISTAN’S NEW REGIME

On 1 October, an article from the Carnegie Center which says that in 4 years, Uzbek President Shavkat Mirziyoyev has managed to establish a reputation both at home and abroad as a reformer.  Next year, Mirziyoyev must run for reelection and make an important choice: whether to continue with his half-hearted liberalisation without touching the foundations of the regime, or to embark on the more vigorous reforms that Uzbek society expects from him. 

https://carnegie.ru/commentary/82839

EU COURT ANNULS SANCTIONS LISTING OF FORMER UKRAINE PRIME MINISTER AND PROSECUTOR GENERAL AND SON

On 1 October, the EU Sanctions Blog reported that the EU General Court has annulled the 2019 acts designating Sergej Arbuzov, the former Prime Minister of Ukraine, Victor Pshonka, former Prosecutor General, and his son Artem Pshonka.  However, they remain sanctions, having been relisted in March 2020.

MICROSOFT REPORTS SPIKE IN FOREIGN TARGETING OF COVID-19 RESEARCHERS AND THINK TANKS

On 29 September, The Hill and others reported that Microsoft said it had seen a major spike in foreign efforts to target US public policy groups and organisations involved in COVID-19 research, marking a shift from previous cyber attempts to disrupt critical infrastructure.  It found that countries like Russia were now focusing on NGO, human rights groups, think tanks, colleges and universities and other groups involved in public policy.  Coronavirus researchers have also been a top target.  Microsoft said 52% of all nation-state targeting over the past year originated from Russia, with the other half coming from China, North Korea and Iran.  The US was the target of almost 70% of attacks, followed by the UK at 19%, and Canada, South Korea and Saudi Arabia rounding out the top 5.

https://thehill.com/policy/cybersecurity/518744-microsoft-reports-spike-foreign-targeting-covid-19-researchers-think-tanks

UK: INTERNET OF THINGS “HELPING TO PROVIDE KEY EVIDENCE IN CRIMINAL TRIALS” OBSERVES DPP

On 30 September, FSM Security reported that digital devices like smart doorbells, dashcam footage, car GPS systems and even Amazon Alexa are providing increasingly more evidence in criminal trials, the Director of Public Prosecutions has revealed.  Addressing the Westminster Policy Forum on the challenges of prosecuting crime in 2020, Max Hill QC spoke about how developments in digital technology are driving significant changes in the way evidence is collected and used in court.

https://www.fsmatters.com/IoT-helping-to-provide-evidence-in-criminal-trials

COMPARISON OF UK AND CAYMAN ISLANDS REQUESTS FOR DISCLOSURE OF INFORMATION

On 29 September, Carey Olsen published a diagrammatic representation of the similarities and differences between requests, demands, and orders compelling the production of information in the onshore (UK) and offshore (Cayman Islands) jurisdictions.

PAKISTAN ISSUES AML/CFT/CFP REGULATIONS FOR REGULATED ENTITIES

On 1 October, Business Recorder reported that the State Bank of Pakistan (SBP) has issued the AML/CFT/CPF regulations for its Regulated Entities.  The SBP has warned that any violation of these regulations will attract penal as well as administrative actions. 

https://www.brecorder.com/news/40022837/sbp-issues-aml-cft-cpf-regulations-for-res

https://www.dawn.com/news/1582582

TRUCKERS CHARGED IN RECORD $336 MILLION US-CANADA TOBACCO-SMUGGLING CASE

On 29 September, Freightwaves reported that the Quebec-based group accused of moving nearly 90 contraband loads.  Truck drivers and the 2 alleged ringleaders were among the 13 charged in Quebec in connection with the tobacco-smuggling operation.

https://www.freightwaves.com/news/truckers-charged-in-record-336m-us-canada-tobacco-smuggling-case

THE EUROPEAN BANKING AUTHORITY (EBA) HAS PUBLISHED ITS ANNUAL WORK PROGRAMME FOR 2021

 On 30 September, Market Screener reported on the contents of the EBA workplan for 2021, focusing on 6 main areas.  These include building the infrastructure in the EU to lead, coordinate and monitor AML/CFT supervision and providing the policies for factoring in and managing Environmental, Social and Governance (ESG) risks.

https://www.marketscreener.com/news/latest/EBA-publishes-work-programme-for-2021–31448853/

ZIMBABWE: CHINESE FIRM VIOLATES MONEY LAUNDERING LAWS

On 1 October, Pindula in Zimbabwe reported that the Reserve Bank of Zimbabwe (RBZ) has penalised a Chinese brick manufacturing company, Silver Dragon, for violating section 11 of the Bank Use Promotions Act which seeks to stem money laundering.  Silver Dragon is alleged to have failed or neglected to submit required returns to the RBZ.

HONOLULU BUSINESSMAN ACCUSED OF STEALING $12.8 MILLION IN COVID RELIEF FUNDS

On 30 September, KHON 2 reported that prosecutors have accused a Honolulu businessman of stealing nearly $13 million of federal aid money.  It is said that Martin Kao used false information to get loans from the Paycheck Protection Program.

GAMBLING OPERATOR GVC WARNS OF PROFIT HIT FROM NEW GERMAN GAMBLING REGULATIONS

On 1 October, Reuters reported that Isle of Man-based GVC Holdings has said that new gambling regulations in Germany, its second-largest online-gaming market, will reduce the Ladbrokes and bwin brand-owner’s 2021 profit by £70 million.  The tighter regulations, which will come into effect this month, included deposit limits across poker and slot gaming of €1,000 per month, switching off all casino table games until individual German federal states issue licences, as well as restrictions on advertising.

https://uk.reuters.com/article/uk-gvc-holdings-outlook/bookmaker-gvc-warns-of-profit-hit-from-german-gambling-regulations-idUKKBN26M5QB

PREVENTING CORRUPTION OF PARLIAMENTARIANS, JUDGES AND PROSECUTORS: FRANCE CAN DO BETTER

On 1 October, GRECO, the Council of Europe Group of States Against Corruption, has published a report which notes that some progress has been made regarding members of parliament, such as oversight of senators’ operational expenses, the system for dealing with conflicts of interest and the 2 Houses’ regulations on receiving gifts, and the publication online of gifts and invitations declared by National Assembly members.  It calls on the authorities to continue making headway in this field, in particular as concerns oversight of Assembly members’ operational expenses and the publication online of the Assembly members’ and senators’ declarations of assets.

https://www.coe.int/en/web/portal/-/preventing-corruption-of-parliamentarians-judges-and-prosecutors-france-can-do-better

JOINT UK-FRENCH UNIT SEES ALMOST 100 SUSPECTED PEOPLE SMUGGLERS ARRESTED

An NCA news release on 1 October advised that a new joint unit of UK and French law enforcement officers working together to tackle organised immigration crime has been involved in the arrest of almost 100 suspected people smugglers in France.  The Joint Intelligence Cell, which became operational on 21 July, has also played a part in stopping around 500 migrants from making the crossing in small boats.

https://www.nationalcrimeagency.gov.uk/news/joint-uk-french-unit-sees-almost-100-suspected-people-smugglers-arrested-as-law-enforcement-steps-up-fight-against-organised-immigration-crime

ANDORRA HAS CONFIRMED THAT IT IS ENGAGED IN AN ACTIVE INVESTIGATION OF THE REPORTED MONEY LAUNDERING OPERATIONS INVOLVING FORMER MEMBERS OF THE GOVERNMENT OF MALTA

On 30 September, in the continued coverage of development affecting Malta, Kenneth Rijock in his blog reported that Andorra has confirmed an active investigation of the reported money laundering operations involving former Malta Prime Minister Joseph Muscat and other present or former members of the Government of Malta and linked to the Banca Privada d’Andorra (BPA) scandal.

https://rijock.blogspot.com/2020/09/andorra-brings-more-bad-news-for-muscat.html

10,500 COUNTERFEIT CASIO WATCHES SEIZED BY US CUSTOMS

A news release from US Customs & Border Protection on 30 September advised that during an inspection of an arriving shipment, CBP officers in Louisville uncovered 10,500 counterfeit Casio watches worth more than $680,000.  The packages were coming from Hong Kong and were going to one recipient in Laredo, Texas.

https://www.cbp.gov/newsroom/local-media-release/10500-counterfeit-casio-watches-seized-cbp-officers-louisville

SECOND TANKER CARRYING IRANIAN FUEL REACHES VENEZUELAN WATERS

On 1 October, Hellenic Shipping News reported that the second of a group of 3 Iranian tankers entered Venezuelan waters, carrying fuel for the gasoline-starved nation, which is struggling under a collapsing oil industry and U.S. sanctions that have crippled imports and exports.

CONFLICTING RULINGS IN CASES BROUGHT UNDER THE HELMS-BURTON ACT OVER CUBAN ASSETS

On 1 October, an article in Lawfare reminds one that Title III (dating from 1996, but only activated in 2019) of the Act was designed to scare investors away from the island by allowing US nationals to sue any persons or entities who “trafficked” in property confiscated by the Castro regime.  Title III defines “trafficked” expansively, to include not only engaging “in a commercial activity using or otherwise benefiting from confiscated property” but also profiting from any trafficking done by anyone else.  Title III also provides for treble damages under certain circumstances.  It looks at developments in litigation under Title III, and a requirement that plaintiffs to show that defendants really knew that the property in question was confiscated — which may be a high bar in the many cases where the defendant did not directly interact with a property with a registered claim.

https://www.lawfareblog.com/conflicting-rulings-cases-brought-under-helms-burton-act

FINANCIAL INTELLIGENCE FOR THE ILLEGAL TRADE IN WILDLIFE

Manchester CF has produced fort briefing which explains that a environmental crime is the fourth largest crime in the world after drug trafficking, counterfeit crimes and human trafficking, and that the illegal wildlife trade is by some estimated at $7-23 billion per year. 

It also briefly explains the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), and then looks at the illegal ivory trade and the exploitation of elephants from Africa.

SETTLEMENT AGREEMENT OFAC AND GENERALI GLOBAL ASSISTANCE INC OVER CUBA SANCTIONS

On 1 October, OFAC advised that there had been a settlement with Generali Global Assistance Inc (GGA), a New York-incorporated travel assistance services company.  GGA agreed to remit $5,864,860 to settle its potential civil liability for 2,593 apparent violations of the Cuban Assets Control Regulations.  GGA intentionally referred the Cuba-related payments to its Canadian affiliate, thereby avoiding processing reimbursement payments directly to Cuban parties and to travellers while they were located in Cuba.  GGA then subsequently reimbursed its Canadian affiliate for those payments.

https://content.govdelivery.com/accounts/USTREAS/bulletins/2a3ac8c

https://home.treasury.gov/system/files/126/gga_web_posting_10012020.pdf

OFAC PUBLISHES INTERNATIONAL CRIMINAL COURT-RELATED SANCTIONS REGULATIONS

On 1 October, OFAC published regulations to implement Executive Order 13928 of June 11, 2020 (Blocking Property of Certain Persons Associated With the International Criminal Court). It is said that OFAC intends to supplement these regulations with a more comprehensive set of regulations, which may include additional interpretive and definitional guidance, general licenses, and statements of licensing policy.

OFAC PUBLISHES FINAL RULE AMENDING WMD AND IRAN SANCTIONS REGULATIONS

On 1 October, OFAC published a Final Rule updating a Note to the Weapons of Mass Destruction Proliferators Sanctions Regulations, amending the Note to explain that SDN List entries for designated persons will include additional information regarding certain risks associated with dealings with such persons.  Separately, OFAC is also amending the Iranian Transactions and Sanctions Regulations to refine the list of organisations whose activities are authorised under the general licence for the official business of certain international organizations, and to make a technical correction.

US CUSTOMS EXERCISE TARGETED CHINESE MAIL AND EXPRESS PARCELS FOR COUNTERFEIT GOODS OR CONTRABAND

On 29 September, Homeland Security Today reported on Operation Mega Flex, which yielded more than 4,200 seizures of illicit goods and 2,400 agriculture violations over the past 15 months -including counterfeit goods, illegal narcotics, fake identity documents, prohibited plant and animal products etc.  The Operation is a CBP-led, interagency effort that was initiated in July 2019 to measure compliance and assess illicit networks in the international mail environment through periodic enhanced inspections.  It says that, on average CBP processes more than 420,000 parcels of mail and 180,000 express consignment shipments from China each day, and claims that through Operation Mega Flex, it has found that approximately 12.5% of targeted parcels contain counterfeit goods or contraband.

IRISH AUTHORITIES SEIZE 85 CARS IN SHAM MARRIAGE IMMIGRATION SCAM RAID

On 1 October, Motorious reported that Irish police had seized 85 cars from 2 dealerships. Those “sham marriages” involved someone who was a EU citizen marrying another person from outside of the EU. Most of the immigrants were men coming from Asia, especially India and Pakistan. They would pay the crime ring €20,000 each to marry women from the EU.  To launder the money from the immigration scam, the gang involved it purchased the dealerships, say authorities. They then purchased the vehicles legitimately in the UK, transported them to Ireland, eventually selling them. 

https://www.motorious.com/articles/news/irish-authorities-seize-85-cars/

Meanwhile –

11 CHARGED AS PART OF MARRIAGE FRAUD RING AT FORT BRAGG

On 1 October, Patch.com in North Carolina reported that a marriage fraud ring involving soldiers at Fort Bragg attempted to evade immigration laws while also increasing soldiers’ pay through a housing allowance increase, according to the DoJ.

https://patch.com/north-carolina/across-nc/s/h9g1c/11-charged-part-marriage-fraud-ring-fort-bragg

US: LEADER OF INTERNATIONAL MONEY LAUNDERING ORGANISATION IN DOMINICAN REPUBLIC ARRAIGNED ON FEDERAL CHARGES

A news release from the DEA on 1 October announced that Luis Velazquez-Cordero (aka “El Pequeño”), 35, of the Dominican Republic, is charged by indictment with 5 counts of money laundering and conspiracy to commit money laundering for his role in laundering millions in illegal cash drug proceeds. The indictment includes a forfeiture money judgment for $80 million, representing a portion of the property involved in the money laundering scheme. He was arrested in the Dominican Republic in July and extradited to the US. 8 other defendants have been charged in New Jersey federal court with money laundering and other charges related to the same international conspiracy.  It is alleged that, from August 2016 through July 2020, Velazquez-Cordero directed conspirators operating in New Jersey, New York, and Florida to pick up millions in cash drug proceeds from drug trafficking organizations operating in the US and exchange the cash for cashier’s checks at US banks.

https://www.dea.gov/press-releases/2020/09/29/leader-international-money-laundering-organization-dominican-republic

DUBLIN CRIME GANG BEHIND €4 MILLION CASH SEIZURE ‘BIGGER DRUG DEALERS THAN KINAHAN CARTEL’

On 1 October, Dublin Live reported that a Dublin crime gang whose dirty money has been seized in Garda raids are understood to be the biggest drug traffickers in Ireland – even surpassing the Kinahans. National Drugs and Organised Crime Bureau gardai swooped on 2 properties to seize €4 million during raids in Co Kerry and Co Laois.

https://www.dublinlive.ie/news/dublin-news/dublin-crime-gang-behind-4m-19031929

INDICTMENT OF 4 MEN FOR CONSPIRACY AND VIOLATING THE BANK SECRECY ACT BY WILFULLY FAILING TO ESTABLISH, IMPLEMENT, AND MAINTAIN AN ADEQUATE AML PROGRAMME AT THE BITCOIN MERCANTILE EXCHANGE (BITMEX)

A release on Mondo Visione on 1 October advised the indictment of Arthur Hayes, Benjamin Delo, Samuel Reed, and Gregory Dwyer, they being charged with violating the Bank Secrecy Act, and conspiring to violate the Bank Secrecy Act, by wilfully failing to establish, implement, and maintain an adequate AML programme.  One interesting aside is the allegation that,  on or about July 2019, Hyes bragged that the Seychelles was a more friendly jurisdiction for BitMEX because it cost less to bribe Seychellois authorities – just “a coconut” – than it would cost to bribe regulators in the US and elsewhere.

https://mondovisione.com/media-and-resources/news/department-of-justice-us-attorneys-office-southern-district-of-new-york-fo/

https://mondovisione.com/media-and-resources/news/statement-of-cftc-commissioner-brian-d-quintenz-regarding-the-commissions-enfo/

https://www.investing.com/news/cryptocurrency-news/cftc-charges-bitmex-with-illegally-operating-derivatives-exchange-2313288

https://fortune.com/2020/10/01/giant-cryptocurrency-exchange-bitmex-hit-with-criminal-and-civil-money-laundering-charges/

I had left off this link (as it did not seem to generate much interest!), but it seemed time to add it again and say that, if you would like to make a (polite) gesture and help me with my removal and computer costs, I have a page at https://www.buymeacoffee.com/KoIvM842y

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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