Panama Covid-19 update – this Sunday will be, apparently, the last lockdown Sunday (or was it last week, I’m not sure…), and the international flights and tourism is suppoed to open up from Monday – we’ll see how that goes.
Meanwhile, there were still another 698 cases reported today, and another 8 fatalities (2,448 to date in total). There are now 21,242 active cases, with 120 people in ICU and 731 in other wards.
7 October 2020
UN: KENYA RANKED HIGHLY IN ‘DIRTY’ MONEY BUSINESS
On 5 October, the Kenyans website reported that the latest UNCTAD report titled Economic Development in Africa Report 2020 ranked Kenya at position 24 globally among countries that record high levels of illicit financial flows – and ahead of Nigeria, Angola, Egypt, Mauritius, Cameroon and South Africa.
ALMOST HALF OF UK BANK SPECIALISTS CAN’T SPOT SIGNS OF HUMAN TRAFFICKING AMONG TRANSACTIONS
On 6 October, the Independent reported that, in the UK, specialists in a third of banks and other consumer-facing financial institutions have admitted that human trafficking already accounts for significant financial losses; and half have had to investigate criminal activity linked to human trafficking among their own customer transactions.
US COMMERCE DEPARTMENT BUREAU OF INDUSTRY AND SECURITY AMENDMENTS TO THE EXPORT ADMINISTRATION REGULATIONS (EAR)
On 7 October, the EU Sanctions Blog reported that the amendments are linked to reviewing any licence application where BIS may consider “whether items may be used to engage in, or enable violations of” human rights abuses. Licence requirements have also been imposed on exports and re-exports of water cannon systems intended for riot or crowd control, parts/ components of such systems, and related technology/software. Finally, BIS has implemented export controls on 6 emerging technologies, as agreed at the Wassenaar Arrangement 2019 Plenary.
ESTONIA: NEW AML TOOL COULD OVERCOME PRIVACY CONCERNS
On 6 October, Bloomberg reported that local units of several banks will join a 6-month pilot project by technology startup Salv to create a secure data-exchange tool with financial watchdogs in Estonia. On identifying suspicious transactions, participants in the pilot can use the tool to match similar activities at other banks. It uses encrypted data that blocks access to specific client or transactional information, including which other lender the match comes from.
TRUMP ADMINISTRATION TO SHARPLY LIMIT SKILLED-WORKER VISAS IN POST-COVID PERIOD
On 6 October, AP reported that the Trump administration has announced plans to sharply limit visas for skilled workers from overseas, a move that officials said was a priority amid job losses caused by the coronavirus pandemic. It is said that about one-third of the people who have applied for H1-B visas in recent years would be denied under the new rules.
FINCEN AND BANKING AGENCIES PROVIDE CLARIFICATION ON PEP SCREENING BEST PRACTICES
On 5 October, Schulte, Roth & Zabel published an article saying that FinCEN and 4 US banking agencies had released joint guidance on AML due diligence expectations for bank customers who may be considered PEP. The article considers this guidance and what it identifies as the key takeaways.
PANAMA SHIP CAPTAIN HELD IN LEBANON OVER BORDER PLOT TO SMUGGLE FUEL TO SYRIA
On 7 October, Arab News reported that a ship’s captain and a shipping agent were arrested in Lebanon on charges of trying to smuggle 4 million litres of petrol into Syria. Security sources told Arab News the Panamanian-registered Jaguar S was intercepted off the Lebanese coast at Zahrani, a notorious stronghold for the Iran-backed Hezbollah group and the Amal Movement.
HONG KONG: HK$12.5 MILLION GOODS SEIZED, INCLUDING PLANTS
On 7 October, The Standard reported that goods worth HK$12.5 million including plants have been seized and a 44-year-old man arrested in a joint operation against smuggling, by the marine police and customs. Orchids and cacti were found among about 300 plants.
SUDAN ECONOMIC SANCTIONS AND EXPORT CONTROLS: A PRIMER FOR AIRCRAFT LESSORS
On 30 September, an article from Vedder Price examines the position for aircraft and jet engine lessors that require their lessees to comply with US economic sanctions and export control programmes in respect of supplies involving Sudan. The article reviews the current status of Sudan insofar as the existing US sanctions programmes are concerned. It says that OFAC Guidance provides a valuable reminder that Sudan remains a special case. Although no longer subject to a comprehensive trade embargo administered by OFAC, Sudan is still subject to a national emergency declaration under IEEPA and is still listed as a State Sponsor of Terrorism, a designation which triggers export controls. Aircraft and jet engine lessors whose lessees fly to Sudan should be mindful of that country’s status and should ensure that their leases require compliance with sanctions and export controls otherwise applicable to the leased aircraft and engines.
US: TRUST COMPANIES FACE INCREASED AML REQUIREMENTS
On 6 October, an Asset Management and Investment Funds Alerton the K&L Gates website was concerned with new rules published by FinCEN on 15 September that expand AML obligations of certain banks, trust companies, and credit unions under the Bank Secrecy Act (BSA).
PROSECUTORS RAID GERMAN FA OFFICES AND HOMES IN TAX EVASION INVESTIGATION
On 7 October, the Independent reported that the Frankfurt prosecutors’ office confirms 6 former and current DFB officials are suspected of intentionally falsely declaring income from asset management to the sum of €4.7 million.
NORWAY’S TAX AUTHORITIES FEAR A WAVE OF CORONA FRAUD FROM FOREIGN CRIMINALS
On 7 October, Norway Today reported that Norwegian tax authorities are currently investigating 112 cases of corona funding fraud, and the Tax Administration (Skatteetaten) is said to fear a wave of foreign criminals will take advantage of the schemes, saying that “foreign criminal groups look at the Norwegian support schemes as a jar of honey”.
BULGARIA: 5 CHARGED AFTER DISRUPTION OF A RACKETEERING AND LOAN SHARKING CRIMINAL GROUP
On 7 October, Bulgarian state TV reported that 5 people have been charged after the Prosecutor’s Office and police in Sofia disrupted an organised criminal group created for the purpose of racketeering, property fraud and loan sharking.
AUSTRALIA: ‘DEPLORABLE’ CHILD-LIKE SEX DOLLS ARE INTERCEPTED AT CUSTOMS
On 7 October, the Mail Online reported that 2 men have been charged after ‘deplorable’ child-like sex dolls were intercepted at the Australian border. Officers intercepted 2 air cargo packages from Hong Kong at customs in Perth last month, and allegedly found a silicon child-like sex doll in each package.
THE ITALIAN MAFIA’S INFILTRATION OF COSTA RICA
On 7 October, an article in Insight Crime reports on mafia infiltration of Limon, the major port in Costa Rica, seen as a major transit point for illegal drugs en route to Europe. It links the murder of a Costa Rican fruit exporter in 2018 and the conviction by an Italian court in January of his father and business partner of using their fruit company in Costa Rica to traffic cocaine into Europe. It also mentioned that, in July, fugitive ‘Ndrangheta drug trafficker Franco D’Agapiti, who was the co-owner of a luxury hotel and casino resort in the Pacific coast tourist town of Jacó, was arrested in Costa Rica and InSight Crime traced 3 other types of businesses, as well as vehicles, to suspected and convicted Italian drug traffickers in Costa Rica.
CRASHED AIRCRAFT IN COLOMBIA MAY BE EXAMPLE OF ‘CLONED CRAFT’
On 7 October, Insight Crime reported that a small aircraft that crashed on the outskirts of Bogata had the same registration number as a drug smuggling aircraft seized in Honduras a decade ago — a likely case of a cloned registration.
AUSTRALIA: MAN ALLEGEDLY BEHIND A $400 MILLION FRAUD AGAINST A MAJOR KOREAN INVESTMENT HOUSE LOOKING TO INVEST IN NATIONAL DISABILITY INSURANCE SCHEME HOUSING PROJECTS
On 7 October, The Age reported about a Melbourne man allegedly behind a $400 million fraud against a major Korean investment house looking to invest in National Disability Insurance Scheme (NDIS) housing projects. His lawyers revealed the potential criminal charges when asking the Supreme Court of Victoria to stop civil proceedings brought against him and his companies.
FRAUD WITH AGRICULTURAL FUNDS IN BULGARIA
On 6 October, EurActiv said that a recent investigative report has exposed fraud in the use of EU agricultural funds in the country, part of a widespread criminal scheme which she has flagged to the attention of the European Public Prosecutor. It refers to a TV documentary that revealed how hundreds of acres of agricultural land in the village of Dabovo are cultivated with soybeans, but only on paper.
ILLICIT DRUG TRADE AT BELGIAN PORT FUELS CRIME WAVE
On 6 October, France 24 reported that drug trafficking around Antwerp in northern Belgium is generating increasingly violent crime, which the authorities are struggling to tackle. It is the number one gateway for cocaine to the continent, thanks to its closer trade links with South America. With almost 40 tonnes of cocaine seized by the end of September, this year is on course to beat the annual record of 61.8 tonnes – and one has to add another 70 or so tonnes intercepted in Latin America on their way to Antwerp.
MALAWI ACHIEVES FIRST NON-CONVICTION BASED FORFEITURE ORDER
On 7 October, the Basel Institute on Governance congratulated Malawi on achieving the first ever non-conviction based forfeiture order under the new Financial Crimes Act of 2017. It says that the use of this civil forfeiture mechanism is a huge step forward in Malawi’s fight against corruption, fraud and money laundering.
SANCTIONS COMPLIANCE IN IRELAND
An article in the Autumn 2020 edition of ICQ Magazine discusses the essential components of a risk-based sanctions compliance programme and the relevant regulatory expectations – and the effects of Brexit.
PODCAST: HOW DONALD TRUMP TURNED THE PRESIDENCY INTO A BUSINESS
In the latest TRACE podcast: “White House Inc: How Donald Trump Turned the Presidency Into a Business”, Dan Alexander, author and senior editor at Forbes, discusses his book about Trump’s business deals with foreign entities, including one very strange deal with the sovereign wealth fund of Qatar.
FRANCE TO USE UAV TO PATROL MEDITERRANEAN
On 6 October, Homeland Security Today reported that the European Maritime Safety Agency (EMSA) has established a multi-purpose maritime surveillance operation led by the French Navy and customs, with operational missions having started on 23 September for an initial period of 3 months.
UK: FINANCIAL REGULATOR BANS CRYPTO-BASED PRODUCTS FOR RETAIL INVESTORS AFTER A YEAR-LONG REVIEW
Market Insider and others on 7 October reported that the FCA has banned the sale of certain types of crypto-based financial products for retail investors after a year-long review – banning firms acting in the UK from selling, marketing, and distributing products that track the price of cryptoassets. These would cover futures, options, contracts-for-difference (CFD), and exchange-traded notes on cryptocurrencies.
IT’S TIME TO TAKE CREDENTIAL STUFFING SERIOUSLY
On 7 October, a post from the Compliance & Enforcement blog from the Program on Corporate Compliance and Enforcement at the New York School of Law explains that credential stuffing is often not an attack by itself but a means to gain access to an online account to launch another attack, but rather assists attackers who can use automated tools to take stolen usernames/passwords from one account and website and test to see if those same credentials (or very similar credentials) work for other accounts and websites.
US TELEMEDICINE FRAUD
On 7 October, Lexblog reported in a post that on 30 September the DoJ announced its latest health care fraud take down, and charged 345 doctors, medical professionals, owners/operators, and others with criminal health care fraud schemes implicating more than $6 billion in total alleged loss. It says that while telemedicine has obviously been a lifeline for patients during the pandemic as people are sheltering in place and avoiding leaving their homes, history shows that fraud schemes follow “opportunities” created by crisis and the DoJ has now shown that it recognised early on that telemedicine fraud would explode during COVID-19. The DoJ also announced the establishment of the National Rapid Response Strike Force (NRRSF), the mission of which is to investigate and prosecute fraud cases involving “major health care providers” operating in multiple jurisdictions.
SINGAPORE BANKS TAKE ON TRADE FINANCE FRAUD WITH BLOCKCHAIN REGISTRY
On 7 October, Global Trade Review reported that a group of major banks hope that a blockchain-based registry of trade finance transactions will put a stop to the fraudulent practices that have plagued Singapore’s commodities sector this year. The registry project is jointly led by Standard Chartered and DBS Bank but brings together 14 international financial institutions. The registry is also supported by government innovation agency Enterprise Singapore, with the Association Banks of Singapore acting as an advisor.
BRAZIL’S CAR WASH CORRUPTION PROBE EYES PETROBRAS BUNKER FUEL DEALS
On 7 October, Reuters reported that Brazilian police have expanded the Car Wash corruption investigation to alleged kickbacks valued at $8 million on contracts for bunker fuel bought by state-run oil company Petroleo Brasileiro SA for its fleet of tankers. A statement indicates that a long-running probe into Petrobras’ dealings with some of the world’s largest commodity trading firms – including Vitol, Glencore, and Trafigura – is expanding geographically.
FinCEN FILES REPORTING FROM ACROSS AFRICA
On 7 October, ICIJ provided a summary on reporting of how its partners investigated suspicious transactions linked to prominent politicians, arms companies, the ivory, gold and diamond trades, and more.
UK “BOUNCE BACK” LOANS: TAXPAYERS MAY LOSE £26 BILLION ON UNPAID LOANS
On 7 October, the BBC carried news of an NAO report that says that up to 60% of emergency pandemic loans made under the Bounce Back scheme may never be repaid – due to from fraud, organised crime or default.
IRELAND A ‘SOFT SPOT’ FOR MONEY LAUNDERING
On 7 October, the Irish Times reported comments that Ireland is a “soft spot” for international money launderers and will continue to be used for nefarious purposes unless action is taken to stop it, by UK-based financier and anti-corruption campaigner Bill Browder.
UK: FCA STATEMENT ON CANNABIS-RELATED BUSINESSES AND THE APPLICATION OF POCA 2002
On 7 October, an article from Wilmer Hale said that a statement from the FCA setting out its approach to assessing applications for listing made by cannabis-related businesses. The statement is to be followed in due course by a consultation on what guidance should be issued. The statement centres on how the Regulator interprets the Proceeds of Crime Act 2002 in respect of funds generated by cannabis-related business. The statement makes plain that cannabis-related businesses may still represent a POCA risk.
UK FINANCE: 2020 HALF-YEAR FRAUD UPDATE
This report from UK Finance contains data on losses due to unauthorised fraudulent transactions made using payment cards, remote banking and cheques and authorised push payment (APP) scams. The figures show that in the first half of 2020, losses due to unauthorised financial fraud using payment cards, remote banking and cheques decreased eight per cent, to £374.3 million. Meanwhile in the first half of 2020, a total of £207.8 million was lost to APP scams. This was equivalent to losses seen in the same period in 2019.
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