Panama Covid-19 update– it seems that the all-day Sunday lockdown is ending – but the Government have said this before and changed their mind. The 2300 to 0500 curfew is to remain, it seems.
Meanwhile, another 696 cases and 12 fatalities (so no sign of a large downturn there), with 21,113 active cases, of whom 117 are in ICU and 561 in other wards.
21 October 2020
NORTH KOREAN GROUP ACCUSED OF PHISHING ATTACK AGAINST RUSSIAN DEFENSE INDUSTRY
On 20 October, NK News reported that Anastasia Tikhonova, a senior researcher at cybersecurity firm Group-IB, has attributed more 2020 phishing attempts to a North Korea-linked group called Kimsuky and is accusing it of attempting phishing attacks that targeted Russia’s aerospace and defence industry in 2020, according to Russian newspaper Kommersant. Tactics included classic email fake login-capture phishing and more sophisticated job-offer lures.
WILL THE NORTH KOREA UN SANCTIONS PANEL OF EXPERTS DISAPPEAR IN THE FUTURE?
On 21 October, NK Pro reported that the UN Panel of Experts on North Korea formed in June 2009, following UN Security Council Resolution 1874. With its first report published in May 2010, the Panel has now been producing reports for 10 years. It says that the closure of a UN Panel of Experts focusing on Iran in 2015 does show that the existence of the DPRK Panel is not guaranteed forever. The newspaper asked 5 former members or coordinators under what conditions would support for the Panel’s work dwindle — and at what point would experts be asked to find new jobs?
US: TOP UNIVERSITIES TOOK BILLIONS IN UNREPORTED FOREIGN FUNDS
On 20 October, the Wall Street Journal reported that top universities took billions in unreported foreign funds, a report from the US Education Department has reported. It is not illegal to take such funds, but universities are obligated to disclose them under a statute that is decades-old but has not been vigorously enforced in past years. For example, it is said that Cornell University received more than $1.2 billion in foreign funds, including $760 million related to its campus in Qatar and about $1 million in contracts from Huawei.
US GUIDANCE BROADENS SANCTIONS TO THWART COMPLETION OF NORDSTREAM 2 RUSSIAN GAS PIPELINE
On 21 October, KYC 360 reported that the US State Department has broadened the scope of its sanctions targeting the unfinished Russian-backed natural-gas pipeline with new guidance published on its website. These expand on upon last year’s measures, saying sanctions would apply to companies providing services, facilities or funding for “upgrades or installation of equipment” for vessels that would work on Nord Stream 2 saying that it wants to make sure that all parties have clarity that they could fall under the sanctions.
AUSTRALIA: PUTIN’S OLIGARCH ALLY TO CASH IN ON GOVERNMENT’S GAS-LED RECOVERY
On 20 October, the Guardian reported that Viktor Vekselberg is behind a company registered in Delaware which is in line to reap dividends if one of the key gas basins the government has earmarked for quick development can be successfully fracked. It says that Viktor Vekselberg, who was made subject to US sanctions in 2018 over a number of matters including Russia’s invasion of Ukraine, and Longview Petroleum, the ultimate owners of which are not clear, hold substantial stakes in Falcon Oil & Gas – which is registered in Canada but run from Ireland, owns a little under a fifth of a Northern Territory Beetaloo basin exploration project – and which is involved in developing a fracking project in the basin.
3 SOUTH FLORIDA ‘BROKERS’ CHARGED IN $4.9 MILLION SCAM THAT SEC SAYS TARGETED SENIORS
On 21 October, KYC 360 reported that 2 felons and a former stockbroker who played legitimate stockbrokers are the latest charged in a $4.9 million penny stock scam swirling around NIT Enterprises. The SEC charged Mason Newman, Boca Raton’s Christian Baquerizo and Kevin Cardenas with fraudulently selling $1.4 million of NIT stock to primarily senior citizens, 2015-19.
A HACKING GROUP IS DONATING STOLEN MONEY TO CHARITY
On 20 October, the BBC reported that hackers claim to have extorted millions of dollars from companies, but say they now want to “make the world a better place”.
In a post on the dark web, the gang posted receipts for $10,000 in Bitcoin donations to 2 charities; but one of them, Children International, says it will not be keeping the money.
A NEW WORLD OF SHIP LEASING AND SALE AND LEASEBACK TRANSACTIONS
On 16 October, an article from Reed Smith says that the most common way of financing ships has been through debt and equity financing. However, over the past decade, ship leasing has become a very significant competitor and alternative for the provision of finance for the acquisition of ships. Recent market studies are expecting the global ship lease market to grow at a significant pace over the next 5 years. It says that BIMCO (which represents shipowners which control around 65% of the world’s tonnage) has released ‘SHIPLEASE’ – be rolled out to support shipowners, leasing companies, financial brokers and lawyers when negotiating and drawing up sale and leaseback agreements. The article asks what is ship leasing and why is it such a strong trend in shipping? It explores this growing market and looks at what is in store for market players in these new and challenging times.
VIDEO: MODERN SLAVERY – AN UPDATE FOR DEFENCE PRACTITIONERS
5 St Andrew’s Hill Chambers in the UK has released a YouTube video of a webinar in which attendees address some of the issues which arise in practice and to provide an update of important developments. It refers in particular to the defence contained in section 45 of the Modern Slavery Act 2015 that a defendant had themself been exploited.
BVI COMPANIES: HIDDEN OWNERS, OSTENSIBLE AUTHORITY AND DUOMATIC PRINCIPLE
On 20 October, an article from RPC was concerned with a Privy Council case, where the Court found that a company’s director and registered agent were not in breach of their tortious duties of care to the company where they were acting on the instructions of an agent who had ostensible authority. The firm concludes that case clarifies that the Duomatic principle can apply to ostensible authority as well as actual authority, and it also provides interesting insight into circumstances where arrangements cloaking the beneficial owners of, in particular, offshore companies are relatively common. Part of the decision-making rested on the fact that owners who seek to disguise themselves in this manner run the risk of being disobeyed by the people or entities that they instruct, and the beneficial owners should not be allowed to transfer that risk to others. In those circumstances, their only recourse is to sue the rogue agent.
UK: IS IT TIME FOR THE FCA TO RE-THINK THE USE OF ITS CRIMINAL POWERS?
An article from Shearman & Sterling on 14 October suggested the above as Nikhil Rathi, the new CEO of the FCA took up his role on 1 October. It says that one of the challenging issues in the in-tray is the regulator’s approach to enforcement and, in particular, the use of its criminal powers. The article argues that the backlog from a more proactive apprach to the use of criminal investigations means that, rather than identifying “the heart of the case” quickly and promptly ending investigations where there is no substance to suspicions or evidence of serious misconduct, many individuals and firms are spending months or even years under investigation before cases are closed without further action being taken. The backlog also means that cases that ought to be being pursued are delayed. As a result of the way the FCA now treats investigations, firms cannot expeditiously reach settlements and achieve closure. The backlog means that victims are waiting for restitution or compensation and wrongdoers are not being prohibited and/or convicted in good time. It says that last month, the FCA also revealed it has now closed half of the 14 criminal investigations under the Money Laundering Regulations that were open at the beginning of the year. Of the 7 that remain open, 6 are being pursued on a ‘dual-track’ basis (i.e. they may still result in a regulatory outcome) and recent outcomes against firms, such as Standard Chartered Bank and Commerzbank, indicate that the FCA is still far more likely to seek regulatory outcomes for AML failings. On reasons for a lack of enthusiasm for criminal investigations it says that they tend to take longer to complete and can be very expensive. The process of gathering evidence and reviewing disclosure is often far more time consuming and resource intensive. While firms are often willing to enter into early discussions in an attempt to settle regulatory investigations, those who are subject to ‘dual track’ investigations are often far less inclined to co-operate for fear of incriminating themselves and facing prosecution. The article makes some suggestions for the FCA CEO to consider.
CZECH REPUBLIC ATTEMPTS TO MAKE APPROVAL OF STATE AID MEASURES CONDITIONAL ON THE ABSENCE OF LINKS TO NON-COOPERATIVE JURISDICTIONS
On 20 October, Kinstellar reported in an article that, in July, the European Commission issued Recommendation 2020/139 on making State financial support to undertakings in the EU conditional on the absence of links to non-cooperative jurisdictions. Although the Recommendation is not legally binding for EU Member States, Czech authorities have already started to request that applicants for certain forms of state aid demonstrate fulfilment of the conditions stipulated in the Recommendation. The article says that it is anticipated that such verification procedures will become standard practice for Czech authorities prior to approving certain forms of state aid.
PODCAST – BUYING EU CITIZENSHIP: THE CYPRUS PAPERS
In the latest TRACE podcast, Alex Crutcher of the Al Jazeera Investigative Unit discusses the sale of “golden passports” to wealthy criminals and high-risk individuals. The team pursued the story in the wake of a major data leak, and their reporting has resulted in the cancellation of the programme and several high-level resignations in the Cypriot government.
TURKEY: POLICE RECOVER $10 MILLION WORTH OF SMUGGLED FOSSILS
On 21 October, Hurriyet reported that Turkish anti-smuggling teams have uncovered 879 animal and plant fossils worth $10 million and dating back 150-200 million years in 2 operations in the capital Ankara. The teams found the fossils in a house allegedly being used by an organisation founded and run by imprisoned televangelist Adam Oktar.
UKRAINE: ABOUT 60% OF SMUGGLED CIGARETTES COME THROUGH PORTS
On 21 October, Interfax Ukraine reported that about 60% of attempts to smuggle cigarettes is recorded through ports, in general, tobacco products are most popular among other smuggled goods, according to First Deputy Head of the State Border Guard Service of Ukraine, Volodymyr Nikiforenko. This year the State Border Guard Service is said to have suppressed attempts of illegal movement of tobacco products across the border about 750 times, seized 12 million packages of cigarettes.
WILL ICELAND GET OFF FATF GREY LIST?
On 21 October, the Icelandic Monitor posed this question as the latest FATF Plenary opened. In October 2019, Iceland was placed on the list, for in FATF’s opinion, the country had failed to implement adequate measures with respect to this issue. On this list, there were 12 countries, including Pakistan, Syria, Yemen, Zimbabwe, Cambodia and Ghana – countries where corruption or chaos is rampant. In June, a general FATF meeting confirmed that Iceland had completed its action plan in an adequate manner, but subsequently, it became clear that a special assessment of the situation would have to be done on location before the country could be taken off the list.
ARGENTINA’S TAX AUTHORITY LAUNCHES COMPLIANCE CAMPAIGN
On 21 October, STEP reported that the Federal Administration of Public Revenues has announced that is it launching the tax planning information regime (IPF regime) to crack down on tax evasion by companies and individuals – by monitoring tax-planning strategies that may lead to tax evasion, as well as encouraging voluntary compliance.
A PRIMER ON CANADIAN SANCTIONS LEGISLATION
On 21 October, Blake Cassels & Graydon LLP published an article saying that Canada, like other major jurisdictions, has a broad range of economic and financial sanctions targeting foreign states and their nationals, as well as various terrorist organisations. Although there is a great deal of harmonisation between Canadian sanctions laws and those of Canada’s international partners (such as the US and the EU), there are also major differences. Canadian sanctions laws apply to all individuals and businesses in Canada and to all Canadian citizens and Canadian-incorporated businesses operating outside Canada. There are 5 federal statutes under which the Government of Canada imposes economic sanctions and trade restrictions. The article also refers to other relevant laws, such as concerned with import or export controls.
UK: COURT OF APPEAL DECLARES HOME OFFICE IMMIGRATION POLICY ‘UNLAWFUL’
On 21 October, the Law Society Gazette reported that the Court declared unlawful an immigration policy that campaigners argued imposed too tight a timetable on people facing deportation for them to get proper access to justice.
POST-BREXIT REGULATIONS: FINANCIAL SERVICES BILL INTRODUCED
On 21 October, HM treasury published a news release advising that a new Bill designed, it says, “to ensure the UK’s world-leading financial services sector continues to thrive and grasp new opportunities on the global stage” has been introduced into Parliament. It is described as the first step in shaping a regulatory framework for the UK’s financial services sector outside of the EU. It includes provisions to –
- deliver long-term market access between the UK and Gibraltar for financial services firms on the basis of alignment and cooperation, now that the UK and Gibraltar have left the EU;
- increase the maximum prison sentence for market abuse from 7 to 10 years in line with other sentences for financial crimes;
- increase beneficial ownership transparency for trusts – which will clarify the Government’s ability to enforce and make changes to extra-territorial trust registration powers; and
- streamline the FCA’s process for removing a firm’s authorisation and taking them off the public register, to improve accuracy and reduce the risk of fraud.
FINNISH CRYPTOCURRENCY PROVIDER TIGHTENS COMPLIANCE IN FACE OF WIDESPREAD FRAUD
On 21 October, SCCE reported that LocalBitcoins, a Finnish P2P bitcoin marketplace plagued by criminal transactions, has spent the past year bolstering its compliance functions after a study found that the marketplace processed the most criminal transactions of any cryptocurrency platform in the world.
CONSENT ORDER AGAINST KANSAS BANK RELATING TO BSA/AML COMPLIANCE
On 21 October, Weiner Brodsky Kider PC published an article saying that the Federal Deposit Insurance Corporation in the US recently issued a consent order against a Kansas-based bank relating to alleged violations of the Bank Secrecy Act. The order included a requirement for the bank to cease all activity related to its foreign financial institution customers, including but not limited to funds transfers, remote deposit capture, money service business remittances, Automated Clearing House transfers, and funds transfers to or from any foreign central bank accounts.
MEXICO REMOVES LICENCES FROM SEVERAL CASINOS
On 21 October, Calvin Ayre reported that the current administration has been on a warpath lately, targeting the gambling industry and, in particular, casino licences that had been issued by former president Vicente Fox. It is suggested that there was annoyance that one company was able to secure the licences for as many as 10 properties under a 12-year licence after taking its case to court, where a judge reportedly signed off on the requests.
US CUSTOMS SEIZE ANCIENT CARVED STONES FROM CAMEROON
On 21 October, Macau Business reported that US customs officials in Miami said they seized ancient carved stones from Cameroon known as Ikom monoliths that had been exported to the US using fake documents. Experts believe the stone sculptures were made sometime between 200 and 1,000 AD.
POLAND ARRESTS GOVERNMENT CRITIC ON ALLEGED MONEY LAUNDERING CHARGES
On 21 October, Jurist reported that officers had arrested Roman Giertych, a high-profile lawyer, former deputy prime minister of Poland, and staunch critic of the Polish government, on charges of money laundering.
WHAT LIES BEHIND ARMED ROBBERY OF CANCER DRUGS IN MEXICO CITY?
On 21 October, Insight Crime reported on a massive robbery of nearly 38,000 cancer drugs from a warehouse in Mexico City which, it says, points to a growing sophistication in the country’s lucrative black market for medicine, with those involved reacting to specific shortages and carrying out highly targeted operations. Mexico has seen a recent spate of high-profile thefts of medical goods, including a highway robbery of over 10,000 doses of flu vaccine for the public health sector, and gunmen also intercepted a truck carrying 20 dialysis machines in Mexico City.
HOW CAN INTERNATIONAL TRADE CONTRIBUTE TO SUSTAINABLE FORESTRY AND THE PRESERVATION OF THE WORLD’S FORESTS THROUGH THE GREEN DEAL?
On 21 October, a briefing paper from the EU Parliament Research Service says that the EU has committed to promoting sustainable forest management both domestically and internationally. However, efforts so far have concentrated on promoting the legality of trade in timber and timber products, via policy instruments such as FLEGT and the EU Timber Regulation. The paper proposes 11 measures, both at the unilateral, bilateral and multilateral level, that inter alia combine market access incentives on the part of consumer markets such as the EU with obligations to promote principles of sustainable production on the part of producer countries.
PAYPAL – LAUNCH OF A NEW SERVICE ENABLING ITS CUSTOMERS TO BUY, HOLD AND SELL CRYPTOCURRENCY DIRECTLY FROM THEIR PAYPAL ACCOUNT
A release on Mondo Visione on 21 October advised its new service and is the first to receive a conditional Bitlicense from the New York State Department of Financial Services (DFS).
SEC SEEKS $5 MILLION FINE OVER KIK’S $100 MILLION ICO
On 20 October, Decrypt reported that the SEC had told a New York court that court that Canadian-based messaging app company Kik should pay a $5 million fine for illegally holding a $98 million initial coin offering (ICO) for its crypto network, Kin.
PARAGUAY POLICE SEIZE RECORD $500 MILLION COCAINE HAUL HIDDEN IN CHARCOAL
On 21 October, Reuters reported that Paraguayan police said that they had seized a record 2.3 tons of cocaine at a private port near Asunción, with a market value of around $500 million, hidden in a charcoal shipment destined for Israel. The seizure is the largest cocaine bust in Paraguay, considered a transit country for drug trafficking to Europe and other destinations.
POLICE HANDED INFORMATION ON CLAIMS VATICAN SENT $1 MILLION TO AUSTRALIA IN RELATION TO GEORGE PELL SEXUAL ABUSE TRIAL
On 20 October, ABC News reported that financial crimes regulator AUSTRAC has passed information to police about allegations of money being transferred from the Vatican in relation to the trial of Cardinal George Pell.
WORLD BANK GUIDANCE ON EVALUATING COMPLIANCE PROGRAMMES
A post from the FCPA Blog on 21 October advised on an initiative by the World Bank’s enforcement arm, the Integrity Vice Presidency (INT), investing significant resources into formally evaluating companies’ compliance programmes during an investigation – said to be a shift from its previous practice of looking at compliance safeguards only after a sanction had already been handed down.
CENTRAL BANK OF BAHAMAS PREPARES FOR THE NATIONAL RELEASE OF CENTRAL BANK DIGITAL CURRENCY (CBDC)
On 19 October, a release on the CFATF website advised that the Central Bank of the Bahamas is preparing for a nationwide rollout of its digital currency, known as “Project Sand Dollar”. The CBDC had been trialled in 2 regions of the Bahamas, and the gradual national release of the CBDC will commence on 20 October through authorised financial institutions.
RUSSIAN NAVY SEEN ESCORTING IRANIAN TANKERS BOUND FOR SYRIA
On 21 October, USNI News reported that the Iranian-flagged oil tanker Samah entered the Mediterranean Sea via the Suez Canal, and evidence suggested that the ship sailed to Syria, escorted by 2 Russian Navy ships.
THE LITTLE-KNOWN STORY OF US AND SOVIET PURSUIT OF RADIOLOGICAL WEAPONS
The Fall 2020 edition of International Security carries an article saying that, since 9/11, most expert commentary on radiological weapons (aka RDD or “dirty bombs”) has focused on non-state actors. However, the article says, numerous countries in the past have expressed interest in radiological weapons; a number have actively pursued them; and 3 tested them on multiple occasions before ultimately deciding not to deploy the weapons. It asks rre radiological weapons a thing of the past, or do they remain an attractive option for some countries? It refers to circumstances in the future that might prompt renewed interest on the part of some states in radiological weapons.
UK INSOLVENCY REFORM – SCRUTINY OF ADMINISTRATION PRE-PACK SALES
An article from K&L Gates LLP on 21 October was concerned with a report from the Insolvency Service on the state of pre-pack sales following the administration of insolvent UK companies. Draft regulations would require enhanced scrutiny of pre-pack sales to connected parties during the administration process. If the draft regulations are adopted, a pre-pack sale will require consent of the company’s creditors or the submission of an independent evaluator’s report. They are designed to help change the perception that pre-pack sales only serve to benefit the connected persons purchasing the company’s assets, but will also likely lead to increased costs and delays.
INVESTIGATION INTO CORRUPTION AT LIBYAN EMBASSIES IN ITALY AND VATICAN
The Libya observer on 21 October reported that the Head of Libya’s Audit Bureau in Tripoli has sent reports to the Attorney General about corruption cases at the Libyan embassies in Vatican City and Italy, with claims that officials at the embassies had taken state funds for their own use and for others, in addition to transferring money from the embassies’ financial allocations to persons not working at the embassies.
FORMER PRESIDENT OF ICE CREAM MANUFACTURER CHARGED WITH WIRE FRAUD AND CONSPIRACY IN CONNECTION WITH AN ALLEGED SCHEME TO COVER UP SALES OF LISTERIA-TAINTED ICE CREAM IN 2015
A news release from the US DoJ on 21 October advised that Paul Kruse, the former president of ice cream manufacturer Blue Bell Creameries LP, has been charged with wire fraud and conspiracy in connection with an alleged scheme to cover up the company’s sales of Listeria-tainted ice cream in 2015.
US: MAN PLEADS GUILTY TO OVER $40 MILLION IN FRAUD
On 21 October, TC Palm reported that a Florida man, David John Ridling, 58, has pleaded guilty Wednesday to 10 counts of wire fraud, 4 counts of bank fraud, 8 counts of money laundering, and 2 counts of aggravated identity theft. The DoJ is also is seeking a forfeiture judgment of over $40 million and the forfeiture of approximately $348,000, 2 trucks and a trailer as well as property. He operated and controlled Blue Cypress Grain LLC and tried to defraud 5 financial institutions, a financial services provider and an Orlando business out of over $50 million, through the use of false brokerage account statements, fabricated tax returns, and false financial statements to obtain loans and lines of credit.
200 LAW FIRMS SUSPENDED IN UAE FOR FAILING TO COMPLY WITH AML PROCEDURES
On 21 October, Gulf News reported that a total of 200 law firms in the UAE that had failed to comply with AML procedures have been suspended from practicing for 1 month.
WHY WE SHOULD MAINSTREAM AN ANTI-CORRUPTION PERSPECTIVE INTO “FOLLOW THE MONEY” APPROACHES TO NATURAL RESOURCE CRIME
An article from the World Wildlife Fund on the need for financial investigations of natural resource crime and corruption and a “follow the money” approach. It says that financial investigations can identify and collect evidence against mid- and high-level members of a criminal network, but they are currently underused in the investigation of natural resource crime. This results in missed opportunities to identify corrupt actors and practices too. A lack of inter-agency collaboration between anti-corruption, financial crime and environmental management authorities means that there is a lack of information about the financial aspects of corruption related to crime in the renewable natural resource sector (wildlife, timber and fisheries). Well-informed risk assessments or context analyses should inform programmes and strategies to support follow-the-money work, and resulting efforts should include protections, partnerships and procedures to incentivise and give confidence to local agencies in pursuing financial disruption strategies.
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