OTHE THINGS YOU MAY HAVE MISSED – OCTOBER 22

Panama Covid-19 update – for some reason they have stopped giving the figures for those in the ICU and other hospital wards on the evening news report…but did say that there were another 792 cases reported today, 15 more fatalities (2,612 to date) and another 7,748 tests. There are 21,217 actives cases, of the total 127,227 total cases reported to date.

22 October 2020

SOURCE OF FUNDS/SOURCE OF WEALTH IN ASIA

On 18 October, Regulation Asia published an article for which it spoke to financial crime compliance experts about the ongoing effort required to achieve and maintain high standards for source of wealth and source of funds checks.  It refers to recent guidance from the Monetary Authority of Singapore and a set of FAQ from the Wolfsberg Group on hw to identify, mitigate and manage the money laundering risks of dealing with customers through appropriate source of wealth and source of funds checks.

https://www.regulationasia.com/sow-sof-checks-what-does-good-look-like/

WHAT HAPPENS TO EU LAW AT THE END OF THE TRANSITION PERIOD?

Osborne Clarke in the UK has produced a blog post which seeks to answer this question and looking at the concept of “retained EU law” after 1 January –

  1. Existing EU law which is not already on the UK statute book will be converted into UK legislation;
  2. Existing UK legislation which has been made since 1973 to implement EU obligations will be saved; and
  3. Some rights and powers contained in the EU Treaties will be preserved in UK law provided they are sufficiently clear, precise and unconditional to confer rights on individuals.

https://sites-osborneclarke.vuturevx.com/34/3674/october-2020/brexit-business-brief—what-happens-to-eu-law-at-the-end-of-the-transition-period-.asp?sid=15c7131c-7a85-4c66-8da8-10dffc297f9c

HONG KONG SHIPPING LINES SANCTIONS BY US LINKED TO SINGLE SHANGHAI RESIDENT

On 21 October, Radio Free Asia reported that 4 Hong Kong shipping companies – Reach Holding Group (Shanghai), Reach Shipping Lines, Delight Shipping, Gracious Shipping, Noble Shipping, and Supreme Shipping – sanctioned by the US for doing business with IRISL have been traced to a single name, purportedly belonging to a person based in Shanghai.  Delight, Gracious, Noble, and Supreme shipping lines named in the statement all share a single, sole director: Shanghai resident Shen Yong; and the 4 shipping lines have the same sole shareholder, Cyprus-registered Santatos Shipping Co Ltd.  Vists to Hong Kong addresses quoted revealed an empty space used by multiple companies needing to provide addresses in Hong Kong.

https://www.rfa.org/english/news/china/linked-10212020105857.html

AUSTRALIA: WESTPAC’S TIES TO PUERTO RICO BANK EURO PACIFIC SPARK CALLS FOR FINANCIAL CRIME REFORM

On 21 October, The Age reported that links between Australia’s second-biggest bank and an offshore bank at the centre of a sweeping international money laundering and tax evasion probe have sparked fresh calls for reform of the financial sector’s approach to curbing crime.  Westpac had a “correspondent banking relationship” with Puerto Rico based Euro Pacific until 2018. 

https://www.theage.com.au/business/banking-and-finance/westpac-s-ties-to-puerto-rico-bank-euro-pacific-spark-calls-for-financial-crime-reform-20201019-p566bh.html

GUATEMALAN CONFIRMS ITS COMMITMENT TO A BAN ON HEZBOLLAH 

On 13 October, Algemeiner reported that the Guatemalan government has reaffirmed its commitment to a ban on Hezbollah by announcing new legislation to prevent the financing of terrorism.  Along with Colombia and Honduras, Guatemala confirmed in January that it was designating Hezbollah as a terrorist group.

https://www.algemeiner.com/2020/10/13/guatemala-to-enforce-ban-on-hezbollah-with-anti-terrorism-financing-legislation

FORMER US HOSTAGE ACCUSES QATARI BANK OF FUNDING FIELD HOSPITALS FOR TERRORISTS

On 9 October, The National in UAE reported that Matthew Schrier was kidnapped and tortured in Syria by terrorists for 211 days in 2012 while working as a photographer.  He has filed a lawsuit in Florida against Qatar Islamic Bank (QIB) alleging that Syrian Al Qaeda terrorist groups, Jabhat Al Nusrah and Ahrar Al Sham, “used an international network of donors and charities to fund” their activities.

https://www.thenationalnews.com/world/former-us-hostage-accuses-qatari-bank-of-funding-field-hospitals-for-terrorists-1.1090990

BREXIT: UK TRANSITION TOOL

With just around 70 days before the end of the Brexit transition period (and with the talks on any further agreement seemingly struggling), the UK has re-emphasised the availability of an online tool, saying that business, family, and personal circumstances will be affected by the changes. In using the tool and answer a few questions one can apparently get a personalised list of actions.  One can also sign up for emails to get updates for what you need to do. 

https://www.gov.uk/transition

INDIA: 3 MONTHS AFTER KERALA GOLD SMUGGLING INCIDENT, THE NATIONAL INVESTIGATION AGENCYSTRUGGLES TO ESTABLISH ‘TERROR’ LINK

An analysis article in The Wire on 11 October says that, despite media reports that the Islamic State was involved in the gold smuggling, the NIA has not succeeded in providing any evidence.  3 months after the NIA began its probe, the way the case is being viewed has changed dramatically. It has become a ‘politically sensitive’ case from a ‘terror linked’ one.  The NIA investigators have so far not succeeded in proving their claim that the case is related to terrorism, and seems to be changing its arguments on the ‘terror link’ in the case. The NIA argues that gold smuggling itself is a terrorist activity, as it could destabilise the country’s economic security – and there are suggestions of political influence or motives affecting the case.

https://thewire.in/government/kerala-gold-smuggling-nia-terror-link

BREXIT: REVISITING ABOLITION OF THE VAT RETAIL EXPORT SCHEME (RES)

On 19 October, an article from Squire Patton Boggs said that the decision had been examined by the House of Commons Treasury Select Committee, which heard evidence on the effects that the withdrawal of VAT RES could have on the UK retail and tourism sectors.  As a result, the Committee wrote to the Chancellor requesting a more detailed cost-benefit analysis of the merits and risks posed by the change.

https://www.squirepattonboggs.com/-/media/files/insights/publications/2020/10/revisiting-abolishing-vat-retail-export-scheme/revistingabolishingvatretailexportscheme.pdf

RECENT CHANGES IN CHINESE EXPORT CONTROLS: ARE YOUR CHINA OPERATIONS READY?

On 22 October, US law firm Crowell Moring published an Alert posing this question.  It says that China is revamping its export control regime for the first time in nearly 2 decades and issuing its first unified Export Control Law, which combines concepts from more than a dozen existing Chinese laws and related regulations.  The Alert summarises the most significant changes from current Chinese export control practice, highlights what may be included in the pending Export Control Law, and comments on anticipated impact on businesses operating in China.  It also provides some recommended approaches for companies with China operations (or rely on third parties in China) to consider in advance of implementation of the Export Control Law.

https://www.retailconsumerproductslaw.com/2020/10/recent-changes-in-chinese-export-controls-are-your-china-operations-ready/

FINANCIAL CRIME COMPLIANCE IN THE CONTEXT OF PROTECTING CHILDREN ONLINE

An article from Freshfields Bruckhaus Deringer on 20 October says that recent AML enforcement in Australia where certain of the transactions where Westpac bank fell short of its obligations were potentially linked to the online sexual exploitation of children – and sends a strong message on financial crime compliance in the context of protecting children online.  It says that while press coverage of money laundering frequently highlights money flows linked to corruption, drug trafficking, organised crime and tax avoidance, the penalty involved also sheds further lights on the role of the financial system in protecting children online.  It says that it should also remind institutions that US and UK regulators, being the most active in this area, are not the only source of significant penalties.  The article concedes that, unlike some of the more “traditional” areas of financial crime concern, detecting commercial exploitation can present particular difficulties for institutions (for instance, the inability of onboarding due diligence to identify red flags which tend to characterise “typical” consumers of such exploitation and the fact that payment for OSEC often adopts a high-frequency, low-value model.

https://riskandcompliance.freshfields.com/post/102gihl/listening-to-the-voice-of-financial-crime-risk-and-combatting-the-online-exploi

MARKETS-BASED MONEY LAUNDERING: SPOTTING THE SIGNS EARLY

On 21 October, a brief from FTI Consulting says that the “Russian Laundromat” case – involving “mirror trades”, in which several Russian individuals bought securities through Deutsche Bank’s Moscow office and concurrently sold the same through the bank’s London office – is one of few cases of money laundering involving the markets to make headlines in recent years.  It is said to have revealed how large market players without adequate controls may be exploited to launder billions of pounds using relatively simple techniques – but has not resulted in sea-changes in the approaches taken by regulators and law enforcement to scrutinise how the markets can be abused to launder money, or in significant changes to how firms operating in this space control the risk of money laundering.  It warns that the propensity for markets to be used for markets-based money laundering has increased due to the increase in the availability of higher risk products such as micro-cap investments, increased participation by retail investors and overall increased volumes of trades – as well as the introduction of better controls against money laundering in the retail space driving criminals to seek out new channels for the laundering of proceeds of crime.

https://www.jdsupra.com/legalnews/markets-based-money-laundering-spotting-57473/

PRAMOD MITTAL IS BRITAIN’S BIGGEST BANKRUPT

On 21 October, India Today carried an article saying that Pramod Mittal, brtoher of Britain’s 19th richest person -steel tycoon Lakshmi Mittal, has been declared as Britain’s biggest bankrupt.  He is the same man who had spent £50 million on his daughter’s wedding.  It is reported that it all went downhill for Pramod Mittal 14 years back when he consented to be a guarantor for debts of a Bosnian coke producer called GIKIL.  His Isle of Man-registered Global Steel Holdings signed to stand in as the guarantor to the debts of GIKIL.  GIKIL could not make repayments to its steel trading guarantor firm in London.  That debt was then pursued by a company named Moorgate Industries, which obtained the bankruptcy order and, according to a statement by Moorgate Industries, bankruptcy proceedings were initiated after Pramod Mittal failed to make payments on agreed deadlines.  Eventually, a bankruptcy order was issued for £139,786,656.43 plus interest.  In addition, an investigation against him in Bosnia charging him to be involved in organised crime saw hm arrested but later on released at a bail of £1 million. The investigation is still going on.  It is said that he offering to repay 18 pence on the pound of his debt.

https://www.indiatoday.in/business/story/pramod-mittal-man-who-spent-50-million-on-his-daughter-s-wedding-is-britain-s-biggest-bankrupt-1733882-2020-10-21

SOUTH AFRICA: HAWKS SWOOP DOWN WITH MORE ARRESTS IN CORRUPTION BLITZ

On 22 October, the Mail & Guardian reported that arrests for government-based fraud and corruption have taken place in Gauteng and the Eastern Cape.

https://mg.co.za/news/2020-10-22-hawks-swoop-down-with-more-arrests-in-r1-4-billion-corruption-blitz

AS CROATIA MOVES INTO THE EUROZONE, CORRUPTION AND BANKING ISSUES REMAIN UNADDRESSED

On 22 October, EU Reporter says that, even as Croatia receives a coveted endorsement from the other economies of the Eurozone, the country continues to be rocked by corruption scandals.  It says that corruption has become an endemic issue in Croatia, with even the gains made after the country acceded to the EU now at risk of being lost.  The inability to effectively prosecute past wrongdoing has driven Croatia down Transparency International’s rankings, with the country how earning just 47 of 100 points in the group’s “perceived corruption” index.  It says that neither Croatia’s corruption issues nor its conflicts with the banking sector have been enough to derail the country’s Eurozone ambitions.

https://www.eureporter.co/frontpage/2020/10/22/as-croatia-moves-into-the-eurozone-corruption-and-banking-issues-remain-unaddressed

IS COLOMBIA’S AVIATION AGENCY TRAFFICKING FOR SINALOA CARTEL?

On 22 October, Colombia Reports says that the discovery of drug trafficking labs on the estate of the family of former Aerocivil director Fernando Sanclemente increases concern that the agency is being used for drug trafficking.

https://colombiareports.com/is-colombias-aviation-agency-trafficking-for-sinaloa-cartel-this-time

https://www.gov.uk/government/news/new-rules-and-logos-to-protect-british-food-and-drink

UK: HOW TO PROVE AND VERIFY SOMEONE’S IDENTITY

On 22 October, an updated version of the Good Practice Guide (GPG) 45, designed to help you decide how to check someone’s identity, was published by the Cabinet Office.  The guidance was written by Government Digital Service (GDS) with help from organisations across the public and private sectors, and aligns with a number of international standards and regulations.  It does not explain the practical ways you can check someone’s identity, and instead says that you would need to decide what tools or processes you want to use based on what’s appropriate for your service. 

https://www.gov.uk/government/publications/identity-proofing-and-verification-of-an-individual#history

EPA SETTLEMENT FOR ILLEGAL IMPORTS OF AIR FILTER PRODUCTS INCORPORATING NANOSILVER

On 21 October, Bergeson & Campbell PC published an article saying that the US Environmental Protection Agency (EPA) has announced a settlement with Electrolux Home Products Inc to resolve alleged violations of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) and, as part of the settlement, Electrolux will pay a civil penalty in the amount of $6,991,400.  It is said that Electrolux imported approximately 420,000 Frigidaire brand dehumidifiers and air conditioners that contained filters incorporating an unregistered nanosilver and that were labelled and marketed with pesticidal claims – and the claims included “antibacterial filter” and “helps eliminate bacteria in the air that can make breathing difficult”.

https://nanotech.lawbc.com/2020/10/epa-announces-settlement-for-illegal-imports-of-air-filter-products-incorporating-nanosilver/

JERSEY BUSINESS TENDENCY SURVEY RESULTS PUBLISHED

On 22 October, Jersey published the results of the latest Business Tendency Survey with timely, qualitative information about the Island’s economy.  Chief executives and managing directors are asked for their opinions on the current situation of their business compared to 3 months earlier and their expectations for the next 3 months.

https://www.gov.je/News/2020/Pages/Business-Tendency-Survey-September-2020.aspx

$8.3 BILLION SETTLEMENT BY OPIOID MANUFACTURER PURDUE PHARMA MAY NOT ENCOMPASS BILLIONS THE COMPANY HAS ALLEGEDLY STASHED OFFSHORE

On 22 October, OCCRP reported that the billionaire Sackler family, which owns Purdue, put the company in bankruptcy last year prior to the  settlement, and have reportedly shielded much of what it owes from being confiscated. 

https://www.occrp.org/en/daily/13297-opioid-giant-s-8-billion-settlement-may-miss-wealth-stashed-offshore

2 UNDERGROUND DOPING LABS DISMANTLED IN FRANCE

On 22 October, an article from Europol advised that the French Gendarmerie and the French Customs, supported by the Hellenic Police and Europol, took down a criminal network involved in the production and trafficking of doping substances and counterfeit medicines.  French law enforcement officers dismantled 2 clandestine steroid manufacturing labs and arrested 24 suspects.

https://www.europol.europa.eu/newsroom/news/two-underground-doping-labs-dismantled-in-france

CRACKDOWN ON UK GAMBLING ADS EXPECTED TO BAN USE OF CELEBRITIES

On 22 October, the Guardian reported that the use of celebrities such as sports personalities and reality TV stars in betting and gambling ads is expected to be banned under new rules designed to crack down on marketing targeting under-18s.  Under the current rules an advert is banned only if it likely to appeal more to an under-18 than to an adult.  Under the new rules an ad will be banned if it appeals to children, regardless of how it may be viewed by adults.

https://www.theguardian.com/society/2020/oct/22/crackdown-on-uk-gambling-ads-expected-to-ban-use-of-celebrities

COURT OF APPEAL: ABORTION “PILLS BY POST” – APPROVAL OF PROCEDURE NOT UNLAWFUL

On 21 October, the UK Human Rights Blog  said that the Secretary of State had granted a temporary approval during the COVID-19 pandemic of “the home of a pregnant woman” as a class of places for the taking of Mifepristone, one of the 2 drugs required for a termination of pregnancy during the first 10 weeks.  The Appellants challenged this decision by way of judicial review, arguing, inter alia, that it was unlawful as being without the powers conferred by the Abortion Act 1967 (as amended).

https://ukhumanrightsblog.com/2020/10/21/abortion-pills-by-post-approval-of-procedure-not-unlawful-court-of-appeal/

RANSOMWARE: 4 STRATEGIES FOR BUSINESSES TO STAY AHEAD OF EXTORTIONISTS

On 22 October, Control Risks says that over the last 6 to 12 months, ransomware groups have continuously adapted their approach to maximise their chances of successfully extorting victims.  Some of the most prolific ransomware groups have begun to demonstrate agility in responding to changes in the threat landscape.  It outlines some of the key strategies that businesses can use to stay one step ahead of ransomware extortionists in light of their evolving approaches to targeting and extorting victims. 

https://www.controlrisks.com/our-thinking/insights/ransomware–4-strategies-for-businesses-to-stay-ahead-of-extortionists

A GUIDE TO REGULATORY FINTECH SANDBOXES INTERNATIONALLY

On 20 October, an article from Baker McKenzie says that regulators around the world are responding quickly to the rapidly evolving financial technology, or fintech, landscape.  As new or emerging financial products, services or delivery channels may not meet all regulatory requirements, financial regulators internationally have implemented fintech regulatory sandbox regimes as a solution.  The guide describes the steps being taken by the jurisdictions listed below, as well as the establishment of the Global Financial Innovation Network to help those firms which operate across more than one country to co-ordinate with different regulators.

https://www.bakermckenzie.com/en/insight/publications/guides/regulatory-fintech-sandboxes

SRA SLAPPED WITH COSTS ORDER OVER FAILED PROSECUTION OF SOLICITOR

On 22 October, Legal Futures reported that the Solicitors Disciplinary Tribunal (SDT) has taken the unusual step of making a costs order for £40,000 (ahead of a detailed assessment) against the Solicitors Regulation Authority (SRA) for the “grave errors” it made in a case it eventually had to withdraw.  The SRA had alleged that he dishonestly sought to recover more costs in litigation than he was entitled to, but only interviewed the solicitor’s client years after it started investigating the case.  This led SRA to concede that it could not prove the allegations.

https://www.legalfutures.co.uk/latest-news/sra-slapped-with-costs-order-over-failed-prosecution

TOWARDS A MANDATORY EU SYSTEM OF DUE DILIGENCE FOR SUPPLY CHAINS

On 22 October, a brief from the EU Parliament Research Service says that the growth of international supply chains has undoubtedly brought enormous benefits to developing countries, but at the same time it has had certain negative impacts, relating for instance to violations of human and labour rights, including forced labour and child labour, environmental damage, land grabbing, and corruption.  The European Commission has undertaken some preliminary steps, including publishing a study and conducting public consultations, towards a possible legislative initiative on mandatory due diligence, but such an initiative has not been included in its 2021 work programme.  It mentions, for example, the conflict minerals regulation and timber Regulation, the EU Non-financial Reporting Directive (NFRD) and EU voluntary approaches with third countries.

https://www.europarl.europa.eu/RegData/etudes/BRIE/2020/659299/EPRS_BRI(2020)659299_EN.pdf

US SEIZES MORE DOMAIN NAMES USED BY FOREIGN TERRORIST ORGANISATION

On 21 October, a news release from the US DoJ advised that the US has seized “Aletejahtv.com” and “kataibhezbollah.com” – 2 websites that were unlawfully utilised by Kata’ib Hizballah. 

https://www.justice.gov/opa/pr/united-states-seizes-more-domain-names-used-foreign-terrorist-organization

HONG KONG OIL TRADERS ‘UNABLE TO OBTAIN FINANCE’ AFTER SINGAPORE FRAUD SCANDAL

On 21 October, Global Trade Review reported that 2 Hong Kong-based oil traders – NewOcean Energy and Strong Petrochemical – say banks have reacted to the fraud scandal in Singapore’s commodities finance sector by restricting credit to the wider market, resulting in substantial financial losses.  It says that though the companies say difficulties initially arose due to a drop in demand caused by Covid-19 containment measures alongside a historic slump in oil prices, both cite the impact of fraud cases in Singapore on their ability to do business.

https://www.gtreview.com/news/asia/hong-kong-oil-traders-unable-to-obtain-finance-after-singapore-fraud-scandal/

HOW PIRACY HELPED GROW THE VIDEO GAMES INDUSTRY IN INDIA

On 21 October, an article in Vice.com said that, by making games affordable and accessible to generations of kids in the country, piracy primed the market, inspired talent, and paved the way for more legitimate businesses.  Today, India is the fastest growing games market in the world, has a burgeoning game development industry, and is on the radar of global gaming giants. But in the 80s and 90s, when the industry was exploding worldwide, the scene was practically non-existent in India.

https://www.vice.com/en/article/xgzq9q/pirated-and-illegal-video-games-helped-india-market-grow

HONG KONG FINES GOLDMAN SACHS RECORD $350 MILLION OVER 1MDB FAILINGS

On 22 October, Reuters reported that the Securities and Futures Commission (SFC) has fined Goldman Sachs’s Asian business $350 million for its role in Malaysia’s multibillion-dollar 1MDB scandal, the largest single fine ever levied by the regulator in the Asian financial hub.  In July, Goldman agreed to pay $3.9 billion to settle Malaysia’s criminal probe and it is expected to agree to pay more than $2 billion to settle US charges over its role in the scandal.

https://www.reuters.com/article/goldman-sachs-1mdb-hong-kong/hong-kong-fines-goldman-sachs-record-350-million-over-1mdb-failings-idUSKBN27717P

https://fcpablog.com/2020/10/22/goldman-sachs-reaches-3-3-billion-resolution-of-malaysia-fcpa-violations/

ARGENTINA CRACKS DOWN ON CURRENCY TRAFFICKING AMID FOREX BATTLE

On 21 October, Reuters reported that Argentine police has carried out a series of raids to crack down on foreign currency trafficking, which comes as the country looks to counter a foreign exchange crisis that has seen black market dollar trades flourish.  The raids are part of nearly 2-year investigation into suspected money laundering, foreign currency trafficking and potential drug trafficking by organisations with ties to Bolivia, Chile and Peru.  Argentina is battling a long-running economic crisis, with an expected 12% contraction this year, and is gearing up to negotiate a new programme with the IMF after emerging from a sovereign default.

https://uk.reuters.com/article/idUKL1N2HC23G

INCREASED SECURITY THREATS FOR VESSELS OPERATING IN THE GULF OF GUINEA

On 22 October, Hellenic Shipping News reported that shipping bodies BIMCO, ICS, INTERCARGO, INTERTANKO and OCIMF warns that as the dry season approaches and sea conditions abate, an increase in attacks in the Gulf of Guinea has traditionally been seen, so maritime security risks to vessels operating in the Gulf of Guinea require renewed attention.

https://www.hellenicshippingnews.com/increased-security-threats-for-vessels-operating-in-the-gulf-of-guinea/

US STATE DEPARTMENT PROPOSES CHANGES TO BUSINESS VISA RULES

A Client Alert from Wilmer Hale on 22 October said that the State Department has proposed changes to policy and regulations governing the use of short-term B-1 visas in an attempt to clarify, and in some cases limit, the use of these visas, which have long been a source of debate.  The proposal was scheduled to be published in the Federal Register on 21 October and would go into effect after a 60-day comment period.  Written comments are due by 21 December.  B-1 visas, which are commonly used non-immigrant visas for temporary business visitors, allow a foreign national to travel to the US for a period of 6 months, which may be extended to a total of 1 year. 

https://www.wilmerhale.com/en/insights/client-alerts/20201021-state-department-proposes-changes-to-business-visas-rules

THE EVOLUTION OF DOMESTIC TERRORISM IN THE UNITED STATES

On 22 October, a briefing from the Center for Strategic and International Studies says that white supremacists and other like-minded extremists conducted two-thirds of the terrorist plots and attacks in the US in 2020, according to new CSIS data.  Anarchists, anti-fascists, and other like-minded extremists orchestrated 20% of the plots and attacks, though the number of incidents grew from previous years as these extremists targeted law enforcement, military, and government facilities and personnel.  Despite these findings, however, the number of fatalities from domestic terrorism is relatively low compared to previous years.

https://www.csis.org/analysis/war-comes-home-evolution-domestic-terrorism-united-states

US CUSTOMS PREVENTS $287 MILLION OF DUTY EVASIONS THROUGH ‘GAME-CHANGING’ ENFORCE AND PROTECT ACT (EAPA)

On 21 October, an article from Homeland Security Today reported that in Fiscal Year (FY) 2020 (i.e. to 30 September), US Customs and Border Protection (CBP) prevented importers from evading $287 million in duties owed to the US Government through EAPA, a 500% increase since the beginning of the EAPA programme in FY 2017.  The majority of duty evasion investigated through the EAPA programme this year involved Chinese goods transshipped through Cambodia, the Dominican Republic, India, Malaysia, Laos, Taiwan, Turkey, Thailand, or Vietnam.  Some of the most common evasion schemes include illegally shipping goods through a third country or attempting to undervalue or misclassify goods upon entrance into the US.

https://www.hstoday.us/federal-pages/dhs/cbp/cbp-prevents-287m-of-duty-evasions-through-game-changing-enforce-and-protect-act/

REPORT: US CUSTOMS DOES NOT HAVE A COMPREHENSIVE STRATEGY FOR MEETING ITS LARGE SCALE NON-INTRUSIVE INSPECTION (LS-NII) EQUIPMENT NEEDS AT ALL CBP LOCATIONS

On 19 October, Homeland Security Today reported that an Office of Inspector General (OIG) report says US Customs and Border Protection does not have a comprehensive strategy for meeting its Large Scale Non-Intrusive Inspection (LS-NII) equipment needs at all CBP locations.  CBP uses LS-NII imaging systems to examine large conveyances such as cars, trucks, buses, rail cars, and sea containers. 

https://www.hstoday.us/subject-matter-areas/border-security/cbp-rapped-over-large-scale-inspection-system-acquisition-strategy/

US: ‘STUNNING’ EXECUTIVE ORDER WOULD POLITICISE CIVIL SERVICE

On 22 October, Government Executive reported that President Trump had signed an Order that would potentially pull thousands of federal employees in “policy-making” positions out of the competitive service, making them at-will employees.  It is aimed at creating a new classification of “policy-making” federal employees that could strip swaths of the federal workforce of civil service protections just before the next president is sworn into office.  One professor is quoted as saying that what the Order seeks to so is to undo what the Pendleton Act and subsequent civil service laws tried to accomplish, which was to create a career civil service with expertise that is both accountable to elected officials but also a repository of expertise in government. The argument here is that anyone involved in policymaking can be swept into this new classification, and once they’re in, they’re subject to political review and dismissal for any reason.

https://www.govexec.com/management/2020/10/stunning-executive-order-would-politicize-civil-service/169479/

JIHADI INSURGENCY IN MOZAMBIQUE GROWS IN SOPHISTICATION AND REACH

An article in the CTC Sentinel about the activities of Ahl al-Sunnah wa al Jamma’ah (ASWJ), saying that the demonstrated ability to drive out government forces and hold the town marked a step-change in the group’s capabilities and ambitions. In June 2019, the ASWJ was formally adopted by the Islamic State as the Mozambican wing of its Central Africa Province.  The article says that a unique combination of circumstances has enabled an exponential growth in the insurgency: a traditional Islamic leadership out of touch with younger, radicalised Muslims; widespread economic and social deprivation in northern Mozambique amid a wealth of natural resources, compounded by ethnic cleavages; corruption and ineffective governance; and security forces that are poorly equipped, trained, and led. 

https://ctc.usma.edu/jihadi-insurgency-in-mozambique-grows-in-sophistication-and-reach/

FORMER LA LIGA CLUB PRESIDENT JAILED FOR 7 YEARS

On 22 October, Football Espana reported that former Rayo Vallecano president Teresa Rivero has had her 7-year prison sentence in Spain ratified after being convicted of a tax offence totalling €8.4 million.

https://www.football-espana.net/2020/10/22/former-la-liga-club-president-jailed-for-seven-years-for-tax-fraud

HUSBAND OF COUPLE WHO HIRED WORKERS FROM INDIA SENT TO PRISON FOR HUMAN TRAFFICKING CONVICTIONS RELATED TO FORCED LABOUR OF FOREIGN NATIONALS

A news release from US DoJ on 22 October advised that a former Stockton, California resident Satish Kartan, 46, has been sentenced to 188 months in prison for forced labour violations.  In addition, he was ordered $15,657 be paid in restitution to 3 victims, in part to cover their back wages and other losses.

https://www.justice.gov/opa/pr/husband-sentenced-188-months-prison-human-trafficking-convictions-related-forced-labor

SEC RECORD $114.1 MILLION AWARD TO WHISTLEBLOWER

A release on Mondo Visione on 22 October reported that the $114 million award consists of an approximately $52 million award in connection with the SEC case and an approximately $62 million award arising out of the related actions by another agency.  The combined $114 million reward marks the highest award in the programme’s history and eclipses the next highest award of $50 million made to an individual in June 2020.

https://mondovisione.com/media-and-resources/news/sec-issues-record-114-million-whistleblower-award/

GOLDMAN SACHS SETTLEMENT IN US OVER 1MDB FCPA CHARGES

On 22 October, a series of releases on Mondo Visione reported on charges against and settlement with Goldman Sachs over its involvement in the 1MDB bribery and corruption scandal.

https://mondovisione.com/media-and-resources/news/sec-charges-goldman-sachs-with-fcpa-violations/

https://mondovisione.com/media-and-resources/news/us-department-of-justice-goldman-sachs-charged-in-foreign-bribery-case-and-agre/

UK ALSO ANNOUNCES £96 MILLION FINE FOR GOLDMAN SACHS

Another release on Mondo Visione on 22 October advised that the FCA and PRA have fined Goldman Sachs International (GSI) a total of £96.6 million for risk management failures connected to 1Malaysia Development Berhad (1MDB) and its role in 3 fund-raising transactions for 1MDB. The FCA and PRA fines are part of a $2.9 billion globally coordinated resolution reached with the Goldman Sachs Group Inc. (GSG) and its subsidiaries.

https://mondovisione.com/media-and-resources/news/uk-financial-conduct-authority-and-pra-fine-goldman-sachs-international-966m-f/

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SPANISH POLICE ARREST HEAD OF BILLION-DOLLAR CRYPTO ARBITRAGE PLATFORM ON FRAUD ALLEGATIONS

On 22 October, Coindesk reported that Spanish National Police have arrested Santiago Fuentes, the operator of cryptocurrency arbitrage firm Arbistar 2.0, in a crackdown on the platform that researchers and investors allege to be a massive bitcoin Ponzi scheme.

https://www.coindesk.com/arbistar-operator-arrested-crypto-ponzi

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EU ADDS 2 RUSSIAN INDIVIDUALS AND A GRU SECTION TO ITS CYBER ATTACK SANCTIONS LISTS

EU Regulation 2020/1536/EU has added the names of 2 individuals Dmitry Sergeyevich BADIN and Igor Olegovich KOSTYUKOV for involvement in a cyber attack on the German parliament.  Also listed is the 85th Main Centre for Special Services (GTsSS) of the Main Directorate of the General Staff of the Armed Forces of the Russian Federation (GU/GRU).

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OFAC: 3 INDIVIDUALS AND 3 ENTITIES ADDED TO SANCTIONS LIST AND 2 IRGC-RELATED ENTRIES AMENDED

On 22 October, OFAC advised that 3 individuals had been added to its SDN List for connections with Hezbollah or the Iran Revolutionary Guards Corps (IRGC) – 2 said to be high-ranking Hezbollah officials and the other the Iranian ambassador to Iraq; and 3 entities with links to the IRGC Quds Force have been added for alleged interference in the US election process.  At the same time, the entries for the IRGC and IRGC-Quds Force have themselves been amended.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20201022

https://home.treasury.gov/news/press-releases/sm1159

https://home.treasury.gov/news/press-releases/sm1161

https://home.treasury.gov/news/press-releases/sm1158

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TEXTILES CONTRABAND SURGES IN COLOMBIA AS CONVENIENT MONEY LAUNDERING TACTIC

On 21 October, a brief in Insight Crime advised that fashion continues to fuel money laundering in Colombia, generating millions in losses for the country’s textile industry.  In September, several anti-contraband operations raided stores, leading to textile seizures valued at more than some $2.6 million.  Between 2018 and 2019, Colombia experienced a 337% increase in textile contraband.  The smuggling of clothing began to take force during the 1990s as the Colombian economy expanded, and te free trade zone in Colón in neighbouring Panama became a money laundering paradise thanks to contraband smuggling, as traffickers bought large quantities of textiles with tax benefits before smuggling them into Colombian territory, and boosted by a 2012 free trade agreement with the US.  However, the textile sector, a key Colombian industry, has been negatively affected for several years by the massive arrival of Asian clothing.  The article says that this is not a problem unique to Colombia – in Mexico, 2 out of every 3 articles of clothing purchased in the country entered illegally, while in Argentina, textile goods and illegal commerce flow freely across the country’s borders.

https://www.insightcrime.org/news/brief/textile-contraband-colombia-money-laundering/

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US HAS AUTHORISED PORT DIRECTORS TO SEIZE AND COMMENCE FORFEITURE PROCEEDINGS AGAINST STEVIA EXTRACTS AND DERIVATIVES OVER FORCED LABOUR CONCERNS

On 22 October, Sandler Travis Rosenberg reported that US Customs and Border Protection has authorised port directors to seize, and commence forfeiture proceedings against, stevia extracts and derivatives mined, produced, or manufactured in China by the Inner Mongolia Hengzheng Group Baoanzhao Agriculture, Industry, and Trade Co Ltd with the use of convict, forced, or indentured labour.

https://www.strtrade.com/trade-news-resources/str-trade-report/trade-report/seizures-forfeitures-authorized-for-some-stevia-extracts-from-china

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IRISH CENTRAL BANK ISSUES AML BULLETIN ON TRANSACTION MONITORING

On 15 October, an article from Dillon Eustace saying that, on 2 October, the Central Bank of Ireland published the 6th issue of its Anti-Money Laundering Bulletin, focusing on transaction monitoring.  It highlights the importance of transaction monitoring, which the Bank states will continue to be a key focus area in its ongoing supervision of compliance by designated persons with AML/CFT requirements.  The Bulletin sets out the Bank’s findings following supervisory engagements across multiple credit and financial institutions, and also sets out the Bank’s expectations with regard to the application of transaction monitoring controls.

https://www.dilloneustace.com/legal-updates/central-bank-issues-aml-bulletin-on-transaction-monitoring

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INDIA AND PAKISTAN WRANGLING OVER MONEY LAUNDERER ALTAF KHANANI

On 21 October, Deutsche Welle said that Khanani is one of the world’s most-wanted money launderers, and had maintained business ties with groups like al-Qaida.  He could now prove to be damaging for Pakistan’s efforts for removal from the FATF grey list.  It says that the Pakistani fraudster was involved in the illicit international movement of money between countries like Pakistan, UAE, the US, the UK, Canada and Australia.  His organisation also moved money for drug cartels and terrorist groups such as Hezbollah and al-Qaida.  He was arrested in Panama in September 2015 by DEA and later sent to the US, where a court sentenced him to 68 months in prison.  He was released from prison in July, but his current location appears unknown.  The FinCEN Files contain more information about his activities, and the article says that the Files and Khanani could present problems for Pakistan; but not just Pakistan – in India, the revelations have once again turned the spotlight on Khanani and some of its banks.

https://www.dw.com/en/why-india-and-pakistan-are-wrangling-over-money-launderer-altaf-khanani/a-55350858

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GUATEMALA SEEKS EX-MINISTER IN RELATION TO CASH DISCOVERY

On 21 October, AP reported that Guatemalan prosecutors are seeking the arrest of a former communications minister, José Luis Benito Ruiz , on money laundering charges after finding a connection to a house in which authorities found about $16 million in various currencies.

https://apnews.com/article/business-arrests-jimmy-morales-guatemala-guatemala-city-763a102ceac5081a1fd6a868cad6b503

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