Panama Covid-19 update – well, it seems no Sunday lockdown this week, and the beaches to be open…
Meanwhile, another 639 new cases reported and 10 more fatalities, with 21,259 active cases, and another 6,909 tests carried out.
23 October 2020
EU EXPLORES TOUGHER CURBS ON CITY HEDGE FUND MANAGERS
The Financial Times has reported that the European Commission is considering tougher curbs on the management of hedge funds from overseas financial centers such as the City of London. The FT says that tougher curbs on delegation align with broader themes of centralizing oversight and onshoring financial services that have arisen since the 2016 Brexit vote.
US COMMODITY FUTURES TRADING COMMISSION BEGINS POLICING AML ENFORCEMENT
On 21 October, Orrick, Harrington & Sutcliffe LLP published an article saying that, with 3 recent actions, the CFTC appears to have chosen to enter the AML arena in earnest, representing a notable development in futures regulation.
FinCEN FILES SPARKS FRESH UK INQUIRY INTO LAUNDERING OF DIRTY BILLIONS
On 22 October, ICIJ reported that a powerful UK parliamentary committee has launched a fresh AML inquiry 19-months after it outlined findings that the nation’s response to billions of pounds in money-laundering was “fragmented”. The Treasury Committee says it will examine the effectiveness of both AML systems and sanctions.
KENYA: SUBMISSION OF BENEFICIAL OWNER DETAILS
On 20 October, ENSafrica published an article saying that Kenyan companies are now required to submit details of their beneficial owners to the Registrar of Companies. However, companies had not been able to comply with these requirements because the Registrar had not yet established a beneficial ownership register within the registry system. The register opened with effect from 13 October and companies are therefore required to comply.
UK TRUST REGISTER: WHICH TRUSTS HAVE TO REGISTER? – DECISION-TREE
On 21 October, Bryan Cave Leighton Paisner LLP published an article and diagrammatic decision tree, saying that the expansion of the UK trust register (to comply with the EU Fifth Money Laundering Directive ) means that many more trusts including some bare trusts and some non-UK resident trusts that have no liability to UK tax must now be registered with the UK Revenue on the UK Trust Registration Service. It produces a flowchart to decide if a trust is required to register.
US: CALL TO PRESERVE THE JONES ACT FOR SHIPPING
On 22 October, Defense One published an opinion piece saying that, as we pass the 100th anniversary of the Jones Act, a form of cabotage law, it is clear the legislation is vital to ensuring the US maritime industry is strong for 100 years more. Officially known as the Merchant Marine Act of 1920, the law requires that ships carrying cargo between 2 US points fly the US flag, and be owned and built in the US, and be crewed by at least 75% US citizens. It is said that a new report says that the Act is necessary given the amount of support other maritime nations give to an industry rightly established as vital to their nation’s economic security and defence. It is said that Jones Act ships make up 60% of total ocean-going US-flag fleet and employ an equivalent percentage of mariners.
MARITIME DISPUTES IN THE EASTERN MEDITERRANEAN: WHY AND WHY NOW?
On 23 October, the Stockholm International Peace Research Institute published a report about the dispute and tensions in the Eastern Mediterranean. It looks at the background (all the way back to 1923 Treaty of Lausanne, which formally ended the conflicts involving the Ottoman Empire and established the new, sovereign Turkish republic and the treaty’s Aegean map was particularly complicated and has remained disputed.
HAMAS USES SECRET CYBERWAR BASE IN TURKEY TO TARGET ENEMIES
On 22 October, The Times reported that, according to intelligence sources, Hamas has set up a secret headquarters in Turkey for carrying out cyberwarfare and counter-intelligence operations. The headquarters in Istanbul, are said to have been set up about 2 years ago and are separate from Hamas’s official offices in the city which deal mainly with co-ordination and funding.
VETERAN IRISH GANG BOSS ARRESTED IN SPAIN
On 23 October, Olive Press reported that John Gilligan, 68, has been arrested for allegedly running a prescription drug smuggling ring in Costa Blanca. He is also said to be under suspicion for cannabis smuggling. In the 1990s he was convicted of cannabis smuggling in Ireland before relocating to Spain. He was later arrested at Dublin Airport carrying €20,000 in cash.
CAYMAN ISLANDS “GLOBAL CITIZEN” SCHEME
On 21 October, an article from Appleby advised that on 16 October the Cayman Islands brought into operation its Global Citizen programme, with exemption from usual immigration and work permit regulations. The regulations expire on 30 November 2023 (unless extended to a later date by Cabinet). A person meeting the following requirements may apply to the Director of the Workforce, Opportunities and Residence Cayman Office (WORC) for the grant of a Global Citizen Certificate that would allow the successful applicant to reside in the Cayman Islands for a period of up to 24 months. The successful applicant may have a dependent or dependents accompany or join him or her in the Cayman Islands if named in the Global Citizen Certificate. A dependent who also wishes to work remotely from the Cayman Islands shall make his or her own application to the Director of WORC for a Global Citizen Certificate.
RED FLAG INDICATORS OF PAYMENT PROTECTION PROGRAM (PPP) & ECONOMIC INJURY DISASTER LOANS (EIDL) FRAUD FOR FINANCIAL INSTITUTIONS
On 23 October, US Homeland Security Investigations issued a list of Red Flag indicators
- Multiple loan applications among several financial institutions.
- After the issuance of a PPP loan to a customer, there is no additional transaction activity such as employee payroll check transactions, rent, or utility payments.
- Requested loan amount does not match the previous financial transaction history of the employer or company.
- Over-inflation of the number of employees or reported income that is not consistent with the business type or previous history of business.
- Wages reported for employees are not consistent with job function or all reported wages are the same regardless of job function.
- Financial transactions since February 2020 are inconsistent with previous financial activity or normal business activity.
- Supporting loan documents (IRS documents, form I-9) are submitted with updated forms that were not available during the date of use, expired forms, or backdated forms.
- Unable to verify business information or history through public records.
- Businesses with an EIN issued between February 2020 – present.
- Businesses with COVID-19 in the name or any business that references COVID-19 related testing, supplies, or treatments.
- Irregular International wires citing COVID-19 related relief, testing, or treatment.
- The use of altered tax documents.
- Omission of criminal history or failure to disclose previous legal proceedings as part of the loan application.
BREXIT: HOME OFFICE ANNOUNCES TOUGHER CRIMINALITY RULES FOR EU CITIZENS
On 21 October, a news release from the Home Office advised that, from January 2021, EU criminals could be barred from entering the UK under tougher border rules.
TRADE DEFENCE: EU PUBLISHES A REPORT ON MARKET DISTORTIONS IN RUSSIA
On 23 October, the EU Commission published a report on significant government-induced distortions in the economy of Russia. The factual report prepared for the purpose of the EU’s trade defence proceedings focuses on Russia’s macro-economy, the main production factors, such as labour and energy, used in all manufacturing processes, and certain specific sectors of the economy, including steel, aluminum and chemicals. It followed a previous report which described the situation in China. The Commission selected the 2 countries for the first reports because of their relative importance in the EU’s anti-dumping activity.
CHINA CRACKS DOWN ON ILLEGAL GAMBLING & MONEY LAUNDERING SCHEMES
On 23 October, Beingcrypto reported that the People’s Bank of China (PBoC), in coordination with law enforcement, has conducted a series of arrests as part of an ongoing crackdown on illegal online gambling sites. An announcement from the Bank cited 3 cases where the government had intervened in cross-border gambling operations. In China, all forms of gambling, including online gambling, are illegal. Legal gambling is only permitted at casinos in the special administrative region of Macau.
BREXIT: BUSINESSES TRADING TIMBER URGED TO PREPARE FOR CHANGE
On 23 October, a news release from DEFRA said that businesses trading timber between Great Britain and Northern Ireland are being urged by the UK Government to take action to ensure they are prepared for the end of the transition period on 31 December. It says that due diligence checks will take place on timber flowing from Great Britain to Northern Ireland, and on timber flowing from the EU to GB and GB to EU. There will be no new due diligence checks on timber flowing from NI to GB or timber flowing from the EU to NI. There will be no changes to the current process for businesses importing from outside of the EU. To comply with their obligations, timber traders will be required liaise with the Office for Product Safety and Standards (OPSS). Separately, DEFRA has published new guidance for movements from 1 January.
BREXIT: CARRYING OUT INTERNATIONAL ROAD HAULAGE FROM 1 JANUARY
On 23 October, the Department for Transport issued a news release explaining what UK goods vehicle operators need to do to carry out international road haulage from 1 January, when operator licensing requirements for journeys to, through or from the EU, Iceland, Liechtenstein and Norway will change. The Community Licence will be phased out and replaced with a UK Licence for the Community. The new licence and certified copies will be issued automatically and must be carried when driving abroad.
UK: SENTENCING CODE GRANTED ROYAL ASSENT
On 22 October, the MoJ advised that a new code to simplify the country’s complex sentencing laws moved a step closer as the Sentencing Act 2020 received Royal Assent. The Code will come into force on a date specified by a commencement regulation, which will be made in due course.
USE OF PRECISION STRIKE ASSETS BY AZERI FORCES IN NAGORNO-KARABAKH ILLUSTRATES HOW THE PRECISION REVOLUTION HAS SPREAD BEYOND GREAT POWERS
A Commentary from RUSI on 22 October says that Azeris used long-range fires and UAV to strike assembly areas, command posts, logistics and manoeuvre Armenian elements as they approached the combat area. That a country such as Azerbaijan was able to effect precision strikes at operational depth – once thought to be the sole preserve of great powers – by using a range of relatively cheap tools to substitute for its lack of a robust air force is strategically noteworthy. In the future, Western forces should anticipate a robust, layered threat to the safety of their rear areas, even when facing sub-peer opponents. The Azeris have made use of Israeli ballistic missiles, “loitering” munitions and strike UAV.
FinCEN FILES: SERBIAN ARMS DEALER CONDUIT TO SAUDI ARABIA THROUGH QATAR
On 23 October, an article from OCCRP starts by saying that a Cypriot shell company accused of funnelling bribes on behalf of a notorious Serbian weapons dealer deposited $1.7 million into a secretive trust fund set up for a prominent Saudi, and the fund’s Qatari parent company was subsequently fined by regulators for a string of regulatory offenses, and a criminal investigation has been launched that could lead to charges against its directors. It says that Saudi Arabia has become a major buyer of weapons from Serbia’s state-owned factories since the start of the Syrian civil war. Slobodan Tešić, the arms broker who allegedly controls the shell company that made the transfer, has been a key benefactor of this upsurge in business. In 2017, the US also sanctioned Tešić, saying he had paid “large bribes” to secure contracts for weapons deals and said that Tešić controls a Cyprus shell company, Grawit Limited (which he denied). OCCRP says it now can be revealed the reason for the US action.
NOTORIOUS KYRGYZ CRIMINAL ARRESTED
On 23 October, OCCRP reported that Kyrgyz law enforcement have arrested Kamchybek Asanbek (aka Kamchybek Kolbayev), said to be one of the Kyrgyzstan’s top organized crime bosses. It is also claimed that Kolbayev was also behind some influential political parties at the country’s latest parliamentary election. In 2011, the US State Department “offered a reward of up to $1 million for information leading to the disruption of the financial mechanisms” of the Kolbayev criminal network. Kolbayev has been called a “crowned Thief-in-Law,” a title given to kingpins of criminal groups in the former Soviet Union – the Thieves-in-Law having originated in Stalinist prison camps.
CHINA: CUSTOMS SEIZES 217 TONS OF BARRED SOLID WASTE
On 22 October, MENA FN reported that customs representatives in the coastal city of Qingdao in east China’s Shandong Province have seized 217 tons of illegally-imported solid waste. The contents of the containers was a combination of molten slag, dross and other objects, which are barred solid waste.
US CUSTOMS OFFICIALS SEIZE COUNTERFEIT WATCHES WORTH MORE THAN $8.8 MILLION IF THEY WERE AUTHENTIC
On 23 October, the North Kentucky Tribune reported that counterfeit watches that would have been worth more than $8.8 million if they were authentic were seized by Customs and Border Patrol officers at the Port of Cincinnati.
CAMEROON CUSTOMS SEIZE RECORD AMOUNT OF IVORY TUSKS
On 22 October, CGTN reported that Cameroon customs have seized 626 kg of smuggled ivory, amounting to 118 elephant tusks. Cameroon Radio Television (CRTV) reported that the tusks were concealed in a truck that was trafficking the smuggled items from neighbouring Gabon.
AUSTRAC ANNUAL REPORT 2020
The Australian Transaction Reports and Analysis Centre (AUSTRAC) has released its annual report for the year ended 30 June.
UK: MORTGAGE APPLICATIONS – AVOIDING MONEY LAUNDERING SUSPICION
On 23 October, The Money Pages carried an article saying that mortgage application fraud is on the rise. With that in mind AML service, SmartSearch, has offered advice to ensure you avoid unwarranted suspicion. The article says that mortgage application fraud occurs when an individual provides false or altered documents in support of a mortgage application, and that fraudulent applications on mortgages were up by 5% in 2019, as 13% of British adults believed it was ‘reasonable’ to exaggerate income on a mortgage application.
BACK TO BREXIT: WHAT UK BUSINESS NEEDS TO KNOW
|Law firm Gowling WLG says that, with the end of the Brexit transition period on 31 December fast approaching and the risk of a ‘no-deal’ between the UK and EU continuing to increase, it’s more important than ever for businesses to be prepared for all eventualities. It has produced a publication that provides guidance on key challenges and concerns, including trade and customs compliance, workforce, supply chain and regulation. https://gowlingprodblobstorage.blob.core.windows.net/gowlingprodblobstoragecontainer/gwlg/media/gowlingwlg/gwlg/insights-resources/guides/2020/10/back-to-brexit-what-uk-business-needs-to-know.pdf|
DID AN ALLEGED CORRUPT NATURAL GAS CONTRACT ROB NIGERIA OF $9.6 BILLION?
On 23 October, an article from Transparency International reported on an alleged scam to make Nigeria pay billions to a BVI company has put the spotlight on how courts of arbitration can be used to misappropriate public funds. It involved processing ‘wet gas’ to supply more usable ‘lean gas’ and involved 2 Irishmen with no experience of the gas sector. The article says that long and drawn out investor-state arbitration in London, resulted in 2017 with Nigeria being held liable for $6.6 billion in damages plus interest. Today the bill stands at almost $10 billion. The vast sums alone made the story compelling, but a subsequent investigation by the Nigerian Economic & Financial Crimes Commission may have uncovered an unprecedented case of corruption hidden within corruption.
PIRACY AND ARMED ROBBERY ON THE RISE IN ASIA AS REGION SEES 39% INCREASE IN ATTACKS
On 17 October, Homeland Security Today reported that a total of 75 incidents of piracy and armed robbery against ships (comprising 73 actual incidents and 2 attempted incidents) were reported in Asia during January-September 2020.
US AMENDMENT TO CUBAN ASSETS CONTROL REGULATIONS
On 23 October, KPMG reported that OFAC has released for publication in the Federal Register a final rule that amends the Cuban assets control regulations. It removes from the scope of certain remittance-related general authorisations any transactions involving entities or sub-entities identified on the Cuba “restricted list”. The final rule is intended to restrict such entities’ and sub-entities’ access to funds obtained in connection with remittance-related activities, including in their role as intermediaries or in their receipt of fees or commissions from processing remittance transactions.
FinCEN AND FEDERAL RESERVE WANT TO LOWER THE $3,000 THRESHOLD ESTABLISHED IN 1995 TO $250 FOR INTERNATIONAL TRANSACTIONS REPORTING
On 23 October, Coin Telegraph reported that according to a Notice of Proposed Rule Making, the agencies want to lower the $3,000 threshold established in 1995 to $250 for international transactions, meaning that financial institutions would need to exchange client information alongside all transactions greater than $250 that begin or end outside of the US. This “Travel Rule” would apply to quite small amounts of money changing hands, and the proposed change specifically calls out “convertible virtual currencies,” saying that they would also fall into the category of money for the purposes of this rule.
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