Panama Covid-19 update – heard today that my wife’s aunt has been diagnosed with Covid-19. Although not apparently serious, given her age and general state of health she was considered vulnerable (as was her husband) and, while not requiring going into hospital, she needed to be quarantined and monitored. So she has been put up in one of the hundreds of requisitioned hotel rooms – and very nice it is too, it seems. In a really nice part of the city, in a lovely modern hotel with great sea views…and with the government picking up the tab. this seems to be another example that (despite complaints of some people – there always are some), the country has generally coped better with the crisis better than many others 9and, to be honest, better than I would have expected), and a lot better than other, richer and more “advanced” countries (e.g. the UK?).
Meanwhile, another 7,939 tests produced another 798 new cases; with 15 more fatalities taking us to 2,678 to date. There are currently 21,025 active cases of the total 132,045 recorded to date.
29 OCTOBER 2020
GREECE: FORMER MINISTER, WIFE AND HIS COUSIN FOUND GUILTY OF MONEY LAUNDERING
On 28 October, the National Herald reported that the former minister Akis Tsochadzopoulos, his wife and his cousin were found guilty of money laundering by a criminal appeals court.
BAHRAIN: 5 FUTURE BANK OFFICIALS JAILED FOR MONEY LAUNDERING
On 28 October, Gulf News reported that Bahrain’s High Criminal court has sentenced 5 Future Bank officials to 5 years in prison and fined them, in the latest of a series of money laundering cases against Iranian banks. The Future Bank received requests for suspicious financial transfers in favour of the Central Bank and other Iranian banks through the SWIFT system without reporting them.
UKRAINE’S TOP COURT DEALS CRITICAL BLOW TO ANTI-CORRUPTION AGENCY
On 28 October, Rferl reported that the Ukraine’s Constitutional Court has stripped the country’s anti-corruption agency of some of its critical powers. The court declared it unconstitutional to hold officials criminally liable for intentionally providing false information on asset declarations. It also struck down several powers of the National Agency for Preventing Corruption (NAZK). The court ruling is also controversial because 4 judges are under investigation by the NAZK for failing to properly declare assets in their declarations. The judges did not recuse themselves from the case, despite calls to do so from the government and anti-corruption campaigners.
GOLDMAN SACHS 1MDB CLAWBACKS
On 28 October, Compliance Week reported that the board of Goldman Sachs will attempt to claw back approximately $174 million from a dozen current and former executives in the aftermath of the 1MDB scandal. in one of the largest clawback attempts ever. Goldman Sachs also said that it has spent the past 5 years overhauling its compliance and internal control systems in response to the scandal involving violations of the Foreign Corrupt Practices Act (FCPA) anti-bribery provisions. The clawback would include long-term performance incentive awards made to former senior executives.
UK: DISCLOSURE PILOT SCHEME: A ROUND-UP OF KEY CASES SINCE JANUARY 2020
On 26 October, an article from Stewarts examines the key case law and guidance that has emerged from the courts of England and Wales in relation to the Disclosure Pilot Scheme since January of this year, and also provides an overview of potential reforms on the horizon. The Disclosure Pilot Scheme (the “DPS”), which has been in force since 1 January 2019, was originally intended to finish at the end of December 2020, but has now been extended for another year (i.e. until the end of 2021). This is the second follow-up report on the Pilot, the previous one for the period from January 2019.
JERSEY: COURT GUIDANCE ON CONTRACTUAL INTERPRETATION AND FORMATION PARTICULARLY IN INSTANCES WHERE THEIR AGREEMENT IS NOT CAPTURED IN A SINGLE WRITTEN DOCUMENT
On 23 October, an article from Carey Olsen reported that, in a recent judgment the Royal Court of Jersey made some noteworthy comments on contractual formation and validity, having carefully considered Jersey, English and French jurisprudence. This, it says, is of relevance to commercial parties operating in Jersey, particularly in instances where their agreement is not captured in a single written document.
CAN EVIDENCE GATHERED 26 YEARS LATER REALLY BE RELIED ON?
On 26 October, an article from Reed Smith reported that the Estonian government has committed themselves to re-investigate the disaster of the Estonia ferry in 1994. The decision to re-investigate comes after the release of a Discovery Network programme where it was claimed to have discovered new and crucial information. With improvements in technology since 1994, the article says, it will be interesting to see what is discovered and it could open the door to other marine casualties being re-investigated in the future.
DRUG SMUGGLING IN COMMERCIAL SHIPPING
On 29 October, Splash 247 carried an article sayig that, with the maritime industry continually improving anti-narcotics operations around the world, traffickers are finding increasingly novel and ingenious ways of smuggling drugs. The article explores the indirect legal and commercial consequences to shipowners and charterers arising out of delays and losses caused.
MALAYSIA’S GUIDELINES ON DIGITAL ASSETS ENTER INTO FORCE
On 29 October, Regulation Asia reported that Malaysia’s SC (Securities Commission) has announced that its guidelines on digital assets have come into force, providing a regulatory framework for IEO (Initial Exchange Offerings) and digital asset custodians. Under the guidelines, IEO platform operators are required to assess and conduct the necessary due diligence on issuers, review issuer proposals and disclosures in their whitepapers, and assess their ability to comply with the requirements of the guidelines as well as the SC’s AML/CFT guidelines. The guidelines also include rules and regulations to facilitate the provision of digital asset custody services by interested parties.
THE STATUS OF THE FRONT END OF SAUDI ARABIA’S NUCLEAR FUEL CYCLE
On 7 October, the Middlebury Institute published a report saying that recently articles have appeared regarding possible developments in the Kingdom of Saudi Arabia’s (KSA) nuclear programme. Saudi Arabia has constructed a facility, with Chinese assistance, to produce long-range solid-propellant ballistic missiles that could serve as a delivery system for a future nuclear force. A research team at the James Martin Center for Nonproliferation Studies (CNS) has analysed recent media articles and has reviewed underlying, unpublished reports. The purpose of the report is to capture the team’s findings and analysis up to the date of publication. The report concludes that Saudi actions can be understood as a longer-term hedge against a nuclear-armed Iran. In this context, insufficient safeguards on the KSA’s nuclear programme should be a point of concern for all countries. International nuclear suppliers and assistance providers, including China, should not provide further support to the budding Saudi nuclear programme until Saudi Arabia has taken steps to demonstrate its peaceful nature.
FINANCIAL STABILITY BOARD (FSB) REPORT ON STABLECOINS
On 29 October, Bird & Bird published an article saying that the Financial Stability Board (FSB) has published its report with recommendations on how to promote coordinated and effective regulation, supervision and oversight of Global Stablecoin (GSC) arrangements. Global stablecoins are defined as a “specific category of crypto-assets which have the potential to enhance the efficiency of the provision of financial services, but may also generate risks to financial stability, particularly if they are adopted at a significant scale”. It says that the report and its recommendations are addressed to authorities at a jurisdictional level and focus on privately issued GSC predominantly intended for retail use. The main area of focus is the risk of financial instability that the mass-adoption of GSC could create, and how to mitigate this through effective and comprehensive regulation.
THE UK TRUST REGISTER – WHERE ARE WE NOW?
On 26 October, a briefing from Taylor Wessing says that changes anticipated due to 5MLD were potentially far reaching and caused significant concern to the private client world.
UK: PRE-PACKAGED ADMINISTRATION (PRE-PACKS)
The House of Commons Library has produced a briefing paper which looks in detail at how pre-pack administrations work in practice under revised Statement of Insolvency Practice (SIP 16) ; the “pros and cons” of the procedure; the recommendations of the Graham Review; and provides a summary of the measures introduced by a 2015 Act. It goes on to consider the Insolvency Service 2020 report and the proposed regulatory framework set out in the draft regulations. This briefing paper applies to England and Wales, and Scotland.
At the same time, Hogan Lovells produced a briefing, saying that on 8 October, the Insolvency Service published the outcome of its review of industry reforms to pre-pack sales in administration and made recommendations which will impact the way in which pre-pack sales to connected parties in particular operate in the UK in the future.
INTERPOL AND COUNCIL OF EUROPE COOPERATE IN PUBLISHING THE GUIDE FOR CRIMINAL JUSTICE STATISTICS ON CYBERCRIME AND ELECTRONIC EVIDENCE
A news release from Interpol on 29 October advised that, to effectively tackle the multifaceted and imperceptible nature of cybercrime, criminal justice authorities need a good understanding of the scale, types and impact of the crime. For this reason, the Council of Europe and INTERPOL have jointly developed the Guide for Criminal Justice Statistics on Cybercrime and Electronic Evidence to support countries develop a clearer vision of the global problem.
The Guide is at –
PERU AT A CROSSROADS: CORRUPTION, STABILITY AND THE 2021 ELECTIONS
On 29 October, an article from Control Risks says that the country’s Congress is to vote on a new attempt to impeach President Martín Vizcarra, after failing to oust him on 18 September due to corruption allegations. He is the sixth consecutive head of state to be accused of corruption in Peru. It says that Vizcarra is highly likely to survive the new impeachment attempt, as he did in September, but he will have very limited opportunities to enact significant reforms to combat corruption in the next 9 months. It considers the likely continued political instability, saying that corruption risks are likely to persist in some public contracting processes, particularly in cases where the contracting agency is part of a regional or local government authority.
WHAT ARE THE WIDER SUPERVISORY IMPLICATIONS OF THE WIRECARD CASE?
On 29 October, the EU Parliament Research Service published a briefing paper which highlights several lessons for the regulation and supervision of fintech companies. It says that, although the case of Wirecard appears to be an accounting fraud of the more classical type, many lessons can be drawn for the design of fintech regulation and supervision. To some extent, the inability of the authorities to detect such a misconduct in a prominent and well-known company is the result of regulatory loopholes, which may leave room for future transgressions.
UN: HOW EXTREMIST GROUP AL-SHABAAB FUNDS ACTIVITIES
On 28 October, the UN reported that a group of UN-appointed experts detailed in a recent report how the Al-Shabaab extremist group raises funds for its activities. The briefing is said to have provided insight into the trafficking of components for improvised explosive devices, the maritime trade and Al-Shabaab’s revenue system, and the charcoal trade.
LITHUANIA: GOVERNMENT GIVES GREEN LIGHT TO THE AML CENTRE OF EXCELLENCE
On 28 October, the Bank of Lithuania reported that a unique public-private cooperation project initiated by the Bank of Lithuania was given a green light, when the Lithuanian government approved the establishment of the Centre of Excellence in Anti-Money Laundering. The centre set up to mobilise public and private efforts in combating money laundering and terrorist financing (AML/CTF) as well as to strengthen the prevention framework. The Centre was established by the Ministry of Finance, the Bank of Lithuania and the country’s commercial banks, while other financial market participants will also be invited to join its activities in the future. The Financial Crime Investigation Service, the Police Department, the State Tax Inspectorate and the Prosecutor General’s Office are expected to take joint action with the centre as well.
HUNGARIAN FRAUDSTERS INDICTED AFTER OLAF INVESTIGATION
A news release from OLAF on 27 October advised that Hungarian public prosecutors have followed a recommendation from OLAF and opened proceedings against individuals accused of illegally overcharging for the renovation of children’s playgrounds using EU money. Prosecutors are calling for prison sentences for the fraudsters, who illegally pocketed more than €1.7 million in European and Hungarian funding.
CENTRAL BANK DIGITAL CURRENCIES (CBDC): DRIVERS, APPROACHES, AND TECHNOLOGIES
On 28 October, VOX, from the European Centre for Economic Policy Research, carried an article saying that CBDC are in the limelight, but the motives for issuance and, relatedly, the policy approaches and designs differ. The article surveys the drivers, policy approaches and technical designs, based on a comprehensive and publicly available database. It finds that all CBDC projects aim to complement cash rather than replace it and many projects would allow for an important role of the private sector in the payment system.
INDIA: KERALA CHIEF MINISTER’S FORMER SECRETARY ARRESTED IN A MONEY LAUNDERING CASE AND CPI(M) PARTY SECRETARY DETAINED IN DRUGS CASE
The Hindustan Times on 29 October reported that a day after the arrest of Kerala chief minister Pinarayi Vijayan’s former secretary M Sivasankar in a money laundering case, the ruling CPI(M) party suffered another setback after the Enforcement Directorate arrested party secretary Kodiyeri Balakrishnan’s son Bineesh Kodiyeri in a narcotics case. The latter was arrested after he failed to give convincing answers about an alleged funding of the drug racket after 3-hours of questioning.
PODCAST: SHATTERED FAMILIES, A REFUGEE CRISIS AND THE US DIMINISHED REPUTATION
In the last TRACE podcast before the US election, Mandy Patinkin and Kathryn Grody describe with passion their work with the International Rescue Committee. They say what America as a haven means to them and mourn the news that 545 children separated from their parents on the US southern border cannot be restored to their parents. They conclude with a fervent appeal to Americans to turn out to vote in this election.
US EXPORT ADMINISTRATION REGULATIONS (EAR) REVISED LICENCE REVIEW POLICY
On 29 October, the EU Sanctions Blog reported that the licensing of the export of items controlled for national security reasons and destined for China, Venezuela or Russia will require agencies to consider whether the proposed export/re-export/transfer of the controlled items will make a “material contribution to the development, production, maintenance, repair, or operations” of the weapons systems capability of those countries. The blog post lists the criteria taken into account. The new rules take effect from 29 October.
UK POINTS-BASED IMMIGRATION SYSTEM FOR EU WORKERS FROM 1 JANUARY
On 29 October, the Business Secretary said that the Brexit transition period is ending on 31 December and there will be no extension. The current rules for hiring workers from the EU will change. Time is running out and he says that he urges businesses to act now to prepare for a new relationship with the EU. The new system will treat EU and non-EU citizens equally and transform the way in which employers recruit internationally. You will need to be a licensed sponsor to hire eligible workers from outside the UK – this normally takes 8 weeks and fees apply. New job, salary and language requirements will apply to anyone that you want to hire from outside the UK. The new system will not apply to hiring Irish citizens, or EU citizens already living and working in the UK who are eligible under the EU Settlement Scheme.
LATVIAN AVIATION INDUSTRY AND GOVERNMENT COLLABORATE TO FIGHT HUMAN TRAFFICKING
On 24 October, Homeland Security Today reported that Latvia’s Riga Airport, the national airline airBaltic, the Ministry of the Interior and NGO have signed a memorandum of cooperation committing to actively cooperate in the prevention of human trafficking. The purpose of the memorandum is to promote the prevention of trafficking of human beings and to strengthen cooperation between aviation companies, state institutions and NGO in identifying and referring victims for the provision of support, assistance and protection.
US: INTERNATIONAL FIREARMS TRAFFICKER ARRESTED IN ICE INVESTIGATION
A news release from US Immigrations and Customs Enforcement on 28 October advised that a man from the state of Georgia has been arrested on charges of conspiracy and smuggling goods out of the US in violation of the International Traffic in Arms Regulations (ITAR). According to court documents, between 2014 and 2020, Ihor Radionov, 51, with co-conspirator Vladimir Volgaev, and a further co-conspirator residing in Ukraine, conspired to export defence articles out of the US, including gun barrels and slides, without a licence or prior written approval from the Department of State.
AUSTRALIA: COURT ORDERS COMMONWEALTH BANK OF AUSTRALIA TO PAY A $150,000 PENALTY FOR CREDIT LEVEL INCREASE FOR PROBLEM GAMBLER
A release on Mondo Visione on 29 October advised that the Federal Court has ordered the Commonwealth Bank of Australia (CBA) to pay a $150,000 penalty after the Court found the bank breached the responsible lending provisions of the National Consumer Credit Protection Act 2009.
17-YEAR JAIL TERM UPHELD FOR FORMER SOUTH KOREAN LEADER
On 29 October, the Straits Times reported that former South Korean president Lee Myung-bak, who was president from 2008 to 2013, has been ordered back to prison as the country’s Supreme Court upheld a 17-year jail term for bribery and embezzlement offences. He had been out on bail awaiting the ruling and was not in court for the decision. The ruling is not subject to further appeal and, at age 78, it means Lee is likely to die in prison unless he receives a presidential pardon.
IRELAND: FORMER AIRPORT POLICEMAN JAILED OVER €1 MILLION MONEY LAUNDERING
On 29 October, the Irish Times reported that Mark Adams, 41, a former airport policeman and male model has been jailed for 5 years for his role in the money laundering of a total of more than €1 million.
I had omitted the following link (as it did not seem to generate much interest!), but it seemed time to add it again and say that, if you would like to make a (polite) gesture and help me with my removal and computer costs, I have a page at https://www.buymeacoffee.com/KoIvM842y