Panama Covid-19 update – well, holiday week a bit of a wash out. Here the rain actually stopped (it was only a drizzle most of the time), but further north some 300 homes flooded, roads and bridges shut, landslides etc, as side effects of Hurricane Eta still around. Fishing boats banned from going out and beaches closed, due to potential risks…at least it takes one mind (and the news programmes) away from the US election results.
One worry I have heard expressed is whether the holiday week will mean more people travelling and meeting up (though the bad weather might put a stop to some of it) will mean infection and fatalities will show a subsequent rise.
Meanwhile, another 432 new cases (of 3,201 tests carried out) and 13 more fatalities. There are now 19,073 active cases (including the wife’s aunt in her swanky hotel room overlooking the bay).
4 NOVEMBER 2020
UK: ACCOUNT FREEZING AND FORFEITURE POWERS WIDELY USED BY LAW ENFORCEMENT AGENCIES
On 2 November, an article from Kingsley Napley is concerned with that it describes as the popularity and increasingly widespread use of Account Freezing and Forfeiture Orders (AFrO and AFoO) that were created under the Criminal Finances Act 2017. Since their introduction they have been used by a range of different law enforcement agencies, from the SFO and NCA to police forces around the country and recoveries made under these orders have run into the millions.
PERU’S CONGRESS TO INITIATE IMPEACHMENT TRIAL FOR PRESIDENT VIZCARRA OVER CORRUPTION ALLEGATIONS
On 2 November, Reuters reported that Peru’s Congress has approved a motion to initiate a process to remove President Martín Vizcarra from office over corruption allegations, a month and a half after he survived a prior impeachment trial. This follows media reports that the president allegedly accepted bribes from 2 companies that won public works tenders when he was the governor of the southern region of Moquegua.
KOREAN PROSECUTORS RAID BROKERAGE FIRMS OVER LIME ASSET MIS-SELLING
On 3 November, Regulation Asia reported that South Korean prosecutors have raided 2 brokerage firms in connection with a growing financial fraud scandal involving hedge fund Lime Asset Management, which is accused of providing inaccurate information about fund products sold to customers through banks and securities firms.
SINGAPORE: CENTRAL BANK SAYS IT WILL PRIORITISE COMBATTING DISCLOSURE BREACHES, MIS-SELLING OF FINANCIAL PRODUCTS AND MONEY LAUNDERING
On 3 November, Reuters reported that, in its ‘Enforcement Report’ that is published every 18 months, the Monetary Authority of Singapore also said it would focus on countering terrorism financing. It said it would seek to update its enforcement powers to better detect, investigate, and take action against financial misconduct and would increase focus on the accountability of senior management for any breaches.
SOMALIA SANCTIONS: UN PANEL OF EXPERTS REPORT
The Panel of Experts has published its annual report which says that Al-Shabaab is using domestic bank accounts and electronic mobile services to transfer, save and invest funds raised through “taxation” and “import tariff” systems. The report recommends that member states and the private sector support the Somalian government in its efforts to mitigate terrorist financing risks. The report also calls for better enforcement of export controls on IED components.
UK: MODERN SLAVERY ACT PROPOSALS
ON 27 October, an article from Ogletree Deakins was concerned with a report and review of the implementation of the Act and the effects on supply chains, companies and public sector organisations. Proposals are to extend the number of organisations subject to reporting obligations; introduce binding rules on the content, timing, and publication of modern slavery statements; and potentially introduce a single enforcement body to oversee compliance. The proposals have stopped short of recommending enhanced civil penalties for non-compliance although the sole sanctions at present for a failure to report are the risk of being publicly ‘named and shamed’ by the Home Office and possible exclusion from the ability to tender for government contracts. However, to date, it is said that only the Crown Commercial Service has exercised its discretionary power to prevent companies in breach of reporting requirements from tendering for their contracts.
In its article, Dentons said that t UK Government report highlighted that “significant progress” has been made on the issue and is divided into 5 “themes” – Pursue, Prevent, Protect, Victim identification and support, International response to modern slavery and upstream prevention.
BREXIT – THE NEW UKNI MARK – GUIDANCE RELEASED ON WHEN AND HOW TO USE IT
On 29 October, an article from Cooley is concerned with the rules for use of the “UKNI” mark in place of the “CE” mark when one is placing certain goods (typically goods subject to the CE marking) on the market in Northern Ireland after the end of the Brexit transition period. The UKNI mark can never be used on its own, and must accompany an EU conformity mark. You cannot use the marking if you are placing goods on the market in the EU or you are planning to use an EU body to carry out conformity assessments.
STRAIT SHIPBROKERS IN SINGAPORE AS WELL AS ITS EXECUTIVE MURTUZA MUSTAFAUNIR BASRAI HAD BEEN ADDED TO THE US SDN LIST
On 4 November, Hellenic Shipping News reported that the US State Department press release has noted that Strait was sanctioned for knowingly engaging in a significant transaction involving the purchase, acquisition, sale, transport or marketing of petroleum products from Iran.
CAYMAN ISLANDS SAY THAT IT HAS MADE SIGNIFICANT ACHIEVEMENTS IN RESPONDING TO A CRITICAL EVALUATION OF ITS AML REGIME
On 3 November, the Cayman Compass reported that, on the eve of being reassessed by FATF, the Cayman Islands government has said it had made significant achievements in responding to a critical evaluation of its AML regime. The original March 2019 evaluation had found major shortcomings in the jurisdiction’s systems. FATF will now determine whether sufficient progress has been made and is expected to to make an announcement in February 2021.
ECOWAS, EU AND GERMANY LAUNCH €41 MILLION FLAGSHIP PROGRAMME TO FIGHT ORGANISED CRIME IN WEST AFRICA
On 3 November, All Africa reported that the Economic Community of West African States (ECOWAS), in collaboration with the EU and the government of Germany launched 3 transnational projects designed to curb Organised Crime in West Africa. The projects dubbed ‘Organised Crime: West African Response’ (OCWAR) is designed to support ECOWAS Member States in countering criminal activities the region. The 3 projects will stimulate cooperation between law enforcement agencies and private Internet service providers thereby facilitating financial investigations.
NEW ZEALAND: LUXURY CARS AMONG $6 MILLION OF ASSETS SEIZED IN MAJOR AUCKLAND MONEY LAUNDERING BUST
On 4 November, Stuff reported that 9 people have been arrested and $6 million in assets seized by police in one of the largest money laundering operations seen in Auckland, with more than $120 million in transactions that may have been laundered. 8 luxury cars, including a Bentley, 2 Porsches, 2 Range Rovers, a Mercedes, a Rolls-Royce and a BMW, have been seized.
COVID-19 – SPENDING ON PPE, VENTILATORS, MEDICINES ETC
On 27 October, OCCRP published a report saying that, along with media partners in 37 countries, it collected information from over 37,800 COVID-19 related tenders and contracts worth over €21 billion, running from February to October this year. They cover key goods such as personal protective equipment (PPE), ventilators, tests, and medications. It gives an unprecedented view of just what Europe’s governments have been spending their billions on — and where things may have gone astray.
MERCENARIES IN THE SERVICE OF AUTHORITARIAN STATES
On 4 November, ETH Zurich published a report saying that, by using mercenaries and ostensibly private security services, China and Russia project power and protect their interests abroad without openly deploying their armed forces. However, in doing so, the 2 countries follow 2 very different paths. It says that, in a European context, the privatisation of military tasks is often associated with the use of Western private contractors in Iraq and Afghanistan. However, there are increasing reports of other state actors turning to private military services. Outsourcing the government’s security functions to private providers, or creating new security tasks for nominally private security providers, is thus not only a Western phenomenon.
OVERSEAS BUSINESS RISK – NORTH MACEDONIA
On 4 November, the Department for International Trade published updated information on key security and political risks which UK businesses may face when operating in North Macedonia.
UK: SITES WHERE HAULIERS AND HGV DRIVERS CAN GET ADVICE ON TRANSPORTING GOODS TO THE EU AFTER 1 JANUARY
On 4 November, the UK Department for Transport provided updated information about advice sites, located at motorway service stations and truck stops, where hauliers and drivers of HGV can visit for in-person advice on new rules and documents needed to move goods between the UK and EU from 1 January; how to prepare for the changes; and how to use the new “Check an HGV” service.
BREXIT AND COVID-19 DRIVE SWITCH TO UK-EU UNACCOMPANIED CARGO
On 4 November, Lloyds Loading List reported that cargo owners and carriers have already begun reverting to a UK-Europe freight model similar to that seen prior to 1992, when there were far higher levels of UK-EU unaccompanied cargo and less than 50% of UK-Europe trade went through Dover.
HONG KONG CUSTOMS OFFICIALS NET SHIPMENT OF NEARLY 8,000 HAIRY CRABS
On 3 November, the South China Morning Post reported that Hong Kong customs has confiscated nearly 8,000 hairy crabs at a border checkpoint on a goods vehicle from mainland China in a record seizure of the popular delicacy. Importers have been required to apply for a permit for hairy crabs since 2018, after the creatures, usually brought into the city from the mainland or Taiwan, were found to have almost double the accepted levels of dioxins and dioxin-like polychlorinated biphenyls the previous year.
DEMAND FOR ILLEGAL ALCOHOL CLAIMING HUNDREDS OF LIVES ACROSS LATIN AMERICA
On 3 November, Insight Crime reported that a sizeable seizure of adulterated rum shipped to Honduras from Europe is only the latest example of how Latin America’s demand for black market liquor has exploded due to limits on sales during the coronavirus pandemic. This is despite (or because) governments have introduced temporary dry laws and restrictions on the legal sale of alcohol to discourage social gatherings and parties since the pandemic began. This gave bootleggers and smugglers a chance to expand their operations and cater to a growing number of consumers and Honduras has seen a spate of deaths directly linked to the consumption of adulterated alcohol. Panama, which had one of the strictest dry laws in March-April, does not appear to have seen dramatic growth in its black market for liquor during the pandemic, localised operations have continued to facilitate the smuggling of contraband alcohol into Costa Rica (and there have been numerous seizures of real or bootleg alcohol connected to illegal parties and gatherings).
STATE OF PLAY OF EU-IRAN RELATIONS AND THE FUTURE OF THE JCPOA
On 3 November, a research briefing the from EU Parliament Research Service says that the EU must further develop its strategic autonomy, enhance and expand its interaction with Iran to ensure the JCPOA’s survival, while also taking a more proactive role in mitigating and mediating conflicts in the region.
SECURITIES COMMISSION MALAYSIA HAS WON ITS CIVIL CASE ALLEGING INSIDER TRADING
A release on Mondo Visione on 4 November advised that the High Court has found that the Securities Commission Malaysia had successfully proven its claim in a civil suit against Dato’ Sreesanthan Eliathamby, 60, for insider trading. Dato’ Sreesanthan was a senior partner in a law firm and acted as a legal adviser for the proposed privatisation of a company.
WAR CRIMES PROSECUTORS AND EU MISSION TARGET KOSOVAR EX-PRESIDENT IN PRISTINA OPERATION
On 4 November, Rferl reported that investigators are carrying out special operations in the Kosovar capital in cooperation with local police and the EU’s rule-of-law mission. Police and investigators were at the home of a former acting president and onetime Kosovo Liberation Army (UCK) senior member, Jakup Krasniqi. Last month the Kosovo Specialist Chambers (KSC) and Specialist Prosecutor’s Office (SPO) made their first arrest, detaining the former head of the intelligence service of the Kosovo Security Force, Salih Mustafa, on the basis of an arrest warrant and a confirmed indictment issued by a pretrial judge of the KSC.
US: 2 ADMIT TO USING CASINOS TO FACILITATE FINANCIAL CRIME
A news release from US DoJ on 28 October announced that a recent guilty plea is the fourth in an ongoing investigation targeting operators of unlawful underground financial institutions that transfer money between the US and China, thereby circumventing domestic and foreign laws regarding monetary transfers and reporting, including US AML scrutiny and Chinese capital flight controls. Often the “customers” of the network wanted the money to gamble at Las Vegas casinos, it is said.
MALTA: FIRM FINED €1.18 MILLION BY FIAU FILES CONSTITUTIONAL CLAIM OVER SEVERITY OF FINE
On 4 November, Malta Today reported that a financial services firm that was closed by the Malta Financial Services Authority has filed a constitutional claim protesting a sanction by the FIAU. MPM Capital Investments was fined €1.18 million by the Financial Intelligence Analysis Unit – a record fine, as an unlicensed payment service provider, coupled with ineffective controls that breached money laundering rules.
AN ANTI-CORRUPTION PERSPECTIVE INTO “FOLLOW THE MONEY” APPROACHES TO NATURAL RESOURCE CRIME
On 3 November, a report by RUSI was published by the Global Coalition to Fight Financial Crime saying that “follow the money” (FTM) techniques are increasingly being applied to investigate natural resource crimes and networks, but the corruption that facilitates these crimes is not often included in programmes and initiatives that apply financial investigations to environmental crime; and that governments, the private sector, civil society, and donors will get better results from these initiatives with more effective integration of anti-corruption objectives. It also says that there is a lack of inter-agency collaboration between anti-corruption, financial crime and environmental management authorities. It warns that powerful corrupt actors may obstruct financial investigations, or prevailing political dynamics within or outside institutions may create disincentives for uncovering corruption, such as fear of repercussions.
SUDANESE MEN HIRED AS SHOPPING MALL SECURITY GUARDS ‘TRICKED’ INTO FIGHTING IN LIBYA CIVIL WAR
On 3 November, The Independent reported claims that as many as 390 Sudanese men reportedly hired by an Emirati security company as guards in the UAE, were tricked into fighting in Libya. They are said to have been recruited by Black Shield Security Services believing they would be guarding facilities in the UAE including malls and hotels.
SWISS AML BARRIERS ARE FULL OF HOLES
A post on the FCPA Blog on 4 November makes this argument, saying that Switzerland remains the go-to destination for the more discerning kleptocrats and assorted lawbreakers.
BRAZIL: PRESIDENT BOLSINARO’S SENATOR SON CHARGED WITH CRIMES
On 4 November, the Mail Online reported that prosecutors in Rio de Janeiro state have charged a son of President Jair Bolsonaro with commanding a criminal organisation and laundering money when he was a state lawmaker between 2007 and 2018. The charges were made against Flávio Bolsonaro and 16 others on 19 October.
RESEARCH INTO LINKS BETWEEN MONEY LAUNDERING AND MARITIME CRIME IN GULF OF GUINEA AND NIGER DELTA
On 9 October, a FATF-style regional body, Inter-Governmental Action Group against Money Laundering in West Africa (GIABA), announced that it and the EU have signed an agreement for research on how money laundering, terrorist financing and illicit financial flows are linked to maritime crime in the Gulf of Guinea and Nigeria’s Niger Delta. The EU has provided $300,000 for the research which will be conducted by GIABA, an institution of the Economic Community of West African States (ECOWAS). The research is part of ECOWAS’ Support to West Africa Integrated Maritime Security (SWAIMS) Project, also funded by the EU.
SECTOR BY SECTOR: WHERE DO GLOBAL GREENHOUSE GAS EMISSIONS COME FROM?
PODCAST: UNDERSTANDING TRUMP’S EXECUTIVE ORDER ON THE CIVIL SERVICE (IT’S MUCH MORE SERIOUS THAN IT SOUNDS)
In the latest TRACE podcast, Harvard law professor Matthew Stephenson provides some context for understanding Trump’s new executive order and then lists the three primary threats it poses for corruption. A more detailed discussion can be found on his blog – Global Anticorruption Blog.
MILITANT MARITIME OPERATIONS ALONG AFRICA’S EASTERN COAST
A Commentary on War on the Rocks on 4 November starts with mention of a coordinated attack by Ahlu-Sunna Wa-Jama (ASWJ) — a Mozambican terrorist group — reached the port city of Mocímboa da Praia in Mozambique’s northern Cabo Delgado. It says that militants have grown more sophisticated in their maritime strategies, using drone boats, floating mines, and even maintaining their own fleets. Whether for moving members, staging complex assaults, smuggling weapons, or trafficking illicit commodities, maritime activities can afford militant organisations a number of advantages, broadening the scope of their operational range and spheres of influence. It argues that the tendency to ignore the maritime environment) opens the door for militant actors to operate at sea and undermines counter-terrorism efforts.
THIRD COUNTRIES ALIGN WITH EU SANCTIONS ON LIBYA
An EU news release on 4 November advised that North Macedonia, Montenegro, Serbia, Albania, Iceland, Liechtenstein, Norway, Ukraine, and Armenia have confirmed that they are to align their sanctions regime with the most recent change to the EU Libyan sanctions regime – with 2 persons responsible for human rights abuses and 3 entities involved in violating the UN arms embargo being added to the sanctions lists.
UK AND ISLE OF MAN RENEW TERRORISM SANCTIONS DESIGNATIONS OF POPULAR FRONT FOR THE LIBERATION OF PALESTINE (PFLP) AND THE POPULAR FRONT FOR THE LIBERATION OF PALESTINE – GENERAL COMMAND (PFLP-GC)
A Notice from HM Treasury on 4 November advised that the UK had renewed the designation of these 2 organisations under the Terrorist Asset-Freezing etc. Act 2010 (TAFA). The Isle of Man has followed suit.
US: MAN ACCUSED OF BROKERING PRIVATE PASSENGER AIR TRAVEL FOR DRUG TRAFFICKERS ALLOWED TO WITHDRAW GUILTY PLEA
On 4 November, the EU Sanctions Blog reported that a federal court in Miami has allowed Victor Mones Coro, the owner of a Florida-based private aviation company, to withdraw his guilty plea in the face of the imminent disclosure of significant amounts of potential evidence after he had pleaded guilty. It is said that that the information is material to his potential sentence, and that he would not have agreed to the plea agreement had the files been disclosed earlier.
ENDING DUTY-FREE SHOPPING “WILL MEAN £300 MILLION HIT TO AIRPORTS”
On 4 November, Yahoo finance carried a Telegraph article about a new study which claims that ending tax-free shopping after the Brexit transition period will cost cash-strapped airports £300 million every year. A survey of the 20 biggest members at the Airport Operators Association (AOA) suggested they will lose an average of £15 million annually from the scrapping of duty-free shopping on goods such as perfumes, electronics, clothes and chocolate.
HAS YOUR COMPLIANCE PROGRAMME BEEN ADAPTED TO ACCOUNT FOR RECENT CHANGES TO US EXPORT CONTROLS?
On 3 November, an article from Bryan Cave Leighton Paisner posed this question saying that various regulatory changes were aimed at addressing national security concerns related to certain countries of interest, including China, Russia and Venezuela and, with significant changes having been introduced this year, it is critical to ensure that your compliance programme is keeping up with the changes. In Part 1 of an article, it runs through some of the changes to bear in mind.
FinCEN DELEGATES ITS EXAMINATION AUTHORITY TO “FEDERAL FUNCTIONAL REGULATORS” WHO SUPERVISE INSTITUTIONS FOR BSA COMPLIANCE
An article on 4 November from Foodman CPAs & Advocates lists these regulators –
- Federal Deposit Insurance Corporation (FDIC)
- Board of Governors of the Federal Reserve System (Federal Reserve)
- National Credit Union Administration (NCUA)
- Office of the Comptroller of the Currency (OCC)
- Commodity Futures Trading Commission (CFTC)
- Securities and Exchange Commission (SEC)
- Internal Revenue Service (IRS)
It explains who does what in the structure.
SPAIN: FORMER KING FACES FURTHER FRAUD ALLEGATIONS
On 4 November, Telesur and others reported that a new investigation will be focused on the use of credit cards by the King or his family. The investigation will be focused on the use of credit cards sponsored from abroad and whose ownership was not held by the King or his family between 2016 and 2018.
IRELAND: STUDENT CHARGED IN CONNECTION WITH €1.4 MILLION MONEY LAUNDERING PROBE
On 4 November, RTE reported that Cheng Yu, a 25-year-old student has been charged in connection with a €1.4 million money laundering probe. He is from China but has been living in Ireland for the past 2 years and is an economics student at UCD.
US: MAN PLEADS GUILTY TO MONEY LAUNDERING AS PART OF A NIGERIAN FRAUD SCHEME
A news release from US DoJ on 4 November advised that Afeez Olajide Adebara, 35, pleaded guilty to conspiracy to commit money laundering in a US District Court, connected to his role as a money launderer in a Nigerian romance scam that defrauded multiple victims, including elder Americans, of millions. He is said to have organised and led a money laundering operation from Oklahoma in order to conceal the proceeds of a Nigerian Romance Scam.
US: CHAIRMAN OF WEALTH MANAGEMENT BUSINESS CHARGED WITH SECURITIES FRAUD
A news release from US DoJ on 3 November advised that TERRENCE CHALK, aka “TERRENCE CASH”, the Chairman of Greenlight Investment Partners and several related entities operating in Florida, has been charged with securities fraud and wire fraud for his role in a scheme to fraudulently induce individuals to invest in his wealth management business under false pretences, including operating under an alias to hide his criminal past.
AS ILLICIT SHIPPING BECOMES MORE PREVALENT, HOW BANKS CAN BEST RESPOND
On 4 November, IHS Markit published an article saying that, in light of advisories from OFAC and the UK authorities, it would seem opportune to identify how big the actual burden is, where the pain-points exist, and how they could be managed. After running through potential red flags etc, is asks what is the overarching criteria and how can confidence levels be raised when handling suspect vessels? It proposes steps to be taken which, with the right application and use of technology, can make the overall process of screening for maritime sanctions easier and less burdensome.
US DoJ ISSUES CRYPTOCURRENCY ENFORCEMENT FRAMEWORK
On 4 November, the Compliance & Enforcement Blog from the Program on Corporate Compliance & Enforcement at the New York University School of Law published a post about a Framework which summarises threats posed by illicit uses of cryptocurrency, the applicable laws that the DoJ and other US federal regulatory agencies apply in seeking to identify and mitigate such threats, and the ongoing challenges faced by the DoJ in prosecuting criminal conduct in the digital asset ecosystem. The post concludes that the Framework is a significant effort by the DoJ to define and describe its focus with respect to legal enforcement against bad actors in cryptocurrency markets. The emphasis on the BSA and the regulatory and reporting requirements applicable to MSB and VASP highlights the need for market participants to have robust compliance programs, particularly with respect to AML/CFT. While the Framework provides clear examples of criminal and unlawful activities across a number of legal frameworks, the absence of robust guidelines from federal regulators overseeing the cryptocurrency markets creates a necessity for proactive and innovative compliance efforts.
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