Panama Covid-19 update – the weather, the side effects of Hurricane Eta further north, has eased for us at least, and even sunny today. A further holiday today as well. but in the north bad floods, roads and bridges closed, and the fishermen banned from going to sea. For all that it is awful, on the news channel it is always “mal tiempo” (bad weather)!
Meanwhile, another 543 new cases (18,733 now active – this number gradually falling, unlike in US and Europe) with 12 more fatalities and another 4,329 tests carried out.
5 NOVEMBER 2020
SEC WHISTLE-BLOWER GETS $28 MILLION
On 5 November, KYC 360 reported that the SEC has paid $28 million to another whistle-blower who provided information that led to a successful enforcement action. The SEC did not provide information on the individual’s identity or the company involved, citing federal law that protects confidentiality.
CRYPTOCURRENCY EXCHANGES COINBASE, PAXFUL, GEMINI AND BITFINEX HAVE JOINED THE ANTI-HUMAN TRAFFICKING CRYPTOCURRENCY CONSORTIUM
On 3 November, Coin Telegraph reported that the companies have joined the ATCC, which was launched in April 2020 by the Anti-Human Trafficking Intelligence Initiative, a non-profit consortium focused on intelligence sharing, best practices and the development of tools to fight trafficking. ATCC brings together crypto exchanges, blockchain intelligence firms and law enforcement.
EU MINISTERS AGREE TO SET UP EU AML BODY
On 4 November, Reuters reported that EU European Union have agreed to set up an EU body that would fight money laundering, supporting a European Commission proposal from May.
UK: THE RETURN OF CROWN PREFERENCE – IS THE TIME RIGHT TO CHANGE THE ORDER OF PRIORITY?
On 3 November, Brodies LLP published an article saying that the preference will be restored on 1 December, coming into force just before a new Covid-19 lockdown takes effect and at a time when many businesses, having taken advantage of the option to defer VAT payments, or fallen behind with payments as a result of the pandemic, have greater than normal HMRC liabilities. The article lays out the current list of priorities for money realised from the assets of an insolvent company as applied to meet claims of creditors. It then says that, for insolvencies commencing on or after 1 December, amounts due to HMRC in respect of the following will be categorised as secondary preferential debts – VAT, PAYE Income Tax, employee National Insurance contributions (NIC), student loan deductions and Construction Industry Scheme (CIS)deductions. The preference applies to all such tax debts regardless of when they arose. It is not limited to a specific period pre-insolvency nor is it restricted to any such debts arising on or after 1 December. HMRC will thus come after fixed-charge holders, expenses of the insolvency process and ordinary preferential debts (primarily limited to certain employee claims), but before other charges, such as floating charges.
THE EUROPEAN PROJECT ICS2 (IMPORT CONTROL SYSTEM)
On 3 November, MME Legal Tax Compliance published an article saying that ICS2 stands for Import Control System 2, which is a freight prior information system through which data is collected on all goods imported into the joint security area (Switzerland, EU and Norway) before they reach the external border of the security area and enable custom authorities to carry out targeted risk analysis based on the pre-declaration data, to identify high-risk consignments. The article considers how ICS2 applies in respect of Switzerland.
FIGHTING REPORTED IN ETHIOPIA
On 4 November, the Guardian reported that fighting has been reported in northern Ethiopia after the country’s prime minister, Abiy Ahmed, ordered a military response to an “attack” by the ruling party of the restive Tigray region on a camp housing federal troops. It warns that a stand-off between the federal government and the Tigray People’s Liberation Front (TPLF) could plunge Ethiopia into a bitter and bloody civil conflict.
ISLE OF MAN: CHECKLIST FOR RESIDENTS AND BUSINESSES AS BREXIT TRANSITION PERIOD NEARS END
On 5 November, a Government’s website and updated interactive guide ‘Are you ready for 2021?’ together offer the latest information and advice on a broad range of topics, including travel to the EU, trading goods and important steps for EU nationals living in the Isle of Man.
US COMMERCE DEPARTMENT AMENDS NATIONAL SECURITY LICENSE REVIEW POLICY FOR ITEMS DESTINED TO CHINA, RUSSIA, AND VENEZUELA
On 5 November, an article from Baker McKenzie reported that, on 29 October, the US Commerce Department’s Bureau of Industry and Security issued a final rule amending the licence review policy under the Export Administration Regulations for items controlled for national security reasons when destined to China, Russia, or Venezuela. The amendments add Venezuela to the list of countries to which the policy applies and modify the policy to replace the reference to military capabilities with a new, more nuanced standard for assessing the contribution an item would make to those countries’ weapons systems.
HOUTHIS ACCUSED OF SMUGGLING 14,000 HISTORICAL YEMENI MANUSCRIPTS
On 5 November, Asharq Al-Awsat reported that the Yemeni government has accused Houthi militias of looting and smuggling more than 14,000 ancient manuscripts and artifacts.
SOUTH AFRICA: EXPLOSIVES SMUGGLING – USED FOR ILLEGAL MINING AND ROBBERIES
On 5 November, the Daily Maverick reported that the smuggling of explosives has become a growing problem in South Africa and the Southern African region. Originating from the mining and construction industries in the region, explosives find their way across the South African border. They are used by illegal miners and organised criminals in attacks on armoured vehicles transporting large amounts of cash as well as bombings of ATM. Reports have identified large amounts of smuggled explosives originating from Zimbabwe and intercepted by authorities at the Beit Bridge border.
TAIWANESE BILLIONAIRE WITH MALAYSIAN, CAMBODIAN, INDONESIAN TITLES ARRESTED FOR ALLEGED MONEY LAUNDERING
On 5 November, Taiwan News reported that the “Legendary” tycoon had escaped Taiwanese authorities during underworld bust in August. The billionaire chairman of a financial holding headquartered in Taichung, Taiwan, has been arrested for his alleged connection to illegal gambling and money-laundering, and was being held in Changhua, Taiwan.
e-MONEY LAUNDERING IN JAPAN NEARLY TRIPLED IN 2019
On 5 November, Japan Times reported that almost 4,000 cases of suspected money laundering, many of which were linked to e-money transfer providers, were reported to police in 2019, nearly triple the figure recorded the previous year, the National Police Agency (NPA) said. The 3,913 cases reported by nonbank operators of funds transfer services compare to 1,391 in 2018.
GANGS IN LATIN AMERICA USE BRIBERY, SECRET ROUTES TO SMUGGLE JAGUAR PARTS TO CHINA
On 5 November, Reuters reported claims that criminal organisations in Bolivia and other Latin American countries are bribing police and circumventing customs restrictions to smuggle parts of jaguars to mainland China. Jaguar parts in China are passed off as tiger products and sold for their reputed medicinal properties.
SHINING A LIGHT ON THE ISSUE OF WINE FRAUD
On 5 November, Newswise published an article saying that University of Adelaide wine researchers are developing a fast and simple method of authenticating wine – a potential solution against the estimated billions of dollars’ worth of wine fraud globally, but also offering a possible means of building regional branding.
2 RECENT SEC CASES INVOLVING CRYPTOCURRENCY OFFERINGS
On 4 November, an article from Faegre Drinker Biddle & Reath LLP says that the cases represent additional milestones in the debate over whether, and when, cryptocurrency offerings involve US securities laws as officials have expressed the view that cryptocurrencies sold only to be used to purchase a good or service, such as Bitcoin or Ethereum, may not be securities. It is said that the different results in the cases demonstrate that ICO may be viewed by the SEC and courts as offerings of securities, but that legal issues remain controversial and somewhat unsettled.
ITALY ARRESTS DOZENS OF SUSPECTED NIGERIAN MAFIA MEMBERS
On 4 November, OCCRP reported that, in a sweeping operation in 2 Italian cities, police arrested 74 members of the Nigerian mafia, including the alleged leader, 50-year-old Emmanuel “Boogye” Okenwe. The self-styled “King of Ferrara” headed the gang known as the ‘Arobaga Vikings’ or ‘Norsemen Kclub International’. Turin has been the centre of the Nigerian mafia in Italy for over a decade. Apart from Turin or Ferarra, they have established a wide network, with individual cells, known as “decks” in cities across the country.
THE ILLEGALITY PRINCIPLE IN CIVIL CLAIMS REMAINS INTACT DESPITE THE UK SUPREME COURT FINDING IN FAVOUR OF A MORTGAGE FRAUDSTER IN A DISPUTE WITH A LAW FIRM
On 5 November, the Law Society Gazette reported that, in a recent case, ruled unanimously last week that a negligence claim should not be barred by the illegality defence, despite revelations that the former client of the law firm had procured a mortgage advance by fraud. However, lawyers reflecting on the judgment indicated that the court has not ruled out the possibility of using the illegality defence in some circumstances.
BREXIT – IMPLICATIONS FOR CONTRACT DISPUTES FROM 1 JANUARY
On 5 January, an article from Eversheds Sutherland says that managing disputes involving a UK counterparty will become more complex and costly from 1 January, and ask what changes can you make to your contracts to ensure that disputes can be resolved in a timely and cost effective manner?
SECURITIES COMMISSION MALAYSIA WARNS THE PUBLIC ON THE SHARP INCREASE OF CLONE FIRM SCAMS THIS YEAR
A release on Mondo Visione on 5 November said that Securities Commission Malaysia (SC) has cautioned the public on the sharp increase of clone firm scams this year, with scams are perpetuated by companies that fraudulently impersonate a legitimate entity, including misusing the name and logo of a PLC to dupe investors and to solicit funds.
SOUTH KOREA WILL BAN DOMESTIC CIRCULATION OF PRIVACY COINS
Finance Magnates on 4 November reported that South Korea’s Financial Services Commission (FSC) has announced its decision to ban anonymous digital currencies that possess a high-risk of money laundering. The new rules will come into force in March next year, barring all domestic cryptocurrency exchanges from offering services with such privacy coins. All domestic cryptocurrency exchanges will have to confirm the users’ real names by verifying them against their personal identities; and the exchanges need to report their operational activities with the regulator.
BARBADOS BANK GOVERNOR HITS BACK AT AML ‘BLACKLISTING’
Central Banking on 4 November reported that the governor of the Central Bank of Barbados has criticised the country’s ‘blacklisting’ for money laundering weaknesses by the EU, describing it as unfair and badly timed.
HONG KONG POLICE OFFICER AMONG 11 ARRESTED OVER SUSPECTED MONEY LAUNDERING
On 5 November, the South China Morning Post reported that an officer from the emergency unit of New Territories South regional headquarters allegedly processed a total of HK$210 million (US$26 million) in suspected crime proceeds. The arrests of 8 men and 3 women, aged 19 to 30, were made after police’s financial investigations division launched a probe upon receiving intelligence last month.
US SEIZES ANOTHER 27 WEBSITES – LINKED TO IRAN’S ISLAMIC REVOLUTIONARY GUARD CORPS
A news release from the US DoJ on 4 November advised that the US authorities had seized 27 domain names that Iran’s Islamic Revolutionary Guard Corps (IRGC) unlawfully used to further a global covert influence campaign. 4 of the domains purported to be genuine news outlets but were actually controlled by the IRGC and targeted audiences in the US, to covertly influence United States policy and public opinion, in violation of the Foreign Agents Registration Act (FARA). The remainder targeted audiences in other parts of the world. This seizure follows an earlier seizure of 92 domains used by the IRGC for similar purposes.
TIPS FOR BORROWING AND LENDING AGAINST ART
On 2 November, an article from Field Fisher sees its art finance experts offer some tips for borrowers and lenders. Increasingly, international private banks offer art loans and there are a number of specialist lenders and auction houses that have operated in this field for many years, and set out a number of practical but often overlooked points we regularly address in any art loan.
BHS BUYER DOMINIC CHAPPELL GIVEN 6 YEARS FOR TAX EVASION
On 5 November, the Guardian and others reported that the 53-year-old bankrupt has been sentenced to 6 years in jail for evading tax on the £2.2 million income he received from his doomed takeover of the chain store BHS. He spent hundreds of thousands of pounds on luxury items, including a yacht, a holiday to the Bahamas, a Bentley car and Beretta guns, instead of paying £600,000 due in tax, and after buying the department store chain from the billionaire Sir Philip Green for £1 in March 2015. But just a year into his ownership, it collapsed with the loss of 11,000 jobs and a £571 million pensions black hole.
SFO INVESTIGATES BOMBARDIER OVER INDONESIAN AIRLINER DEALS
On 5 November, Reuters and others reported that the SFO was investigating the Canadian aerospace company over suspected bribery and corruption related to deals with the airline Garuda Indonesia. Garuda bought 18 airliners from the company, parts for which were made at the company’s factory in Northern Ireland. Bombardier sold its regional airliner business to Mitsubishi last year, with US company Spirit acquiring the Belfast factory.
US: DISRUPTION OF 2 TERRORISM FINANCING CAMPAIGNS THAT UTILISED CRYPTOCURRENCY DONATIONS (AND A THIRD THAT DIDN’T) FOLLOWING A MULTI-AGENCY INVESTIGATION
A release on Mondo Visione on 5 November announced that the DoJ confirmed the disruption of terrorism financing campaigns following a multi-agency investigation conducted by the FBI, HSI, and IRS-CI. The investigation led to the largest-ever seizure of cryptocurrency assets related to terrorism financing, with more than $1 million worth of cryptocurrency recovered from terror finance campaigns and financial facilitators operating unlicensed money services businesses (MSB). It says that Chainalysis tools aided in the investigation of the 2 campaigns relying on cryptocurrency donations.
THE DAWN OF FINTECH IN LATIN AMERICA
A paper from the Bank for International Settlements on 5 November takes stock of how it is transforming financial services in the region. It describes the fintech landscape in terms of investment, firms and services provided and finds that fintech has quickly gained traction in Latin America, mainly in the areas of payments and alternative finance. It also evaluates the prospects for fintech by exploring the institutional framework to supervise and regulate it. It is said that the fintech regulation in the region takes an activity-based approach rather than an entity-based one, except in Mexico. The paper finally presents the challenges that fintech faces in becoming a game changer for the region, and concludes that fintech can be a strong catalyst to improve financial and social conditions in Latin America by incorporating the unbanked into the financial system and providing alternative sources of finance to firms.
ISLE OF MAN – SEVERAL SETS OF SANCTIONS-RELATED REGULATIONS ON NOVEMBER ORDER PAPER
The Order Paper for the Island’s parliament for 20 November includes several sets of regulations concerned with sanctions measures and which would bring Island law more fully into line with that of the UK. The regulations relate to Burundi, Bosnia-Herzogovina, Nicaragua, Mali and Lebanon, counter-terrorism sanctions, Guinea and Guinea-Bissau, and the chemical weapons and cyber sanctions regimes. They are all made under the Sanctions and Anti-Money Laundering Act 2018 (of Parliament) which will replace the existing EU Regulations which currently have effect in the Island, as a consequence of the UK’s departure from the EU.
INSURANCE FRAUD E-BOOK
The CRI Group has produced an e-book as a primer for any insurance fraud professional and companies looking to avoid becoming victims of insurance fraud claims. It provides the tools and knowledge needed to effectively combat insurance fraud.
IRANIAN PARLIAMENT APPROVE BILL SPECIFYING INCREASED URANIUM ENRICHMENT
On 5 November, Nuclear Engineering International reported that Iran’s parliament has approved a Bill requiring the Atomic Energy Organisation of Iran (AEOI) to produce at least 120 kg of 20% enriched uranium a year at its Fordow nuclear facility. AEOI is required to start this process within 2 months and store the enriched uranium inside the country.
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