OTHER THINGS YOU MAY HAVE MISSED – NOVEMBER 18

Panama Covid-19 update – worryingly, La Prensa reported that within a week the admission of patients with Covid-19 to hospitalisation increased by more than 100, and between 3 and 17 November 200 people were hospitalised.

The numbers remain concerning, at 1,112 new cases and 14 additional fatalities; there are 17,171 active cases, of which 158 are in ICU, 711 in other wards and 613 in requisitioned hotels. There have been another 9,205 tests, despite the disruption caused by the hurricanes and flooding, with a positive rate of 12.1%.

18 NOVEMBER 2020

OECD RECOMMENDATIONS TO US ON BRIBERY

On 17 November, the Wall Street Journal reported on the OECD Working Group on Bribery report on the US, concentrating on recommendations made to improve the US systems.  The Working Group said the US could improve by extending protection to more whistleblowers and by offering additional transparency in the resolution of foreign-bribery cases; and extend anti-retaliation protection to all private-sector tipsters that may raise FCPA-related allegations, including those who report alleged corruption by companies that do not issue securities or those who only report tips to the DoJ.

https://www.wsj.com/articles/antibribery-group-praises-u-s-enforcement-against-foreign-bribery-11605655374

WIRECARD OVERPAID FOR STRING OF ACQUISITIONS, CAUSING LARGE SHAREHOLDER LOSSES

On 18 November, the Wall Street Journal reported that German prosecutors allege that Wirecard AG executives overpaid for a string of companies, causing massive losses to shareholders of the now disgraced financial-technology company.  It is said that Henry O’Sullivan was a behind-the-scenes payments consultant who was paid as an adviser on at least 10 separate acquisitions, among a larger group of deals done at inflated values.

https://www.wsj.com/articles/the-man-at-the-center-of-wirecards-deal-machine-11605696233

WHAT DOES THE SUPREME COURT JUDGMENT IN SEVILLEJA v MAREX MEAN FOR VICTIMS OF FRAUD?

On 29 July, an article from tenet Compliance & Litigation Ltd commented on the implications of a UK Supreme Court case from July which overturned nearly 20 years of precedent relating to the principle of “reflective loss”, and a rule of company law that a shareholder cannot bring a claim for reduction in the value of his shares which is merely the result of a loss suffered by the company in consequence of a wrong done to that company by the defendant.  Although the scope of potential claims was widened somewhat in 2002, this new decision says that the principle should be taken back to the very limited circumstances set out in the original 1982 case, and the Court also said that the “reflective loss” principle is a rule of company law and not a more general principle of the law of damages.

https://tenetlaw.co.uk/articles/what-does-the-supreme-court-judgment-in-sevilleja-v-marex-mean-for-victims-of-fraud/

AUSTRALIAN ACCUSED OF PROMOTING ALLEGED US$2.5 BILLION BitConnect PONZI SCHEME CHARGED

On 17 November, the Sydney Morning Herald reported that an Australian man, John Louis Anthony Bigatton, accused of running the local arm of an alleged cryptocurrency Ponzi scheme has been charged with offences that carry jail terms of up to 10 years.  BitConnect was an online currency platform with a market capitalisation of $2.5 billion.  It held events around the world that showcased the benefits of investing in its platform, including large seminars in Australia – but collapsed in early 2018 wiping out the investment.

https://www.smh.com.au/business/markets/australian-accused-of-promoting-alleged-us2-5b-bitconnect-ponzi-scheme-charged-20201117-p56feu.html

2 ARRESTED IN $1.5 MILLION HARVARD FENCING TEAM BRIBERY SCANDAL

On 16 November, the Guardian reported that a former Harvard fencing coach and a wealthy Maryland businessman have been arrested, on accusations that the coach accepted $1.5 million in bribes in exchange for helping the businessman get his 2 sons into the Ivy League school as fencers and face charges of conspiracy to commit federal programmes bribery.  The case is separate the recent college admissions scandal in which an admissions consultant ran a scheme to get students into top universities with rigged test scores or fake athletic credentials, but the allegations are similar.

https://www.theguardian.com/education/2020/nov/16/harvard-fencing-bribery-scandal-arrests

WHY FinCEN WANTS DETAILS ON ALL CROSS-BORDER TRANSACTIONS OVER $250

On 16 November, Coindesk reported that under a proposed rule change notified last month, FinCEN and the Federal Reserve would modify the thresholds at which banks must collect and store fund transfer information, reducing it from $3,000 to $250 for any transfers – in crypto or fiat – that go outside the US.  It reports that a FinCEN specialist has said that lowering reporting thresholds for international transactions will help law enforcement and other national security authorities, and that criminals are using smaller value transfers and virtual currencies to facilitate terrorism financing, narcotics trafficking and other illicit activities, like cybercrime.  The FATF Travel Rule aims to prevent money laundering by identifying the originator and beneficiary of a transaction when funds of over a certain amount are transferred. Applying this rule to the pseudonymous architecture of crypto is a challenge being worked through by FATF in collaboration with local regulators and the digital asset industry.

https://www.coindesk.com/fincen-fatf-travel-rule-threshold-v20-summit

JERSEY INTRODUCES STATUTORY MIGRATION REGIME FOR LIMITED PARTNERSHIPS INTO JERSEY

On 17 November, Ogier published an article saying that the statutory continuance regime came into force in July 2020 under the Limited Partnerships (Continuance) (Jersey) Regulations 2020.

https://www.careyolsen.com/briefings/jersey-introduces-statutory-migration-regime-limited-partnerships-jersey

RETHINKING PROHIBITION: TOWARDS AN EFFECTIVE RESPONSE TO DRUGS IN SOUTH AFRICA

On 13 November, ENACT Africa said that a new report showed that prohibitionist and punitive drug policies in South Africa remain a fundamental barrier to an equitable and just society.  The report explores the universal costs and consequences of prohibition before providing a global contextualisation of current drug policy debates.  It then outlines the historical context of drug policy in South Africa and suggests what might be done differently in the present and future to reduce the burden of drugs and drug policy in the country.  The report found that, despite the vast expenditure on a prohibitionist and criminal justice approach to drugs globally over more than five decades, drugs are more readily available at lower prices, drug use has increased significantly and the social and health harms associated with current policies and responses to drugs are substantial; and that the criminalisation of people who use drugs is a massive burden on the police, courts and correctional services, as well as a significant barrier to resolving the economic, social and health challenges that communities face in developing an equitable and just society.

https://enact-africa.s3.amazonaws.com/site/uploads/2020-11-13-rethinking-prohibition-research-paper.pdf

PODCAST: “BLOOD AND OIL: MOHAMMED BIN SALMAN’S RUTHLESS QUEST FOR GLOBAL POWER”

In the latest TRACE podcast, Bradley Hope discusses his excellent book about the rise of Crown Prince Mohammed bin Salman and key milestones like the “Ritz Carlton Prison”, the kidnapping of Prime Minister Hariri of Lebanon and the murder of Jamal Khashoggi. He also discusses some of MBS’s modernisation efforts and what the Kingdom might look like if he hadn’t risen to a position of power.

https://traceinternational.org/resources-podcast

OVERFLOW CONTAINER STACKS CONTINUE TO PROLIFERATE AROUND THE UK AS LOGISTICS INDUSTRY FAILS TO TACKLE THE GROWING CONGESTION HITTING SUPPLY CHAINS

On 17 November, Loadstar reported that stacks of empty containers have begun to appear at several ports around England.

https://theloadstar.com/uk-ports-need-outside-help-as-containers-pile-up-by-the-thousand/

SANCTIONS: THE TRUMP ADMINISTRATION’S RECORD AND RECOMMENDATIONS FOR THE NEXT ADMINISTRATION

A report from the Atlantic Council says that economic sanctions have become a default setting for the US Government and Congress to respond to policy problems that seem to require less than military action.  Results, as with any policy tool, have been uneven.  Under the uncertain policy direction of the Trump administration many of the gains achieved through the sanctions policy tool are in danger of unravelling while failing credibility and uneven application are weakening the tool.  What in sanctions policy works, what doesn’t, and what should the Biden administration do to make sanctions work better?  It makes a number of recommendations for the administration. 

https://www.atlanticcouncil.org/wp-content/uploads/2020/11/US-Sanctions-Policy-Report-v4-002.pdf

TRANSPORTING GOODS BETWEEN GB AND THE EU FROM 1 JANUARY: GUIDANCE FOR HAULIERS AND COMMERCIAL DRIVERS

On 18 November, a news release from HMRC says new guidance explains what documents you will need, how to follow new rules to manage traffic heading to ports and new border control processes.  There will be separate guidance on moving goods between Great Britain and Northern Ireland.  However, it warns that some of the rules are still being agreed between the UK and the EU and the guidance will be updated with the latest information as soon as it is available.

https://www.gov.uk/guidance/transporting-goods-between-great-britain-and-the-eu-from-1-january-2021-guidance-for-hauliers

UK: FURTHER AMENDMENT ORDERS FOR SANCTIONS IN BRITISH OVERSEAS TERRITORIES

On 18 November, new Orders were published that extend several existing sanctions regimes to British Overseas Territories (except Bermuda and Gibraltar which implement sanctions through their own domestic legislation).

https://www.legislation.gov.uk/uksi/2020/1287/contents/made

https://www.legislation.gov.uk/uksi/2020/1286/contents/made

https://www.legislation.gov.uk/uksi/2020/1285/contents/made

https://www.legislation.gov.uk/uksi/2020/1284/contents/made

https://www.legislation.gov.uk/uksi/2020/1283/contents/made

https://www.legislation.gov.uk/uksi/2020/1282/contents/made

https://www.legislation.gov.uk/uksi/2020/1281/contents/made

LOOT BOXES IN VIDEO GAMES

On 18 November, the House of Commons Library published a research paper saying that loot boxes have been defined as “features in video games which may be accessed through gameplay, or purchased with in-game items, virtual currencies, or directly with real-world money”.  They often appear as chests, crates, or card packs.  Concerns have been raised about the “structural and psychological similarities” between loot boxes and gambling and that they can encourage children to gamble, possibly leading to harmful behaviour.  However, the Gambling Act 2005 does not cover loot boxes but the Gambling Commission has also said that it is “concerned with the growth in examples where the line between video gaming and gambling is becoming increasingly blurred”.  A 2019 Parliamentary report called for regulations to be made to extend the 2005 Act to loot boxes, and a House of Lords 2020 report on gambling harm also called for loot boxes to be brought within the scope of the Act.  A DCMS call for evidence into the impact of loot boxes closes on 22 November.

https://commonslibrary.parliament.uk/research-briefings/cbp-8498/

UK: FCA ISSUES WARNING ON UNAUTHORISED FINTECH LANISTAR

On 18 November, Finextra reported that the FCA  has issued a warning to would-be investors in Lanistar, a much-hyped fintech start-up aiming for a £1 billion valuation, stating that the firm is providing services or products without authorisation.

https://www.fca.org.uk/news/warnings/lanistar-limited

https://www.finextra.com/newsarticle/36972/fca-issues-warning-on-unauthorised-fintech-lanistar/startups

GAMBLING COMPANIES SEE SIGNIFICANT RISE IN ACCOUNT TAKEOVER FRAUD

On 18 November, Gambling Insider reported that online gaming companies have experienced a rise in account takeover fraud, new research has revealed.  It says that showed 52% of companies in the gambling industry have seen a notable increase in account takeover activity in the past year, which is when a fraudster gains access to an account that doesn’t belong to them to steal funds; 72% of retail operators believe account takeover is in their top 3 fraud threats, alongside online payment and friendly fraud, while 29% think such fraud is now their top fraud-related threat.

https://www.gamblinginsider.com/news/10442/gambling-companies-see-significant-rise-in-account-takeover-fraud

MALAWI POLICE ARREST PASTOR WANTED IN SOUTH AFRICA FOR FRAUD AND MONEY LAUNDERING

On 18 November, Reuters reported that Malawi police arrested pastor and businessman Shepard Bushiri after he skipped bail in South Africa and fled to his home country.  Bushiri, who describes himself as a prophet, has a big social media following and a lifestyle that includes expensive clothes, mansions and sports cars. 

https://in.reuters.com/article/malawi-safrica-bushiri/malawi-police-arrest-pastor-wanted-in-south-africa-for-fraud-money-laundering-idINKBN27Y1GZ

RUSSIA: PROSECUTORS SEEK TO FORFEIT $2.7 MILLION ASSETS BELONGING TO EX-HEAD OF UDMURTIA

On 18 November, RAPSI in Russia reported that prosecutors have filed a lawsuit seeking to forfeit to the state over $2.7 million belonging to the former head of Russia’s Udmurt Republic, Alexander Solovyov, his family and businesses, according to a statement published on the website of the Prosecutor General’s Office.  According to the prosecution, in 2007 – 2016, he had a hidden extracurricular income exceeding his official earnings contrary to the anti-corruption legislation.

http://rapsinews.com/judicial_news/20201118/306513219.html

UK GOVERNMENT SERVICE DELIVERY OBJECTIVES, COMMITMENTS AND TARGETS FOR MANAGEMENT OF EXPORT LICENSING APPLICATIONS

On 18 November, a news release from the Department for International Trade contained a link to guidance on government performance targets for the administration of the export licensing system by Export Control Joint Unit (ECJU).

https://www.gov.uk/government/publications/service-and-performance-code-for-export-licensing/ecju-service-and-performance-code

A GUIDE ON CONDUCTING CORRUPTION RISK ASSESSMENTS IN PUBLIC ORGANIZATIONS

The UN Office on Drugs and Crime has produced a guide saying that all organisations and government institutions face the risk of corruption.  Whether through the awarding of public contracts, collection of taxes or other revenues, payment of social benefits, or in any of the other ways in which a government interacts with its citizens, there is the ever-present chance that a public official will engage in corruption through the misuse of specific powers, insights and access to information.  Likewise, it says, persons interacting with government institutions and public officials might try to use corruption to, for example, influence or circumvent rules, procedures and decisions.  It explains that a corruption risk assessment is a systematic tool that can be used by public organisations to identify corruption vulnerabilities within their operations and devise efficient, cost-effective strategies to mitigate those vulnerabilities or risks.  The goal of any risk assessment is to identify a realistic set of potential areas or scenarios that may be vulnerable to corruption, determine which should be prioritised, and develop and implement mitigation measures.

https://www.unodc.org/documents/corruption/Publications/2020/State_of_Integrity_EN.pdf

CUSTOMS AUTHORITIES IN CHINA AND CONGO BASIN MEET ONLINE TO DEVISE STRATEGIES TO COUNTER ILLEGAL WILDLIFE AND TIMBER TRADE

On 18 November, the NGO Traffic reported that, earlier this month, customs officers from China, Cameroon and Republic of the Congo met online during an event entitled “International Illegal Wildlife Trade (IWT) and Timber Trade Governance Meeting for China-Congo Basin Countries Customs Authorities”.  Delegates made firm commitments on intelligence-sharing and joint trans-boundary law enforcement actions and spoke about illegal wildlife trade issues related to Chinese businesses operating in Africa. Such meetings have been ongoing from 2017.  This virtual meeting was funded by the UK Foreign, Commonwealth and Development Office, and also supported by the German Government’s Partnership against Poaching and Illegal Wildlife Trade (in Africa and Asia), implemented by GIZ on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ) and the German Federal Ministry for Environment, Nature Conservation and Nuclear Safety (BMU).

https://www.traffic.org/news/customs-authorities-in-china-and-congo-basin-meet-online/

“ROBUSTNESS” OF SOFTWARE DEFINED AND THE POST OFFICE HORIZON SOFTWARE CASE

An article in the Digital Evidence and Electronic Signature Law Review discusses the use of the term “robustness” of software, as used in the case of Bates v Post Office Ltd, where the properties of the Post Office Horizon transaction processing system (at the heart of the scandal whereby numerous subpostmasters in the UK have been accused of, and even jailed for, alleged or purported fraud) were investigated and argued.  The concept of robustness was at the core of the defendant’s argument, which was that Horizon was “robust”, if not infallible.  It says that the notion of “robust” has a defined meaning in international standards for software engineering. 

https://journals.sas.ac.uk/deeslr/article/view/5171/5036

RECORD COCAINE HAUL AT BELGIUM PORT UNCOVERS POLICE CORRUPTION

An article in Insight crime on 17 November says that authorities in Belgium have arrested a former top counter-narcotics official being investigated for suspected involvement with a ring that concealed 11.5 tons of cocaine in cargo shipped from Guyana to the port of Antwerp, in a case that it says reveals how law enforcement corruption is crucial to moving massive amounts of drugs into Europe.  It is also reported that the official involved, the former head of the counter-narcotics division of Belgium’s Gendarmerie, has been arrested in the past and indicted for drug trafficking in 2001, the same year the Gendarmerie was abolished.

https://www.insightcrime.org/news/analysis/belgium-cocaine-seizure-corruption/

UN PANEL OF EXPERTS REPORT ON MALI SANCTIONS

On 17 November, a news release announced that the UN Security Council has held a meeting about the report from the Panel of Experts published in August, and which included mention that 8 individuals have so far have been sanctioned for obstructing implementation of the 2015 Mali Peace and Reconciliation Agreement. 

http://undocs.org/S/2019/636

GREECE: HUSBAND OF A WHISTLEBLOWER WHO PROVIDED EVIDENCE IN DAPHNE CARUANA GALIZIA CASE RELEASED A DAY AFTER POLICE ARRESTED HIM FOLLOWING A REQUEST FROM CYPRUS’ AUTHORITIES

On 17 November, OCCRP reported that the husband of a whistleblower who provided evidence of alleged corruption to slain Maltese journalist Daphne Caruana Galizia was released after Greek police arrested him following a request from Cyprus’ authorities.  Pantelis Varnava, the husband of Maria Efimova (a former employee at the Malta-based Pilatus Bank) and a citizen of both Greece and Cyprus, is facing extradition from Greece on charges of fraud, embezzlement, forgery and money laundering.  Varnava was released with restrictive terms barring him from leaving the country, and is obligated to check in regularly with the police, his lawyer said.  

https://www.occrp.org/en/daily/13415-husband-of-whistleblower-released-following-arrest-in-greece

SPAIN’S DISGRACED FORMER KING ‘SPENT OVER £7 MILLION ON FLIGHTS’

On 17 November, The Independent reported that the monarchy was plunged into fresh controversy after claims the disgraced former King Juan Carlos paid for private jet flights worth nearly €8 million to the Caribbean, US and the Middle East.  It is claimed that the flights were paid for from the Lichtenstein-based offshore account Fondation Zagatka, which is under investigation by a Swiss magistrate.

https://www.independent.co.uk/news/world/europe/bad-altitude-spain-s-disgraced-former-king-spent-over-ps7m-on-flights-b1724431.html

NEW ZEALAND: AUCKLAND LAWYER STRUCK OFF FOR LAUNDERING MONEY FOR COMANCHEROS 

On 17 November, Stuff reported that Andrew Neill Simpson, a lawyer who was jailed after admitting laundering $2.2 million for members of the Comanchero Motorcycle Club has been struck off.  He is said to have used specialist knowledge as a lawyer to advise on structuring the laundering scheme across the multiple trust accounts he set up.

https://www.stuff.co.nz/national/crime/300160660/auckland-lawyer-struck-off-for-laundering-money-for-comancheros

LEGAL CLAIM IN US CLAIMED THAT PHILLIP MORRIS SMUGGLED CIGARETTES AND DISTORTED DATA

On 17 November, OCCRP reported that a former business partner says that Swiss tobacco giant Philip Morris International facilitated the theft of his intellectual property, a critical methodology used to measure worldwide flows of contraband cigarettes.  A complaint has been filed in the state of New York by Raoul Setrouk, an Israeli businessman who’s worked with the company for 25 years.  The complaint also says the company smuggled its cigarettes into Libya despite US sanctions.  The complainant’s company, MSIntelligence, uses a variety of methods to quantify illegal cigarette consumption in over a hundred countries, from Mexico to Algeria.  The article reminds one that, in the early 2000s, Philip Morris faced a massive lawsuit from the European Commission over facilitating the widespread smuggling of its cigarettes into the EU – following a similar lawsuit in the US, and settled for $1.25 billion.

https://www.occrp.org/en/daily/13413-complaint-phillip-morris-smuggled-smokes-distorted-data

3 DETAINED IN RAIDS OVER SPECTACULAR €1 BILLION GERMAN JEWEL HEIST

On 17 November, the Guardian reported that arrests have been made in large-scale raids in Berlin which link the jewel robbery at Dresden museum last year to the same “Lebanese mafia” family whose members were sentenced earlier this year over the theft of one of the world’s largest gold coins from a Berlin museum.

https://www.theguardian.com/world/2020/nov/17/three-detained-in-germany-over-1bn-green-vault-jewel-heist

PODCAST: MONEY LAUNDERING IN THE CAYMAN ISLANDS

In the first of a planned series of podcasts, Appleby Global has released this short (5 minute) podcast providing a high-level overview of key Cayman Islands Regulatory topics with Cybersecurity.

https://soundcloud.com/user-641917806/qa-with-aq-cybersecurity

ANOTHER PIRATE ATTACK AND KIDNAP REPORTED IN GULF OF GUINEA

On 17 November, International Marine News reported that 14 crew members are reported to have been kidnapped from heavy lift vessel Zhen Hua 7 (IMO 9166560) on 13 November in the Gulf of Guinea. The vessel was about 78 nm northwest of Sao Tome. 27 seafarers were onboard the ship at the time of the incident.  This was the eighth offshore incident within the Gulf of Guinea in the previous 9 days and is the 21st kidnapping within the Gulf of Guinea within 2020, with 110 seafarers kidnapped.

https://insurancemarinenews.com/insurance-marine-news/another-pirate-attack-and-kidnap-reported-in-gulf-of-guinea/

INTERNATIONAL GROUP UPDATE ON THE NEW US SANCTIONS IN RELATION TO PIPELINES NORD STREAM 2 AND TURKSTREAM

On 17 November, International Marine News reported that the group of P+I Clubs says that both the Countering America’s Adversaries Through Sanctions Act (CAATSA) and the Protecting Europe’s Energy Security Act (PEESA) have the potential to reach the activities of non-US ship owners and others in the marine industry – including insurers.  The International Group  said that a change in US policy meant that there was now a potential for sanctions (including being blocked by the US) against a person who sells, leases or provides the Russian Federation with goods or services that meet certain fair market value thresholds and that directly and significantly facilitate the expansion, construction, or modernisation of NS2 or TurkStream.  The International Group warns that those owning or operating vessels that are used in connection with NS2 or TurkStream or those providing services to such vessels should consider whether their activities might trigger an application of sanction provisions.

https://insurancemarinenews.com/insurance-marine-news/nord-stream-2-and-turkstream-ig-update-on-new-us-sanctions/

CRIMINALS LAUNDER CORONAVIRUS RELIEF MONEY THROUGH VENMO, CASH APP, PAYPAL AND OTHER APPS

On 18 November, NBC News reported that criminals are laundering illegally obtained funds meant for Covid-19 relief through the most popular apps for legally sending and receiving money, law enforcement officials say.  It is said said fraudsters find so-called “money mules” to deposit funds into the apps, then move them from one account to the other in an effort to hide the source of the funds.  The US Secret Service has 700 pending investigations related to the Paycheck Protection Program and the Unemployment Insurance Relief program and in an increasing number of those cases, the suspects used one of the apps to move the stolen money.  So far, 80 defendants have been charged with attempting to steal more than $240 million from the PPP program, a DoJ spokesman said.

https://www.nbcnews.com/tech/security/criminals-launder-coronavirus-relief-money-venmo-cash-app-paypal-apps-rcna180

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

Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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