OTHER THINGS YOU MAY HAVE MISSED – NOVEMBER 20

Panama Covid-19 update – another wet couple of days (though with long dry spells) as a “tropical wave” passes nearby. Meanwhile, 1,200 new cases show infections remain worryingly high – though 9,000+ more tests demonstrate a proactive approach to seeking out new cases. There have been 10 more fatalities, and 16,609 active cases – 152 in ICU and 773 in other hospital wards.

20 NOVEMBER 2020

LASHKAR-E-TAIBA FOUNDER GUILTY ON 2 MORE CHARGES OF TERRORISM FINANCING

On 19 November, Reuters reported that a Pakistani court has sentenced Islamist leader Hafiz Saeed, founder of Lashkar-e-Taiba (LeT), the militant group blamed by the US and India for the 2008 Mumbai siege, to 10 years in prison on 2 charges of terrorism financing, his lawyer said. he sentences – 5 years each – will run concurrently.  Saeed is already in jail will not serve any extra jail time.  He is described as chairman of a charity called Jammaat ud-Dawa.

https://www.reuters.com/article/us-pakistan-court-militancy-financing/pakistani-islamist-found-guilty-on-two-more-charges-of-terrorism-financing-idUSKBN27Z1TZ

SWISS PROSECUTORS TO END MAGNITSKY CASE 

On 20 November, KYC 360 reported that Swiss prosecutors are close to ending a decade-old probe into alleged money laundering tied to a $230 million tax-fraud case pursued by Sergei Magnitsky, whose death in a Russian jail prompted the US to enact laws targeting those responsible.

https://www.riskscreen.com/kyc360/news/swiss-prosecutors-to-end-magnitsky-case-as-browder-calls-foul/

https://www.swissinfo.ch/eng/swiss-prosecutor-to-shut-down-russian-money-laundering-probe/46174612

AUSTRALIA: AN ALLIANCE BETWEEN LAW ENFORCEMENT AGENCIES AND FINANCIAL SERVICES COMPANIES THAT SHARE INFORMATION ABOUT CRIMINAL METHODS AND BANK DATA

On 20 November, the Australian Financial review reported on an unusual alliance between law enforcement agencies and financial services companies that share information about criminal methods and bank data has contributed to and supported dozens of arrests for money laundering, fraud and drug trafficking, and other more sinister crimes over the past year alone.  The group is known as the Fintel Alliance and has contributed to a 945% increase in the reporting of suspected child-related offences since it was established in 2017.  In its annual report the group announced that a new risk assessment of Australian casinos is due alongside ones for gambling junkets and the gold bullion industry.  The annual report provides information about the growing attraction of gold bullion and other unorthodox stores of value such as bitcoin that crooks are turning to in order to move the proceeds of crime in a world where cash can attract attention.

https://www.afr.com/companies/financial-services/how-bank-data-is-used-to-catch-crooks-and-stamp-out-sex-crimes-20201119-p56g8z

LASHKAR-E-TAIBA FOUNDER GUILTY ON 2 MORE CHARGES OF TERRORISM FINANCING

On 19 November, Reuters reported that a Pakistani court has sentenced Islamist leader Hafiz Saeed, founder of Lashkar-e-Taiba (LeT), the militant group blamed by the US and India for the 2008 Mumbai siege, to 10 years in prison on 2 charges of terrorism financing, his lawyer said. he sentences – 5 years each – will run concurrently.  Saeed is already in jail will not serve any extra jail time.  He is described as chairman of a charity called Jammaat ud-Dawa.

https://www.reuters.com/article/us-pakistan-court-militancy-financing/pakistani-islamist-found-guilty-on-two-more-charges-of-terrorism-financing-idUSKBN27Z1TZ

SWISS PROSECUTORS TO END MAGNITSKY CASE 

On 20 November, KYC 360 reported that Swiss prosecutors are close to ending a decade-old probe into alleged money laundering tied to a $230 million tax-fraud case pursued by Sergei Magnitsky, whose death in a Russian jail prompted the US to enact laws targeting those responsible.

https://www.riskscreen.com/kyc360/news/swiss-prosecutors-to-end-magnitsky-case-as-browder-calls-foul/

https://www.swissinfo.ch/eng/swiss-prosecutor-to-shut-down-russian-money-laundering-probe/46174612

AUSTRALIA: AN ALLIANCE BETWEEN LAW ENFORCEMENT AGENCIES AND FINANCIAL SERVICES COMPANIES THAT SHARE INFORMATION ABOUT CRIMINAL METHODS AND BANK DATA

On 20 November, the Australian Financial review reported on an unusual alliance between law enforcement agencies and financial services companies that share information about criminal methods and bank data has contributed to and supported dozens of arrests for money laundering, fraud and drug trafficking, and other more sinister crimes over the past year alone.  The group is known as the Fintel Alliance and has contributed to a 945% increase in the reporting of suspected child-related offences since it was established in 2017.  In its annual report the group announced that a new risk assessment of Australian casinos is due alongside ones for gambling junkets and the gold bullion industry.  The annual report provides information about the growing attraction of gold bullion and other unorthodox stores of value such as bitcoin that crooks are turning to in order to move the proceeds of crime in a world where cash can attract attention.

https://www.afr.com/companies/financial-services/how-bank-data-is-used-to-catch-crooks-and-stamp-out-sex-crimes-20201119-p56g8z

EU LEANS HEAVILY ON US PROGRAMME TRACKING TERROR FINANCING

On 19 November, the Wall Street Journal reported that a new review by the US Privacy and Civil Liberties Oversight Board, an independent federal agency that advises the president on intelligence and counterterrorism programs. has revealed the extent to which European governments have come to rely on a US surveillance programme that monitors global financial transactions for ties to terrorism.  The US Treasury Department’s Terrorist Finance Tracking Program, or TFTP, was created after the 9/11 attacks and new data shows it is now widely used by European authorities — even as EU institutions, concerned about the privacy of their citizens and possible surveillance, move to more strictly control transfers to the US of data they gather.  Some 40% of the database searches performed by Treasury were on behalf of EU Member States or Europol.

https://www.wsj.com/articles/eu-leans-heavily-on-u-s-program-tracking-terror-financing-11605794404

VENEZUELA OPPOSITION FIGHTS CREDITORS FOR CONTROL OF BILLIONS IN GLOBAL ASSETS

On 19 November, the Wall Street Journal reported that creditors from hedge funds to oil companies are moving closer to seizing billions of dollars in Venezuela’s overseas assets, posing a threat to an opposition movement that has sought to protect the assets for an eventual change of government.  It says that creditors are seeking as much as $100 billion in Venezuelan money and property as compensation for the billions Maduro’s bankrupt regime owes them. The property includes Houston-based oil refining company Citgo Petroleum, gold bullion kept in the Bank of England, bank accounts in New York and large jets, helicopters and mansions in South Florida.

https://www.wsj.com/articles/venezuela-opposition-fights-creditors-for-control-of-billions-in-global-assets-11605790800

AUSTRALIA’S ENFORCEMENT OF OECD BRIBERY CONVENTION SUBJECT TO FURTHER CRITICISM

A Commentary from Jones Day says that Transparency International’s Progress Report 2020: Assessing enforcement of the OECD Anti-Bribery Convention (“the Report”) has grouped Australia with 9 other countries (including Germany, France and Sweden) in the “moderate enforcement” category.  Only the US, UK, Switzerland and Israel reach the threshold of “active enforcement”. It says that the main reproaches to Australia’s compliance with its OECD Convention obligations fall into 2 broad categories, inadequacies in enforcement and inadequacies of the legal framework.

https://www.jonesday.com/en/insights/2020/11/foreign-bribery-australias-enforcement-of-oecd-convention-subject-to-further-criticism 

DOES LAWFUL ACT DURESS EXIST?

On 18 November, an article from Morton Fraser said that the Court of Appeal in England and Wales previously overturned a decision of the High Court and decided that where a party uses a lawful act or acts to apply economic pressure to a counterparty, the court will not set aside the resulting contract on grounds of duress unless bad faith is established. Now the questions involved are before the Supreme Court in a hearing.  This is said to be the first economic duress case which has come before the Supreme Court and cases on this topic are difficult.  It is accepted these days that a contract may be avoided on the grounds of economic duress, but related to unlawful threats.  In the previous leading case the fear was expressed that to expand the law on duress would enable settled accounts to be reopened between parties when they fell out even where they were settled in good faith, with good faith was a critical factor in the judgment.

https://www.morton-fraser.com/knowledge-hub/does-lawful-act-duress-exist

IRELAND AND WHISTLEBLOWING

An article Walkers on 17 November reflects on the law on whistleblowing in Ireland, saying that Ireland already has substantial protection for whistleblowers but, even so, the scope and applicability of employers’ obligations will broaden when Directive (EU) 2019/1937 on the protection of persons who report breaches of Union law (“Whistleblowing Directive”) is implemented.  Ireland must implement the Whistleblowing Directive by 17 December 2021 and, from then, private employers of 50 or more employees will be required to establish reporting channels (which may be internal or provided by an external third party) within their organisation for workers who wish to report breaches of EU law.

https://insights.walkersglobal.com/post/102gke8/ireland-update-winds-of-change-for-whistleblowing

FORMER UKRAINIAN POLITICIAN ARRESTED IN MOSCOW WHILE ALLEGEDLY TRYING TO SELL SMUGGLED IRON AGE GOLD

On 20 November, Russia Today reported that Oleg Markov, a former member of Odessa City Council has been arrested in Moscow on suspicion of selling smuggled items of historical value. He was allegedly attempting to pass on Iron Age Scythian gold, as well as an amphora with stones, a necklace, a bracelet, and a medallion.

https://www.rt.com/russia/507296-ukranian-politician-antiques-smuggling/

INDIA – TURMERIC: THE YELLOW GOLD FOR SMUGGLERS
On 20 November, the Times of India carried a report following the seizure of 600 kg of turmeric in 15 bags, all set to be loaded onto a fishing boat for smuggling to Sri Lanka in July.  Since then more than 12 tonnes turmeric has been seized in 15 incidents by various agencies.  This followed a ban on import of the yellow spice by the Sri Lanka government imposed on 21 December 2019.  The idea was to promote domestic cultivation and thereby local economy.

https://timesofindia.indiatimes.com/city/chennai/turmeric-the-yellow-gold-for-smugglers/articleshow/79310904.cms

CHINA HAS MADE DRONE WARFARE GLOBAL

On 20 November, Foreign Affairs reported that the US must join the market or risk getting left behind.  It says that armed drones are proliferating rapidly, and drone warfare is thus likely to become even more prevalent in coming years.  Research shows that 18 countries obtained armed drones from 2011 to 2019.  By contrast, prior to 2011 just 3 countries had armed drones: the US, the UK, and Israel.  The rapid rise in drone deployment has coincided with China’s emergence as a major supplier. From 2011 to 2019, 11 of those 18 countries we tracked bought armed drones from China.  The article refers to the Missile Technology Control Regime, a voluntary export control regime created in 1987 which severely restricts its ability to sell armed drones.  It was established during the Cold War to prevent the spread of missiles that could carry WMD, with drones having to avoid being regarded as Category I systems — defined as those that can travel more than 300 km and carry a payload of more than 500 kg.  The US has announced revisions to its own rules in July (and has since approved armed drone sales to Taiwan and UAE), and the article also notes that the US retains the leverage to cut off the supply of replacement parts and ammunition to countries that fail to comply with its rules –  even where the drone is produced in, and supplied from, another country, but uses US-designed parts or weaponry.  Other potential suppliers — such as Turkey — have also increased sales in recent years and will contribute to broader drone proliferation (e.g. Azerbaijan used Turkish drones to conduct airstrikes in its war with Armenia).

https://www.foreignaffairs.com/articles/china/2020-11-20/china-has-made-drone-warfare-global

CJEU CLARIFIES LEGALITY OF SURVEILLANCE LEGISLATION FOR NATIONAL SECURITY

On 20 November, Elvinger Hoss in Luxembourg published an article on the lawfulness of national security laws of the UK, France and Belgium, which each require electronic communications services providers to retain and disclose traffic and location data of their respective users to national authorities for the purpose of combating crime or safeguarding national security.  The Court provided some important clarifications on the circumstances in which traffic and location data can be collected and retained.

https://www.elvingerhoss.lu/publications/cjeu-clarifies-legality-surveillance-legislation-national-security?utm_source=Mondaq&utm_medium=syndication&utm_campaign=LinkedIn-integration

SINGAPORE FINANCIAL REGULATION FINES INCREASE BY 68%

On 20 November, an article on Out-law reported that the Monetary Authority of Singapore (MAS) issued 68% more fines by value in the 18 months to June than in the previous 18-month period, but fines for money laundering activity fell.  It latest Enforcement Report covers the 18 month period of January 2019 to June 2020, giving details of enforcement actions taken for breaches of MAS regulations and requirements.

https://www.pinsentmasons.com/out-law/news/singapore-financial-regulation-fines-increase-by-68-percent

SWEDBANK : FINAL REPORT SUBMITTED TO THE ESTONIAN FINANCIAL SUPERVISORY AUTHORITY

On 20 November, Market Screener reported that Swedbank AS has submitted a final report describing the actions taken of theEstonian Financial Supervision and Resolution Authority (EFSA)It is said that thereport addresses historic shortcomings that were identified and reflects the full commitment of Swedbank Group to establish systems, controls and solutions for AML/CFT purposes.

https://www.marketscreener.com/quote/stock/SWEDBANK-AB-6496651/news/Swedbank-Final-report-submitted-to-the-Estonian-Financial-Supervisory-Authority-31826797/

CANADA: LAND REGISTRY SET UP TO HELP FIGHT MONEY LAUNDERING IN BRITISH COLUMBIA IS A ‘PAPER TIGER’

On 19 November, The Lawyer’s Daily published an article saying that a Canadian think-tank is calling one of the marquee initiatives of British Columbia’s fight against money laundering largely toothless and is recommending a major revamp in order to have it do what it was actually set up to do.  The primary purpose of such a registry is to help law enforcement agencies detect, investigate and prosecute money laundering by providing quick access to critical information, but a report from the CD Howe Institute said it will be a “paper tiger” unless key changes are made.

https://www.thelawyersdaily.ca/articles/22478/land-registry-set-up-to-help-fight-money-laundering-in-b-c-a-paper-tiger-think-tank-says

HMRC OPENED FEWER THAN 5 CRIMINAL INVESTIGATIONS INTO THE UNLAWFUL EXPORTATION OF GOODS EVERY YEAR FOR THE PAST 3 YEARS

On 20 November, the EU Sanctions Blog reported a Global Investigations Review article claiming that a FoI request had revealed that HMRC has opened fewer than 5 criminal investigations into the unlawful exportation of goods every year for the past 3 years, and describing export control as a “backwater”.

https://www.europeansanctions.com/2020/11/hmrc-opens-fewer-than-5-export-control-investigations-per-year/

CBD IS NOT A NARCOTIC UNDER EU LAW, HIGHEST COURT RULES

On 20 November, EurActiv reported on a recent CJEU decision which says that banning the marketing of cannabidiol oil (CBD) imported from other Member States is contrary to EU law since there is no scientific evidence that hemp-based products have psychotropic effects.  CBD is a lighter chemical compound extracted from hemp plants but containing less than 0.2% of the active substance tetrahydrocannabinol (THC).

https://www.euractiv.com/section/health-consumers/news/cbd-is-not-a-narcotic-under-eu-law-highest-court-rules/

OECD CONSULTATION ON STRENGTHENING MUTUAL AGREEMENT PROCEDURE

Thomson Reuters reported that, on 18 November, the OECD published a consultation document – BEPS Action 14: Making Dispute Resolution Mechanisms More Effective – 2020 Review.  It invited responses by 18 December on the 2020 review of BEPS Action 14 (“making dispute resolution mechanisms more effective”). 

https://www.taxathand.com/article/15686/OECD/2020/2019-MAP-statistics-released-input-requested-on-2020-review-of-BEPS-action-14

https://uk.practicallaw.thomsonreuters.com/Document/Ib734f8862a0b11ebbea4f0dc9fb69570/View/FullText.html?transitionType=Default&contextData=(sc.Default)&firstPage=true

BREXIT: IMPORTING LOW-VALUE GOODS

Accounting Web on 20 November produced another short briefing on an aspect of Brexit, this time explaining how to import goods worth below £135 on and after 1 January.  As usual with Brexit, what seemed like a simple idea – dispensing with the low-value goods exemption – seems needlessly complicated, with “import VAT” charged on goods over £135 in value (including imports of 2 of more goods together which individually are worth less than £135), and “supply VAT” for imports of less than £135, and suggesting the use of “online market places” to simplify things.

https://www.accountingweb.co.uk/tax/business-tax/brace-for-brexit-9-importing-low-value-goods

TAX EVASION IN IRELAND COSTS OTHER COUNTRIES $16 BILLION A YEAR

On 20 November, the Irish Times reported that Ireland is one of the biggest tax havens in the world, costing other countries almost $16 billion in lost revenues each year, according to a major new report from the UK-based Tax Justice Network.  The report said Ireland was responsible for 3.7% of all global tax losses.

https://www.irishtimes.com/business/economy/tax-evasion-in-ireland-costs-other-countries-16bn-a-year-1.4414706

https://www.occrp.org/en/daily/13431-over-427-billion-is-lost-to-tax-havens-every-year

US CUSTOMS: IMPORTERS USED SECOND SCHEME TO EVADE IMPORT DUTIES AFTER FIRST DISCOVERED

On 20 November, Sandler Travis Rosenberg reported that US Customs and Border Protection has found substantial evidence that 2 US importers evaded the anti-dumping duty order on carbon steel butt-weld pipe fittings from China by transshipping them through Vietnam. It found evidence suggesting that the importers shifted their business from Malaysia to Vietnam after the Department of Commerce’s determination of circumvention with respect to pipe fittings from China through Malaysia.

https://www.strtrade.com/trade-news-resources/str-trade-report/trade-report/importers-used-second-scheme-to-evade-ad-cv-duties-after-first-discovered-cbp-finds

REPRESENTATIVES FROM LAW ENFORCEMENT AND THE JUDICIARY, FIU, INTERNATIONAL ORGANISATIONS AND THE PRIVATE SECTOR HAVE MET VIRTUALLY TO SHAPE INTERNATIONAL CROSS-SECTOR SOLUTIONS AGAINST THE CRIMINAL USE OF CRYPTOCURRENCIES

On 20 November, Interpol reported that the 4th Global Conference on Criminal Finances and Cryptocurrencies was co-organised by INTERPOL, Europol and the Basel Institute on Governance.  The conference is an initiative of the Working Group on cryptocurrencies and money laundering established in 2016 by the 3 organisations, and aims to strengthen knowledge, expertise and best practices for financial investigations and intelligence on virtual assets and cryptocurrencies.

https://www.interpol.int/News-and-Events/News/2020/Shaping-an-international-response-against-criminal-finances-and-misuse-of-cryptocurrencies

ROMANIAN DUO ARRESTED FOR RUNNING MALWARE ENCRYPTION SERVICE TO BYPASS ANTIVIRUS SOFTWARE

A Europol news release on 20 November reported that 2 Romanian suspects have been arrested yesterday for allegedly running the CyberSeal and Dataprotector crypting services to evade antivirus software detection. These services have been purchased by more than 1,560 criminals and used for crypting several different type of malware, including Remote Access Trojans, information stealers and ransomware.  The pair also operated the Cyberscan service which allowed their clients to test their malware against antivirus tools.  The operation was led by the Romanian Police together with the FBI, the Australian Federal Police (AFP), the Norwegian National Criminal Investigation Service (Kripos) and Europol.

https://www.europol.europa.eu/newsroom/news/romanian-duo-arrested-for-running-malware-encryption-service-to-bypass-antivirus-software

KILLER DRUG GHB ‘SHOULD BE RECLASSIFIED’, SAYS OFFICIAL REPORT

On 20 November, the BBC reported that the UK’s Advisory Council on the Misuse of Drugs says GHB should become a Class B drug – the same as speed or cannabis.

It also advises better data collection and reporting of the drug’s use.  Testing for GHB and related compounds should be routine in cases of unexplained sudden death, the report also advises.

https://www.bbc.com/news/uk-55007273

GUYANA’S ROLE IN TRANSNATIONAL DRUG TRAFFICKING

On 20 November, Insight Crime published an article saying that a recent string of high-profile interceptions targeting international drug trafficking operations have confirmed Guyana remains a crucial transit point for cocaine headed to the US and across the Atlantic.  The article looks at Guyana’s decisive role as a transit hub on drug trafficking routes linking Latin America to lucrative markets for cocaine.

https://www.insightcrime.org/news/analysis/corruption-containers-cocaine-guyana/

CENTRAL BANK OF IRELAND REPORT: SERIOUS CONCERNS ABOUT COMPLIANCE WITH FITNESS AND PROBITY OBLIGATIONS

On 20 November, an article from Eversheds Sutherland said that the CBI had issued a “Dear CEO” letter in which it set out key findings from a thematic inspection it carried out on compliance by a number of banks and insurance companies with their obligations under the fitness & probity regime, and was highly critical of the firms it investigated for the purposes of the thematic review.

https://www.eversheds-sutherland.com/global/en/what/articles/index.page?ArticleID=en/global/ireland/new-cbi-report-highlights-serious-concerns-with-firms-compliance-with-fitness-_-probity-obligations

TEXAS REGULATORS ARE GOING AFTER A HOST OF CRYPTO COMPANIES THEY ALLEGE TO BE INVESTMENT SCAMS – 10 OF WHICH THEY SAY ARE CONTROLLED BY A SINGLE TEXAS MAN

On 20 November, Coindesk reported that the Texas State Securities Board on Thursday ordered 15 companies to cease and desist operations with a series of emergency orders against crypto, forex and binary options hubs that purport to be based in Texas.  10 companies are named in a first order, 3 in a second one and 2 in a third.

https://www.coindesk.com/texas-crypto-scams

BERMUDA COMPANIES TIED TO US CRYPTO EXCHANGE FACING CRIMINAL CHARGES

On 19 November, the Royal Gazette in Bermuda reported that companies affiliated with a cryptocurrency exchange facing criminal and civil charges in the US for allegedly facilitating money laundering may yet get a licence to operate in Bermuda, according to the Government’s fintech consultant.  Named is Bitmex, one of the world’s largest cryptocurrency derivatives trading platforms, owned and operated by HDR Global Trading Ltd, a Seychelles-incorporated entity.  Company founder and former CEO Arthur Hayes – who is now being sought by US authorities for questioning – visited Bermuda in June 2018 and met the Premier, David Burt.  The US lawsuit alleges that 5 Bitmex entities and the owners and operators of the Bitmex trading platform operated an unregistered trading platform and violated multiple regulations, including failing to implement required anti-money laundering procedures.  Hayes, along with Bitmex co-founders Ben Delo and Samuel Reed and employee Gregory Dwyer, also face criminal charges brought by the US DoJ of wilfully failing to “establish, implement and maintain an adequate anti-money laundering programme”.

https://www.royalgazette.com/news/article/20201119/bermuda-companies-tied-to-us-crypto-exchange-facing-criminal-charges/

THE MOST REPORTED COUNTERFEIT GOODS IN THE UK OVER THE PAST YEAR WERE TOBACCO AND CIGARETTES

On 19 November, the London post reported that 86% of UK Trading Standards authorities stated that they had investigated tobacco and cigarette cases during this period. London and the surrounding areas are a particular hotspot for the illicit tobacco trade. In London, it has been estimated that the trade generates £100 million every year for those involved. 

https://london-post.co.uk/londons-alternative-tobacco-trade/

MORE INDONESIAN SAILORS REPATRIATED FROM “DEADLY” CHINESE FISHING FLEET

On 13 November, Mongabay reported that Indonesia’s Foreign Ministry says another 88 of its citizens have been repatriated from a Chinese fishing fleet where 6 of their compatriots died under harsh working conditions. At least 257 Indonesian crew members have now returned this year from working on board vessels owned by Dalian Ocean Fishing.  They allege dangerous and likely illegal working conditions on board the boats, including 18-hour workdays and being forced to catch and fin sharks, including protected species, despite the vessels being tuna-fishing boats. Officials from 3 Indonesian recruitment agencies have been charged with human trafficking in connection with the case.

https://news.mongabay.com/2020/11/more-indonesian-sailors-repatriated-from-deadly-chinese-fishing-fleet/

FORMER WIRECARD BOSS BRAUN STONEWALLS GERMAN LAWMAKERS’ INQUIRY

On 19 November, Reuters reported that Wirecard’s former boss, Markus Braun, stonewalled questions from lawmakers when he was temporarily released from jail for an inquiry into post-war Germany’s biggest corporate fraud.  He declined to answer more than 50 questions about Wirecard’s demise, other than to say no German officials behaved inappropriately.

https://www.reuters.com/article/wirecard-accounts-braun/update-1-german-lawmakers-to-quiz-ex-wirecard-boss-on-berlins-role-idUSL1N2I50EL

NEW YORK: BEAR BILE RUMOURED TO BE COVID CURE SEIZED IN CHINATOWN

On 18 November, Patch.com reported that at least 3 shops in Chinatown were busted for selling illegal bear bile products.  Bear bile is sometimes used in traditional Chinese medicine to treat flu and respiratory symptoms, and recently as an ingredient of a drug to treat COVID-19, according to World Animal Protection.

https://patch.com/new-york/west-village/thousands-dollars-bear-bile-products-seized-chinatown

RARE ELECTRIC NARCO SUBMARINE SEIZED IN COLOMBIA

On 16 November, USNI News reported that Central and South American drug runners are continuing to create new specialized smuggling vessels to move narcotics into the US, as evidenced by a sophisticated electric submersible seized earlier this month.  The Colombian Navy, assisting by the DEA and local law enforcement agencies, raided an artisan boatyard near the Cucurrupí River in the Chocó area of Colombia.  Under a makeshift roof they discovered a high-capacity narco-submarine.  The submarine is estimated to have cost $1.5 million to construct. 

https://news.usni.org/2020/11/16/rare-electric-narco-submarine-seized-in-colombia

SWISS CRIMINAL CHARGES AGAINST FALCON PRIVATE BANK

On 16 November, Finews reported that the Swiss attorney general is indicting Falcon Private Bank, which is being wound down by its Abu Dhabi owner, with money laundering, according to Swiss business outlet Handelszeitung.  The charges are in connection with corporate wrong-doing and organizational deficiencies from 2012 until 4 years ago, and a spokesman for Falcon said the bank will fight, denies the allegations made in the indictment and will defend its interests in court.  The charges appear to be in connection with a stake that Aabar Investments, the Abu Dhabi vehicle through which the oil-rich emirate controlled the wealth manager, took in Unicredit.

https://www.finews.com/news/english-news/43834-falcon-switzerland-charges-abu-dhabi-khadem-al-qubaisi-money-laundering

GERMANY: ENORMOUSLY EXPANDING’ CRIMINAL LIABILITY FOR MONEY LAUNDERING

On 20 November, an article from Freshfields Bruckhaus Deringer is concerned with an official draft Bill reforming the crime of money laundering in Germany.  The new Bill has been harshly criticised by those in the AML community, particularly changes targeting petty crimes.  These are going to increase the burden on law enforcement agencies, which are already struggling to enforce today’s much narrower offence, and raise the level of risk for any company doing business in Germany.  The article says that the latest proposed definition on criminal money laundering is the result of a legislative process in which the boundaries of criminal liability have been drawn wider with every new draft.  It says that the dilemma faced by Germany was that implementing a new EU Directive – which aims to standardise criminal liability for money laundering in the EU, and act against organised and cross-border crime – requires the inclusion of an additional list of predicate offences scattered widely across German criminal law that cannot be handled uniformly.

https://riskandcompliance.freshfields.com/post/102gklu/enormously-expanding-criminal-liability-for-money-laundering-second-update-o

UK: FUJITSU STAFF UNDER INVESTIGATION FOR POTENTIAL PERJURY IN POST OFFICE IT TRIAL NAMED

On 19 November, Computer Weekly reported that Court documents reveal the names of the Fujitsu employees under investigation for potentially providing misleading information in criminal trials of Post Office subpostmasters accused (wrongly, it seems) with fraud or theft.

https://www.computerweekly.com/news/252492350/Fujitsu-staff-under-investigation-for-potential-perjury-in-Post-Office-IT-trial-named

FATF: WHY HUMAN TRAFFICKING NEEDS TO BE A HIGH-RISK CRIME

An article from the FATF President says that human trafficking is big business.  Dubbed a ‘low-risk, high-reward’ crime, it is one of the most profitable criminal activities in the world, but perpetrators face comparatively little risk of a conviction.  This, he says, needs to change.  The annual proceeds from people smuggling and forced labour exceed $150 billion according to estimates.  Most victims of human trafficking are women and girls, with thousands forced into prostitution. 

https://media-exp1.licdn.com/dms/document/C561FAQGIxXOpPhvyMg/feedshare-document-pdf-analyzed/0/1605804296792?e=1605981600&v=beta&t=QRSZX-fK_7piNmDcYT_xFLAyPNGhLM1oaXpAd5nQnI4

https://www.fatf-gafi.org/media/fatf/content/images/HumanTrafficking-2018.pdf

THE DEATH OF AYMAN AL-ZAWAHRI AND THE FUTURE OF AL-QAIDA

An article in Lawfare on 19 November asks if Zawahri is dead, where will al-Qaida go next and what kind of movement will Zawahri’s successor inherit?  One of the biggest question marks about Zawahri’s leadership is now in play: What kind of movement will he bequeath to his successor? Much depends on who takes the helm.  The al-Qaida core and its affiliates in Yemen, North Africa, and other countries have been waging war for decades and they are likely to put forward a battle-tested leader who has at least some credibility. Indeed, it is possible that the new leader may be more charismatic than Zawahri.  Any successor will also benefit from the decline of ISIS.  The new leader will also need to ensure the loyalty of local affiliates, like al-Qaida’s branch in Yemen.  But if the global al-Qaida brand remains weak, there is less incentive for new groups to join and more for existing affiliates to defect. Perhaps more important, local groups may profess loyalty to the new leader but go their own way in practice.  Whoever emerges as al-Qaida’s leader is likely to preside over a turning point in the broader jihadi movement. New venues for jihadism in Africa and Asia are emerging. Al-Qaida’s new leader, however long he survives, will have his hands full.

https://www.lawfareblog.com/death-ayman-al-zawahri-and-future-al-qaida

CALL FOR GOVERNMENTS TO BACK COMMON DEMURRAGE AND DETENTION FEES

On 20 November, Loadstar reported that concern about the widespread application of detention and demurrage charges has led the British International Freight Association to call for governments around the world to adopt the US Federal Maritime Commission’s position on the fees.  It is joining a call from The International Federation of Freight Forwarders Associations (FIATA) for governments to support the key considerations laid out by the FMC in its Final Rule on Demurrage and Detention from May. 

The term “demurrage” from Old French demeurage, from demeurer – to linger, tarry – originated in vessel chartering and referred to the period when the charterer remained in possession of the vessel after the period normally allowed to load and unload cargo. By extension, demurrage refers to the charges that the charterer pays to the ship owner for its delayed operations of loading/unloading. 

https://theloadstar.com/governments-must-back-common-rules-for-demurrage-and-detention-fees/

https://container-xchange.com/blog/demurrage-detention/

THIRD COUNTRIES HAVE ALIGNED WITH EU SANCTIONS

On 20 November, the EU Sanctions Blog reported that Montenegro, Albania, Norway and Ukraine have aligned with recent EU sanctions measures which designated 40 Belarusian officials, added 4 entities and 2 people to the EU’s Russia sanctions list for their involvement in the Kerch bridge construction and renewed existing sanctions in respect of Moldova for 1 year.  North Macedonia, Iceland, and Liechtenstein have so far aligned only with the Belarus and Moldova sanctions.  Georgia has aligned itself with the Moldova sanctions.

https://www.europeansanctions.com/2020/11/third-countries-align-with-eu-belarus-russia-moldova-sanctions/

TAXATION OF THE DIGITAL ECONOMY: UPDATE

On 19 November, KPMG published its latest update of developments involving both direct and indirect taxes. 

https://tax.kpmg.us/content/dam/tax/en/pdfs/2020/digitalized-economy-taxation-developments-summary.pdf

ALLEGED SINALOA CARTEL MEMBER EXTRADITED TO US FROM ITALY

On 20 November, Yahoo Finance reported that Ramón Santoyo-Cristobal (aka “Dr Wagner”), a former Mexican federal police officer accused of trafficking drugs for the Sinaloa Cartel was extradited to the US from Italy.  He was a fugitive for almost 3 years until he was arrested in 2019 in Rome. He contested extradition to the US in Italian courts, which rejected his arguments.

https://uk.news.yahoo.com/alleged-sinaloa-cartel-member-extradited-214010033.html

IRAN SAYS IT SEIZED PANAMA-FLAGGED TANKER FOR ALLEGED FUEL SMUGGLING

On 20 November, Rferl reported that the Islamic Revolutionary Guards Corps (IRGC) has reportedly detained a Panama-flagged oil tanker in the Persian Gulf that was carrying 300,000 litres of illegal oil.  The 10 foreign crew members were detained and the case was handed over to prosecutors in the port city of Parsian. 

https://www.rferl.org/a/iran-says-it-seized-panama-flagged-tanker-for-alleged-fuel-smuggling/30961114.html

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US: THE ROLE OF COMPLIANCE IN GOVERNMENT ENFORCEMENT

An article in the November issue of Compliance Today from WilmerHale focuses on several recent DoJ guidance documents that provide companies with increased transparency in corporate enforcement actions.  These include DoJ guidance on cooperation credit in FCA investigations.  Another guidance document examines how a prosecutor can evaluate claims that a corporation is unable to pay a proposed fine or monetary penalty.  A third describes the attributes of an effective compliance programme, and a fourth details the circumstances in which, as a part of a resolution, DoJ may require a corporate monitor.  It says that the policies should serve as guideposts for companies to gauge the DoJ expectations on compliance, analyse strategic decisions, and conform their conduct to appropriate standards.  It says that this guidance, including the commentary on cooperation credit, effective compliance programmes, and the use of monitorships, will help companies ensure that they appropriately detect and respond to risks of misconduct. Ideally, effective compliance programmes will afford a strong defence against any governmental inquiry or enforcement actions.

https://www.jdsupra.com/legalnews/the-role-of-compliance-in-government-64544

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MEXICAN AUTHORITIES MAY FREEZE BANK ACCOUNTS WITHOUT COURT ORDER UNDER NEW LAW

On 20 November, bnamericas reported that Mexico’s congress is poised to approve a Bill that would give the federal government’s financial crimes unit the ability to freeze bank accounts without a court order in suspected cases of money laundering and financing of terrorism.  The proposed legislation, dubbed the Ley Nieto, is viewed by proponents as a powerful tool that will help the country comply with stringent international AML/CFT guidelines established by FATF.  The UIF said that there are $99 million in blocked bank accounts that have not been claimed by any individual, adding that it believes it has blocked accounts holding 1 billion pesos tied to the infamous Jalisco Nueva Generación cartel, as well as 1,300 accounts held by 14 criminal organisations frozen in the so-called Operation Zócalo.

https://www.bnamericas.com/en/news/mexican-authorities-may-freeze-bank-accounts-without-court-order-under-new-law

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AML RULES: IMPACT ON ART MARKET

On 19 November, an article from Forsters LLP on the International Law Office website reminds one that the EU Fifth AML Directive was enacted into UK law with effect from 10 January and requires art businesses to implement systems intended to prevent their potential use in money laundering or for various other offences (in addition to those systems already required under the Proceeds of Crime Act 2002).  The rules apply to those trading, storing or acting as intermediaries in ‘works of art’, where the value involved is more than €10,000 (either for a single work of art or as part of a series of transactions).  Those affected are expected to register with HMRC.  It says that those businesses affected should have implemented systems and checks to address the new rules. This is potentially difficult for an industry that has emphasised discretion and whose clients may be unused to the level of due diligence information required.  The deadline for registration was originally 10 January 2021, but it has now been proposed that this be extended to 10 June 2021 (although the other requirements are already in force).  The article says that it is hoped that more detailed guidance will be forthcoming and (assuming registration is extended as proposed) that HMRC will take a more sympathetic approach to non-compliance during the period following 10 June 2021.  In the long term, it will be interesting to see how the art market reacts and whether this legislation will cause a cultural shift in an industry which is notorious for its lack of transparency and regulation.

https://www.internationallawoffice.com/Newsletters/Private-Client-Offshore-Services/United-Kingdom/Forsters-LLP/Anti-money-laundering-rules-impact-on-art-market

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SUICIDE, MONEY LAUNDERING AND MATCH-FIXING: THE $4.2 BILLION SCOURGE OF ILLEGAL GAMBLING IN ASIA

On 15 November, the South China Morning Post reported that an Asian Racing Federation’s research paper shows that unregulated betting is growing quicker than the legal alternative throughout the region.  A research paper outlines the widespread damage as illegal gambling grows at a quicker rate than the legal market. The report focuses on Hong Kong, Singapore, South Korea, Australia, New Zealand and South Africa, with illegal betting growing faster than legal gambling in all of those jurisdictions.  The article says that, in Hong Kong, illegal betting profits in 2016 were estimated to be between HK$12 billion to HK$13 billion – in comparison to the Jockey Club’s net margin of HK$11.45 billion in the 2016-17 financial year; and that triads “run the vast majority” of illegal betting in Hong Kong and the issue is extended regionally by “the deep involvement of transnational organised crime in Macau casino junkets”.  In South Korea illegal betting makes up 62% of the total market and the government losing out on $7.9 billion in tax revenue each year.

https://www.scmp.com/sport/racing/article/3110655/golden-sixty-looks-join-elite-company-10th-consecutive-win-jockey-club

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OTHER THINGS YOU MAY HAVE MISSED – NOVEMBER 19

Panama Covid-19 update – the Government has apparently authorised purchase of nearly 2 million doses of the AstraZeneca/Oxford University vaccine, while local reports also say that pregnant women and minors would not be vaccinated, due to a lack of evidence on potential effects.

Meanwhile, as the number new cases remains stubbornly high, at 1,256 today, at least the health ministry achieved a new target of over 10,000 tests (with a 11.8% hit rate). There were 15 more fatalities, and there are 16,852 active cases, with 152 in ICU, 719 in other wards and 667 in hotels.

19 NOVEMBER 2020

REGULATORS ARE PREPARING TO TIGHTEN RESTRICTIONS ON INVESTMENT FUNDS AND SHADOW LENDERS

On 17 November, American Banker reported that regulators had concluded they threatened the stability of the financial system at the height of this year’s pandemic-fuelled market volatility.  The Financial Stability Board, a panel of global regulators, indicated it would issue proposals next year to make money market funds more resilient and then address risks posed by the broader nonbank financial sector in 2022.

https://www.americanbanker.com/articles/shadow-lenders-poised-to-get-tougher-rules-in-global-crackdown

GERMANY ACCUSES RUSSIA, CHINA OF STALLING OVER NORTH KOREA FUEL SANCTIONS

On 17 November, Reuters reported that Germany has accused Russia and China of preventing a UN Security Council committee from determining whether North Korea has breached a cap on refined petroleum imports.  China and Russia have notified the UN sanctions committee of refined petroleum exports, but they did so in tonnes instead of barrels and the committee has been unable to agree on a conversion rate so it can determine when the cap was reached.

https://www.reuters.com/article/us-northkorea-sanctions-un/germany-accuses-russia-china-of-stalling-over-north-korea-fuel-sanctions-idUSKBN27X2U5

UK: NCA CALLS FOR FURTHER SAR REFORMS

On 19 November, KYC 360 reported that the NCA is calling for additional reforms to the country’s system for reporting suspicious transactions in an effort to scale back the volume of defensive filings it receives.  Although the Home Office has launched a “transformation programme” aimed at overhauling the UK’s regime for SAR, additional steps are needed, according to the head of the agency’s UKFIU division.  He is quoted as saying that the tendency to defensive reporting from some parts of some sectors is one of several issues we are considering in SAR reform.  The NCA has separately seen a sharp rise in SAR filed by challenger banks and other fintech firms, with the companies submitting a total of 83,609 reports in 2019 — more than double the number they filed in 2018.  The NCA believes that the increase in reports can be largely attributed to the relatively fast growth in customer bases and the adoption of automation in onboarding and account monitoring.  Up to March, the FIU saw a 20% increase in SAR received.

https://www.riskscreen.com/kyc360/news/uks-national-crime-agency-calls-for-further-sars-reforms/

NIGERIA PROBES PROTESTERS UNDER TERROR-FINANCING LAW

On 12 November, Bloomberg reported that Nigeria is investigating prominent participants in recent protests against police brutality for possible violations of a law against financing terrorism; with an application to freeze 20 bank accounts for 180 days backed by allegations the account owners may have broken the counter-terrorism legislation.  The only company targeted, Gatefield Nigeria Ltd, is a public affairs company that raised funds to support independent journalists to cover the protests. 

https://www.bloomberg.com/news/articles/2020-11-11/nigeria-probes-protesters-under-terror-financing-law

QATARI OFFICIALS “INTIMIDATED CLAIMANTS IN TERROR CASE”

On 11 November, the Guardian reported that British counter-terrorism police have been asked to investigate claims that witnesses and claimants in a terror-funding case were intimidated by officials working for the state of Qatar, the High Court has been told.  The allegations emerged in a case involving compensation claims submitted originally by 8 Syrian refugees against Doha Bank.

https://www.theguardian.com/uk-news/2020/nov/11/high-court-hears-claims-qatar-officials-intimidated-terror-case-witnesses

AUSTRIA ARRESTS 30 HAMAS AND MUSLIM BROTHEHOOD MEMBERS IN CRACKDOWN

On 10 November, Middle East Monitor reported that raids were conducted simultaneously around the country and focused on the Austrian branches of Hamas and the Muslim Brotherhood.  More than 70 individuals are currently being investigated, it is reported, though only 30 were arrested during yesterday’s raids.  Police also seized smartphones, documents, computers and large sums of cash, but no weapons or explosives, the report said.

https://www.middleeastmonitor.com/20201110-austria-arrests-30-hamas-muslim-brothehood-members-in-crackdown-on-islamism/

OBSERVATIONS OF SEA THEFT AND ATTEMPTED INCIDENTS IN EASTBOUND LANE OF SINGAPORE STRAIT

On 19 November, Seatrade Maritime News carried an article which aims to provide awareness of an area of concern, including analytical insights into the incidents and the observed modus operandi of the perpetrators.  The spate of incidents involved occurred at the north of Batam and Bintan in the east bound lane of the Singapore Strait.

https://www.seatrade-maritime.com/opinions-analysis/observations-sea-theft-and-attempted-incidents-eastbound-lane-singapore-strait

US: RECOMMENDATIONS FOR THE NEXT ADMINISTRATION

The Stimson Center has produced a series of article with recommendations for the incoming Biden Administration.

https://www.stimson.org/project/presidential-inbox

Existing efforts to address trafficking are disaggregated and fail to involve legitimate industry as partners in prevention. The President should catalogue the threat, better target government resources, and incentivise legitimate business to do more to help prevent illicit trafficking at home and abroad.

https://www.stimson.org/2019/preventing-illicit-trafficking-transnational-criminal-organizations

Ensure US policy on drones sets the standard for drone transfers and use around the world.  As lethal drone technology continues to proliferate and countries around the world look to the US precedent, the US has an opportunity to be a leader and set a responsible international precedent to develop appropriate policy frameworks to guide the transfer and use of armed drones.

https://www.stimson.org/2020/u-s-drone-policy

COMBATING AIS SWITCH-OFF AND SPOOFING: CASE STUDY

A case study from Windward demonstrates how examining the context of a suspicious voyage can reveal the likely origin of a cargo, e.g. oil from Iran, even when the ship “goes dark” or attempts to spoof its AIS readings so as to disguise its routing.

https://wnwd.com/insights/going-dark-is-so-2019

A CONSISTENT APPROACH TO EXTENSIONS OF MORATORIUM PERIODS FOR SAR

On 17 November, an article from Kingsley Napley was concerned with a Home Office Circular in September and about extensions to the moratorium period for SAR, which acted as a restatement of the law and aims to ensure consistency in practice by law enforcement agencies in relation to the Defence Against Money Laundering (DAML) regime under the Proceeds of Crime Act 2002.  The Circular sets out the responsibilities for the agencies involved in the process, and gives some indication of ways in which affected parties can play a part in the process. It makes clear the responsibilities of the UKFIU in respect of their duties to the individual or business who has made the SAR and/or those parties affected by the refusal of consent and/or the moratorium period. 

https://www.kingsleynapley.co.uk/insights/blogs/criminal-law-blog/a-consistent-approach-to-extensions-of-moratorium-periods-for-suspicious-activity-reports#page=1

ADDRESSING MISSILE THREATS IN THE MIDDLE EAST AND NORTH AFRICA

A briefing paper from the Stockholm International Peace Research Institute provides an overview of regional missile arsenals and by considering ways to address related risks.  The paper makes policy recommendations, highlighting the need to move beyond the selective focus on certain types of missiles in the hands of certain states, towards a more comprehensive approach based on greater transparency, responsible arms exports and confidence – and security-building measures (CSBM).  The paper says that the proliferation of missiles in the MENA region is linked with intractable security dilemmas and conflicts, arms exports and the use of force by extra-regional states.  It emphasises the need for CSBM and comprehensive risk assessment of arms export policies, which could help strengthen efforts to restrain both the further proliferation and use of missiles in MENA.

https://www.sipri.org/sites/default/files/2020-11/pb_2011_missiles_0.pdf

US: FORMER RAYTHEON ENGINEER SENTENCED FOR EXPORTING MILITARY-RELATED TECHNOLOGY TO CHINA

On 18 November, KOLD and others reported that Wei Sun, 49, a Chinese national and naturalised US citizen has been sentenced to 38 months in prison for previously pleading guilty to 1 felony count of violating the Arms Export Control Act (AECA).  Sun was employed in Tucson for 10 years as an electrical engineer with Raytheon Missiles and Defense. From December 2018 to January 2019, he from the US to China on a personal trip.  On that trip, he brought unclassified technical information in his company-issued computer, including data associated with an advanced missile guidance system that was controlled and regulated under the AECA and the ITAR. Despite having been trained to handle these materials correctly, he knowingly transported the information to China without an export licence in violation of the AECA and the ITAR. 

https://www.kold.com/2020/11/18/former-raytheon-engineer-sentenced-exporting-military-related-technology-china/

WHY SANCTIONS CAN WORSEN HUMAN RIGHTS ABUSES

On 19 November, a research paper from the University of Georgia says that a considerable body of research shows economic sanctions can exacerbate human rights abuses – but the reasons have remained unclear.  However, researchers at the University of Georgia discovered 2 mechanisms that fit the pattern, and their conclusions could have a significant impact on the future use of sanctions as a foreign policy measure. The research suggests 2 factors: that sanctions provide a signal to the domestic community that their country is struggling in some way; this leads to violent protests, which are then repressed.  The second suggestion is that sanctions reduce state capacity — the ability of the government to monitor conditions on the ground.

https://news.uga.edu/why-sanctions-can-worsen-human-rights-abuses/

IRELAND: MAN ARRESTED IN MONAGHAN IN CONNECTION WITH INTERNATIONAL ILLEGAL IMMIGRANT SMUGGLING OPERATION

On 19 November, KFM Radio and others reported that a man has been arrested in Co Monaghan in connection with an international illegal immigrant smuggling operation.  A gang, mostly made up of Georgian nationals based there, is also believed to be involved in money laundering and supplying false documents.

https://kfmradio.com/news/19112020-1339/man-arrested-co-monaghan-connection-international-illegal-immigrant-smuggling

UK: FISHING BOAT CONTAINING 69 SUSPECTED ALBANIAN MIGRANTS AND 3 CREW MEMBERS INTERCEPTED OFF THE COAST OF GREAT YARMOUTH 

On 18 November, the Shropshire Star reported that 72 people have been arrested in an anti-people smuggling operation after they were found crammed onto a 30m fishing boat off the coast of East Anglia.

https://www.shropshirestar.com/news/uk-news/2020/11/18/seventy-two-arrested-in-anti-people-smuggling-operation/

ITALIAN POLICE ARREST 19 MEMBERS OF A MAFIA FAMILY FOR MONEY LAUNDERING

On 19 November, Euro Weekly reported that the arrests included 68-year-old regional council chief Domenico Tallini, and followed accusations ranging from mafia association to attempted extortion, harbouring illegal weapons, money laundering and voter fraud.  The Calabria region is said to be the stronghold of the ‘Ndrangheta, Italy’s wealthiest and most powerful mafia group.

https://www.euroweeklynews.com/2020/11/19/italian-police-arrest-19-members-of-a-mafia-family-for-money-laundering/

WHO IS RESPONSIBLE WHEN PERSONAL DATA IS SENT VIA UNENCRYPTED CONNECTIONS?

An article from Bird & Bird on 19 November says that, according to the Danish Data Protection Agency, no data controller should request data subjects to send sensitive or confidential personal data via an unencrypted internet connection.  It says that a new statement reinforces that the obligation to ensure appropriate security is advanced if the data controller has requested a data subject to send information to the data controller, i.e. the obligation to ensure security applies not only from the point in time the data controller receives the data, but from the point in time the data subject sends the requested information to the controller.  There are only 2 exceptions to the advanced security measure; unrequested personal data provided by data subjects, or in case a data subject actively chooses not to make use of a secure transmission solution.  The article says that the position means that data controllers who request data subjects to send sensitive or confidential personal data, now have an obligation to provide the data subject the opportunity to use an encrypted channel.

https://www.twobirds.com/en/news/articles/2020/denmark/who-is-responsible-when-personal-data-is-sent-via-unencrypted-connections

CANADA NAMES CHINA, RUSSIA AS MAIN CYBER-CRIME THREATS; SEES RISK TO POWER SUPPLY

On 19 November, Defence Web reported that the Communications Security Establishment (CSE) signals intelligence agency identified state-sponsored programmes in China, Russia, Iran and North Korea as major cyber crime threats for the first time, and said it feared foreign actors could try to disrupt power supplies.

https://www.defenceweb.co.za/cyber-defence/canada-names-china-russia-as-main-cyber-crime-threats-sees-risk-to-power-supply/

EU COURT: A MEMBER STATE MAY NOT PROHIBIT THE MARKETING OF CBD LAWFULLY PRODUCED IN ANOTHER MEMBER STATE WHEN IT IS EXTRACTED FROM THE CANNABIS SATIVA PLANT IN ITS ENTIRETY AND NOT SOLELY FROM ITS FIBRE AND SEEDS

A news release from the Court of Justice of the EU on 19 November advised that the Court had ruled that a prohibition may however be justified by the objective of protecting public health but must not go beyond what is necessary in order to attain it.  It arises from a case involving CBD produced in the Czech Republic from hemp plants grown lawfully and using the entirety of the plant, the leaves and flowers included; and then imported into France to be packaged in electronic cigarette cartridges.

https://curia.europa.eu/jcms/upload/docs/application/pdf/2020-11/cp200141en.pdf

GERMANY: 4 BANKERS WITH MM WARBURG ARE ACCUSED OF GRAVE TAX EVASION THROUGH “CUM-EX” TRANSACTIONS

On 19 November, The Economist reported that 4 Warburg bankers accused of grave tax evasion through so-called “cum-ex” transactions in 13 cases between 2006 and 2013 that cost the German taxman more than €325 million. Cum-ex trades are share transactions done at high speed on or just before the day dividend payments are recorded. Before payment, shares come with (cum) dividends, which are reflected in their prices; after, they come without (ex).

https://www.economist.com/finance-and-economics/2020/11/19/a-tax-evasion-scandal-draws-in-hamburgs-elites

INTERPOL RED NOTICES AND DOUBLE JEOPARDY IN THE SCHEGEN ZONE

On 19 November, a news release from the Court of Justice of the EU contained advice from the Advocate General to the Court in respect of an application by a German citizen.  He had been the subject of a Red Notice issued by Interpol, but had settled the matters involved with a prosecutor in Germany. However, he could not travel to another Member State, for fear of being arrested and deported from that other state to the US.  The Advocate General’s opinion was that, having settled the matter in Germany, the citizen should not be subject to the risk of arrest and extradition, as this would violate the principle of double jeopardy.  On the other hand, the Advocate General opined that the transmission of the citizen’s personal data was not affected by a finding of double jeopardy – it does not call into question the veracity and accuracy of data such as, for example, the personal information, the fact that that person is wanted in a third country for having been accused or found guilty of certain crimes, and that an arrest warrant has been issued against him or her in that country.

https://curia.europa.eu/jcms/upload/docs/application/pdf/2020-11/cp200143en.pdf

NEW REPORT FINDS THAT CRIMINALS LEVERAGE AI FOR MALICIOUS USE – AND IT’S NOT JUST DEEP FAKES

On 19 November, a news release from Europol advised that a jointly developed new report by Europol, the UN Interregional Crime and Justice Research Institute (UNICRI) and Trend Micro looking into current and predicted criminal uses of artificial intelligence (AI) has been released. The report provides law enforcers, policymakers and other organisations with information on existing and potential attacks leveraging AI and recommendations on how to mitigate these risks.  The report concludes that cybercriminals will leverage AI both as an attack vector and an attack surface. Deep fakes are currently the best-known use of AI as an attack vector. However, the report warns that new screening technology will be needed in the future to mitigate the risk of disinformation campaigns and extortion, as well as threats that target AI data sets.

https://www.europol.europa.eu/newsroom/news/new-report-finds-criminals-leverage-ai-for-malicious-use-%E2%80%93-and-it%E2%80%99s-not-just-deep-fakes

The report is at –

https://www.europol.europa.eu/publications-documents/malicious-uses-and-abuses-of-artificial-intelligence

UK: PRIVATE PROSECUTOR BRINGING HIGH COURT ENFORCEMENT ACTION OVER CONFISCATION ORDER CAN CLAIM COSTS FROM CENTRAL FUNDS

On 13 November, an article from 5 St Andrew’s Hill Chambers about a recent Court of Appeal case said that the Court held that a private prosecutor was entitled to recover their costs from central funds in relation to a High Court application for enforcement of a confiscation order.  While the confiscation proceedings in question had arisen under the old Criminal Justice Act 1988, the court held that the same principles would apply under the replacement Proceeds of Crime Act 2002. While this would seem to have limited practical implications given that the number of outstanding CJA 1988 confiscation orders deriving from private prosecutions and which require enforcement proceedings is extremely limited.  However, the article argues that, in a wider context, this case has important and practical implications.  The judgment emphasises and makes it plain that private prosecutors are entitled to claim their costs from central funds when making enforcement applications pursuant to POCA 2002; and it makes it plain that, provided it has brought an application reasonably, a private prosecutor may make a claim.

https://www.5sah.co.uk/news-and-events/articles/2020-11-13/private-prosecutor-bringing-high-court-enforcement-proceedings-can-claim-costs-from-central-funds-mirchandani-v-chancellor

$20.7 MILLION IN DESIGNER JEWELLRY SEIZED BY US CUSTOMS

A news release from US Customs & Border Protection on 18 November advised that CBP had seized more than $20 million in designer jewellery at the Detroit Windsor Tunnel.  It was destined for a New York auction house where it was to be appraised and eventually sold on behalf of the owner, a Canadian citizen.

https://www.cbp.gov/newsroom/local-media-release/207-million-designer-jewelry-seized-detroit-border

BREXIT: HAULIER HANDBOOK PUBLISHED TO ENSURE HAULIERS AND COMMERCIAL DRIVERS ARE BORDER-READY

The Chartered Institute of Logistics and Transport reported that the UK Government says that the Handbook has been published and is now available to view on the GOV.UK website.  The handbook, which will be translated into 13 different languages, acts as a one-stop-shop to provide key information and advice on customs procedures, clearly setting out how hauliers can prepare themselves, their vehicles and their goods to continue travelling smoothly across the GB-EU border and help minimise disruption. The guidance is for haulage companies and commercial drivers moving goods between Great Britain (England, Scotland and Wales) and the EU, and tells you what you will need to do from 1 January. 

https://ciltuk.org.uk/News/Latest-News/ArtMID/6887/ArticleID/32965/Haulier-Handbook-published-to-ensure-hauliers-and-commercial-drivers-are-border-ready

COUNCIL OF THE EU UNVEILS AMBITIOUS NEW AML ACTION PLAN

On 19 November, an article from Ballard Spahr says that, on 5 November, the Council unveiled a new action plan to strengthen AML/CFT across the EU. The article says that the Plan contains teeth and  outlines 6 pillars to spur improvement, and says that the most notable proposal is a legislative one, suggesting supervision at the EU — rather than national — level over the AML/CFT system.

https://www.jdsupra.com/legalnews/council-of-the-european-union-unveils-52990/

LEBANESE MP, HIS SON AND ALLEGED VENEZUELA LINKS

On 19 November, L’Orient Today in Lebanon reported concerns over alleged connections between a Lebanese MP and his son, a web of offshore companies in Beirut, whose co-owners included the brother of a fugitive former head of Venezuela’s state-owned oil company and a businessman indicted in Andorra for a multibillion-dollar criminal scheme.  Both MP and his son deny any substantive links to any nefarious activities of the companies involved.

https://today.lorientlejour.com/article/1241676/a-lebanese-mp-his-son-and-their-business-with-men-who-allegedly-stole-billions-from-venezuela.html

DOES THE FCPA UNFAIRLY PENALISE FOREIGN COMPANIES MORE THAN US ONES?

An interesting post on the FCPA Blog on 19 November involved examination of data which showed that, despite the publicity leading one to believe that non-US companies were more often involved, the blog says that since 1977, there have been 251 corporate enforcement actions; and of those 251 FCPA cases, 168 involved companies headquartered in the US – meaning that 67% of all FCPA corporate enforcement actions have been against US companies.  The same applies in recent years, despite appearances to the contrary.

https://fcpablog.com/2020/11/19/the-fcpa-unfairly-punishes-foreign-companies-or-does-it/

FORMER AUSTRALIAN EXECUTIVE ARRESTED, CHARGED OVER ALLEGED OIL BRIBERY PLOT

On 18 November, the Sydney Morning Herald reported that Australia’s longest-running bribery investigation has resulted in the arrest in Queensland of Russell Waugh, a former senior executive from construction giant Leighton Holdings over his alleged involvement in a $1 billion international graft Unaoil case.  He is facing charges of bribing Iraqi officials.

https://www.smh.com.au/business/companies/former-australian-executive-arrested-charged-over-alleged-oil-bribery-plot-20200918-p55wv1.html

AUSTRALIA: POLICE RAID UNION OVER “SERIOUS OFFENCE”

On 19 November, the Australian Financial Review reported that Australian Federal Police are targeting the head of the Construction, Forestry, Maritime, Mining and Energy Union NSW and his son as part of an investigation into a “serious” offence.  Police have raided its headquarters and gathered material from the union offices.  The union is the country’s main trade union in the industries included in its name, has around 150,000 members and 400 full-time staff and officials.

https://www.afr.com/work-and-careers/workplace/police-raid-cfmeu-over-serious-offence-20201118-p56fnb

https://www.abc.net.au/news/2020-11-18/nsw-cfmeu-afp-police-raids-underway-in-sydney/12894250

AUSTRALIAN REGULATOR’S MOVE ON MONEY LAUNDERING DELAYS CROWN CASINO LAUNCH

On 18 November, Reuters reported that Crown Resorts was delaying a planned $1.6 billion development in Sydney after a state gambling regulator said it was suspending the gaming licence of the casino operator.  The company has said it would press ahead with the non-gaming elements.

https://uk.reuters.com/article/idUKL1N2I40A1

UNDERSTANDING THE CUCKOO SMURFING TECHNIQUE IN MONEY LAUNDERING

A post on the Sanctions Scanner blog sets out to explain “cuckoo smurfing”, a special money laundering technique and a method for money launderers to hide their transactions as international legal activities of non-doubtful bank customers.

https://sanctionscanner.com/blog/understanding-the-cuckoo-smurfing-technique-in-money-laundering-203

ABU DHABI: GOVERNANCE PRINCIPLES AND PRACTICES TO MITIGATE CYBER THREATS AND CRIME

The Financial Services Regulatory Authority has published a set of cybersecurity governance principles and practices aims to provide guidelines to firms with practical illustrations of how the principles should be interpreted to mitigate their cyber risks.  It says that firms are therefore required to tailor their risk management programmes by following a risk-based assessment methodology to identify the cyber risks their businesses are exposed to.  The guidelines are intended to contribute to supporting a holistic response to illicit activity involving cyber-related criminality recognising its correlation with fraud, money laundering and terrorist financing; and with the aim of balancing innovation and risk to create a safer and more resilient financial ecosystem.

https://media-exp1.licdn.com/dms/document/C561FAQEgT0qgm0chUw/feedshare-document-pdf-analyzed/0/1605714824811?e=1605906000&v=beta&t=sMfco13KcXIaNl9HJRxsyxdTTufFen_vFMjeDwmkYO8

SEC WHISTLEBLOWER AWARD OF OVER $900,000

A release on Mondo Visione on 19 November advised that the SEC has announced an award of over $900,000 to a whistleblower who identified securities law violations occurring overseas. The timely and important information resulted in a significant expansion of an ongoing investigation.  The SEC has awarded more than $721 million to 114 individuals since issuing its first award in 2012. All payments are made out of an investor protection fund established by Congress that is financed entirely through monetary sanctions paid to the SEC by securities law violators.

https://mondovisione.com/media-and-resources/news/sec-awards-whistleblower-over-900000/

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