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/

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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