Day: December 24, 2020

Following the last-minute agreement between the UK and the EU (and with the suggestion being made that it was last minute not only because of the chance such brinksmanship might force a few more concessions, but also so that any criticism or even analysis of the agreement is practically impossible before it takes effect, in 7 days time), the UK has produced this 34-page summary of the many hundreds of pages of the agreement.  No real detail, of course.  A quick glance does reveal –

• A Protocol to enable the Parties to work together while upholding their respective customs regimes, to safeguard revenue and prevent fraud through efficient and reciprocal exchange of information and mutual assistance across customs matters;
• An Annex to provide for the mutual recognition of the Parties’ respective Authorised Economic Operator (AEO) security and safety schemes. As a result, AEO assessed and recognised under either the UK or EU scheme will face fewer controls relating to safety and security when moving their goods between the UK and the EU, facilitating trade and flow at the border;
• A s Protocol which builds on existing international agreements, including the OECD Convention on Mutual Administrative Assistance in Tax Matters. It will enable UK and EU authorities to cooperate and exchange information relating to VAT, including for the purpose of combating VAT fraud. The Protocol will also allow for either Party to make a request of the other to recover unpaid customs duties, excise or VAT on its behalf;
• It provides for streamlined extradition arrangements, akin to the EU’s Surrender Agreement with Norway and Iceland, but with appropriate further safeguards for individuals beyond those in the European Arrest Warrant;
• Provision for effective cooperation on mutual legal assistance in criminal matters supplementing the relevant Council of Europe Conventions by providing for streamlined processes, including standard formats for making requests and specific timescales for action;
• It commits the UK and EU to support international efforts to prevent and fight against money laundering and terrorist financing, exchange relevant information, and maintain comprehensive AML/CFT regimes, and to maintain high standards of beneficial ownership transparency, beyond FATF minima; and
• It provides for effective cooperation on asset freezing and confiscation, supplementing the relevant Council of Europe Conventions by providing for streamlined processes, including standard formats for making requests and specific timescales for action.

The devil will be in the detail, and there still appears a great deal of detail to be finalised or even agreed.

This summary is signed by the UK Prime Minister.  It will be interesting to see (and compare) the EU equivalent, and to see if there is any problems from some Member States.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/948093/TCA_SUMMARY_PDF.pdf

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On 24 December, Baker McKenzie reported that, in November, Canada introduced new federal privacy legislation that, if adopted, will create one of the strictest data protection regimes in the world, accompanied by some of the most severe financial penalties, rivalling the standards in the EU and California. Companies with a connection to Canada will need to build the new federal law, and applicable provincial laws, into their global compliance strategy.

https://globalcompliancenews.com/canada-watch-out-gdpr-canada-proposes-strict-new-privacy-law-framework-backed-by-significant-fines02122020/

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On 24 December, Eurasia Review reported that President Recep Tayyip Erdogan has authorized controversial oil exploration by a survey vessel in the eastern Mediterranean for a further 6 months, until June next year.  He has also obtained parliamentary approval for troop deployment in Libya for another 18 months.  The survey vessel Oruc Reis will now continue searching for oil and gas in territorial waters claimed by Greece and Cyprus, in a move that will infuriate the EU.

https://www.eurasiareview.com/24122020-turkey-sends-oil-ship-to-eastern-med-approves-libya-troop-deployment/

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On 24 December, BNN Bloomberg reported on the pervasiveness of fraud in the $214 billion Economic Injury Disaster Loan programme, meant to help businesses hurt by Covid-19. In hundreds of neighbourhoods in Chicago and across the country, the records show government aid flowing to statistically impossible numbers of small businesses, many of which appear on closer inspection to be fictional.  Grants given included those that went to 21 people who claimed to have businesses at the same ranch-style house.  Thousands more grants and loans went to self-described farmers operating in densely populated cities, including more than $150,000 approved for a pair of poultry farms in Apartment 13D of a swanky high-rise in Manhattan’s Greenwich Village.  It says that the disaster-aid programme has distributed about $194 billion in low-interest loans to 3.6 million small businesses across the country, as well as $20 billion in 5.8 million grants of as much as $10,000 that don’t have to be repaid. Its separate from the $525 billion Paycheck Protection Program, which offered forgivable loans through private lenders.  The 2 poultry farms in Greenwich Village appear to be the invention of a scammer who stole the identity of the apartment’s residents, a church treasurer and his wife – and the former is quoted as asking – would it be too much to ask for the government to figure out it shouldn’t be making loans to poultry farmers in New York City?

https://www.bnnbloomberg.ca/poultry-farms-in-apartment-13d-show-scale-of-pandemic-aid-fraud-1.1540877

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On 22 December, an article from Clyde & Co considers the risks for freight forwarders and customs brokers identified in a recent paper on TBML published by FATF and the Egmont Group of FIU.  It says that, historically, TBML has been a highly effective way for organised crime groups and professional money launderers to disguise the proceeds of crime.  In fact, a 2006 FATF study of TBML described it as one of the top 3 methods used by criminals to launder the proceeds of their crimes.  The paper highlights a number of factors which together paint a picture where TBML still presents a significant money laundering or terrorism financing risk.  The article says that companies operating in sectors which are unregulated for AML purposes, such as freight forwarders and customs brokers, need to be alive to the potential risks to their businesses and livelihoods of being unwittingly caught up.

https://www.clydeco.com/en/insights/2020/12/trade-based-money-laundering-tbml-risk-in-the-frei

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On 24 December, a Notice from HM Treasury advised that, following decisions of both the UN and EU, the RAFIDAIN BANK had been removed from the UK Consolidated List.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/948000/Notice_Iraq_2020_2197.pdf

https://www.gov.im/news/2020/dec/24/financial-sanctions-iraq/

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On 24 December, KYC 360 reported an article from The Times said that “gangsters, drug dealers and sex traffickers are using money transfer businesses to launder at least £1 billion in cash every year”, the NCA said after a Times investigation.  It is said that UK outlets outnumber by 4 to 1 those in France, Germany, Italy, Netherlands and Spain combined.  Intelligence has suggested that about 15% of more than 31,000 outlets are exposed to money laundering from groups involved in human trafficking, importing drugs and other crimes.

https://www.riskscreen.com/kyc360/news/1bn-a-year-laundered-in-cash-transfers/

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On 22 December, AP reported that money laundering complaints have been filed against 5 religious groups in Mexico, including the Luz del Mundo church whose leader is charged in the US with child rapes.  A statement said that religious groups “are vulnerable to being improperly used by organized crime groups, including terrorists, given that frequently they are subject to very little oversight by authorities and are given greater tax benefits by governments”.  La Luz del Mundo is a Guadalajara-based evangelical Christian church was founded by the founder’s grandfather and claims 5 million followers worldwide.

https://apnews.com/article/sexual-abuse-by-clergy-united-states-mexico-crime-d427496026765476929381e9fee116e6

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