Panama Covid-19 update – well, a merry Christmas then? On the one hand, 220 Cuban doctors have arrived to help out in Panama, to relieve the pressure on the medical system and its staff. On the other hand, a record 51 deaths in one day.
As well as the 51 fatalities, there were another 3,413 new cases identified, meaning that there are now 39,914 active cases, with 187 in ICU and 1,683 in other wards.
Anyway, typical Panama family Christmas Eve meal late tonight (we are lucky to have some of 3 generations in one household). I hope that you, dear reader, have as good a Christmas Eve and/or Christmas Day as is possible under all the circumstances. Stay safe!
24 DECEMBER 2020
TRANSPARENCY INTERNATIONAL ADVISES UK FINANCIAL INSTITUTIONS TO WITHDRAW FROM AGYAPA GHANAIAN GOLD MINES DEAL
On 23 December, Ghana Web reported that Transparency International has urged the FCA to review the Government of Ghana’s application to list Agyapa Royalties Limited on the London Stock Exchange and reject the listing if corruption concerns are not satisfactorily addressed. Agyapa Royalties Limited is a Jersey-based Special Purpose Vehicle (SPV) that will own almost 76% of the royalties generated from 16 large gold mines in Ghana under a scheme that has caused controversy and political fallouts in Ghana.
UGANDA DETAINS LEADING LAWYER FOR LGBT RIGHTS ON MONEY LAUNDERING CHARGES
On 23 December, the Guardian reported that Nicholas Opiyo, known for representing LGBTQ+ people, was arrested in a restaurant in Kampala by plainclothes security and financial intelligence officers. The executive director of rights organisation Chapter Four Uganda was seized along with 3 other lawyers – Herbert Dakasi, Anthony Odur and Esomu Obure – and Hamid Tenywa, human rights officer of the opposition party, National Unity Platform (NUP).
CAYMAN ISLANDS MONETARY AUTHORITY HAS FINED WESTERN INTERNATIONAL TRUST COMPANY LIMITED $482,717 FOR BREACHES OF AML REGULATIONS
On 23 December, the Cayman Compass reported that the regulator said the fine was imposed for failing to apply CDD and EDD, as well as failing to identify beneficial owners, verify the source of funds, scrutinise transactions and consider all relevant risk factors. Some of the findings represented failings of the company to remediate similar issues uncovered in previous on-site inspections.
PAKISTAN: SEIZURE OF ASSETS OF SHEHBAZ FAMILY MEMBERS AND OTHERS IN MONEY LAUNDERING CASE
On 22 December, the Express Tribune reported that the National Accountability Bureau (NAB) had seized the assets of 6 accused, including family members of Pakistan opposition party the Muslim League-Nawaz (PML-N) President Shehbaz Sharif.
US WARNS CRYPTO STABLECOINS ON MONEY LAUNDERING AND RISK CONTROLS
On 24 December, KYC 360 reported that US financial regulators are warning firms involved with stablecoins to tighten protections against money laundering. Operators of the coins should maintain adequate cash reserves, according to a statement released by the President’s Working Group on Financial Markets, whose members include the heads of US Treasury, Federal Reserve, SEC and the Commodity Futures Trading Commission.
IS A GAMBLING DEBT ILLEGAL AND UNENFORCEABLE IN MALAYSIA?
On 14 October, an article from Skrine reported that the Malaysian High Court had sided with Wynn Resorts (Macau) in a multi-million-dollar lawsuit against a punter who had gambled at the Macau-based casino and had owed it millions of dollars. The Plaintiff is a licensed casino operator in Macau and in question was whether the credit agreement which facilitated the Defendant’s gambling activity by way of gaming credit and which then enabled him to be given the requisite number of gaming chips is a “wagering agreement” and if the Plaintiff was seeking to recover money “won” on a “wager. It was held that enforcement of a debt which arises under a credit facility to enable the defendant to gamble at the Plaintiff’s casino is not contrary to Malaysian public policy. It is said that the High Court decision is useful in clearing the uncertainties as to whether it is lawful to sue on a “gambling debt” in Malaysia – saying that the law only prohibits gaming contracts or wagering contracts and not gaming debt or gaming credit.
FinCEN PROPOSES TRACKING AND REPORTING VIRTUAL CURRENCY TRANSACTIONS INVOLVING UNHOSTED WALLETS
On 22 December, an article from Sidley Austin LLP published an article saying that FinCEN had issued a notice of proposed rulemaking regarding a proposal to impose on banks1 and money service businesses new recordkeeping, reporting, and identity verification requirements in relation to certain transactions involving convertible virtual currency (CVC) or digital assets with legal tender status if the counterparty to the transaction does not have an account with, or a digital asset wallet hosted by, a financial institution regulated under the Bank Secrecy Act or certain foreign financial institutions. The time for comments end on 4 January.
HOW DO JUDGES DECIDE WHICH WITNESSES TO BELIEVE?
On 22 December, Stevnes & Bolton LLP published an article in the wake of the Johnny Depp libel case in London. It says that the case turned largely on witness evidence and the credibility, or otherwise of those giving evidence, shedding a light on the difficulty of assessing witnesses and over relying on them in proceedings. Short of polygraph tests, truth serums or time machines, the article asked, how do judges decide whether witnesses are telling the truth? The article considers such things as the demeanour of the witness and witness preparation, saying that assessing the truth or otherwise of witness evidence is notoriously difficult. Memory is fallible, and courts are having to increasingly rely on witness evidence, which many are ill-equipped to deal with. However, it says, through thorough preparation and consideration of the intense scrutiny witness evidence will be subject to, witness credibility can be strengthened, helping judges get closer to the truth.
US IMPOSES AEROSPACE EXPORT CONTROLS ON CHINA AND RUSSIA
On 23 December, AIN Online reported on the latest round of US measures against China, with a new Military End User (MEU) List requiring export licences for exports, re-exports, and in-country transfers of equipment and technology. Included on the list are leading aerospace groups such as China’s AVIC and COMAC, including AVIC’s General Aviation division, as well as the Aero-Engine Company of China, Harbin General Aircraft Industries, and Xian Aircraft. In Russia, United Aircraft Corporation, Sukhoi Civil Aircraft, Irkut, Kazan Helicopters, and Beriev are all on the new MEU List.
US SENATOR ASKS TREASURY FOR SANCTIONS BRIEFING ON OLEG DERIPASKA
On 24 December, Bloomberg Quint reported that Sherrod Brown, of the Senate Banking Committee, has asked the US Treasury for a briefing about allegations that Russian billionaire Oleg Deripaska continued to influence day-to-day activities of the Rusal aluminium company and whether such involvement would breach a 2018 sanctions relief arrangement. It has been reported that European officials had provided information to the US government indicating that Deripaska continued to exert control this year over Rusal, one of the world’s largest aluminium producers.
CZECH INTELLIGENCE REPORT HIGHLIGHTS PROLIFERATION CONCERNS FROM PAKISTAN
On 24 December, DNA reported that the Czech Republic’s national intelligence agency, Security Information Service, in its annual report has highlighted increased proliferation concerns from Pakistan, a worry pointed out by a German government report earlier this year. It lists Pakistan along with North Korea, Syria, Iran as “countries of proliferation concerns” which “continued their covert attempts to procure internationally controlled items”. The report explained that the countries used less known or purpose-created companies and third countries for re-exportation and tried to disguise money transfers in order to avoid being traced back.
HONG KONG: SFC TO REQUIRE OPEN-ENDED FUND COMPANIES TO APPOINT RESPONSIBLE PERSON FOR AML
On 24 December, Regulation Asia reported that the Securities and Futures Commission has released consultation conclusions on proposed CDD requirements for OFC, following a consultation launched in September. The proposal is to require OFC to appoint a responsible person to carry out AML/CFT functions, similar to requirements imposed on limited partnership funds.
DIRTY MONEY ‘CONTINUING TO FLOW’ BETWEEN PAKISTAN AND UK
On 24 December, an article in The News International in Pakistan reported that a UK Government National Risk Assessment report has revealed that dirty money is continuing to flow from Pakistan to the UK and vice versa. The report has named Pakistan, China, Hong Kong, Russia and UAE as the hotspot countries from where the most flow of money takes place. On Pakistan, the report said that the UK continues to have close economic links to Pakistan, with significant remittance flows estimated at approximately $1.7 billion in 2017. The report noted that these economic and cultural ties “also enable and disguise illicit funds to be transferred between the UK and Pakistan, including through illegal informal value transfers”; and that elements from Pakistan are buying high-value assets in the UK and elements from the UK are buying high value assets in Pakistan, using cash and dirty money.
ALLEGED IRISH CRIME BOSS DANIEL KINAHAN SUED FOR MONEY LAUNDERING AND ABUSING US LAW
On 21 December, the Irish Independent reported that Daniel Kinahan is being sued by a boxing manager in the US under its organised crime laws. He and sports management company MTK Global are alleged to have signed champion boxer Joseph Diaz, 28, earlier this year while he was still under contract and offered him $100,000 up front. The boxer’s former manager, Moses Heredia, has now filed a civil cause of action over the signing, along with his company Heredia Boxing Management.
LEADING BUSINESS AVIATION GROUPS FORM ALLIANCE AGAINST ILLEGAL CHARTERS
On 17 December, the Blue Sky website carried an article saying that a global group of leading business aviation organisations have announced a coordinated effort to combat illegal on-demand charter flights in the sector. The group, called the Air Charter Safety Alliance, will raise awareness among potential customers, charter brokers, ministries of transport, and national aviation authorities regarding the use of unauthorised aircraft operators for on-demand flights. It is said that the coalition will develop and promote several safety programs that assist on-demand charter operators while continuing to improve their already impressive safety performance.
BRITISH OVERSEAS TERRITORIES SANCTIONS ORDERS
The UK has published 2 Orders-in-Council. One extends with modifications the ISIL (Da’esh) and Al-Qaida (United Nations Sanctions) (EU Exit) Regulations 2019, as amended from time to time, to all British Overseas Territories except Bermuda and Gibraltar (which implement sanctions under their own legislative arrangements). The other revokes Orders in Council which gave effect in specified British Overseas Territories to various sanctions regimes established during the UK membership of the EU or during the Brexit Transition Period on 31 December.
TUNISIAN EX-PRESIDENTIAL CANDIDATE NABIL KAROUI REARRESTED
On 24 December, the Daily Mail reported that controversial Tunisian media mogul and former presidential candidate Nabil Karoui was rearrested in connection with an affair involving money laundering and tax evasion. He was arrested in August last year after being indicted on tax evasion and money laundering charges stemming from a 2017 investigation, and has been rearrested on the same charges.
HONG KONG MEDIA TYCOON JIMMY LAI WINS BAIL AFTER 3 WEEKS IN JAIL
On 24 December, the Irish Independent reported that Hong Kong media tycoon Jimmy Lai has been granted bail after he was remanded in custody over fraud and national security-related charges. An outspoken advocate for democracy in Hong Kong, he was charged with fraud in December for allegedly violating the lease terms for office space for his media company, Next Digital; and then later charged again under the national security law, on suspicion of colluding with foreign forces and endangering national security.
CRYPTO HEDGE FUND FOUNDER STEFAN QIN ACCUSED OF FRAUD BY SEC
On 24 December, Coindesk reported that the SEC has accused the founder of hedge fund Virgil Capital, which specialises in cryptocurrency arbitrage, of fraud. Stefan Qin, 23, has been accused by the SEC of “fabricated records” for failing to redeem $3.5 million in investments and attempting to withdraw $1.7 million in investor funds to pay off Chinese loan sharks. The SEC accuses Qin of fraud involving the Virgil Sigma Fund LP of New York and VQR Multistrategy Fund LP of the Cayman Islands.
INDIA: ENFORCEMENT DEPARTMENT RESTRAINS PROPERTIES WORTH OF AGRI GOLD GROUP
On 24 December, DNA reported that, a day after the Enforcement Directorate arrested 3 promoters of the Agri Gold Group of Companies in a Ponzi scheme fraud case, the agency restrained properties of the group.
MALAYSIAN RUBBER GLOVE MANUFACTURERS REMINDS GLOBAL GLOVE IMPORTERS TO STAY VIGILANT AGAINST FRAUDS AND SCAMS
On 23 December, MSME reported that the President of the Malaysian Rubber Glove Manufacturers Association (MARGMA) reminded the buyers from around the World to be vigilant of scammers and con man while sourcing for rubber gloves, and that the global shortage of rubber gloves will last beyond Quarter 1 of 2022. The article lists the major types of scams reported over this past year where perpetrators are not manufacturers. The Association calls on buyers to beware of who they are dealing with and if in doubt, to check with the manufacturers directly.
UK: GENERAL TRADE LICENCE RUSSIA SANCTIONS
On 24 December, the Department of International Trade published Notice to Exporters 2020/22 which provided information about a licence which provides regulation on the provision of technical assistance, financial services and funds, and brokering services. The licence comes into force at 11 pm on 31 December 2020 and permits the provision of certain technical assistance, financial services and funds, and brokering services otherwise prohibited under regulations 43, 44 or 45 of the Russia (Sanction) (EU Exit) Regulations 2019 in relation to energy-related goods. The licence only permits these activities where the goods are not for use in Russia.
CLOUD COMPUTING: A BRIEF OVERVIEW OF INTELLECTUAL PROPERTY ISSUES
On 23 December, an article from Smart & Biggar said that the majority of businesses worldwide using computing resources and storing data “in the cloud.” However, despite the ease of use and convenience of cloud computing, moving data and services into the cloud raises several legal issues for both cloud computing providers and users. The article highlights some of the issues and questions related to intellectual property (IP) rights raised by cloud computing. These include issues for patent owners, copyright infringement issues, confidential information and trade secrets.
PHILIPPINES: ARREST WARRANTS ISSUED FOR GAMBLING FRAUDSTERS
On 24 December, Calvin Ayre reported that arrest warrants had been issued in the Philippines for Jan Robert Gustaffson, Sylvia Bernadette Gonzales de Guzman, Maria Arleen Aldaba and Sherwin Quiambao, all of whom face multiple counts of qualified theft. Quiambao remains at large while Gustaffson, a Swedish national, reportedly fled the country in February. They are said to be part of a criminal group that launched an attack against their former employer, Spectrogen Corp, a business process outsourcing firm supplying services to Philippine-based online gambling operators.
WALMART FACES LAWSUIT FOR ROLE IN US PRESCRIPTION OPIOID CRISIS
On 24 December, OCCRP reported that the US authorities are seeking what could amount to billions of dollars in civil penalties against the retail giant Walmart for allegedly letting its pharmacies fill thousands of suspicious prescriptions across the country at the height of its opioid crisis. Prosecutors say that Walmart “systematically” violated the Controlled Substances Act over the course of several years, even as it recognized the fact that the nation was suffering from a prescription drug abuse epidemic.
BREXIT: TEMPORARY WAIVER FOR SAFETY AND SECURITY REQUIREMENTS ON EXPORTS FROM GREAT BRITAIN FOR 2 CATEGORIES OF MOVEMENTS
On 24 December, the Chartered Institute of Logistics & Transport reported that the temporary waiver will apply from 1 January to the movement of empty pallets, containers and vehicles moved under a transport contract to the EU; and movements of goods in Ro-Ro vehicles where there is a requirement for an exit summary declaration. In such cases, temporarily, there will be no requirement for an EXS. This will only apply until 31 March, and from 1 April safety and security export declarations will be legally required for empty pallets, containers and vehicles moved under a transport contract; and movements of goods in Ro-Ro vehicles.
See also –
PLANNED AMENDMENTS TO THE GERMAN CIVIL CODE TO STRENGTHEN CONSUMER PROTECTION RIGHTS
On 24 December, Baker McKenzie reported that, in November, the German Federal Ministry of Justice and Consumer Protection published 2 draft Bills for the implementation of certain aspects of the Directive on digital content and services and the Directive on better enforcement and modernisation of consumer protection rules. If adopted, the draft Bills will amend the German Civil Code.
CHANGES TO THE EVIDENCE OF ULTIMATE BENEFICIAL OWNERS IN THE CZECH REPUBLIC
On 24 December, Baker McKenzie reported that the Czech parliament is adopting a new regulation with respect to the registration of ultimate beneficial owners (UBO). Although the obligation of companies to register their UBOs has existed for some time under the Czech regulatory regime, it has shown to be insufficient in practice as the absence of any penalties or sanctions has led to the vast majority of business corporations still neglecting this obligation to register their UBO.
SWITZERLAND: FIFA FILES CRIMINAL COMPLAINT AGAINST BLATTER OVER LOSS-MAKING MUSEUM
On 22 December, Swissinfo reported that FIFA has issued a lawsuit against Joseph “Sepp” Blatter alleging criminal mismanagement of funds. The complaint accuses the disgraced former president of wasting $564 million on a Zurich-based World Football Museum, which opened in 2016,
CYBERCRIMINALS HAVE STARTED INDEXING THE DARK WEB
SHOPIFY STORES RIDDLED WITH FAKES AND FRAUDSTERS
On 23 December, the BBC reported that Shopify provides the technology backbone for businesses to set up a store and sell their products online, and it has become valuable to small businesses during the Covid-19 pandemic, because its services are cheap and easy to set up. However, research has shown that nearly 26,000 of the 124,000 Shopify stores it analysed were “related to fraudulent practices”.
BELGIUM: MAGISTRATES SAY THAT IT IS VIRTUALLY IMPOSSIBLE IN BELGIUM TO CARRY OUT THE NECESSARY RESEARCH INTO THE FINANCES OF MAJOR CRIMINALS
On 24 December, the Brussels Times reported that a new book by a group of magistrates made this claim. It is said that, thanks to a lack of manpower and resources, it is virtually impossible in Belgium to carry out the necessary research into the finances of major criminals. Although the book concentrates on financial crimes as commonly thought of, it also makes clear that all forms of serious crime are financial and economic at their heart: drugs, human trafficking, cybercrime, prostitution. The book calls on the Belgian government to introduce a systematic pairing of a financial investigation in every serious case of a criminal investigation; and offers the model of the iCOV in the Netherlands – the infobox for Criminal and Unexplained Assets – a cooperation between police, customs, tax inspectors, the anti-money laundering unit and the prosecutor’s office.
NEW UK SANCTIONS AND EXPORT CONTROLS RULES – TOP 10 TAKEAWAYS
On 24 December, Latham & Watkins LLP published a Client Alert which sets out top 10 takeaways for how the end of the Brexit transition period will affect sanctions and export controls in the UK
AUSTRALIA HAS IMPLEMENTED “PHASE 1.5” IN AML/CFT REFORMS “SECOND TRANCHE” OF REFORMS REMAINS OUT OF GRASP
On 24 December, Allen & Overy published an article about a new AML law passed by both Houses of Parliament on 10 December without amendment, and which received Royal Assent on 17 December. The new Act implements incremental reform, most relevantly to reporting entities, in the areas of customer due diligence and correspondent banking relationships. A link to an earlier article on the Amendment Act’s introduction into Parliament, is provided and contains an overview of its key provisions. The Act was introduced in response to the highly critical FATF report on Australia’s AML/CFT legislative framework in 2015. However, it does not extend the system to designated non-financial businesses (DNFBP) and professional sectors (including real estate agents, accountants, lawyers, precious stones dealers, and trust and company service providers), as was originally proposed. It has been described as “Phase 1.5” in Australia’s AML/ CTF reforms, and addresses some – but not all – of the deficiencies identified by FATF.
UKRAINE: TATAROV BRIBERY CASE TAKEN FROM NABU – ALLOWING HIM TO ESCAPE ARREST
On 24 December, the Kyiv Post reported that the Prosecutor General’s Office has taken a bribery case against President Volodymyr Zelensky’s Deputy Chief of Staff Oleg Tatarov from the National Anti-Corruption Bureau (NABU), prompting accusations that it is protecting the suspect. The case was given to the Security Service of Ukraine (SBU), which is believed by civic watchdogs to be more politically dependent, less effective than the NABU, and is run by Zelensky’s friend, Ivan Bakanov. Tatarov is under investigation in a case linked to Maksym Mykytas, a former lawmaker and ex-president of state-owned construction firm Ukrbud. Mykytas has been charged with alleged embezzlement conducted through an Ukrbud housing development contract for Ukraine’s National Guard.
2 US ARMY RESERVISTS RAN A $3 MILLION FRAUD AND MONEY LAUNDERING SCHEME THROUGH ONLINE ROMANCE SCAMS AND SPOOFED EMAILS
On 24 December, Insider reported that 2 US Army reservists have pleaded guilty to conspiracy to commit wire and bank fraud related to a $3 million scheme where the men tricked elderly men and women into sending them money. They created fake emails and sometimes gained unauthorised access to business email accounts in an effort to induce victims into transferring money into their bank accounts. One of the victims of the scheme included a US Marine Corps veteran’s organisation.
JAPAN: ABE DENIES ROLE IN CHERRY BLOSSOM SCANDAL THAT RESULTED IN CHARGES FOR AIDE
On 24 December, Nikkei Asia reported that former Japanese PM Shinzo Abe has denied any knowledge of his office picking up the tab for lavish dinner parties held for his supporters in a scandal that has brought charges against one of his aides. The Tokyo District Public Prosecutors Office brought a summary indictment against Abe’s former aide for allegedly failing to report expenses related to the events. Prosecutors had questioned Abe earlier but decided against bringing charges against him.
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