OTHER THINGS YOU MAY HAVE MISSED – JANUARY 7

Panama Covid-19 update – still in lockdown, with another 4,135 new cases for a total of active cases now being 52,114. There have also been 38 new fatalities, meaning we have now seen over 4,300 deaths since March. 16,136 tests were carried out, with a positive rate of 25.6%. There are 226 people in ICU, 2,098 in other wards and 681 in hotel rooms.

As an aside, does it seem a good idea, in the middle of a pandemic, to be involved in mass crowds invading the Capitol building in Washington, all packed together – mostly with people without masks, and shouting (a news item said loudmouths presented a higher risk of spreading the virus), inside and out…

7 JANUARY 2021

OFAC: PUBLICATION OF COMMUNIST CHINESE MILITARY COMPANIES FAQ

On 7 January, OFAC issued a new FAQ related to Executive Order 13959 “Addressing the Threat from Securities Investments that Finance Communist Chinese Military Companies”.  The question posed is – may market intermediaries and other participants facilitate divestment from publicly traded securities of Communist Chinese military companies, including divestment by investment fund managers?

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/865

DELOITTE ‘GAVE IN TO PRESSURE’ BY AUTONOMY

On 7 January, KYC 360 reported that a tribunal report has laid bare how Deloitte and 2 of its former audit partners succumbed to pressure to help Autonomy, the sole FTSE 100 audit client of Deloitte’s Cambridge office in 2009, meet market expectations.  Autonomy, founded in 1996, grew to become Britain’s largest software developer. Deloitte audited Autonomy’s accounts before the company’s sale to Hewlett-Packard for $11 billion in 2011.  A year later $8.8 billion was written off the value of Autonomy, $5 billion of which was attributed to “accounting improprieties”.  Deloitte was ordered to pay a record £15 million fine by the accounting watchdog for “serious and serial failures” in its audit of Autonomy in September, and the tribunal’s report into its investigations was published on 6 January.

https://www.riskscreen.com/kyc360/news/deloitte-gave-in-to-pressure-by-autonomy/

CREDIT SUISSE CUTS TIES WITH SOME VENEZUELAN WEALTH CLIENTS

On 7 January, KYC 360 reported that Credit Suisse Group AG has cut relationships with a number of Venezuela’s wealthy as it weighs the risk of doing business with PEP clients in the sanctions-hit country.  It is said to have cut assets it manages for the nation’s wealthy by more than half over the past few years, to about $2 billion.

https://www.riskscreen.com/kyc360/news/credit-suisse-cuts-ties-with-some-venezuelan-wealth-clients/

UKRAINE PROBING WHETHER VACCINES SMUGGLED FROM ISRAEL AND GIVEN TO TOP OFFICIALS

On 6 January, the Times of Israel reported that Ukraine is investigating whether vaccines were smuggled from Israel and illegally used at a Kyiv clinic and senior Ukrainian officials and businessmen are among those believed to have received the vaccine, which hasn’t been approved by Ukraine.

https://www.timesofisrael.com/liveblog_entry/ukraine-probing-whether-vaccines-smuggled-from-israel-given-to-top-officials/

ISLE OF MAN: DOUBTS THAT MONEYVAL WILL VISIT IN 2021

On 7 January, IOM Today reported that the head of the FSA has cast doubts on whether the AML body will be travelling to the island this year to conduct a follow-up review.  She said she had expected officials from Moneyval to travel to the island because we are in a state of ’enhanced follow-up’.

www.iomtoday.co.im/article.cfm?id=59885&headline=FSA%20chief%27s%20doubts%20over%20Moneyval%20returning%20this%20year&sectionIs=NEWS&searchyear=2021

UK: LUTON MONEY TRANSFER BUSINESS FINED RECORD £23.8 MILLION FOR SERIOUS MONEY LAUNDERING BREACHES

On 7 January, the Hertfordshire Mercury reported that MT Global Limited, a money transfer business in Luton, has been fined a record £23.8 million for breaching regulations.  Between July 2017 and December 2019 it was found to have breached 7 AML regulations.

https://www.hertfordshiremercury.co.uk/news/luton-money-transfer-business-fined-4863903

DANISH PROSECUTORS DROP MONEY LAUNDERING CHARGES AGAINST EX-DANSKE BANK STAFF

On 7 January, Market Screener reported that Danish prosecutors said that they had dropped charges against 6 former Danske Bank employees as part of an investigation into the bank’s involvement in one of the world’s biggest money laundering scandals – saying that it has not found gross negligence, and thus there is no basis for indictment for having violated the money laundering Act.   Danske Bank is under investigation in several countries over some €200 billion of suspicious transactions that passed through the bank’s Estonian branch between 2007 and 2015.

https://www.marketscreener.com/quote/stock/DANSKE-BANK-A-S-1412871/news/Danske-Bank-A-S-Danish-prosecutors-drop-money-laundering-charges-against-ex-Danske-Bank-staff-32136884/

UK CHEMICALS INDUSTRY FACES £1 BILLION BILL TO BUILD POST-BREXIT DATABASE

On 7 January, EurActiv reported that the UK is facing a £1 billion bill to replicate the EU’s chemical database after the government opted to leave the REACH system on 31 December.  The UK has decided to build up its own chemicals database, a process that will take years to complete.

https://www.euractiv.com/section/energy-environment/news/uk-chemicals-industry-faces-1-billion-bill-to-build-post-brexit-database/

DENMARK CHARGES 2 BRITISH NATIONALS OVER ‘CUM-EX’ TRADING SCHEME

On 7 January, Reuters reported that Danish prosecutors said that they had charged 2 British nationals with unlawfully obtaining more than $1.5 billion via a sham trading scheme to make double tax reclaims.  The fraud scheme, known as ‘cum-ex’ trading, involved submitting more than 3,000 applications to the Danish Treasury on behalf of investors and companies from several countries around the world in order to receive dividend tax refunds.

https://uk.reuters.com/article/uk-denmark-fraud/denmark-charges-two-british-nationals-over-cum-ex-trading-scheme-idUKKBN29C0YM

TURKEY: DEUTSCHE WELLE JOURNALISTS INVESTIGATED OVER ARTICLE ON ‘SUSPICIOUS TRANSACTIONS’

On 7 January, Bianet reported that prosecutors have opened an investigation against a correspondent and a news manager for Deutsche Welle’s Turkish service because of a report about a Turkey-based bank’s activities revealed in the FinCEN files.   DW Turkish article titled “Accusation by US banks: Aktif Bank facilitates suspicious transactions” had listed some activities by the bank, citing the FinCEN leak. The investigation started after a criminal complaint by the AktifBank and AktifBank is owned by Çalık Holding, which has close ties to the government.

https://bianet.org/english/media/237197-deutsche-welle-journalists-investigated-over-article-on-suspicious-transactions

FORMER CHINA DEVELOPMENT BANK CHAIRMAN HU HUAIBANG JAILED FOR LIFE FOR BRIBERY

On 7 January, the Globe & Mail reported that China Development Bank’s former chairman Hu Huaibang has been sentenced to life in prison for bribery.  Hu, who was arrested last February, was convicted of receiving bribes totalling $13.24 million between 2009 and 2019. 

https://www.theglobeandmail.com/business/international-business/asia-pacific-business/article-former-china-development-bank-chairman-hu-huaibang-jailed-for-life-for

MIDDLEMAN LINKED COLOMBIAN GANGS WITH ISRAELI AND, JAPANESE MAFIA

On 7 January, an article in Insight Crime saying that an Israeli national suspected of ties to Japanese and Israeli mafia groups is accused of drug trafficking and money laundering in Colombia, in a case that reveals further details about the logistical role foreign brokers play in the country’s criminal circles.  In October, Gabriel was convicted of drug trafficking and money laundering.  He was sentenced to 26 years in prison by a Colombian court.  He also faces criminal proceedings outside Colombia, including in Israel and in the Netherlands, and in 1998, he was convicted in absentia in France for being part of an international drug trafficking syndicate and sentenced to 20 years in prison. The network smuggled cocaine, and other drugs, to Europe using contacts in Colombia and Ecuador.  He also reportedly has ties to a hostel in Bogotá, which has for years been under investigation for suspected drug retail and sex tourism aimed at Israeli men visiting Colombia.

https://www.insightcrime.org/news/brief/israeli-middleman-colombian-gangs/

AT CENTRE OF SCANDAL, KYRGYZ TYCOON’S FAMILY LAWYER APPOINTED AS JUDGE

On 7 January, Rferl reported that a lawyer for the wealthy family of former deputy chief of Kyrgyzstan’s Customs Service, Raimbek Matraimov, who has been implicated in a high-profile case involving the illegal funnelling of hundreds of millions of dollars abroad, has been made a judge.  Leila Baidaeva was appointed to the post at Bishkek’s Sverdlov district court.  Baidaeva was one of the lawyers for Matraimov’s extended family and their Ismail Matraimov Public Foundation. She assisted them in filing a libel lawsuit in late 2019 against RFE/RL’s Kyrgyz Service.

https://www.rferl.org/a/at-center-of-scandal-kyrgyz-tycoon-s-family-lawyer-appointed-as-judge/31037553.html

UK BAN ON CRYPTOCURRENCY DERIVATIVES (ETN) COMES INTO FORCE

On 7 January, ZD Net reported that a ban on the sale of crypto derivatives has come into force today in the UK.  The FCA has banned the sale of derivatives and exchange traded notes (ETN) “that reference certain types of crypto assets to retail consumers”.  The article explains that crypto-based derivatives are often marketed as tradable securities that derive value from an underlying asset, such as an established cryptocurrency, whereas ETN are unsecured debt traded in a similar manner to the stock market.  UK regulators believe the industry, as a whole, is too risky for retail consumers to enter without regulation.

https://www.zdnet.com/article/uk-ban-on-cryptocurrency-derivatives-comes-into-force-today/

CHINA JAILS 17 FOR SMUGGLING PANGOLIN SCALES

On 5 January, RTHK reported that the gang were convicted of importing 23 tonnes of scales from pangolins – the world’s most trafficked mammal – from Nigeria between 2018 and 2019.  2 men identified as “masterminds behind the racket” were sentenced to between 13 and 14 years in prison. The others were given jail terms ranging from 15 months to 12 years.

https://news.rthk.hk/rthk/en/component/k2/1568805-20210105.htm

COUNTDOWN TO LITHUANIA’S E-RESIDENCY SCHEME LAUNCH

On 6 January, The Mayor website reported that Lithuania is putting finishing touches to its first e-residency scheme which will help foreign nationals to do business in the country without even setting foot there.  The e-residency scheme is scheduled to start operating as early as this month, allowing foreigners to establish companies, open bank accounts, and submit tax declarations online, among other things.  A similar project operating in Estonia attracted 75 000 foreigners who set up 15 000 companies in 6 years.

https://www.themayor.eu/ga/countdown-to-lithuanias-e-residency-scheme-launch

FINANCIAL FRAUD ENFORCEMENT AND FCPA PRIORITIES FOR 2021 AND BEYOND

Law firm Greenberg Traurig has produced a series of “White Collar Insights”, seeking to predict trends and developments going forward.  These include one on financial fraud developments and the key fraud areas that the firm expects governments to concentrate on.

https://www.gtlaw.com/en/insights/2021/1/financial-fraud-enforcement-priorities-for-2021-and-beyond

https://www.gtlaw.com/en/insights/2021/1/fcpa-enforcement-what-to-expect-in-2021

UK: GRANT THORNTON SUED FOR £200 MILLION OVER PATISSERIE VALERIE AUDITS

On 7 January, the Irish Times reported that the liquidators are suing accounting firm Grant Thornton for £200 million over alleged negligence in its audits of the cafe chain that collapsed following a suspected significant accounting fraud.  The firm audited Patisserie Valerie for 12 years but failed to spot an alleged manipulation of its books.

https://www.irishtimes.com/business/retail-and-services/grant-thornton-sued-for-200m-over-patisserie-valerie-audits-1.4452739

4 THINGS YOU NEED TO KNOW ABOUT THE EXTENDED LIMITATIONS PERIOD FOR SEC DISGORGEMENT

On 7 January, an article from Winstead Attorneys says that the recently-passed National Defense Authorization Act doubled the statute of limitations for some disgorgement actions from 5 years to 10.  The article provides 4 things the firm says that one needs to know about what it describes as a significant legislative development.  Disgorgement is a remedy available to the SEC under which a party that was unjustly enriched can be forced to pay back its ill-gotten gains.

https://www.jdsupra.com/legalnews/four-things-you-need-to-know-about-the-8425597/

UK: LARGE CAR ‘CHOP SHOP’ GANG ORDERED TO PAY BACK £1 MILLION

On 7 January, Asian Image reported that a gang behind one of the UK’s largest car “chop shop” scams have been ordered to pay back more than £1 million of their ill-gotten gains. They were part of a stolen car racket involving 117 cars which were stolen from around the and stripped for parts.

https://www.asianimage.co.uk/news/18994462.large-chop-shop-gang-ordered-pay-pack-1million/

BOEING TO PAY $2.5 BILLION FINE LINKED TO 737MAX PROGRAM FRAUD CHARGES

On 7 January, The Street reported that Boeing has agreed to pay a $2.5 billion fine to the US DoJ over fraud and conspiracy charges linked to its 737 MAX jet programme.  Boeing said the settlement involves a criminal penalty of $243.6 million, based on the conduct of 2 former MAX program technical pilots, and set up a $500 million fund to provide compensation for families of the victims of the Lion Air and Ethiopian Airlines accidents

https://www.thestreet.com/investing/boeing-to-pay-2-5-billion-fine-linked-to-737-fraud-charges

REGULATOR: LATVIAN BANKS HAVE TAKEN “SUBSTANTIAL STEPS” TO COUNTER MONEY LAUNDERING

  • On 7 January, LSM reported that Latvia’s financial regulator, the Financial and Capital Market Commission (FKTK) has that it carried out 12 inspections of banks related to money laundering issues in 2020 and found “only a few cases” meriting punitive action.  FKTK said it had “significantly changed its approach in carrying out full-scope inspections, focusing on in-depth review of elements of internal control system,” and promised this would continue in 2021.  In 2020, the regulator imposed fines totalling just over €2 million – the Regional Investment Bank (€473,000), Signet Bank (€906,000) and Citadele Bank (€647,070). 

https://eng.lsm.lv/article/economy/banks/regulator-latvian-banks-have-taken-substantial-steps-to-counter-money-laundering.a388065

If you would like to make a (polite) gesture and make a (very) modest contribution to my ongoing with my relocation, 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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