Panama Covid-19 update – one shouldn’t get annoyed, I know, but had to use the technical term “bollocks” to refute claims by someone on Linkedin that face masks were just a means of “control” and “you have rights”…well, tell that to the 4,500 dead here, and/or the 56,020 other active cases – particularly those over 2,500 in hospital…
As well as 2,157 new cases and 42 new fatalities, there are 56,020 active cases, or whom 224 are in ICU and 2,312 in other wards.
11 JANUARY 2021
US MOTIONS EXPAND DRUG CLAIMS AGAINST HONDURAS PRESIDENT
On 10 January, AP reported that US federal prosecutors have filed motions saying that Honduran President Juan Orlando Hernández took bribes from drug traffickers and had the country’s armed forces protect a cocaine laboratory and shipments to the US. The motions also implicate senior military, police, political and business figures in laundering money and bribery. The President, who has not been charged, has repeatedly denied any connection to traffickers despite the 2019 conviction of one of his brothers, Juan Antonio Hernandez. He was elected president in 2013, and was re-elected in 2017 to a term that ends in January 2022.
DEUTSCHE BANK WILL PAY $125 MILLION OVER BRIBERY VIOLATIONS
On 8 January, the New York Times reported that the German bank will enter a deferred prosecution agreement to resolve charges stemming from its attempts to win business in several countries. The penalty relates to millions of dollars paid to consultants in countries like Saudi Arabia, UAE, Italy and China, which were actually bribes to politically-connected fixers that gave the German bank access to foreign officials.
INFOGRAPHIC: SEA ROBBERIES IN SINGAPORE STRAIT IN 2020
On 11 January, Seatrade Maritime News provided an infographic from Information Fusion Centre (IFC) summarising sea robberies, thefts and attempted incidents in the Singapore Strait during 2020.
PODCAST: KLEPTOPIA: HOW DIRTY MONEY IS CONQUERING THE WORLD
RUSI’s Centre for Financial Crime & Security Studies has released this podcast, part of a collection of discussions from past CFCS webinars and events with top financial crime thinkers. For this one it is said that dirty money is flooding the global economy, emboldening dictators and poisoning democracies. Journalist Tom Burgis unveils the stories that form his book Kleptopia. Alexandra Wrage, president and founder of TRACE, moderates and together they take us into the murky realm of global illicit flows.
ANTI-CORRUPTION ENFORCEMENT IN MEXICO
On 11 January, Lexology published a chapter of the Global Investigation Review’s “The Americas Investigations Review” (dated 9 October) which says that anti-corruption enforcement policy in Mexico has shifted notoriously during the 2 years since the federal administration of President Andrés Manuel López Obrador has been in office, and who was elected on a campaign platform that hinged heavily on the fight against corruption. It is said that the fight against corruption during the AMLO administration has, thus far, been associated with high profile, politically charged prosecutions and less so with a systematic enforcement.
BRAZILIAN EVOLUTION IN THE ANTI-CORRUPTION ARENA
Another article in the publication, dated 13 October, which looks at the interplay of the different authorities and the current anti-corruption enforcement scene in Brazil. It considers the impacts of the overlapping of jurisdictions and laws in companies that choose to cooperate and sign leniency agreements stemming from corruption violations. The Brazilian Clean Companies Act (BCCA) has become the central piece in the anti-corruption framework, and by October 2020 the Office of the Comptroller General (CGU) has opened 785 administrative proceedings and fined 106 companies under the BCCA.
FREEZING (MAREVA INJUNCTION) ORDERS IN UNITED STATES DISTRICT COURTS
On 7 January, an article from Mintz considers what it says is the faulty but commonly accepted conclusion that freeze orders to preserve assets pending litigation (commonly referred to as Mareva injunctions) are not available in the US. It is said that virtually all common law jurisdictions, including English, Australian and American courts, recognised a general presumption that a plaintiff alleging only a general claim of money damages is not entitled to a pre-judgment order restraining the defendant from disposing assets. However, in 1975, a Court of Appeal case in London (i.e. the Mareva case) allowed for a pre-judgment injunction where “it appears the debt is due and owing, and there is a danger that the debtor may dispose of his assets so as to defeat it before judgment” and, since 1998, Mareva injunctions have been codified into English civil procedure rules (as “freezing orders”), and most common law nations recognise an analogous process. In 1999, the US Supreme Court reviewed the applicability of Mareva in US federal cases and, since then, conventional wisdom has been that freeze orders to preserve assets pending judgment are unavailable in the US. However, federal courts have repeatedly confirmed that this conventional wisdom overstates the ruling and that, in fact, freeze orders are available with the proper pleadings and evidence. In doing so, those courts have generally adopted standards for issuance that are similar to those found in other common law jurisdictions. The article examines 3 situations where they can be obtained.
OFAC ISSUES NEW AND AMENDED GUIDANCE ON CAATSA
On 6 January, Cadwalader Cabinet published an article saying that OFAC has issued new and amended Ukraine-/Russia-related guidance under the Countering America’s Adversaries Through Sanctions Act in FAQ 869 and about the application of the 50% Rule. In addition, FAQ 870 clarifies that US financial institutions are prohibited from making loans or providing credits totalling more than $10,000,000 in any 12-month period for a person added to the Non-SDN Menu-Based Sanctions List. This limit excludes loans or credit provided to the identified person for activities “to relieve human suffering”.
JERSEY CELL COMPANIES
On 6 January, Carey Olsen published a briefing saying that, from 2006, Jersey law has recognised 2 cell company vehicles –
- the (Jersey) Protected Cell Company (PCC) , said to be a “second generation” PCC that represents the first significant advance from the PCC model developed in other jurisdictions; and
- the Incorporated Cell Company (ICC), described as “a truly innovative new corporate vehicle that offers an unmatched combination of flexibility and strength”.
The article considers the advantages, purposes and uses of both. It also considers the tax and regulatory treatment and the relationship between the cell and cell companies – as well as their formation and insolvency processes, conversion to or from a cell and their constitution. It is said that, whether the cell company is an ICC or a PCC, the key point of note is that a person is not a shareholder in the cell company merely by virtue of being a shareholder in a cell created by that cell company. When considering “ownership”, there is no link between the cell company and each of the cells it creates: they each have their own constitution and members and should be considered independent entities.
TREASURY SHARES IN A JERSEY COMPANY
On 6 January, an article from Carey Olsen explained the status of such shares, which are well established in other jurisdictions, and were introduced into Jersey by a 2008 law.
On 11 January, the Delhi Times take on the continuing India-Pakistan tension and rivalry – this time about Pakistan allegedly obstructing membership of the Nuclear Supplier Group for India.
BREXIT DEAL: IMPACT ON THE UK ART AND LUXURY MARKET
An article from Charles Russell & Speechlys on 8 January offers a high-level analysis of key aspects of the UK-EU Brexit Agreement and how they will impact clients that operate in the UK’s art and luxury market. Since 1 January, Arts Council England will no longer issue EU export licences, and exporters will instead have to apply to ACE for a UK licence. No licence will be required to move works between Great Britain and Northern Ireland, and EU licences issued before 1 January will still be valid for export at UK borders. Temporary EU export licences will also remain valid for their duration, and can be extended (but only once). Temporary exports of cars and musical instruments previously covered by a Specific Open Licence will be covered by the UK OGEL for export to any destination, so there is no need to apply for an individual licence. It says that the UK has decided not to proceed with the new EU Regulation 2019/880 which prohibits the introduction of non-EU cultural goods into the customs territory removed from the country they were created in breach of the laws of that country. This means that high-risk objects (such as art, antiques and books more than 250 years old) will require an import licence to enter the EU, but now not to the UK. However, the Agreement provides that the UK will continue to work with the EU to facilitate the return of cultural property illicitly removed from the territories of either side, having regard to the principles enshrined in the 1970 UNESCO Convention. [on the other hand, as far as I am aware, the Dealing in Cultural Objects (Offences) Act 2003 remains in force, and does not specifically mention the EU Regulation…].
DUTCH CRIMINALS LAUNDERING MONEY IN AFRICAN COUNTRIES
On 11 January, the NL Times reported that Dutch criminals are increasingly laundering their illegally earned money in African countries like Uganda and Kenya. They buy gold and diamonds with cash, and then export these raw materials, according to the departing director of the Tax Authority’s investigative department FIOD. He also said that gold and diamonds are sold all over the world and the proceeds are then used to buy a hotel in Amsterdam, for example, and cars and agricultural machines and equipment are also increasingly bought and sold for money laundering purposes. Another popular target for money launderers is agricultural companies in African countries, as cash is still widely used in this industry.
SRI LANKA FINES 3 FINANCE COMPANIES UNDER AML RULES
On 11 January, Economynext reported that Sri Lanka’s FIU has fined 3 finance companies under the country’s AML/CFT laws. The firms were mostly for not doing sufficient customer due diligence, under rules set in 2016, the FIU said.
FORGET BREXIT, THE MOST IMPORTANT TRADE DEAL IN 2021 IS IN AFRICA
On 11 January, EurActiv carried an article saying that, by creating a shared market between 54 countries, the African Continental Free Trade Area (AfCFTA) will change the face of African trade, and has the potential to accelerate the economic development of the continent. The free trade area can expedite intra-Africa trade by building on the progress made by eight existing regional economic communities, such as the Common Market for Eastern and Southern Africa (COMESA) and the Economic Community of West African States (ECOWAS). Boosting intra-Africa trade will both inspire and require more investment into transport, and other supportive infrastructure such as energy, water and telecommunications to allow Africa to reap greater economic benefits within the continent. By reinforcing continental trade and capacity, the AfCFTA can also help unlock greater international opportunities.
US PLANS TO DESIGNATE YEMEN’S HOUTHI MOVEMENT AS FOREIGN TERRORIST GROUP
On 11 January, Defence Web reported that the US plans to designate Yemen’s Houthi movement as a foreign terrorist organisation, Secretary of State Mike Pompeo has said, a move that diplomats and aid groups worry could threaten peace talks and complicate efforts to combat the world’s largest humanitarian crisis.
UK: COVERT HUMAN INTELLIGENCE SOURCES – DRAFT CODE OF PRACTICE
On 11 January, the Home Office released factsheets and draft amendments to the Covert Human Intelligence Sources (CHIS) Code of Practice. The updated information includes added use and conduct authorisation process and authorisation process factsheets.
DUBAI RESIDENT ACCUSED OF $5.5 MILLION FRAUD BY A RUSSIAN BANK FIGHTS EXTRADITION BID
On 11 January, the National in UAE reported that the Kyrgyzstani citizen told a Dubai Court that his life will be at risk if he is sent back. He is accused of belonging to a group that defrauded the Russian bank by granting loans to people who had not undergone background checks and using fake documents to do so.
TURKEY: TV PREACHER GETS 1,000-YEAR TERM FOR CRIMINAL SECT
On 11 January, ANSA Med reported that a court in Istanbul has sentenced the controversial Turkish Islamic preacher Adnan Oktar to over 1,000 years in jail for creating a criminal sect. Oktar has been detained for over 2 years and was on trial with 235 followers on several charges, including criminal association, attempted espionage, fraud and sexual abuse of minors. In his pirate TV show he preached a controversial interpretation of Islam surrounded by scantily dressed dancers whom he called ”kittens”.
2-TIER SYSTEM APPLIES FOR POST-BREXIT VEHICLE IMPORTS FROM NORTH AND BRITAIN
On 11 January, the Irish Times reported that post-Brexit VAT changes between the Republic and Britain have added thousands of euro to the cost of imported second-hand cars from England, Scotland and Wales – but not Northern Ireland. The imposition of VAT on second-hand cars coming from England. Scotland or Wales to the Republic will add more than €4,000 to the price of a car with a value of €20,000 in the Republic.
IS “LONDONOGRAD” HIDING A CULTURE OF DIRTY TRICKS IN BANKING?
On 11 January, City AM carried an article in the light of a court case involving alleged banking fraud committed during the sale in 2016 of Vivacom, the largest Bulgarian telecoms company. It is said that the case demonstrates the vulnerabilities of Western financial and legal infrastructure and also raises questions about the passive role that British authorities take when administering the financial sector in England.
UK: PUBLIC URGED TO BE VIGILANT AS FRAUDSTERS TARGET ELDERLY AND VULNERABLE WITH FAKE COVID VACCINE
A news release from NCA on 11 January warns that fraudsters are targeting elderly and vulnerable people with a vaccine scam and asking for bank details or cash payments for access to vaccines that are fake or non-existent. The National Economic Crime Centre is said to be working with partners with government and law enforcement to urge people to remain vigilant and follow basic advice in relation to the NHS COVID vaccination programme, which will always be free. The NHS will never ask for payment for vaccines or bank details.
FUGITIVE FORMER SAUDI INTELLIGENCE OFFICER LIVING IN CANADA HAS A MALTA CBI PASSPORT
On 11 January, Kenneth Rijock in his always fascinating blog revealed that a senior counter-terrorism official in the Ministry of the Interior, as well as his wife and children. Al-Jabri, who is wanted in Saudi Arabia on charges relating to the theft of $11 billion in state funds, has been living in Canada for an unknown number of years. He and 2 of his adult children, still living in Saudi Arabia, hold Maltese IIM (Citizenship by Investment) passports.
EXPORTING GOODS FROM THE UK: STEP BY STEP GUIDE
On 11 January, the Department for International Trade published this flowchart guide on how to move goods from the UK to international destinations, including the EU.
JERSEY: MEDICINAL CANNABIS LICENCES ISSUED
On 11 January, Jersey issued a news release advising that Jersey has issued the first licences for commercial cultivation of medicinal cannabis in the Channel Islands, and some of the most recent in the British Isles.
COLOMBIA ARRESTS 198 SUSPECTED CLAN DEL GOLFO MEMBERS
On 9 January, OCCRP reported that Colombia appeared determined to crush one of the most powerful criminal organisations operating in the country, arresting 198 suspected members of the Clan del Golfo and extraditing one previously arrested suspect to the US to face charges for allegedly conspiring to distribute Colombian cocaine there.
LEGAL PROFESSIONAL PRIVILEGE (LPP): BREACH OF COMPANY DIRECTOR’S DUTIES AND THE INIQUITY EXCEPTION IN PRACTICE
On 4 January, a briefing from Exchange Chambers says that there has been considerable litigation in recent years over LPP, testing its boundaries. The briefing considers a High Court case involving disclosure of privileged material and what it says is an important decision around the “iniquity exception” in the context of allegations of breaches of statutory duties by a company director. It was alleged that the director had breached the duties by seeking to maintain sole personal control by such things as improperly removing a corporate shareholder from the register of members and denying that that it was in fact a shareholder, and allegedly forging letters of resignation of another director and resisting attempts to reinstate him. It is explained the “iniquity exception” applies in respect of documents which were created for the purpose of furthering a criminal or fraudulent purpose.
EU-UK TRADE: LIFE SCIENCES COMPANIES FACE DUAL REGIME
On 11 January, an article from Out-Law reported that additional regulatory hurdles now apply to manufacturers of medicines and medical devices that want to place products on both the EU and UK markets in spite of the recent agreement of a new EU-UK trade deal.
OVERVIEW OF THE LAW REGARDING ELECTRONIC TRANSACTIONS IN CERTAIN JURISDICTIONS
On 11 January, an article from Appleby provides in table format specific information about execution formalities and requirements for different types of documents. It covers Bermuda, BVI, Cayman Islands, Jersey, Guernsey, Isle of Man, Mauritius and Seychelles.
LIBYA AND NORTH AFRICA EMERGE AS COCAINE TRANSIT HUBS
On 11 January, Insight Crime reported that cocaine was discovered in 2 separate maritime cargo containers bound for Libya, a strong indication that both the North African country and the broader region are becoming increasingly used cocaine transit routes to Europe and the Middle East. One consignment was detected in Malta Freeport and the other in Ecuador. This is not the first discovery of cocaine being shipped to Libya in recent years, though it is the largest. It is said that increased counter-narcotics efforts in West Africa are likely leading cocaine traffickers to rely more heavily on maritime routes through North Africa, as soaring South American cocaine supplies are increasingly smuggled aboard shipping containers to reach both a swelling European market and a nascent Middle East one.
As delays and confusion continue to affect UK-EU post-Brexit trade, the Chartered Institute for Logistics and Transport says that the UK Department for Transport has supplied CILT with an important leaflet from the French customs authority detailing which documents should be scanned to enter France and which ones should not – saying that this should help avoid common errors with entry of goods to France.
UK: FCA WARNING TO CONSUMERS OVER INVESTMENTS OFFERING HIGH RETURNS BASED ON CRYPTOASSETS
On 11 January, a release on Mondo Visione advised that the FCA is aware that some firms are offering investments in cryptoassets, or lending or investments linked to cryptoassets, that promise high returns. Investing in cryptoassets, or investments and lending linked to them, generally involves taking very high risks with investors’ money. If consumers invest in these types of product, they should be prepared to lose all their money.
HEZBOLLAH: NARCO-TERROR AND CRIME IN LATIN AMERICA
The Jewish Policy Center has published an article asking if the Biden Administration go after Hezbollah’s drug trafficking and money laundering networks? It refers to Project Cassandra, a decade-long operation run through the DEA Special Operations Division, which sought to stop Hezbollah from trafficking drugs into the US and Europe. It is said that Project Cassandra achieved much, but it did not stop Hezbollah’s ongoing illicit activities. The article says that Hezbollah still depends financially on Iranian largesse. But its growing budget – in itself a consequence of Hezbollah’s expanding role in the region as an Iranian terror proxy – means that outside sources of income have become more important in the past 2 decades. The article refers to Hezbollah involvement in South America, particularly in the Tri-Border Area of Argentina, Brazil and Paraguay.
THE RYUK FAMILY OF RANSOMWARE
On 7 January, AdvIntel Advantage published a redacted version of a report in research collaboration with the cybersecurity firm HYAS into the Ryuk family of ransomware, which has been particularly successful in economic terms as well as having a disruptive impact on many industries around the world. The article outlines some of the financial findings related to the group that might be useful for a broad audience. The research involved tracing payments involving 61 deposit addresses attributed to Ryuk ransomware, and says that the Ryuk criminals send a majority of their Bitcoin to exchanges through an intermediary to cash out. It is said that researchers, law enforcement agencies, and security operations centres can contact the authors for more detailed observables related to Ryuk, related cryptocurrency transactions, and the precursor malware families.
MEETING THE REQUIREMENTS OF FIFTH AND SIXTH AML DIRECTIVES
On 11 January, Finextra reported that recent analysis conducted by LexisNexis highlighted that many financial institutions are struggling to complete their implementation plans for the EU 5AMLD. Even more troubling was that many of those surveyed were not even aware of its key purpose. So, it asks, what activities should banks be focusing on to ensure their compliance to both 5AMLD and the more recent 6AMLD?
LEGAL SERVICES AND THE REVISED UK AML/CFT NATIONAL RISK ASSESSMENT
On 11 January, the Law Society of Scotland identified how Chapter 10 of the Risk Assessment documents the UK Government’s view of the key money laundering risks associated with legal services. It goes on to list the actions the Society needs to take – saying that individual firms themselves must also review and refresh their firm-level risk assessments where necessary in light of the updated document.
CHINA’S CENTRAL BANK STEPS UP AML SUPERVISION
On 11 January, the Global Times in China reported that the People’s Bank of China fined 417 institutions $96.98 million in 2020, for failing to effectively carry out AML measures – 3 times the level of the previous year. China is speeding up the revision of AML regulations and stepping up its supervision mechanism, as well as shifting from a “rule-based” to a “risk-based” approach, the central bank said.
CYPRUS BRINGS BENEFICIAL OWNER REGISTRY INTO OPERATION
On 11 January, STEP reported that Cyprus has brought into operation its central register of beneficial ownership, completing the transposition of the EU Fourth AML Directive (4AMLD). However, because the registry is being implemented under 4AMLD, and not 5AMLD, it will not be available to the public. This situation is unlikely to change until the end of 2021 at the earliest, experts have said. In the meantime, access will be restricted to competent authorities such as the Tax Department and the police.
US: AIRLINES REINSTATE COLLECTION OF FEDERAL EXCISE TAX FOR AIR CARGO
On 11 January, American Shipper reported that airlines operating in the US are collecting the federal excise tax on freight shipments that were suspended for most of last year to help the industry survive the economic fallout from the coronavirus pandemic. Until the end of 2020, airlines were not required to charge the 6.25% tax on goods shipped by air or the 7.25% tax on passenger tickets, as well as other passenger fees, as a way to help attract customers. During that period, the government also did not impose excise taxes on jet fuel.
JERSEY’S NEW REGISTER OF BENEFICIAL OWNERS AND SIGNIFICANT PERSONS
On 5 January, Carey Olsen published an article about the new Law and associated secondary legislation which came into force on 6 January and establishes a new, central register of beneficial owners and significant persons in Jersey. Information will continue not to be made publicly available. A decision on whether and, if so, when and the extent to which such information may be made public will be deferred until a consensus on approach has been reached in the EU under 5AMLD, anticipated to be some time in 2022.
BITCOIN HOLDERS BARRED FROM DEPOSITING PROFITS IN UK BANKS
On 11 January, KYC 360 reported a Times article saying that some banks will not accept transfers from bitcoin exchanges. HSBC, one of the biggest banks in the UK, does not process cryptocurrency payments or allow customers to bank money from digital wallets. While other leading banks will accept transfers from digital wallets to current accounts, many will not allow customers to use their credit cards to buy or sell bitcoin.
SUPREME COURT HEARS ORAL ARGUMENTS IN NESTLÉ v DOE AND CARGILL v DOE INTERNATIONAL HUMAN RIGHTS CASES
On 11 January, Lawfare carried an article on hearings held in December before the US Supreme Court to determine when a US company can be sued for alleged violations of international human rights abroad under the Alien Tort Statute (ATS). This case addresses 2 questions relating to the ATS: first, does the ATS allows plaintiffs to overcome the traditional bar on extraterritorial application in a case alleging an American corporation aided and abetted slavery and forced labour abroad? And does the judiciary have the authority under the ATS to impose liability on a domestic corporation?
£113 MILLION SCOTS BANK SCAM CROOK ‘CHILLIN IN DUBAI’ WITH BOXING STAR AMIR KHAN
On 11 January, the Daily Record reported that a Scot jailed for his part in one of the UK’s biggest cyber frauds has been spotted lapping up the luxury Dubai lifestyle with the boxer. Nouman Chaudhary was jailed for up for more than 3 years in 2016 for his part in his brother’s £113 million banking scam.
ESTATE AGENT’S MONEY FIRM FINED £23 MILLION OVER AML BREACHES
Only 11 January, The Negotiator reported that a business owned by a former estate agent who operated both businesses out of careworn offices has been fined a record £23 million for breaching money laundering laws. Luton-based money transfer firm MT Global was handed HMRC ‘s biggest-ever fine – 3 times the last biggest fine of £7.8 million, given to a money service bureau in London in 2019. The firm was fined for failing to carry out risk assessments, having the correct policies, controls and procedures, conducting due diligence, and record keeping.
UK: 7 MEN WILL FACE NO ACTION OVER A SUSPECTED HIJACKING OF AN OIL TANKER OFF THE ISLE OF WIGHT.
On 11 January, Insurance Marine News reported that the Special Boat Service (SBS) stormed the crude oil tanker in October after the crew raised concerns about stowaways. 2 had previously been charged with conduct endangering ships. The CPS has said that the cases had been discontinued after they heard new expert evidence.
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