OTHER THINGS YOU MAY HAVE MISSED – JANUARY 22

Panama Covid-19 update – while the TV news contained pieces about the vaccination programme continuing, it also updated with the latest statistics, still too high but maybe also levelling off somewhat – 2,041 new cases and 33 new fatalities (the total now just a shade under 5,000 to date). 49,310 active cases, with 259 in ICU, 2,500 in other wards and 577 in hotels.

On the other hand, noticed this truck on the same TV news report, as if new supplies of the virus were also being delivered!

No photo description available.

22 JANUARY 2021

UN AID COORDINATOR HALTS VENEZUELA CASH TRANSFER PROGRAMMES

On 20 January, Reuters reported that the UN Office for Coordination for Humanitarian Affairs (OCHA) has said it has halted programmes in Venezuela that provide cash transfers to the poor via local non-profit organisations.  The suspension does not affect other humanitarian activities in its portfolio, and OCHA says that it is seeking to provide other types of benefits to those who have been receiving cash transfers.  The move follows a spate of police raids on non-profit organisations, and the detention of 5 members of HIV-prevention organisation who now face charges including criminal association and money laundering.

https://www.reuters.com/article/us-venezuela-aid/u-n-aid-coordinator-halts-venezuela-cash-transfer-programs-sources-say-idUSKBN29P2XX

LATVIAN BANK ALLEGEDLY LINKED TO PUTIN’S PINK PALACE SCHEME

On 21 January, LSM reported that the SMP bank is alleged to have played a role in a complex chain of transactions that helped Russian President Vladimir Putin obtain a palatial private residence.  While most of the transactions in question involved Russian financial institutions and offshore companies, Latvia’s former SMP bank, which had close ties to Putin associates, is also said to be involved.  In 2008, Russia’s SMP bank acquired a controlling stake in existing Latvian bank Multibanka and rebranded it to match its own name.  In 2014, it changed hands and new owners changed the name to Meridian Trade Bank (MTB).  After 2 fines and a warning over compliance failures, it was again renamed in 2020 as Industra Bank.

https://eng.lsm.lv/article/economy/banks/latvian-bank-allegedly-linked-to-putins-pink-palace-scheme.a389798/

https://www.occrp.org/en/daily/13694-navalny-hits-back-by-exposing-putin-s-fairytale-palace

2 FORMER JULIUS BAER CEO REPRIMANDED FOLLOWING MONEY LAUNDERING INQUIRY

On 21 January, Reuters reported that 2 former CEO of private bank Julius Baer were reprimanded by Switzerland’s financial regulator after an inquiry into money laundering in Venezuela and corruption at soccer’s world governing body FIFA.  FINMA did not name the executives but former Chief Executive Boris Collardi, now a partner at Geneva wealth manager Pictet, and his successor Bernhard Hodler, confirmed they had received written reprimands.

https://www.riskscreen.com/kyc360/news/swiss-financial-watchdog-punishes-julius-baer-for-money-laundering-failures/

US: UPDATE ON COMMUNIST CHINESE MILITARY COMPANIES (CCMC) SANCTIONS (PART I)

On 22 January, a post on the Compliance & Enforcement blog from the Program on Corporate Compliance and Enforcement blog at New York University School of Law, which is being published in 2 parts, updates our prior guidance to cover additional developments.

https://wp.nyu.edu/compliance_enforcement/2021/01/22/update-on-communist-chinese-military-companies-ccmcs-sanctions-part-i-of-ii/

BAHAMAS: ECONOMIC SUBSTANCE REPORTING DEADLINE EXTENSION

On 21 January, an article from Lennox Paton advised that the Commercial Entities Substance Requirements Act (CESRA) 2018 requires all legal entities registered in The Bahamas to comply with economic substance reporting by submitting an annual filing to the minister of finance.  Due to the COVID-19 pandemic, the deadline in respect of reporting for 2019 has been extended to 31 January.

https://www.internationallawoffice.com/Newsletters/Private-Client-Offshore-Services/Bahamas/Lennox-Paton/CESRA-economic-substance-reporting-deadline-extension

UK: NEW BUSINESS SUPPORT MEASURES: CORPORATE INSOLVENCY AND GOVERNANCE ACT 2020 

On 22 January, the House of Commons published a research briefing paper which outlines the main elements of the new Act, which introduces permanent measures to update the insolvency regime and temporary measures to provide struggling businesses a lifeline during the coronavirus crisis.

https://commonslibrary.parliament.uk/research-briefings/cbp-8971/

HOW ISABEL DOS SANTOS, ONCE AFRICA’S RICHEST WOMAN, WENT BROKE

On 22 January, Forbes Magazine published an article explaining why it had dropped Isabel dos Santos from its list of Africa’s richest people.  It says that 8 years ago, it declared her the richest woman in Africa, worth an estimated $3.5 billion. The daughter of Angola’s long-time former president grew immensely wealthy in a textbook case of how to loot a country.  Now, with her father out of office, her empire is a shadow of what it once was, with corruption charges levied against her by her country, assets frozen by courts in three different nations and a lawsuit claiming hundreds of millions of dollars in unpaid debt in a fourth country.  Forbes assumes she has no access and likely no chance to gain back control of the frozen assets—together worth about $1.6 billion if not frozen—, so we give her no value for them and by our calculations she is no longer a billionaire.

https://www.forbes.com/sites/kerryadolan/2021/01/22/the-unmaking-of-a-billionaire-how-africas-richest-woman-went-broke

PODCAST: KLEPTOPIA: COUNTER TERRORISM FINANCING: DOES THE CURRENT GLOBAL APPROACH WORK?

A podcast from RUSI.  20 years on from the 9/11 attacks, has the global response to terrorist financing adapted, alongside the evolving risk landscape?  In the podcast, Tom Keatinge is joined by Rachel Love from Standard Chartered Bank and Professor Jimmy Gurulé from Notre Dame Law School in the US to discuss the recent paper, ‘A sharper image: Advancing a Risk-Based Response to Terrorist Financing’ and examine the current state of counterterrorist financing efforts.

https://www.rusi.org/multimedia/episode-ten-counter-terrorism-financing-does-current-global-approach-work

RUSSIA’S CENTRAL BANK TARGETS ONLINE GAMBLING IN LATEST CRACKDOWN

On 22 January, Calvin Ayre reported that the central bank is said to be targeting the online gaming segment with new controls that make it difficult for gamblers to cash out or place wagers and, while the bank’s end game isn’t totally clear, there are plenty of plausible theories.  Given the fact that gamblers have lost access to virtually all online gambling-related payment channels, except for Bitcoin (BTC), there seems to be a definite and concrete plan unfolding. It is suggested that the bank  is looking to thwart illegal online casinos and sportsbooks that are accessible in Russia.

https://calvinayre.com/2021/01/22/business/betting-business-in-cis-countries-and-laws-adopted-in-2020/

FAKE EURO NOTES AT RECORD LOW LEVEL

On 22 January, the Law Society Gazette in Ireland reported that data from the European Central Bank indicate that the pandemic had an impact on the amount of counterfeit euro banknotes in circulation last year.  The ECB says 460,000 counterfeit euro notes were withdrawn in 2020, down almost 18% from 2019. About two-thirds of the total withdrawn were €20 and €50 banknotes.

https://www.lawsociety.ie/gazette/top-stories/fake-euro-notes-at-record-low-level/

UK: ECONOMIC IMPACTS ON SOCIETY OF DIFFERENT TYPES OF CRIME

On 22 January, HM Treasury produced updated information containing supplementary guidance to its Green Book on the full range on impacts on society of different types of crime.  The research study provides estimates for the full range on impacts on society of different types of crime, including costs incurred in anticipation of crime such as defensive expenditure, costs as a consequence of crime such as physical and emotional costs, and costs incurred in the response to crime such as costs to the criminal justice system. 

https://www.gov.uk/government/publications/green-book-supplementary-guidance-crime 

US EXPORT RESTRICTIONS ADDED FOR 2 CHINESE ENTITIES

On 22 January, Sandler Travis Rosenberg reported that the China National Offshore Oil Corporation Ltd and Beijing Skyrizon Aviation Industry Investment Co Ltd had been added to the US Military End-User (MEU) List.

https://www.strtrade.com/trade-news-resources/str-trade-report/trade-report/january/export-restrictions-added-for-two-chinese-entities

US CUSTOMS INTERCEPTS 780 FAKE FAKE INFRARED ZONE HEATERS 

On 20 January, the Star Tribune in Minnesota reported that US Border Patrol agents found 780 of the fake infrared zone heaters inside a rail car bound for the nearby northern Minnesota town of Ranier.  They are said to be worth around $260,000.  The heaters, which originated in China, violated IP rights regulations, officials said.

https://www.startribune.com/customs-agents-intercept-780-fake-heaters-at-international-falls-border/600012859/

TIME TO ACT: THE UK TRUST REGISTER AND THE FIFTH MONEY LAUNDERING DIRECTIVE

On 19 January, a Commentary from Wilberforce Chambers said that HMRC’s registration requirements for trusts may not have been the focus of many practitioners’ attention during 2020, but the 31 January deadline for Trusts Registration Service notifications is likely to focus minds not just on annual compliance requirements, but also on the myriad of changes that have taken place over the past year.  It says that 4 features of the new regime are particularly important to note.  It concludes that, with just over a year until almost all trusts become registrable and more extensive information has to be provided, it is certainly time to get started.

https://www.wilberforce.co.uk/time-to-act-the-uk-trust-register-and-the-fifth-money-laundering-directive/

TRUMP LEAVES BIDEN CORRUPTION PROBLEM AT MEXICO BORDER WALL

On 21 January, Insight Crime reported that the border wall project has developed a spotty record of attracting organized crime to its many construction sites, leaving the incoming Biden Administration with a financial, legal and bureaucratic mess that could take years to clean up.  The wall has, in some instances, led to illicit activity by border security personnel and by the construction companies hurrying to get it done.  It mentions the fact that US Border Patrol officials are arrested at around 5 times the rate of any other law enforcement agency in the country, according to internal reports, and in 2019, the figure reached a 5-year high of 286 officials.

https://www.insightcrime.org/news/brief/corruption-mexico-border-wall/

FCA: INSIDER DEALER ORDERED TO PAY £3.9 MILLION IN COMPENSATION

On 22 January, a release on Mondo Visione advised that the High Court has made a consent confiscation order totalling £3,893,964.82 to be paid by Walid Choucair. In June 2019, Walid Choucair was sentenced to 3 years’ imprisonment in respect of 5 offences of insider dealing alongside Fabiana Abdel-Malek taking place in 2013-4. Abdel-Malek had been employed as a senior compliance officer by the investment bank UBS AG in their London office and used her position to identify inside information which she passed to her family friend Choucair, an experienced day trader of financial securities, using pay-as-you-go mobile telephones. 

https://mondovisione.com/media-and-resources/news/uk-financial-conduct-authority-insider-dealer-walid-choucair-ordered-to-pay-3/

FLORIDA MAN KNOWN AS “THE MONKEY WHISPERER” INDICTED FOR TRAFFICKING IN PROTECTED PRIMATES

A news release from US DoJ on 20 January advised that Jimmy Wayne Hammonds, aka “the Monkey Whisperer” (57), has been charged with conspiracy, trafficking, and submitting a false record in violation of the Lacey Act, a federal law involving the illegal trade in wildlife. Hammonds was also charged with violations of the Endangered Species Act and witness tampering.  If convicted, Hammonds faces a maximum penalty of 20 years’ imprisonment on the witness tampering count, up to 5 years in federal prison on each of the conspiracy and Lacey Act counts, and up to 1 year on each Endangered Species count.

https://www.justice.gov/usao-mdfl/pr/florida-man-known-monkey-whisperer-indicted-trafficking-protected-primates

NIGER ‘SCANDAL OF THE CENTURY’ EXPOSED IN FinCEN FILES SPARKS LAWSUIT DEMANDING ACTION

On 20 January, ICIJ reported that English front companies allegedly siphoned millions of dollars from Niger, one of the world’s poorest countries, in a military procurement scandal that has engulfed the country and sparked lawsuits.  Journalists in Niger had obtained a confidential audit from the country’s ministry of defence that alleged up to $120 million in defence spending had disappeared from the West African country, often into tax havens and bank accounts controlled by unknown owners.  Last month, 4 Niger-based civil society organisations filed paperwork in court in the capital, Namey, to force the government to open an inquiry into corruption, forgery, and other crimes.  As part of the case file, the organisations submitted a newspaper’s FinCEN Files investigation.

https://www.icij.org/investigations/fincen-files/niger-scandal-of-the-century-exposed-in-fincen-files-sparks-lawsuit-demanding-action/

https://www.statista.com/chart/22136/levels-of-trust-in-business-by-country

https://www.statista.com/chart/12634/where-trust-in-government-is-highest-and-lowest

OFAC SANCTIONS EXEMPTION RELATING TO THE NORTH SEA RHUM FIELD IN NORTH SEA

On 21 January, it was announced by Serica Energy that OFAC had been granted an extension to its licence, and a secondary sanctions assurance from OFAC relating to the North Sea Rhum field, which is co-owned by the National Iranian Oil Company. The licence will remain valid until 31 January 2023.

https://www.serica-energy.com/downloads/releases/SQZ_OFAC%20License%20Renewal%20and%20Corporate%20Update_vF%20210121.pdf

US BUREAU OF INDUSTRY AND SECURITY (BIS) ANNUAL REPORT TO CONGRESS FOR FISCAL YEAR 2020

This report covers the work of BIS to the end of FY 2020 (i.e. September 2020); with 279 entities added to its Entity List and so subject to export control restrictions – as of the end of FY 2020, there were a total of over 1,500 active entries on the Entity List across 78 countries.  It also says that 37,895 export licence applications were processed (10% increase from 2019), of which 86% were approved, and the average licence application processing time was 23 days.  BIS also says that it has completed 937 end-use checks in 37 countries over the year.

https://www.bis.doc.gov/index.php/documents/pdfs/2711-2020-bis-annual-report-final/file

3 FOREIGN NATIONALS CHARGED WITH CONSPIRACY TO STEAL US. GOVERNMENT RECORDS AND DEFRAUD US REFUGEE PROGRAMME

On 22 January, a news release from the US DoJ advised that the 3 were charged with conspiracy to steal US government records and to defraud the United States, theft of U.S. government records, and conspiracy to launder money, all related to the US Refugee Admissions Program (USRAP); with 2 also charged with computer fraud and abuse.  

https://www.justice.gov/usao-dc/pr/three-foreign-nationals-charged-conspiracy-steal-us-government-records-and-defraud-us

US: ‘MONEY MULE’ INDICTED FOR MAIL FRAUD IN SCHEME THAT STOLE MORE THAN $400,000 FROM ELDERLY VICTIMS

A news release from the US DoJ on 22 January that Arifkhan Pathan, a 30-year-old man from Washington State, was indicted yesterday by a grand jury for 2 counts of mail fraud related to his participation in a scheme to defraud elderly victims across the country.

https://www.justice.gov/usao-wdwa/pr/money-mule-indicted-mail-fraud-scheme-stole-more-400000-elderly-victims

ATLANTA MAN ADMITS TO BRIBING US MARINE CORPS OFFICIAL IN EXCHANGE FOR $2 MILLION IN TRANSPORTATION CONTRACTS

A news release from the US DoJ on 22 january advised that a 30-year-old man from Louisiana who allegedly in 2019 was a senior account manager at a bus brokerage company that provided transportation to the US Marine Corps Reserves.  That same year, he started a competing transportation brokerage company called National Charter Express.  He agreed to pay kickbacks to a civilian employee of the US Marine Corps Reserves, in exchange for directing business.

https://www.justice.gov/usao-edla/pr/atlanta-man-admits-bribing-us-marine-corps-official-exchange-2000000-transportation

MEPs VOTE TO ADD CHANNEL ISLANDS AND BVI TO TAX HAVEN BLACKLIST

On 22 January, the Guardian reported that the European Parliament is pushing for UK territories including the BVI, Guernsey and Jersey to be added to an EU tax havens blacklist after the conclusion of the Brexit deal.  The resolution included measures calling for the automatic inclusion on the blacklist of countries which use a 0% tax regime. Among these are the UK territories, viewed by transparency campaigners as havens for tax avoidance.

https://www.theguardian.com/world/2021/jan/22/meps-vote-to-add-channel-and-british-virgin-islands-to-tax-haven-blacklist

 

 

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

BENY STEINMETZ FOUND GUILTY OF CORRUPTION

On 22 january, the Real Deal and others reported that Geneva court has found Israeli billionaire Beny Steinmetz guilty of corruption, and sentenced to 5 years in jail for paying bribes to a Guinean public official in order to secure rights to an iron-ore mine.  The French-Israeli diamond tycoon has been convicted of corruption charges linked to mining rights deals in Guinea and multimillion dollar bribes to the country’s former first lady.

https://therealdeal.com/2021/01/22/beny-steinmetz-found-guilty-of-corruption

https://www.thenationalnews.com/world/europe/french-israeli-tycoon-convicted-of-multimillion-dollar-mining-bribe-involving-former-first-lady-1.1151876

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NORDIC AND BALTIC STATES HIRE IMF TO PROBE REGIONAL MONEY LAUNDERING RISKS

On 22 January, LSM reported that Latvia is among a group of Nordic and Baltic countries that are asking the IMF to conduct an analysis of cross-border money laundering and terrorist financing risks in the region, the Latvian Central Bank has said in a statement.  The 8 countries of the Nordic-Baltic Constituency of the International Monetary Fund (Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway, and Sweden) have taken the initiative to engage the IMF to conduct a regional analysis of money laundering and terrorist financing threats and vulnerabilities.

https://eng.lsm.lv/article/economy/banks/nordics-and-baltics-hire-imf-to-probe-regional-money-laundering-risks.a389846/

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CUBA: FOLLOW-UP AML/CFT REPORT

CUBA: FOLLOW-UP AML/CFT REPORT

On 22 January, FATF-style regional body GAFILAT published the Fourth Regular Monitoring and Requalification Report on Technical Compliance of the Republic of Cuba.  It analyses the country’s progress towards addressing technical compliance deficiencies identified in its Mutual Evaluation Report (MER) of 2015 (after which Cuba was placed in the regular follow-up process).  It is said that Cuba has addressed its technical compliance deficiencies identified in the MER in relation to –

FATF Recommendation 31, originally rated PC, now Compliant;

FATF Recommendation 28, originally rated PC, now compliant; and

FATF Recommendation 35, originally rated PC and which has not been re-rated. 

The report also reviews other FATF Recommendation ratings since the MER, with Recommendation 15 (new technologies) downgraded from C to PC.  Cuba will continue in the regular follow-up process and will continue to report to GAFILAT on the progress made to strengthen its implementation of AML/CFT measures.

https://www.gafilat.org/index.php/es/biblioteca-virtual/miembros/cuba/informes-de-seguimiento-6/4009-fourth-regular-follow-up-report-and-re-rating-of-cuba/file

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THE PANDEMIC AND FRUSTRATION, FORCE MAJEURE, AND HARDSHIP: AN ENGLISH LAW PERSPECTIVE

On 22 January, Dentons published an article saying that the changed market circumstances caused by the COVID-19 pandemic have made certain obligations more difficult to perform for many contracting parties. This has led affected parties to seek legal advice about how to excuse or suspend performance of their contractual obligations, or even terminate contracts altogether.

In this context, 2 well-known legal concepts are being tested: the common law doctrine of frustration and the contractual remedy of force majeure. A third legal concept, economic hardship, is also receiving increased attention.  The article looks at how these concepts are being interrogated and developed under English law.

https://www.dentons.com/en/insights/articles/2021/january/22/three-degrees-of-hardship-an-english-law-perspective

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INTERPOL REPORT CHARTS TOP CYBERTHREATS IN SOUTH-EAST ASIA

On 22 January, a news release from Interpol advised that a report has highlighted the key cybercrime trends and threats confronting the Association of Southeast Asian Nations (ASEAN) region.  The ASEAN Cyberthreat Assessment 2021 report outlines how cybercrime’s upward trend is set to rise exponentially, with highly organised cybercriminals sharing resources and expertise to their advantage.  Interpol has identified the region’s top cyberthreats:

  • Business E-mail Compromise (BEC) campaigns continue to top the chart with businesses suffering major losses, as it is a high-return investment with low cost and risk;
  • Phishing – cybercriminals are exploiting the widespread use of global communications on information related to COVID-19 to deceive unsuspecting victims;
  • Ransomware – cybercrime targeting hospitals, medical centres and public institutions for ransomware attacks has increased rapidly as cybercriminals believe they have a higher chance of success given the medical crisis in many countries;
  • E-commerce data interception poses an emerging and imminent threat to online shoppers, undermining trust in online payment systems;
  • Crimeware-as-a-Service puts cybercriminal tools and services in the hands of a wider range of threat actors – even non-technical ones, to the extent that anyone can become a cybercriminal with minimal ‘investment’;
  • Cyber Scams – with the increase of online transactions and more people working from home, cybercriminals have revised their online scams and phishing schemes, even impersonating government and health authorities to lure victims into providing their personal information and downloading malicious content; and
  • Cryptojackingcontinues to be on the radar of cybercriminals as the value of cryptocurrencies increases.

https://www.interpol.int/News-and-Events/News/2021/INTERPOL-report-charts-top-cyberthreats-in-Southeast-Asia

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OTHER THINGS YOU MAY HAVE MISSED – JANUARY 21

Panama Covid-19 update – the vaccination programme is up and running and, as of 4 pm today, we are told that 2,728 people have already been vaccinated – concentrating on frontline medical staff. One of the first vaccinated was a long-serving ICU nurse who has been on the Covid frontline since the start.

Meanwhile, the figures continue to look (slightly) encouraging – despite 1,975 new cases and 26 more fatalities. There are 50,593 active cases, with 243 in ICU, 2,390 in other wards and 621 in hotels.

21 JANUARY 2021

IRAN STRUGGLING TO PRY TRAPPED BILLIONS FROM SOUTH KOREAN BANKS

On 21 January, KYC 360 reported that South Korean banks, wary of US sanctions are holding tight to billions of dollars of Iranian funds, Iran says, apparently unwilling to budge before Joe Biden assumes the US Presidency.  The banks won’t release $7 billion of payments for Iranian oil that are stuck in won-denominated deposits in South Korea, not even to a special humanitarian trade channel partly overseen by the US Government.

https://www.riskscreen.com/kyc360/news/iran-struggling-to-pry-trapped-billions-from-south-korean-banks/

SWITZERLAND: 10-YEAR FREEZE ON FORMER TUNISIAN PRESIDENT ZINE EL ABIDINE BEN ALI’S ASSETS IN SWITZERLAND HAS EXPIRED

On 19 January, Swissinfo reported that the federal government freeze expired because of a 10-year maximum legal limit.  However, most of the $67 million assets of Ben Ali and his entourage, frozen after of the “Arab Spring” uprising which drove Ben Ali from power, are also covered by a second freeze ordered in the context of judicial cooperation. 

https://www.swissinfo.ch/eng/freeze-on-ben-ali-swiss-funds-expires–as-tunisia-drags-its-feet-/46299384

THE UK TRUST REGISTER AND THE FIFTH MONEY LAUNDERING DIRECTIVE

On 19 January, an article from Wilberforce says that HMRC’s registration requirements for trusts may not have been the focus of many practitioners’ attention during 2020, but the 31 January deadline for Trusts Registration Service notifications is likely to focus minds not just on annual compliance requirements, but also on the myriad of changes that have taken place over the past year.  The article identifies 4 features of the new regime which are particularly important to note.  It concludes by saying that, as the UK moves towards increasingly comprehensive registration of trusts, there will be much for trusts and tax practitioners to digest and act upon to ensure compliance with the extended regulatory regime. With just over a year until almost all trusts become registrable and more extensive information has to be provided, it is certainly time to get started.

https://www.wilberforce.co.uk/time-to-act-the-uk-trust-register-and-the-fifth-money-laundering-directive/

UNEXPLAINED WEALTH ORDERS – WHERE ARE WE NOW?

On 20 January, an article from Field Fisher said that the introduction of Unexplained Wealth Orders (UWO) in the Criminal Finances Act 2017 was heralded as a powerful new weapon for enforcement authorities to wield in the fight against organised crime.  Several UWO have been obtained over the past 3 years. There have been some successes, but also a costly own goal.  It says that now is an appropriate time to evaluate the status of UWO and how they will be used in the future in light of the successes and failures that have taken place.

https://www.fieldfisher.com/en/services/fraud-financial-crime-and-investigations/fraud-corporate-crime-blog/unexplained-wealth-orders—where-are-we-now

THE SFO YEAR IN REVIEW

On 18 January, Part 1 of the Field Fisher Financial Crime Winter Round-up 2020-21 says that the SFO continues to face criticism for its readiness to close down cases and focus on reaching financial settlements with corporates through Deferred Prosecution Agreements (DPA), whilst failing to prosecute individuals associated with the affected corporates.  However, in terms of results, the last 6 months have arguably been its most successful period under the tenure of Lisa Osofsky with the agency securing convictions, concluding various DPA and entering into some record-breaking settlements.  The article reflects on the increased activity from the SFO over the last 6 months. 

https://www.fieldfisher.com/en/services/fraud-financial-crime-and-investigations/fraud-corporate-crime-blog/part-1-financial-crime-winter-round-up-2020-21-sfo-yir

FRANCE HAS REVISED ITS SYSTEM FOR EXPORTING ART AND ANTIQUES, REMOVING RED TAPE

On 20 January, Art Net reported that changes could make France more attractive as a market for overseas buyers in some key disciplines.  It has revised its national system for exporting cultural goods, dramatically expanding the ease of trade. The move is considered a major win for the country’s art industry.  The changes, which came into effect on 1 January, raise the value thresholds at which an export certificate or “passport” must be obtained for a broad swathe of art, antiques, and collectibles. In some cases, the threshold has been doubled. The changes significantly reduce red tape barriers for the French art market, and are the result of vigorous lobbying over the past decade from French trade representatives working closely with the Syndicat National des Antiquaires, the country’s largest association of art and antiques dealers.  The changes remove an entire tier of red tape for major parts of the art market in France — Europe’s second largest art market after the UK — leaving them only to meet EU export licensing obligations.

https://news.artnet.com/market/france-export-licence-value-thresholds-art-antiques-1938215

QUALCOMM CHINA SHIPMENTS SLASHED ON US SANCTIONS

Mobile World Live reported that a report has highlighted the decline in Qualcomm’s shipments.  At the end of 2019 the research company estimated Qualcomm held a 37.9% share of the market.

https://www.mobileworldlive.com/devices/news-devices/qualcomm-china-shipments-slashed-on-us-sanctions

TRIAL OVER GHOSN SMUGGLING CONTINUES IN ISTANBUL

On 20 January, Republic World reported that Turkish prosecutors have pushed for maximum 12 years in prison for a Turkish private airline company official and 2 pilots accused of smuggling former Nissan chairman Carlos Ghosn out of Japan.  The pilots and flight attendants have denied involvement in the plans to smuggle Ghosn or of knowing that Ghosn was on the plane.

https://www.republicworld.com/world-news/middle-east/trial-over-ghosn-smuggling-continues-in-istanbul.html

EX-JULIUS BAER CEO REPRIMANDED IN LAUNDERING PROBE

On 21 January, Swissinfo reported that former Julius Baer Group Ltd CEO Boris Collardi was reprimanded by Switzerland’s financial regulator over a money laundering probe that has cast a shadow over his move to Geneva private bank Pictet & Cie.  This comes almost a year after the regulator said the bank fell significantly short in combating money laundering in its Latin American business between 2009 and early 2018.

https://www.swissinfo.ch/eng/ex-julius-baer-ceo-collardi-reprimanded-in-laundering-probe/46305790

UK: ‘LARGEST-EVER FAKE MONEY HAUL’ AS 3 JAILED OVER £12 MILLION SCHEME

On 21 January, Yahoo News reported that 3 men have been jailed for their part in a conspiracy to supply more than £12 million in counterfeit banknotes after police seized what is thought to be the “largest face-value seizure of fake currency in UK history”.  A police raid at an industrial unit in Beckenham, London, in May 2019 and found £5.25 million in false £20 notes.

https://uk.news.yahoo.com/counterfeit-money-seized-police-120605811.html

UK: EMAIL ATTACHMENTS NOT COVERED BY LEGAL PRIVILEGE

On 21 January, the Law Society Gazette reported that e-mail attachments are not to be covered by legal professional privilege (LPP) even if the email is, the Supreme Court has effectively decided.  The court refused permission to appeal in a case where the appellant challenged the decision of the High Court and Court of Appeal to disclose 21 email attachments.  The issue before the Supreme Court was whether an email with attachments should be treated as a single communication for the purposes of LPP, and so if the email was privileged, whether the attachments were also to be treated in the same way. The court refused permission to appeal because its application did not raise an arguable point of law.

https://www.lawgazette.co.uk/law/email-attachments-not-covered-by-legal-privilege-court-clarifies/5107110.article

https://www.legalfutures.co.uk/latest-news/email-attachments-are-not-privileged-just-because-message-is

BREXIT UNCERTAINTY HAS FUELED A NEW WAVE OF SCAMS

On 21 January, Finbold reported on 3 scams that it says have become common in the wake of Brexit uncertainty –  a new twist on the unpaid tax scam, saying that new rules means the victim must pay up immediately or face increased penalties; get rich quick scams involving a company that it is said will succeed after Brexit has happened; and where a victim is conned into supplying their passport details or into paying for a new one.

https://finbold.com/brexit-uncertainty-has-fueled-a-new-wave-of-scams-heres-the-top-3

HONG KONG: REPORT ON AML/CFT REGTECH: CASE STUDIES AND INSIGHTS

On 21 January, the Hong Kong Monetary Authority (HKMA) published a report titled “AML/CFT Regtech: Case Studies and Insights”, highlighting the opportunities that regulatory technology (regtech) offers to transform the effectiveness and efficiency of AML/CFT efforts, and sharing end-to-end approaches which worked in real-life examples.  HKMA has collaborated with an international consulting firm to follow up progress made by 3 groups of banks.  The report details case studies and insights of banks which have implemented technologies, including network analytics and robotic process automation (RPA), and is designed to provide practical guidance to banks at various stages of AML/CFT regtech adoption.

https://www.hkma.gov.hk/media/eng/doc/key-information/guidelines-and-circular/2021/20210121e1a1.pdf

FORMER NEW YORK CONSTRUCTION EXECUTIVE TO THREE YEARS IN PRISON FOR EVADING TAXES ON $1.4 MILLION IN BRIBES

On 20 January, OCCRP reported that, for more than 8 years, Anthony Guzzone, former director of Global Construction at Bloomberg LP in New York, failed to report the bribes to the IRS.  The sums came from the bribes he received from building subcontractors who, in exchange, were awarded various construction contracts and sub-contracts performed for Bloomberg as part of a kickback scheme.  Along with other Bloomberg managers and officials at Turner Construction, a building contractor that performed projects for the U.S. company, he asked for a total of more than $6 million in bribes.

https://www.occrp.org/en/daily/13678-bloomberg-ex-executive-sentenced-in-kickback-scheme-case

BIDEN’S SECURITY CHALLENGES IN CENTRAL AMERICA

On 20 January, Insight Crime reported that the new President declared Central American security as a priority in one of the few foreign policy plans released during his campaign.  It is said that his approach will represent an about-face from that of Trump, whose bullying style on migration often left little capital for other security issues plaguing the region.  Rather than shrink from Trump, the presidents of the 3 countries involved took advantage of his transactional nature.  One of Biden’s first security tests will be mass migration from El Salvador, Guatemala and Honduras, then there is the narco-politics of Honduras, and corruption, described as a cancer by Biden, “eating away” at the Northern Triangle countries.

https://www.insightcrime.org/news/analysis/biden-security-central-america/

FORMER VATICAN BANK PRESIDENT FACES PRISON SENTENCE IN EMBEZZLEMENT TRIAL

On 21 January, Euronews reported that a Vatican court is expected to issue a verdict in an embezzlement and money laundering trial involving the ex-president of the Institute for the Works of Religion, also known as IOR, or the Vatican bank.  Former president Angelo Caloia proclaimed himself innocent, and “a victim” of “operations orchestrated by other people”.  The trial also involves Gabriele Liuzzo’ son, Lamberto Liuzzo, who faces a six-year prison sentence.  The investigations began in 2014 and focused on operations carried out between 2001 and 2008 which caused estimated financial damage of €57 million.  CNN later reported he had been sentenced to nearly 9 years in prison.

https://www.euronews.com/2021/01/21/former-vatican-bank-president-faces-prison-sentence-in-embezzlement-trial

https://edition.cnn.com/2021/01/21/europe/vatican-bank-money-laundering-intl/index.html

US: NEW CHARGES DERAIL COVID RELEASE FOR HACKER WHO AIDED ISIS

On 19 January, the always interesting (even if most of it goes over one’s head) Krebs on security blog contained a post saying that Ardit Ferizi, 25, from Kosovo, a hacker serving a 20-year sentence for stealing personal data on US military and government employees and giving it to an Islamic State hacker group in 2015 has been charged once again with fraud and identity theft.  The new charges have derailed plans to deport him under compassionate release because of the COVID-19 pandemic.  The release was granted in part due to his 2018 diagnosis of asthma, as well as a COVID outbreak at the facility where he was housed in 2020, and he was in quarantine pending deportation.

https://krebsonsecurity.com/2021/01/new-charges-derail-covid-release-for-hacker-who-aided-isis/

IRELAND: HEALTHCARE WORKER ADMITS MONEY LAUNDERING AFTER BEING CAUGHT WITH €600,000

On 20 January, RTE reported that a healthcare worker has admitted money laundering offences at the Special Criminal Court after she was caught with over €600,000 in criminal cash.  Her partner, Thomas Rooney, also appeared before the court on similar charges and was also remanded on bail to be arraigned next month.  Dawson was arrested last May on suspicion of enhancing the ability of an organised crime gang to commit a serious offence. 

https://www.rte.ie/news/crime/2021/0120/1190949-money-laundering/

KPMG UK FRAUD BAROMETER JANUARY 2021

KPMG has released the latest edition of this publication.  The latest results cover January to December 2020.  The Fraud Barometer has been tracking fraud trends since the 1980s and the analysis of cases has continually identified trends in the types of fraud that have dominated the UK courts.  The bi-annual Barometer identifies the latest fraud trends and patterns affecting the UK economy which helps businesses remain alert to new threats and respond to any fraud risks in an appropriate and proactive manner.  The headlines include that fraud by value reached £724 million, down 36% compared to 2019, the volume of fraud decreased by 51%, but procurement fraud rose 200% and loan and mortgage fraud increased 675%.

https://home.kpmg/uk/en/home/insights/2020/08/fraud-barometer.html 

BENEFICIAL OWNERS REGISTRY FOR CYPRUS COMPANIES

On 20 January, an article from Antoniou McCollum & Co says that Cyprus is fully transposing into national law Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing (aka the 4th AML Directive).  The article explains the new regime.

https://www.mondaq.com/cyprus/money-laundering/1027254/beneficial-owners-registry-for-cyprus-companies

CRYPTO CRIME – SCAMS AND DARKNET MARKETS DOMINATED 2020 BY REVENUE, BUT RANSOMWARE IS THE BIGGER STORY

On 19 January, Chainanalysis advised that its 2020 Crypto Crime Report is available and published an excerpt.  It says that cryptocurrency remains appealing for criminals as well due primarily to its pseudonymous nature and the ease with which it allows users to send funds anywhere in the world instantly, despite its transparent and traceable design. But the good news is that cryptocurrency-related crime fell significantly in 2020. It says that, in 2019, criminal activity represented 2.1% of all cryptocurrency transaction volume, or roughly $21.4 billion worth of transfers.  In 2020, the criminal share of all cryptocurrency activity fell to just 0.34%, or $10.0 billion in transaction volume. One reason the percentage of criminal activity fell is because overall economic activity nearly tripled between 2019 and 2020.  It also says that the big story for cryptocurrency-based crime in 2020 is ransomware.  While ransomware accounted for just 7% of all funds received by criminal addresses at just under $350 million worth of cryptocurrency, that figure represents a 311% increase over 2019.  No other category of cryptocurrency-based crime rose so dramatically in 2020, as Covid-prompted work-from-home measures opened up new vulnerabilities for many organisations.

https://blog.chainalysis.com/reports/2021-crypto-crime-report-intro-ransomware-scams-darknet-markets

MOZAMBIQUE: ASSET RECOVERY BILL BECOMES LAW, HERALDING NEW ERA IN THE FIGHT AGAINST CORRUPTION

On 20 January, the Basel Institute on Governance reported the entry into force of a new law on asset recovery, which it says significantly extends Mozambique’s capability to recover illicit assets arising from corruption and other criminal activity.  The law, entitled Regime Jurídico Especial de Perda Alargada de Bens e Recuperação de Activos, has now been published in the official gazette. The law includes a basic form of non-conviction based confiscation of assets as part of criminal proceedings, a special regime for gathering evidence that empowers prosecutors to order the breaking of banking and tax secrecy rules to obtain evidence, creation of an Asset Recovery Office within the Attorney General’s Office, and creation of an Asset Management Office within the department responsible for managing state property.

https://baselgovernance.org/news/mozambique-asset-recovery-bill-becomes-law-heralding-new-era-fight-against-corruption

COVID-19 CRUSHED NORTH KOREA’S ILLEGAL POACHING ENDEAVOURS IN RUSSIA

On 21 January, NK Pro reported that, according to a new report from the Global Fishing Watch, North Korean fishing boats in Russian waters fell by 95% in 2020.  It is said that Chinese industrial fishing in North Korean waters has driven down the DPRK fish stocks to dangerously low levels.  In response, North Korean fishermen often used the neighbouring Russian waters and illegally poach there — but now, a new report suggests that this activity has mostly stopped in the COVID-19 era.

https://www.nknews.org/pro/covid-19-crushed-north-koreas-illegal-poaching-endeavors-in-russia/

THE LESSONS OF THE PAST POINT TO REJOINING THE IRAN DEAL

On 21 January, an article in War on the Rocks at the Texas National Security Review argues that failures of the past hold important lessons for US non-proliferation policy today, as the incoming Biden Administration aims to revive the Iran nuclear deal.  That deal succeeded where previous efforts had failed precisely because it avoided the mistakes of the past.  Those arguing for a “better deal” or no deal at all are following the same faulty logic that led to failures of the early 2000s.  The Biden Administration is therefore right to attempt to rejoin the deal, in spite of the controversy this will generate at home and abroad.

https://warontherocks.com/2021/01/the-lessons-of-the-past-point-to-rejoining-the-iran-deal/

CONTROL RISKS REPORT 2021 – TERROR THREATS IN 2021: NO TIME FOR COMPLACENCY 

On 21 January, Control Risks says that terrorism is an evolving threat and will warrant close monitoring in 2021. It has fallen down the list of priority risks for companies in recent years. Since Islamic State (IS) was at its height, total terrorist attacks numbers globally have been on the slide. Extremist groups no longer hold and administer the amount of territory they once controlled across the Middle East.  However, the increasing permanence of state fragmentation in some countries is fuelling aggressive competition for power, and extremist groups of various stripes are ascendant in the Sahel and parts of sub-Saharan Africa such as Mozambique. 

https://www.controlrisks.com/riskmap/analyst-picks/terror-threats-in-2021-no-time-for-complacency

https://www.controlrisks.com/riskmap/maps

https://www.controlrisks.com/riskmap/top-5-risks

CHINA’S COMMERCIAL JET AMBITIONS SHAKEN AS US BLACKLISTS AIRLINER MAKER

On 15 January, Nikkei Asia reported that the inclusion of China’s state-owned commercial jet maker COMAC on the US sanction lists could disrupt China’s plans to carve out a big piece of the lucrative industry for its homegrown champion, given the company’s high dependence on US suppliers.  Maker of C919 and ARJ21 airliners is heavily dependent on US suppliers.

https://asia.nikkei.com/Business/Aerospace-Defense/China-s-commercial-jet-ambitions-shaken-as-US-blacklists-COMAC 

US TREASURY SECRETARY NOMINEE YELLEN EYES QUICK REVIEW OF U.S. SANCTIONS POLICY

On 19 January, Reuters reported that Janet Yellen, President Biden’s nominee for Treasury Secretary, has told lawmakers she expected to quickly launch a review of US sanctions policy if she and her top deputy were confirmed for their posts.

https://www.reuters.com/article/us-usa-biden-yellen-sanctions/treasury-nominee-yellen-eyes-quick-review-of-u-s-sanctions-policy-idUSKBN29O231

UKRAINIAN LAWMAKER AMONG THOSE SANCTIONED BY U.S. FOR AIDING ELECTION INTERFERENCE PLOT

On 19 January, Kharon reported that the US Treasury has designated several more people and companies involved in a plot led by a Ukrainian lawmaker to interfere in the US presidential election. It is said that Andrii Derkach worked with Oleksandr Dubinsky, a colleague in the Ukrainian parliament, as well as several former Ukrainian government officials, to promote fraudulent and unsubstantiated allegations that current and former US officials had engaged in corruption, money laundering and influence peddling in Ukraine.

https://brief.kharon.com/updates/ukrainian-lawmaker-among-those-sanctioned-by-us-for-aiding-election-interference-plot

US: OPERATION CRYSTAL SHIELD EXPANDS TO BATTLE METH TRANSPORTATION HUBS

On 15 January, Homeland Security Today reported that the DEA has announced the expansion of Operation Crystal Shield, which was launched in February 2020. This expansion includes the designation of 2 additional methamphetamine “transportation hubs” in 2021.  Through this effort, DEA is attacking the entire supply chain, locating and seizing meth shipments before they are broken down and trafficked into communities and neighbourhoods. Additionally, operational resources have been increased by 50% to attack the meth threat and the violence that accompanies it. Operation Crystal Shield has generated more than 800 investigations resulting in over 2,100 arrests, the seizure of nearly $54.5 million in drug proceeds, more than 300 firearms, and more than 60,000 lb of methamphetamine.

https://www.hstoday.us/subject-matter-areas/border-security/operation-crystal-shield-expands-to-battle-meth-transportation-hubs/

https://www.dea.gov/press-releases/2021/01/15/dea-announces-expansion-operation-crystal-shield

US PLANS FULL REVIEW OF APPROACH TO NORTH KOREA

On 21 January, Reuters reported that President-elect Joe Biden’s nominee for Secretary of State, Antony Blinken, has said that the incoming administration planned a full review of the US approach to North Korea to look at ways to increase pressure on the country to come to the negotiating table over its nuclear weapons.  At the same time, the United States would also look at providing humanitarian help to North Korea if needed, Blinken said.

https://www.reuters.com/article/us-usa-biden-state-northkorea/blinken-says-u-s-plans-full-review-of-approach-to-north-korea-idUSKBN29O2QG

EU TAX HAVEN BLACKLIST IS NOT CATCHING THE WORST OFFENDERS

On 21 January, the European Parliament issued a news release advising that MEPs have adopted a resolution pushing for the system used to draw up the EU list of tax havens to be changed, as it is currently “confusing and ineffective”.  It says that the EU’s list of tax havens, set up in 2017, has had a “positive impact” so far but has failed to “live up to its full potential, [with] jurisdictions currently on the list covering less than 2% of worldwide tax revenue losses”, MEPs said.  MEPs propose changes that would make the process of listing or delisting a country more transparent, consistent and impartial.  Criteria should be added to ensure that more countries are considered a tax haven and to prevent countries from being removed from the blacklist too hastily, they say. EU Member States should also be screened to see if they display any characteristics of a tax haven, and those falling foul should be regarded as tax havens too.

https://www.europarl.europa.eu/news/en/press-room/20210114IPR95631/eu-tax-haven-blacklist-is-not-catching-the-worst-offenders

ITALIAN POLICE BUST MASSIVE MAFIA FRAUD SCHEME

On 21 January, Deutsche Welle reported that authorities have arrested dozens of people in a sweeping crackdown on the ‘ndrangheta crime syndicate. Government officials and politicians are among the suspects.  The case reveals the gang’s extensive money laundering efforts and bids to buy influence in one of Italy’s poorest regions.  The suspects include alleged ‘ndrangheta crime bosses as well as government officials, politicians and white-collar suspects.  They’re accused of a range of crimes including tax fraud, criminal association, revealing official secrets, influence peddling and other charges.  Among those under house arrest is the regional government’s finance minister in Calabria and Christian Democrat (UDC) member, Francesco Talarico. He is accused of accepting a “package of votes” from the ‘ndrangheta in 2018 in exchange for awarding public contracts. The more well-known leader of the center-right UDC, Lorenzo Cesa, is also accused of being involved. Cesa, a member of the European Parliament, is suspected of “mediation” between the Talarico and the mafia organisation.

Cesa denies any involvement, but stepped down from his post as the head of the UDC.

https://www.dw.com/en/italian-police-bust-massive-mafia-fraud-scheme/a-56304393

PURPORTED BIOTECH EXECUTIVE CHARGED WITH INTRODUCING MISBRANDED DRUG INTO INTERSTATE COMMERCE FOR DISTRIBUTION OF “COVID-19 VACCINE”

On 21 January, a news release from the US DoJ advised that a Redmond, Washington, man who held himself out as a biotech expert was arrested on a federal warrant charging him with introducing misbranded drugs into interstate commerce.  He claims to be Founder & President of North Coast Biologics and in a variety of online postings from as early as March, 2020, he claimed to have a COVID-19 vaccine that he offered to inject in customers for $400-$1000 each. 

https://www.justice.gov/usao-wdwa/pr/purported-biotech-executive-charged-introducing-misbranded-drug-interstate-commerce

US CORPORATE TRANSPARENCY INCHES FORWARD

On 21 January, RUSI issued a Commentary about the recent Anti-Money Laundering Act (AMLA) 2020, saying that AMLA legislates for a range of actions to strengthen the US response to financial crime.  It emphasises the role of effective responses to financial crime in safeguarding national security (something the UK would do well to study closely), for example directing the US Treasury to produce studies on the abuse of the US financial system by China and other authoritarian regimes; it expands the frameworks for information sharing among financial institutions; and it increases the power of the DoJ to demand information from banks around the world. Like most attention, it focuses on the Corporate Transparency Act and beneficial ownership changes, but says that disappointing is the missed opportunity to set an example for the importance of data verification.  It also says that US leadership must continue to tackle the flaws in its own domestic system – such as the glaring failure to regulate lawyers and accountants effectively – that facilitate global illicit finance.

https://rusi.org/commentary/some-benefit-us-corporate-transparency-inches-forward

TOP 10 FREIGHT FORWARDERS OF 2020

On 11 January, Global Trade Magazine published an article detailing the top 10 freight forwarder companies in 2020 – Kuehne + Nagel; DHL; DB Schenker; DSV Global; Sinotrans Ltd; Expeditors; Geodis; Bolloré Logistics; Nippon Express; Hellman Worldwide Logistics

https://www.globaltrademag.com/top-10-freight-forwarders-of-2020/

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