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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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%.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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
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