Panama Covid-19 update – from Monday, 8 February, restaurants reopen (subject to restrictions on people using them and with a 7 pm curfew) and the gender-based shopping restrictions end (but with a 50% capacity limit on shops).
Meanwhile, 1,181 new cases added today, with 26 new fatalities. There are now said to be 34,718 active cases, 241 in ICU and 2,150 in other wards.
3 FEBRUARY 2021
JAPAN GETS DETAILS ON 2 MILLION OFFSHORE ACCOUNTS TO COMBAT TAX EVASION
On 3 February, The Mainichi reported that Japan’s National Tax Agency has said that it has received details on around 2.06 million offshore accounts held by Japanese individuals and corporations in 86 countries and regions in the year to June 2020, under the OECD Common Reporting Standard to prevent tax evasion.
GANG CLOSE TO BANGLADESH PM EXTRACTS BRIBES FOR STATE CONTRACTS
On 1 February, Al Jazeera reported that a criminal gang is allegedly colluding with Bangladesh’s security forces to extract bribes for state contracts and job positions, all the while maintaining powerful links with the country’s Prime Minister Sheikh Hasina, an Al Jazeera investigation is said to have found.
AUSTRALIA: BANKS FEAR AFTERPAY INCREASES MONEY LAUNDERING RISKS
On 3 February, KYC 360 reported that banks fear that buy now, pay later operators such as Afterpay, which operate outside traditional banking rules, have increased the risk they will be ensnared in more AML cases. Banks say they cannot see where money is being spent because the new players are standing in between banks and transactions. The Australian Banking Association wants Treasury to close “gaps” in regulations to reduce growing payments risks.
WHAT THE CFTC’S SETTLEMENT WITH VITOL INC PORTENDS ABOUT ENFORCEMENT TRENDS
A post from the Compliance & Enforcement blog at the Program on Corporate Compliance & Enforcement at the New York University School of Law examines the Commodity Futures Trading Commission settlement with Vitol, an energy and commodities trading company in Houston. This was the first public action coming out of the CFTC’s initiative to pursue violations of the Commodity Exchange Act involving foreign corruption. The settlement involved cooperation between US and Brazilian regulators in what appears to be another significant corporate resolution associated with the Operation Car Wash corruption investigations in Brazil.
INVESTING IN CANNABIS: UK MONEY LAUNDERING CONSIDERATIONS
On 29 January, Field Fisher published a briefing saying that there is a very fine line that investors need to tread with cannabis to stay on the right side of money laundering regulations in the UK.
COUNTERFEIT AND PIRATED GOODS CONTROL IN THE ASSOCIATION OF SOUTHEAST ASIAN NATIONS (ASEAN)
On 1 February, Ella Cheong in Malaysia published an article saying that, since the ASEAN consists of 10 member nations, the process of engaging the customs in each nation to prevent any exports and imports of infringing goods differs greatly. The article provides a summary on the differences in engaging the customs of each member nation of the ASEAN to prevent exports and imports of infringing goods.
BREXIT UPDATE: VAT ON PLEASURE CRAFT
On 27 January, an article from Shoosmiths LLP is concerned with outlining the post-Brexit position on the payment of VAT for existing pleasure boat owners in the UK, including those leaving and/or returning to the UK. It also considers the purchase of a boat in the UK for use in the UK or EU.
THE ‘UNAMBIGUOUS IMPROPRIETY’ EXCEPTION TO WITHOUT PREJUDICE PRIVILEGE IN ENGLISH LAW
On 28 January, an article from Freshfields Deringer Bruckhaus LLP on 28 January reported on a UK Court of Appeal case involving the “without prejudice” privilege. The Court set a high hurdle to overturning the privilege, saying that the standard of a ‘good arguable case’ or ‘plausible evidential basis’ was too low and that “the test remains one of unambiguous impropriety. Nothing less will do”. If parties fear that spontaneous comments made at settlement negotiations will be misconstrued this may deter honest and productive attempts to settle and instead encourage parties to produce carefully scripted and recorded statements at such meetings, or avoid attempts to settle altogether. In the case in question, the defendant had threatened to disperse its assets at risk if the claimant pursued its claim.
NORTH KOREA: NAMPHO CONTAINER PORT REMAINS ACTIVE DESPITE CONTINUED BORDER CLOSURES
On 2 February, 38 North reported that commercial satellite imagery indicates the Nampho container port – North Korea’s largest west coast port and the closest major port to Pyongyang – continued to handle cargo throughout 2020 despite North Korea’s border closure due to COVID-19. In contrast to the quiet cargo yards along the country’s land border with China, container volumes at Nampho fluctuated throughout last year, indicating the continued flow of international trade. It also reports a new oil terminal constructed at the port.
SUSPECTED IRANIAN LOITERING SAM USED DUTCH COMPONENTS
On 3 February, Janes reported that surface-to-air missiles found by the US Navy on 2 dhows smuggling weapons to Yemen are powered by small gas turbine engines made by the company AMT Netherlands, according to a recently released report by the UN Panel of Experts on Yemen. AMT Netherlands makes small jet engines for remotely-controlled aircraft, gliders, and research purposes. The missiles also included MTi-100 inertial sensor modules made by Xsens Technologies, another Dutch company, that were exported to another company in China in 2015–16.
ROMAN BUST SEIZED IN GERMANY AFTER CONFUSION AROUND IMPORT LAWS FOR ARTEFACTS IN TRANSIT
On 3 February, the Art Newspaper reported that it was taken because German law requires archaeological objects have export licences from the country of origin — but the bust was in transit through to Austria from the US. The dealer involved got it back only after taking legal action. The North Rhine-Westphalia Ministry for Culture has said the state’s customs authorities had detained 46 objects that were in transit under the Cultural Assets Protection Law by the end of October 2020, 40 of them destined for other EU countries.
WORLD BANK RAMPS UP DEBARMENT ENFORCEMENT AND ADOPTS NEW SANCTION DISCLOSURE PRACTICE
A blog on the always-worth-reading FCPA Blog on 3 February advised that, already in 2021, the World Bank has debarred 12 entities or individuals – with 11 cross-debarments (debarments first imposed by another international financial institution). The post also says that from 1 January, the World Bank changed its publication practices and, in all cases, will now state the sanctionable practice for why the firm or individual has been debarred.
UKRAINE BLACKLISTS 2 LAWMAKERS’ AIRCRAFT IN LATEST ROUND OF SANCTIONS
On 3 February, UNIAN reported that Ukraine authorities had designated 2 aircraft owned by MPs from the Opposition Platform – For Life Party Viktor Medvedchuk and Taras Kozak, who used them to fly to Russia. The aircraft were registered in Moldova after the US had announced its plans to impose sanctions against Medvedchuk.
HUMAN RIGHTS DUE DILIGENCE IN THE SUPPLY CHAIN: CANADA’S ADVISORY ON DOING BUSINESS WITH CHINA
On 2 February, McCarthy Tetrault LLP published an article saying that, following the recent global regulatory focus on supply chain risks and related compliance strategies, Global Affairs Canada and the Canadian Trade Commission Service have issued several measures, along with a related Advisory to Canadian businesses designed to address human rights violations in global sourcing. The measures and the Advisory specifically address ongoing reports of human rights violations in Xinjiang, and set out the Government of Canada’s compliance expectations with respect to Canadian entities doing business with that region in China.
OVER 80 PEOPLE ARRESTED IN CHINA FOR SMUGGLING FAKE CORONAVIRUS VACCINES
On 3 February, One India reported that, according to official media, China has arrested over 80 people for smuggling and supplying counterfeit COVID-19 vaccines, amid reports that some of the jabs have already made their way to Africa. It is said that 3,000 doses of the fake vaccines were confiscated from the accused in a special drive that China has carried out to curb vaccine-related crimes
EGYPT: 5,000 ARTEFACTS THAT HAD BEEN ILLEGALLY SMUGGLED OUT OF THE COUNTRY HAVE ARRIVED SAFELY BACK FROM THE US
On 3 February, Ahram Online reported that, after 5 years of diplomatic discussions and joint efforts with US authorities including the Department of Homeland Security, Egypt has succeeded in recovering a collection of 5,000 artefacts from the Museum of the Bible in Washington. Egypt has been seeking to repatriate the objects, which were smuggled out of the country from illegal excavations. Over the past 2 years it is said that Egypt has successfully repatriated 5,694 artefacts and 21,660 coins from Italy, the Czech Republic, the US, Sharjah, Kuwait, France, Cyprus, UK, and Germany.
OVER 3,000 SMUGGLED RELICS RETURNED TO IRAN SINCE AUGUST 2017
On 2 February, the Tehran Times reported claims by a minister that more than 3,000 historical objects that had been looted and smuggled out of Iran decades ago have been returned home since August 2017, when President Hassan Rouhani began his second administration. The article provides some examples.
MALTA: PREPARING FOR THE NEW CORPORATE SERVICES PROVIDER (CSP) REGIME
On 3 February, the Times of Malta reported that a revised CSP Act has received Parliamentary approval and is awaiting ministerial sign-off before coming into force. The MFSA has also begun consulting on new CSP rules, and the necessary new legal regulations are, it says, unlikely to be delayed by controversy.
FORMER CEO AND CHAIRMAN OF ABU DHABI STATE FIRM JAILED FOR MONEY LAUNDERING
On 3 February, Arab Business Industries reported that the unnamed former chairman and CEO of a government-owned Abu Dhabi company have been jailed for money laundering. Investigations showed that the accused created several companies outside the country to try to cover up the misappropriation of funds.
LOS ANGELES-AREA MAN TO PLEAD GUILTY TO OPERATING BITCOIN-CASH EXCHANGE BUSINESS AND MONEY LAUNDERING
On 29 January, a news release from US Immigration & Customs Enforcement advised that a man was charged with running an unlicensed company that exchanged tens of millions of dollars in Bitcoin and cash. Hugo Sergio Mejia, 49, was charged with money laundering and operating an unlicensed money transmitting business and, in a plea agreement he agreed to plead guilty to these federal felony offences. He also admitted he established companies to mask his true activity, including Worldwide Secure Communications LLC, World Secure Data and The HODL Group LLC. He advertised his business online and was referred to customers by word of mouth, communicating with them via encrypted messaging services, and meeting them in person at coffee shops.
SLOVAKIA: SLOW PROGRESS IN PREVENTING CORRUPTION OF PARLIAMENTARIANS, JUDGES AND PROSECUTORS
A news release on 3 February from the Council of Europe’s Group of States against Corruption (GRECO) expressed disappointment at the slow progress of the Slovak Republic in implementing measures to prevent corruption of parliamentarians, judges and prosecutors.
105 ARRESTED FOR STEALING OVER €12 MILLION FROM US-BASED BANKS
A news release from Europol on 3 February advised that a cross-border operation coordinated by Europol and led by the Spanish National Police and the US Secret Service resulted in the dismantling of an organised crime group involved in fraud and money laundering. On 6 October, law enforcement offices carried out more than 40 house searches, arrested 37 suspects (2 in Austria, 11 in Greece, 23 in Spain and 1 in the UK) and seized 13 luxury cars. The follow up actions led to the freeze of 87 bank accounts worth €1.3 million. The criminal organisation, mainly formed of Greek nationals, set up shell companies in the US and opened bank accounts for these companies. US-based banks issued debit and credit cards for these accounts. Retailers in on the scam, most of whom were in Spain, used the payment cards to finance the available credited amounts on the cards. To launder the stolen funds, they transferred them to different bank accounts, owned by members of the criminal network located in several EU countries. More than 50 American financial institutions became victims of these fraudulent activities losing over €12 million.
AUSTRALIAN POLICE FIND NO CRIME IN VATICAN MONEY TRANSFERS
On 3 February, ABC News reported that Australian police have said they found no evidence of criminal misconduct in money transfers from the Vatican that a financial agency mistakenly inflated by almost $1.8 billion and fuelled corruption speculation.
ALBANIA: NEW AML LAW WITH CHECKS ON REAL ESTATE AGENTS, RELATIVES AND ASSOCIATES OF OFFICIALS
On 3 February, Top Channel TV reported that a new AML law launched for public consultation provides for an increase in the number of entities supervised by the institutions, including officials such as ambassadors or charge d’afair, while stricter monitoring is also provided for real estate agents.
WHY DID ANTIGUA GIVE A PASSPORT TO A CONVICTED MURDERER WANTED IN BANGLADESH FOR KILLING OPPOSITION LEADER?
On 2 February, Kenneth Rijock posed this question in a post on his blog said that Haris Ahmed, a fugitive murderer on the Most Wanted list in his native Bangladesh, had evaded arrest and extradition due to his Antigua & Barbuda CBI/CIP passport.
US: $540,000 PENALTY TO SETTLE CHARGES THAT COMPANY PREPARED AND PROVIDED TO A FREIGHT FORWARDER INVOICES THAT VASTLY UNDERSTATED THE VALUE GOODS BEING EXPORTED TO RUSSIA
On 3 February, Sandler Travis Rosenberg reported that the items involved are used in telecommunications networking equipment and their export is controlled. BIS states that $480,000 of the penalty, and a denial of export privileges, will be suspended for 2 years and then waived provided the individual does not commit any additional export violations during that time.
WHISTLEBLOWERS REPORT COVID-19 CORRUPTION IN SOUTH AFRICA
On 3 February, OCCRP reported that an investigation of over 100 whistleblower reports revealed widespread allegations of theft of COVID-19 unemployment benefits and corruption in South Africa, according to a report by Corruption Watch. Out of 126 whistleblower reports, 77 centred around suspicions that employers had withheld TERS relief payments from employees. Workers waiting on these payments reported being unable to afford essentials like food, rent, transportation or airtime services.
The report is at –
SIERRA LEONE NATIONAL APPEARS IN COURT IN FINLAND ON WAR CRIMES CHARGES
On 3 February, Jurist reported that Gibril Massaquoi is accused of committing serious war crimes during Liberia’s second civil war between 1999 and 2003. Having lived in the Tampere region for the past 10 years as a registered Finnish resident, he was detained by the Finnish police in March. Even though the suspected crimes were committed outside of Finland’s borders, due to customary international agreements, Finland is obliged to investigate any such crimes and prosecute perpetrators where necessary.
UK: THE FUTURE OF PROSECUTIONS IN RELATION TO CORONAVIRUS SUPPORT PAYMENTS
On 28 January, an article from Carmelite Chambers considers the widely reported instances of fraud in relation to the government’s coronavirus support schemes and the implications for prosecutions. It includes a quote that “in 10 years’ time, people will still be looking for the money…when the inquiries start into what happened with this scheme”. It also says that the Fraud Advisory Panel have set up a COVID-19 watch group to share information on emerging fraud threats. It considers the frauds, the legislation and businesses’ responsibilities. It warns that loose drafting means uncertainty will remain for some time to come, but in the longer term, whether these provisions may become testing grounds for possible expansion into other areas of the criminal law must remain one possibility.
UK: FCA HAS SECURED AN INTERIM RESTITUTION ORDER OF JUST OVER £676,000 AGAINST 5 OF THE 7 DEFENDANTS ACCUSED OF CARRYING ON UNAUTHORISED DEPOSIT TAKING BY ACCEPTING MONEY FOR PROJECTS INCLUDING FOREX-TRADING AND CRYPTO-ASSETS WITHOUT FCA AUTHORISATION
A release on Mondo Visione on 3 February reported that Bright Managment (sic) Solution Limited, Soccer League International Limited and individuals were affected. The court made declarations that the fundraising involved unauthorised deposit-taking and ordered permanent injunctions against the 5 defendants.
CANADIAN MAN WENT TO JAMAICA FOR A HOLIDAY AND EXTRADITED FROM THERE TO THE US TO FACE FRAUD AND MONEY LAUNDERING CHARGES
On 23 February, CTV News reported that Martin Hogan, 52, has been accused by US authorities of defrauding dozens of American seniors out of their savings in a cross-border swindle totalling as much as $2 million. It is said that he and several co-conspirators, both Canadian and American, told seniors they’d won a sweepstakes in Canada but needed to pay taxes or customs fees to release the money over the border.
US: 2 WOMEN INDICTED ON CHARGES STEMMING FROM $100 MILLION HOME HEALTH CARE FRAUD AND MONEY LAUNDERING SCHEME
A news release from the US DoJ on 1 February advised that 2 women had been arrested and charged in connection with a $100 million home health care fraud scheme. The government also filed a civil action seeking forfeiture of 5 properties and 40 financial accounts and investments involved in a scheme to launder the ill-gotten gains. According to the indictment, from January 2013 to January 2017, one was part-owner and operator of Arbor Homecare Services LLC. The other was a Licensed Practical Nurse employed as a home health nurse at Arbor. It is alleged that they engaged in a conspiracy to use Arbor to defraud MassHealth and Medicare of at least $100 million by committing health care fraud and paying kickbacks to induce referrals.
BRITISH FIRMS PART WAYS WITH STRICKEN KENYAN BETTING GIANT SPORTPESA
On 22 January, Finance Uncovered reported that Kenya’s SportPesa have been dealt yet another blow after 2 advisory companies that are key to its international operations severed ties — raising further questions over its future. They are Equiom, SportPesa’s registered agent in the Isle of Man, which has provided corporate services, such as maintaining company records since 2015, and London law firm Ince GD Corporate Services which has acted as its UK company secretary since 2017.
PRINCETON UNIVERSITY AGREES TO PAY $54,000 TO SETTLE VIOLATIONS OF EXPORT ADMINISTRATION REGULATIONS
On 3 February, KPMG reported that the Bureau of Industry and Security (BIS) of the Commerce Department issued an order relating to a US university that agreed to pay $54,000 to settle 37 alleged violations of the Export Administration Regulations (EAR). Between November 2013 and March 2018, the university engaged in conduct prohibited by the EAR when it exported various strains and recombinants of an animal pathogen (items subject to the EAR) from the US to various overseas research institutions, without the required BIS licences.
US: OFFICIALS SAY $44 MILLION IN FAKE SPORTS GEAR SEIZED OVER PAST YEAR
On 3 February, the Mail Online reported that, as the Super Bowl approaches, officials said more than 169,000 counterfeit sports-related items worth $44 million were seized in the past year. The effort, known as Operation Team Player, begins at the end of each Super Bowl and continues through the next. It is overseen by a unit of Homeland Security Investigations, part of the Homeland Security Department.
A FUTURE FOR MONEY? EXPLORING CENTRAL BANK DIGITAL CURRENCY (CBDC) AND STABLECOIN CRYPTOCURRENCY SYSTEMS
Starting on 23 November, Dentons produced a 7-part series of articles –
Part one outlines a brief history of currency and payment systems, what constitutes “money”, and how our modern-day payment infrastructure works. This section establishes context for an analysis of stablecoins and CBDC.
Part two introduces the concept of stablecoin cryptocurrency.
Part three explores contemporary stablecoin initiatives to identify the technical makeup of various stablecoin systems and their associated payment flows.
Part four introduces the concept of CBDC and outlines prospective use cases for CBDC.
Part five introduces general criterion for evaluating the efficacy of stablecoins and CBDC within the context of payments and settlements. The criterion used in this report are: financial integrity, financial stability, and monetary policy, all of which are the overarching public policy goals of monetary authorities.
Part five evaluates stablecoins against these public policy objectives.
Part six evaluates CBDC against these public policy objectives.
Part seven concludes this series by summarising key points and raising a number of important questions for end-users, private entities and governments, about the future of money.
Part 7 is to follow
UK – MONEY LAUNDERING: UNDERSTANDING RISKS AND TAKING ACTION FOR HIGH VALUE DEALERS
On 3 February, HMRC published updated guidance on recognising and reducing the risk of money laundering if you are a high value dealer.
SPAIN HAS EXTRADITED ALONSO ANCIRA, FORMER CHAIRMAN OF ALTOS HORNOS DE MEXICO (AHMSA) TO MEXICO
On 3 February, Borderland Beat reported that the former chairman of Altos Hornos de Mexico (AHMSA), the largest integrated steel plant in Mexico. Ancira faces corruption and money laundering charges after he was implicated in the fraudulent sale-purchase of Agros Nitrogenados, a plant fertilizer firm and subsidiary of AHMSA.
NEW YORK HEDGE FUND FOUNDER PLEADS GUILTY TO BANKRUPTCY FRAUD IN CONNECTION WITH NEIMAN MARCUS BANKRUPTCY
A news release from the US DoJ on 3 February advised that DANIEL KAMENSKY, the founder and manager of New York-based hedge fund Marble Ridge Capital, pled guilty to one count of bankruptcy fraud in connection with his scheme to pressure a rival bidder to abandon its higher bid for assets in connection with Neiman Marcus’s bankruptcy proceedings so that Marble Ridge could obtain those assets for a lower price.
US: CONTRACTOR WHO WAS AWARDED $34.5 MILLION IN GOVERNMENT MONEY AND PROVIDED ZERO MASKS PLEADS GUILTY TO FRAUD
On 3 February, pro Publica reported that authorities agreed to pay a first-time vendor in a desperate search for protective equipment. Now Robert Stewart admits he defrauded 3 federal agencies and lied about being in the Marine Corps. He was awarded more than $38 million in federal contracts to provide N95 masks has pleaded guilty to defrauding 3 different federal agencies as part of a scheme to profit from the COVID-19 pandemic.
GIBRALTAR LOOKS TO ENHANCE ITS REGULATIONS FOR DIGITAL ASSET EXCHANGES
On 31 January, Fintech Times reported that, at a time when digital assets have been criticised by financial authorities in the UK and Europe, Gibraltar is said to be outlining appropriate market standards for exchanges operating in the digital asset space. Gibraltar is said to be keen to raise its profile as a well-regulated commercial centre in the areas of financial services, digital technology innovation and online gaming. Its plans include updating its already regulated digital ledger technology (DLT) framework with the development of a ‘10th Core Principle’, specifically for digital asset exchanges.
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