Panama Covid-19 update – the Rt rate has crept up nationally to 0.99 (though here in the city it has fallen to 0.8). As Phase 2 of the vaccination programme begins on Thursday. there are 599 new cases today and 12 new fatalities. There are 8,048 active cases, with 170 in ICU and 1,026 in other wards.
2 MARCH 2021
COMMERCIALISING CANNABIS AND PATENT LITIGATION
On 1 March, Field Fisher released an Insight saying that there has been a significant growth in patenting in and around cannabis, for example in methods and apparatus to extract particular desired ingredients from the cannabis plant, or in relation to the use of cannabis or derivative products for the treatment of particular conditions. The article says that so far, however, there has been very little cannabis-related patent litigation – that may be changing.
REPORT: BLOCKCHAIN, BITCOIN AND DIGITAL FINANCE 2021
On 18 February, JP Morgan released an 86-page report on the state of digital finance and fintech for 2021 summarising the overall growth of digital financial services such as cryptocurrency, the impact of corporate interest, and CBDC implementation. Among other things it notes the rising global interest in CBDC testing and implementation spearheaded by China and other countries throughout Asia.
https://www.tbstat.com/wp/uploads/2021/02/JPM_Bitcoin_Report.pdf
FORMER IMF CHIEF RATO TO STAND TRIAL IN SPAIN ON CORRUPTION CHARGES
On 1 March, Reuters reported that former IMF chief Rodrigo Rato, found guilty of embezzlement in 2018, is close to standing trial again in Spain after a court charged him with corruption, money laundering and tax dodging.
https://www.reuters.com/article/idUSKCN2AT2SQ
CANADIAN AML REGIME AMENDMENTS AFFECT SOME VIDEO GAME AND SOCIAL MEDIA VIRTUAL CURRENCIES
On 25 February, DLA Piper published an article saying that new amendments will come into force on 1 June. The purpose is to close loopholes found in the existing regime and to adapt to commercial realities in an era of e-commerce, FinTech, and digital technology. In order to understand whether a particular provider of an interactive entertainment service or platform is operating a “money service business” it is critical to understand what types of virtual currencies will subject a provider to the changed regulations.
INDIA: OFFICIALS AND POLITICAL LEADERS ALLEGEDLY RECEIVED HUGE KICKBACKS EVEN AS THEY HELPED AN ILLEGAL COAL BUSINESS
On 2 March, The Statesman carried an article about an ongoing investigation by the CBI into a case involving illegal mining and the transport of illegal coal, and the associated kickbacks said to be involved.
https://www.thestatesman.com/india/cbi-nabs-handler-coal-smuggling-racket-kingpin-1502955006.html
MYANMAR USING ISRAELI-MADE TECHNOLOGY AND VEHICLES IN CRACKDOWN
On 1 March, i24 News reported a New York Times story that Israeli-built vehicles, US software and European hardware are enabling Myanmar to crackdown on protesters. It is said that Israel banned military sales to Myanmar in 2018, but soldiers deployed on the day of the coup appeared to be trucks produced by Israel’s Gaia Automotive Industries produced after the ban. Weapons manufacturer Elbit Systems and digital forensics company Cellebrite are also named as providing services to the Myanmar government.
PRINCETON UNIVERSITY HAS AGREED TO PAY A FINE FOR 37 EXPORT VIOLATIONS RELATED TO CONTROLLED STRAINS AND RECOMBINANT ANIMAL PATHOGENS SENT TO FOREIGN RESEARCH FACILITIES
On 1 March, Chemistry World reported that 15 countries, including China and the UK, were involved, and that the university has settled with the US Commerce Department for $54,000 and it has also agreed to conduct external and internal audits of its compliance with regulations.
HONG KONG REGULATORY ENFORCEMENT TRENDS – ANNUAL REVIEW AND LOOK AHEAD
On 2 March, Freshfields Bruckhaus Deringer reported on the work of the Securities and Futures Commission and Hong Kong Monetary Authority in 2020. It also predicts some trends for the future.
UK GOVERNMENT ‘EXPECTS’ GREATER TRANSPARENCY FROM ISLE OF MAN AND CHANNEL ISLANDS BY END OF 2023
On 2 March, the Jersey Evening Post reported that, in a letter to a Parliamentary Select Committee in the UK, the Financial Secretary to the Treasury, said that Westminster would respect the ‘constitutional boundaries’ of the 3 islands, , and work with them as part of a global drive towards greater company-ownership transparency. Jersey, Guernsey and the Isle of Man are expected to have appropriate legislation ready within 2 years.
WHEN WILL HONG KONG DATA PROTECTION LAW BE UPDATED?
On 2 March, an article from Bird & Bird published article saying that a little over a year since the publication of a review paper, the proposed amendments have yet to be implemented as law. The article takes a look at the current status of the proposed amendments and what businesses should expect. It briefly lists the proposed amendments.
GANG SMUGGLING INDIAN NATIONALS BUSTED IN ROMANIA
On 2 March, a news release from Europol announced that it had supported the Romanian Police to dismantle an organised crime group involved in migrant smuggling. The migrants were paying between €5 000 and €6 000 per person to be smuggled in lorries and vans from Romania to Germany, Italy and Portugal. A number of Indian citizens, some of them residing legally in Romania, were coordinating the criminal activities.
https://www.europol.europa.eu/newsroom/news/gang-smuggling-indian-nationals-busted-in-romania
EU COURT: ACCESS TO TRAFFIC OR LOCATION DATA IN RESPECT OF ELECTRONIC COMMUNICATIONS, ALLOWING PRECISE CONCLUSIONS TO BE DRAWN CONCERNING A PERSON’S PRIVATE LIFE, IS PERMITTED ONLY IN ORDER TO COMBAT SERIOUS CRIME OR PREVENT SERIOUS THREATS TO PUBLIC SECURITY
A news release from the Court of Justice of the EU on 2 March was concerned with a case from Estonia ruled that access in criminal cases to a set of traffic or location data allowing precise conclusions to be drawn concerning a person’s private life, is permitted only in order to combat serious crime or prevent serious threats to public security. In addition, it was held, EU law precludes national legislation that confers upon the public prosecutor’s office the power to authorise access of a public authority to such data for the purpose of conducting a criminal investigation.
https://curia.europa.eu/jcms/upload/docs/application/pdf/2021-03/cp210029en.pdf
EU COUNCIL APPROVES PROPOSAL TO STRENGTHEN THE COOPERATION OF THE EU AGENCY FOR CRIMINAL JUSTICE COOPERATION (EUROJUST) WITH NON-EU COUNTRIES
On 2 March, it was announced that the EU the Commission is to start negotiations on the exchange of information with 13 countries: Algeria, Argentina, Armenia, Bosnia and Herzegovina, Brazil, Colombia, Egypt, Israel, Jordan, Lebanon, Morocco, Tunisia and Turkey.
https://ec.europa.eu/commission/presscorner/detail/en/MEX_21_982
UK POST-BREXIT: PASSENGER PURCHASES OF ALCOHOL AND TOBACCO
On 2 March, the House of Commons Library produced an updated briefing paper on duty-free sales to passengers on international journeys.
https://commonslibrary.parliament.uk/research-briefings/sn01223/
UN: LIBYA INTERIM PM ELECTED THROUGH BRIBERY
On 2 March, the Middle East Monitor reported that Libya’s interim prime minister was elected after bribing participants to vote in his favour, according to a UN inquiry. He reportedly offered sums between $150,000 and $200,000 in order to attract the votes of at least 3 attendees.
https://www.middleeastmonitor.com/20210302-libya-interim-pm-elected-through-bribery-un-inquiry-says
KYRGYZSTAN: HEAD OF FINANCIAL POLICE DEPARTMENT DETAINED FOR ILLEGAL MONEY TRANSFER
On 2 March, 24KG reported that the State Committee for National Security of Kyrgyzstan (SCNS) has detained the head of the Department of the State Service for Combatting Economic Crimes (Financial Police) for Bishkek city.
UK GOVERNMENT NARROWS DEFINITIONS OF SECTORS IN SCOPE OF NEW NATIONAL SECURITY REGIME
On 2 March, the Department for Business, Energy and Industrial Strategy reported that the Government has published further details about the sectors within scope of the mandatory notification regime under the National Security and Investment Bill. This follows a consultation to gather views on how the definitions of the 17 sectors in scope of mandatory notification could be refined and narrowed to ensure they are as targeted and proportionate as possible. Many of these sectors are emerging, such as quantum technologies and synthetic biology, and are being defined for the very first time in law. The list may be further refined following continued engagement with stakeholders in the relevant sectors as the Bill continues its passage.
UK: PAYMENT SYSTEMS REGULATOR CALLS FOR VIEWS ON APP SCAMS AND CONSUMER PROTECTION IN INTERBANK PAYMENT
On 1 March, Hogan Lovells reported that the PSR seeking views on potentially far-ranging measures which aim to reduce authorised push payment (APP) fraud and improve protection for victims. Alongside this it is looking at increasing consumer protection in interbank payments (i.e. those payments consumers make from their bank account directly to another bank account using e.g. Faster Payments). These protections could include an industry wide reimbursement model similar to that offered to consumers under the credit regime.
https://www.psr.org.uk/media/5yvpidyc/psr_cp21-3_app_scams_call_for_views_feb-2021.pdf
ROMANIAN-OWNED COMPANY EXPLOITING MOLDOVANS IN FRANCE
On 1 March, OCCRP reported that a Romanian-owned string of French construction companies was suspected of employing 100-500 illegal Moldovan workers. The criminal organization allegedly took its victims’ original identification documents and replaced them with fake Romanian IDs. This news followed arrests made in France, coordinated by Eurojust and it is said that workers were reported to have made the French minimum wage, but authorities said they worked well beyond the maximum 35 hours per week.
https://www.occrp.org/en/daily/13959-romanian-owned-company-exploiting-moldovans-in-france
10 KEY ISSUES TO WATCH IN AFRICA IN 2021
On 1 March, Control Risks published an article saying that it had identified 10 key issues to watch in Africa in the year ahead, including elections in Ethiopia, Benin, Zambia and Gambia, and “preparations for high-profile leadership successions” in Kenya and Nigeria. It highlights Covid-19 and vaccination, digital acceleration and threats. It also refers to theAfrican Continental Free Trade Area (AfCFTA), which came into force on 1 January, bringing together 1.3 billion people in a $3.4 trillion economic bloc – set to become the world’s largest free trade area since the establishment of the WTO in 1995.
https://www.controlrisks.com/our-thinking/insights/ten-key-issues-to-watch-in-africa-in-2021
FRENCH GUIANA’S UNPATROLLED WATERS LURE ILLEGAL FISHING CREWS
On 1 March, Insight Crime reported that illegal fishing off the coast of French Guiana surged amid the COVID-19 pandemic, as French maritime patrols struggled to mobilise resources, luring illegal fishing crews to the country’s pristine waters. Nearly 20 tons of fish have been seized from illegal fishing vessels since the start of the year. The combination of scheduled repairs and the COVID-19 pandemic allowed fishermen to target the relatively pristine waters of French Guiana.
https://insightcrime.org/news/french-guiana-waters-lure-illegal-fishing-crews/
4 KEY TAKEAWAYS FROM THE “ROMANIAN MAFIA” IN MEXICO
On 1 March, an article in Insight Crime examined a criminal group, led by Romanians based in Mexico and which specialised in ATM skimming and credit card fraud Inquiries have continued to uncover fascinating details about how the group operated, including a network of political alliances. It is said that federal authorities have announced suspected links between Florian Tudor, alias “El Tiburón” (The Shark), the gang’s Romanian leader, and a broad protection ring of Mexican politicians, including former governors of the Mexican state of Quintana Roo, national lawmakers and local mayors of towns near Cancún.
https://insightcrime.org/news/romanian-mafia-atm-skimming-mexico/
BELIZE OFFICIALS AND POLICE HELP HIDE DRUG PLANES
On 1 March, Insight Crime reported that Belize is grappling with reports that corrupt officials have been facilitating the nation’s use as a transit point for cocaine. Already this year, the driver of the commander of Belize’s defence force, was arrested along with 2 police officers after trying to flee the site where a plane carrying cocaine had landed – said to be among 9 suspects arrested while attempting to flee the illicit landing site in a boat. Authorities in Belize have been making frequent attempts to intercept such aircraft, and the US classes Belize as a “major transit country for drugs coming from South America”, recognising the nation as vulnerable to exploitation by traffickers due to its central location, porous borders and sparsely populated landscape.
https://insightcrime.org/news/drug-planes-descend-belize-police-military-officials-arrested/
FUTURE UK FINTECH STRATEGY PUBLISHED IN KALIFA REVIEW
On 2 March, CMS law reported that, following the 2020 Budget, the Chancellor asked Ron Kalifa OBE to carry out an independent review of the UK’s fintech sector to establish priority areas for industry, policy makers, and regulators. This has now been published. It sets out the key threats and opportunities and proposes the creation of a Centre for Finance, Innovation, and Technology (CFIT).
https://www.cms-lawnow.com/ealerts/2021/03/future-uk-fintech-strategy-published-in-kalifa-review
PURPORTED UZBEK CRIME BOSS TAKES FAMILY FEUD TO SOCIAL MEDIA
On 1 March, Rferl reported that a reputed crime boss from Uzbekistan has spoken out on social media about a violent family feud that involves the former head of international amateur boxing who is reputed to be one of the world’s leading drug kingpins. Ravshan “Zolotoi” (Golden) Muhiddinov posted a 12-minute video on Instagram. The dispute is with his uncle, Gafur Rakhimov, who headed the International Amateur Boxing Association (AIBA) and has been named by the US as a leading international heroin trafficker.
https://www.rferl.org/a/uzbek-crime-boss-family-feud-social-media-rakhimov-muhiddinov/31128184.html
SWITZERLAND – INADEQUATE TRANSPARENCY, ENFORCEMENT AND LEGISLATION
Transparency International in Switzerland has published a 57-page report which sets out to provide a detailed analysis of the current legislation and practice in the field of corporate criminal law, including the applicable criminal proceedings. In addition, it examines the respective corporate criminal law of the neighbouring countries, the UK and the OECD, as well as experiences from antitrust law, which provides mechanisms that are also relevant in the field of corporate criminal law. The report shows that there is a need for improvement in all areas and Transparency Switzerland presents 10 requirements, along with specific suggestions.
https://transparency.ch/wp-content/uploads/2021/02/Corporate_Criminal_Liability_Report.pdf
OFFSHORE JURISDICTIONS WITH AIRCRAFT AND SHIPPING DATA
On 1 March, Sayari provided a list, with links of offshore jurisdictions which provide readily searchable aircraft registries – the article pointing out that use and ownership of aircraft is often linked to shell companies and assets owned and used by those evading taxes and scrutiny.
ICELANDIC CRIMINAL GROUPS ACTIVE ABROAD
On 1 March, the Iceland Monitor reported that the activities of Icelandic criminal groups abroad are much more extensive than you might conclude, and they known to be active in Spain, the Netherlands, Germany, Italy, Denmark and South America. Their main activity centres around illegal drugs, but they are involved, too, in fraudulent activity, such as money laundering.
https://icelandmonitor.mbl.is/news/news/2021/03/01/icelandic_criminal_groups_active_abroad/
ROMANIAN POLITICIAN AND EX-PRESIDENT’S DAUGHTER GET JAIL TERMS FOR CORRUPTION
On 2 March, Reuters reported that a Romanian court has sentenced a former government minister as well as the daughter of former president Traian Basescu to jail for money laundering and instigating others to take bribes in a 2009 presidential campaign financing case. Ioana Basescu, a public notary, received a 5-year prison sentence; and Elena Udrea, a former centre-right minister, lawmaker and close political ally of former president Basescu was handed an 8-year prison term. The verdicts are not final and are subject to appeal.
JERSEY: CHANGES TO AML/CFT HANDBOOK ON CDD LEGAL PERSONS AND ARRANGEMENTS
On 2 March, Comsure Compliance in Jersey reported that the Jersey FSC is making changes to the AML/CFT Handbooks to comply with FATF Recommendations and following industry feedback to a consultation. These changes will come into effect on 31 May. Involving CDD and certain legal persons and arrangements, the changes are intended to demonstrate full implementation with FATF standards. The article details where the changes are being made.
US POSTAL SERVICE (USPS) IS LOOKING TO BROADEN ITS OPTIONS OF SHIPPING PARCELS TO INTERNATIONAL DESTINATIONS WITH PRIVATE PROVIDERS
On 2 March, Loadstar reported that USPS has invited public comment on a preliminary proposal to partner with private commercial services for final-mile delivery of its outbound parcel shipments; but is also reportedly planning to scale back its first-class mail service. A plan allegedly calls for an end of shipping first-class mail by airfreight. Instead, it will move on trucks, often involving a relay of distribution depots, and this would hit FedEx, which has held the USPS ‘Air Cargo Network’ contract since 2013, and it was extended last year to September 2024.
THE US ENTITY LIST: LIMITS ON AMERICAN EXPORTS
In February, a Paper from the Belfer Center says that the US Government is increasingly relying on export controls to restrict foreign companies from accessing critical made-in-America components. Within the Commerce Department, the Bureau of Industry Security (BIS) maintains the “Entity List” of blacklisted firms under export control restrictions. In the last 10 years the Entity List has increased 9-fold to nearly 1,200 entities, as hundreds of companies from China’s Huawei to Russia’s Gazprom join the ranks of foreign firms prohibited from receiving US exports. The Paper reports on a first-of-its-kind analysis of the makeup of the Commerce Department’s Entity List, by country, by sector, and by year of addition
https://www.belfercenter.org/publication/united-states-entity-list-limits-american-exports
US FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL UPDATES BANK SECRECY ACT / AML EXAMINATION MANUAL
On 1 March, an article from Cadwalader Cabinet reported that the FFIEC had updated its BSA/AML Examination Manual which provides guidance to examiners for evaluating an institution’s BSA/AML compliance program and compliance with related regulatory requirements. The updates are said to bolster its risk-focused approach toward BSA/AML examinations and provide examiners with updated information concerning transaction testing.
https://www.findknowdo.com/news/03/01/2021/ffiec-updates-bank-secrecy-act/aml-examination-manual
THE EVOLUTION OF THE BOOGALOO MOVEMENT
On 26 February, Homeland Security Today reported that January 2021 marked 1 year of overt, offline Boogaloo movement activity in the US by the movement’s members, often referred to as the “Boogaloo Bois”. Derived from an article in the CTC Sentinel, it says that the rapid evolution of the Boogaloo from niche internet forum meme to mainstream mobilisation narrative in hardened violent extremist milieus suggests it presents a unique security challenge for both social media companies and US law enforcement agencies going forward.
https://www.hstoday.us/subject-matter-areas/counterterrorism/the-evolution-of-the-boogaloo-movement/
https://ctc.usma.edu/the-evolution-of-the-boogaloo-movement/
US NATIONAL SECURITY COMMISSION ON ARTIFICIAL INTELLIGENCE (NSCAI) RECOMMENDATIONS ON US CONTROLS ON EXPORTS OF SEMICONDUCTOR TECHNOLOGY TO CHINA
A final report to the US Congress from the NSCAI calls for coordinated export controls on advanced semiconductor manufacturing equipment with other states; a policy of presumptive denial of licences for exports of such equipment to China; and targeted end-use export controls and reporting requirements to prevent the use of AI chips and equipment that enable human rights violations.
https://www.nscai.gov/wp-content/uploads/2021/03/Full-Report-Digital-1.pdf
NEARLY 100 ON TRIAL IN SICILY FOR SUSPECTED MAFIA EU FRAUD
On 2 March, the Daily Mail reported that a trial has begun in Sicily for 97 suspected Mafia members and white-collar professionals allegedly in cahoots with mobsters in what prosecutors contend was a scheme that fraudulently garnered millions of euros in EU agriculture funds. Prosecutors alleged that local Cosa Nostra clans, with the aid of complicit notaries and bureaucrats handling the paperwork, managed to gain €10 million in EU aid starting in 2013 for a sprawling area of grazing land in a park in eastern Sicily.
SEC CLAIMS $45 “PUMP & DUMP” MILLION FRAUD TIED TO AIRBORNE WIRELESS STOCK
On 2 March, Bloomberg reported that the SEC is suing the company and the California man it claims secretly controlled the company – Kalistratos “Kelly” Kabilafkas, 45 – in a $45 million pump-and-dump scheme.
UKRAINE: MINISTRY OF INTERNAL AFFAIRS, WITHOUT WARNING OR ANNOUNCEMENTS, HAS DISBANDED THE ENTIRE ARMS CONTROL SERVICE THAT ISSUED DOCUMENTS FOR WEAPONS IN UKRAINE
On 2 March, 112 UA reported that the Head of the National Police has said that reports of corruption schemes began to come from the regions during an inspection by the Department of Internal Security. Inspection of the work of arms control units lasted 6 months.
NIGERIA: DUTCH COUPLE, COMPANY ARRAIGNED FOR $330,000 OIL VESSEL FRAUD
On 2 March, PM News Nigeria reported that a Dutch couple, Peiter Borremans and Nkechi Borremans alongside Lagon Trade Limited have been arraigned before the Federal High Court, sitting in Port Harcourt, for suspected fraudulent dealings involving a marine tanker vessel.
https://www.pmnewsnigeria.com/2021/03/02/dutch-couple-company-arraigned-for-330000-oil-vessel-fraud
2 MEN CHARGED IN MIAMI IN ECUADORIAN BRIBERY AND MONEY LAUNDERING SCHEME INVOLVING POLICE PENSION FUND
A US DoJ news release on 2 March announced that 2 Ecuadorian citizens have been indicted for their alleged roles in a bribery and money laundering scheme involving Ecuador’s public police pension fund (ISSPOL). John Luzuriaga Aguinaga, 52, and Jorge Cherrez Miño, 46, were each charged with one count of conspiracy to commit money laundering. It is alleged that between approximately 2014 and 2020, Cherrez, an investment advisor, paid more than $2.6 million in bribes to ISSPOL officials, including at least approximately $1,397,066 to Luzuriaga, ISSPOL’s Risk Director and a member of ISSPOL’s Investment Committee, in order to obtain and retain investment business from ISSPOL.
https://www.justice.gov/opa/pr/two-men-charged-ecuadorian-bribery-and-money-laundering-scheme
MEXICAN JUDGE ORDERS ARREST OF FORMER GOVERNOR AND HIS DAUGHTER ‘WITH LINKS TO DRUG CARTEL’ OVER MONEY LAUNDERING CHARGES
On 2 March, the Daily Mail reported an arrest warrant for Roberto Sandoval, the former governor of the state of Nayarit, and another for his daughter, Lidy Sandoval. He reportedly had links to the JNGC cartel and purchased real estate with illicit money and then placed the properties under the name of his family, including his daughter. He and his family were sanctioned by OFAC in May 2019.
AN AFGHAN PARLIAMENTARIAN AND THE MYSTERIOUS STASH OF CASH, GOLD BARS SEIZED AT THE DUSHANBE AIRPORT
On 2 March, Rferl carried an article about $15 million in cash and some 90 kg of gold bars seized from smugglers at the Dushanbe airport, Tajikistan in November. Mohammad Mirza Katawazai, the deputy chairman of the Afghan parliament, angrily rejects the claim by Afghan media that he is linked to the cash and gold.
https://www.rferl.org/a/katawazai-afghanistan-tajikistan-smuggling-cash-gold/31130013.html
LACK OF INTERNATIONAL ACTION LET PIRACY “BREED” IN GULF OF GUINEA
On 1 March, Insurance Marine News carried an article saying that shipping security business Dryad Global has claimed that the international community has acted too slowly in its response to the rapid increase in the level of piracy in the Gulf of Guinea, based around kidnapping of crew.
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