Panama Covid-19 update – another 402 new cases reported today, with 11 fatalities. There have now been nearly 6,000 fatalities in a year (currently the figure stands at 5,934). there are currently 7,083 active cases, 117 in ICU, 703 in other wards and 233 in hotel rooms.
8 March 2021
AUSTRALIA: MILLIONS VANISH INTO CRYPTO WORLD IN HIGH-YIELD BOND SCAM
On 5 March, Australian Financial Review reported that sophisticated British criminals exploited vulnerabilities in Australia’s search engine and cryptocurrency infrastructure to dupe small investors, lured by the promise of high-yield funds seemingly badged by trusted brands. The complex scheme involved stolen identities and fraudulent prospectuses that claimed to represent high-yield investment funds.
AUSTRALIA COMPANY SETTLES CLAIMS OF ECUADOR BRIBERY SCANDAL QUAGMIRE
On 8 March, the Australian Financial Review reported that Cardno has settled a lawsuit against Ecuadorians who sold the Australian engineering company a business that was allegedly bribing top government officials. The acquired company, Caminosca, was secretly paying bribes to win big project contracts. First revealed in 2015, the matter went to arbitration, with Cardno looking to rescind the deal with the sellers, and court battles.
THIRD PERSON HAS PLEADED GUILTY TO FINANCIAL CRIMES AS PART OF THE PANAMA PAPERS INVESTIGATION
On 5 March, ICIJ reported the unexpected guilty plea by Joachim Alexander von der Goltz, revealed by a federal court order in the Southern District of New York. He is the son of Harald Joachim von der Goltz, the 83-year old former US resident who pleaded guilty to tax evasion and fraud in 2020 and sentenced to 4 years in prison. For 16 years, Joachim Alexander von der Goltz and others attempted to evade paying US taxes, according to prosecutors. Von der Goltz’s guilty plea is the third since US officials launched an investigation on the heels of the 2016 Panama Papers investigation.
COMPREHENSIVE GERMAN DUE DILIGENCE ACT ON THE HORIZON
On 17 February, an article from Linklaters says that the German government has reached an agreement on legislation that obliges German companies to carry out due diligence regarding human rights and environmental issues in supply chains globally. It says that the German Due Diligence Act may become one of the most significant human rights due diligence statutes that have thus far been passed by legislators worldwide. If these plans are – as envisaged – realised shortly, companies will find themselves exposed to broad obligations and new liability risks. The purpose of the Act and the new duty of care introduced by it is to protect human rights as expressed in the International Bill of Human Rights and the International Labour Organisation’s 8 core labour conventions. The content of the duty of care shall be closely aligned to the due diligence obligations as outlined in the UN Guiding Principles on business and human rights and the 2016 German National Action Plan. The Act is supposed to apply to companies, regardless of their legal form, that have their head office, principal place of business or registered office in Germany. The supply chain is understood to reach all the way from the raw material to the final product and to include services.
GERMAN EXPORT CONTROL CHECKLIST
On 3 March, Taylor Wessing published a brief (in German) on both internal controls and the managing of exports – including the need for an Internal Control programme, including US controls and changes affecting export controls caused by the UK Brexit.
CENTRAL BANK OF IRELAND – SUPERVISION AND ENFORCEMENT PRIORITIES 2021
On 2 March, Irish law firm A&L Goodbody published an article outlining the prospects for controls and, in the context of AML, says that in 2021 the Central Bank will continue risk-based and intelligence-led inspections adapted for the new working environment, across sectors and with a particular focus on Virtual Asset Service Providers (VASP) and firms performing activities listed under Schedule 2 of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010. It advises that MLRO should focus on keeping risk assessments under regular review to ensure they respond to evolving risks.
DOES AN EXPERT OWE A FIDUCIARY DUTY TO ITS CLIENT?
On 4 March, an article from RPC says that, for the first time, the Court of Appeal in England has considered the duties of an expert concurrently engaged on 2 potentially conflicting disputes. It says that the case provides an interesting review of the duties owed by expert witnesses to their clients and the Court, and highlights important considerations for those engaging expert witnesses and drafting engagement letters.
SFO SECURES ITS SECOND BRIBERY CONVICTION OF 2021 – ANOTHER UNAOIL CASE
On 2 March, an article from Dentons reported that, on 24 February, the SFO secured a fourth conviction related to the long-running Unaoil case. Paul Bond, a former executive at Single Buoy Moorings Inc, was found guilty of conspiracy to give corrupt payments. This is the SFO’s second bribery success of 2021.
ITALY: DRONE PARTS COMPANY RAIDED OVER IRAN EMBARGO BREACH
On 8 March, ANSA in Italy reported that a Hong-Kong-owned company making components for aircraft, helicopters and drones has been searched on suspicion of breaking an embargo in selling dual-use products to Iran. It is suspected of selling military drones to Iran, sources said.
BUSINESS INTERESTS OF MYANMAR’S ARMY ARE WHY IT IS LOATH TO ALLOW CIVILIAN CONTROL
On 7 March, the National Herald in India reported that, in Myanmar, the 2 big business conglomerates – namely – Myanmar Economic Corporation (MEC) and Myanmar Economic Holding Ltd (MEHL) – are military-owned. They in turn used the privatisation process to grab publicly-owned enterprises in the decades leading up to 2011’s political reforms. Military leaders and the associates of military leaders have also grabbed licences, land and economic concessions.
PENALTIES FOR SMUGGLING ILLEGAL WILDLIFE IN AUSTRALIA
On 6 March, an article from Criminal Defence Lawyers Australia says that the bodies which deal with wildlife smuggling cases in New Zealand regard them as very serious offending, particularly when detected in New Zealand, and in Australia, the trade is also tightly regulated. This is because the import and export of wildlife trade is not only illegal, but where animals are concerned, smuggling them is also considered an act of cruelty. In fact, many creatures do not survive the trip.
UPDATE ON THE CAYMAN ISLANDS AND THE FATF LIST OF JURISDICTIONS UNDER INCREASED MONITORING
On 5 March, a briefing from Walkers reported that, following the recent FATF Plenary, the Cayman Islands has been included on the FATF list of “jurisdictions under increased monitoring” pending completion of the final 3 actions of 63 actions to strengthen its AML/CFT/CFP measures that were prescribed in the Mutual Evaluation Report published by the Caribbean FATF in March 2019. The briefing says that the inclusion of the Cayman Islands on the Monitoring List has no direct consequences for investors or clients using Cayman Islands structures. It says that FATF has given the Cayman Islands an action plan, which is brief and to be completed over the next 15 months.
EU-US AGREE TO SUSPEND TARIFFS TO SETTLE AIRCRAFT SUBSIDIES DISPUTE
On 5 March, EurActiv reported that the EU and the US agreed to suspend the tariffs mutually imposed in the context of the Boeing-Airbus dispute, while both sides try to reach a compromise on the subsidies given to their aircraft manufacturers. It had already been announced that the UK and US had also reached such an agreement.
CUTE, BUT DEADLY: EU LAW ENFORCEMENT SEIZE OVER €16 MILLION WORTH OF FAKE TOYS
A news release from Europol on 8 March says that Police and customs authorities worldwide are warning the public to be vigilant with their gift-giving after they have seized over €16 million worth of fake toys during the recent festive period. It says that close to 5 million counterfeit toys have been confiscated, with over 4,700 inspections carried out across 24 countries between 19 October and 31 January in order to detect the illegal shipment and storage of counterfeit toys. So far, 11 fraudsters have been arrested, with investigations ongoing in a number of countries.
US: SWEDISH MAN INVOLVED IN DIGITAL CURRENCY FRAUD FACES 40 YEARS IN JAIL AFTER GUILTY PLEA
On 8 March, Coingeek reported that Roger Nils-Jones Karlsson is a Swedish man accused of defrauding over 3,500 investors through digital currencies and has pleaded guilty to charges of money laundering, wire fraud and securities fraud. Authorities said the man lured investors to invest, promising payments in gold. He is the founder of Eastern Metal Securities.
TAIWAN: PROSECUTORS QUESTION LITE-ON FOUNDER ON INSIDER TRADING ALLEGATIONS
On 8 March, Focus Taiwan reported that prosecutors have questioned Lite-On Technology Corporation (a semiconductor producer) founder Soong Kung-yuan and 7 other people as part of an insider trading investigation in connection to a merger deal Soong helped broker in 2019. Soong is the founder of Lite-On Technology but retired as the company’s chairman in July 2020.
US: TAX TIPS FROM COOPERATING WITNESS IN RECORD $2 BILLION BROCKMAN TAX EVASION CASE
On 8 March, an article in Forbes is concerned with Robert Smith, like Brockman a billionaire, the chief executive of Vista Equity Partners. Smith signed a non-prosecution agreement and is paying $139 million as part of his cooperation deal. The deal covers an array of alleged tax evasion spanning 15 years. It is said that Smith’s cooperating witness deal may be expensive, but the $139 million price tag and his cooperation mean no indictment or jail. The article reviews what has been learned from the agreement.
SEYCHELLES BILL FORESHADOWS FINES FOR TRUSTEES WHO FAIL TO DECLARE BUSINESS RELATIONSHIPS
On 8 March, STEP reported that the National Assembly has approved a new Bill imposing new disclosure and reporting obligations on trustees in the jurisdiction. The Bill is designed to address criticisms raised in a mutual evaluation report published by the FATF-style regional body, the Eastern and Southern Africa Anti-Money Laundering Group in 2018, in assessing the Seychelles’ AML regime against recommendations from FATF. However, enactment of the law came too late for the Seychelles to be removed from the EU’s Annex I list of so-called ‘non-cooperative’ jurisdictions for tax purposes last month.
US ADDS 14 COMPANIES TO ENTIRY LIST FOR EXPORT CONTROL RESTRICTIONS
On 8 March, Sandler Travis Rosenberg reported that the Bureau of Industry and Security has issued a final rule which added 14 new entities to its Entity List, which lists entities restricted from receiving US exports of goods controlled under the Export Administration Regulations. These include 10 entities in Russia, 3 in Germany, and o1ne in Switzerland.
BRITISH PORTS SAY THEY ARE NOT READY FOR BREXIT CUSTOMS CHECKS
On 7 March, the Observer reported that a string of British ports are urging the government to delay the next wave of Brexit red tape, saying that border checkposts will not be ready for the July deadline, while inland customs facilities being built are also behind schedule.
HONG KONG: CUSTOMS OFFICERS ARREST 22 AND SHUT DOWN 17 WEBPAGES IN FAKE DESIGNER GOODS OPERATION
On 8 March, the South China Morning Post reported that officials also seized HK$1.8 million in counterfeit products as they went after swindlers riding high on a wave of online shopping triggered by Covid-19. The fakes included leather handbags, sports shoes, apparel and accessories from well-known designer brands such as Chanel, Louis Vuitton and Hermes. 5 cases involved the sale of fake goods via live social media webcasts. Counterfeiters touted products bearing forged trademarks during live shows carried out late at night to avoid detection.
INTENTION FOR UK DATA PROTECTION LAWS TO PART COMPANY WITH THE EU GENERAL DATA PROTECTION REGULATION (GDPR)
On 8 March, an article in the Law Society Gazette said that the UK Culture Secretary has said he would use the appointment of a new Information Commissioner to focus not just on privacy but on the use of data for ‘economic and social goals’. While the UK has secured a draft ‘adequacy’ agreement with Brussels on data standards, it does not have to copy and paste the EU’s rulebook, he said.
2020: SANCTIONS YEAR IN REVIEW
On 8 March, Dentons published this Review dealing with global developments and policy updates from Canada, Europe, UK and US. It includes summaries of major regulatory developments and guidance and offers a recap and analysis of the year that was, as well as a look ahead to the year to come.
SWANSEA UNIVERSITY: ‘NO EVIDENT CRIMINALITY’ IN BRIBERY PROBE
On 5 March, the BBC reported that a 2-year investigation into allegations of bribery involving a Welsh university has found “no evidence of criminal offending”, police say. The investigation followed a complaint by Swansea University to the SFO.
MOROCCO SEIZES 7 TONNES OF CANNABIS RESIN
On 5 March, Morocco World News reported that information had revealed the involvement of sailors operating on an inshore fishing boat in an attempt to smuggle the drugs.
ILLEGALLY HARVESTED TIMBER SOLD ‘UNDER COVER’ IN ATTAPEU PROVINCE IN LAOS
On 4 March, Radio Free Asia reported that businessmen in the province are selling timber hidden for years in the forest after being harvested illegally, mixing it with other timber allowed by provincial authorities to be sold by local villagers. Mills in the province are not granted licences themselves for logging, “but provincial officials are letting private businessmen buy old wood from the villagers so they can bring out the timber that was hidden”. The article says that Laos has a history of widespread government corruption, with the Government Inspection Authority (GIA) reporting in early 2020 that the government lost up to $120 million in 2019 to corruption, disciplined 700 state employees, and fired 400 of them. In the previous year, the GIA found 970 were involved in corruption amounting to $107 million.
SMUGGLED FOR ITS SONG – THE TRADE IN MALAYSIA’S ORIENTAL MAGPIE-ROBINS
On 5 March, TRAFFIC, the wildlife trade NGO, has published this report saying that this popular songbird is headed for trouble if it is not protected from rampant trapping in Malaysia and smuggling to feed international demand. The Oriental Magpie-robin is common in the wild in Malaysia and other range states. Yet large numbers are being intercepted in seizures with at least 26,950 of the birds confiscated in just 44 incidents that implicated Malaysia from January 2015 to December 2020. The research shows that 66% of these birds were smuggled in 2020 alone.
JOHN DAVID MCAFEE AND EXECUTIVE ADVISER OF HIS CRYPTOCURRENCY TEAM INDICTED FOR FRAUD AND MONEY LAUNDERING CONSPIRACY CRIMES
On 5 March, a news release from the US DoJ advised that JOHN DAVID MCAFEE, the founder of the McAfee antivirus software company, and JIMMY GALE WATSON JR, who served as an executive adviser of MCAFEE’s so-called cryptocurrency team, had been charged with conspiracy to commit commodities and securities fraud, conspiracy to commit securities and touting fraud, wire fraud conspiracy and substantive wire fraud, and money laundering conspiracy offences. It is alleged that they and other members of the McAfee Team, perpetrated two fraudulent schemes relating to the promotion to investors of cryptocurrencies qualifying under federal law as commodities or securities. The alleged activities involved, firstly, a fraudulent practice called “scalping” (which is sometimes referred to as a “pump and dump” scheme). Secondly, it is claimed that they also used MCAFEE’s Official McAfee Twitter Account to publicly tout fundraising events called “initial coin offerings” (ICO) in which start-up businesses issued and sold digital tokens qualifying as securities to the investing public, without disclosing and, in fact, concealing that the ICO issuers were compensating MCAFEE and his team for his promotional tweets with a substantial portion of the funds raised from ICO investors.
INDIA: 2 HELD IN TRADE-BASED MONEY LAUNDERING CASE
On 8 March, The Hindu reported that the Enforcement Directorate has arrested 2 persons for their alleged involvement in a trade-based money-laundering scam, in which funds were sent overseas in the guise of import of a fake ‘customised’ software, with the funds remitted to various companies in Singapore, Hong Kong and China in the guise of payments for the import of the ‘customised’ software. Chartered accountants certified that the software was downloaded in their presence and the certificates were submitted to the banks as proof of import.
DEA NATIONAL DRUG THREAT ASSESSMENT: METH DEATHS RISE AS MEXICAN CARTELS EXPAND MARKET
On 2 March, Homeland Security Today reported on the publication of the 2020 National Drug Threat Assessment, DEA’s annual publication outlining the threats posed to the US by domestic and international drug trafficking and the abuse of illicit drugs. It says that drugs trends in the US continue to evolve. While fentanyl and fentanyl analogues from China have decreased substantially following the DEA’s 2018 emergency scheduling action of fentanyl-related substances and China’s enactment of fentanyl-class controls in May 2019, the opioid threat remains at epidemic levels, affecting large portions of the country. Meanwhile, the stimulant threat, including methamphetamine and cocaine, is worsening both in volume and reach, with traffickers selling increasing amounts outside of traditional markets. The article lists highlights from the report, noting that new to this year’s report is the effect of COVID-19 during the first part of 2020.
The report is at –
CORRUPTION AND LACK OF SERIOUS REFORMS WILL KEEP BULGARIA OUTSIDE THE EURO AREA AT LEAST UNTIL 2026
On 8 March, Novinite reported that several weeks before the parliamentary elections, leading institutes and international organizations presented their forecasts for Bulgaria in 2021 and the next few years, containing – at best – very low expectations for any serious reforms and the fight against corruption.
JAMAICA: FORMER PETROJAM CHAIRMAN CHARGED ON FRAUD ALLEGATIONS
On 8 March, The Gleaner reported that detectives from the Major Organised Crime & Anti-Corruption Agency (MOCA) have arrested and charged former Petrojam chairman, Dr Perceval Bahado-Singh, with 12 counts of obtaining money by means of false pretence dating from 2016-18. Petrojam is Jamaica’s only petroleum refinery.
BRAZIL: JUDGE ANNULS CONVICTIONS AGAINST LULA DA SILVA
On 8 March, Deutsche Welle reported that a court has cleared criminal convictions against ex-President Luiz Inacio Lula da Silva, allowing the leftist leader to run in next year’s presidential election – but the prosecutor general’s office is set to appeal the annulment. He was convicted in 2017 with bribery for accepting a seaside apartment from a construction company in exchange for lucrative government contracts. A year later, another court found him guilty of corruption. These cases arose from Operation Car Wash.
IRAN SLIPS RECORD VOLUME OF OIL INTO CHINA, REACHES OUT TO ASIAN CLIENTS FOR TRADE RESUMPTION
On 8 March, Hellenic Shipping News reported that Iran has quietly moved record amounts of crude oil to top client China in recent months, while India’s state refiners have added Iranian oil to their annual import plans on the assumption that US sanctions will soon ease, according to industry sources and Refinitiv data.
IS A LAX VIRTUAL CURRENCY COMPLIANCE PROGRAM PUTTING YOUR BUSINESS AT RISK?
An article from Forbes on 8 March posed this question and says that 3 recent enforcement actions highlight the US Government’s increased interest in pursuing virtual currency businesses that violate money laundering and terrorism criminal laws, as well as applicable AML and sanctions regulations. It says that law enforcement and regulatory agencies are likely to only increase their focus around virtual currencies in the coming months and years. At least with respect to pursuing enforcement actions and criminal prosecutions, there is a concerted investment in and reliance on technology used to analyse the blockchain. It advises that, to avoid being targeted as part of the increased enforcement, it is important to devote a critical eye to the review of compliance policies, the manner in which a risk assessment is conducted, and the steps taken to mitigate identified risks. Testing the implementation of AML and sanctions controls may save your business from serious monetary and reputational harm.
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