Panama Covid-19 update – another 542 new cases reported today, and 11 new fatalities – giving us now 6,669 active cases – 107 in ICU and 740 in other wards.
10 MARCH 2021
UK INVESTMENT SCREENING – WHAT SHOULD BUSINESSES BE DOING?
On 8 March, an Alert from Gowling WLG published an article saying that the UK Government has published its response to the consultation on the sectors that will be subject to a mandatory notification regime under the National Security and Investment Bill. This Alert sets out an important reminder of what businesses need to be considering now in the context of this new screening regime; particularly in light of its retrospective nature.
UK MONETARY PENALTIES FOR BREACHES OF FINANCIAL SANCTIONS
On 10 March, OFSI issued updated guidance, applicable from 1 April, which describes OFSI’s processes and considerations in relation to the issue of monetary penalties for breaches of financial sanctions.
UK: MONEY MULE RECRUITERS USE FAKE ONLINE JOB ADVERTS TO TARGET ‘GENERATION COVID’
UK Finance has published a news release saying that recruiters are targeting those looking for work or to earn easy money during the pandemic, by posting fake adverts on jobs websites and social media. There were over 17,000 suspected money mule cases involving 21-30 year olds in 2020, up 5% on the previous year.
TUNISIA: FORMER PRESIDENT’S BROTHER-IN-LAW CHARGED WITH CORRUPTION
On 9 March, OCCRP reported that a Tunisian court sentenced the brother-in-law of ousted President Zine El Abidine Ben Ali to 10 years in prison for corruption, but he is unlikely to serve his sentence back home as France is refusing to extradite him, citing the potential of ill-treatment in Tunisian jails. Belhassen Trabelsi fled the country in January 2011 when anti-corruption protests triggered the Arab Spring. He was denied asylum in Canada and was arrested in France in 2019 after Tunisia accused him of fraud, embezzlement and laundering criminal gains.
US STATE DATA PRIVACY LAWS POSE COMPLIANCE HEADACHES FOR BANKS
On 8 March, American Banker reported that US states are stepping up their efforts to protect the privacy of consumer data, and the trend is adding to banks’ compliance challenges as stewards of vast amounts of personal information. These state actions are part of a broader trend of increasing consumer awareness of data privacy. The article provides answers to key questions surrounding the new Virginia law and updated California law.
ALBANIA FIGHTS LOSING BATTLE AGAINST MONEY LAUNDERING
On 10 March, Balkan Insight published an article about Jetmir Kastrati, who was arrested in Denmark, where he goes by the name Sokol Krasniqi, in June 2019 during an operation involving some 30 people accused of trafficking at least 1.65 tonnes of cocaine from the Netherlands to Denmark and Sweden. According to court papers, Kastrati smuggled at least €4 million in cash into Albania between 2013 and 2019. It says that Kastrati’s escapades are not unique and Albania is considered particularly vulnerable to money laundering, with drug trafficking the chief of source of “dirty money” penetrating the country’s meagre economy. According to the US State Department, Albania made “no significant progress” in 2020 toward thwarting money laundering and financial crime.
INTERNATIONAL GANG REPORTEDLY ROBBED 2 CZECH BANKS AND AN INSURANCE COMPANY OF $63 MILLION, USING FICTITIOUS STEEL TRADES
On 8 March, Radio Prague reported that Czech police have been investigating the case in cooperation with their colleagues from the UK, where the main perpetrators who controlled the gang are being prosecuted. 3 Czech citizens and a foreign national have been charged in connection with the case.
FRENCH DRAFT LAW IS A WARNING TO CORRUPT LEADERS
On 8 March, VoA reported that France may soon join just a handful of countries with far-reaching legislation aimed to repatriate confiscated stolen assets to their countries of origin. The legislation has passed in France’s National Assembly, but still faces a Senate vote.
US IMPOSES SANCTIONS & EXPORT CONTROLS ON MYANMAR IN RESPONSE TO MILITARY COUP
On 9 March, a post from Crowell Moring provided details of the sanctions measures imposed by the Biden Administration on 4 March.
NORWAY HAS SUSPENDED THE SALE OF A NORWEGIAN ENGINE MAKER OWNED BY ROLLS-ROYCE HOLDINGS TO A RUSSIAN-CONTROLLED COMPANY WHILE IT ASSESSES THE SECURITY IMPLICATIONS
On 10 March, Business World reported that Norway’s NSM security agency is assessing the €150 million sale of Bergen Engines to a company controlled by Russia’s TMH Group, NSM and the justice ministry said.
KENYA HAS BEEN RANKED AMONG THE COUNTRIES WHERE MONEY LAUNDERING, TERROR FINANCING AND FINANCE FRAUD ARE RIFE
On 10 March, Citizen Digital and others reported that the March 2021 International Narcotics Control Strategy Report from the US State Department has noted that Kenya – the financial hub of East Africa – remains vulnerable with money laundering in formal and informal sectors. According to the report, criminals were using the unregulated networks of hawaladars and other unlicensed remittance systems to facilitate cash-based, unreported money transfers.
US: NEW LAW EXPANDS DoJ GRAND JURY SUBPOENA POWER OVER CORRESPONDENT BANK ACCOUNTS AND FOREIGN BANKS
On 9 March, an article from Ballard Spahr LLP was another concerned with changes being made by the Anti-Money Laundering Act of 2020, passed by the US Congress late last year. It explores the Act’s significant expansion of the US Government’s authority to subpoena information from foreign financial institutions that maintain correspondent banking relationships with US banks. The Patriot Act of 2001 allowed a limited power for the DoJ and the US Treasury to issue subpoenas to non-US banks with correspondent accounts in the US. The new Act AMLA now allows the the agencies to subpoena records of “any account at the foreign bank” with only very limited restrictions.
EUROPEAN BANKING AUTHORITY: CROWDFUNDING – MONEY LAUNDERING AND TERRORIST FINANCING RISK
On 9 March, Crowdfund Insider reported that the EBA has published a document that addresses AML/CFT when it comes to crowdfunding. The report was part of a consultation regarding KYC requirements. The EBA says that crowdfunding service providers (CSP) should recognise the risk of the borderless nature of their transactions as customers may be located anywhere in the world, including high-risk locations. The EBA states that CSP should know their customers as to not be utilised for illicit activities as funds could be used to finance a terrorist attack. The first section of the report is described as generic and applying to all firms, and the second section is sector-specific.
MALTA: TUMAS GAMING’S COO UNDER POLICE BAIL IN MONEY LAUNDERING INVESTIGATION
On 10 March, Lovin Malta reported that Patrick Demanuele, the Chief of Operations at Tumas Gaming, has been placed under police bail as part of a money-laundering investigation linked to Yorgen Fenech, the main suspect in the Daphne Caruana Galizia murder case. Fenech is a key shareholder in Tumas Group and was its head until his arrest and charge in connection with the murder.
THE AUSTRALIAN TAX OFFICE (ATO) CONTINUES TO DISPUTE CLAIMS FOR LEGAL PROFESSIONAL PRIVILEGE (LPP) MADE BY LARGE CORPORATE GROUPS IN THE CONTEXT OF TAX AUDITS AND INVESTIGATIONS
An article from Clyde & Co LLP on 9 March says that the disputes are increasingly heading to court as taxpayers seek to resist the ATO’s wide-ranging information gathering powers. Increasingly, the ATO is disputing claims to withhold documents made in respect of large volumes of documents where there is doubt over the validity of the LPP claim. The article says that where LLP claims are made over a high volume of documents and limited information is provided to the ATO to allow them to assess the claims for privilege, the taxpayer runs a higher risk of a dispute. Furthermore, where redactions are made in support of claims for LPP or the accountant’s concession, care needs to be taken to ensure they are no more than is necessary to prevent the disclosure of the privileged part of the communication.
CHAOS STRIKES GLOBAL SHIPPING
A New York Times article on 6 March reports on the disruption being felt in international shipping trade, with shortages and logjams of containers. It says that the demand for shipping has outstripped the availability of containers in Asia, yielding shortages there just as the containers pile up at American ports. Containers that carried millions of masks to countries in Africa and South America early in the pandemic remain there, empty and uncollected, because shipping carriers have concentrated their vessels on their most popular routes — those linking North America and Europe to Asia. It also says that at ports where ships do call, bearing goods to unload, they are frequently stuck for days in floating traffic jams. The pandemic and its restrictions have limited the availability of dockworkers and truck drivers, causing delays in handling cargo. Empty containers are piled up at ports in Australia and New Zealand; containers are scarce at India’s port of Kolkata, forcing makers of electronics parts to truck their wares more than 1,000 miles west to the port of Mumbai, where the supply is better. Rice exporters in Thailand, Vietnam and Cambodia are forgoing some shipments to North America because of the impossibility of securing containers.
UK: SHOULD FOREIGN COURTS’ PERMISSION BE SOUGHT FOR REMOTE EVIDENCE GIVEN ABROAD?
On 4 March, an article from CMS Cameron Nabarro Olswang LLP reported on an ongoing High Court case and a ruling that prior approval from the competent authority in Germany would be required in order for the claimants’ expert to give evidence via video-link from Germany in a forthcoming trial. This was because there was a real risk that giving permission for the claimants’ expert to give evidence by video-link from Germany without the consent of the German court would breach German law. It is said that this case again illustrates the importance of making advanced preparations for remote trials in the UK where witnesses and experts giving evidence are based in foreign jurisdictions. This ruling follows another recent incident where delay in obtaining permission from the German and Swiss courts for witnesses to give evidence via video-link from overseas caused criticism by a court.
UN PANEL NAMES NORTH KOREAN WHO TRIED SMUGGLING FIGHTER JET PARTS
On 10 March, NK Pro reported that a secret deal to smuggle parts of Russian fighter jets in 2016 was brokered by a North Korean trade representative with possible ties to the DPRK Embassy in Moscow, an unpublished draft of a UN Panel of Experts report indicates.
FILM ALLEGING BELARUSIAN LEADER HAS GILDED LIFE GETS 3 MILLION VIEWS
On 10 March, EurActiv reported that a film accusing Belarusian President Alexander Lukashenko of spending hundreds of millions of dollars on gilded residences, planes and Rolls-Royce and Maybach cars has gained more than 3 million YouTube views since its release on 8 March.
UK MUTUAL LEGAL ASSISTANCE GUIDANCE
On 10 March, the Home Office published updated information for competent authorities abroad (and in the UK) about obtaining evidence within the UK (or abroad) to assist in criminal investigations or proceedings.
UK: BAIL CHANGES COULD FAIL CRIME VICTIMS, SAYS LAW SOCIETY
On 10 March, the Law Society Gazette reported that the Police, Crime, Sentencing and Courts Bill, introduced to the House of Commons, would give police more time to investigate suspects under police bail so fewer people are ‘released under investigation’. However, the Law Society said victims, witnesses and those accused of crimes need to know investigations and charging will take place ‘within a reasonable time frame’.
See also the Home Office factsheet –
UK: PERSONAL SERVICE COMPANIES, IR35 AND TAX AVOIDANCE
On 10 March, the House of Commons Library published an updated research paper about IR35, a commonly-used term for legislation introduced in 2000 to tackle the misuse of personal service companies (PSC) for tax avoidance purposes. The term is not defined in law, but is usually taken to mean a limited company, the sole or main shareholder of which is also its director, who, instead of working directly for clients, or taking up employment with other businesses, operates through their own company. For any engagement the client will pay the PSC for the individual’s services without first deducting income tax or employee National Insurance contributions (NIC) as it would for any employee under PAYE.
THAI WOMAN EXTRADITED IN US NAVY CORRUPTION CASE
On 10 March, Manufacturing.net reported that she is linked to the $35 million ‘Fat Leonard’ case in which US Navy officers were bribed with gifts, trips and prostitutes. She is a former executive for a Singapore-based defence contractor linked to a sweeping corruption scandal. Pornpun “Yin” Settaphakorn appeared before a judge in San Diego and was ordered detained.
UK VISA REQUIREMENTS
On 10 March, the Home Office published an update one-page guide to those countries and territories whose nationals require visas to enter the UK.
FAKE JEWELLERY WORTH NEARLY $3.2 MILLION SEIZED BY US CUSTOMS
A news release from US Customs & Border protection on 9 March advised that officers in Cincinnati seized 2 shipments containing 734 items of counterfeit jewellery. It came from China and would have been worth a total of $3,191,370 million had it been genuine. One of the shipments contained 543 bracelets and rings labelled as Cartier, and the other held 191 bracelets, rings, and earrings with Cartier and Hermes emblems.
UK: COVID RELIEF FRAUD AND RESPONSE
On 5 March, a post from Carmelite Chambers says that the rapid introduction of schemes to allow access to types of relief quickly and without much oversight makes them extremely vulnerable to misuse. It says that a number of the schemes appear vulnerable to abuse. In the recent UK Budget, the Taxpayer Protection Taskforce was announced as a specialist taskforce within HMRC. Its sole purpose will be to combat fraud across all Covid-19 support and relief schemes introduced by the Government and to “clamp down on tax avoidance and evasion”, according to the Chancellor. The taskforce will receive an investment of £100 million and 1,265 staff to populate it. However, the post comments that financing a taskforce to combat the fraud after the money has already been paid out, rather than improving the security around paying the money in the first place is akin to the implementation of a taskforce to combat causes of the open stable door after the horse has already left. In fact, it is said, if anything, the new reliefs system is at far more risk than its antecedents; and now those seeking to abuse Recovery Loans will be after a pot of up to £10 million, rather than £50,000.
A BRIEF GUIDE TO DEFENDING WIVES AND PARTNERS IN CONFISCATION PROCEEDINGS
On 10 March, a blog post from Carmelite Chambers says that the confiscation regime brought in by the Proceeds of Crime Act 2002 in the UK was designed to be draconian. The article concludes that the confiscation regime remains a long way from respecting any proper procedural, legal or equitable rights of the wives and partners of convicted defendants. Substantial reforms are necessary to bring this area of the law into the modern era. There is no sign that the Law Commission’s ongoing consultation is looking at any of these areas, and women, as always, will have to campaign for these rights.
BATTLE FOR GUATEMALA’S TOP COURTS INTENSIFIES
On 9 March, an article in Insight Crime says that the naming of judges to Guatemala’s high courts has turned into an escalating fight between political elites seeking to stack the courts with allies and anti-impunity prosecutors accusing those same elites of influence peddling.
SEC CHARGES FOR DECADE-LONG INVESTMENT ADVISER FRAUD THROUGH 2 PRIVATE HEDGE FUNDS USED TO CONCEAL MASSIVE LOSSES INCURRED BY ANOTHER FUND
On 9 March, a release on Mondo Visione advised that the SEC had charged George Heckler, of Charleston with operating a decade-long investment adviser fraud through 2 private hedge funds, Cassatt Short Term Trading Fund LP (Cassatt) and CV Special Opportunity Fund LP (CV Special), that he had formed to conceal massive losses incurred by Conestoga Holdings LP (Conestoga), another fund controlled by Heckler.
EUROJUST SUPPORTS SPANISH ACTION AGAINST ILLEGAL STREAMING OF FOOTBALL MATCHES
A news release from Eurojust on 9 March advised that Spanish authorities have taken action to block the illegal streaming of football matches of major professional leagues via the Mobdro mobile application. More than 43 million users worldwide had downloaded this application to watch games of, for instance, the Spanish La Liga and English Premier League via servers and platforms that illegally tapped into regular audio-visual signals.
US RETURNS HUNDREDS OF PRE-COLUMBIAN ARTIFACTS TO MEXICO
On 9 March, a news release from US Immigration & Customs Enforcement advised that Homeland Security Investigations (HSI) had returned 277 pre-Columbian artifacts to Mexican officials during a repatriation ceremony in the Mexican Consulate in Nogales. The pieces were recovered after 2 separate investigations by HSI special agents.
US 15-YEAR DENIAL OF EXPORT PRIVILEGES IMPOSED IN RESPECT OF ALEXANDER BRAZHNIKOV, A US BUSINESSMAN
The US Commerce Department Bureau of Industry and Security has confirmed a 15-year prohibition originally imposed in 2019. In 2015, he was convicted of conspiring to export controlled electronic components without the required licences from the US to Russian end-users.
US PUTS ON HOLD MEASURES INVOLVING CERTAIN FOREIGN MILITARY INTELLIGENCE END-USERS
On 10 March, KPMG reported that a Final Rules announced in January that proposed rule concerning US technologies and specific activities of US persons who may be supporting foreign military intelligence end-uses and end-users in China, Cuba, Russia, and Venezuela as well as those located in “terrorist-supporting countries”. It is said that due to the Biden Administration’s regulatory freeze, the interim final rule is currently being evaluated and that BIS is “looking at how to proceed”.
EU: BETTER COOPERATION BETWEEN NATIONAL AUTHORITIES ON TAXATION OF DIGITAL TRADING
A news release from the EU on 10 march advised that MEPs have recommended changes to draft legislation aiming to trace and tax the sales that people make through online platforms more effectively. The legislation aims to oblige digital platforms to report the income earned by those selling goods and services on their platforms. Tax authorities would also be obliged share this information with each other.
AUSTRALIA: CRYPTOCURRENCY ‘MONEY-LAUNDERING SYNDICATE’ – 6 ARE ARRESTED AND CASH SEIZED
On 10 March, the Daily Mail reported that detectives have charged a further 6 people as part of an investigation into a criminal syndicate accused of laundering money using cryptocurrency. Last month, detectives arrested a 30-year-old man and seized $1 million cash during a vehicle stop at Strathfield. The man was charged with 24 offences and remains before the courts.
CONTAINER CRISIS – 3 CHINESE COMPANIES — CIMC, DFIC AND CXIC — PRODUCE ABOUT 80% OF THE WORLD’S CONTAINERS
EU PRIVACY LAW AND US SURVEILLANCE: SOLVING THE PROBLEM OF TRANSATLANTIC DATA TRANSFERS
An article in Lawfare on 10 March says that, unfortunately, most current approaches to resolving the EU-US conflict following the Schrems II decision of the European court fall short; and the European Data Protection Board (EDPB) insists on rigid technological fixes that will severely hinder most transatlantic transfers of personal data. The article mentions some of the suggestions made in a White Paper for the US Department of Commerce and the dynamics that underlie the problem.
I would be grateful for any modest contribution for my time and ongoing costs of computer, relocation, and (still ongoing) removal costs, I have a page, where contributions start as low as $3, at https://www.buymeacoffee.com/KoIvM842y