On 22 March, OFAC announced that 4 new individuals – 2 Chinese and 2 Burmese, plus the 33rd and 77th Light Infantry Divisions of the Burmese military, had been added to its sanctions lists. The entries for 4 existing Burma/Myanmar sanctions targets were also amended.
On 24 March, JoyNews reported that its investigations have uncovered how a gold smuggling syndicate illegally exports gold through the country’s land, airports and seaports. This illegal business is aided by security operatives, politically connected individuals and shipping agents. It reminds one that in 2018, the President had revealed how $5 billion was unaccounted for in gold exports from Ghana to the UAE.
On 23 March, the Guardian reported that 2 tankers flying the flag of the Cook Islands have been removed from the islands’ shipping registry after allegations the vessels were sanctions-busting, transporting Iranian crude oil while concealing their movements.
Panama Covid-19 update – the Rt rate continues below 1 at 0.91 (down from 0.92 last week), although 3 interior districts continue above 1. 454 new cases were reported today, and 7 new fatalities. there are now 5,114 active cases, with 106 in ICU (an increase) and 585 in other wards.
23 MARCH 2021
REASONABLE ENQUIRIES MUST BE MADE UPON RECEIPT OF POTENTIALLY CONFIDENTIAL INFORMATION
On 23 March, an article from RPC said that the Court of Appeal in London recently held that a recipient of information will be bound by a duty of confidentiality if it was reasonable for them to have made enquiries as to the confidential nature of the information and they failed to do so. The Appellants had appealed a High Court decision which found that it had acted in breach of its equitable obligation of confidence by obtaining and misusing a rival company’s client information. The case resulted from a group of sales consultants leaving their employer in 2016 to join its competitor, taking clients’ names and contact details from the computer system and disclosed them to their new employer, in breach of implied terms in their contracts of employment and equitable obligations of confidence.
UK ART DEALERS TOLD TO TOUGHEN UP IN FIGHT AGAINST MONEY LAUNDERING
On 23 March, a post from Boodle Hatfield said that the NCA has issued UK art galleries with an “amber alert” following concerns that potentially hundreds of millions of pounds are being laundered through art sales. The NCA had already warned art dealers to file more SAR where they have concerns over the buyer, seller or source or destination of the funds being used to purchase art. However, the NCA fears that galleries have not been stringent enough in their checks.
6 CHARTS SHOW HOW SANCTIONS ARE CRUSHING IRAN’S ECONOMY
On 22 March, CNBC carried an article saying that its economy is crumbling after years of US sanctions — and Iran insists the US must suspend those restrictions before the 2 sides can return to nuclear talks. The article takes a look at the state of Iran’s economy through 6 charts.
BULGARIAN ANTIQUITIES WORTH AN ESTIMATED £76,110 WERE SMUGGLED INTO THE UK
On 22 March, UK NIP reported that ancient coins, pendants, brooches, statues and spearheads were among the artefacts found hidden inside a trailer full of trousers at the Port of Dover in October. Evidence including messages found on his mobile phone led investigators to believe he had been planning to deliver the items to another member of the organised crime group, who would then try to sell them to antique collectors in London.
US: COINBASE PAYS $6.5M PENALTY OVER WASH TRADING ETC
On 22 March, the Crypto Newspipe reported that Coinbase has settled with the US Commodity Futures Trading Commission (CFTC), over allegations of wash trading, inaccurate reporting etc. The CFTC claimed that between 2015 and 2018, Coinbase “recklessly delivered false, misleading, or inaccurate reports concerning transactions in digital assets”, and there were also allegations of wash-trading in Litecoin markets in 2016.
On 23 March, Regulation Asia reported that from 25 March, virtual asset service providers (VASP) will have 6 months to register with KoFIU, and must start report suspicious transactions. The travel rule will apply 1 year later. New AML rules for VASP are set to take effect from 25 March, requiring them to register with KoFIU to continue providing services.
EUROPEAN BANKING AUTHORITY (EBA) PUBLISHES REGULATORY INSTRUMENTS TO ADDRESS DE-RISKING PRACTICES
On 23 March, The Paypers reported that the EBA has published 3 regulatory instruments to address de-risking practices based on evidence gathered in its call for input. The instruments clarify that compliance with AML/CFT obligations in EU law does not require financial institutions to refuse, or terminate, business relationships with entire categories of customers that they consider presenting a higher risk.
BREXIT AND INTELLECTUAL PROPERTY: GIBRALTAR, THE ISLE OF MAN AND THE CHANNEL ISLANDS
On 22 March, a short article from Charles Russell Speechlys LLP summarised the position re an EU trade mark (EUTM) or Registered Community Design (RCD) in the various territories, noting that the most significant impact is on protection in Gibraltar.
US: NEW COMMERCE RULE COVERING ICTS TRANSACTIONS INVOLVING FOREIGN PARTIES (CHIEFLY IN RUSSIA AND CHINA)
On 23 March, Wilmer Hale issued a Client Alert says that a new rule from 22 March establishes a process for the US Department of Commerce to review and, potentially, modify or block commercial transactions between US and foreign parties for certain information and communications technology and services (ICTS). It advises that companies engaged in covered transactions that could potentially raise national security-related concerns – especially those involving China and Russia and those involving critical infrastructure – should carefully assess the potential regulatory risk resulting from this rule. The transactions covered include “any acquisition, importation, transfer, installation, dealing in, or use of any [ICTS], including ongoing activities, such as managed services, data transmission, software updates, repairs, or the platforming or data hosting of applications for consumer download”.
UK: TACKLING PROMOTERS OF TAX AVOIDANCE DRAFT GUIDANCE
On 23 March, HMRC published a news release advising that draft technical guidance covering changes to anti-avoidance regimes, published in the new Finance Bill which will strengthen the sanctions against those who promote or enable tax avoidance schemes, including for VAT and other indirect taxes.
JUST 1% OF BUSINESSES ARE TAKING STRONG ACTION ON DEFORESTATION: STUDY
On 23 March, EurActiv reported that an analysis of the anti-deforestation work of 553 of the world’s largest businesses has found that just 1% are taking ‘best practice’ action. This is despite the multi-billion-dollar risks associated with inaction. The analysis covers the corporates currently disclosing information on forestry through its environmental disclosure platform. Those disclosing operate in the timber products, palm oil, soy, cattle products, rubber, cocoa and/or coffee sectors.
37 ARRESTS IN A HIT ON COUNTERFEITERS OF HIGH QUALITY €500 FAKE BANKNOTES IN SPAIN
On 23 March, a news release from Europol reported that Europol supported the Spanish authorities in dismantling an organised crime group involved in the distribution of high-quality counterfeit euro banknotes, fraud and money laundering. Law enforcement authorities from Germany and Sweden also assisted the investigation. The investigation was triggered in October 2019 by the detection of counterfeit banknotes in several cities in the Spanish province of Grenada. The suspects were using money mules to introduce the false currency into the legal circuit through the ATM of a number of Spanish banks.
On 23 March, the Law Society Gazette reported that the UK is to push for a more liberal global data transfer regime in the face of ‘protectionist forces’, a government minister has said in the latest hint at government plans to create an independent post-Brexit data protection regime. It is said that the government ‘Will make the case for removing unnecessary barriers to data flows, where the significant benefits of growth and innovation are put at risk by more protectionist forces’.
SRI LANKAN AIRLINES SUES AIRBUS FOR $1 BILLION IN COURT OVER BRIBERY CLAIMS
On 23 March, Simple Flying said that the Airbus bribery scandal continues to rumble on, with one of the affected airlines taking legal action. SriLankan Airlines is suing the company for $1 billion in compensation relating to bribery claims surrounding an order of 14 airlines to be leased. As well as the billion-dollar compensation sought, SriLankan Airlines is seeking to cancel the outstanding delivery of 4 A350-900 and to claw back some $19 million in pre-delivery payments for these.
SWISS SUPREME COURT REVERSES FREEZE ON ANGOLAN TYCOON’S $900 MILLION FORTUNE
On 23 March, Reuters reported that Switzerland’s top court has ruled against a freeze on $900 million belonging to a jailed Angolan businessman – Carlos Manuel de Sao Vicente, a key figure in Angola’s oil industry. It cited insufficient evidence for money laundering alleged by prosecutors. de Sao Vicente was a key figure in Angola’s oil industry, heading a group of companies called AAA International which sold insurance contracts to state oil company Sonangol over nearly 2 decades.
McAFEE BODYGUARD PLEADS NOT GUILTY IN $13 MILLION DIGITAL CURRENCY FRAUD CASE
On 23 March, Coingeek reported that the former bodyguard to John McAfee has pleaded not guilty in a $13 million fraud case. Jimmy Gale Watson Jr. faces an indictment including conspiracy to commit securities fraud and substantive wire fraud. He became one of the executives behind the McAfee Team, a digital currency team founded by the antivirus software innovator that purported to give investors tips and advice on the best projects to invest in.
IRELAND: OLAF SAYS TEMPLEMORE FUNDS INVESTIGATION IS CLOSED
On 23 March, the Irish Times reported that the watchdog had said that its investigation into the use of European funds at the Garda Training College is “currently closed”. However, OLAF said it cannot provide the Public Accounts Committee (PAC) in Ireland with information on the results of the investigation “so as not to prejudice any potential follow-up at national level”. OLAF began an investigation in 2017 amid allegations that EU funds may have been diverted and questions over what the money was used for.
UK GOVERNMENT STRENGTHENS TAX POLICYMAKING WITH OVER 30 UPDATES, CONSULTATIONS AND DOCUMENTS PUBLISHED
On 23 March, HM Treasury said that it had published a series of tax documents and consultations in a move to strengthen policymaking and help create a more trusted, simple and modern tax system. These included an Air Passenger Duty consultation published, alongside a business rates review interim report and a tax administration framework call for evidence.
UK: RESTRICTIONS UNDER NEW CHEMICAL REGIME ANNOUNCED FOR FIRST TIME
On 23 March, a news release from the Department for Environment, Food and Rural Affairs says that the UK Government has laid out plans for restriction work that will be carried out in the first year of UK REACH.
UK ICO CONFIRMS TRANSFERS OF DATA TO SEC IN THE PUBLIC INTEREST
On 23 March, an article from Goodwin Law reported that the Information Commissioner’s Office has published a letter sent to the SEC which confirms that it is possible for SEC-regulated UK firms to transfer personal data to the US where the transfer is necessary for important reasons of public interest under GDPR. The ICO, however, has emphasised that reliance on such a derogation should not be relied on as the “rule” but must continue to be assessed on a case-by-case basis.
UK: JUDGE ALLOWS USE OF DOCUMENTS SHARED BY MISTAKE
On 22 March, the Law Society Gazette reported that a High Court judge has granted defendants permission to use documents inadvertently shared by the claimants’ solicitors before trial. It had been argued it would have been obvious to a ‘reasonable solicitor’ that a mistake had been made when their witness statements from around 10 years ago were disclosed. However, the defendants said it was not appreciated that a mistake had been made. It was submitted that these documents were relevant to the case and should be allowed as a matter of principle.
On 23 March, the Straits Times reported that Malaysia’s Customs Department has said that it scored its biggest drug haul when it seized 94.8 million Captagon pills worth about S$1.7 billion at Port Klang in Selangor. The pills, which contain the amphetamine drug fenethylline hydrochloride, weighed 16 tonnes in total. They are said to have arrived from the Middle East and were meant to be shipped to a third country in the Far East.
MALTA: FORMER AIDE TO EX-PRIME MINISTER AMONG 11 CHARGED WITH CORRUPTION
On 23 March, OCCRP reported that prosecutors in Malta charged former top government official Keith Schembri, his father and 9 business associates with money laundering and fraud. Schembri was accused years ago by murdered journalist Daphne Caruana Galizia of corruption. Schembri served as former Prime Minister Joseph Muscat’s chief of staff,
UNEXPLAINED WEALTH ORDERS (UWO) HAVE NOT BEEN A COMPLETE DAMP SQUIB
FT Adviser has published an article by Jonathan Fisher of Bright Line Law which says that in the 2 years since their introduction, there have been 5 cases, and one of theses has ended in disaster. Meanwhile, according to the UK’s National Risk Assessment, the level of money laundering has increased during the same period. Based on this performance, it says, wealthy criminals will not be quaking in their boots in the coming year. However, the author says that, in fairness to the enforcement authorities, before criticising their performance too harshly, there are 3 things need to be borne in mind. Similar enforcement tools exist or are proposed in Ireland, Australia, the US and BVI. The article says that the real problem is that expectations were not properly managed when UWO were introduced into the UK, and the indications emanating from the NCA at the time were inappropriate.
DRUG TRAFFICKING, MONEY LAUNDERING AND ILLEGAL IMMIGRATION IN HONDURAS
On 18 March, Thomson Reuters published a report saying that Honduras has become a gateway point for a significant source of drug trafficking into the US, along with the proliferation of other crimes. Among other things, the article says that the Honduran alliance with Colombian and Mexican cartels has now also given birth to clandestine drug labs in the jungles of Honduras manned by a combination of Honduran and Colombian traffickers who cook hundreds of kilos of cocaine at a time.
HOW TIGHTENING REGULATION IS FORCING CRIMINALS TO GO TO EXTREME LENGTHS TO CASH-OUT THEIR CRYPTOASSETS
On 22 March, Elliptic argued that criminals now have few options to cash-out their crypto proceeds without being identified and reported, and hence crypto laundering has therefore evolved to become increasingly sophisticated, and has led to the rise of professional crypto laundering services. Criminals are increasingly accessing crypto cash-out services through darknet markets such as Hydra. Like the Silk Road and Alphabay before it, Hydra is a marketplace for illicit goods and services where cryptocurrency is used as the primary payment method. It is said that the extreme lengths to which cyber criminals are being forced to go in order to launder and cash-out their cryptocurrency is telling and indicates that the efforts of regulators and businesses to clamp down on crypto laundering are working.
US: FORMER VENEZUELAN OFFICIAL PLEADS GUILTY IN CONNECTION WITH INTERNATIONAL BRIBERY AND MONEY LAUNDERING SCHEME
A news release from the US DoJ on 23 March advised that Jose Luis De Jongh Atencio, 48, a dual US-Venezuelan citizen and former official at Citgo Petroleum Corporation, a Houston-based subsidiary of Venezuela’s state-owned and state-controlled energy company PDVSA, has pleaded guilty in connection with his role in laundering millions of dollars in bribes and corruptly providing business advantages to multiple individuals who obtained contracts with Citgo and PDVSA.
MOLDOVAN MP ULANOV CLASSED AS A SUSPECT WITH SEARCHES CARRIED OUT AT HIS OFFICE OVER FRAUD AND MONEY LAUNDERING ALLEGATIONS
On 23 March, the IPN News Agency reported that the Anticorruption Prosecutor’s Office has classed MP Denis Ulanov, who is featured in the bank fraud case, as a suspect. He is said to be suspected of involvement in large-scale swindles and money laundering in the interests of a criminal association. He and another MP, Petru Jardan, who were remanded in custody, say the accusations made against them are part of a political attack against them
JAPAN SHIES AWAY FROM SANCTIONS ON CHINA OVER XINJIANG
In its 24 March edition, Nikkei Asia reported that as Europe, the US and other major Western economies hit China with a spate of sanctions over alleged human rights violations in Xinjiang, Japan has so far stood pat, because of both a lack of effective tools and concern about harming an already complicated relationship with Beijing.
REMOTE EVIDENCE IN ENGLISH COURTS: SOME TIMELY REMINDERS
An article from Latham & Watkins LLP on 23 March reminded parties seeking to rely on video-link evidence should plan ahead and, where necessary, obtain local and foreign court approval. It says that the High Court has, in a number of recent decisions, provided some timely reminders for practitioners as to proper arrangements for giving video-link evidence, and the need, in some cases, to obtain foreign court permission in respect of giving video-link evidence abroad.
RUSSIA: BORIS SPIEGEL, A RUSSIAN-JEWISH PHARMACEUTICALS MOGUL ARRESTED IN MOSCOW IN CONNECTION WITH A CORRUPTION INVESTIGATION
On 23 March, Forward reported that Spiegel was charged with offering a local politician the equivalent of about $400,000 in bribes. His wife, Yevgenia, was also arrested along with several other individuals in connection with the corruption investigation that began with an inspection into the affairs of Ivan Belozertsev, the governor of the Penza region, situated about 300 miles south-east of Moscow.
MOLDOVA’S PRESIDENT SEEKS HELP OF FOREIGN PROSECUTORS TO TACKLE MAJOR CORRUPTION CASES
On 23 March, Universul reported that the Moldovan President has said European prosecutors can help Moldovan prosecutors tackle major corruption cases in the former Soviet republic and recover assets stolen from the state. This came after 2 lawmakers had their immunity lifted and were later detained on corruption charges.
3 INDICTED IN BRIBERY SCHEME RELATED TO U.S. MILITARY CONTRACTS IN ALASKA
A news release from the US DoJ on 23 March advised that the 3 have been charged in a 26 count indictment with conspiracy, bribery, and money laundering involving millions of dollars’ worth of US military contracts in Alaska. 2 of those indicted owned and managed Best Choice Construction LLC, a federal government contractor that provided construction and other services.
WHAT LAWS CONSTRAIN THE RUSSIAN MERCENARY WAGNER GROUP?
An article on Lawfare on 23 March posed this question. It explains that the Wagner Group, a Russian private military company (PMC), has played a strategically important role in countries such as Syria, Ukraine and Libya — and it’s found itself repeatedly at the receiving end of US sanctions. Wagner has helped Bashar al-Assad’s forces in the Syrian civil war and participated in the Russian takeover of Crimea. But it asks are the group’s actions legal? Though Wagner’s activities are nominally regulated by both international law and the domestic laws of the countries where the group is present, these laws put relatively few constraints on Wagner’s operations. The following table lists the status of these laws and conventions in countries where Wagner operates. All the listed countries except Azerbaijan have ratified Additional Protocol I of the Geneva Convention. The UN Working Group on the Use of Mercenaries has been a regular advocate for greater regulation of the private military and security companies (PMSC) industry and drafted a PMSC Convention in 2009.
CHINA CANNOT SEIZE PORT OF MOMBASA IF THERE IS A DEBT DEFAULT, SAYS KENYA
On 23 March, Insurance Maritime News reported that Kenyan authorities have insisted that China will not be able to seize the Port of Mombasa if Kenya defaults on the money it borrowed from China to finance the loss-making Standard Gauge Railway (SGR). Mombasa Port is an important Kenyan strategic assets, generating $480 million in revenues and $125 million in profits in 2019.
1,831 SAR WORTH $27 BILLION WERE RECEIVED 2019-2020 BY TRINIDAD AND TOBAGO FIU – THE MOST IT HAS RECEIVED IN ITS 10-YEAR HISTORY
On 5 March, the Trinidad & Tobago Guardian reported that the increase has been attributed to increased fraudulent activity – including resulting from the COVID-19 pandemic – and demonitisation of the cotton $100 notes. There was an 88% decrease in reports on suspected terrorism financing, apparently due to the collapse of the ISIS terrorist group. The information came from the FIUTT report for October 2019 to September 2020, laid in Parliament by the Finance Minister.
GIBRALTAR: PROCEEDS OF CRIME LEGISLATIVE AMENDMENTS
The National Coordinator for Anti-Money Laundering and the Combatting of Terrorist Financing March newsletter deals with legislative changes made by the following several pieces of proceeds of crime legislation which were published and came into force on 22 March. These amendments dealt with matters including virtual assets and virtual asset service providers (VASP).