Panama Covid-19 update – the virus continues to circulate, with another 415 new cases reported today – meaning that there are 5,043 active cases, of which 107 are in ICU and 581 in other wards. There were another 5 fatalities.
24 MARCH 2021
GERMANY HIRES TOP SWISS REGULATOR TO HEAD ITS FINANCE WATCHDOG
On 22 March, Reuters reported that Mark Branson, the head of Switzerland’s financial markets regulator, is to become president of Germany’s finance watchdog BaFin, as part of a shake-up at the regulator after the Wirecard fraud.
SINGAPORE CHARGES 33-YEAR-OLD IN ALLEGED $750 MILLION FRAUD
On 22 March, Bloomberg reported that Singapore has accused Ng Yu Zhi. 33, of fraud over his alleged involvement in cheating investors to put at least S$1 billion into nickel deals that never took place. This followed an investigation into Envy Asset Management Pte and Envy Global Trading Pte, where Ng served as a director. Investors were promised varying returns, which averaged 15%, over a period of three months, and many rolled over their contracts to reinvest their principal and returns, according to court proceedings.
WIRECARD AIDED ONLINE MARIJUANA SALES, US PROSECUTORS ALLEGE
On 23 March, the Wall Street Journal reported claims in a US court that Wirecard AG and its fugitive former No. 2 executive played a key role in an alleged scheme to trick banks into processing marijuana sales. It is alleged that Wirecard was one of several European banks that opened fraudulent accounts to disguise around $160 million in marijuana purchases made through Eaze Technologies Inc, a California-based marijuana-delivery service. The supply of marijuana remains technically illegal under federal law, even where legalised at state level.
AUSTRALIAN AUTHORITIES TO BLOCK A FURTHER 10 GAMBLING WEBSITES
On 24 March, iGB reported that the Australian Communications and Media Authority (ACMA) has ordered the blocking of a further 10 online gambling websites it said have been operating in the country illegally. Since November 2019, a total of 238 illegal gambling websites have been blocked in the country, and another 130 illegal services have pulled out of the country’s market since it began to enforce new illegal offshore gambling rules in 2017.
AUSTRALIA: 2 VIDEOS ON DEALING WITH THE PROCEEDS OF CRIME
On 18 March, Sydney criminal lawyers published 2 new videos –
· Dealing With Property Reasonably Suspected of Being Proceeds of Crime – $100,000 or More; and
· Intentionally Dealing in Proceeds of Crime – Any Value.
LITHUANIA: CUSTOMS SEIZES SOFTWARE FOR WMD AND CONVENTIONAL WEAPONS
On 24 March, Delfin.com reported that Lithuanian customs officers had detained software that can be used for WMD and conventional weapons. The software concerned was seized during an attempt to export it to UAE without the required documents. The consignor was an Irish company which initially failed to submit the required export licence.
INDIA: SMUGGLERS BUSTED WITH $382,000 IN GOLD AND CASH UNDER THEIR TOUPEES
On 23 March, the New York Post reported that 2 suspects were busted at an airport trying to smuggle gold and money under their wigs. They concealed black packets of gold paste weighing 698 grams, and gold was also discovered in the hapless traffickers’ socks and even rectums. All told, the confiscated contraband was reportedly worth a whopping $382,943.
FORMER ECUADORIAN GOVERNMENT OFFICIAL SENTENCED TO PRISON FOR ROLE IN BRIBERY AND MONEY LAUNDERING SCHEME
A news release from the US DoJ on 23 March advised that Juan Ribas Domenech, 52, an Ecuadorian and Italian national, was sentenced to 51 months in prison for his role in a scheme to launder bribes paid to him in exchange for helping 3 UK reinsurance companies obtain and retain reinsurance business from Ecuador’s public surety company. Ribas was the chairman of Seguros Sucre, Ecuador’s state-owned and -controlled surety company and an advisor to the then-president of Ecuador. Bribe payments were paid through various intermediaries, including two reinsurance introducer companies. A portion of the bribes were laundered through the US.
DRAFT BILL AND THE 7-POINT PLAN TO REFORM GERMANY’S FEDERAL FINANCIAL SUPERVISORY AUTHORITY
An article from Bird & Bird on 24 March reports developments that follow the Wirecard and Greensill scandals.
FORMER IMF CHIEF RATO FACES FRESH FRAUD ACCUSATIONS IN SPAIN
On 24 March, EurActiv reported that the former managing director of the IMF, Rodrigo Rato, is facing fresh allegations fromSpanish anti-corruption prosecutors, including alleged tax fraud, corruption, and document falsification. It is said that Spain’s anti-corruption prosecutor’s office outlined 11 allegations against the former politician and banker.
RUSSIAN REGIONAL GOVERNOR FIRED AFTER BRIBERY CHARGE
On 24 March, Rferl reported that Russian President Vladimir Putin has dismissed Ivan Belozertsev, one of his staunch supporters, the governor of the Penza region in the Volga Federal District, after he was arrested on suspicion of taking a bribe.
FINANCIAL CRIME COMPLIANCE COSTS INCREASED 20.6% ACROSS ASIA-PACIFIC REGION
On 24 March, the Paypers reported that a survey identifies the drivers affecting financial crime compliance and highlights spending trends. The study also explores the business impacts of changes in the financial crime compliance environment particularly regarding new regulations and identifies challenges and impacts associated with the COVID-19 pandemic. The report found that the total projected cost of financial crime compliance increased for larger financial institutions in the Asia-Pacific (APAC) market.
UK: CONFIDENCE IN BEVERAGE SUPPLY CHAINS COMES UNDER PRESSURE AS FRAUD CONCERNS RISE
CLH News in the UK on 24 March said that a combination of widespread incidence of food fraud and significant supply chain disruption signals a rising level of brand and product risk for global beverage manufacturers, according to a new report. Despite the risk to brands and potential serious consequences for people’s health, only 37% of those surveyed regard managing fraud as a ‘very high priority’, with a significant minority (1 in 5) in the alcohol sector rating it as an ‘average priority’ or lower.
UK: REPORT PUTS ‘UMBRELLA’ COMPANIES UNDER THE SPOTLIGHT
On 24 March, the Chartered Institute of Taxation reported that the Low Incomes Tax Reform Group (LITRG) has published a new research report looking at the use of ‘umbrella’ companies and other labour market intermediaries in the UK. The factual and technical report also considers the nature and scale of disguised remuneration schemes. It is intended to help increase public knowledge of how labour market intermediaries work and bolster the evidence base in this under-researched area.
FURLOUGH FRAUD LOSSES: THE TAXPAYER PROTECTION TASKFORCE
An article from White & Case on 24 March says that a year since the introduction of the Coronavirus Job Retention Scheme, or the ‘furlough scheme’ as it is more commonly known, the extent of fraud associated with the government assistance programme has started to become clear. In the recent Budget, the UK Chancellor announced the creation of the Taxpayer Protection Taskforce. The Government is investing £100 million in the deployment of a team of 1,265 HMRC officials to investigate individuals and companies who have exploited the various schemes designed to assist businesses and employees to withstand the COVID-19 pandemic. It is said that HMRC is giving employers some leeway to report excessive claims, noting that it is not seeking to punish mistakes in compliance, but rather to tackle deliberate non-compliance. It is also said that reported that millions of pounds have been provided to businesses beneficially owned by foreign states and billionaire tax exiles.
UK: UPDATED GUIDANCE ON DEFINITION AND SCOPE OF CONTROLLED TECHNOLOGY IN RELATION TO STRATEGIC EXPORT CONTROL LEGISLATION
On 24 March, Notice to Exporters 2021/02 contained updated guidance on –
- the scope of regulations around transferring military or dual-use technology;
- the scope of technology transfer including cloud storage and routing;
- technology control exceptions in the Export Control Order 2008;
- what licences to use for controlled technology transfer; and
- UK and EU technology legislation definitions.
It says that trade associations or those who represent exporters should alert their members to this new guidance.
UK: MANDATORY CLIMATE-RELATED FINANCIAL DISCLOSURES BY PUBLICLY QUOTED COMPANIES, LARGE PRIVATE COMPANIES AND LLP
On 24 March, a news release from the Department for Business, Energy and Industrial Strategy launched a consultation which seeks views on proposals to mandate climate-related financial disclosures by publicly quoted companies, large private companies and Limited Liability Partnerships (LLP). The closing date is 5 May.
BROCHURE: A GUIDE TO THE UK’S COMMERCIAL SPACEPORTS
On 23 March, the UK Space Agency published a brochure which offers an overview of the proposed commercial spaceports currently being developed across the UK.
ECONOMIC SUBSTANCE UPDATE: BERMUDA AND CAYMAN ISLANDS
On 24 March, Appleby published a short article as its first update of 2021.
EDPB GUIDELINES ON VIRTUAL VOICE ASSISTANTS
On 24 March, CMS Law reported that the European Data Protection Board (EDPB) had published its draft Guidelines on Virtual Voice Assistants (VVA), which are software services that take voice as an input, identify and execute a command or question, and interact with users or other devices. The guidelines provide a hands-on guidance for stakeholders across the whole VVA ecosystem. The EDPB has launched a public consultation on the draft guidelines. Comments can be submitted by 23 April.
US AND UK: QUARTERLY FINANCIAL CRIME HORIZON SCANNERS
On 24 March, Eversheds Sutherland published 2 publications that summarise key financial crime related legal and regulatory changes expected over the next 18 months to 2 years, as well as providing electronic links to key resources.
FCA CAMPAIGN TO ENCOURAGE INDIVIDUALS TO REPORT WRONGDOING
On 24 March, a release on Mondo Visione reported that the campaign, ‘In confidence, with confidence’, encourages individuals working in financial services to report potential wrongdoing to the FCA, and reminds them of the confidentiality processes in place. As part of the campaign, the FCA has published materials for firms to share with employees, as well as using its events to highlight the campaign.
It has also produced a digital toolkit for industry bodies, consumer groups and whistleblowing groups to encourage individuals to have confidence to step forward.
CANADA: KYC REQUIREMENTS UPDATED
On 24 March, FINTRAC issued new guidance on KYC, including that for PEP and heads of international organisations.
USING WOOD FORENSIC SCIENCE TO DETER CORRUPTION AND ILLEGALITY IN THE TIMBER TRADE
The World Wildlife Fund and TRAFFIC have released a report saying that illegal logging and the associated illegal timber trade are major global threats to forest conservation and management and are closely linked to corruption, both in the forest and in the supply chain to market. It also said that wood forensic science has yet to reach its full potential but is improving rapidly; properly supported and used in combination with other approaches, it can make a significant contribution towards combatting crime and corruption in the forestry sector.
DARK SIDE OF CHINA’S ORGANISED CRIME CRACKDOWN REVEALED IN PRIVATE LENDER CASE
On 23 March, the South China Morning Post reported that loans to cash-hungry businesses lead to life imprisonment for woman caught up in a government campaign against crime and corruption. Her lawyer warns this and similar cases could end the country’s vast private credit market. The article looks at how lenders vital to the booming private sector have been caught in ever-changing regulatory nets.
FEDS SLASH SWISS BANKER’S SENTENCE IN VENEZUELAN MONEY LAUNDERING CASE IN MIAMI
On 24 March, the Miami Herald reported that Matthias Krull, a Swiss banker who was thrust into the spotlight of a billion-dollar Venezuelan money laundering case in Miami has received one of the biggest sentence reductions in US history because of his assistance in helping federal authorities unravel an international web of financial corruption.
TIME TO RETURN INTEGRITY TO THE UK CORPORATE REGISTRY
On 4 March, RUSI issued this short, 6-minute video saying that, over the last decade there has been a succession of money laundering scandals with the UK and its Companies House at the centre. Journalist and Author Oliver Bullough explains how this happened, the devastating impact it has across the globe and what the UK government can do about it.
REPORT: EU-TURKEY POLITICAL, ECONOMIC AND TRADE RELATIONS
On 24 March, the EU Sanctions blog reported that the EU Commission has received a report which, amongst other things, says that its relations, and dialogue on Greek-Turkish maritime issues have improved since December 2020 – but it nevertheless on further targeted sanctions and other measures
FINCEN DIRECTOR DESCRIBES IMPLEMENTATION EFFORTS FOR 2020 AML ACT
On 24 March, an article from Cadwalader Cabinet about an address to the Florida International Bankers Association AML Conference by FinCEN Director Kenneth Blanco, in which he outlined the bureau’s implementation efforts since the enactment of the 2020 Act.
REPORT: THE UK’S RELATIONSHIP WITH IRAN
On 24 March, the EU Sanctions blog said that the Parliamentary Foreign Affairs Committee has published a report: “No prosperity without justice: the UK’s relationship with Iran”. It recommended that the UK work with the US to bring all parties back to compliance and should outline what a replacement to the JCPOA would look like, and prioritise sanctions designations under its human rights sanctions regimes for activities at home and abroad.
EU COUNCIL ADOPTS NEW RULES TO STRENGTHEN ADMINISTRATIVE COOPERATION
On 24 March, Accountancy daily reported that the European Council has adopted new rules designed to improve administrative cooperation in the field of taxation and address the challenges posed by the digital platform economy. The new rules cover digital platforms located both inside and outside the EU and will apply from 1 January 2023 onwards.
SINGAPORE REGULATOR TO REVIEW COMMODITY TRADER’S RISK CONTROLS AFTER LOSSES
On 24 March, Global Trade review reported that Singapore’s financial regulator is conducting a review of Envysion Wealth Management’s governance and risk management, after the company lost millions of dollars to an alleged fraudulent nickel trading scheme. This comes after fraud charges filed against Ng Yu Zhi, a director of Envy Asset Management and Envy Global Trading which is said to have involved the “purported trading of nickel”. Ng’s companies raised around $750 million in total, police add, with investors promised returns of around 15%. Prosecutors accuse Ng of siphoning off hundreds of millions of dollars into his personal account, however, and a large proportion of investor funds remains unaccounted for.
LIBYA LETTER OF CREDIT SYSTEM ABUSED FOR “RAMPANT FRAUD”
On 24 February, Global Trade Review reported that the Libyan central bank’s letter of credit (LC) system may have been exploited for “fraud on a large scale”, researchers believe, after finding LC-based transaction volumes were far higher than actual imports.
WHY UK KEPT EXPORTING A DEADLY PESTICIDE THAT KILLS THOUSANDS
A report from Channel 4 TV in the UK on 24 March says that hundreds of secret documents and a whistleblower raise questions about whether manufacturer Syngenta put profit before people, in making and exporting weedkiller Gramoxone, with its active ingredient paraquat. It is claimed that secret company documents suggest Syngenta had safer more expensive alternatives that it held back from consumers to protect its profits – which the company denies.
TEXAS MAN PLEADS GUILTY TO $24 MILLION COVID-RELIEF FRAUD SCHEME
A news release from US DoJ on 24 March advised that a Texas man, Dinesh Sah, 55, pleaded guilty to orchestrating a fraudulent scheme to obtain approximately $24.8 million in forgivable Paycheck Protection Program (PPP) loans and laundering the proceeds. He admitted that he submitted fraudulent applications, filed under the names of various purported businesses that he owned or controlled, to 8 different lenders and claimed that these businesses had numerous employees and hundreds of thousands of dollars in payroll expenses when, in fact, no business had employees or paid wages consistent with the amounts claimed in the PPP applications. He further admitted that he submitted fraudulent documentation in support of his applications, including fabricated federal tax filings and bank statements for the purported businesses, and falsely listed other persons as the authorized representatives of certain of these businesses without the authority to use their identifying information on the applications.
SURINAME’S CORRUPTION AND MONEY LAUNDERING CHALLENGES
On 24 March, Global Americans reported on the release of Suriname’s National Risk Assessment of AML/CFT. The NRA indicates that the country is still plagued by insufficient awareness of the phenomenon of money laundering, and thus will face major challenges in the future. It is said that, adding to a sense of urgency, Suriname is poised to emerge as a major oil producer. It is said that the NRA was conducted against the backdrop of a country that has increasingly become associated with corruption. The NRA flagged many of the same problems as a 2017 UN Development program report, reflecting the extent of the dilemma facing the new government elected in May 2020. Although the NRA indicates that Suriname has made some improvements with regards to combating money laundering and corruption, it also clearly stressed that considerable work remains to be done. Suriname has the opportunity to benefit from its potential oil wealth, but corruption and money laundering must be controlled first.
STEAMSHIP MUTUAL INSURER WARNS ON BANK TRANSFER FRAUDS
On 24 March, Insurance Maritime News reported that Steamship Mutual P+I Club has informed its members that it had recently become aware of a cyber security incident involving a broker’s systems that resulted in an attempt to induce a Steamship Mutual member to transfer funds to a bank account established for fraudulent purposes. The attempt was supported by forged documentation using Steamship’s letterhead and an official signature purporting to authorise a third-party factor to receive funds on Steamship’s behalf.
TECHNIQUE THAT IDENTIFIES EVERY BANKNOTE’S ‘UNIQUE AND UNCLONABLE’ FINGERPRINT TO CURB FORGERY
On 24 March, an article from Engineering & technology reported that researchers at the University of Warwick have developed a technique that identifies every banknote’s ‘unique and unclonable’ fingerprint, which could help prevent the increasing exchange of counterfeit banknotes.
CASHING IN ON GUNS: IDENTIFYING THE NEXUS BETWEEN SMALL ARMS, LIGHT WEAPONS AND TERRORIST FINANCING
Project CRAAFT (Collaboration, Research & Analysis Against the Financing of Terrorism) at RUSI and the International Centre for Counter-Terrorism – The Hague (ICCT) have published this new report which presents the main findings of a year-long research project on Small Arms and Light Weapons (SALW) as a source of terrorism financing. 2 chapters take a regional focus and explore this phenomenon in respectively West Africa and the Middle East. A final chapter considers the various direct and indirect ways through which terrorists are ‘Cashing in on Guns’, and lists a number of policy recommendations for the EU to take a step forward in addressing this phenomenon.
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