Panama Covid-19 update – another 2 fatalities reported today, alongside 364 new infections, with 4,578 active case – 415 in various wars, plus 69 more in ICU.
7 APRIL 2021
ISLE OF MAN AMENDMENT OF 1 ENTRY ON YEMEN SANCTIONS LIST
On 6 April, an email advised that the entry for Sultan Saleh Aida Aida ZABIN on the list of those subject to sanctions had been amended.
COVID-19 WILL NOT FRUSTRATE AIRCRAFT LEASE AGREEMENTS
On 7 April, an article from Vedder Price said that a recent High Court case in London saw an argument rejected that the COVID-19 pandemic had frustrated underlying aircraft leases. It is said that the case demonstrates the courts’ reluctance to interfere with the performance of letters of credit and similar instruments which are intended to be equivalent to cash. It emphasises the importance which is attached to such instruments in facilitating commercial transactions. However, the article comments that the result of the case leaves some room for speculation as to whether the court would have reached the same judgment in the context of a short wet-lease agreement pursuant to which the lessee assumes only limited obligations.
SOUTH KOREAN PROSECUTORS SELL (AND PROFIT OFF) BITCOIN TAKEN FROM CRIMINALS
On 5 April, Coindesk reported that South Korean prosecutors have sold Bitcoin confiscated from the operator of the illegal pornography site and that the sale turned a profit of around $10.9 million.
PANAMA: SPANISH COURT RULES MARTINELLI PROBE CONTINUES
On 6 April, Newsroom Panama reported that a Spanish court has ruled that the corruption case involving Baltazar Garzón FCC for works in Panama, and for which former President Martinelli is under investigation, should continue. It is said that the company faces several legal proceedings related to the alleged payment of bribes to former officials of the Martinelli administration for the construction of infrastructure works,
US: IDENTITY THEFT RED FLAGS AND CYBERSECURITY DEFICIENCIES
A blog post on the Compliance & Enforcement blog from the Program on Corporate Compliance and Enforcement at the New York University School of Law examines a recent settlement in which a broker-dealer based in Germany fell foul of FINRA regulations in the US concerned with the protection against identity fraud. It is said to be the first major enforcement action involving these regulations since 2018 and potentially signals a more aggressive and meaningful focus on them. The post attempts to analyse the unique fact pattern of the case and offer practical suggestions for compliance officers navigating the nuances of identity theft protection and cybersecurity in the new, remote work world.
FAILURE TO EXPORT AIRCRAFT FROM THE US – AVOIDING CIVIL, CRIMINAL PENALTIES AND AIRCRAFT SEIZURES
On 5 April, an article from Vedder Price reported that an indictment provided that the US Government charged the defendants with, among other things, conspiracy to commit export violations, and had seized 12 aircraft. The indictment is described as unprecedented and alarming to the international aviation community. It is said that aircraft are deeded to be permanently exported from, if not permanently returned to, the US within 12 months after the date of export. It is said that what was particularly alarming to many industry participants was the US Government’s position as to what circumstances require compliance with the permanent export laws, and that a trust company is responsible, as registered owner, for compliance with these export laws. According to anecdotal accounts, it is said, the US Government may be investigating as many as 15,000 aircraft owned by Non-Citizen trusts (NCT) for export compliance, including aircraft that have exited NCT trusts in the last 5 years. It is said that many aircraft owners failed to properly export aircraft is that they simply did not realize they were required to do so if the aircraft remained on the US registry. It is said that a recent example of a tragic circumstance exists relating to an NCT-registered aircraft being operated primarily outside of the US, which resulted in renewed scrutiny of the use of NCT. This was the crash of a US-registered light aircraft in the English Channel, in which an Argentinian footballer died.
MONEY LAUNDERING ENQUIRY INTO ARGENTINE KIRCHNER FAMILY REACHES NOWHERE
On 7 April, the Rio Times reported that Argentine Vice President Cristina Fernández de Kirchner has recovered all her assets involved in an alleged money laundering scheme. However, it is noted that the tax bureau will maintain overseers at hotels in Patagonia to check money balances and report to the judiciary any irregularity they may notice.
US VISA BAN ON MEMBER OF PARAGUAYAN CONGRESS
On 6 April, the US State Department announced the public designation of a Representative in the Paraguayan Legislature’s Lower House, Ulises Rolando Quintana Maldonado due to his involvement in significant corruption. He and his wife are barred from entry into the US.
AN OVERVIEW OF FOREIGN SECURITY INVOLVEMENT IN MOZAMBIQUE
On 7 April, defence Web reported that a number of private security companies, foreign governments and militaries have become involved in Mozambique in its fight against the insurgency in Cabo Delgado. Private military contractors included Russian security company Wagner Group, but it is said that an estimated 200 Wagner personnel left Mozambique in November 2019, after suffering heavy casualties. Security companies includes those with which Total may have contracts to protect its multi-billion dollar oil and gas projects in Mozambique. It is said that G4S is the biggest employer in Mozambique outside the public sector, according to the company’s website. So far, Mozambique’s President Nyusi has limited his requests for foreign government and military assistance to logistical support and training. This included involvement of the US and Portugal, and the UK signed an MoU with Mozambique in May 2019, committing to tackling the insurgency in Cabo Delgado through defence cooperation and “tackling the underlying issues”.
UK: MUTUAL LEGAL ASSISTANCE
On 7 April, the Home Office issued updated guidance for competent authorities abroad (and in the UK) about obtaining evidence within the UK (or abroad) to assist in criminal investigations or proceedings.
‘CHILLING IMPACT’: SUMMARY OF WHITEHALL SUBMISSIONS TO PUBLIC LAW REVIEW PUBLISHED
On 7 April, the Law Society Gazette carried an article saying that a summary of government submissions to the Independent Review of Administrative Law has been published – 3 weeks before a consultation on proposed reforms to the judicial review process closes.
TAX AVOIDANCE AND TAX EVASION
An updated briefing paper from the House of Commons Library on 7 April says that in recent years tax avoidance has been the subject of considerable public concern, although there is no statutory definition of what tax avoidance consists of. Tax avoidance is to be distinguished from tax evasion, where someone acts against the law. By contrast tax avoidance is compliant with the law, though aggressive or abusive avoidance, as opposed to simple tax planning, will seek to comply with the letter of the law, but to subvert its purpose.
PERU: 6 PRESIDENTIAL CANDIDATES, 2 CANDIDATES FOR VICE-PRESIDENCY AND 134 CANDIDATES FOR PARLIAMENTARY SEAT ARE BEING PROBED FOR ALLEGED CORRUPTION
On 7 April, Prensa Latina related this information which is said to be in a recent report from the Gustavo Mohme Llona Foundation.
ONE CYBERCRIME GANG EXTORTED $75 MILLION FROM TARGETS
On 7 April, BNN Bloomberg reported that one gang of cybercriminals extorted at least $75 million from private sector companies, local governments and hospitals, a former NSA contractor concluded in a months-long study, said to be an alarming sign of the potential financial rewards for online attacks. The study is a broad examination of attacks in recent months, examining the goals, practices and payoffs of what its author calls the world’s first “ransom cartel”.
US CONGRESS REPORT ON IRAN SANCTIONS
On 7 April, USNI News released the updated version of a 2020 report from the Congress Research Service.
CALIFORNIA MAN ARRESTED – SUSPECTED IN $227 MILLION PONZI SCHEME TIED TO HBO AND NETFLIX LICENSING DEALS
On 7 April, the East Bay Times reported that a Los Angeles man, Zachary Joseph Horwitz, 34, has been arrested on suspicion of running a $227 million Ponzi scheme that solicited investors for phony film licensing deals.
A MADE-IN-MIAMI MONEY LAUNDERING SAGA DEVELOPS EVEN DEEPER UKRAINE ROOTS
On 7 April, an article from McClatchy is concerned with what is described as a tangled story about money and power, and one that demonstrates the magnetic pull of Miami when money laundering is alleged. It is said to involve a couple of Ukrainian oligarchs sanctioned for alleged money laundering, a mix of Florida-based businessmen who employed the husband of a prominent Democratic politician, some political connections tracing back to Rudy Giuliani, former Ukrainian presidents and even the Kremlin.
REPEAT FRAUDSTER SENTENCED TO OVER 5 YEARS IN PRISON FOR OPERATING CREDIT CARD FRAUD RING FROM LATVIA TARGETING US CITIZENS
A news release from the US DoJ on 6 April advised that Edgar Ivulans, 43, of Latvia, was sentenced to 5 years and 5 months in prison, and was ordered to pay $12,754 in restitution, to forfeit $12,754, and to further pay a $4,000 special assessment. A Latvian citizen, he was arrested in Germany and successfully extradited to the US to face the charges in this case, but operated the fraud scheme from his home in Latvia.
ON A TRIP TO ISRAEL, SLOVENIAN PM MET WITH SPYWARE COMPANY
On 6 April, OCCRP reported that, during a state visit to Israel in December, Slovenian Prime Minister Janez Janša met for several hours with 5 Israeli companies, including a controversial spyware company, NSO Group, with a history of hacking phones of human rights activists and journalists.
SOUTH AMERICAN CRACKDOWN ON ILLEGAL GUN TRADE REVEALS SERIOUS TRAFFICKING DESPITE PANDEMIC
On 6 April, a news release from the UN Office on Drugs and Crime said that a police operation targeting firearms trafficking across South America has seen thousands of illicit firearms seized, thousands of arrests and investigative leads generated on crime networks and smuggling routes. Coordinated by INTERPOL and UNODC, the joint operation enabled police, customs, border and prosecution services to work together, carrying out nearly 10,000 checks against INTERPOL databases to track illegal firearms and identify potential links with organised crime.
DARK WEB HITMAN IDENTIFIED THROUGH CRYPTO-ANALYSIS
On 7 April, Europol advised that it had supported the Italian Postal and Communication Police in arresting an Italian national suspected of hiring a hitman on the dark web. The hitman, hired through an internet assassination website hosted on the TOR network, was paid about €10 000 worth in Bitcoins to kill the ex-girlfriend of the suspect.
ORGANISATIONS SHOULD FOCUS ON TO APPLY AND INTEGRATE TECHNOLOGY MORE EFFECTIVELY IN CORPORATE INVESTIGATIONS
On 7 April, an article in Control Risks analyses how changing technology is challenging traditional investigation methodology and offers practical considerations organisations should focus on to apply and integrate technology more effectively in corporate investigations. It says that rapidly evolving technology has disrupted traditional approaches to investigations. Technological advancements frequently outpace legal reforms, regulations, and industry knowledge, so investigators must develop and update their methods to keep up with the breakneck pace of digital transformation.
UK: FCA BANS FINANCIAL ADVISER FOR ACTIONS OUTSIDE THE WORKPLACE
On 7 April, an article from Out-Law was concerned with the Financial Conduct Authority (FCA) having issued a decision notice withdrawing approval for an independent financial adviser to perform regulated functions after he was found guilty of attempting to meet a child following sexual grooming.
GERMANY AND FRANCE WELCOME A PROMISE BY US TREASURY SECRETARY TO WORK ON A GLOBAL CORPORATE MINIMUM TAX RATE AS A STEP TOWARDS MAKING A LANDMARK DEAL ACHIEVABLE
On 7 April, Hellenic Shipping News reported that while Germany and France welcomed the promise low-tax Ireland voiced reservations. It is part of efforts by more than 140 countries to update the rules for taxation of cross-border commerce for the first time in a generation, and to discourage multinationals from booking profits in low-tax countries regardless of where their income is earned.
GAFILAT: GUIDE ON SECTORAL RISK ASSESSMENT
The Latin American FATF-style regional body GAFILAT has published this guide from September 2020 (in English, Spanish and Portuguese). It is aimed at providing member states with the necessary technical support to be able to satisfactorily comply with the international AML/CFT standards. It says that the ratings reflected in the Mutual Evaluation Reports of member states are said to show that most of the countries assessed need to deepen their understanding of the risks of certain sectors or activities, which for whatever reasons, are not sufficiently known and understood. This calls for an additional effort on the part of the countries to acquire sufficient knowledge about these risks to enable them to assess, understand and — if necessary — mitigate them.
EASTERN CARIBBEAN BANK DCash FIRST BLOCKCHAIN-BASED CURRENCY INTRODUCED BY AN INTERNATIONAL CURRENCY UNION
On 6 April, Euronews reported that the product became available from 31 March in St Lucia, Grenada, St Kitts & Nevis, Antigua & Barbuda. It involves use of a downloaded app and a QR code on a smartphone.
US: MAN SENTENCED TO 12 YEARS FOR ATTEMPTING TO PURCHASE CHEMICAL WEAPON ON THE DARK WEB
A news release from the US DoJ on 6 April announced that a Missouri man was sentenced to 12 years in federal prison without parole for attempting to purchase a chemical weapon, capable of killing hundreds of people, on the dark web with Bitcoin. The quantity of the chemical weapon involved had the capacity to kill approximately 300 people.
SOUTH AFRICA: GUPTA FAMILY USED LAWSUIT TO PREVENT CONFISCATION
On 6 April, OCCRP reported claims that the Gupta family had one of its companies sue another over unpaid loans, which prevented authorities from confiscating the sued company’s assets allegedly obtained through corruption, according to documents from a court in Bermuda.
FRENCH COURT REDUCES FINE FOR LATVIA’S RIETUMU BANKA FOR ALLEGED ENGAGEMENT IN MONEY LAUNDERING
On 6 April, the Baltic Times reported that a French court has reduced the fine imposed on Latvia’s Rietumu Banka by almost 75% to €20 million – for its alleged involvement in money laundering. In 2017, a court fined Rietumu Banka for facilitating a scam to “democratise” tax evasion among ordinary taxpayers and small businesses in France.
MALTESE ARMS DEALER WAS ‘UNAWARE’ THAT HE BROKE LIBYA EMBARGO
On 5 April, the Times of Malta reported that a Maltese arms dealer has told the UN security council that he did not know his military-grade vessels were to be used by private military contractors in violation of sanctions on Libya. However, James Fenech’s claims is said to have lacked credibility and he was found to be in ‘technical noncompliance’ with the UN’s arms embargo, according to a new UN Security Council report.
A GLOBAL RESEARCH REPORT ON FINANCIAL INSTITUTION FINES AND ENFORCEMENT ACTIONS IN 2020
A report from Fenergo said that in 2020, financial institutions and individuals were in receipt of financial penalties and enforcement actions totalling $10.6 billion as a result of compliance failures. Penalties related to AML alone made up 99% of this total, at $10.5 billion. Since the financial crash in 2008, an estimated $46.6 billion in enforcement actions has been levied against financial institutions and individuals for non-compliance with AML, sanctions, data privacy and MiFID obligations. Fenergo examines the trends and key events driving enforcement actions in 2020, and highlights what one can anticipate in 2021.
OVER 27 TONNES OF COCAINE INTERCEPTED IN THE PORT OF ANTWERP
On 5 April, the Brussels Times reported that Customs had intercepted a total of 27.64 tonnes of cocaine in the port of Antwerp over the preceding 42 days, with a market value of at least €1.382 billion.
EUROPE’S BILLIONAIRES ARE $1 TRILLION RICHER THAN A YEAR AGO
On 6 April, Forbes reported that the wealth of Europe’s billionaires has risen to hit $3 trillion, Forbes found, as the world’s richest remained largely shielded from the financial harm caused by the coronavirus pandemic. There are said to be 628 European billionaires, up from 511 the previous year. As a group, they are $1 trillion richer than a year ago, suggesting that for the hyperwealthy, the pandemic year has been lucrative.
US OFFICIALS SAY INVESTMENTS DIVERTED TO HEMP COMPANIES WERE ILLEGAL
On 7 April, Hemp Today carried an article about an Indiana company which illegally steered as much as $4 million to several hemp companies while its president used more than $1.7 million in investor funds for personal benefit. George S Blankenbaker Jr, president of Stevia Corporation, agreed to plead guilty to federal wire fraud and money laundering in federal criminal court, and to pay almost $5.2 million in civil penalties in a separate preliminary settlement with the SEC. the SEC described the scheme involved as one that included “ponzi-style” payments in which new investor money was used to cover dividends owed existing shareholders, and other expenses. Blankenbaker ran the fraud scheme from August 2016 to May 2019 through StarGrower Commercial Bridge Loan Fund 1 LLC, StarGrower Asset Management LLC and Blankenbaker Investments Fund 17 LLC.
DID YOUR NEW REFRIGERATOR HELP FUND TERRORISM?
An article on the Fraud Eats Strategy website explains how trade-based money laundering exploits the demand for consumer goods. It starts by saying, or repeating, that of the 3 primary methods that transnational criminal and terrorist organizations use to launder the proceeds of illicit activity and finance terrorism, trade-based money laundering is arguably the most challenging. Almost any product, service, or sector can be used – from precious metals to household appliances.
There is also the podcast which discusses trade-based money laundering –
HOW SHOULD THE CRS FIT INTO A HOLISTIC FINANCIAL COMPLIANCE STRATEGY?
The International Chamber of Commerce has published an article saying that the OECD Common Reporting Standard (CRS), developed in 2014, has been a game changer in terms of standardising financial compliance approaches and tax transparency standards globally. It aims to create a level playing field for the automatic exchange of financial account information between jurisdictions. Effective implementation at international level is central to this purpose. It and the US-targeted FATCA have necessitated changes to the way financial institutions operate with respect to compliance measures and new governance and internal control strategies. It is said that it is essential that consistent, efficient and sustainable compliance strategies are put in place to ensure operational effectiveness, which will be instrumental in improving data quality and internal controls as well as establishing compliant mechanisms for tax audits. It lists a number of elements that financial institutions should consider as part of a holistic, sustainable compliance strategy.
SUPPLY CHAIN FINANCE
On 5 April, the International Chamber of Commerce published an article about the recently published Standard Definitions for Techniques of Supply Chain Finance. This underlines the fact that SCF is a number of techniques with some overlaps, but commercially used at different points of the supply chain. These techniques include forfaiting, factoring, invoice purchasing, and, of course, payables finance. The article follows the failure of Greensill and contrasts what it did to the guidance.
TEXAS: $1.3 MILLION IN COUNTERFEIT GOODS SEIZED AT THE WORLD’S LARGEST FLEA MARKET
On 6 April, a news release from US Immigration and Customs Enforcement advised that special agents seized $1.3 million in counterfeit goods during the First Monday Trade Days market in Canton, Texas. Over 1,000 items were confiscated, including several boxes of luxury designer goods such as high-end purses, caps, shoes and sunglasses.
EXPORT CONTROL: PRACTICAL TOOLS FOR ADDRESSING THE RISK OF WEAPONS DIVERSION
On 31 March, the Stimson Center hosted a launch of a new report, saying that the diversion of conventional weapons from licit to illicit markets is a key international security concern, as unregulated weapons can exacerbate and perpetuate conflict and armed violence, facilitate violations of international human rights law and international humanitarian law, and contribute to insecurity and instability. Such risks underscore the importance of robust arms transfer controls and weapons management procedures at the national level. The report is described as a good practice compendium on methods to mitigate arms diversion. It points out that the prevention of diversion is a significant element of the UN Arms Trade Treaty (ATT).
US: DUBAI-BASED TRANSNATIONAL MONEY LAUNDERER SENTENCED TO 50 MONTHS IN PRISON
A news release from US DoJ on 7 April advised that Dubai-based Alade Sodiq and others in the US and Europe conspired to use phone “spoofing” service and other means to transfer millions in fraudulently obtained funds. From at least 2013 through in or about 2018, he and various other conspirators, located in countries including the US, Canada, Italy, UK, and the UAE, were involved in a scheme to fraudulently access millions of dollars held in individuals’ and corporations’ bank accounts, and to conduct financial transactions using those bank accounts without the knowledge or authority of the accounts’ legitimate owners.
GIBRALTAR POLICE LAUNCH NEW INTERNATIONAL FORUM AIMED AT FIGHTING THE FINANCING OF TERRORISM
On 7 April, the Royal Gibraltar Police have launched a new international forum aimed at fighting the financing of terrorism. According to a statement by the RGP, the project will see officers from law enforcement agencies and financial intelligence units in Guernsey, the Isle of Man, Jersey and Gibraltar team up to share their expertise and experiences.
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