Panama Covid-19 update – another 562 new cases reported today, with the number of active cases also up, at 4,601, although hospitalisations are not (yet) increased. There are now 48 people in ICU and 303 in other wards. There were 3 new fatalities reported.
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12 MAY 2021
MYSTERY OF SANCTIONED TYCOON’S ASSETS IN ZIMBABWE REVIVAL PLAN
On 12 May, KYC 360 reported that in December, the government announced a multibillion-dollar project called Kuvimba Mining House Ltd. that would hold some of the nation’s most valuable gold, platinum, chrome and nickel mines and whose revenue would be used to revive the country’s moribund economy. It is said that the announcement was met with scepticism among local journalists and some industry analysts. Decades of graft and economic turmoil have left once-prosperous Zimbabwe a ruined state. Documents show how, through a complex series of transactions, the mining assets that form the core of the Kuvimba holdings were until recently owned by or tied to Kudakwashe Tagwirei, a politically connected businessman and presidential adviser who was sanctioned for corruption by the US last year.
https://www.riskscreen.com/kyc360/news/mystery-of-sanctioned-tycoons-assets-in-zimbabwe-revival-plan
JPMORGAN MUST TURN OVER US COMPLIANCE RECORDS IN NIGERIAN OIL LICENCE CASE
On 12 May, KYC 360 reported that the High Court in London has ordered JPMorgan Chase to turn over compliance documents ahead of a trial in which the bank stands accused of enabling the misappropriation of $875 million from the government of Nigeria, in a case related to the controversial and long-contested OPL 245 oil licence deal,
BELL-RINGERS AND A BOWLS TEAM AMONG GROUPS CAUGHT UP IN HSBC MONEY LAUNDERING BLITZ
On 12 May, This is Money reported that village bell-ringers and local bowls clubs are having their bank accounts closed by HSBC in a crackdown on money laundering. Last month it reported how the bank had shut down the account of a pigeon racing club, and has since heard from other community groups which have also been hit. Clubs are facing demands for more personal details and records — and having their accounts closed if they cannot comply.
UK: SERCO – WHERE TO NEXT FOR THE SFO?
On 10 May, an article from DLA Piper looks at the prospects for the SFO after the trial of 2 former Serco executives collapsed last month after errors in disclosure led the judge to direct the jury to return verdicts of not guilty. This marks the fourth failure, in 4 attempts, to successfully prosecute senior employees for their involvement in Deferred Prosecution Agreements that their employers had agreed with the SFO, accepting corporate criminal liability on the basis that those employees were personally guilty of the offences. The cases have therefore produced seemingly contradictory outcomes with regard to corporates (accepting criminal liability) and individuals (all subsequently acquitted) based on the same evidence. The article says that the acquittals in the aforementioned cases raise a number of concerns regarding the way they are handled and the DPA process, as well as the possible erosion of the attractiveness of DPA to corporates. Meanwhile, a blog post from Carmelite Chambers considers the acquittals in the Serco case in the light of the history of the SFO, along with the history and consequences of DPA. It concludes that either the SFO essentially doubles down on cases where DPA have been agreed and ramps up the investigation and procedures surrounding any prosecution; or a more cautious SFO where either DPA are agreed with no individuals being prosecuted or the pursuit of a DPA falls away and the SFO seek to prosecute defendant companies in the future.
https://www.dlapiper.com/en/us/insights/publications/2021/05/the-serco-episode-concludes/
https://www.carmelitechambers.co.uk/blog/blog-serco-broke-sfos-back
WEBINAR – INTERIM ACCOUNT FREEZING ORDERS UNDER POCA
On 10 May, 36 Commercial chambers released the audio recording of a webinar with 2 barristers discussing all of the issues raised in a case where Chinese citizens’ bank accounts were frozen by UK authorities and look more into interim account freezing orders.
https://36commercial.buzzsprout.com/1109828/8493367
IS THE US MORE EFFECTIVE THAN THE UK AT PROSECUTING ECONOMIC CRIME?
On 7 May, MacFarlanes published an article posing this question, saying that the US is widely perceived as the dominant nation in the enforcement and prosecution of global economic crime. However, it says that recent analysis undertaken by the firm – and based on multiple freedom of information requests submitted by its corporate crime and investigations team – shows the picture of success and failure on both sides of the Atlantic is more nuanced than might initially appear. It compared the work of prosecutors in the US and the UK by examining several key areas of economic crime; and then it analysed why the US continues to maintain its dominance in the enforcement of economic crime and look at the direction of travel in both jurisdictions.
RUSSIA SANCTIONS AND THEIR IMPACT ON COMMODITIES COMPANIES: ACTION FOR COMPANIES ENGAGED IN TRANSACTIONS WITH RUSSIAN GAS AND ENERGY COMPANIES
On 11 May, an article from DLA Piper warns that if a company engages in transactions with gas or energy companies in Russia, it is important that it takes note of rapidly moving developments and should consider CDD on these companies, ensuring that they closely monitor upcoming sanctions, and ensuring that any contract include protections for it and the projects should US sanctions be imposed on the counterparties.
CUSTOMS AUTHORITIES IN NORTH-EAST CHINA HAVE BUSTED A WATCH-SMUGGLING CASE WORTH $28 MILLION
On 12 May, Ukrainian News carried an article saying that gang members smuggled high-end watches from Hong Kong, and managed to evade taxes by smuggling 24,061 watches, with authorities confiscating 1,558 watches.
https://ukranews.com/en/news/774888-watch-smuggling-case-busted-in-ne-china
VATICAN BROKER AT HEART OF EXTORTION PROBE ARRESTED IN LONDON
On 12 May, the Financial Times reported that Gianluigi Torzi, a London-based Italian businessman has been arrested at the request of the Italian authorities. He represented the Vatican in property deals in London, and has been arrested on suspicion of money laundering.
https://www.ft.com/content/f2a1707b-28cb-4431-97aa-63fe3200b1ea
ITALIAN MAFIA HAS FOUND WAYS TO EXPAND AND STEAL MILLIONS FROM SWITZERLAND DURING THE CORONAVIRUS PANDEMIC
On 12 May, Swissinfo reported that, to date, the federal Money Laundering Reporting Office (MROS) estimates that at least $199 million has been stolen from government loans issued to offset the financial damage of the coronavirus pandemic. It is said that the presence of Italian mafia in Switzerland dates back more than 40 years.
https://www.swissinfo.ch/eng/italian-mafia-milks-swiss-covid-funds-for-expansion-/46612700
ISLE OF MAN: ‘ZERO-TEN’ TAX RATES BIGGEST CHALLENGE FOR NEXT GOVERNMENT
On 12 May, Manx Radio reported that the next island government, following this year’s general election, main challenge will be keeping the Island’s tax rates under the so-called “zero-10” arrangements will be the biggest challenge for the next administration. This has been said by the Chief Minister, who is not standing for re-election. Under the arrangement, adopted by the Isle of Man and other offshore jurisdictions, most companies pay 0% corporation tax, while others pay 10% and some 20%, depending on which sector they are in.
https://www.manxradio.com/news/isle-of-man-news/zero-ten-tax-rates-biggest-challenge-for-next-govt/
CORRUPTION AND ANTI-CORRUPTION PLEDGES IN THE WESTERN BALKANS
On 3 May, the Global Infinitive Against Transnational Organised Crime published a report based on analysis provided by experts who examined corruption and its impact on governance in the region, and reviewed the anti-corruption frameworks as well as government efforts to tackle corruption. In particular, it looks at how the governments are implementing their own anti-corruption pledges made in the context of the Berlin Process, an initiative aimed at stepping up regional cooperation in the Western Balkans and aiding the integration into the EU. The report is designed to contribute constructively to the implementation and review process of the anti-corruption pledges made as part of the Berlin Process, and highlight areas where further progress is needed.
https://globalinitiative.net/analysis/corruption-western-balkans/
https://globalinitiative.net/wp-content/uploads/2020/10/Infrastructure-of-Integrity-GI-TOC.pdf
BLACK GOLD – THE CHARCOAL GREY MARKET IN KENYA, UGANDA AND SOUTH SUDAN
On 31 March, the Global Infinitive Against Transnational Organised Crime published a report saying that charcoal is a vital commodity, used by as much as 80% of the urban population in East Africa as their primary energy source for cooking, and it provides incomes and livelihoods for millions. It says that failures to enforce existing regulations and to design better enforcement regimes are a threat to sustainable development. Regulatory blind spots lead to environmental degradation, as trees are unsustainably harvested, and public health costs, linked to indoor pollution.
THE FLOW OF PEOPLE, DRUGS AND MONEY IN THE WESTERN BALKANS
On 10 May, the Global Infinitive Against Transnational Organised Crime published a report which sheds light on the dark numbers of mixed migrant flows through the Western Balkans, the prices that they pay to be smuggled, as well as the cost of drugs in the region, to provide an indication of the volume of illicit trade and the potential profits being made. The hope is said to be that this report can lead to a greater understanding of illicit economies in the Western Balkans in order to take more effective measures to reduce the incentives and profits of organised crime.
CHINA’S THIRD WAY ON DATA GOVERNANCE
On 12 May, EurActiv reported that last year, China launched its bid to shape global data governance, eager to create its own approach alongside those created by the US and the EU. Since then, it has been working on a comprehensive data protection framework that could be a game-changer for potential Western investors. The second draft of its Personal Information Protection Law (PIPL) was published at the end of April for public consultation.
https://www.euractiv.com/section/data-protection/interview/chinas-third-way-on-data-governance/
SPANISH AND UK POLICE FORCES RECOVER €6 MILLION IN 2-YEAR LONG PONZI SCHEME INVESTIGATION
A news release from Europol on 12 May announced that hundreds of victims of a €15 million Ponzi scheme may soon recover up to 40% of their losses as a result of an international law enforcement effort to recover the ill-gotten funds. Spanish authorities have recovered over €6 million in the framework of an investigation into a Ponzi scheme exceeding €15 million with over 200 victims.
EU ADVOCATE GENERAL OPINION: IRANIAN UNDERTAKINGS MAY INVOKE EU LAW BLOCKING US SECONDARY SANCTIONS BEFORE THE COURTS OF THE MEMBER STATES
A news release from the EU on 12 May advised that an Opinion from the Advocate General was that the decision by an EU undertaking to terminate a contractual relationship with an Iranian undertaking subject to US primary sanctions should be regarded as invalid if it cannot be justified on any ground other than the desire to comply with US legislation providing for secondary sanctions against non-US undertakings trading with such Iranian undertakings which falls under the EU blocking statute. The case involved operations of Bank Melli in Germany.
https://curia.europa.eu/jcms/upload/docs/application/pdf/2021-05/cp210078en.pdf
UK: INFORMATION ON THE LICENSING REQUIREMENTS AND APPLICATION PROCESS FOR LOW-THC CANNABIS (INDUSTRIAL HEMP)
On 12 May, the Home Office issued updated guidance on the growing of low-THC cannabis (industrial hemp), with a factsheet on licensing requirements. The guidance document contains information for growers on the licensing application process and fees.
DUPLICATION OF PROCEEDINGS – THE ARREST, WITHIN THE SCHENGEN AREA AND THE EU, OF A PERSON WHO IS THE SUBJECT OF AN INTERPOL NOTICE
A news release from the EU courts on 12 May was concerned with a case an Interpol Red Notice was raised at the request of the US for a suspect who subsequently had the matters involved as the subject of a criminal investigation in Germany. The person involved applied in 2017 through the German courts seeking an order requiring that Germany to take the measures necessary to arrange for the Red Notice be withdrawn. Amongst the arguments raised was that it involved an infringement of the peron’s right to freedom of movement, since he could not travel to any State that is a party to the Schengen Agreement or to any EU Member State without risking arrest. He also argued that, due to those infringements, the processing of his personal data appearing in the red notice is contrary to EU Directive 2016/680, which concerns the protection of personal data in criminal matters.
https://curia.europa.eu/jcms/upload/docs/application/pdf/2021-05/cp210076en.pdf
UK: CALL FOR INFORMATION ON THE COMPUTER MISUSE ACT 1990 IN A REVIEW OF THE LEGISLATION
On 12 May, the Home Office issued a news release to UK organisations including academia, business, law enforcement agencies, the cybersecurity industry and the private sector. The aim is to identify whether there is activity causing harm in the area covered by the Act that is not adequately addressed by the current offences.
THE US HAS RETURNED $452 MILLION TO MALAYSIA RELATED TO THE SCANDAL-HIT SOVEREIGN WEALTH FUND 1MDB
On 12 May, the International Business Times reported that the US DoJ remitted the money to a special “assets recovery” account in Malaysia.
https://www.ibtimes.com/us-returns-452-mn-1mdb-funds-malaysia-3197402
UK: JUNE 2022 COURT DATE SET FOR ‘MULTI-MILLION POUND’ PENSION FRAUD CASE
On 12 May, Pensions Age reported that 3 defendants in The Pension Regulator’s investigation into a ‘multi-million-pound’ pension fraud have appeared in court again, with a trial date now confirmed for June 2022. The regulator alleged that between 2012 and 2014, 245 savers were persuaded to transfer their pension savings, totalling £13.7 million, into 11 pension schemes, which were controlled by the defendants, one of whom was extradited from Spain to face the charges.
https://www.pensionsage.com/pa/2022-court-date-set-for-multi-million-pound-pension-fraud-case.php
AUSTRIAN CHANCELLOR UNDER INVESTIGATION BY ANTI-CORRUPTION PROSECUTORS
On 12 May, Politico and others reported that Austrian Chancellor Sebastian Kurz is under investigation by anti-corruption prosecutors over allegations that he lied to a parliamentary commission probing the so-called Ibiza scandal and its fallout. He and his chief of staff Bernhard Bonelli are suspected of providing false testimony – but he denied any wrongdoing and criticised the commission. The Ibiza Affair brought down Kurz’s coalition with the Austrian far-right Freedom Party in 2019, and has since expanded from looking into the scandal itself to investigate wider allegations of cronyism under that government.
https://www.politico.eu/article/austria-chancellor-sebastian-kurz-investigation-ibiza-scandal
UK: NEW POWERS TO TACKLE UNFIT DIRECTORS OF DISSOLVED COMPANIES
On 12 May, the Insolvency Service and others advised on new legislation to target company directors who dissolve their businesses and leave staff or taxpayers out of pocket. The Insolvency Service will be given powers to investigate directors of companies that have been dissolved, closing a legal loophole and acting as a strong deterrent against the misuse of the dissolution process. It is said that the process will no longer be able to be used as a method of fraudulently avoiding repayment of Government backed loans given to businesses to support them during the Coronavirus pandemic. The measure will also help to prevent directors of dissolved companies from setting up a near identical business after the dissolution. The changes are contained in the Ratings (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill
https://www.gov.uk/government/news/new-powers-to-tackle-unfit-directors-of-dissolved-companies
FORM OVER SUBSTANCE? UK ANTI-CORRUPTION SANCTIONS ARE NO SUBSTITUTE FOR ACTION
A Commentary from RUSI on 12 May says that the UK’s anti-corruption sanctions must be paired with seizing and returning stolen assets to benefit deprived citizens. It says that issuing sanctions may ‘send a signal’, but the UK must now prioritise substance over form. Only when it can clearly demonstrate that its actions are addressing the negative impact corruption has on economic growth and development will it be recognised as the ‘force for good’ that the foreign secretary promotes.
AS COVID RESTRICTIONS EASE, SMUGGLING IN THE INDIAN OCEAN IS ON THE RISE
On 12 May, OCCRP reported that the easing of COVID restrictions may have contributed to the recent rise in smuggling incidents in the Indian Ocean which saw everything from old Soviet arms to African psychotropic plants illegally crossing its waters in March. It refers to a new report from the Indian Navy detailing such increases.
https://www.indiannavy.nic.in/ifc-ior/IFC_IOR_MMSU_MAR%2021.pdf
12 ARRESTED IN FRANCE IN LATEST HIT AGAINST TOBACCO SMUGGLERS
A news release from Europol on 12 May advised that the French Gendarmerie with the support of the French Judicial Customs arrested 5 individuals and seized 250,000 counterfeit cigarettes in a series of raids in the city of Nantes. This follows the arrest of 7 other members of the same organised crime group in the cities of Nantes, Rodez and Montpellier, when close to 5 tonnes of counterfeit cigarettes was seized. Since the start of the investigation, the French investigators collected evidence that over 75 tonnes of counterfeit cigarettes were imported and distributed throughout France for a loss to the French budget estimated close to €22 million.
EUROPEAN TRADING SCHEME RESULTING IN €30 MILLION IN LOSSES UNCOVERED
On 12 May, a news release from Europol advised that German authorities initiated the investigation into a large-scale online investment fraud network with hundreds of victims across Europe. A large criminal network involved in investment fraud and money laundering was dismantled as a result of a cross-border operation. The investigation, led by Germany, involved law enforcement and judicial authorities from Bulgaria, Israel, Latvia, North-Macedonia, Poland, Spain and Sweden. The criminal network created different trading online platforms advertising substantial profits from investments in high-risk options and cryptocurrencies, luring victims through advertisements in social media and search engines, and organised mainly by Israeli nationals with call centres run from Bulgaria and North-Macedonia.
INTERNATIONAL TRANSFERS OF PERSONAL DATA AFTER SCHREMS II
On 12 May, the EU Parliament Research Service published a briefing note summarising the situation since the July 2020 EU court decision and saying that, during its May plenary session, the EU Parliament is due to debate resolutions on, respectively, the Schrems II ruling, and on UK data adequacy, i.e. that UK level of data protection.
https://www.europarl.europa.eu/RegData/etudes/ATAG/2021/690603/EPRS_ATA(2021)690603_EN.pdf
SEC CHARGES AGAINST COLORADO-BASED REGISTERED BROKER-DEALER OVER FILING OF SAR
A release on Mondo Visione on 12 May advised that the SEC had announced settled charges against GWFS Equities Inc, a Colorado-based registered broker-dealer and affiliate of Great-West Life & Annuity Insurance Company, for violating the federal securities laws governing the filing of SAR. GWFS provides services to employer-sponsored retirement plans. It is said that in 2015-18, GWFS was aware of increasing attempts by external bad actors to gain access to the retirement accounts of individual plan participants. GWFS failed to file approximately 130 SAR, including in cases when it had detected external bad actors gaining, or attempting to gain, access to the retirement accounts of participants in the employer-sponsored retirement plans it serviced.
SANCTIONED FAKE DIGITAL ID NETWORK IN PAKISTAN MOVED FUNDS THROUGH RESORT PROPERTIES
On 10 May, Kharon reported that a Karachi-based e-commerce business sanctioned by the US – SecondEye Solution, which was also known as Forwarderz – and whose principals were indicted for producing fake identification documents, is connected to a group of resort properties and other businesses in Pakistan. It also says that the network also appears to be evolving.
UK CAR INSURANCE: 170,000 CLAIMS LINKED TO ‘CRASH FOR CASH’ GANGS
On 11 May, the BBC reported that “crash for cash” is the name given to a fraud when criminals deliberately cause a road collision to claim compensation, and that parts of Birmingham were the centre of these cases. The Insurance Fraud Bureau (IFB) said there were 2.7 million motor insurance claims across the UK from October 2019 to the end of last year, of which 170,000 could be linked to suspected crash for cash networks.
https://www.bbc.com/news/business-57058755
LIBYA WEALTH FUND GROWS ASSETS DESPITE UN SANCTIONS
On 10 May, Pensions & Investments Online reported that the Libyan Investment Authority recorded a 2% increase in assets over the 7 years to 31 December 2019, to $68.4 billion, despite UN sanctions on Africa’s largest sovereign wealth fund.
https://www.pionline.com/sovereign-wealth-funds/libya-wealth-fund-grows-assets-despite-un-sanctions
NEW MISSING BOOKS REGISTER AIMS TO DETER ANTIQUARIAN BOOK THIEVES
On 12 May, the Art Law & More blog from Boodle Hatfield said that this Summer a new register’ aims to help tackle the recent surge of high-profile book thefts. The the register encourages booksellers to check if books have been reported missing before selling them.
US TREASURY IDENTIFIES SINALOA-BASED MEXICAN NARCOTICS TRAFFICKER THAT HELPS FUEL THE US OPIOID EPIDEMIC
On 12 May, OFAC identified Jesus Gonzalez Penuelas and the Gonzalez Penuelas Drug Trafficking Organization as Significant Foreign Narcotics Traffickers. The Gonzalez Penuelas DTO operates primarily in Sinaloa and Sonora, Mexico, various ports of entry in the US, and numerous U.S.-based distribution cells in California, Texas, Colorado, Washington, Utah, and Nevada. The upper echelons of the Gonzalez Penuelas DTO hierarchy consist of Jesus Gonzalez Penuelas’ family members.
https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20210512
PODCAST: RANSOMWARE: RENEE DUDLEY
In the latest TRACE podcast, Renee Dudley of ProPublica discusses her fascinating research into the unsettling world of ransomware: how it works, the role that “recovery services” play, and where the ransom money ends up. This episode was originally published in October 2019.
https://www.traceinternational.org/resources-podcast
PODCAST: PANAMA-US RELATIONS, FACTORS AFFECTING WESTERN HEMISPHERE SECURITY AND PROSPERITY, AND IMPLICATIONS FOR PANAMANIAN AND U.S. POLICY
On 12 May, the Hoover Institution released a podcast in which former Lieutenant General HR McMaster and former Panama Vice-President Isabel de Saint Malo de Alvarado discuss Panama-US relations, factors affecting Western Hemisphere security and prosperity, and implications for Panamanian and US policy.
INVESTIGATION LEADS TO THE RETURN OF 2 THAI RELIGIOUS RELICS REPORTED STOLEN BY THAILAND AND DISPLAYED AT SAN FRANCISCO ASIAN ART MUSEUM
A news release form US Immigration & Customs Enforcement on 12 May advised that a 3-year investigation led to a settlement in a lawsuit in February in which the City and County of San Francisco consented to the forfeiture of 2 Thai lintels housed and on display at the San Francisco Asian Art Museum. These religiously significant lintels are alleged to have been exported from Thailand in violation of Thai law over 50 years ago and subsequently donated to San Francisco and displayed at its Asian Art Museum.
US: MASSIVE CATTLE-BASED PONZI SCHEME
On 12 May, a release on Mondo Visione reported that a federal grand jury in Colorado has returned an indictment charging an Illinois woman and a Georgia man with running a Ponzi scheme that raised approximately $650 million from investors across the country. The conspirators solicited hundreds of millions of dollars from victim-investors throughout the US. Most often, the conspirators fraudulently represented to victim-investors that their investments were backed by short-term investments in cattle. They also used false and fraudulent pretences to solicit money from victim-investors for the conspirators’ Colorado-based marijuana business. Other victim-investors gave the conspirators money based on false promises that investment money would be used for legitimate business activity related to cattle or marijuana, without having the investment money linked to specific investment opportunities.
UK: PROPOSALS FOR TACKLING PROMOTERS AND ENABLERS OF NATIONAL INSURANCE CONTRIBUTIONS AVOIDANCE SCHEMES
On 12 May, a Tax Information and Impact Note from HMRC is about legislative changes to the disclosure of tax avoidance schemes to stop NI contributions avoidance – these involve a series of legislative changes to the Disclosure of Tax Avoidance Schemes (DOTAS) regime to strengthen HMRC’s ability to further clamp down on the market for NI contributions avoidance.
GERMANY: N26 MOBILE BANK FACES SCRUTINY OVER MONEY LAUNDERING FAILURES
On 12 May, Finextra reported that German financial regulator BaFin has ordered mobile bank N26 to fix problems with its IT monitoring and CDD to prevent money laundering and terrorist financing. BaFin is appointing a special commissioner to monitor the fintech giant’s compliance with the order to implement appropriate internal controls and safeguards and comply with general due diligence requirements. The order comes 2 years after BaFin first reprimanded N26 for lax AML controls.
US LIFTS SANCTIONS ON SENIOR FIGURE IN MEXICO’S SINALOA CARTEL
On 12 May, Reuters reported that the US had lifted financial sanctions on a former top lieutenant of Mexico’s Sinaloa drug cartel, saying that Jesus “El Rey” Zambada, who gave testimony against kingpin Joaquin “El Chapo” Guzman, had shown behavioural change.
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