Panama Covid-19 update – The striking figure from today’s data is that 14 fatalities are recorded – the highest daily number since 11 March. Most are said to be in Chiriqui province, close by the Costa Rica border – in both Costa Rica and Chiriqui there have been a rise in cases, with a lockdown and curfew imposed in the latter. Oddly, other data for the day are, on the face of it, less worrying – with “only” 235 new cases and a fall to 5,833 actives cases – 57 in ICU and 370 in other wards.
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24 MAY 2021
CURAÇAO-BASED OPERATOR RAGING RHINO €440,000 FINE FOR ILLEGALLY OFFERING ONLINE GAMING IN THE NETHERLANDS
On 21 May, iGB reported that an investigation by the KSA found that Raging Rhino’s LuckyDays.com site was accessible to Dutch customers, and offered links to problem gambling help services in Dutch. Online games of chance remain prohibited until the country’s regulated i-gaming market opens on 1 October.
POLICE MAKE MULTIPLE ARRESTS IN UK-WIDE CRACKDOWN ON SCAM TEXTS
On 24 May, UK Finance reported that police have made 8 arrests following a series of early morning operations targeting individuals suspected of sending out “smishing” texts – scam messages aim to steal people’s personal and financial details by directing recipients to fake versions of trusted organisations’ websites, such as Royal Mail. Operations were conducted across London, Coventry, Birmingham and Colchester.
CHINA CRACKDOWN FORCES CRYPTO MINING OPERATORS TO END OPERATIONS
On 24 May, Al Jazeera reported that cryptocurrency mining operators are suspending their China operations after Beijing stepped up its efforts to crack down on Bitcoin mining and trading. The State Council has said that it is targeting virtual currency mining, a big business in China that accounts for as much as 70% of the world’s crypto supply.
THE RISE AND FALL OF A US OILMAN IN IRAQ
On 22 May, OCCRP carried a feature about Todd Kozel, founder of London-listed oil company Gulf Keystone. He struck a deal involving huge revenues to an Iraqi Kurdistan politician’s company in 2007. Although the deal was later deemed illegal and was voided, Gulf Keystone was allowed to keep exploiting the field – with US and UK authorities failing to act on whistleblower claims of corruption. It is said that Gulf Keystone funnelled $12 million to an offshore company that was secretly connected to both Kozel and the Kurdistan Regional Government, and claims that Kozel used an offshore trust to buy shares in the company and before its oil discovery was reported. However, an affair and subsequent divorce caught him out and attracted the attention of the authorities. It is said that the activities bore the hallmarks of “related party fraud” – secret self-dealing through which company officials funnel investors’ money into their own pockets. Kozel was arrested at New York’s JFK airport just before Christmas in 2018 and charged with fraud and money laundering. A plea agreement shows the court will accept a guilty plea on 5 counts of failure to file tax returns and Kozel will face a sentence of 60 months in prison at most, and no further charges. He will have to pay around $22 million in back taxes. However, the article ends with a quote from a whistleblower that there are countless businessmen out there just like Todd Kozel, and they do in fact get away with it.
CAMBODIA TAKES A LOOK AT ROYAL ‘OKNHA’ NOBLEMAN TITLES AFTER SCANDALS
On 21 May, Radio Free Asia reported that the title of “Oknha”— meaning nobleman or lord — is granted by royal decree to anyone who contributes at least $500,000 to the government. Because many are involved in corrupt activities, political analysts said and Prime Minister Hun Sen has set up a working group to manage the issue.
UNNAMED DUBAI GOLD TRADER FINED FOR FAILING TO COMPLY WITH AML/CFT LAWS
On 24 May, The National reports that a gold trader as an DNFBP in Dubai has been fined a total of $367,597 for 8 separate breaches of laws governing money laundering and terrorism financing. There was a failure “to establish internal policies, controls and procedures commensurate with the volume of its business”, failure to reduce risk, and a series of other offences. The Ministry of Economy reiterated its warning to DNFBP which fail to comply with a 2018 federal law introduce to combat financial crime that they face fines, as well as the potential suspension of their licences or even the closure of their businesses.
FAKE EURO BANKNOTE DEALERS BUSTED BY GERMAN AND ITALIAN POLICE
On 21 May, Euronews reported that a gang printing and distributing counterfeit euro banknotes was broken up by Europol and German and Italian police, with police raiding 18 properties in Naples, Italy, where the operation was based, and 1 house in Germany where the notes were distributed.
US: KELLY, BLASZCZAK AND THE SCOPE OF INSIDER TRADING LIABILITY
On 24 May, an article from Hogan Lovells says that since the US Supreme Court’s May 2020 decision in the ‘Bridgegate’ case, the scope of the decision’s impact on federal white collar criminal prosecution has been an open question. However, it says, the potential implications for insider trading prosecutions were made clear on 11 January in United States v Blaszczak. The Court then vacated a 2020 decision by the US Court of Appeals for the Second Circuit that had affirmed 4 insider trading convictions, and requires a lower court to re-examine whether confidential government information may be considered property under federal anti-fraud statutes. It is said that the outcome of this could have a lasting impact on insider trading and other criminal prosecutions which implicate government property. The article comments that time will tell whether the development will, in an insider trading context, mark a pendulum shift towards a narrowing of criminal liability, just a year after the Blaszczak decision appeared to do the opposite.
AUSTRALIA: ILLEGAL TOBACCO BEING GROWN AND WORTH ALMOST $40 MILLION SEIZED
On 17 May, Wolters Kluwer Australia reported that a joint operation by the ATO and Queensland Police uncovered approximately 10 acres of mature illegal tobacco with an estimated excise value of almost A$40 million.
AUSTRALIA: CURRENT FOCUS OF THE SERIOUS FINANCIAL CRIME TASKFORCE (SFCT)
On 19 May, a news release from the Australian Tax Office provides an update on the aims of the SFCT – an ATO-led joint-agency taskforce established in 2015. It brings together the knowledge, resources and experience of relevant law enforcement and regulatory agencies to identify and address the most serious and complex forms of financial crime. It says that the current COVID-19 situation has provided a platform for criminals to become more active, targeting vulnerable people at a time when they need help. It says that the current focus of the SFCT is on:
- cybercrime (technology enabled crime) affecting the tax and superannuation systems;
- offshore tax evasion;
- illegal phoenix activity; and
- serious financial crime affecting the ATO-administered measures of the Commonwealth Coronavirus Economic Response Package.
US: IMPORTING “TOOLS OF TRADE” DUTY-FREE
On 15 January, Allyn International published an article explained that under US customs law tools of trade are defined as instruments, equipment, or apparatus that are necessary for the exercise of a trade or profession. The article considers the question: what exactly constitutes a tool of trade? Is the product you are importing eligible for duty free status? The article is concerned with the re-import of such tools of trade.
[Bear in mind the use of ATA Carnets, a sort of “passport” for goods, for taking tools of trade to or between countries]
FROZEN OR TERMINATED BANK ACCOUNT: WHAT CAN YOU DO?
On 4 November, an article from Collyer Bristow LLP considered what could be done if a business’s bank account is blocked – and the business has done nothing wrong, but may have been caught in aggressive compliance or de-risking action by the bank or financial institution. It notes that, in the UK, the Financial Ombudsman has made it clear that it requires banks to give reasonable notice of at least 30 days if they intend to close a personal bank account. This is intended to allow the customer sufficient time to make alternative banking arrangements and it is recognised that a longer notice period may be appropriate for business customers. It goes on to examine the situation where a bank might freeze or purport to close a bank account without giving any notice, which is generally permitted under their terms and conditions in “exceptional circumstances”, and will usually occur where the bank suspects that fraud or money laundering may be occurring or is imminent.
THE FCA APPROACH TO Cum-Ex
On 21 May, an article from Rahman Ravelli details the FCA case against Sapien Capital Ltd in relation to Cum-Ex trading. Cum-Ex trading was a practice that saw shares traded on or just before the last cum-dividend date, which meant a party could then claim a rebate on withholding tax. The FCA fines the broker firm £178,000 for money laundering failings in the first action to be taken over Cum-Ex by a regulator not based in a country affected by the scandal. Sapien was said to have acted as a broker for purported over-the-counter (OTC) trades worth £2.5 billion in Danish equities and £3.8 billion in Belgian equities.
THE EU HAS RECENTLY SET OUT ITS PLANS FOR BUSINESS TAX REFORM – BEFIT (BUSINESS IN EUROPE: FRAMEWORK FOR INCOME TAXATION)
On 20 May, MacFarlanes LLP published an article saying that the European Commission recently set out its plans for business tax reform in the 21st Century. The BEFIT measure revives the common consolidated corporate tax base (CCTB), and is noteworthy in the sense that the Commission believes that now, on the cusp of global international tax reform, is the time to recast this proposal, being embolden by progress made by the OECD in tax matters. A Communication from the Commission sets out both a long-term vision to provide a fair and sustainable business environment and EU tax system, and a tax agenda for the next 2 years, with targeted measures that promote productive investment and entrepreneurship and ensure effective taxation.
SOUTH KOREA SAYS UNILATERAL SANCTIONS AGAINST NORTH KOREA ‘USELESS’
On 24 May, NK News reported that South Korea’s unification ministry has said that sanctions against North Korea that have been in place since the DPRK attacked and killed dozens of South Korean sailors in 2010 are no longer effective. The sanctions banned inter-Korean economic cooperation, forbade North Korean vessels from entering South Korean waters and suspended humanitarian aid “in principle”.
NORTH KOREAN SHIP NAMED IN SANCTIONS REPORT SINKS NEAR JAPAN’S WEST COAST
On 24 May, NK Pro reported that the vessel appears to have been carrying 6,500 tons of iron banned for sale by UN sanctions. The DPRK-flagged Chong Bong sent a distress signal due to “flooding of its freight storage” on 21 May.
GREENWASHING IS ‘BIGGEST CONCERN’ FOR 44% OF ESG INVESTORS
On 24 May, International Investment reported that greenwashing is top of the worry list for investors when it comes to responsible investing, with 44% concerned that ESG investments were not what they claimed to be, according to research conducted by Quilter. This was closely followed by investors having concerns around these investments having higher fees and costs (42%) and if they will perform better than more traditional portfolios (38%). It says that the Treasury Select Committee group of MPs recently argued the FCA should be handed powers to tackle greenwashing as part of an effort to cut carbon emissions.
SOUTH AFRICA COMMISSIONS ZIMBABWE SANCTIONS STUDY
On 24 May, The Herald in Zimbabwe reported that South Africa has revealed how it commissioned its own anti-sanctions research study on Zimbabwe as part of efforts to lobby for the lifting of the economic restrictions against the country.
A FATHER AND HIS SONS LINKED TO A SUSPECTED NOTORIOUS LIBERIAN POACHER AND IVORY TRAFFICKER FACING CHARGES IN THE US
On 24 May, The Standard in Kenya carried a report on Moazu Kromar, saying that an application filed by the Office of Director of Public Prosecutions (ODPP) in Kenya lifts the veil on Mombasa Port’s links to a web of transnational criminal enterprise. It claims that Abdulrahman Mahmoud Sheikh (aka Said Juma) and his sons, Sheikh Mohamud Abdulrahman and Mahmoud Abdulrahman Sheikh, were part of this web with operations cutting across Africa, Asia and the US.
SUPPLY-CHAIN COMPLIANCE LESSONS FROM A ‘TRUE CRIME’ MASTERPIECE
On 24 May, a post on the FCPA Blog contained an interview with the authors, an award-winning team of current and former reporters from the Miami Herald, whose book tells the story of “the three amigos”– Miami businessmen who smuggled billions of dollars in gold from South America. The report involved the $3.6 billion NTR Metals money laundering case which was filed in Miami federal court in 2017.
MONEYVAL CARRIES OUT EVALUATION VISIT TO CROATIA
On 21 May, the Council of Europe reported that a team of evaluators from the Council of Europe’s Committee of Experts for the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL) carried out an onsite visit to Croatia from 10 to 21 May. The report will be scheduled for discussion and adoption at MONEYVAL’s 62nd Plenary meeting in December.
IATA DOES NOT PLAN TO BAN THE TRANSPORT OF LITHIUM ION BATTERIES BY AIR
On 24 May, Loadstar reported that the decision follows a recent airport fire, but is calling for greater penalties for errors and better collaboration with governments. It says that the lithium ion battery market is expected to see compound annual growth rate of 12.6% from 2020 to 2027. It says that IATA’s dangerous good expert pointed out that some vaccine shipments also contained lithium ion batteries and that taking batteries off the shipments would mark an unnecessary impediment to the rapid transport of vaccines.
POLITICIANS FROM MEXICO SPAR IN TEXAS COURT OVER WHO’S MORE CORRUPT
On 24 May, the San Antonio Express-News reported on Hector Javier Villarreal Hernández, who is the former treasurer of the border state of Coahuila is at the centre of allegations that officials in Mexico stole hundreds of millions of dollars from taxpayers and laundered the money through South Texas banks and real estate. However, Villarreal tried to shift responsibility to his former boss, Jorge Juan Torres López, who has pleaded guilty to money laundering.
IRELAND: ‘CASH FOR VISAS’ SCHEME GAVE €179 MILLION TO INVESTMENT FUNDS SINCE 2012
On 23 May, the Belfast Telegraph reported that the Immigrant Investor Programme offered residency visas to foreign investors in exchange for a contribution of at least €1 million. It says that new legislation was introduced to limit the ability of real estate investment trusts (REIT) to bulk-buy new housing developments amid public outcry that the funds were pushing first-time-buyers out of the market. IIP offers residency visas of an initial 5 years to foreign investors and their families in exchange for a donation of no less than €1 million.
LONDON CAPITAL & FINANCE PLC AND FRAUD COMPENSATION
The House of Commons Library has a page dedicated to a Bill dealing with this matter, and which will shortly be updated with a briefing in preparation for the Second Reading of the Bill.
See also the Gloster Report into the investigation of the case, as updated in December. The case involved, amongst other things, allegations of highly suspicious transactions involving a small group of connected people which have led to large sums of the Bondholders’ money ending up in their personal possession or control. At the time of the report (first published in November) criminal investigations were ongoing. The case received significant media and political attention because of its impact on retail investors and the questions about the regulatory framework which the case raised –
See also –
LONDON CAPITAL & FINANCE SPENT £70 MILLION OF BONDHOLDERS’ CASH ON FIRM WITH 2 FRAUDSTERS
On 22 May, the Evening Standard reported that bosses at the collapsed investment firm London Capital & Finance invested £70 million of bondholders’ money with a hotel property firm where 2 senior players now have fraud convictions.
TURKEY GRIPPED BY MAFIA BOSS’ CORRUPTION ALLEGATIONS
On 24 May, The New Arab reported that former mob boss Sedat Peker has alleged widespread corruption among top government officials, saying a deep state remains in the country. Peker is currently believed to be residing in the UAE after fleeing Turkey in 2019. He has alleged he left the country after being tipped off by former Interior Minister Suleyman Soylu about a pending criminal investigation against him.
UK: TACKLING FRAUD, BRIBERY AND CORRUPTION IN THE MINISTRY OF JUSTICE
On 24 May, a news release from the MoJ was concerned with how to report suspected fraudulent activity in the MoJ and find out what action it can take.
VISITING THE UK AS AN EU, EEA OR SWISS CITIZEN
In the light of recent stories of the detention of visitors on legitimate journeys to the UK post-Brexit, the Home Office on 24 May published updated information on what you need to know about crossing the UK border and visiting the UK.
ORGANISATION OF AMERICAN STATES (OAS) DESIGNATES HAMAS AS A TERRORIST ORGANISATION
On 24 May, Kenneth Rijock in his blog said that the OAS had named HAMAS, the radical Palestinian organization, a terrorist entity on 17 May.
SANCTIONS TARGETING RUSSIA’S DEFENCE SECTOR: WILL THEY INFLUENCE ITS BEHAVIOUR?
A blog post from the RAND Corporation on 20 May posed this question, asking if recently announced US sanctions would hurt Russia’s defence industry enough to curb the Kremlin’s behaviour? It does say that there are few indications that the cumulative effect of US and EU sanctions, expulsions of diplomats and suspected intelligence offices, and financial restrictions are causing Putin to be more cautious. It is said that, aside from oil and gas exports, Russia’s main export is its advanced conventional weaponry – but even though it is aggressively marketing, negotiating to sell, and selling weapons abroad, arms exports are not generating as much revenue as they did in the past. It is said that restrictions creating problems may have an impact on the quality and endurance of Russian advanced conventional weapons, which serve as Russia’s only internationally recognised finished export good. It is noted that 3 years ago, the US Congress passed legislation that aims to discourage countries from purchasing Russian advanced conventional weapons, and while the threat of sanctioning countries that purchase Russian weapons has caused some countries to think twice about buying Russian weapons, it has also created problems in some bilateral relations. It is concluded that, though it seems that sanctions directed against Russia’s defence industry have had notable effects, Russia’s continued behaviour may not foreshadow an adjustment in its international activities.
US CUSTOMS MODIFIES WITHHOLD RELEASE ORDER ON CERTAIN TOBACCO IMPORTS FROM PREMIUM TOBACCO MALAWI LIMITED
On 24 May, a news release from US Customs and Border Protection advised that it had modified an existing WRO on imports of tobacco from Malawi with effect from 21 May. CBP previously prohibited the entry of certain imports into the US based on reasonable suspicion that they were produced using forced labour, with an WRO issued in November 2019. CBP has modified the WRO based on a rigorous evaluation of PTML’s social compliance programme and efforts to identify and minimize the risks of forced labour in its supply chain, and evidence that sufficiently supports PTML’s claims that tobacco from club growers (smallholder growers that use little or no farm worker labour) is not grown and harvested using forced labour or forced child labour.
IRELAND: REVENUE SEIZE 1.5 MILLION CIGARETTES
On 21 May, the Revenue Commissioners reported that officers had seized 1.5 million illicit cigarettes following a search at a business premises in Newcastle, Co Dublin. The seizure was made following an intelligence-led, joint operation, carried out by Revenue’s Customs Service and HMRC under the auspices of the cross-border Joint Agency Taskforce (JATF). The seized cigarettes, which had been imported into Ireland from Germany, were branded ‘L&M’ and have a retail value of almost €900,000.
FATF-STYLE ASIA-PACIFIC GROUP TO REVIEW EVALUATION AND TYPOLOGIES REPORTS IN JULY
The FATF-style regional body APG’s annual meeting will be hosted by the government of Malaysia and held in virtual format in July. The Mutual Evaluation Committee and the plenary meeting will consider a number of follow-up reports and the mutual evaluation reports on New Zealand; South Korea; Japan and Tonga. The Operations Committee and the plenary meeting will also consider the typologies project reports and the annual typologies report.
AN ASSESSMENT OF THE US GOVERNMENT DOMESTIC TERRORISM ASSESSMENT
An article on Lawfare on 24 May is concerned with a report containing a strategic intelligence assessment and data on US domestic terrorism. The Congressionally-mandated report assesses the domestic terrorism threat, details the various agencies’ investigative procedures and provides data on domestic terrorism cases. It is said that the 40-page report is a valiant, albeit incomplete, attempt to lay down an initial marker on the state of domestic terrorism in America, and that the news cycle about the report may have come and gone, but here are some important takeaways that shouldn’t be overlooked. For the first time, the FBI has put a solid number on domestic terrorism arrests in the US, and, in short, it has been arresting fewer and fewer domestic terrorism subjects every year since 2015. The article concludes that the report is a good first step toward greater transparency into an issue that is chief among the minds of both policymakers and the public.
A CLIMATE PROBLEM – CHINA FINANCES MOST COAL PLANTS BUILT TODAY
An article in The Conversation on 24 May says that roughly 70% of the coal plants built globally now rely on Chinese funding. It asks how soon will China end its reliance on coal and its financing of overseas coal-fired power plants?
TAXATION OF THE DIGITALISED ECONOMY
On 24 May, KPMG released the latest edition of its regular update of direct and indirect tax developments from a digital economy perspective.
BIDEN ADMINISTRATION PROPOSES NEW CRYPTOCURRENCY REPORTING RULES
On 24 May, Greenberg Traurig published 2 articles about –
- a US Treasury report which proposes new reporting requirements for transactions, including cryptocurrency transactions. Under the proposed plan, financial institutions, payment settlement entities, and digital asset exchanges and custodians would be required to report gross inflows and outflows that exceed a de minimis threshold on all business and personal accounts; and
- an Executive Order on improving US cybersecurity
See also a Lawfare podcast on the Executive Order at –
BELARUS AND THE HIJACKING OF RYANAIR FLIGHT FR4978: A PRELIMINARY INTERNATIONAL LAW ANALYSIS
On 24 May, Lawfare published a timely article saying that, from the perspective of international law, it is difficult to overstate the seriousness of Belarus’ actions. It is said that it seems apparent that, in contriving an emergency landing of Flight FR4978 off the back of a fake bomb threat, Belarus committed an outrageous breach of the Montreal Convention. It seems that, as a comparative rarity in international law, there appears to be a clear breach of 2 respected international treaties by a state, combined with a clear route to the jurisdiction of an international court or tribunal. Whatever the practical difficulties, the article argues that the international community should not baulk from trying to bring Belarus into line here via coordinated political and legal means.
See also EU news release –
SOUTH AFRICA: GOVERNMENT LAUNCHES ANTI-CORRUPTION INITIATIVE TO SAFEGUARD INFRASTRUCTURE INVESTMENT PLAN
On 24 May, SABC reported that the Minister for Public Works and Infrastructure Development Patricia De Lille and Head of the Special Investigations Directorate Advocate Andy Mothibi launched the Infrastructure Built Anti-Corruption Forum in Cape Town. A new initiative it is aimed at safeguarding the multi-billion rand Infrastructure Investment Plan which forms part of the country’s Economic Reconstruction and Recovery Plan. The government has brought together the private sector, public entities and civil society to work together on more effective ways to detect, prevent and act against corruption.
SOUTH AFRICA: INVESTIGATION INTO ALLEGATIONS OF CORRUPTION IN HEALTH MINISTRY AT ADVANCED STAGE
On 24 May, SABC reported that the head of the Special Investigating Unit has said that the investigation into allegations of corruption in the Health Ministry is about to be concluded. He said it is part of the broader investigations into PPE procurement, which they hope to complete by the end of August.
UK: VAT FRAUDSTER’S £1.5 MILLION CONFISCATION ORDER STILL ‘ALIVE’ DESPITE ERROR
On 24 May, the BBC reported that Stephen Pigott, 57, who was ordered to pay back his profits from a £40 million VAT fraud in 2007, has been told a confiscation order is still “alive and kicking” after fears he might avoid repaying it due to an “admin error”. Folkestone Magistrates’ Courthas heard that the mistake had been corrected and the order reinstated. The music producer, who has worked with artists including Celine Dion, Rod Stewart and the Pet Shop Boys, was later ordered to repay an amount which has since risen to £2.59 million as a result of interest. An application had been incorrectly filled out, with the word “confiscation” inserted instead of “restraint”. However, the court heard the mistake was not spotted until Pigott was due to be sentenced for remaining unlawfully at large after recall to prison.
VIRTUAL ASSETS AND SANCTIONS: WHAT BUSINESSES NEED TO KNOW
On 24 May, an article from K2 Integrity refers to increasing sanctions-related scrutiny of companies that provide related services and focusing regulatory and enforcement oversight on these emerging systems. The article focuses on sanctions enforcement by OFAC, but says that it is important to note that other US regulatory bodies also play a major part in the adoption or scrutiny of virtual assets.
SOUTH AFRICA: THE TOTAL(ISH) COST OF THE GUPTAS’ STATE CAPTURE
On 24 May, Daily Maverick reported an estimate of the cost of “state capture” by the Gupta family in South Africa at nearly 50 billion rand. It says that an investigation has revealed that the 3 primary sites of State Capture were Transnet, Eskom, and the Free State provincial government.
FROM BODY SNATCHERS TO DODGY MARKETERS: THE DIRTY HISTORY OF FUNERAL SCHEMES
On 24 May, The Conversation published an article on the history of scams and frauds involving funerals and burials, referring back to “burial clubs” in 18th Century England and even body snatchers. It explains that funeral schemes come in various forms but work on the same basic idea. They promise a guaranteed pay out upon death to cover funeral expenses. There appears a history of problems – for example, in 1817, the House of Commons heard evidence about burial clubs meeting in the local public houses and entrusting their subscription money to the publican, who then misspent it. It moves on to modern schemes, and problems found in Australia, with scams targeting indigenous people.
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