OTHER THINGS YOU MAY HAVE MISSED – MAY 31

Panama Covid-19 update – amongst the news stories today was that Panama had sent a field hospital to neighbouring Costa Rica to help relieve pressure on treatment capacity. It only seems like yesterday that Panama itself was receiving such field hospital units from the US to help it cope.

Meanwhile, another day with only 1 new fatality, but also with another 321 new cases reported. There are now 6,327 active cases (seemingly concentrated in 3 districts, rather than more widely), with 53 in ICU and 368 in other wards. Most, of course, are at home, but 341 are in so-called “hospital hotel” rooms.

Sometimes one wonders how seriously some people are taking things, with the news of a raid on a disco in the old city at the weekend, with 300 people discovered, including 60 minors. Maybe they should have treated some of them like the guy refusing to wear face mask and face shield on the Metro last week. In a row with police, he was tazered before being arrested…

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31 MAY 2021

SUPER RICH ARE CHOOSING SINGAPORE AS THE WORLD’S SAFEST HAVEN

On 31 May, KYC 360 reported a Bloomberg article saying that money is sloshing around Singapore like never before.  As the coronavirus pandemic hammers Southeast Asia and political turmoil threatens Hong Kong, the city has become a safe harbour for some of the region’s wealthiest tycoons and their families.  Singapore has long been a draw for wealthy Chinese, Indonesians and Malaysians who would come for short trips to shop, play baccarat at the casino or get medical check-ups at world-class clinics.  The pandemic has prompted many tycoons and their families to stay for months, in some cases seeking residency to ride out the storm.  The number of single family offices in the city-state has doubled since the end of 2019 to about 400.  One top banker who declined to be identified said Chinese clients ranked first among new account openings, followed by those from India and Indonesia.

https://www.riskscreen.com/kyc360/news/the-super-rich-are-choosing-singapore-as-the-worlds-safest-haven/

THE RISE OF CRYPTO LAUNDRIES: HOW CRIMINALS CASH OUT OF BITCOIN

On 31 May, the Australian Financial Review reported that, in the world of online crime, anonymous cryptocurrencies are the payment method of choice. But at some point, virtual hauls need to be turned into hard cash.   It refers to the ways for criminals to cash out of cryptocurrencies, including exchanging bitcoin for gift vouchers, prepaid debit cards or iTunes vouchers, for example.

https://www.afr.com/markets/currencies/the-rise-of-crypto-laundries-how-criminals-cash-out-of-bitcoin-20210531-p57wl2

BELGIUM AND LATVIA SEIZE ASSETS IN RUSSIA MONEY LAUNDERING AFFAIR

On 31 May, KYC 360 reported that Belgian and Latvian authorities have seized Russian assets in a money laundering affair that saw the killing of whistleblower Sergei Magnitsky.  It says that last year a Belgian investigating judge seized some €400,000 from the proceeds of an apartment sale in the Belgian city of Antwerp.  He also charged 2 Russians – Sergey Medvedev and Irina Terkina – with money laundering.  Authorities in Estonia, France, the Netherlands, Switzerland, and the US have also seized money amounting to more than €40 million over the years, and now And Latvia has joined them as authorities seized a flat worth €230,000 in a trendy part of Riga, with stolen funds having flowed in via banks in Cyprus, Estonia, and Latvia in the name of shell companies.

https://euobserver.com/world/151985

NICARAGUA: ULTIMATE BENEFICIAL OWNERS

On 27 May, Arias published an article saying that Nicaragua has created the Registry of the Final Beneficiary of Commercial Companies.  The Registry, which is part of the National Registry System (SINARE), operates completely virtually, and is responsible for recording the information of the final beneficiary of each commercial company, in addition to providing access to it, guaranteeing the integrity, confidentiality, traceability and security of the data guarded.

https://ariaslaw.com/boletines/NEWSLETTER%202021/MAYO/NI%20MAYO%202021%20ESP.pdf

GUERNSEY: THE GROWING REACH OF THE ECONOMIC SUBSTANCE RULES

On 27 May, MacFarlanes reported that during May that the Guernsey Revenue Service had issued a Circular which announced that the economic substance rules will be extended to partnerships.  The extension will apply to limited partnerships (with and without legal personality), limited liability partnerships (LLP) and foreign partnerships, including limited partnerships and LLP which are foreign incorporated, but with their place of effective management located in Guernsey.

https://blog.macfarlanes.com/post/102gz90/the-growing-reach-of-the-economic-substance-rules

INDONESIA HAS RELEASED AN IRANIAN TANKER AND A PANAMANIAN VESSEL THAT WERE BOTH SEIZED ON SUSPICION OF ILLEGAL OIL TRANSFERS

On 30 May, Shine reported that Indonesia had released an Iranian tanker and a Panamanian vessel – Iranian-flagged MT Horse and Panama-flagged MT Freya – that were both seized at the beginning of the year on suspicion of illegal oil transfers.  The captains of both tankers were found guilty of entering Indonesian territory without a permit.  The captain of the Freya was also fined $140,000 for dumping oil illegally in Indonesian waters. 

https://www.shine.cn/news/world/2105309843/

SANCTIONS-BUSTING TANKERS SET FOR THE SCRAPHEAP

On 31 May, Splash 247 reported that ageing ships moving sanctioned oil cargoes could be broken up as the Biden Administration in the US looks at sanctions relief for both Iran and Venezuela.  It is said that tanker brokers Gibson suspect up to 10% and 6% of the VLCC and Suezmax fleets respectively are involved in such activity – although it also says that the actual number is likely to be higher. 

https://splash247.com/sanctions-busting-tankers-set-for-the-scrapheap/

ECOWAS SUSPENDS MALI AFTER SECOND COUP, BUT NO NEW SANCTIONS

On 31 May, RFI reported that West African leaders have suspended Mali from the Economic Community of West African States (Ecowas) in response to the recent military coup, the second in 9 months. Ecowas said authorities must stick to a timetable for a return to democracy, but stopped short of imposing fresh sanctions.

https://www.rfi.fr/en/africa/20210531-ecowas-suspends-mali-after-second-coup-but-no-new-sanctions

MOROCCO TO TIGHTEN AML MEASURES

On 30 May, the North Africa Post reported that Morocco has adopted a new law to fight money laundering.  The new text, which will enter into force once published in the official gazette, is intended to update the penal code, introducing new penalties for those guilty of money laundering.  It is also said to add violations of the stock market and pyramidal schemes to the list of money laundering violations and tightens control on casinos.  A separate legal instrument will provide for enforcement of UN CTF and proliferation sanctions measures.

https://northafricapost.com/50054-morocco-to-tighten-anti-money-laundering-measures.html

HM TREASURY: MANY CRYPTO ASSET START-UPS DO NOT MEET AML STANDARDS

On 29 May, OBN reported that the Treasury Economic Secretary had told an MP that many crypto start-ups aren’t meeting AML standards.  It says that a significant number of companies are unable to implement the right and robust AML management framework and hire the right people.  Currently, 167 companies are waiting for AML/CFT registration, and 77 new start-ups are waiting for a full evaluation of their registration.

https://ourbitcoinnews.com/uk-treasury-official-a-considerable-number-of-cryptocurrency-companies-do-not-meet-the-manelon-prevention-standard/

CYPRUS VOTES FOR NEW PARLIAMENT AMID ANGER OVER GOLDEN PASSPORTS SCANDAL

On 31 May, EurActiv reported that, despite the furore, conservative ruling party DISY lost just 1 seat, while ultra-nationalist ELAM party, which had played on migration fears, doubled its representation to 4 seats.  The election came after Cyprus last November dropped its controversial passport-for-investment scheme following an Al Jazeera documentary showing reporters pretending to represent a Chinese businessman seeking a Cyprus passport despite having a criminal record. Parliament was at the centre of the furore after the Speaker and an opposition lawmaker were secretly filmed allegedly trying to facilitate the passport for the fugitive investor.

https://www.euractiv.com/section/elections/news/cyprus-votes-for-new-parliament-amid-anger-over-golden-passports-scandal

BOSNIAN EX-SECURITY MINISTER JAILED FOR CORRUPTION

On 31 May, the Washington Post reported that the Court of Bosnia-Herzegovina ruled that Sadik Ahmetovic abused his position for illegal financial gains at cost to the state budget, and sentenced him to 6 months in prison for corruption.

https://www.washingtonpost.com/world/bosnian-ex-security-minister-jailed-for-corruption/2021/05/31/324cbdc2-c1ed-11eb-89a4-b7ae22aa193e_story.html

MOLDOVA: CONTROVERSIAL BUSINESSMAN VEACESLAV PLATON IS TO BE ACQUITTED IN BANK FRAUD CASE

On 31 May, ZDG in Moldova reported that the case of businessman Veaceslav Platon, who had been sentenced to 18 years in prison, had been under review for 7 months. He was released from prison in June 2020 after his sentence was suspended.

https://www.zdg.md/en

POLICE PROPOSE INDICTING CZECH PM AND EX-ADVISOR FOR ALLEGED EU SUBSIDY FRAUD

On 31 May, Radio Prague International reported that police had proposed indicting Prime Minister Andrej Babiš and a former advisor – Jana Mayerová – for having allegedly temporarily changed the status of his Stork’s Nest complex over a decade ago to get an EU grant intended to support SME, alleging that Babiš illegally acquired €2 million in EU subsidies through fraud.

https://english.radio.cz/storks-nest-police-propose-indicting-czech-pm-ex-advisor-alleged-eu-subsidy-8719047

COVID FRAUD: GERMAN GOVERNMENT UNDER FIRE

On 31 May, Deutsche Welle reported that the German Health Minister has distanced himself from accusations of embezzlement in COVID rapid testing centres, in the latest bungle in Germany’s handling of the pandemic.  The Minister has announced he wants to take tighter control of testing centres to counter alleged embezzlement by coronavirus test providers across the country.

https://www.dw.com/en/covid-fraud-german-government-under-fire/a-57726240

US CUSTOMS WITHHOLD RELEASE ORDER AGAINST CHINESE FISHING COMPANY DALIAN OCEAN FISHING OVER FORCED LABOUR ACCUSATIONS

On 31 May, Jurist explained that Withhold Release Orders are targeted bans on the import of products from a company or region based on the use of forced labour.  This effort marks the first time that the US has blocked the import of an entire fleet’s products (the company is said to have 32 vessels), as opposed to those of a single ship.

https://www.jurist.org/news/2021/05/us-blocks-import-of-all-products-from-chinese-fishing-company-over-forced-labor-allegations/

https://www.cmtradelaw.com/2021/05/customs-and-border-patrol-cbp-issues-withhold-release-order-wro-against-chinese-fishing-vessels

WHAT IS THE PURPOSE OF MARKING CORRESPONDENCE “WITHOUT PREJUDICE”?

A briefing from Eversheds Sutherland on 31 May explains when the restrictions on use for documents marked “without prejudice” will and won’t apply.  It warns that a party may not use “without prejudice” correspondence to attempt to conceal information from a court. Furthermore, privilege over that correspondence may be waived if, despite being marked “without prejudice” or a genuine attempt to settle a dispute it contains information that is: threatening; in the public interest; causes prescription to start running on a claim; or amounts to an act of insolvency.

https://www.eversheds-sutherland.com/global/en/what/articles/index.page?ArticleID=en/global/South-africa/without-prejudice

PAKISTAN AND UZBEKISTAN TRADE GOODS VIA AFGHANISTAN IN LANDMARK FIRST

On 31 May, Rferl reported that Pakistan and Uzbekistan have exchanged goods through war-torn Afghanistan for the first time, in a move hailed as a milestone for regional economic integration.  A Pakistani cargo truck transported medicine under TIR Convention rules from the port city of Karachi to the Uzbek capital, Tashkent, via Kabul.  The shipments are part of 5 planned trial runs aimed at testing the viability of various routes in the region, where trade has been hampered by the decades-old conflict in Afghanistan and longstanding diplomatic tensions between Kabul and Islamabad.  The project has received technical and financial support from the US Agency for International Development (USAID). 

https://www.rferl.org/a/pakistan-uzbekistan-trade-afghanistan/31282051.html

VIDEO: HOW DOES NORTH KOREA FINANCE A NUCLEAR WEAPONS PROGRAM? 

A 42-minute documentary from Deutsche Welle asks how is it possible that North Korea can finance a nuclear weapons program? One of the poorest countries in the world is even able to worry the US with its nuclear arsenal. The answer lies in the criminal activities of “Office 39”.  This is a secret division of the government. Its goal is to obtain foreign currency by any means possible, providing Kim Jong Un’s totalitarian regime with financial resources. Drugs, counterfeit money, human trafficking, insurance fraud: nothing is off-limits for these North Korean gangsters.

https://www.youtube.com/watch?v=ib9Z7lublQE

RUSSIAN CYBERCRIMINAL CONVICTED OF DEFRAUDING AMERICAN COMPANIES OF MILLIONS OF DOLLARS THROUGH DIGITAL ADVERTISING “SPOOFING” SCHEME

A DoJ news release on 28 May announced that Aleksandr Zhukov, a Russian national, had been convicted wire fraud conspiracy, wire fraud, money laundering conspiracy, and money laundering.  Between September 2014 and December 2016, Zhukov carried out his digital advertising fraud scheme through a purported advertising network called Media Methane.  Media Methane had business arrangements with other advertising networks whereby it received payments in return for placing advertising placeholders (“ad tags”) on websites.  Rather than place these ad tags on real publishers’ websites, however, Media Methane rented more than 2,000 computer servers housed in commercial datacentres in Dallas and the Netherlands, and used those datacentre servers to load ads on fabricated websites, “spoofing” more than 6,000 domains.  

https://www.justice.gov/usao-edny/pr/russian-cybercriminal-convicted-defrauding-american-companies-millions-dollars-through

COUPLE ACCUSED OF BRINGING £14 MILLION OF ‘DIRTY’ CASH INTO BRITAIN CAN BE NAMED

On 28 May, the Evening Standard announced a court victory allowing it to name the couple who had brought the money from Azerbaijan.  However, in a concession to the couple, the judge granted a 7-day stay on naming the couple — who own several multi-million pound London properties and face the seizure of around £6.5 million in their bank accounts — to allow them to seek a judicial review of her decision.

https://www.standard.co.uk/news/crime/evening-standard-victory-14m-cash-couple-azerbaijan-can-named-b937553.html

£5 MILLION CASH FOUND UNDER MATTRESS IN FULHAM FLAT

On 29 May, the Evening Standard reported that 3 money launderers have been sentenced after £5.1 million in “dirty cash” was found under beds, in cupboards and dumped on the floor of a flat.  It was found when undercover officers swooped on Ruslan Shamsutdinov, 36, with cash linked to Sergejs Auzins, 46, a Russian middleman working for gun and drugs syndicates across London.  It is said that the Covid-19 pandemic had “really exacerbated their problem of how to get rid of money”.

https://www.standard.co.uk/news/crime/5-million-pounds-cash-found-under-mattress-fulham-flat-b937732.html

https://amlintelligence.com/2021/05/police-in-london-discover-stg5m-in-cash-that-gang-could-not-launder-due-to-covid-restrictions/

HOW 3 CHINESE COMPANIES CORNERED GLOBAL CONTAINER PRODUCTION

On 31 May, Hellenic Shipping News reported that how many containers exist is controlled by China. Virtually every ocean shipping container in the world is built there.  it says that just 3 Chinese companies account for the majority of production, with Chinese factories now building more than 96% of the world’s dry cargo containers and 100% of the world’s refrigerated containers.

https://www.hellenicshippingnews.com/how-three-chinese-companies-cornered-global-container-production/

3 ARRESTED FOR SMUGGLING OVER 250 VIETNAMESE MIGRANTS TO GERMANY

On 31 May, a news release from Europol advised that some 740 police officers had carried out coordinated raids across Germany and Slovakia against the members of a criminal syndicate smuggling Vietnamese nationals into Europe, arresting 3 individuals. The criminal network provided migrants back in Vietnam with valid Schengen visas issued on false grounds using invitations provided by various companies controlled by the network in Slovakia.

https://www.europol.europa.eu/newsroom/news/3-arrested-for-smuggling-over-250-vietnamese-migrants-to-germany

FATF: NATIONAL AND REGIONAL AML/CFT RISK ASSESSMENTS

On 31 May, FATF published an updated list of links to a large number of national and regional risk assessments.  The regional risk assessments are for SE Asia/Australia, the EU and GAILAT (Latin America).

http://www.fatf-gafi.org/publications/methodsandtrends/documents/ml-tf-risks.html

KYRGYZSTAN DETAINS EX-PM IN GOLD MINE PROBE

On 31 May, the International Business Times reported that Kyrgyzstan had detained a former prime minister, Omurbek Babanov, 51, over corruption at the country’s largest gold mine, the centre of a legal dispute with Canadian firm Centerra.  The Kumtor gold mine is the Central Asian country’s largest foreign investment project and accounts for around a tenth of the economy.

https://www.ibtimes.com/kyrgyzstan-detains-ex-pm-gold-mine-probe-3213437

LAUNCH OF THE EUROPEAN PUBLIC PROSECUTOR’S OFFICE (EPPO), A TOOL TO TACKLE CORRUPTION AND FRAUD ACROSS EUROPE

On 31 May, Renew Europe, a centrist grouping in the EU Parliament, issued a news release welcoming the imminent launch of the EPPO.  EPPO will have the competence to investigate and prosecute infringements of the EU budget, such as fraud, corruption and serious cross-border VAT fraud over €10 million.

https://reneweuropegroup.eu/en/news/1922-renew-europe-welcomes-truly-historic-launch-of-the-eppo-a-tool-to-tackle-corruption-and-fraud-across-europe

https://www.eppo.europa.eu

PHILIPPINES: SUPREME COURT EXPANDS GOVERNMENT ABILITY TO SEIZE ASSETS IN MONEY LAUNDERING CASES

On 31 May, the Rappler website reported on a new provision added to the Anti-Money Laundering Act from 31 May.  From this date, the government may pursue asset forfeiture for deposits or accounts of individuals who are believed to be violating AMLA.

https://www.rappler.com/business/supreme-court-expands-government-avenue-seize-assets-money-laundering-cases

VIDEO: JACOB ZUMA AND THE ARMS DEAL

On 31 May, SABC released a short 4-minute video saying that former South African President Jacob Zuma and French arms company Thales face fraud, corruption, racketeering and money laundering charges in connection with the 1999 multi-billion rand arms deal, starting in 1999, with reports of an investigation surfacing in 2002.

https://www.sabcnews.com/sabcnews/timeline-jacob-zuma-and-the-arms-deal/

RESERVE BANK OF INDIA ASKS BANKS FOR CDD FOR TRANSACTIONS IN VIRTUAL CURRENCIES

On 31 May, The Hindu and others reported that the RBI has advised banks and other regulated entities to continue to undertake due diligence of customers dealing in virtual currencies.  It said a 2018 Circular cautioning banks against dealing with virtual currencies had been overturned by a court order.  However, the RBI asked banks, as well as other entities to continue to carry out CDD processes in line with regulations governing standards for KYC, AML/CFT and obligations of regulated entities under the Prevention of Money Laundering Act 2002, in addition to ensuring compliance with relevant provisions under Foreign Exchange Management Act (FEMA) for oversea remittances.

https://www.thehindu.com/business/Economy/rbi-asks-banks-for-customer-due-diligence-for-transactions-in-virtual-currencies/article34691855.ece

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US TRADE REPRESENTATIVE PROPOSES FORCED LABOUR PROVISIONS IN WTO FISHERIES SUBSIDIES NEGOTIATIONS

A post from Crowell Moring on 28 May advised that the USTR proposed that the WTO address forced labour on fishing vessels as part of an agreement on curbing harmful fisheries subsidies.  The proposed changes are detailed in the post, and include a prohibition on any subsidy to a vessel [or operator] engaged in illegal, unreported and unregulated (IUU) fishing or fishing related activities in support of such fishing. 

https://www.cmtradelaw.com/2021/05/u-s-trade-representative-ustr-proposes-forced-labor-provisions-in-wto-fisheries-subsidies-negotiations

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HARMFUL TAX PRACTICES WITHIN THE EU: DEFINITION, IDENTIFICATION AND RECOMMENDATIONS

A briefing paper from the EU Parliament Research Service on 31 May contains an assessment and proposes solutions.  It contains policy recommendations for future EU standards.  The purpose of the present study is to provide the general public with a tool for understanding the phenomenon of harmful tax competition within the EU and assessing the solutions proposed to combat it from a legal perspective.  Models of 7 tax measures are constructed, which may potentially lead to harmful tax competition if implemented by one or more Member States of the EU.  The 7 models involve –

  • Lowering or corporate tax rates;
  • Patent boxes;
  • Shell companies;
  • Notional interest deduction regimes;
  • Foreign source income exemption regimes;
  • Special economic zones; and
  • Tax rulings.

https://www.europarl.europa.eu/RegData/etudes/STUD/2021/662905/IPOL_STU(2021)662905_EN.pdf

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ROLLS-ROYCE PHANTOM, WITH AFTERMARKET CROCODILE-SKIN UPHOLSTERY, SEIZED IN ITALY

On 31 May, the Hindustan Times reported that a Rolls-Royce Phantom in Italy has been seized by the authorities because it used illegal crocodile leather inside the cabin for seats and upholstery.  It is said that the car was customised by an aftermarket workshop and reportedly being imported to Italy from Russia.  The owner is likely to face heavy fines and will probably have to remove the interior as well.

https://auto.hindustantimes.com/auto/news/this-rolls-royce-phantom-has-been-seized-by-italian-customs-know-why-41622346924581.html

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GRECO STILL NOT SATISFIED WITH MALTA’S IMPLEMENTATION OF ANTI-CORRUPTION MEASURES

On 31 May, Newsbook Malta reported that, despite another Council of Europe organ – MONEYVAL – giving Malta a clean bill of health on AML/CFT measures, its anti-corruption body says that Malta has only implemented 4 of 9 recommendations issued in 2014 to prevent corruption by GRECO, while 5 remain partly implemented.

https://newsbook.com.mt/en/greco-still-not-satisfied-with-maltas-implementation-of-anti-corruption-measures/

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HOW THE OFAC SANCTIONS ADVISORY IS CHANGING THE MARITIME INDUSTRY FOR GOOD

On 31 May, Splash 247 reported that, when OFAC, the US State Department and the US Coastguard issued their long-awaited maritime sanctions Advisory a year ago, it was a landmark moment.  This sought to make clear that the onus of responsibility for sanctions compliance lies with everyone across the supply chain, and stressed the need for the private sector to plug the many holes currently used to circumvent sanctions. The Advisory became instantly pivotal for all those with exposure to maritime trade.  The article says that, after 12 months one can see the impact of this advisory on sanctions-flouting activities relating to Venezuela and North Korea.

https://splash247.com/how-ofacs-sanctions-advisory-is-changing-the-maritime-industry-for-good/

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