Panama Covid-19 update – the President has advised the extension of various pandemic relief schemes until (at least) the end of 2021. For example, people with mortgages can arrange agreements with banks to avoid loss of house, car etc. essentially, it seems, the agreements will be “pay what you can”, but the customer has to approach their bank by 30 September. The original banking moratorium expires on 30 June as did the Panama Solidario plan, which includes the delivery of food bags and digital vouchers. The relief continues for those unemployed etc, but users must register for social service for 24 hours a month within their community or take a training course – having to register online by 31 July.
Numbers continue to creep along, still over 10,000 active cases, and 5 more people in ICU, although “only” 2 more fatalities. 514 news cases reported today and 10,521 active cases – 89 in ICU, 501 in other wards and 390 in so-called hospital hotels.
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21 JUNE 2021
ISLE OF MAN CONFIRMS ADDITION TO ISIL/AL-QAIADA SANCTIONS LIST
On 21 June, the Isle of Man confirmed that Mohammad Ali AL HABBO, designated by both the UN and UK, was on the list of those subject to sanctions in connection with ISIL/Al-Qaida.
UK: TSB BANK BANS CRYPTOCURRENCY AMID FRAUD CONCERNS WITH BINANCE AND KRAKEN
On 19 June, The Times reported that more than 5 million British banking customers of the TSB are to be barred from buying cryptocurrencies within days amid concerns that trading platforms are riddled with fraudsters.
NORWAY TO CRACK DOWN ON UNLICENSED MARKET AS GOVERNMENT SUBMITS GAMBLING ACT
On 18 June, iGB reported that the new law would specifically crack down on operators who are not permitted to offer gambling in Norway, and would apply not only to operators, but also to those who “pass on” customers, such as affiliates. Marketing gambling to children will be a criminal offence, and there is a blanket ban on gambling with credit cards so as to promote responsible gambling habits.
US: CONVICTED IN A SCHEME TO TRICK FINANCIAL INSTITUTIONS INTO PROCESSING $150 MILLION ONLINE MARIJUANA SALES
On 18 June, the Wall Street Journal reported that a federal judge sentenced a California businessman to 2½ years in federal prison for orchestrating an international scheme that tricked US banks. The scheme involved disguising cannabis sales through shell companies, false merchant codes and payment-processing companies around the world. Evidence presented at trial showed that the conspirators sought assistance from Wirecard AG and met with a former top executive there.
UK: MODERN SLAVERY ACT 2015 IS GETTING TOUGHER
On 18 June, an article from Ropes & Gray says that in September, the UK Government announced an “ambitious package” of “powerful new measures to strengthen and future-proof the Modern Slavery Act’s transparency legislation” and to “ensure that large businesses and public bodies tackle modern slavery risks in supply chains”. This followed a public consultation and Independent Review commissioned by the Home Office in 2018, to assess where the Act had worked well or could be more effective. The article looks at some headline points from the new Bill
EU COMMISSION OPINION ON EU SANCTIONS AND “MAKING AVAILABLE” AND THE IMPACT OF A NON-SANCTIONED COMPANY AND ITS SUBSIDIARIES OF HAVING A DESIGNATED PERSON DIRECTOR
On 17 June, an article from Herbert Smith Freehills LLP says that the EU Commission was asked to issue its Opinion in relation to a designated who was the Chairman of the Board of Directors of a non-designated, non-EU entity. In turn, this owns a subsidiary company based in an EU Member State. The Commission was asked to confirm whether the designated person should be regarded as controlling the first entity and whether EU persons were prohibited from making payments to the EU subsidiary. The Opinion is said to clearly demonstrates the importance of due diligence for companies wishing to comply with EU sanctions, and the importance of identifying designated persons within the supply chain or otherwise connected with contractual counterparties.
UK HELP AND SUPPORT FOR MONEY LAUNDERING SUPERVISION
On 21 June, HMRC issued updated assistance with recorded webinars to find out more about money laundering supervision.
EU WARNS LEBANESE ELITE OF ‘TARGETED SANCTIONS’
On 21 June, EU Observer reported that Lebanese leaders could face EU visa bans and asset-freezes for obstructing the formation of a new government and implementing reforms.
MALTA: MFSA TO CONTINUE IDENTIFYING AREAS WHERE IT CAN STRENGTHEN PRACTICES
On 21 June, the Malta Independent reported that the Malta FSA has published a status update on the implementation of the 2019 AML/CFT supervisory strategy. A MFSA statement said that it will continue to identify areas where it can strengthen its practices through engagement with other Supervisory Authorities, participation in the international community and through an ongoing process of organisational development.
SWISS BILLIONAIRE’S ENFORCED ART COLLECTION AUCTION HALTED
On 21 June, Swissinfo reported that the auction has been cancelled at the last minute after a $6.5 million tax evasion penalty was settled. Urs Schwarzenbach had been found guilty of tax evasion by illegally importing works of art into the country and authorities seized 158 items. He is still being pursued by the Swiss authorities for further millions for the art import scam that took place between 2008 and 2013.
ISLE OF MAN: EXTENSION OF ECONOMIC SUBSTANCE REQUIREMENTS TO PARTNERSHIPS AND LLC
On 18 June, an article from Appleby says that a new Order extends the scope of the economic substance rules in Part 6A of the Income Tax Act 1970 to cover partnerships, including limited partnerships both with and without legal personality, and limited liability companies (LLCs). The expanded rules will apply to accounting periods commencing on or after 1 July.
BERMUDA: ECONOMIC SUBSTANCE UPDATE
On 21 June, Appleby reported that amendments are proposed that will, in the case of Bermuda, more types of partnerships) into the scope ot the economic substance requirements. A Bill has been introduced in response to commitments made to the EU Code of Conduct Group, and similar amendments have also been proposed in the other British Overseas Territories as well as the Crown Dependencies of Isle of Man, Guernsey and Jersey.
CHINA’S GDPR IS COMING: ARE YOU READY?
On 21 June, an article from Dentons was concerned with the Personal Information Protection Law, regarded as the “Chinese GDPR” and widely believed to have significant influence on the development of many industries especially the digital business. It is said that the firm will offer 15 thematic articles on various topics to guide the compliance under the PIPL from a practical perspective.
INFORMATION COMMISSIONER’S OFFICE GETS POWERS TO CONDUCT FINANCIAL INVESTIGATIONS
An article from Out-Law on 21 June says that the UK is giving authorities, including data protection authority ICO, new powers that will give them the power to conduct their own financial investigations. Accredited financial investigators at the ICO, along with the Department for Transport, the London Fire Commissioner and the Department for the Economy of Northern Ireland, will now be able to conduct investigations, apply for restraint orders and carry out search and seizure exercises in circumstances where they believe cash has been obtained through or intended for use in criminal activities.
UK FINANCIAL INSTITUTIONS SPENDING £28.7 BILLION A YEAR ON COMPLIANCE – EQUIVALENT TO HALF THE UK DEFENCE BUDGET
On 21 June, a release on Mondo Visione advised that UK Firms are responding to mounting AML pressure by increasing spend on teams rather than technology, with 70% of budgets committed to people powerand thetotal cost of AML to UK firms could reach over £30 billion by 2023. This information is contained in a report from LexisNexis Risk Solutions.
LIBYA’S SOVEREIGN WEALTH FUND SEEKS EASING OF UN SANCTIONS SO IT CAN INVEST MORE AT HOME
On 18 June, Forbes reported that the Libyan Investment Authority (LIA) is making a renewed attempt to secure some easing of international sanctions on its assets, so it can launch a new wave of domestic investments. It has been under UN sanctions since 2011, but says it now wants to be allowed to transfer money from one frozen bank account to another, to avoid being exposed to negative interest rates. It also wants to be allowed to reinvest funds from maturing bonds and to be allowed to make new investments with frozen cash.
HOW HUMAN TRAFFICKERS EXPLOIT INTERNATIONAL ECONOMICS: UNDERGROUND BANKING AND CASH MOVEMENT (PART 1 OF 4)
On 14 June, ACFCS published Part 1 of a 4-part series by the non-profit Anti-Human Trafficking Intelligence Initiative (ATII).It claims that the sex and labour trafficking industry second only to drug trafficking as the world’s largest criminal industry, according to industry estimates. In tandem, while crypto and other virtual value steams have meant more banking and remittance opportunities for underserved regions, it has also aided some illicit groups in obfuscating their trafficking transaction trails.It refers to red flags for identifyingslave or sex labour trafficking and includes 2 brief case studies.
See also –
REPORT FINDS PHONE NETWORK ENCRYPTION DELIBERATELY WEAKENED
On 17 June, Vice reported that a new paper shows that 2 old encryption algorithms still used in mobile networks can be exploited to spy on phones’ internet traffic. Researchers speculated that a weakness was intentionally put into the algorithm and, after the paper was published, the group that designed the algorithm confirmed this was the case. It is said that it was introduced because the export regulations at the time did not allow for stronger encryption. While the systems involved are not widely used anymore after cellphone providers adopted new standards for 3G and 4G networks, both persist as a fallback in certain countries and networks.
UK: GANG STOLE ‘LUXURY’ KEYLESS CARS WORTH MORE THAN £3 MILLION BEFORE DISMANTLING THEM AND SHIPPING PARTS TO LITHUANIA
On 18 June, My London reported that a gang stole more than 130 vehicles worth upwards of £3 million from London and the Home Counties before dismantling them and shipping the parts to Lithuania.
OLAF REPORT 2020
The EU Anti-Fraud Office (OLAF) has published its report for 2020. It says its work on tackling COVID-19-related fraud focused primarily on counterfeit face masks, hand sanitisers and gels, many of which appeared rapidly on the EU market at the start of the pandemic as fraudsters looked to take advantage of EU countries rushing to increase their stocks. However, it is said that the virus did not prevent OLAF from continuing with its other work as well throughout 2020, on issues as diverse as conflicts of interest, collusion and manipulation of public procurement procedures, as well as illegal trade in cigarettes or cooling gases. It considers its performance and trends.
$71 BILLION IN CRYPTO HAS REPORTEDLY PASSED THROUGH ‘BLOCKCHAIN ISLAND’ MALTA SINCE 2017
On 20 June, Coin Telegraph reported that FATF and 2 regional organisations, has flagged Malta’s initial push to attract cryptocurrency business as “problematic”. Although Malta has upgraded its crypto-focused regulations in recent years, financial watchdogs are said to be concerned about whether the nation’s AML regime has been robust enough.
MALTA CHAMBER OF COMMERCE BUSINESS UNIT RESPONDS TO ALLEGATIONS OF LAX CRYPTO OVERSIGHT
On 21 June, Coin Telegraph reported that a business unit within Malta’s Chamber of Commerce has struck down allegations that the country failed to uphold proper regulatory oversight of cryptocurrency businesses in its early embrace of the industry in 2017 and 2018.
CRIMINALS ARE MAILING ALTERED LEDGER DEVICES TO STEAL CRYPTOCURRENCY
On 16 June, the Bleeping Computer website reported that scammers are sending fake replacement devices to Ledger customers exposed in a recent data breach that are used to steal cryptocurrency wallets. The article says that a device came in an authentic looking packaging, with a poorly written letter explaining that the device was sent to replace their existing one as their customer information was leaked online.
CHINA: UN HUMAN RIGHTS EXPERTS ALARMED BY ‘ORGAN HARVESTING’ ALLEGATIONS
On 14 June, a news release from the UN Office of the Human Rights Commissioner said that UN human rights experts have said that they were extremely alarmed by reports of alleged ‘organ harvesting’ targeting minorities, including Falun Gong practitioners, Uyghurs, Tibetans, Muslims and Christians, in detention in China. It is said that they have received credible information that detainees from ethnic, linguistic or religious minorities may be forcibly subjected to blood tests and organ examinations such as ultrasound and x-rays.
CHINA INTENSIFIES CRACKDOWN ON BITCOIN MINING
On 21 June, a video report from France 24 reported that Sichuan province announced over the weekend that it would shut down major Bitcoin mines. It’s the latest local crackdown on cryptocurrency mining, which stands to have a significant impact on the world’s crypto processing power.
US: FIRST AMERICAN FINANCIAL MORTGAGE COMPANY PAYS “FARCICAL” $500,000 FINE
On 21 June, a post on Krebs on Security described as “farcical” the fine imposed on the leak of 800 million documents, many containing sensitive financial data and related to real estate transactions dating back 16 years. First American is the second-largest mortgage title and settlement company in the US, handling nearly a quarter of all closings each year.
CANADIAN COURTS ASSIST CRYPTO RECOVERY
On 21 June, a post on the FCPA Blog says that, although Canada is often considered a haven for laundered money and hidden assets, Canadian courts have shown consistency in their helpful approach to recovering cryptocurrency, as courts have been asked to opine on applying criminal and civil recovery remedies to this digital asset. It is said that, based on case law to date, it appears that Canadian courts will exercise their discretion to tailor traditional remedies to assist parties seeking relief related to crypto assets in Canada. Plaintiffs will be asking Courts to make creative orders in this emerging area to dissuade fraudsters from continuing to consider Canada a haven for laundering or hiding assets, crypto or otherwise.
IRAN’S MISSILE PROGRAMME: 2 PROBLEMS, NOT ONE
On 16 June, the Next Generation Nuclear Network published an post saying that there are 2 key issues related to Iran’s ballistic missiles, not one. Although there are few easy answers to either of these, a proper framing is an essential starting point to open up a broader set of ideas and potential solutions. The first problem is how to slow or prevent altogether Iran’s future development of missiles that could reach Western Europe or the US. Iran’s transfer of artillery rocket and missile technology to proxies throughout the Middle East, dating back to at least the early 2000s, constitutes a separate, proliferation problem. It is said that, although there are few easy answers to either of these, a proper framing is an essential starting point to open up a broader set of ideas and potential solutions.
BOLIVIAN EX-MINISTER OF DEFENCE “PLOTTED A SECOND COUP USING US MERCENARIES”
An article in The Intercept on 17 June made this assertion, saying that leaked phone recordings and emails reveal a top official was prepared to use foreign troops to block Bolivia’s left-wing MAS party from returning to power.
US: USE OF RADIOACTIVE MATERIALS IN COMMERCIAL APPLICATIONS HAS INCREASED BY 30%, RAISING SECURITY RISKS
On 14 June, Homeland Security Today said that a new report has found that the use of high-risk radioactive materials in medical, research, and commercial applications has increased by about 30% in the US in the last 12 years, and says that the government should improve security, tracking, and accountability to reduce health and security risks — while also supporting the development of nonradioactive alternatives to replace them. The report is from the National Academies of Sciences, Engineering, and Medicine. The report considers the long-term health impacts and socio-economic effects of possible misuse or malicious use — such as a “dirty bomb” scenario. The new report finds some progress has been made since the last report in 2008 in replacing cesium irradiators with X-ray technology for blood treatment and research – but no progress has been made in replacing cesium chloride from applications such as calibration systems used for radiation monitoring equipment. The International Atomic Energy Agency (IAEA) categorization system used by NRC places radioactive materials into five categories based on risk to human health and Category 1 materials have the highest potential to immediately harm human health. Most commercial applications fall into Categories 1 to 3, but only Category 1 and Category 2 materials are currently subject to enhanced security measures and tracked. The report makes a number of recommendations to improve the situation.
The report is at –
NEW UKRAINE SANCTIONS ON RUSSIAN AND UKRAINIAN BUSINESSMEN
A news release from the Ukraine President’s Office on 18 June advised that a decision was made to impose sanctions against Dmytro Firtash, Pavlo Fuks, Serhiy Chemezov, Mykhailo Shelkov. Dmytro Firtash – because his titanium companies had allegedly supplied raw materials to Russian military enterprises; and Russian businessman Pavlo Fuks – for numerous violations during the obtaining of licences for the development of hydrocarbon deposits. In addition, a decision was made to impose sanctions against 12 people who, according to the Ministry of Internal Affairs leaders of criminal groups. Also, sanctions were imposed on 4 legal entities and 6 individuals who are affiliated with the Russian secret services and are said to have been directly involved in the development of the components of the Petya virus, carried out its administration, modernisation, and organised cyberattacks on critical infrastructure in Ukraine. These latter individuals are already on the US sanctions list.
SYNTHETIC BIOWEAPONS ARE COMING
An article in the June edition of Proceedings from the US Naval Institute says that the COVID-19 pandemic has revealed critical weaknesses in the human domain of warfare at just the moment technology has emerged that gives bad actors new power to exploit those weaknesses. Developments in synthetic biology will create next-generation bioweapons, it says, known as “synthetic bioweapons” (SBW). It considers options (from a naval viewpoint), for example, the possible use of synthetic bioweapons to neutralise a ship or task force pre-emptively, before any active conflict, incapacitating a crew instead of killing it. The article also mentions the possibility of “specific ethnic genetic attacks” on whole racial or ethnic groups. It warns that reactions to synthetic biology attacks will be fraught with difficulties in attribution, signalling, and response; and that the Syrian use of chemical weapons (and North Korea and Russia’s highly targeted use) has destroyed the credibility of threats of a nuclear response to all use of forms of WMD. The 1975 Biological and Toxic Weapons Convention outlawed the acquisition and stockpiling of all forms of biological weapons but lacked inspection or enforcement regimes. As the slow initial response to COVID-19 demonstrates, it is said, it takes time to recognise a new threat, understand it, identify its origin, and develop medical countermeasures.
EU AND CANADA SET UP A STRATEGIC PARTNERSHIP ON RAW MATERIALS
On 21 June, the EU announced a framework setting the ground for the EU-Canada strategic partnership on raw materials. It is said that the partnership will allow both sides to advance trade and investments into a secure, sustainable and resilient raw materials value chain, which is key to achieving the transition to climate-neutral and digitalised economies. It will focus on the integration of EU-Canada raw material value chains while specifically enhancing collaboration on science, technology and innovation collaboration; as well as environmental, social, and governance (ESG) criteria and standards.
On 21 June, FATF initiated a virtual plenary, the outcome of which is due to be announced on 25 June. Delegates will discuss the mutual evaluation assessments of Japan and South Africa’s AML/CFT measures and will hear the progress made by some jurisdictions identified as presenting a risk to the financial system (e.g. Pakistan). It will finalise key reports, including on money laundering and environmental crime, ethnically and racially motivated terrorist financing and 2 reports that explore the opportunities that technology can offer to improve AML/CFT efforts. FATF will also finalise its second 12-month review of the implementation of revised FATF Standards for virtual assets and virtual asset service providers, and guidance on proliferation financing risk assessment and mitigation.
UK: CPS UPDATES ITS APPROACH TO PROSECUTIONS FOR FAILURE TO REPORT MONEY LAUNDERING
On 21 June, an article from Herbert Smith Freehills is concerned with new guidance issued on 2 June, the main changes involving section 330 of the Proceeds of Crime Act 2002, which creates the offence of ‘failure to disclose’ when a person knows or suspects, or has reasonable grounds to knowing or suspecting, that another person is engaged in money laundering. The Guidance states that prosecutions under section 330 may be brought even where it cannot be proven that any underlying money laundering was “planned or undertaken“.
US SANCTIONS BY THE NUMBERS
The Center for a New American Security has published a series of articles and graphs showing the growth of US sanctions of various types –
Human Rights and Corruption
UK ARRESTS MAN ALLEGEDLY INVOLVED IN MASSIVE COCAINE SHIPMENTS FROM SOUTH AMERICA
On 21 June, OCCRP reported that the NCA had arrested a man for allegedly participating in the shipping of several tons of cocaine from South America to Germany. The suspect had used the encrypted platform Encrochat to communicate with his associates, a service which French law enforcement unlocked last year. The 44-year-old unnamed suspect was arrested in South-East London, on behalf of German authorities as “he is believed to have a significant role in an Albanian and German organised crime group behind cocaine importations over a number of years”.
A GUIDE TO HONG KONG’S CYBER SECURITY LAWS AND PRACTICES
On 21 June, Allen & Overy LLP published this guide, saying that past decade has seen a huge increase in the incidents of cyber crime in Hong Kong. The number of cases in 2020 representing a 55% increase on the 2019 figure alone.
BRITISH FORMER DEUTSCHE BANK COMMODITIES TRADER SENTENCED TO PRISON FOR FRAUD SCHEME
A news release from US DoJ on 21 June advised that a British former commodities trader has been sentenced in Illinois to 12 months and a day in prison for a scheme to commit wire fraud affecting a financial institution. James Vorley, 41, was convicted by a federal jury in September. He was employed as a precious metals trader at Deutsche Bank in London, and engaged in a scheme to defraud other traders on the Commodity Exchange Inc, which was a public exchange. Vorley placed fraudulent orders that he did not intend to execute in order to create the false appearance of supply and demand and to induce other traders to transact at prices, quantities, and times that they otherwise would not have traded.
TURKISH BUSINESSMAN ARRESTED IN AUSTRIA ON CHARGES THAT HE ALLEGEDLY LAUNDERED OVER $133 MILLION IN FRAUD PROCEEDS
A news release from US DoJ on 21 June announced that Sezgin Baran Korkmaz had been arrested in Austria on 19 June, at the request of the DoJ. He allegedly laundered over $133 million in fraud proceeds through bank accounts that he controlled in Turkey and Luxembourg. The proceeds allegedly related to a scheme by Jacob Kingston, Isaiah Kingston, and Levon Termendzhyan to defraud the US Treasury by filing false claims for over $1 billion in refundable renewable fuel tax credits for the production and sale of biodiesel. Korkmaz and his co-conspirators allegedly used proceeds from the fraud to acquire the Turkish airline Borajet, hotels in Turkey and Switzerland, a yacht named the Queen Anne, and a villa and apartment on the Bosphorus strait in Istanbul.
SEC HAS ANNOUNCED THAT IT HAS FILED AN EMERGENCY ACTION CHARGING AN OFFSHORE FUND AND 2 INDIVIDUALS WITH ENGAGING IN A FRAUDULENT SCHEME, AND OBTAINED AN ASSET FREEZE TO SAFEGUARD REMAINING INVESTOR FUNDS AT RISK OF IMMEDIATE DISSIPATION
A release on Mondo Visione on 21 June advised that the SEC complaint alleges that from at least 2018 to the present, Ofer Abarbanel of California and Victor Chilelli of Delaware and New York engaged in a scheme to defraud investors in an offshore mutual fund they controlled. It is alleged that they represented to investors that the fund would invest primarily in US Treasury securities and also enter into certain types of reverse repurchase agreements with US Treasury securities serving as collateral. According to the complaint, when investors sought to redeem $106 million in investments last month, the defendants refused and instead took steps to transfer funds to an account from which no redemptions could be drawn.
IRAN STORES MORE OIL ON TANKERS AS IT COUNTS DAYS TO ENTER MARKETS
In its 22 June edition, Hellenic Shipping News reported that Iran could quickly export millions of barrels of oil it is holding in storage if it reaches a deal with the US and has been moving oil into place to prepare for an eventual restart. The National Iranian Oil Company (NIOC) is expected to restart large-scale export from onshore and offshore storage that contains as much as 200 million barrel, according to energy consultancy and monitoring businesses. Iran has boosted the volume of crude it has stored on oil tankers in recent months, and it is estimated that around 78 million barrels of oil and condensate are stored on water and this compares against only 41 million barrels at the same time last year.
PIRACY IN THE AMAZON REGION
A short article in The Marine Insurer is concerned with the problem of piracy in the Amazon region that discusses the risk prevention and management needed to counter the problem, targeting barges carrying valuable cargo.
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