Panama Covid-19 update – things continue here, with 1,205 more new cases and 7 new fatalities (2 being from earlier periods). 12, 760 active cases include 106 in ICU and 577 in hospital wards.
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1 JULY 2021
USING THE UKCA MARKING
Guidance is available from the Department of Business, Energy and Industrial Strategy on the UKCA (UK Conformity Assessed) marking, which is to be used for goods being placed on the market in Great Britain (England, Wales and Scotland) – replacing the EU “CE” marking. It covers most goods which previously required the CE marking, known as ‘new approach’ goods. The UKCA marking alone cannot be used for goods placed on the Northern Ireland market (which remains part of the EU Single Market). The UKCA marking applies to most goods previously subject to the CE marking. It also applies to aerosol products that previously required the ‘reverse epsilon’ marking. The UKCA marking came into effect on 1 January. However, to allow businesses time to adjust to the new requirements, you will still be able to use the CE marking until 1 January 2022 in most cases.
DOMINICAN FORMER LAW MINISTER ARRESTED ON SUSPICION OF DIVERTING FUNDS
On 1 July, KYC 360 reported that Dominican authorities had arrested Jean Alain Rodriguez, a former attorney general, over accusations of diverting public funds to a political group that backed the Dominican Liberation Party, (DLP). His arrest is the fourth in “Operation Medusa”, an investigation into officials of the attorney general’s office in recent years.
SMUGGLING OPERATION THAT SEES MILLIONS OF CHINESE CIGARETTES PASS THROUGH TEXAS
On 29 June, the Houston Chronicle reported that a traffic stop last year led officials in South Texas to a massive trove of illegal goods, and the resulting case provides a glimpse into the operations of Chinese businesses that are well on their way to taking over the global tobacco market. One person involved admitted he intended to smuggle nearly 423 million cigarettes through Texas into Mexico. The article refers to an OCCRP report involving a Panama-based network of shell companies sending huge amounts of Chinese cigarettes from the Colón Free Trade Zone — the second-largest port in the world, at the Atlantic end of the Panama Canal — into Latin American countries where there is no legal market for them. It is said to involve China National Tobacco Corporation, by far the world’s largest cigarette company.
INSIDE AN ORGANISED CRIME CLAN THAT MOVED COCAINE ACROSS EUROPE
On 30 June, an OCCRP report says that the Giorgi-Boviciani clan of the ’Ndrangheta crime group used north-western Europe as a cocaine and tax-evasion haven. It helped oversee a multi-million-dollar cocaine pipeline from Latin America to Europe, shipping drugs to Antwerp, Rotterdam, and Hamburg, often via West Africa. Officials say the Giorgis moved the proceeds into the legal economy via the food and restaurant industries. The Giorgis are allied with the ’Ndrangheta’s Romeo-Staccu clan, which in turn works under the Pelle-Gambazzas, ’Ndrangheta royalty who lord over one of the 3 territories into which the group has divided the Italian province of Reggio Calabria. This article was the first of a 2-part series, and the second part will concentrate on the Latin America side of the operation.
NATWEST CAPS TRANSFERS TO CRYPTO EXCHANGES, INCLUDING BINANCE, OVER FRAUD CONCERNS
On 1 July, KYC 360 reported that, in the UK, the Natwest Group has capped the daily amount customers can send to cryptocurrency exchanges, including major platform Binance, because of concerns over investment scams and fraud,
On 30 June, Mourant published an article, from the perspective of the Channel Islands, which says that the ability to evidence effectiveness is and will be an overarching regulatory theme for the next few years and defines a new era for financial services businesses in international financial centres (IFC) worldwide. It applies equally to both the regulator and the entities it supervises – we are all in this together. It is, for example, the chief concern in FATF evaluations (the other element is the more easily complied with technical compliance). The article says that effectiveness involves moving from technical compliance to being able to evidence and demonstrate that the work a financial services business, or regulator, is doing in any particular area is having a positive impact on outcomes, i.e. what you are doing is effective. The article says that financial services business cannot rest on their laurels and need to prioritise investment in risk and compliance – saying that now is the time to get your house in order.
UAE TERRORISM FINANCING GUIDANCE
The Committee for Goods Subjected to Import & Export in the UAE has published guidance on terrorism financing and counter-proliferation financing sanctions.
On 5 May, Windward published a short article on “flag hopping” – repeatedly registering with new flag states to avoid detection. It provided the following illustration demonstrating how crude oil tankers appear to be the largest class of vessel using the tactic. It gives an example of one crude oil tanker that, from 2012-2017, flew the Panamanian flag; but then in the next 3 years went through 3 flags – Marshal Islands, Liberia, and Honduras – all of which are considered flags of convenience. It was designated by OFAC in 2020, when it was flying the Honduran flag, and even after its designation, it continued flag hopping to the flag of Djibouti and Tanzania.
UK: PRIVACY CONCERNS OVER LIVE FACIAL RECOGNITION ADDRESSED BY ICO
On 27 June, Security Matters in the UK reported that the Information Commissioner has commented extensively on privacy issues around the use of live facial recognition technology in public places, duly expressing “deep concern” about the potential for such technology to be deployed “inappropriately, excessively or even recklessly”. The ICO has issued an Opinion on the use of live facial recognition in public places by private companies and public organisations, and this includes an outline of how the law sets a high bar to justify the use of live facial recognition and its algorithms in those environments where you shop, socialise or gather.
WARNING OF GROWING THREAT OF TERRORISM IN AFRICA
On 28 June, Dryad Global reported that UK Foreign Secretary will announce new UK funding to fight the growing threat of terrorism in West Africa. The UKwill commit £12.6 million to support efforts to counter the group in the Lake Chad Basin, which covers north-east Nigeria, Cameroon, Niger and Chad. The funds will be used to support both the regionally-led military fight against Daesh, and projects encouraging its fighters to leave the terrorist group. Foreign ministers from more than 45 countries are meeting to discuss deepening cooperation to combat Daesh and its affiliate terrorist groups, including emerging threats across the African continent.
DUAL-USE – ORDINARY GOODS CAN BE WAR GOODS UNDER AUSTRALIA’S EXPORT CONTROLS
On 29 June, an article from Moulis Legal is concerned with the Defence Strategic Goods List (DSGL), which lists the munitions and dual-use goods, technologies and software that are export-controlled. It says that questions will still arise – does the technology meet the ‘control’ threshold, is the manner of ‘supply’ covered by the legislation, etc; but the DSGL does at least give export control managers a reference point against which they can test any given transaction. However, it warns that Australia’s export controls are not limited to the items listed on the DSGL and the potential application of those controls may not be apparent even after undertaking rigorous due diligence.
CANADA ADOPTS NEW EXPORT CONTROLS AND AMENDS PROCESS FOR INTRODUCING FUTURE CONTROLS
On 30 June, an article from McCarthy Tétrault LLP says that Canada recently announced changes to Canada’s Export Control List, which provides for the control of exports and transfers of goods and technology. The amendments involve new controls over exports and technology transfers related to software designed for monitoring or analysis by law enforcement, certain items designed to circumvent information security, and certain military-related software, including software for offensive cyber operations. The changes come into force on 23 July. A new Guide includes several key additions and updates, and a number of minor clarifications and edits were also included.
PHILIPPINES: SMUGGLED RARE SPIDERS AND CENTIPEDES SEIZED
On 1 July, GMA News Online reported that customs personnel had seized an overstaying parcel containing wildlife species that was misdeclared as teaching materials. Officers found 44 wildlife species composed of 25 tarantulas, 12 spiderlings, 5 centipedes, and 2 Ornithoctonus black spiders. The parcel came from Thailand.
INDIA: BETEL NUT SMUGGLING
On 1 July, The Sentinel reported that the CBI had raided 19 premises, including those of customs house agents, and several private persons including proprietors/partners of importing companies and others. Smuggling of betel nuts over the Myanmar border is alleged to have involved fake documents, certificates of origin, bogus or undervalued bills and invoices, and forged customs clearance certificates.
ASEAN AND AUSTRALIA LAUNCH PROJECT PORTCULLIS 2021 TO TACKLE ILLICIT TOBACCO
On 1 July, Mirage News reported that the Association of Southeast Asian Nations (ASEAN) and Australia established Project Portcullis 2021 in June, the ASEAN-Australia Task Force on Illicit Tobacco was used to combat the smuggling of illicit tobacco in a month of action. The month of action had more than 50 referrals and has led to the seizure of 19 million sticks of cigarettes being smuggled in the region.
RECENT CASES ON CIVIL FORFEITURE OF PROPERTY UNDER MALAYSIA’S AML LAW
On 1 July, an article from Skrine first briefly outlines the AML framework, and then goes on to examine several recent cases which shed light on the courts’ approach to an application for forfeiture of property. The article reflects on what must be proven by the prosecution to succeed in a civil forfeiture, saying that courts adopt a strict approach in evaluating the evidence presented even if the standard is on a balance of probabilities and particular importance is placed on the sufficiency and admissibility of evidence.
AUSTRALIA: CROWN RESORTS FACES NEW MONEY LAUNDERING SCANDAL
On 1 July, the Sydney Morning Herald reported that the casino operator faces a fresh money laundering scandal stemming from its illegal practice of accepting credit card payments in exchange for gambling chips through the hotel desk at its Melbourne property.
NEW BUSINESS SUPPORT MEASURES: CORPORATE INSOLVENCY AND GOVERNANCE ACT 2020
On 1 July, the House of Commons Library published a research paper about the Act which received Royal Assent on 25 June 2020. Its measures involve those which are permanent and update the UK insolvency regime, and temporary measures to insolvency law and corporate governance intended to assist struggling businesses during the pandemic. Almost all its provisions commenced on 26 June 2020, but most of its temporary business protection measures have retrospective effect from 1 March 2020. The Act involves permanent insolvency measures, temporary insolvency measures and temporary corporate governance measures – which are explained in the paper.
SOUTH AFRICA: PROSECUTOR JAILED FOR CORRUPTION
On 1 July, IOL reported that a Limpopo prosecutor has been sentenced to 4 years’ imprisonment for corruption. He was arrested in 2018 and convicted of soliciting bribes from an accused who reported him to the police.
LITHUANIA: MAYOR REMOVED FROM OFFICE OVER CORRUPTION
On 1 July, LRT reported that the Lithuanian Central Electoral Commission (VRK) has removed Vaclovas Andrulis as mayor of Kelmė District following his conviction for corruption. He was convicted of demanding a bribe of €10,000 for favourable treatment as part of a municipal project for the maintenance of public spaces.
UK: PENSIONS ADMINISTRATION STANDARDS ASSOCIATION (PASA) HAS UNVEILED ITS COUNTER FRAUD GUIDANCE FOR UK PENSION SCHEMES, TRUSTEES AND PROVIDERS
The Actuarial Post has reported that PASA, the independent body dedicated to driving up standards in pensions administration, has unveiled its Counter Fraud Guidance for UK pension schemes, trustees and providers. The Guidance encompasses the many types of fraud affecting the pensions sector (at the time of publication) and the range of tactics needed to be deployed to counter pensions fraud so proactive steps can be taken to minimise its extent and cost.
SHADOW ECONOMY ACCOUNTS FOR NEARLY A THIRD OF UKRAINE’S GDP IN 2020
On 1 July, the Kyiv Post reported that Ukraine’s shadow economy has grown to 30% of its GDP in 2020, an increase from 27% in 2019. With a GDP of $151 billion in 2020, the shadow economy represents over $45 billion in lost revenue to the state.
UK: ACCESS TO CASH CONSULTATION
On 1 July, HM Treasury launched a consultation process as the next step in legislating to protect access to cash and ensuring that the UK’s cash infrastructure is sustainable for the long term. An Impact Assessment is published alongside the consultation. The closing date is 23 September.
BREXIT: CUSTOMS, VAT AND EXCISE UK TRANSITION LEGISLATION FROM 1 JANUARY 2021
On 1 July, HM Treasury published an updated collection which brings together Customs, VAT and Excise EU Exit legislation and Customs notices that have the force of law applicable to UK transition.
FORMER MONTSERRAT BRITISH OVERSEAS TERRITORY FIRST MINISTER GROOMED AND SEXUALLY ABUSED 5 GIRLS
On 1 July, a news release from NCA advised that David Brandt, aged 78, a former First Minister of the British overseas territory of Montserrat has been convicted of sexually exploiting 5 girls including 2 13-year-olds. He led the Montserrat government between 1997 and 2001.
US SANCTIONS STILL DEMAND CAREFUL COMPLIANCE
On 1 July, Control Risks published an article saying that the Biden administration will take a more deliberate, pragmatic approach to sanctions policy, will take a more deliberate, pragmatic approach to sanctions policy and its policy will be to push further into human rights, democracy, and technology issues. It says that companies should continue to strengthen sanctions compliance programmes in line with guidance from OFAC and other good practices, including risk assessment, training and awareness, due diligence, and a suitable management framework.
PRESIDENT RAISI AND THE NUCLEAR DEAL – IMPLICATIONS FOR SANCTIONS AND FINANCIAL TRANSACTIONS
On 1 July, Control Risks published an article following the election of the new Iranian President. It argues that the Supreme Leader will ensure that Raisi reaches an agreement with the US on a return to mutual compliance with the JCPOA nuclear deal. It comments on sanctions changes that could result. However, it cautions that while payment channels with Iran may increase, remaining US sanctions and Iran’s blacklisting by FATF will deter many international banks from processing Iran-related transactions.
EU RULES UK HAS ADEQUATE DATA PROTECTION: NOW WHAT?
On 1 July, an article from Eversheds Sutherland posed this question. It also asks: is your organisation subject to the EU GDPR, or do you do business with organisations who are subject to the EU GDPR? If so, it says to read on to learn how the European Commission’s UK adequacy decisions could affect you.
BELGIAN APPELLATE COURT UPHOLDS $542 MILLION FREEZE OF KAZAKHSTAN’S NATIONAL FUND ASSETS
On 30 June, a release on Cision PR Newswire reported that the Brussels Court of Appeal had rejected the appeals brought by the Republic of Kazakhstan and the National Bank of Kazakhstan (NBK) against an attachment of Kazakhstan’s state assets in Belgium. The attachment followed Kazakhstan’s continued unlawful refusal to pay a $545 million final and binding arbitral award in December 2013.
BELGIAN SECURITY SERVICES COMPANY AND 3 FORMER EXECUTIVES INDICTED FOR BID RIGGING ON US DEPARTMENT OF DEFENCE CONTRACTS
A news release from US DoJ on 30 June advised that a federal grand jury returned an indictment against Belgium-based Seris Security NV (Seris) and 3 executives for their roles in a conspiracy to fix prices, rig bids and allocate customers for defence-related security services, including a multimillion-dollar contract issued in 2020 to provide security services to the US DoD for military bases and installations in Belgium.
FinCEN: 180-DAY UPDATE ON AML ACT IMPLEMENTATION
A news release on 30 June announced FinCEN’s delivery of 2 key requirements pursuant to the Anti-Money Laundering of 2020, which includes the Corporate Transparency Act. The release lists achievements to date.
COLOMBIA SEIZES 6 TONNES OF COCAINE FROM ELN REBELS
On 29 June, NASDAQ reported that Colombia’s military has seized 6 tonnes of cocaine from guerrillas of the leftist National Liberation Army (ELN) in a jungle region in the south-east of the country.
‘DOCTOR BITCOIN’ PLEADS GUILTY TO ILLEGAL CASH-TO-CRYPTO SCHEME
A news release from US DoJ on 29 June advised that Mark Alexander Hopkins, 42, had pleaded guilty to one count of operation of an unlicensed money transmitting business. It is said that he ignored federal law and allowed fraudsters to use Bitcoin to operate under the radar of law enforcement. He is said to have admitted he ran a business that converted US dollars to cryptocurrency, primarily Bitcoin, for a fee. He frequently sent BTC to customers’ crypto wallets without taking additional steps in verifying the source of the cash, he admitted.
NIGERIA WANTS REMOVAL OF WAR RISK INSURANCE FOR GULF OF GUINEA
On 30 June, Insurance Marine News reported that Nigerian authorities are lobbying for the removal of the war risk insurance required for cargo vessels that call at the country’s ports, a surplus demanded because of the enormous growth in recent years of kidnapping incidents on vessels transiting the Gulf of Guinea. It is claimed that the country had demonstrated enough commitment towards tackling maritime insecurity in its territorial waters and the wider Gulf of Guinea. It is said that Oceans Beyond Piracy’s 2020 report indicated that the total cost of additional war risk area premiums incurred by Nigeria-bound ships transiting the Gulf of Guinea was $55 million in 2020, while the 35% of ships transiting the area also carried additional kidnap and ransom insurance totalling $100 million. However, from January to March this year the Gulf of Guinea accounted for 43% of global piracy incidents.
PIRACY IN THE AMAZON
On 30 June, an article from Insurance Marine News reported that river piracy in the Amazon was having a detrimental impact on barges that operated on inland waterways, as well as on their crews. It is claimed that the barges were usually laden with valuable cargoes which could be easy to load or unload and in the vast inland waterways were insufficiently policed.
WAS AMEC FOSTER WHEELER – PENALISED FOR FCPA VIOLATIONS – ‘AFRAID’ OF ITS AGENTS?
A post on the FCPA Blog on 1 July poses this question about UK-based Amec Foster Wheeler (AFW), which has agreed to $41 million penalties under the FCPA. The post suggests payments to 3 agents for its projects were, at least in part, motivated by the fear that an agent could make life difficult for the company if they were not paid.
THE COVID CRIME INDEX
BAE Systems has produced a report which looks at how pandemic-related fraud and cyber crime are delivering a new blow to financial institutions. The report takes readers through a summary of the key challenges or factors that have hindered or impacted financial institutions (FIs) and their customers over the last 12 months. It provides global data and insights from IT security, risk and fraud teams, along with commentary and recommendations from BAE Systems Applied Intelligence experts.
CHINESE SILICON: US SAYS FORCED LABOUR IN THE XINJIANG SUPPLY CHAIN
On 25 June, an article from Kharon provides background to the news that US Customs & Border Protection had issued an order barring imports of all silica-based products made by Hoshine Silicon and its subsidiaries, citing indications of forced labour use, including intimidation and threats, and the restriction of movement.
THE UK BRIBERY ACT 2010 – A SUMMARY OF THE ACT ON ITS TENTH ANNIVERSARY
On 1 July, Gowling WLG published an article summarising the content of the Act – as well as some practical tips for businesses seeking to ensure they don’t fall foul of its requirements.
US: BULGARIAN NATIONAL SENTENCED TO FEDERAL PRISON FOR ILLEGAL EXPORTS TO RUSSIAN MILITARY AND SPACE PROGRAMME
A news release from US Immigration & Customs Enforcement on 1 July advised that Tsvetan Kanev, 49, a Bulgarian national, was sentenced in May to 2 years in prison for violating the International Emergency Economic Powers Act by seeking to export controlled electronic equipment from the US to the Russian military and space programme under false pretences. The defendant had inquired with a US manufacturer about purchasing radiation-hardened integrated circuits that are commonly used in satellites. He told the manufacturer that the circuits were sought by the Bulgarian Academy of Science, but the manufacturer was suspicious of the defendant’s claim and referred the matter to federal authorities. Federal agents then mounted a sting operation. The defendant was arrested in Germany in January 2020 and then extradited to the US.
TRACE GUIDANCE AND WHITE PAPERS ON CORRUPTION AND BRIBERY
TRACE International, a non-profit business association founded in 2001 to provide multinational companies and their commercial intermediaries with anti-bribery compliance support. It makes available a number of white papers, reports etc – including
CHICAGO ALDERMAN AND HER CHIEF OF STAFF INDICTED ON FEDERAL BRIBERY CHARGES
A US DoJ news release advised that a federal grand jury had indicted City of Chicago Alderman CARRIE M. AUSTIN, 72, and her Chief of Staff, CHESTER WILSON Jr., 55, on bribery offences for allegedly conspiring to receive home improvements from construction contractors seeking city assistance for a development project.
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