On 20 July, the Cyprus Mail reported that an EU report has said that Cyprus has made some progress toward tweaking its justice system, but there remains work to be done on improving transparency and accessibility to public documents, mechanisms to combat corruption, and full disclosure of the assets of elected officials. The report also refers to important reforms remain pending – such as setting up an anticorruption agency, protection of whistleblowers, regulation of lobbying and asset disclosure for elected officials. It also says that the investigation of corruption cases continued, with the manipulation of sports competition stands out as a particular risk area, although adjudication of corruption cases remains low. It also mentions the inquiry launched into the citizenship-by-investment scheme, looking into allegations of corruption involving foreign individuals and high-ranking officials.
On 20 July, an article from NAVEX Global says that, with less than 6 months now to go until the 17 December deadline for Member States to transpose the Whistleblower Protection Directive, progress is still very mixed. Only Denmark has completed the transposition of the Directive, with the new Whistleblower Protection Act passed on 24 June.
On 20 July, the EU issued a news release as a Q&A on the EU AML/CFT package and its 4 legislative proposals. It is said that these 4 proposals together constitute an ambitious set of measures to modernise the EU’s AML/CFT regime.
On 19 July. Elliptic carried an article which follows a real case involving the REvil ransomware – from initial infection and negotiation, through to the cryptocurrency payment and laundering of the funds.
On 14 July, ACFCS published an article in the light of the FinCEN release of AML priorities and Wolfsberg metrics of effectiveness. It says that the future of financial crime has “effective” compliance teams generating “highly useful” and “relevant” intelligence for investigators in focused, shifting defined “priority areas,” both broad generators of illicit income, like corruption and cyber-enabled fraud, but also attuned to the actions and reactions of international threat actor groups.
A news release from the US State Department on 20 July advised that it had designated former Honduran President Porfirio “Pepe” Lobo Sosa (Lobo) and former First Lady Rosa Elena Bonilla Avila (Rosa Lobo) due to their alleged involvement in significant corruption. It is said that President Lobo accepted bribes from the narco-trafficking organization Los Cachiros in exchange for political favours, and Rosa Lobo engaged in significant corruption through fraud and misappropriation of public funds for her personal benefit. They and their immediate family members are ineligible for entry into the US, along with the designation of the following members of the Lobos’ immediate family: their son, Fabio Porfirio Lobo; their daughter, Ambar Naydee Lobo Bonilla; and the Lobos’ minor child.
On 20 July, a Commentary from RUSI asks, as the UK’s human rights sanctions programme marks its first anniversary, how has the government used its new powers? Who has been sanctioned, where and why? For example, it points out that the largest share of those sanctioned – a total of 29 – are in Russia, followed by Saudi Arabia with 20.
On 16 July, Mayer Brown published an article saying that, on 12 July, the EU issued guidance on due diligence for EU businesses to address the risk of forced labour in their operations and supply chains. The non-binding Guidance is intended to provide companies with practical advice on the use of existing international due diligence instruments and does not create any new legal obligations. The article considers who is covered by the guidance, what should be covered by the due diligence procedures and what companies should do – especially if problems are encountered. Among other things, the article introduces a new (to me anyway) abbreviation – HRDD (human rights due diligence).
On 15 July, an article from TLT refers to a recent Home Office Circular clarifying how SAR should be disclosed in civil litigation. However, the article says, the guidance is in very general of terms and leaves some specific circumstances unaddressed. For example, it notes that the Circular does not cover SAR made under the Terrorism Act 2000. Use in litigation is tricky, it suggests, as disclosing that a SAR has been filed or that a money laundering investigation is being undertaken may amount to the offences of tipping off or prejudicing an investigation. The article highlights the importance of separate internal processes, i.e. separate from the preparation and filing of the SAR, avoid references to SAR in internal documentation about decisions to terminate or exit a customer and to focus on other factors to end a relationship with a customer. The article also looks at when a SAR might be disclosable. It urges businesses to put in place internal processes which make a clear distinction between a SAR and the other commercial reasons to exit customers or to suspend account access where money laundering is suspected.
Panama Covid-19 update – the Supreme Court has ruled that the novel controls imposed last year during the lockdown, whereby people were allowed out based on gender and ID number was apparently unconstitutional (in my humble opinion, it was a good way to operate giving the circumstances).
Meanwhile, passenger numbers at the main airport rose 25% in June compared to May, this after a considerable fall compared to January. At the same time, more airlines are offering renewed or increased operations (including the one with which I still have an unused return ticket, and which hasn’t operated since April 2020 – not that one can really make use of the ticket, given restrictions in Europe).
It is also reported that Panama’s GDP fell 8.5% in Q1 2021. this followed a 17.9% drop in 2020. Not all sectors were adverse affected, however. While construction fell by some 54%, mining, the Canal, exports of containers and from the Colon Free Zone all rose – as did fishing (despite the “yellow card” warning from the EU).
Moving on to today’s figures – 688 new cases are reported, but numbers in the ICU and other hospital wards rose by only 3 and 18 respectively. There were 7 new fatalities, and there are now 13,448 active cases – 134 in ICU and 628 in other wards.
Any modest contributions for my time and ongoing expenses are welcomed! I have a page where you can do so, and where contributions start as low as $3, athttps://www.buymeacoffee.com/KoIvM842y
19 JULY 2021
UK BELARUS SANCTIONS GENERAL LICENCE
On 19 July, HM Treasury issued a General Licence providing that, in an emergency, an air carrier or aircraft operator may make payment(s) directly or via an intermediary to Belaeronavigatsia for air traffic services.
2 MORE VESSELS BOARDED IN EASTBOUND LANE OF SINGAPORE STRAIT
On 19 July, Seatrade Maritime News reported that 2 more ships were boarded by armed men just a day after a report repeated warnings about attacks in the area. In both cases the perpetrators fled upon by sighted by the crew with injuries or items stolen reported.
AUSTRALIA: ALLEGED WESTPAC FRAUDSTERS IN MULTIMILLION-DOLLAR PROPERTY BINGE
On 16 July, the Sydney Morning Herald reported that a business accused of defrauding Westpac by almost $400 million allegedly funnelled tens of millions of dollars of proceeds into high-end residential properties in Melbourne and near Sydney and a portfolio of petrol stations in small Victorian towns. Westpac aired the allegations when it took civil action in the Federal Court to freeze the assets of Bill Papas, his business partner Vincenzo Tesoriero and their companies. Papas is in Greece and is yet to return to face the allegations, is said to have tested positive for COVID-19.
CZECH REPUBLIC: NEW LEGISLATION FOR THE PROTECTION OF WHISTLEBLOWERS
On 15 July, an article from White & Case says that, at the end of this year, a new Act on the Protection of Whistleblowers is set to come into force which will impose a host of new obligations on employers and public contracting authorities in the Czech Republic. Implementing the EU Directive, obliged entities will have to conform to their new statutory obligations by 31 March 2022.
RUSSIA AND US TO CARRY ON SPACE ENGINE COOPERATION DESPITE SANCTIONS
On 19 July, TASS in Russia reported that the Russian government has approved Roscosmos’ proposal to conduct negotiations aimed at signing a contract to supply Russia’s new rocket engines for the American company Orbital Sciences LLC.
CALIFORNIA MAN JAILED FOR SMUGGLING MILLIONS OF DOLLARS IN FAKE IPHONE PARTS INTO THE US
On 19 July, iMore reported that a Californian man, Chan Hung Le, 46, has been sentenced to 2 years in federal prison after admitting to smuggling millions of dollars in fake iPhone parts into the US. He admitted to being part of a team that brought counterfeit iPhone parts into the country before selling them online. The whole thing started in 2011 and ran for 9 years.
TOKYO COURT JAILS US CITIZENS OVER CARLOS GHOSN ESCAPE
On 19 July, Al Jazeera reported that a court has sentenced 2 US citizens to prison for helping former Nissan chairman Carlos Ghosn escape Japan where he faced criminal charges of financial misconduct. Michael Taylor was sentenced to 2 years in prison, while his son, Peter, was given a term of 1 year and 8 months. Both had pleaded guilty to smuggling Ghosn out of the country hidden in a box.
7 BRITISH FUGITIVES ARRESTED IN SPAIN IN JUST 3 WEEKS
On 19 July, a news release from NCA advised that 7 fugitives have been arrested in Spain in the space of just 3 weeks as a result of joint operations between the NCA and the Spanish National Police. The fugitives – all men – are wanted in the UK for various unrelated offences including supplying Class A and B drugs, supplying firearms, causing wounding with intent and conspiracy to rob.
On 19 July, Macworld reported that in the 9 months since October 2020, US Customs has seized roughly 360,000 counterfeit wireless headphones, such as the AirPods Pro. The seized counterfeit headphones are estimated to be worth $62.2 million. In 2019 US Customs only seized counterfeit wireless headphones worth just $3.3 million.
ITALIAN CARABINIERI ARREST 11 ALLEGED COSA NOSTRA MEMBERS
On 19 July, OCCRP reported that Italian police had detained 11 suspected members of a Sicilian mafia clan from the village of Torretta, near Palermo. The clan is historically tied to the Cosa Nostra and the New York mafia and the suspects are accused of infiltrating the Sicilian political and economic institutions, as well as being affiliated with organized crime in New York, according to Italian Carabinieri. Torretta, a village of 4,000 people, has been known as a mafia stronghold.
US ADDS 6 RUSSIAN ENTITIES TO ENTITY LIST IMPSONG EXPORT RESTRICTIONS
On 18 July, it was announced that the Commerce Department had added 6 entities. Businesses on the Entity List are prohibited doing business with US persons; and US persons that seek to do business with companies on the Entity List must apply for and receive a permit from the Commerce Department.
On 19 July, Jurist reported that the EU has blocked the UK from joining a European accord for recognising civil court judgments. The Lugano Convention determines which countries may hear cross-border disputes between the 27 EU Member States, Iceland, Norway and Switzerland in civil and commercial cases. Additionally, it also ensures recognition of judgments across the Member States, which in turn significantly reduces legal costs for individuals and small business seeking legal redress outside their home countries.
On 10 July, The Guardian published a follow-up to the exposé of the alleged misuse of the Pegasus hacking/surveillance software. In this article it is said that a leak suggests Indian opposition leader among hundreds selected for possible surveillance by Modi government.
ALBANIA EX-DEPUTY INTERIOR MINISTER UNDER ARREST ON BRIBERY CHARGES
On 14 July, Balkan Insight reported that prosecutors say former deputy minister Rovena Voda took money and other favours to give someone a job in the civil service – and now faces charges of accepting bribes.
OLAF AND SPANISH AUTHORITIES BUST TRAFFIC IN ILLICIT F-GASES
On 15 July, a news release from the EU anti-fraud office OLAF advised that it and the Spanish authorities dismantled a criminal organisation trafficking in illicit refrigerant gases. Operation Verbena led to the seizure of 27 tonnes of illicit refrigerant gases – also called F-gases or hydrofluorocarbons (HFC) – and to the arrest of 5 people. HFC are commonly used in refrigerated units and while importing them into the EU is allowed, given their significant carbon footprint imports are subject to strict quotas and regulations. The criminal group involved smuggled the gases into Spain from China by providing false information in the relevant customs documentation.
ILLICIT NATURAL RESOURCE EXTRACTION IN NIGERIA FUELS VIOLENCE AND INSECURITY
On 12 July, a post on the LSE Business blog describes how the illicit extraction of gold contributes to prolonging violent conflict in states like Zamfara, and suggests how decision-makers can be firm in halting the disturbing trend.
On 15 July, OCCRP published 3 reports saying that the most sophisticated criminal groups often operate with a blessing from regional and national elites. Criminal groups often develop close ties with elites in an effort to gain protection and access to better resources.
NEW YORK STATE DEPARTMENT OF FINANCIAL SERVICES ON RANSOMWARE
An article from Carlton Fields on 19 July advised that the DFS is continuing its focus on financial institutions’ cybersecurity, issuing new guidance, probing cybersecurity as part of routine examinations, and signalling increased enforcement actions. All of this comes, it says, amid a spate of high-profile ransomware attacks in recent months, including some involving financial institutions. The article itemises what it says that financial institutions need to know in light of these developments.
ILLEGALITY AS A DEFENCE UNDER CAYMAN ISLANDS, BVI, AND BERMUDA LAW
An article from Conyers on 19 July from Conyers compares the provisions in these 3 jurisdictions with English and Hong Kong law. It starts by reminding one that a general doctrine of ‘illegality’, in commercial litigation, is based on 2 related principles – that no person should benefit from his or her own illegal act or wrong; and that the law (and the Court) should not condone, reward, or enforce, illegal behaviour. It considers illegality as a defence to a claim under contract, tort, equity, or in restitution. It remarks on a current divergence between Hong Kong law on the one hand, and English, Bermuda, Cayman Islands, and BVI law on the other hand, affecting cross-border cases where the doctrine of ‘illegality’ might arise.
ITALY: INSTITUTE FOR THE SUPERVISION OF INSURANCE ISSUES FURTHER SECONDARY RULES ON AML
On 19 July, an article from Hogan Lovells advised that the Institute for the Supervision of Insurance (IVASS) published a new Regulation setting out rules on money laundering risk mitigation procedures and providing for amendments to regulations regarding rules on internal organisation, procedures and controls and CDD for AML purposes.
SOUTH AFRICAN VIOLENCE LEAVES TRADE IN TATTERS AND CLAIMS PILING UP
On 19 July, Global Trade Review reported that South African supply chains have been thrown into chaos after violence engulfed the country following the jailing of former President Zuma, with warehouses, distribution centres and trucks destroyed, and major trade routes disrupted. For example, the ports of Richards Bay and Durban – one of Africa’s busiest – have been heavily disrupted by the violence, and continue to face significant backlogs.
SEC CHARGES AGAINST ARON GOVIL OF FLORIDA FOR FRAUD INCLUDING “SCALPING”
On 19 July, a release on Mondo Visione advised that the had announced charges against Aron Govil of Jacksonville, for defrauding investors in 2 companies he controlled, Cemtrex Inc and Telidyne Inc. The complaint includes allegations that he engaged in scalping – secretly selling Cemtrex stock while paying stock promoters to recommend that retail investors buy the company’s stock – and insider trading.
SEC CLOSES DOWN A FRAUD INVOLVING PURPORTED SUPERCOMPUTER
A release on Mondo Visione on 19 July advised that the SEC has announced that it has filed an emergency action and obtained a temporary restraining order and asset freeze to halt an alleged ongoing offering fraud by Las Vegas-based Profit Connect Wealth Services Inc and a mother and son which had raised more than $12 million from at least 277 retail investors. It was claimed that money would be invested in securities trading and cryptocurrencies based on recommendations made by an “artificial intelligence supercomputer”.
On 16 July, American Shipper reported that the Department of Transportation had granted temporary approval to small cargo airlines in South Florida to fly emergency aid to Cuba, where large protests have erupted in response to a long-simmering economic crisis worsened by the COVID pandemic.
SLOVAKIA: EX-INTELLIGENCE AGENTS AND GANG MEMBERS REPORTEDLY LAUNDERED MONEY THROUGH CHINESE COMPANIES
The Slovak Spectator carried an article saying that former members of the Slovak Information Service (SIS) intelligence agency are now facing several charges in corruption-related cases, and members of the organised crime group Takáčovci, reportedly laundered dozens of millions of euros through China.
SWITZERLAND: COMMUNICATIONS BETWEEN A NON-ACCUSED PERSON AND THEIR LAWYER ARE PROTECTED FROM SEIZURE BY THE PROSECUTING AUTHORITIES ONLY IF SUCH LAWYER IS A SWISS/EU/EFTA PRACTITIONER
On 18 July, an article from Bär & Karrer reported that the Swiss Federal Tribunal recently so ruled in a recent milestone decision concerned with criminal proceedings. It is said that this could have a noticeable impact on communications with US lawyers, among others.
On 29 June, the iGaming Academy produced an Update about the new Interstate Treaty on Gambling which came into force on 1 July. It explains that the interim sports betting licences to be granted by the Regional Council of Darmstadt under the current ITG will remain valid until 31 December 2022. It explains the requirements placed on operators as Germany opens up its market to forms of gambling not previously permitted.
SYRIA HAS BECOME A NARCO-STATE – AND A POPULAR DRUG CALLED CAPTAGON IS DOING DAMAGE AT HOME
On 19 July, The Economist published an article saying that Syria (like other Arab states) is facing problems with Captagon, one of the amphetamine family of drugs. As well as young people abusing it at home, faced with the collapse of the formal economy the drug has become Syria’s main export and source of hard currency. The Centre for Operational Analysis and Research (COAR), a Cyprus-based consultancy, reckons that last year authorities elsewhere seized Syrian drugs with a street value of no less than $3.4 billion – and that compares with Syria’s largest legal export, olive oil, which is worth some $122 million a year.
On 19 July, CNN reported that foreign private security companies registered in Cambodia and Myanmar are owned by Chinese nationals. It points out that, as China’s economic footprint grows, so too do the security risks. According to data published by the RAND Corporation, more than 30,000 Chinese enterprises are located overseas, and more than 100 million Chinese citizens travel abroad annually. It also highlighted a recent incident has shown the vulnerability of Chinese projects in Central Asia, the number of which has boomed in recent years under its ambitious “Belt and Road” trade and infrastructure scheme. It reports that the Center for Advanced Defense Studies (C4ADS) says that China-based companies account for 29 of the 49 foreign private security firms operating in Cambodia and Myanmar, and that these companies were incorporated steadily since 2013, with spikes in 2019 and 2020 — timing that likely tied to the rise of Belt and Road projects.