Panama Covid-19 update – “only” 495 new cases reported today, but then only 5,939 tests recorded – much lower than of late, perhaps staff are more busy with the vaccination drive. However, there were 8 new fatalities reported, with 12,998 active cases now on record, with 124 in ICU and 649 in other wards.
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26 JULY 2021
RESPONSIBLE GAMBLING – SUPPLIERS ARE INCREASINGLY COMING UNDER SCRUTINY
On 26 July, iGB said that responsible gambling was once almost entirely the preserve of operators, but suppliers are increasingly coming under scrutiny. Now they are taking action to ensure player protection is built into their products.
https://igamingbusiness.com/responsible-gambling-and-the-supplier-challenge/
US: SOME INDEPENDENT DIRECTORS OF BANKRUPT COMPANIES SHOW BIAS
On 23 July, the Wall Street Journal reported that companies on the brink of insolvency are increasingly appointing independent directors to their boards as they prepare for a bankruptcy filing, but their neutrality is disputed by creditors, lawyers and academics. The directors’ input carries significant weight with bankruptcy judges. However, the article says that the problem, according to new research, is that some of these directors are biased in favour of the companies that hired them.
BIG 4 AUDITORS FAIL TO MEET UK REGULATOR EXPECTATIONS
On 23 July, the Wall Street Journal reported that the Financial Reporting Council has said audits performed by the big 4 accounting firms and smaller rivals failed to meet expectations, raising troubling questions about the financial statements upon which investors rely. The FRC had said that performance had improved from the year before but still fell below expectations, with about 80% of audits assessed as good or requiring only limited improvements.
https://www.wsj.com/articles/big-four-auditors-fail-to-meet-u-k-regulator-expectations-11627045676
NEW DATA PROTECTION REGIME HAS BEEN ESTABLISHED IN THE BVI
Mourant have produced a short brief about a new regime in the BVI which aims to meet UK and EU standards of data protection, as established by the EU GDPR. The Data Protection Act 2021 came into force on 9 July.
CANADA: NEW BILL CONCERNING ULTIMATE BENEFICIAL OWNERS
On 19 July, Lavery Lawyers published an article about an amending Act introduced as a Bill in December 2020 and given assent as an Act on 8 June. It is said that the amendments set out new requirements for corporate transparency and now require registrants to disclose information about the natural persons who are their ultimate beneficiaries, including their names, domiciles and dates of birth, in order to prevent the use of nominees for tax evasion, among other things.
BVI: APPLICABLE UK SANCTIONS EXTENDED TO THE BVI
The BVI FSC maintains a webpage containing details of the UK sanctions measures which have been extended using UK law to include the BVI. The legislative framework thus created enables the relevant authorities in the BVI to take the necessary action to (among other things,) freeze the funds/assets of designated persons and entities. Failure to comply with restrictions and prohibitions in relation to sanctions imposed under the relevant legislation constitutes an offence that may result in the imposition of penalties or imprisonment when a conviction is secured.
https://www.bvifsc.vg/international-sanctions/Applicable-UK-Regulations-Legislative-Framework
BVI RISK ASSESSMENTS
The various risk assessments undertaken in the BVI are available on the FSC website. The latest money laundering and terrorist financing assessments were in 2020, with final progress report on recommendations of the 2016 national risk assessment published in January.
https://www.bvifsc.vg/risk-assessments
5 THINGS TO TAKE AWAY FROM THE FCA’S BUSINESS PLAN
On 22 July, an article from CMS Cameron McKenna Nabarro Olswang LLP listed the top 5 takeaways from the Business Plan released on 15 July. Among other things it says that the FCA intends to test its powers to the limit as a more assertive regulator.
INCORPORATED CELL COMPANIES (ICC)
A briefing from Mourant in Guernsey on 22 July was concerned with ICC, that were introduced into Guernsey in 2006. The briefing details what they are and what they are used for, their framework and advantages, including how to wind them up.
https://www.mourant.com/news-and-views/guides/guides-2021/incorporated-cell-companies.aspx
GERMANY: SUPPLY CHAIN DUE DILIGENCE ACT
On 21 July, Covington & Burling LLP published a briefing, saying that the new legislation approved by the Bundesrat on 25 June and, as the remaining legislative steps are formalities, further changes to its scope are not expected. The law will create new obligations and liability risks for many multinational companies active in Germany and may serve as a model for the EU as its legislative process toward mandatory environmental and human rights due diligence progresses. It is advised that businesses caught by the new legislation should begin to prepare for its entry into force by reviewing and updating their human rights and environmental due diligence frameworks.
https://www.statista.com/chart/3389/us-airports-make-thousands-from-lost-change
CANADA: NEW COMPANY PLANS TO EXTRACT PLUTONIUM FROM USED NUCLEAR FUEL
On 26 July, an article in the Bulletin of the Atomic Scientists reported on Moltex Energy, a start-up company that has received a federal grant to develop a nuclear project in New Brunswick that experts say will undermine Canada’s credibility as a non-proliferation partner. It wants to extract plutonium from the thousands of used nuclear fuel bundles currently stored as “high-level radioactive waste”. It is said that the idea is to use the plutonium as fuel for a new nuclear reactor, and if the project is successful, the entire package could be replicated and sold to other countries. However, it is said that US experts’ primary concern is that other countries could point to Canada’s support of the Moltex programme to help justify its own plutonium acquisition programmes and so undermine non-proliferation efforts. The article asks, as history has shown the dangers of promoting the greater availability of plutonium, why is the Canadian government supporting so-called pyroprocessing promoted by Moltex?
https://thebulletin.org/2021/07/will-canada-remain-a-credible-nonproliferation-partner/
ATTEMPT TO SMUGGLE ANTI-AIRCRAFT MISSILE PARTS FROM UKRAINE
On 26 July, Ukrinform reported that the SBU Security Service have prevented the illegal export of military goods subject to government export control. It suspects a former employee with one of Ukraine’s defence plants was involved. During house searches paperwork is said to have been found confirming criminal intent, as well as components for anti-aircraft missile weapons.
UKRAINE: ENTRY BAN FOR 160 FOREIGNERS AFFILIATED WITH EXTREMIST OR TERRORIST GROUPS
On 20 July, Ukrinform reported that the Security Service of Ukraine (SBU) has banned from entering the country 190 foreigners involved in terrorist and extremist organisations. It also said that 17 persons had been detained at the border, including a Russian national, member of the Islamic Movement of Uzbekistan, wanted by Interpol, and a militant with the Islamic State terrorist organisation, with 45 foreign nationals were expelled to their countries of origin.
CANADIAN UNIVERSITIES WARNED TO BE ON ALERT FOR INTERNATIONAL ESPIONAGE
On 26 July, the Globe & Mail and others reported that in 2020 the Canadian Security Intelligence Service (CSIS) had intensified its effort to warn universities and researchers that they could be the target of international espionage. Documents obtained show that CSIS had given presentations for universities and others involved in critical aspects of the supply chain to sound an alarm about potential threats to Canadian research, which could lead to the potential presence of foreign agents in laboratories that could compromise intellectual property.
https://granthshala.com/csis-warns-canadian-universities-to-be-on-alert-for-international-espionage/
SPIKE IN AMBERGRIS SEIZURES LINKED TO AWARENESS ABOUT ITS VALUE AND A BREAKDOWN OF TRADITIONAL SMUGGLING ROUTES
On 25 July, the Indian Express reported that 6 seizures of ambergris over the last month have highlighted the shadowy but lucrative trade in this waxy substance, at times described as whale vomit, and sometimes as whale faeces. Prior to these, there have been only 2 such seizures in recent years, once in 2019, and before that in 2018. Ambergris is an intestinal secretion in the sperm whale and, ejected by the whale, it floats on the surface of the water. In the water it develops a fragrance, which is why it has been a valued ingredient in perfume. The high price ambergris fetches can raise the suspicion that a whale might have been killed for it. However, in some European countries with a flourishing perfume industry, it is classified as “refuse” and considered legal.
TURKEY: “CHARADE OF PRETENDING TO STRIVE FOR COMPLIANCE” WITH FATF” RECOMMENDATIONS
On 26 July, an article from Nordic Monitor is concerned with a new Bill advertised as Turkey’s intention to address long-running shortcomings in the terrorism financing and money laundering framework, but which the article claims is full of new loopholes that were designed to give President Erdoğan a free hand in undermining FATF recommendations. It says that the most striking shortcoming in the legislation is the absence of any provision concerning a PEP.
UAE CENTRAL BANK ISSUES NEW GUIDANCE ON AML/CFT
On 26 July, Urdu Point reported that the guidance, which came into effect from 8 July, is said to be supplementary to the guidance on financial sanctions for financial institutions and DNFBP, issued in May.
https://www.urdupoint.com/en/middle-east/uae-central-bank-issues-new-guidance-on-anti-1310895.html
https://www.centralbank.ae/en/cbuae-amlcft
INDIA: HOW THE BLACK MONEY LAW IS HELPING CRACK DOWN ON UNDISCLOSED INCOME
On 26 July, India Today reported that a law enacted by the government in 2015 to crack down on undisclosed foreign income and assets has started showing significant results. It says that, under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act 2015 up until May orders have been passed in 166 cases.
EU: GOOD CATCH IN JOINT ACTIONS TARGETING ILLEGAL FISHING
On 26 July, a news release from Europol announced that the Portuguese Guarda Nacional Republicana led a Joint Action Day targeting illegal fishing which involved authorities from Bulgaria, Croatia, Cyprus, France, Italy, Malta, Portugal, Romania, Spain and Sweden. Law enforcement and fisheries control agencies took part in the actions. Seizures included plastic explosives, detonating caps and wick, almost 11 tonnes of fish, crustaceans and clams, high-tech equipment, computers and documents, 167 illegal fishing nets and 20 other illegal tools.
https://www.europol.europa.eu/newsroom/news/good-catch-in-joint-actions-targeting-illegal-fishing
UK: HOW TO PLAY YOUR PART IN PROTECTING THE UK MEDICINES SUPPLY CHAIN
On 26 July, a post from the MHRA Inspectorate says that preventing falsified medicines entering the legal supply chain is a fundamental objective of good distribution practice (GDP) for distributors of medicinal products. The Agency is offering a new webinar which will provide further information and guidance around the challenges faced and real case studies of incidents it has been addressing. It provides a list of questions one should ask whenever offered high-value stock, saying that it is essential to conduct due diligence checks to ensure the authenticity of the medicines.
LANDMARK VATICAN FRAUD TRIAL OF 10 INCLUDING A CARDINAL SET TO START
On 26 July, Reuters reported that the fraud trial of 10 people including a cardinal begins in the Vatican on 27 July.
MONEY LAUNDERING IN CANADA IS PERVASIVE, BUT LITTLE IS DONE ABOUT IT
An article in the Ottawa Sun on 26 July made this claim, saying that Canada is such an appealing money-laundering destination that there is a coined term to refer to illegal money laundered here: “snow-washing”. It reports that, during the past 10 years, Ottawa-area banks flagged more than 10,000 suspicious transactions to Canada’s financial intelligence agency, but during that same period only 20 people faced money laundering-related charges in the city.
INVESTIGATIVE JOURNALIST KHADIJA ISMAYILOVA PUSHES THROUGH PERSECUTION TO UNCOVER CORRUPTION IN AZERBAIJAN
On 26 July, the Globe and Mail carried an article about an interview with this journalist
AUSTRALIA: STAR SYDNEY BACCARAT DEALER CONVICTED FOR $500,000 BETTING SCAM
On 26 July, Casino Beats reported that a former employee of Sydney’s Star Casino has been convicted for his part in an illegal betting scam that is said to have “cheated the casino out of almost A$500,000” in 2020. Hieu Duc Lam, a baccarat dealer, was captured on CCTV footage.
FOURFOLD INCREASE IN UK INVESTMENT FRAUD REPORTS IN 5 YEARS
On 26 July, Investment Advisor reported that the number of investment fraud cases reported to Action Fraud has surged exponentially since 2016, but fraud convictions have not followed a similar trend.
https://international-adviser.com/fourfold-increase-in-uk-investment-fraud-reports-in-five-years/
UK: HUMANITARIAN ASSISTANCE EXCEPTION FOR PETROLEUM PRODUCTS UNDER THE SYRIA SANCTIONS REGIME
On 26 July, HM Treasury published a form is for notifying use of the humanitarian assistance exception relating to petroleum products affected by Syrian sanctions, and involving a person has received funding or economic resources from the UK Government for humanitarian assistance activity in Syria.
UNITED KINGDOM STRATEGIC EXPORT CONTROLS ANNUAL REPORT
On 26 July, the Foreign Commonwealth and Development Office published this report, an annual overview of the UK’s strategic export controls policy and licensing regime. It includes information on export licensing processes, procedures and responsible departments and policy developments.
https://www.gov.uk/government/collections/united-kingdom-strategic-export-controls-annual-report
US CUSTOMS MODIFIES WITHHOLD RELEASE ORDER ON IMPORTS OF CARPETS AND HAND-KNOTTED WOOL PRODUCTS FROM NEPAL
On 26 July, a news release from US CBP advised that the WRO had been modified and that products from the Annapurna Carpet Industries Pvt Ltd were permitted entry into the US. CBP had originally issued a WRO in July 1998 to prevent the importation of carpets and hand-knotted wool products from 7 Nepalese companies, including Annapurna Carpet. This was based on information reasonably indicating that those products were made with the use of forced labour. It modified the WRO after evaluating detailed information on Annapurna Carpet, which sufficiently shows that the company’s products are not made with the use of forced labour. This is the second time CBP has modified the Withhold Release Order on carpets and hand-knotted wool products from Nepal.
8.17 KG GOLD SEIZED AT CHENNAI AIRPORT
On 26 July, OMMcom News reported that Customs said 2 passengers from Dubai have been arrested. The gold was concealed in home appliances like rice cooker, juicer, food mincer and nebuliser.
https://ommcomnews.com/india-news/8-17-kg-gold-seized-at-chennai-airport-2-held
QUASHING ORDERS AND THE JUDICIAL REVIEW AND COURTS BILL
On 26 July, an article from the UK Constitutional Law Association said that, despite commissioning a wide-ranging review of administrative law, the Bill, as now unveiled, does not include restrictions on judicial review that many had feared. Indeed, it says relatively little about judicial review. The principal judicial review reform contained in the Bill would allow courts to suspend the effect of quashing orders and limit their retrospective effect. The article considers this and its possible meaning and effect. The author of the piece concludes that the Bill could, in fact, confer considerable additional powers on the judiciary, including in effect a power to legislate to change Acts of Parliament and alter private rights. It is said that the new Bill would obviate the need for retrospective legislation, and that courts could step into Parliament’s shoes and tailor the retrospective impact of quashing orders themselves. It concludes that the relevant clause in the Bill does not represent a restriction on judicial review or judicial power. Another clause, by conferring on judges a discretion to limit the consequences of ultra vires decisions and acts, would represent a significant transfer of power to judges and potentially draw them into complex policy areas and the author makes recommendation to modify and improve the latter.
DESPITE OUTRAGE, GUATEMALA CONTINUES TO DISMANTLE ANTI-CORRUPTION EDIFICE
On 26 July, Insight Crime carried an article arguing that the dismissal of Juan Francisco Sandoval, the country’s leading anti-corruption prosecutor, marks the formal end of efforts to strengthen anti-corruption bodies in Guatemala. However, the article says that perhaps the most surprising aspect of Sandoval’s dismissal is that it took so long.
https://insightcrime.org/news/despite-outrage-guatemala-continues-bulldoze-anti-corruption-edifice/
UK: MAN JAILED FOR 4 YEARS FOR FRAUDULENT TRADING, MASQUERADING AS A REGULATED FINANCIAL ADVISER
On 26 July, a release on Mondo Visione advised that Ian James Hudson had been sentenced to 4 years’ imprisonment for fraudulent trading, with 2 additional terms of 14 months, to run concurrently following an earlier guilty plea. This followed charges laid by the FCA namely carrying on a business, Richmond Associates, for a fraudulent purpose and carrying on regulated activities when not authorised or exempt. Confiscation proceedings are being pursued by the FCA. Any sums recovered from Mr Hudson will be used to compensate victims.
SURVEY: IN THE FINANCIAL SERVICES SECTOR IN THE UK, ON AVERAGE, ORGANISATIONS SPENT £53 PER CUSTOMER ANNUALLY ON FINANCIAL CRIME DEFENCE AND REFUSED £90,000 OF BUSINESS AND EXITED £90,000 MORE, FOR FINANCIAL CRIME REASONS
A release on Mondo Visione on 26 July said that a survey of 300 financial crime decision makers working in the financial services sector in the UK found that on average, organisations spent £53 annually on financial crime defence for each customer relationship they have; and that they refused an average of £90,240.77 and exited an average of £90,869.52 worth of UK customer relationships for financial crime reasons during the last 12 months.
HISTORIC VATICAN FRAUD TRIAL TO EXPOSE LONDON SECRETS
On 25 July, France 24 reported that a once-powerful Catholic cardinal and 9 others stand trial at the Vatican in an embezzlement scandal that allegedly saw charity funds used in a ruinous London property venture. It follows a 2-year probe into how the Secretariat of State — the key department in the Vatican’s central administration — managed its vast asset portfolio and, in particular, who knew what about a disastrous €350-million London investment.
https://www.france24.com/en/live-news/20210725-historic-vatican-fraud-trial-to-expose-london-secrets
CAMEROON POLICE INTERCEPT PANGOLIN SCALES TRAFFICKED FROM 3 CENTRAL AFRICAN STATES
On 22 July, VoA reported that Cameroonian police say they have for the first time during the pandemic seized parts of an estimated 2,000 pangolins poached in Cameroon and neighbouring Equatorial Guinea and Gabon. Police say travel restrictions had slowed trafficking of the endangered anteater to Asia, where its meat is considered a delicacy and the scales are used in traditional medicine. The traffickers were arrested while preparing to transfer the scales and animal skin to Cameroon’s neighbour, Nigeria. It is said that police in Cameroon, Nigeria and Benin are collaborating to track other members of a group of Pangolin traffickers operating in the 3 countries.
FBI WARNING: CHINESE “TALENT PLANS”
The FBI has issued an alert saying that foreign governments sponsor talent recruitment programmes, or “talent plans”, to bring outside knowledge and innovation back to their countries — and sometimes that means stealing trade secrets, breaking export control laws, or violating conflict-of-interest policies to do so. While various countries use talent plans, the FBI says that the Chinese government is the most prolific sponsor of these programmes, and that the US is one of China’s main targets. It says that China oversees hundreds of talent plans and all incentivise its members to steal foreign technologies needed to advance China’s national, military, and economic goals. It recruits science and technology professors, researchers, students, and others — regardless of citizenship or national origin — to apply for talent plans. The alert outlines the risks for US businesses, universities, and labs.
https://www.fbi.gov/investigate/counterintelligence/the-china-threat/chinese-talent-plans
JAPANESE BANKS TO DEPLOY SHARED SYSTEM FOR AML/CFT MONITORING
On 23 July, Regulation Asia reported that the banking sector is planning to deploy a shared transaction monitoring and screening system for AML/CFT across the industry – a new shared platform for AML/CFT monitoring and screening, to address the issue of false positives in the banking industry.
https://www.regulationasia.com/japan-banks-to-deploy-shared-system-for-aml-cft-monitoring/
BBC PODCAST SERIES – DRUG SHIP: THE LAST VOYAGE OF THE PONG SU
The BBC has released a series of podcasts telling the “true story behind an international drug plot involving the rogue state of North Korea, South-East Asian drug lords, $100 million worth of heroin, spooks, sailors, Australian cops and a web of lies”. It consists of 13 30-minute episodes.
https://www.bbc.co.uk/programmes/p09glsys/episodes/guide
STAGE 2 PEER REVIEW REPORTS ON THE IMPLEMENTATION OF THE OECD BASE EROSION AND PROFIT SHIFTING (BEPS) ACTION 14 MINIMUM STANDARD OF THE MUTUAL AGREEMENT PROCEDURE (MAP)
On 23 July, Accountancy Daily reported that 8 such reviews are now available – covering India, Latvia, Argentina, Chile, South Africa, Lithuania, Croatia and Colombia.
https://www.accountancydaily.co/cch_uk/tat/news_014921_oecd_inclusive_framework
LEEDS WOMAN WHO TRIED TO SMUGGLE £2 MILLION IN CASH OUT OF UK IN SUITCASES JAILED
On 26 July, the Yorkshire Post reported that a money launderer from Leeds who was caught trying to smuggle almost £2 million out of the UK in her suitcases has been jailed for almost 3 years. She was stopped boarding a flight from Heathrow to Dubai in October 2020.
CANADIAN EXTRADITION FIGHT OF SOUTH KOREAN PROPERTY TYCOON REVEALED, HIS FRAUD CASE UNREPORTED FOR YEARS
In its 27 July edition, the South China Morning Post reported that former developer Jung Myung-soo is accused of fleeing to Vancouver from South Korea, where he is wanted in connection with a multimillion-dollar fraud case dating back 16 years. He is a former real estate tycoon behind what was one of Metro Vancouver’s biggest property developments, and his fight against extradition has gone unreported to date. It is said that the case demonstrates the potential marathon nature of such proceedings, with South Korean prosecutors pursuing Jung in Canada since 2011, as a result of alleged offences dating back another 6 years.
UK: FIRST JUDICIAL ANALYSIS OF THE NEW PRACTICE DIRECTION (PD) ON TRIAL WITNESS STATEMENTS
On 26 July, Field Fisher published a report saying that the decision provides an early indication that the Courts will take a robust and common-sense approach to implementing new reforms. Concern had been expressed following the 6 April, when the way that litigators prepare witness statements for trials in the Business and Property Courts changed.
https://www.fieldfisher.com/en/insights/first-court-analysis-of-new-regime-for-trial-witne
https://www.visualcapitalist.com/mapped-gdp-per-capita-worldwide/
RUSSIA WORKING CLOSELY WITH POST-COUP MYANMAR ON MILITARY SUPPLIES
On 21 July, Reuters reported that the head of Russia’s state arms exporter has said that Moscow was cooperating closely with Myanmar’s ruling junta to supply it with military hardware including aircraft.
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