On 28 July, Insurance Marine News reported that the Cargo Integrity Group (CIG) has said that it was “opposed to a new global requirement that all freight containers and their cargoes must be certified clean as a condition for ship loading because there is no risk-based evidence to support such a monumental change”. The CIG claims that compliance and enforcement costs of such measures would be disproportionate to the benefits obtained, with scarce resources across the totality of the approximately 230 million containers moved internationally each year.
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On 28 July, OFAC announced that 8 new individuals and 10 new entities added to SDN Lists. In addition, the existing entries for Kifah MOULHEM and the SYRIAN MILITARY INTELLIGENCE have been amended. The changes include 8 Syrian prisons run by the Assad regime’s intelligence apparatus, which have been sites of human rights abuses against political prisoners and other detainees; and 5 senior security officials of regime entities that control these detention facilities. OFAC is also sanctioning Syrian armed group Ahrar al-Sharqiya, which operates in northern Syria, for abuses against civilians, and is also sanctioning 2 of the group’s leaders. OFAC has also designated a Turkey-based al-Qa’ida financial facilitator for materially assisting al-Qa’ida, and additionally designated a Syria-based terrorist fundraiser and recruiter for providing material support to Hay’et Tahrir Al-Sham (HTS). These latter designations expose the continued efforts by al-Qa’ida and HTS to use the global formal financial system and highlight the need for continued vigilance against terrorist fundraising and recruitment on the internet.
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On 28 July, Global Trade review reported that the UK’s courtship of trade with developing countries after Brexit risks exacerbating the country’s exposure to trade-based money laundering (TBML), according to new research. It is said that a pilot study published in the Journal of Money Laundering Control concludes that accelerated trade with less developed countries is likely to increase the UK’s exposure to TBML and that regulators and law enforcement are ill-equipped to investigate it and “underestimate” money laundering vulnerabilities of trading with high-risk jurisdictions after Brexit.
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On 28 July, Insight Crime reported that Mexico’s largest criminal groups are outsourcing the retrieval of cocaine shipments to smaller groups posing as fishing cooperatives. The cartels are contracting local gangs, which then set up fake fishing cooperatives which register ships and use them to travel up to 350 nautical miles out to sea to receive drugs coming from Colombia and Ecuador.
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On 28 July, The Standard reported that police said the syndicate made use of the 24 domestic helpers – an Indonesian and 23 Filipinas – to open at least 35 bank accounts to launder the “dirty money”. Police Officers 29 people aged between 29 and 41, including 3 Nigerian and 2 Filipino “masterminds”, and another 24 domestic helpers who held the bank accounts were also arrested.
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ISO has published a short article introducing ISO 37002 Whistleblowing management systems – Guidelines, which provides guidance for implementing, managing, evaluating, maintaining and improving a robust and effective management system for whistleblowing.
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On 28 July, the Law Society Gazette reported that poceedings brought by three Russian billionaires and a state-owned oil company against publishing house HarperCollins in the High Court began in London. The case relates to the 2020 book Putin’s People: How the KGB Took Back Russia and Then Took On the West, which covers the emergence of Putin’s regime and the renaissance of the KGB.
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On 28 July, an article from Out-Law says that new guidance issued by HMRC emphasises the increased focus of law enforcement agencies to disrupt the use of the art market as a vehicle for money laundering. It is said that the global art market is valued at more than £50 billion, with an estimated £2.3 billion of this per year linked to financial crime. The extended deadline for registering as an art market participant (AMP) with HMRC expired on 10 June.
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Panama Covid-19 update – although another 1,110 new cases and 13 fatalities reported today, overall active cases and the numbers in ICU, other wards and “hospital hotel” rooms all fell. There are said to be 12,828 active cases, with 121 in ICU and 502 in other wards.
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27 JULY 2021
CO-OWNER OF BEVERLY HILLS VAULT BUSINESS ACCUSED OF ‘EXTENSIVE’ CRIMINAL EMPIRE
On 26 July, the Daily Beast reported that the co-owner of a safe deposit box business allegedly acquired his stake in the company using dirty money he amassed through drug trafficking, health-care fraud, online marketing scams utilizing the names of unwitting celebrities, and even a fraudulent PPP loan. Federal agents raided US Private Vaults Inc in March and prosecutors have charged the business with conspiring to launder money, structure financial transactions, and distribute controlled substances.
SOUTH KOREA TO TOUGHEN RULES TO COLLECT CRYPTOCURRENCIES FROM TAX DODGERS
On 27 July, KYC 360 reported that South Korea will look to tighten a crackdown on tax evasion by cryptocurrency investors and high-income earners as it seeks fresh revenue to cover rising welfare costs. The government proposes revising tax codes so that tax authorities will be able to seize crypto assets even if their cryptocurrencies are stored in digital wallets.
US: DoJ PROBES IF TETHER EXECUTIVES COMMITTED BANK FRAUD
On 27 July, Bloomberg Quint reported that a DoJ investigation is focused on conduct that occurred years ago, and whether Tether concealed from banks that transactions were linked to crypto.
On 26 July, iGB reported that the latest blocking order means that, to date, over 1,000 gambling sites and 100 land-based establishments that offered gambling services without holding the relevant licences have been detected.
UKRAINE SANCTIONS ON 4 RUSSIAN CITIZENS, 2 FRENCH CITIZENS AND 10 ENTITIES
On 27 July, EU Sanctions blog reported that the latest sanctions measures included Russian online retailer Wildberries LLC, its founder/CEO Tatyana Bakalchuk and her husband Vladislav Bakalchuk.
CLAIMS WHERE CONTRACTORS OR CONSULTANTS WERE DOING BUSINESS IN COUNTRIES WITH A HISTORY OF CIVIL AND POLITICAL UNREST
Beale & Co has published an article about a recent UK Supreme Court judgment and the effect it could have on contractors / consultants doing business in countries with a history of civil and political unrest. The case involved a UK company’s claim against the state of Libya following arbitration which had resulted in 2016 of an award to the claimant, but which Libya had not honoured. In 2018, the UK courts had granted an enforcement order, which Libya sought to vary. The article concludes that, whilst the potential to capitalise on an emerging market can be enticing, as this case proves, if the situation on the ground turns for the worse, businesses could find themselves out of pocket, and the Supreme Court decision makes for worrying reading for those with active interests in such countries.
MEXICO READIES NAVY SHIPS TO BRING FOOD AND SUPPLIES TO CUBA
On 23 July, Euronews reported that Mexico will send 2 navy ships loaded with food and medical supplies to Cuba. They will carry syringes, oxygen tanks and masks along with powdered milk, cans of tuna, beans, flour, cooking oil and gasoline.
MADAGASCAR PRESIDENT TARGETED IN ASSASSINATION PLOT
On 22 July, Deutsche Welle reported that several people have been arrested over an assassination plot against President Andry Rajoelina. It is said that 6 people had been arrested — 1 foreign national, 2 dual nationals, and 3 Madagascan citizens.
On 26 July, La Estrella de Panama reported that the Superintendency of Banks of Panama (SBP) has imposed a penalty of $1.25 million on the Bank of China for breaches and violations of the banking and money laundering prevention regime – $1,000,000 for violations of the banking regime, and $250,000 for non-compliance with the money laundering prevention regime. 2 other banks received much smaller penalties.
EGYPT RECEIVES ARTIFACT SMUGGLED TO THE NETHERLANDS
On 27 July, All Africa reported that the artefact dating back to the Old or Middle Kingdom has been returned before being sold in a Dutch auction. The statue was on display at the annual European exhibition of fine arts in Maastricht. It was found that the statue was illegally smuggled out of Egypt.
SWISS CLOSE DECADE-LONG RUSSIAN MONEY LAUNDERING PROBE
On 27 July, Devdiscourse reported that prosecutors said that they have closed a decade-long investigation into suspected money laundering linked to a fraud scandal in which Sergei Magnitsky played a leading role. The investigation involved activity between 2008 and 2010, and was launched in 2011, in part because of a report alleging criminal activity by London-based investor William Browder.
On 27 July, the Home Office published Part 2 of Dame Carol Black’s independent review of drugs, which focuses on drug treatment, recovery and prevention. On the same day, the Home Office published the Government response.
On 27 July, the Home Office published this report which sets out the Government’s plan to deliver the change that it says that Britain needs, with less crime, fewer victims, and a safer country. It sets out a strategic approach to cutting crime: cutting homicide, serious violence and neighbourhood crime; exposing and ending hidden harms; and building capability and capacity to deal with fraud and online crime. It is said to involve “bold new measures to drive down crime and tackle the underlying causes of repeat offending”.
PwC SUED BY RACING CAR DEALER FOR FAILING TO SPOT ALLEGED FRAUD
On 27 July, City AM reported that PwC has been sued by the administrators of JD Classics, a racing car dealership, for allegedly failing to spot fraud resulting in losses of over £41 million. It is reported that administrators claim that despite their identification of a “real risk of fraud”, PwC failed to detect that the true state of the business was being concealed.
CRYPTOCURRENCY PUMP-AND-DUMP SCHEMES: EVERYTHING YOU SHOULD KNOW
On 27 July, cnet produced this short guide for the US, warning that the SEC, which investigates securities scams such as insider trading and pump and dumps, doesn’t yet have similar rules for cryptocurrency.
On 27 July, AsiaNews reported alleged plans to stimulate investment in remote areas of the Russian Far East, despite protests from Japan (the Kurile Islands were seized at the end of WW2). The planwas unveiled by Prime Minister Mikhail Mišustin.
ALBANIAN SPECIAL PROSECUTION ARRESTS THREE PUBLIC OFFICIALS FOR CORRUPTION
On 27 July, Exit News reported that Albanian police have arrested 3 employees of the Tirana Cadastral Agency over charges of “passive corruption”. This follows an investigation into the illegal registration of property in the capital through passive corruption and the falsification of documents. Previously, 9 low-ranking public officials of the Ministry of Interior were arrested for rigging a tender worth €23 million in 2020 for the supply of Albanian police officers with uniforms.
MOLDOVA’S PRESIDENT OPENS NEW PARLIAMENT SESSION ANNOUNCING ‘ZERO TOLERANCE FOR CORRUPTION’
On 27 July, BNE Intellinews reported that President Maia Sandu opened the first session of the new parliament, where her Party of Action and Solidarity (PAS) holds a comfortable majority, with a message of “zero tolerance for corruption”.
On 27 July, the Department for International Trade published this report which provides a detailed overview of the UK’s strategic export controls policy and export licensing decisions for the period January to December 2020.
NCA WARNS FURLOUGHED PORT AND AIRPORT WORKERS COULD BE EXPLOITED BY ORGANISED CRIMINAL GROUPS
On 27 July, a news release from NCA warned that furloughed port and airport workers may be vulnerable to organised crime groups seeking to exploit the Covid crisis. It warns that staff who have a detailed knowledge of controls and processes around the border could be targeted. The warning has been issued to companies at the border, including port and airport operators, contractors, couriers and freight operators, as their furloughed staff return to work following the easing of Covid restrictions.
US TRADE BOYCOTT RULES CAN STILL YIELD SUBSTANTIAL PENALTIES
On 27 July, Sandler Travis Rosenberg reminded that US companies and their foreign affiliates are prohibited from participating in foreign boycotts that the US does not sanction, and that such actions can result in substantial criminal and civil penalties. The Arab League boycott of Israel is the principal foreign economic boycott that US companies must be concerned with, but the laws apply to all boycotts imposed by foreign countries that are not approved by the US. In addition, export regulations also require US persons to report each quarter requests if they have received to take certain actions to comply with, further, or support an unsanctioned foreign boycott.
SPANISH POLICE CUT SERBIAN CRIMINAL DRUG GANG’S OPERATIONS IN SPAIN
On 26 July, OCCRP reported that, with the help of Serbian investigators, Spanish police arrested 43 suspected members of a Serbian organised crime group suspected of having produced marijuana and hashish at plantations in Spain and having distributed their products in Germany.
US CHARGES 9 PEOPLE, INCLUDING A CHINESE PROSECUTOR, WITH CONSPIRING TO ACT AS ILLEGAL AGENTS OF CHINA, INTERNATIONAL STALKING, AND OBSTRUCTION OF JUSTICE
On 27 July, Jurist reported that at least 4 of the 9 individuals named in the indictment were residing in the US at the time of the indictment. According to the indictment documents, the defendants allegedly acted at the direction and under the control of Chinese government officials, “conducted surveillance of and engaged in a campaign to harass, stalk and coerce certain residents of the United States to return to the PRC as part of a global, concerted and extralegal repatriation effort known as ‘Operation Fox Hunt’”.
BOSNIA CHIEF PROSECUTOR GORDANA TADIĆ AXED FOR ‘NEGLIGENCE’
On 27 July, Eurasia Review reported that the Disciplinary Commission of Bosnia’s High Judicial and Prosecutorial Council has axed Gordana Tadić as Chief Prosecutor of Bosnia and Herzegovina, citing professional negligence among other issues.
LITHUANIAN COURT SENDS POLITICIAN TO 6 YEARS IN PRISON FOR SPYING FOR RUSSIA
On 27 July, Rferl reported that a court has sentenced politician Algirdas Paleckis to 6 years in prison after finding him guilty of spying for Russia. It is said that Paleckis and an unspecified number of other Lithuanian citizens allegedly collected information for Russian intelligence for money, and Paleckis and several other Lithuanian citizens were arrested in December 2018 and charged with spying for Russia.
MONETARY AUTHORITY OF SINGAPORE (MAS) PROPOSAL FOR A SERIES OF AMENDMENTS TO ENHANCE INVESTIGATION POWERS
On 27 July, an article from Dentons said that the proposed amendments seek to enhance the MAS’ investigative powers, and clarify and expand MAS’ reprimand powers, which will bolster the MAS’ supervisory and enforcement powers.
XINJIANG’S EXPORTS TO THE EU BOOM, DESPITE POLITICAL CONCERNS OVER FORCED LABOUR
On 25 July, the South China Morning Post reported that imports of products from the region rise 131% in the first 6 months – compared with a 35% increase in exports from China as a whole – and the debate on labour appears to be having little impact, analysts say.
US: HOW UNEMPLOYMENT INSURANCE FRAUD EXPLODED DURING THE PANDEMIC
On 26 July, ProPublica published an article referring to Bots filing bogus applications in bulk, teams of fraudsters in foreign countries making phony claims, online forums peddling how-to advice on identity theft. It says that what may turn out to be the biggest fraud wave in US history, is filing bogus claims for unemployment insurance benefits during the COVID-19 pandemic.
“FISHROT” – THE ICELANDIC-NAMIBIA CORRUPTION SCANDAL
On 20 July, Sage Journals published an article from the Index on Censorship about bribery, tax evasion and the plundering of massive fish stocks which belonged to the people of Namibia. It focuses on the Icelandic fisherman who exposed the scandal, with 27 jurisdictions used for money laundering and tax evasion.
US DEPARTMENT OF DEFENSE ANNOUNCES COMPETITION FOR AI TO DETECT ILLEGAL FISHING
On 22 July, the DoD announced that its Defense Innovation Unit and Global Fishing Watch, a non-profit that uses satellites to provide a view of global fishing activities, have launched a new xView3 Challenge to combat illegal, unreported and unregulated (IUU) fishing. This is a competition with a $150,000 prize that’s intended to attract skilled developers who like a challenge and are adept at exploring novel ways to harness satellite-based synthetic aperture radar data to detect “dark” vessels, which don’t publicly broadcast their location or appear in public monitoring systems.
MFA REFORM LOOKS TO ADDRESS MONEY LAUNDERING, CORRUPTION IN MALTA FOOTBALL
On 27 July, Malta Today reported that the MFA President says new structures in how football clubs in Malta operate will help in reducing corruption and money laundering, while raising the sport’s standards.
THE POST OFFICE HORIZON SCANDAL: THE LAW SAYS COMPUTERS ARE RELIABLE
On 20 July, an article from the Internet Newsletter for Lawyers which involves a discussion which considers what is, arguably, the underlying legal cause of the scandal – that the law says that computers are presumed to be reliable. The scandal involved a large number of sub-postmasters accused of fraud and theft on the basis of what the Post Office’s Fujitsu Horizon software appeared to indicate.
On 27 July, the Center for Strategic and International Studies offered this Q&A article, answering questions about the situation. It starts by reminding one that President Kais Saied invoked emergency powers, fired the prime minister, and suspended parliament for 30 days. He declared that he would govern alongside a new prime minister. Tunisia, long hailed as the only success story of the Arab Spring uprisings, now faces its most dangerous political crisis since the revolution a decade ago.
THE BIDEN-HARRIS ADMINISTRATION’S ENVIRONMENTAL JUSTICE POLICY AGENDA: WHAT COMPANIES NEED TO KNOW
On 27 July, Wilmer Hale published a Client Alert saying that the Biden Administration has taken tangible steps to advance environmental justice (EJ) across the federal government, and the White House has provided key guidance to help agencies direct funding to advance EJ. The firm recommends that regulated entities should consider incorporating several best practices to remain ahead of the evolving EJ regulatory and enforcement landscape.
US 2020 REVIEW OF NOTORIOUS MARKETS FOR COUNTERFEITING AND PIRACY
Released in January by the US Trade Representative this annual report includes the “Notorious Markets List” which identifies online and physical markets that play a significant role in trademark counterfeiting or copyright piracy. In the 2020 report, China is named as the world’s “primary source” of counterfeit products, accounting for 82% of counterfeits. It estimates that an estimated 2.5%, or nearly half a trillion dollars’ worth, of imports worldwide are counterfeit and pirated products.
Guns, knives, swords and other offensive weapons: UK border control
On 27 July, HMRC issued update guidance following new prohibitions being introduced and relating to the possession of offensive weapons and the importation and supply of cyclone and spiral knives (a blade with one or more cutting edges that form a helix and come to a point). A new legal definition of flick knives, banned since 1959, also takes effect, resulting in more of these bladed weapons being outlawed. The guidance summarises the requirements, controls and sanctions that Border Force applies to firearms and offensive weapons when they are imported into the UK.
EU SCOPES SINGAPORE FOR ‘BLACKLIST’ AMID CRACKDOWN ON SHELL ENTITIES
On 27 July, the International Tax Review reported that Singapore is a part of scoping exercises for the EU list of non-cooperative tax jurisdictions, meanwhile a consultation on shell companies could add greater substance tests for the list.
BREXIT – WHAT NEXT FOR .eu DOMAIN NAMES FOR UK HOLDERS?
On 27 July, CMS Law published an article saying that from 1 January, organisations, businesses or undertakings established in the UK (but not in the EU), and individuals who lived outside the EU and were not EU citizens, became unable to hold, register or renew .eu internet domain names in the UK. Those who could not meet the eligibility criteria had their .eu domain names suspended on 1 January, with a deadline for reinstating these open until 30 June.
UK GOVERNMENT EXPLORES AML REFORM FOR OPEN BANKING PAYMENT SERVICE PROVIDERS
On 27 July, CMS Law reported that HM Treasury issued a consultation paper on 22 July covering various proposed amendments to the UK AML framework. HM Treasury is also inviting feedback on the potential money laundering and terrorist financing risks presented by payment initiation services (PIS). The consultation process is open until 14 October, ahead of the proposed introduction of final legislation in Spring 2022.
The RAND Corporation has published a paper considering potential economic and political impacts of a collapse in demand for Afghanistan’s opiates. It points out that Afghanistan is the world’s largest producer of illegal opium poppy and is a key source for heroin markets across Europe and Asia, and illegal opiates have helped sustain farmers and workers in rural Afghanistan while funding nonstate actors and insurgent groups. Given the rise and dominance of fentanyl and other synthetic opioids as they displace heroin in major drug markets in the Americas, the authors assess what might happen to Afghanistan if demand for its opiates dropped off sharply and permanently. It is argued that the loss of demand for Afghan opiates could have significant impacts on economic and political conditions, depending largely on the pace of change.
SERIES OF STUDIES LAUNCHED BY THE EU AND UN SHED LIGHT ON THE SIGNIFICANT DAMAGE BEING CAUSED TO STATES AS A RESULT OF UNCHECKED ILLICIT FINANCIAL FLOWS – ARMENIA
The UN Interregional Crime & Justice Research Institute (UNICRI) published the latest in the series of studies, this one covering Armenia.
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