On 26 August, Baker McKenzie reported that Belarus has become subject to phased tightening of international sanctions restrictions. The article discusses in detail the sanctions restrictions recently introduced by the US, the EU, the UK, Canada, Switzerland and Ukraine with respect to Belarus.
On 3 August, Latin Lawyer published an article saying that, since 2014, Brazil’s Operation Car Wash investigation into widespread bribery and corruption involving politicians and state-owned enterprises has dominated headlines and captured public attention across Latin America and around the world. The international interest in combating corruption in the region shows no sign of abating. It says that companies operating in Latin America should be mindful of recent legislative, judicial and enforcement trends, and of global regulators’ focus on fighting corruption in the region. The article examines recent trends in legislative and constitutional anti-corruption enforcement regimes in Latin America; changes in data protection regimes that may affect corporate investigations in the region; and global enforcement of corruption-related conduct in Latin America, including the impact of Covid-19-related investigations and cooperation among US, Latin American and other regulators.
On 29 August, Deutsche Welle reported on the Economy Ministry releasing data showing export licences worth more than €22 billion had been granted. Hungary is the greatest recipient, followed by the US. The 10 most important customers for Germany’s arms industry include several non-EU and non-NATO member states, such as Algeria (€2 billion), Egypt (€1.88 billion) and Qatar (€720 million), and other recipients include India, Indonesia and Pakistan, with increases for the developing world.
IRAN AND SYRIA VOW ‘MIGHTY STEPS’ IN CONFRONTING US SANCTIONS
On 29 August, the Times of Israel and others reported that the announcement was made by Iran’s new Foreign Minister on being received at the airport for a visit to Damascus by his Syrian counterpart. Iran has been one of Syrian President Bashar Assad’s strongest backers, sending thousands of fighters from around the region to help.
On 27 August, Defence Web reported that, just ahead of a reduced Indian Ocean high risk piracy area (HRA) announcement, a motor vessel (was attacked by pirates off Somalia. It involved a skiff carrying at least 4 armed men, opening fire with small arms and RPG. An RPG caused damage in the vicinity of the bridge of the ship. Nevertheless, the reduced Indian Ocean high HRA announcement was made on 20 August by the International Maritime Bureau (IMB), to become active on 1 September, following a reduction in piracy off Somalia and the Horn of Africa. The recent attack was only the second this year off the Horn of Africa. The article notes that the Gulf of Guinea remains particularly dangerous for seafarers with 32% of all reported incidents taking place in the region.
On 18 August, PNLD reported that 3 benzodiazepines, known as flualprazolam, flunitrazolam and norfludiazepam, have been added Schedule 2 to the Misuse of Drugs Act 1971 on 18 August, therefore making the compounds Class C drugs from that date.
RESPONDING TO THE PROLIFERATION OF UNINHABITED UNDERWATER VEHICLES (UUV)
On 26 August, an article from the Centre for International Maritime Security started with a reference to a “kamikaze” UUV used in an attempt to attack Israeli offshore gas and oil installations, which Hamas had unsuccessfully targeted in the past using rockets and uninhabited aerial vehicles (UAV). However, it says that UUV have been in use since the 1950s, with the US and Russia leading and UUV are now owned by over 50 nations across the world. It says that understanding why and how this technology proliferates is crucial to recognising the role of such new technologies in international security and preparing effective responses. Looking at their history and proliferation – and recent examples of their use (and capture), the article points out that at least 30 states have the indigenous capacity to manufacture UUV. It is said that the current status of aerial drones and their widespread use across the world offers militaries, policymakers, and international organisations the opportunity to prevent a similar scenario from occurring with underwater drones.
On 29 August, an article from Rferl says that 3 years after China blocked imports of garbage from developed countries, Romania is becoming a new dumping ground for illegally imported trash from mostly European countries. It says that companies trying to slash their costs ship the trash to Romania, where profitable black-market operations charge around €250 per ton to receive the waste. But instead of being disposed of according to regulations, the trash is simply dumped in landfills or burned. The head of Romania’s environmental protection agency says that around 3,700 tons of waste has been smuggled into Romania in 2021 alone.
Panama Covid-19 update – once more watching very large vessels navigating both cuts of the Canal,including huge container ships and another with a deck cargo of very expensive-looking boats, one could be forgiven for not thinking that there is any economic problems, but…
Meanwhile, with active cases continuing to fall, the virus and the pandemic rolls along. 4 more fatalities reported today, with 676 new cases. Of the 8,026 active cases, 98 are in ICU and 284 in other wards.
28 August 2021
DEPOSIT FRAUD IS INCREASING AS PAPER IS REPLACED
On 25 August, Finextra explained that deposit fraud occurs when money in the form of electronic or paper payment is put into a bank account. The owner of the deposited amount then takes over and controls the almost instant disbursement of that deposit. The deposit owner can be the scammer themselves or a surrogate. The surrogate owners are often called “mules” and are recruited through social media ads with a promise of a fee per transaction. It further explains that electronic clearance assists the criminals, as funds arriving electronically hold no credit risk, the money is clear and ready to move immediately. The article reveals some of the worrying statistics concerning the problem and sets out what banks can do to counteract it.
CAMBODIA SAYS ‘LOOPHOLES’ MAY HAVE LED TO OIL THEFT AS NGO URGE PROBE
On 27 August, RFA reported that a government spokesman has said that a tanker with nearly 300,000 barrels of crude oil that went missing last month may have left Cambodia unnoticed due to “loopholes” in enforcement. The ship carrying the oil was seized by Indonesian authorities when the Bahamian-flagged tanker anchored off Sumatra with its identification system turned off. Cambodia had issued an Interpol red notice about the alleged theft. An NGO worker has told RFA that Cambodia’s government must now thoroughly investigate how so much oil could have been taken so easily out of the country.
GERMAN COURT HAS SENTENCED 2 SYRIAN NATIONALS ON WAR CRIME AND TERRORISM-RELATED CHARGES
On 28 August, Jurist reported that one was given a life sentence, mainly for shielding the execution of a detained army officer and membership of a foreign terrorist organisation. The other was sentenced to 9 years in prison, for filming the crime and preparing the footage for use as propaganda, as well as for supporting a foreign terrorist organisation. They were members of a group that was part of Jabhat al-Nusra, the Syrian branch of Al Qaeda, and were fighting against Syrian government forces in the civil war. Germany employs universal jurisdiction to prosecute the most serious crimes regardless of nationality and place of commission.
DUTCH TAX AUTHORITIES ALLOWED CELEBRITIES TO USE THE NETHERLANDS AS TAX HAVEN FOR DECADES
On 28 August, the NL Times reported that dozens of well-known artists who sold millions of records and CD were able to avoid taxes in their home country through the Netherlands for decades. A report says that foreign authorities tried to take action several times but the Dutch authorities watched and approved. They used the so-called ‘Antilles Route’ for their music rights, a well-known tax avoidance construction that existed until 2006. A number also had a company in Curacao, with funds routed via the Netherlands to avoid withholding taxes that might have been imposed had the funds gone directly to Curacao.
INDIA: BENGAL CHIEF MINISTER’S NEPHEW IMPLICATED IN MONEY LAUNDERING CASE
In its 29 August edition, the Times of India (and others) reported that the Enforcement Directorate had summonsed Abhishek Banerjee, and his wife Rujira. The MP is the nephew of the Bengal Chief Minister. Several of his associates have also been called in for questioning. It is said that Vinay Mishra, a close associate of Abhishek, who was allegedly instrumental in arranging ‘proceeds of crime’ from illegal coal-mining in the state, has fled to Vanuatu and renounced his Indian citizenship to escape the agencies investigating the scam.
ROMANIAN NATIONAL MAN SENTENCED TO 140 MONTHS FOR MONEY LAUNDERING CONSPIRACY LINKED TO eBay AUCTION FRAUD
A news release from US DoJ on 25 August advised that Adrian Mitan, 36, had pleaded guilty to money laundering conspiracy arising from online auction fraud scheme (commonly referred to as “eBay fraud”), credit card phishing and a brute-force attack scheme, and a vishing scheme, all designed to steal money from Americans. Mitan worked in conjunction with others to post advertisements for goods to sales websites like Craigslist. Once they convinced victims to pay for the item, they laundered the money through a sophisticated operation. He was also involved in a credit card fraud scheme that involved phishing for credit card information from victims and then brute force attacking point of sale systems to obtain all necessary data to create new cloned credit or debit cards. He further admitted to then using those cloned cards to withdraw substantial sums from ATM.
OWNER OF JET CHARTER COMPANY SETTLES FALSE CLAIMS ACT ALLEGATIONS REGARDING MISAPPROPRIATION OF PAYMENT PROTECTION PROGRAM LOAN
On 26 August, a news release from US DoJ advised that Seth A Bernstein, the owner of jet charter company All in Jets LLC (JetReady), located in Florida, has agreed to pay $287,055 to settle allegations. He is said to have applied for and received a PPP loan totalling $1,173,382 in April 2020. Within a day of receiving the loan proceeds, Bernstein allegedly diverted $98,929 of the funds to pay for personal, non-company related expenses. JetReady has since filed for bankruptcy.
SWISS APPROVE EXTRADITION OF KEY FIGURE IN GERMAN “CUM-EX” TAX FRAUD CASE
On 28 August, Swissinfo reported that the government has approved the extradition of Hanno Berger, a German lawyer. He was arrested in Switzerland last month, and has been indicted in Germany on charges of tax evasion in connection with the so-called “cum-ex” scheme.
On 27 August, Insight Crime reported that authorities in Peru have dismantled a ring that sold explosives to gangs involved in illegal mining, showing how dangerous products needed to mine gold generate illicit profits. They arrested 9 suspects who allegedly formed part of a criminal network known as “Los TNT del Norte Chico”, and sold illegal explosives to “mining mafias”. Insight Crime says that Peru’s illegal mining crisis, long out of control, has grown to such a stage where criminal groups can turn a profit by focusing on a single element of the mining supply chain.
On 27 Augut, Sakshi Post reported that an Enforcement Directorate investigation into a money laundering scam involving Chinese online betting applications led it to find hawala payments made to human hair merchants based in Telangana and Andhra Pradesh. It was found that many domestic merchants were selling the raw hair to foreign merchants and this was smuggled out of India via road to Myanmar, and ultimately exported to China, where it was labelled as domestic Chinese hair and processed. The Chinese traders would avoid import duty of 28% on import and also earn 8% export incentives at the time of export.
Panama Covid-19 update – as I sit overlooking a busy night time Panama Canal (and the freight railway line alongside it), it seems that Covid is having little effect. A brief visit to nearby brew-pub seemed to confirm this. But then a chat with the hotel manager put things into perspective – the hotel only reopened in July, having been closed since early 2020, and she had been cooped up in a small apartment with 2 subsequent generations of her family since March 2020.
Otherwise, a glorious day when it would have been nice to use the picnic site hear the lake in the park here, if it wasn’t for the warning signs that there were (not “might be”) crocodiles in the lake…
Meanwhile, another 649 new cases added and 8 new fatalities; with 8,081 active cases, of which 98 are in ICU and 279 in other wards.
27 AUGUST 2021
US: 2 LAWYERS AND 2 SURGEONS INDICTED ON FRAUD CHARGES FOR ALLEGEDLY PARTICIPATING IN AN INSURANCE SCAM USING HOMELESS OR DRUG-ADDICTED PEOPLE TO STAGE TRIP-AND-FALL ACCIDENTS
On 26 August, Reuters reported that the defendants have been indicted by a federal grand jury for allegedly participating in a 5-year, $31 million insurance scam in which “extremely poor” and often homeless or drug-addicted people in New York City were recruited to stage trip-and-fall accidents.
PHILIPPINES: BANKERS BACK PROPOSED LAW COMBATING MONEY MULES AND, PHISHING
On 26 August, the Inquirer reported on the proposed Bank Account and E-Wallet Regulation Act, whereby the crimes would be treated as economic sabotage. Persons who are found aiding a money mule or attempting to commit major offences are also covered by the Bill.
NGO OFFERS CHECKLIST FOR RECOGNISING ILLEGAL WILDLIFE TRAFFICKING POSTS
On 26 August, OCRRP reported that the Global Initiative Against Transnational Organised Crime has developed a checklist which they believe help interested parties identify illegal posts and this way help streamline enforcement and prosecution.
US TO ALLOW HUMANITARIAN EFFORTS IN AFGHANISTAN AND BYPASSING SANCTIONS ON TALIBAN
On 26 August, the Wall Street Journal reported that the US Treasury has given humanitarian organisations a green light to provide aid to Afghanistan, easing concerns from aid groups that antiterrorism sanctions on the Taliban could prevent the country from getting the food and other supplies it needs to stem a growing economic crisis.
BELGIAN ULTIMATE BENEFICIAL OWNER REGISTER: DEADLINE FOR UPLOADING SUPPORTING DOCUMENTS
On 26 August, Crowell & Moring published an article saying that all Belgian companies, foundations, non-profit organisations, fiduciaries and trusts must submit information to the Ultimate Beneficial Owners (UBO) register – and reporting entities are required to upload proof that the information on the UBO register is adequate, accurate and up-to-date. The obligation to upload supporting documents entered into force on 11 October 11 2020, from which date entities registering for the first time were required to upload a copy of all supporting documents at the time of registration. Entities that were already registered before October 11 2020 were given an extended transitional deadline of 31 Augustto update their registration and provide these supporting documents.
OFAC ENFORCEMENT ACTION AGAINST PAYMENTS COMPANY SHOWS THE IMPORTANCE OF ROBUST SANCTIONED PERSON AND LOCATION SCREENING
On 25 August, a post from the Compliance & Enforcement blog from the Program on Corporate Compliance and Enforcement at the New York University School of Law was concerned with a $1.4 million a $1,400,301 settlement agreement with a New York-based online money transmitter and provider of prepaid access, Payoneer Inc. OFAC had determined that Payoneer’s sanctions compliance programme — in particular its sanctioned person and location screening procedures — had several deficiencies that allowed persons located in sanctioned jurisdictions and persons on the SDN List to engage in approximately $802,117 worth of transactions via Payoneer’s services. The post goes on to provide more detail on OFAC’s enforcement action and its implications.
PANAMA PRESENTS PROPOSAL TO REGULATE BITCOIN, NFT AND CRYPTOCURRENCIES
On 25 August, CVBJ reported that Panama has seen a Bill, presented before the National Assembly, which seeks to regulate all activities related to cryptocurrencies. It is said that the country will also evaluate using digital assets as an optional payment method to purchase products and services.
WHAT CAN WE LEARN FROM TOYOTA’S SANCTIONS COMPLIANCE APPROACH?
On 27 August, an article from EJ Insight said that Toyota pick-up trucks have been so widely used by militants in the Middle East and North Africa (MENA) region that Toyota recently changed its policy requesting purchasers of its latest 2022 model of Land Cruisers to sign a contract promising not to resell the vehicle within a year. Such vehicles are popular and can be used for transporting soldiers for sure, as well as being retrofitted with different weapons, including heavy machine guns, anti-aircraft guns and recoilless guns [NOTE: it reached a stage that a Japanese model-maker produced a plastic model kit of such so-called “technicals” – although it made the make and model an anonymous type, rather than labelling it a Toyota]. In fact, it is said that in 2015 the US Government asked Toyota to help determine how the Islamic State had managed to acquire such a large quantity of pick-up trucks. The article says that Toyota’s sanctions compliance policy on the pick-up truck sales seemed sufficient in the eyes of the US Government – in that at least the company has never been formally investigated or penalised for the sales practices. It is said that the story of Toyota gives us a vivid example on the risk-based approach to sanctions compliance. Businesses should start applying the approach in their compliance programmes.
MALTA: THE GOVERNMENT IS FINALISING AN ACTION PLAN TO GUIDE REGULATORS ON FURTHER LEGAL CHANGES INTENDED TO FIGHT FINANCIAL CRIME
On 27 August, the Times of Malta reported that one of the proposed actions is to extend the timeframe within which the tax authorities can take action against tax evaders from 2 to 5, or possibly 8, years. Another initiative is an agreement signed between the Malta Business Registry and the FIAU to share information and collaborate on investigations into the ultimate beneficial ownership of financial structures.
PODCAST: 2 YEARS INTO THE UK ECONOMIC CRIME PLAN (ECP)
On 27 August, a podcast from RUSI discusses RUSI’s current and future programme of work related to the ECP, and what the ECP has achieved so far, where the gaps are and what is likely to lie ahead in its final year of execution.
Freight-Pay: A CUSTOM PLATFORM DEVELOPED FOR USE BETWEEN FIATA MEMBERS
FIATA, the International Federation of Freight Forwarders Associations, has inaugurated this system. Freight-Pay is a custom platform developed for FIATA members to facilitate payments among themselves, instantly send and receive money worldwide while benefiting from reduced transaction fees. It offers user-friendly features to manage payables and receivables, allowing to keep track of all transactions through a single tool.
IRELAND: DATA-SHARING BETWEEN PUBLIC BODIES – 5 KEY UPDATES
On 27 August, a briefing from Eversheds Sutherland said that 7 July marked the date on which a significant number of sections of the Data Sharing and Governance Act 2019 commenced. It says that the provisions has implications for public bodies who have entered into, and who will enter into, data-sharing agreements with another public body. Further, it says, the Act will change the regulatory landscape whereby a new Data Governance Board will be established, and base registries and a personal data access portal may be created. The briefing sets out the 5 key updates.
ON BOARD GHANA’S TRAWLERS – CLAIMS OF HUMAN RIGHTS ABUSES AND ILLEGAL FISHING
An article from Mongabay on 25 August says that a report and video published by the Environmental Justice Foundation describes a range of human rights abuses experienced by fisheries crew members and official observers on board industrial vessels operating in Ghana’s waters. It says that most of these vessels are involved in illegal fishing practices, including the use of undersized nets, the catching and dumping of juvenile fish, and the transshipment of large quantities of pelagic fish that should be reserved for artisanal fishers, which is helping to push Ghana’s fishery to the point of collapse. It also says that human rights abuses are prevalent on industrial fishing vessels across the world, and tend to be entwined with issues of IUU fishing.
A news release from the DEA on 26 August announced a comprehensive review of DEA’s international operations and foreign footprint, following an inspection and report from the DoJ Office of the Inspector General.
MORE CONTAINERS LEAVING LOS ANGELES EMPTY THAN WITH GOODS INSIDE
On 26 August, Insurance Marine News reported that exports from the contiguous US ports of Los Angeles and Long Beach fell by 27.6% and 20.7% year on year, in July, while imports grew by 2.9% at LA, and by 1.6% at Long Beach. Exports have declined in 29 of the past 33 months at Los Angeles, and that there were more than 3 times as many empty containers leaving the port than loaded ones.
EX-CONGO PUBLIC HEALTH MINISTER ACCUSED OF COVID-19 FRAUD
On 27 August, the Daily Mail reported that authorities have arrested Congo’s former public health minister, Dr. Eteni Longondo, following allegations that he misappropriated more than $1 million in funds allocated by the World Bank to fight the COVID-19 pandemic.
2 SOUTH FLORIDA LAWYERS AND FORMER CHIEF OPERATING OFFICER SENTENCED FOR ROLES IN MASSIVE 1 GLOBAL CAPITAL INVESTMENT SCHEME
A news release from the US DoJ on 27 August advised on sentencing following a sprawling fraud scheme that affected more than 3,600 investors in 42 states. Settlement of the case included over $148,976,248 million in restitution to the victims of the scheme. 1 Global was a commercial lending business based in Hallandale Beach, Florida, that made the equivalent of “pay day” loans to small businesses at high interest rates, termed merchant cash advance loans (MCA).
TENTACLES OF ILLEGAL OCTOPUS TRADE AND A MEXICO TOWN
On 27 August, an article in Insight Crime said that seizures of illegally harvested octopus off Mexico’s Yucatán peninsula are shedding light on how corruption in a coastal community facilitates the black market in marine life.
THE SECRET HISTORY OF HAMBANTOTA – PORT IN SRI LANKA AND CHINESE FUNDS
The Center for Strategic and International Studies has published a report saying that some observers have pointed to the underperforming port and alleged that China is using “debt trap diplomacy”, loading countries up with loans and seizing strategic assets after they cannot repay. Others have argued that Sri Lanka, not China, is responsible for its debt woes. The debate is important for understanding the risks lurking in China’s Belt and Road Initiative, especially as the pandemic pushes more of China’s borrowers to the brink.
On 27 August, an article in The Conversation by 2 experts who have been tracking Islamic State Khorasan Province (ISIS-K) for years and answered questions about who the terrorist group is, and the threat it poses in a destabilised Afghanistan.
On 27 August, OFAC and, separately, KPMG reported that First Bank SA, located in Romania, and its US parent company, JC Flowers & Co, have agreed to remit $862,318 to settle potential civil liability for First Bank’s processing of transactions in apparent violation of OFAC’s Iran and Syria sanctions programmes in 2018.
An article from Fenwick & West LLP on 27 August reported on a recent US Supreme Court case which addressed the situation where an inventor develops an invention, files a patent application and assigns the application for value to the company they founded. Then later, the inventor founds another company and develops an improved version of their original invention. The inventor’s former company sues the inventor or the inventor’s current company for patent infringement. In response, the inventor argues that the patent for the original invention is invalid. Should the inventor be able to do so? The case involved the doctrine of “assignor estoppel” — which bars the inventor assignor of a patent from denying the validity of their previously assigned patent.