Panama Covid-19 update – odd to walk into a shop or mall today and not have one’s temperature taken, and the health ministry says that the nightly curfew (midnight to 4 am where we are) – one of the few prominent restrictions remaining in place is under review.
In other news, in a move seemingly designed to counter “permanent tourists”, who never get around to registering as residents (but pop out of the country every 6 months to restart their tourist visa stay), the maximum 6-months period of the standard tourist visa has been reduced to 3 months.
Meanwhile, today’s Covid figures are 481 new cases and 3 new fatalities, with 7,093 active cases, of which 98 are in ICU and 282 in other wards.
2 SEPTEMBER 2021
OPOIDS – PURDUE PHARMA BANKRUPTCY PLAN APPROVED
On 1 September, the Wall Street Journal reported that OxyContin maker Purdue Pharma LP had won court approval of a $4.5 billion bankruptcy settlement that shields its owners, members of the Sackler family, from lawsuits accusing them of contributing to the US opioid epidemic in exchange for providing funding to combat the crisis. Purdue’s family owners collected more than $10 billion from the company between 2008 and 2017, about half of which went to taxes or was reinvested in the business.
TOP SOUTH INDIAN STARS SUMMONED IN MONEY LAUNDERING PROBE
On 1 September, Gulf News reported that the Enforcement Directorate in India had issued notices to 10 persons connected to Tollywood and 2 others including a private club manager as part of a money laundering probe linked to the drugs racket. Actors Rakul Preet Singh, Rana Daggubati, Ravi Teja, Charmee Kaur, Navdeep, Mumaith Khan, Tanish, Nandu, and actor Ravi Teja’s driver Srinivas are among those summoned.
AUSTRALIANS COULD SOON ATTACH A pdf OR HYPERLINK TO A PAYMENT
On 2 September, ZD Net reported that the Reserve Bank of Australia believes the information could help financial institutions with their adherence to the country’s AML/CFT regime. It says that the banking industry is in the process of developing a service to enable large payers, such as corporate or government entities, to send an electronic payment that includes a secure hyperlink to a pdf document.
UK: FINANCIAL REPORTING COUNCIL ACCUSES KPMG OF GIVING REGULATOR ‘FALSE AND MISLEADING’ DATA
On 1 September, Swissinfo reported that the accounting watchdog has filed a disciplinary complaint against KPMG LLP, a former partner and current and former employees of the accounting firm over their role in past audits of 2 UK companies. KPMG said it alerted the regulator when it discovered the issues in 2018 and 2019 and suspended the people involved. The matter involves the Carillion and Regenersis audits, but the complaint does not allege misconduct arising from the audits being badly done or the financial statements not being properly prepared,
OFAC SANCTIONS CONSIDERATIONS FOR THE CRYPTO SECTOR (PART I)
On 1 September, the Compliance & Enforcement blog from the Program on Corporate Compliance and Enforcement from the New York University School of Law published the first of 3 posts dealing with cryptocurrencies and US economic sanctions. Part 1 provides an overview of sanctions compliance principles for the cryptocurrency industry and discusses some key issues of which persons in the crypto space should be mindful. It says that some of the relevant prohibitions remain ambiguous and leave significant questions unanswered and, in turn, some crypto transactions and related regulations may warrant licence and guidance requests to OFAC or even legal challenges in US courts to resolve those ambiguities. But, it says, at a minimum, there are certain basic steps that should be taken to comply with US sanctions. Part II will discuss blocked coins, blocked persons, and sanctioned regions, and Part III will discuss restricted transactions, blocking and rejecting crypto transactions, and compliance considerations.
SOME OF THE MAIN WAYS IN WHICH THE GENERAL PROTECTION OF LIMITED LIABILITY DOES NOT APPLY OR CAN BE LOST
On 31 August, Morton Fraser published the first of 2 parts, with Part 1 discussing those exceptions to the principle of limited liability that arise in insolvency or distress situations. Part 2 will deal with the provisions that have more general applicability.
UK: FRAUDSTERS SHIFT FOCUS FROM FINANCIAL SERVICES TO TRAVEL AND LEISURE
On 25 August, Security Matters reported that a new analysis has found that fraudsters are refocusing their efforts from financial services to other industries, with travel and leisure topping the table in the UK. It says that suspected digital fraud attempts had risen by 17% globally when comparing Q2 2021 to Q2 2020. Travel and leisure fraud rose 156% in the last year, and was by far the most impacted industry in the UK. The global increase was most commonly driven by credit card fraud.
THE NATIONAL SECURITY AND INVESTMENTS ACT 2021 – IMPACT ON UK LAND TRANSACTIONS
On 1 September, Winckworth Sherwood published an article saying that owners and buyers of UK land need to be aware of new government powers under the National Security and Investment Act 2021 that will come into force on 4 January.
UK: OVER 2,000 HAULIERS FINED FOR ARRIVING AT BORDER WITHOUT CORRECT EXPORT DOCUMENTS AFTER TRANSITION
On 1 September, the Institute of Export and International Trade reported that more than 2,000 hauliers were fined for not having the correct export documentation in the 4 months following the end of the Brexit transition period. It warns that, from 1 October, the second stage of the UK Border Operating Model comes into effect, meaning veterinary health certificates will be required for products of animal origin. The third stage comes into effect from 1 January, when frontier declarations will be required for all goods entering GB from the EU.
SRI LANKA: INQUIRY INTO RECOVERING FOREIGN EXCHANGE DOLLARS LOST TO THE COUNTRY THROUGH THE WASTE FUEL OIL RACKET
On 1 September, the Colombo Page reported that the Environment Minister had decided to appoint a special committee to study the issue of recovering foreign exchange dollars lost to the country through the waste fuel oil racket. It has been confirmed that the country loses a large amount of foreign exchange annually in dollars through the irregularities in the disposal of used oil from ships and the irregularities in the process.
LIES, BRIBES AND PROSTITUTES: THE RECRUITMENT OF THE AUSTRALIAN MEAT INDUSTRY’S FOREIGN WORKFORCE
On 31 August, an article in The Age says that Australia’s immigration department is putting hundreds of foreign meatworkers on notice that they need to verify their visa status or leave – but many say they are the victims of unscrupulous practices. Hundreds of Chinese and other foreign workers are employed in abattoirs around the country. A highly sensitive investigation into alleged visa fraud and wrongdoing by the people recruiting staff to work in the nation’s meat processing industry has been underway. There is a concern that foreign meatworkers might have been involved in a form of visa fraud.
US COULD IMPOSE SANCTIONS ON NORD STREAM 2 GAS PIPELINE PROJECT IF IT IS LAUNCHED AND A THREATENING ENERGY SITUATION ARISES FOR UKRAINE
On 2 September, Ukrinform reported that, according to President Volodymyr Zelensky of Ukraine, President Biden personally guarantees that, if Russia or other parties to Nord Stream 2, are involved in anything which could lead to a dangerous situation due to energy issues for Ukraine, the US will impose sanctions.
US GOVERNMENT STRIKES DELICATE BALANCE ON NORD STREAM 2 WITH NEW EXECUTIVE ORDER AND 4 SANCTIONS DESIGNATIONS
On 23 August, an article from Steptoe & Johnson says that the recent developments, as the latest in a series of US actions related to the Nord Stream 2 and TurkStream pipelines, suggest that the US is attempting to strike a balance between formally opposing the Nord Stream 2 project and cooperating with major allies who favour the pipeline’s completion, such as Germany. It says that the measures are not as incrementally significant as they may seem. It argues that, rather than reflecting a more aggressive US stance, the new Executive Order appears to be driven primarily by legal technicalities including a limitation on the sanctions that could be imposed under Protecting Europe’s Energy Security Act of 2019 (PEESA). However, it does warn that it is likely that additional designations under the new Executive Order will be announced from time to time because PEESA still requires the State Department to submit periodic reports to Congress.
KENYA’S CHARCOAL BANS HAVE FUELLED A SMUGGLING PROBLEM
On 2 September, an article in All Africa says that Kenya’s charcoal industry may be mostly informal, but it’s a big deal to the millions who rely on it for fuel or to earn a living – but charcoal production is taking a toll on local ecosystems. Large-scale tree felling threatens the survival of over 100 local species, such as the acacia, and is destroying water catchment areas. The Kenyan government has imposed a series of trade bans on the charcoal business, with the prohibitions are set to end this year, although they may be extended. However, it is said that the bans have also led to widespread smuggling, and rather than regulating the trade, the bans have driven the charcoal business underground.
INDIAN SWISS TYCOON COULD OWE $137 MILLION AMID ISLE OF MAN TRUST TAX PROBE
On 2 September, International Investment reported that the Federal Tribunal in Lausanne on 17 August upheld a decision to freeze assets belonging to Prakash Hinduja in connection with a much larger tax debt to local authorities than he had originally claimed between 2008 and 2017.
US ATTORNEY DETAILS ILLEGAL ACTS IN NUCLEAR CONSTRUCTION PROJECTS
On 31 August, the Bulletin of the Atomic Scientists reported on inquiries into a collapsed The South Carolina project, one of two such troubled Westinghouse reactor construction projects in the US, and which was ended in 2017. It refers to alleged criminal behaviour related to projects that were part of a much-hyped “nuclear renaissance” that began in the early-2000s but has since petered out in the US. Allegations include conspiracy, wire fraud, securities fraud, and causing a publicly-traded company to keep a false record.
NORTH KOREA ACQUIRED 2 OIL TANKERS THROUGH CHINESE BROKERS
On 2 September, NK News reported that a UN report has said that such acquisitions may enhance North Korea’s ability to import refined petroleum or replace aging tankers. The small tankers involved are named as Woo Jeong and Xin Hai.
DOCUMENTS RELATED TO THE UK GOVERNMENT’S WORK TO COMBAT DOMESTIC AND INTERNATIONAL CORRUPTION
On 1 September, the Home Office published updated information which provide details about the government’s work to combat domestic and international corruption, including strategy documents and the role of the Anti-Corruption Champion.
UK HAS SIGNED UP TO THE BENEFICIAL OWNERSHIP DISCLOSURE PRINCIPLES
On 1 September, the Home Office reported that the UK has formally joined the Beneficial Ownership Leadership Group of the G20 and signed up to the best practice beneficial ownership disclosure principles. The Beneficial Ownership Leadership Group was established to drive the global policy shift towards free, open beneficial ownership data. Improving the transparency of who owns and controls companies, known as beneficial ownership, builds business and market confidence, helps tackle corruption and criminal activities and can improve governance and public procurement. The Group looks to shift the global norms of company beneficial ownership transparency by 2023, by committing to developing domestic public registers of company beneficial ownership, support efforts globally and regionally for other countries to do the same.
UK: COUNTERING TERRORIST FINANCING POLICY
On 2 September, the Home Office sets out the Government’s strategy, aka CONTEST, which seeks to reduce the threat of terrorist financing by detecting, preventing, deterring and disrupting the flow of terrorist finance; understand terrorist finance activity by exploiting financial intelligence to prevent and detect illicit activity; and investigate terrorist finance activity to disrupt and deter illicit activity and hold terrorist financiers to account.
BRITON CHARGED IN SINGAPORE IN WIRECARD-LINKED FRAUD
On 2 September, the Daily Mail reported that a British man, James Henry O’Sullivan, 46, has been charged in Singapore over a fraud linked to collapsed German payments firm Wirecard,
BREXIT: UK FOOD AND DRINK EXPORTS TO EU SUFFER ‘DISASTROUS’ DECLINE
On 2 September, the Guardian reported that exports of food and drink to the EU have suffered a “disastrous” decline in the first half of the year because of Brexit trade barriers, with sales of beef and cheese hit hardest. The Food and Drink Federation (FDF) producers lost £2 billion in sales that could not be compensated for by the increased sales in the same period to non-EU countries including China and Australia.
THE CHALLENGE OF TRANSSHIPMENT AND STRATEGIC TRADE CONTROL ANALYSIS
On 18 August, the Strategic Trade Control Research Group LLC published an article saying that transshipment and re-exporting are very common practices in international trade as cargo gets re-grouped and routed through the most efficient paths and ports to the final destination. It quotes one study that said that 28% of world container throughput was represented by transshipment cargo in 2012, and another that, on average, a shipping container was handled 3.5 times between its initial loading and final destination. Hence, transshipment and re-export services are big business for ports, and present increased opportunities for bad actors to exploit vulnerabilities to illicitly traffic goods. The US has published guidance to prevent illicit diversion through transshipment and expressed concerns about states like Iran and North Korea evading sanctions and export controls by exploiting transshipment vulnerabilities. It concludes that transshipment and re-exporting are a major challenge in preventing illicit trade in strategic goods, and the article briefly outlines a way to work around the data difficulties on the issue.
MONETARY AUTHORITY OF SINGAPORE: PROHIBITION ORDERS (PO) AGAINST 2 INDIVIDUALS FOLLOWING THEIR CONVICTIONS IN THE STATE COURTS FOR OFFENCES INVOLVING DISHONESTY
A release on Mondo Visione on 2 September advised that MAS has issued a 4-year PO against Mr Lan Kangming and a 3-year PO against Mr Wee Toon Lee.
THE ROOTS OF ENVIRONMENTAL CRIME IN THE COLOMBIAN AMAZON
On 1 September, an article from Insight Crime says that the Amazon Basin is being ravaged at an accelerating rate by organised criminal groups and “legal” enterprises alike, as deforestation soars and biodiversity suffers. It mentions illegal mining, logging, wildlife trafficking, land grabbing, coca cultivation and other activities that stoke rampant deforestation and biodiversity loss. InSight Crime joined forces with the Igarapé Institute – an independent think tank headquartered in Brazil, that focuses on emerging development, security and climate issues – to map out environmental crime in the Amazon Basin.
IRANIAN AND VENEZUELAN CRUDE IMPORTS INTO CHINA
On 1 September, a post from Vortexa examines recent imports of crude oil into China from Venezuela and Iran. Iranian supplies have remained firm, while imports of Venezuelan crude, said to have been previously masked as diluted bitumen or Malaysian crude blends to evade import taxes, have fallen.
CANADA: SHARK TANK INVESTORS ACCUSED OF SCAMMING HOPEFUL ENTREPRENEURS
On 2 September, the Ottawa Citizen reported that the 2 businessmen allegedly worked together to defraud people through the alleged use of ‘fictional executives, false promises of financial success, and even illusions of being on the show Shark Tank itself’. They have been hit by a lawsuit from 20 people across the US. According to TMZ, the 20 people attached to the suit represent a small portion of potential victims, which could ultimately run into the hundreds.
NIGERIA: PROVIDERS OF EDUCATION SERVICES’ OPPORTUNITIES TO DEMAND AND EXPECT BRIBES FROM PARENTS AND OTHER SERVICE USERS FOR THEIR CHILDREN’S PASSING GRADES
On 1 September, an article from Chatham House says that underinvestment and corruption in Nigeria’s education sector have created a context where providers of education services are presented with routine opportunities to demand and expect bribes from parents and other service users for their children’s passing grades. It says that a 2018 survey reveals an important disparity between people’s personal disapproval of bribe-giving and their belief that others in their community support and approve of the practice.
US: PROSECUTION OF CREWMEMBERS OF THE CONTAINER SHIP MSC GAYANE COCAINE WORTH $1 BILLION IN PHILADELPHIA HAS FINALLY CLOSED
On 2 September, American Shipper reported that the prosecution of crewmembers of the container ship MSC Gayane is finally over, more than 2 years after a record 20 tons of cocaine worth $1 billion was found aboard the ship when it docked in Philadelphia, 8 seafarers have been sentenced to lengthy prison terms, and the last defendant, has just been sentenced. It says that ever since the record-breaking drug bust in 2019 industry insiders speaking to American Shipper have marvelled at the scale of the smuggling operation and wondered aloud how it was carried out. The article contains more detail of the operation, including how smugglers in speedboats loaded duffel bags full of cocaine bricks into nets that were lifted aboard by the crane at the ship’s aft that is used to load stores. Crewmembers unloaded the duffel bags and helped hide the drugs alongside legitimate cargo inside containers as the ship sailed through the Pacific after transiting the Panama Canal.
US COURT CASE ALLEGING PROFITEERING, COLLUSIVE BEHAVIOUR AND VIOLATION OF THE US SHIPPING ACT BY SHIPPING COMPANIES
On 31 August, American Shipper reported on the response to the lawsuit by a Pennsylvania-based furnishings manufacturer.
POSITION PAPER ON BENEFICIAL OWNERSHIP REGISTER TRANSPARENCY
On 25 August, the Global Coalition to Fight Financial Crime published an article saying that it believes that all actors fighting financial crime should have instant access to high quality, highly usable beneficial ownership data. It complains that currently international standards fall short of generating data that is useful and readily available for all law enforcement agencies, obliged entities and other actors fighting financial crime. Its short paper proposes changes to close gaps that it says have been open for far too long.
A STEP-BY-STEP GUIDE TO CONVERTING AN ISLE OF MAN 2006 ACT COMPANY TO THE 1931 ACT
Katz & Co have published this guide to converting an Isle of Man “2006 Act company” (somewhat akin to an international business company of other jurisdictions and requires use of a CSP as a registered agent) to a “1931 company” (akin to a an English limited company, and which can be managed entirely by their owners and directors, without need to involve a CSP). It says that it was possible to reregister a 1931 Act Company under the 2006 Act – but not to carry out a change in the other direction. This anomaly has now been addressed by the Companies Amendment Act 2021, which it says provides a straightforward mechanism to allow 2006 Act companies the freedom to register under 1931 Act.
HOW CORPORATIONS CAN ESTABLISH ETHICAL SUPPLY CHAINS & HELP PROTECT HUMAN RIGHTS
A paper from JS Held, a consultancy business, refers to factors pushing companies to address their environmental and social impact. It is said to be no longer acceptable to profit from damage to the planet or to the societies in which we operate. It also says that companies are also finding themselves under increased scrutiny when it comes to addressing human rights issues in their supply chains. As an example of the risks, it is said that the modern slavery market is estimated to generate $150 billion annually in illegal profits with 14 million people enslaved in the private sector alone. The paper focuses on the emerging factors surrounding corporate responsibility which address these issues and help create an ethical supply chain. It outlines the key risks, where the growing pressure is coming from, and where to focus attention to create procedures that will meet new and forthcoming legal and regulatory standards, safeguard reputation, and assuage the concerns of stakeholders.
[NOTE – interestingly, for me at least, it mentions the “Ruggie Principles” – the UN Guiding Principles on Business and Human Rights, endorsed by the UN Human Rights Council in 2011 – which I remember warning businesses of years ago in a former life. Forgive a moment of smugness, as another of the “other things” I warned of in talks and training sessions several years back finally shuffle to the front of the stage…]
PANAMA: OPERATION FUSION – DRUGS TRAFFICKING THROUGH INTERNATIONAL AIRPORT BUSTED
On 2 September, the PanaTimes reported that 24 people allegedly involved in the shipment of drugs to Europe and the US through Tocumen Airport had been arrested. The drugs from Colombia were flown to the US. Among those arrested are Among the detainees are an official who worked in a Public Prosecutor’s Office, a corporal from the National Aeronaval Service (Senan), employees of a company that provides technical services at the airport and 3 former employees, as well as 2 employees of a security company that also provides services at the air terminal.
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