PANAMA COVID-19 UPDATE – it is reported that third, booster jabs are to start being given to high-risk individuals in the next few days. Meanwhile, the number of active cases continues to slowly fall, as does the Rt rate, which is now 0.86 (down from 0.93 last week). All the same, there were still 426 new cases reported at the weekly news conference today, and 4 new fatalities. Active cases stand at 5,934, with 85 in ICU and 262 in other wards.
Also reported were the fatalities since the beginning of the vaccination programme, showing that of the 2,135 fatalities since January, 1,979 or 92.7% were of those victims with no vaccinations.
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7 September 2021
UK: £32 MILLION OF FRAUD STOPPED BY FINANCE INDUSTRY AND POLICE IN FIRST HALF OF 2021
On 7 September, UK Finance reported that branch staff at banks, building societies and Post Offices worked with the police to stop £32 million of fraud through the Banking Protocol rapid scam response in the first half of this year, according to the latest figures from UK Finance. This is up 65% compared to the same period last year and brings the total amount of fraud prevented to £174 million since the scheme was introduced in 2016. Branch staff invoked the Banking Protocol 4,782 times between January and June 2021, saving potential victims an average of £6,672 each.
US PROBES EXAMINE RAYTHEON’S DEALINGS WITH QATARI DEFENCE CONTRACTOR
On 7 September, the Wall Street Journal reported that the anti-bribery probes by the SEC and DoJ were sparked by a dismissed 2019 lawsuit in California involving the Qatari military. That lawsuit had included allegations that Raytheon had funnelled around $1.9 million, in payoffs through Digital Soula Systems, a Qatar-based defence and security-consulting company that was part-owned by a brother of the country’s emir.
CAYMAN ISLANDS: PROCEEDS OF CRIME ACT (2020 REVISION) RESTRAINT ORDERS
On 6 September, McGrath Tonner published this short guide, which forms part of its financial crime and AML series, and which focusses on restraint orders.
SOUTH AFRICA AND US AGREE TO CRACK DOWN ON FINANCIAL CRIME
On 3 September, Grant Thornton published an article saying that the IRS Criminal Investigation Division (IRS-CI) of the US and the South African Revenue Service (SARS) enforcement divisions are joining forces to fight tax and economic crimes affecting both countries. They are said to be working together to identify, investigate and bring to justice criminals with a nexus to both countries who have committed, among other crimes, international public corruption, cyber fraud, and money laundering. The newly-formed partnership has already uncovered emerging schemes perpetrated by promoters, professional enablers, and financial institutions.
BORIS JOHNSON’S BROTHER LOSES £14 MILLION IN A MONGOLIAN MINE LINKED TO FRAUD AND MONEY LAUNDERING
On 7 September, KYC360 reported that Boris Johnson’s younger half-brother, Maximillian, is battling to save a multimillion-pound investment gone badly wrong. He is said to face a “significant” personal loss amid allegations that fraud, embezzlement and money laundering may have put at risk about £14 million of foreign investment in the Zasag Chandmani gold, copper and iron ore mines.
THE POWER OF OPEN-SOURCE INTELLIGENCE AND NON-PROLIFERATION
On 7 September, the Middlebury Institute released a video interview with Professor Jeffrey Lewis on how open-source intelligence (OSINT) can challenge governments’ monopolies on information. This is linked to a recent article in The Economist. Professor Lewis explains how anyone can help slow the spread of weapons technology.
https://www.middlebury.edu/institute/news/power-open-source-intelligence
NEW EU DUAL-USE REGULATION INCREASES FOCUS ON INTERNAL COMPLIANCE PROGRAMMES (ICP)
On 6 September, an article from Taylor Wessing says that the new EU Dual-Use Regulation 2021/821 enters into force on 9 September, replaces the previous EU Dual-Use Regulation 428/2009 and introduces a number of significant changes to EU export controls. The changes include for the first time, making an Internal Compliance Programme (ICP) explicitly required as a prerequisite for the use of the new general licence EU007 for the intra-group export of software and technology. It says that it is therefore more important than ever to implement a functioning ICP in the company in order to be able to exclude violations of EU export controls.
THE SATOSHI AND THE DREAM OF A FLOATING LIBERTARIAN UTOPIA
On 7 September, The Guardian published an article saying that, in 2021, 3 cryptocurrency enthusiasts bought a cruise ship, named it the Satoshi, and dreamed of starting a floating libertarian utopia – but it did not work out. It travelled to Panama, where it was thought the owners could convince the authorities to let the ship anchor permanently in its waters and de-register as a ship, becoming a floating residence instead, so as to avoid some of the more exacting requirements of maritime law. But while Panama was happy to have the ship moored off its coast, it specified that the ship had to remain officially designated as a ship. This led to obstacles which made the ship an off-putting proposition for insurers, and no one would agree to cover it. Even after the project was abandoned, scrapping the ship proved to be a debacle. Under the Basel Convention, which covers the disposal of hazardous waste, you cannot send a ship from a signatory country (Panama) to a non-signatory country (India) and the contract with the scrapyard had to be cancelled. In the end it was sold to Ambassador, the first British cruise line to launch for 10 years.
THERE IS AN URGENT NEED FOR A MORATORIUM ON SALE OF SPY TECH
An opinion piece from Al Jazeera on 7 September makes this argument in the light of the Pegasus scandal, which clearly demonstrated the dangers posed by the unchecked sale of surveillance technology to governments.
“WEAPONISED” CHINESE GDPR NOW LAUNCHED
On 7 September, an article from Taylor Wessing says that the unified PRC legal framework for data protection (the PRC Personal Information Protection Law or PIPL), was finally promulgated and will take effect as of 1 November. The firm previously summarised the key highlights of the previous draft in an earlier article. In this latest one it revisits where one stands regarding those highlights, as well as other issues that are highly relevant to international companies and worth immediate actions.
IRISH GANG IN TRIAL IN FRANCE FOR ALLEGED RHINO HORN SMUGGLING
On 7 September, the Manila Standard in the Philippines reported that 4 alleged members of an Irish crime gang and 5 other defendants have gone on trial in France accused of trafficking rhino horn and ivory to markets in east Asia. Prosecutors began the case in 2015 after a traffic stop discovered cash and elephant tusks, with the occupants of the car claiming that they were antique dealers. They are said to have been members of the Rathkeale Rovers, an Irish crime gang with roots in the Traveller community.
https://manilastandard.net/mobile/article/364343
ARMENIA EX-PROSECUTOR GENERAL CHARGED WITH FRAUD, MONEY LAUNDERING
On 7 September, PanArmenian reported that the Special Investigation Service of Armenia has detained ex-Prosecutor General and the former head of the Investigative Committee, Aghvan Hovsepyan.
SOUTH KOREA SUCCESSFULLY TESTS SLBM FROM NEW SUBMARINE
On 7 September, Yonhap News reported that South Korea has successfully test-fired a homegrown submarine-launched ballistic missile (SLBM) from a new submarine to become the world’s eighth country to possess the weapon.
https://en.yna.co.kr/view/AEN20210907001900325?section=national/defense
EU ACTION AGAINST POLAND OVER INDEPENDENCE OF POLISH JUDGES
On 7 September, the EU announced that the European Commission has taken 2 separate decisions, both related to decisions of the Court of Justice and where the actions of the Polish authorities continue to undermine the functioning of the Polish justice system. It has decided to request the Court of Justice to impose financial penalties on Poland to ensure compliance, and also decided to send a letter of formal notice for not taking the necessary measures to comply fully with the judgment of the Court of Justice finding that Polish law on the disciplinary regime against judges is not compatible with EU law.
https://ec.europa.eu/commission/presscorner/detail/en/ip_21_4587
CRIME (INTERNATIONAL CO-OPERATION) ACT 2003 (FREEZING ORDER) (ENGLAND AND WALES AND NORTHERN IRELAND) REGULATIONS 2021
These new Regulations in the UK (which extend to England and Wales and Northern Ireland only) replace those references to the EU Framework Decision with a list of offences set out in a new Schedule 1A to the Crime (International Co-operation) Act 2003 (CICA) and a new a list of information required set out in a new Schedule 1B to that Act. The measures are concerned with freezing orders, which are orders for protecting evidence which is in a participating country and pending the transfer of the evidence to a requesting country. With the end of the Brexit Transition Period in January, it has become necessary to amend UK legislation to reflect its new relationship with the EU and remove references to EU legislation which it is said could cause uncertainty in future.
https://www.legislation.gov.uk/uksi/2021/987/pdfs/uksiem_20210987_en.pdf
IRELAND: HORSES AND CARS SEIZED AS 12 ARRESTED IN LIMERICK SEARCHES
On 7 September, RTE reported that 12 people have been arrested as part of a major search-and-seize operation at 65 locations across the northside of Limerick city. They are being questioned about drugs offences and alleged money laundering.
https://www.rte.ie/news/munster/2021/0907/1245165-search-limerick/
THE COCAINE MARKET: MORE COMPETITIVE AND MORE VIOLENT
A news release from Europol on 7 September advised that the increased diversification of the supply at source has led to more violence, according to the new Europol-UNODC “Cocaine Insights Report”. More violent, diverse and competitive: these are the main characteristics of the cocaine trade in Europe. The fragmentation of the criminal landscape in source countries has created new opportunities for European criminal networks to receive a direct supply of cocaine, cutting out the intermediaries.
https://www.europol.europa.eu/newsroom/news/cocaine-market-more-competitive-and-more-violent
2 LITHUANIAN CUSTOMS OFFICERS TAKEN TO RUSSIA BY TRAIN BY MISTAKE
On 6 September, Delfi reported that 2 Lithuanian customs officers were mistakenly taken to Russia by the Kaliningrad-Moscow train, which they were checking at the border. It is said that customs officers were checking a post office car at the Kybartai railway border checkpoint whereas the border guards checking passengers managed to get off the train.
ESG PRINCIPLES IN ASIA
On 2 September, an article from Control Risks says that inflows into Environmental, Social and Governance (ESG) funds reached $80.5 billion in the third quarter of 2020, with ESG funds in Asia witnessing an inflow of over $8.7billion. However, in Asia’s emerging markets – with their opaque regulatory environments and politicised reform programmes – ESG investing is far from straightforward. For example, it says that it is hard to imagine how responsible investment principles can be quickly implemented across this region without a fundamental rethink of what constitutes wealth and value in places like Vietnam, China, India and Indonesia, and are likely to be unappealing for many crisis-stricken governments, particularly in South and South-East Asia, in the wake of the pandemic. It says that Asia is on the front line of the climate change disaster, but it is also and will remain the world’s pre-eminent investment destination. Based on these facts alone, Asia should be at the forefront of a seismic change in global growth patterns, but an acknowledgement is needed that costs will be higher. It says that rolling out or expanding an ESG strategy based on a purely EU experience, for example, will not be sufficient – the region represents a huge ESG opportunity, so long as investors meet Asia’s challenges on its own terms.
https://www.controlrisks.com/our-thinking/insights/putting-money-in-the-right-place
CHINA’S REGULATORY CRACKDOWN RAISES RISKS – BUT IS MORE PREDICTABLE THAN IT SEEMS
On 6 September, Control Risks published an article saying that there seems to have been a deliberate choice by Chinese leaders to avoid any perceived broad attack on foreign business, which might cause a long-mooted – but so far absent – ‘exodus’ of foreign investors and multinationals. However, it would be a mistake to assume that this choice will hold indefinitely, or that it means foreign companies are not subject to the same regulatory scrutiny as Chinese companies and, sooner or later, enforcement cases involving multinationals will return to the headlines.
https://www.controlrisks.com/our-thinking/insights/china-regulatory-evolution
CORRUPTION AND HUMAN RIGHTS IN THIRD COUNTRIES: DEVELOPMENTS IN EU EXTERNAL ACTION SINCE 2017
On 7 September, a briefing from the EU Parliament Research Service says that in 2017, the European Parliament adopted a Resolution on corruption and human rights in third countries which included a set of practical recommendations on corruption and human rights in EU external relations – and this briefing analyses the progress made by EU actors in implementing those recommendations. It concludes that, while action has been taken on various fronts to support anti-corruption efforts in third countries following the recommendations, a more systematic approach to corruption and human rights could be taken in some areas. Cooperation between EU actors and enhanced capacity building on corruption and human rights are also key elements for a successful anti-corruption strategy in EU external action
https://www.europarl.europa.eu/RegData/etudes/BRIE/2021/653647/EXPO_BRI(2021)653647_EN.pdf
GARDAÍ DEAL CRIPPLING BLOW TO COMPUTER HACKERS
On 5 September, the Irish Independent reported that Gardaí investigating the health services cyber attack have seized several websites belonging to the gang responsible in a major escalation against the Russian-based criminals.
US ANTI-CORRUPTION DRIVE SHOULD FOCUS ON EAST EUROPE
On 5 September, an article from the Atlantic Council says that it is in America’s national interest to help consolidate political systems based on the rule of law that can withstand internal corruption and external subversion, referring to the Central European countries located between the Baltic and Black Seas. It says that corruption is a manifestation of much deeper structural problems, in which institutions are manipulated for private gain and the rule of law proves ineffective against informal political networks – evident throughout the wider region and can be seen in Ukraine, Latvia, Romania, and Bulgaria as well as Moldova. This leaves them prone to Russian corruption, money laundering, and other tools of influence, which in turn undermine state integrity and weaken international alliances.
UK: SHOULD COMPANIES HOUSE HIKE FEES TO FUND FRAUD POLICING?
On 6 September, an Insight from the Institute for Chartered Accountants in England and Wales says that a Treasury Committee meeting on economic crime explored ways to increase fraud enforcement funding. In the 2020 UK Budget, it was announced the AML-regulated sector is to be subject to an economic crime levy from 2022 to fund AML efforts, potentially contributing £100 million a year. A consultation for the levy finished back in October 2020, but final confirmation or details have yet to be announced. It is said that in France, such a levy is around £50. In Germany, it’s around £100, and in Australia the charge about £200.
UK: ‘DE-RISKING’ AND FINANCIAL EXCLUSION
An article from the Law Society Gazette on 6 September follows up an article from a year ago about whether there should be a right to banking, and the possibly unintended consequences of banking facilities being withdrawn or frozen, in the light of the large fine levied against Deutsche Bank as a result of operating accounts on behalf of Jeffrey Epstein. It says that concern about de-risking practices and financial exclusion is not new – in 2016, the FCA published a statement saying that it was aware that some banks no longer offer financial services to entire categories of customer they associate with a higher risk but that ‘effective money-laundering risk management need not result in wholesale de-risking’. The article suggests that one attempt at finding a solution to this problem can be found in the EU Payment Account Directive 2014/92, recognised by the European Banking Association as imposing a conflicting requirement upon financial institutions., and this Directive was implemented in the UK by way of the Payment Account Regulations 2015 (which remain in force despite Brexit). Therefore, it says that the right to a basic payment account for those legally resident in the UK has been retained in UK law, subject to eligibility criteria.
https://www.lawgazette.co.uk/practice-points/de-risking-and-financial-exclusion/5109657.article
DIRTY SECRETS OF THE CIGARETTE BUSINESS IN SOUTHERN AFRICA
The BBC has announced that on 13 September BBC TV will broadcast a Panorama documentary claiming that BAT secretly paid 200 informants as part of a covert operation to damage its competitors.
https://www.bbc.co.uk/programmes/m000zpd5
CAPE VERDE’S TOP COURT APPROVES MADURO ENVOY’S EXTRADITION TO US
On 7 September, Reuters reported that Cape Verde’s highest court has ruled that Alex Saab, a Colombian businessman who is wanted by US authorities on charges of laundering money on behalf of Venezuela’s government, should be extradited to the US.
SHIPPING INDUSTRY PROPOSES LEVY TO MAKE ZERO CARBON A REALITY
On 7 September, the Insurance Marine News reported that the International Chamber of Shipping (ICS) and INTERCARGO have proposed the creation of a global levy on carbon emissions from ships. Global shipping is said to have accounted for 2.87% of the world’s CO2 emissions last year. The proposed levy would consist of mandatory contributions by ships trading globally that exceed 5,000 gross tons and would be applied for each tonne of CO2 emitted, and would go into a fund that would be used to deploy bunkering infrastructure in ports around the world to supply cleaner fuels, such as hydrogen and ammonia.
“FudCo” SPAM EMPIRE TIED TO PAKISTANI SOFTWARE FIRM
On 6 September, a post on the Krebs on Security blog said that a review of social media postings shows that a cybercrime group based in Pakistan is prospering, while rather poorly hiding their activities behind a software development firm in Lahore that has secretly enabled an entire generation of spammers and scammers. The common acronym in nearly all of domains involved over the years — “FUD” — stands for “Fully Un-Detectable”, and it refers to cybercrime resources that will evade detection by security tools like anti-virus software or anti-spam appliances.
https://krebsonsecurity.com/2021/09/fudco-spam-empire-tied-to-pakistani-software-firm/
THE COSTS OF POST-9/11 WARS EXCEED $8 TRILLION FOR US
On 1 September, the Boston Globe carried an article said that the Costs of War project, housed at Brown University, also estimated that 929,000 people have been killed in wars since 11 September 2001; and the total cost of the US increasing homeland security and waging wars in Iraq, Afghanistan, and elsewhere since the attacks has exceeded $8 trillion. The figure includes the costs of veterans’ care through 2050, which is trillions higher than researchers previously estimated – earlier estimates for the cost of all post-9/11 wars had been about $6.4 trillion.
https://www.bostonglobe.com/2021/09/01/metro/costs-post-911-wars-exceed-8-trillion-us/
TAIWAN POLICE ARREST 14 SUSPECTS WHO ALLEGEDLY RAN A CRYPTO SCAM WORTH $5.4 MILLION
On 7 September, Yahoo News reported that police in Taiwan have arrested 14 people in connection with a $5.41 million crypto investment scam, and the ringleader reportedly lured investors to his scheme using photos of attractive women. The suspects face charges of both fraud and money laundering. The leader who led the scheme promoted cryptocurrency investments on social media, and also allegedly ran Taipei-based Azure Crypto Co, a platform that offered cryptocurrency transaction services.
https://uk.news.yahoo.com/taiwan-police-arrest-14-suspects-191016522.html
The International Convention for the Prevention of Pollution from Ships (MARPOL) is the main international convention covering prevention of pollution of the marine environment by ships from operational or accidental causes. The MARPOL 73/78 combined instrument entered into force in 1983, and in 1997, a Protocol was adopted to amend the Convention and a new Annex VI was added which entered into force in 2005. MARPOL has also been updated by amendments through the years. It includes regulations aimed at preventing and minimising pollution from ships – both accidental pollution and that from routine operations – and currently includes 6 technical Annexes. Special Areas with strict controls on operational discharges are included in most Annexes.
PODCAST: IRAN’S INTERESTS IN AFGHANISTAN (WITH TRANSCRIPT)
On 7 September, the Center for Strategic and International Studies released a podcast which includes an interview with Colin Clarke, a senior research fellow and the director of policy and research at The Soufan Center. This covers what Iran is set to gain in Afghanistan, Iran’s relationship with al Qaeda and the Taliban, and potential areas of cooperation or conflict between Iran and the US as it withdraws from the region. Then the conversation about the US withdrawal from Afghanistan continues, and its implications for great power competition and cooperation in the Middle East.
https://www.csis.org/podcasts/babel-translating-middle-east/irans-interests-afghanistan
HOW FAMILY OF A MYANMAR JUNTA LEADER ARE TRYING TO CASH IN
On 7 September, an article from Reuters says that Air Force chief Maung Maung Kyaw is a key member of the junta that overthrew Burmese democracy earlier this year. His son and nephew are part of a young generation of military families with wide-ranging business interests, including supplying the armed forces. It says that Ivan Htet, the 33-year-old son of a leading figure in the coup: the chief of the air force, Maung Maung Kyaw is trying to cash in, helping equip the military, along with his wife Lin Lett Thiri, who co-founded a private firm to supply Myanmar’s armed forces, Reuters has found.
https://www.reuters.com/investigates/special-report/myanmar-generals-families/
SAUDI ARABIA: PUBLIC SECURITY CHIEF SACKED OVER CORRUPTION
On 7 September, the Saudi Gazette reported that the King has issued orders to terminate the service of Public Security Director Gen. Khaled Al-Harbi with his retirement. It was also also directed that he and 18 others who are accused of corruption to be referred to the Oversight and Anti-Corruption Authority (Nazaha) to complete the investigation into the charges as well as to take necessary legal measures against them, the Saudi Press Agency is said to have reported.
https://saudigazette.com.sa/article/610689/SAUDI-ARABIA/Public-Security-Chief-sacked-over-corruption
HONG KONG’S FINANCIAL WATCHDOG TO CLAMP DOWN ON CRYPTO TRADING FRAUD
On 7 September, Investing.com reported that China’s Securities Regulatory Commission (SRC) has disclosed its plans to combat illegal cryptocurrency trading, as well as strengthen its supervision over digital assets and unlicensed cryptocurrency transactions.
GUINEA COUP UPENDS CHINA STRATEGY AS ALUMINIUM PRICES SOAR
On 7 September, Nikkei Asia reported that the coup appears likely to keep aluminium prices at historic highs for the foreseeable future, as Guinea, home to the world’s largest reserves of bauxite, is mired in political uncertainty. It considers the impact on China, the leading aluminium producer globally and the biggest consumer of bauxite. It is likely to raise China’s dependence on Australia, a country with which its relations have soured. China also saw Guinea as an alternative source for iron ore, a key material in steelmaking, and where Australia provides more than 60% of its iron ore imports. China has become one of the biggest funding sources for Guinea, and in 2019, its outstanding debt obligations to China equalled 5% of its GDP.
https://www.statista.com/chart/25707/number-of-bitcoin-atms-by-region
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