Panama Covid-19 update – the Rt rate is down from 08.86 last week to 0.82 this week. There are now 4,632 active cases, with 81 in ICU and 216 in other wards. However, 323 new cases have been added, with 10 more fatalities.
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14 SEPTEMBER 2021
RECORD 56 CONTAINERSHIPS QUEUED AT LOS ANGELES/LONG BEACH PORTS
On 14 September, Seatrade Maritime News reported that there are now nearly twice as many containerships waiting to get into the Ports of Los Angeles and Long Beach (LA/LB) as there are berthed for cargo operations. A record imbalance between import and export volumes is causing a huge pile up of empty containers in Southern Californian ports.
AUSTRALIA: AUTHORITY TO INVESTIGATE THE STAR CASINO AMID AML AND JUNKET CONCERNS
On 14 September, iGB reported that the New South Wales Independent Liquor and Gaming Authority has announced an investigation into The Star Casino in Sydney after concerns were raised about its interactions with junkets and money laundering prevention measures. This follows the inquiry into rival resort operator Crown Resorts.
REPUBLICANS VOW TO BLOCK TREASURY NOMINATIONS UNTIL NORD STREAM II COMPANY IS SANCTIONED
On 13 September, the Wall Street Journal reported that senior Senate Republicans have threatened to indefinitely hold up the nominations of 5 top Treasury Department officials if the Biden Administration doesn’t blacklist the firm managing Russia’s Nord Stream 2 pipeline project, Russia-owned Nord Stream 2 AG – which has not been subject to sanctions as this would affect relations with critical ally Germany and do little to stop the project, given that it was near completion.
MALTA: NOTARY FINED €62,000 FOR OVER BENEFICIAL OWNERSHIP AML FAILINGS
On 10 September, the Times of Malta reported another case in the apparent crackdown in Malta. The notary could not identify the ultimate beneficial ownership of certain financial structures he was involved with, the FIAU said in a notice on its website. He could also not explain the corporate ownership and control structure of some financial structures. In other cases, the details were not comprehensive enough to establish who the real ultimate owners were.
VESSEL IDENTITY LAUNDERING: AN EMERGING THREAT TO MARITIME TRADE
On 10 September, Global Trade Review published an article saying that criminals are fraudulently obtaining vessel registration numbers to evade sanctions on maritime trade, researchers say, warning that illicit export operations are becoming “significantly more sophisticated”. It says that a report from C4ADS said that there are multiple cases where the International Maritime Organization (IMO) has been deceived into issuing “clean” identification numbers to sanctioned vessels. C4ADS argues that the IMO should require complete information on a vessel before granting a registration number. Currently, records “often contain missing data fields” such as a ship’s recorded dimensions
OFAC SETTLEMENT UNDERSCORES SANCTIONS COMPLIANCE REQUIREMENTS THAT REACH BEYOND THE US DOLLAR
An article from Arnold & Potter on 10 September considered the recent case of Romanian bank First Bank SA and its US parent company, JC Flowers & Co. these companies agreed to pay the US Treasury more than $850,000 to settle civil penalties associated with 98 commercial transactions that may have violated OFAC Iran and Syria sanctions programmes. While some instances had involved the use of the US dollar, 28 others were Euro-denominated payments made outside the US financial system and involving Iranian parties and interests. Although US sanctions programs generally do not apply where there is no US Nexus, in this case the transactions took place following US company JC Flowers’ majority ownership interest acquisition of First Bank in June 2018. As a result, First Bank was prohibited from engaging in any activities that would be similarly banned for US persons.
THE O2 SFO INVESTIGATION AND THE IMPORTANCE OF ROBUST COMPLIANCE PROGRAMMES
An article from Keystone Law on 9 September says that telecoms company O2 has revealed that it is under investigation by the SFO for potential breaches of the Bribery Act and that it has made financial provision to cover the costs of the possible violation in its latest financial statement. It also says that other telecoms operators may be watching the outcome of the investigation with interest as the SFO often looks at the activities in the wider sector.
PODCAST: NAVIGATING THE STEPS OF AN FCPA INVESTIGATION (PART 1)
On 9 September, Wilmer Hale says that Part 1 of this Fraud Eats Strategy podcast series discusses how to bring order to the chaos of the early days of an FCPA investigation and avoid mortgaging the company’s future in the process.
FREEZING ORDERS AND EXCLUSION TERMS
On 10 September, an article from ParrisWhittaker says that exclusion clauses can be found within freezing orders (aka Mareva or freezing injunctions) – but it asks to what extent will the courts permit them? The article says that, in an important case1, the Court of Appeal in London had issued a ruling that involved an exclusion clause in the context of freezing orders. This ruling also has important persuasive authority on the courts in The Bahamas. It is said that the Court’s approach to exclusion or exception clauses in the context of freezing orders can be categorised as fair and equitable, and the case illustrates the balancing act between protecting assets from disposal to defeat a judgement, and protecting the genuine business needs of a respondent.
TURKEY’S CLAIM TO MARBLE FIGURE QUASHED BY NEW YORK FEDERAL JUDGE RULING
On 14 September, a post on the Art Law & More blog from Boodle Hatfield said that the judge has decided that a marble figure which is owned by a hedge fund billionaire and which has spent decades on display at the Metropolitan Museum of Art in New York will not be returned to Turkey. The Turkish government sued for the return of the figure in 2017, citing the Ottoman decree of 1906 which asserted that all antiquities found in public or private lands are state property and cannot be taken out the country.
LARGEST 3D-PRINTED SHIP FITTING GIVEN GREEN LIGHT
On 14 September, Ship Insight reported that Singapore-based Keppel Technology & Innovation (KTI) has received a verification certificate for a 3D-printed deck mounted type Panama Chock (SWL150 ton) in Singapore. The component is the world’s largest 3D-printed shipboard fitting. It explains that Panama Chocks are large shipboard fittings for towing and mooring, traditionally manufactured by casting, and are welded to a ship as a supporting hull structure.
MOLDOVAN BORDER POLICE DETAIN AN AIRCRAFT WITH 3 UKRAINIAN NATIONALS BELIEVED TO HAVE BEEN HEADING FOR ROMANIA TO SMUGGLE CIGARETTES
On 14 September, Urdu point reported that the aircraft, which had departed Ukraine for Romania, carried 3 Ukrainian nationals, who were also detained.
TRAFFICKERS BUSTED USING ‘NARCO-SUBMARINE’ TO SMUGGLE $95 MILLION IN COCAINE
On 14 September, the Latin Times reported that Colombian drug traffickers have been busted using a “narco-submarine” to smuggle thousands of kilograms of cocaine worth over $95 million to a cartel in Mexico. The defendants reportedly belong to a criminal organisation that builds and maintains narco-submarines used to send cocaine from Colombia into the Pacific Ocean. The cocaine packages are then collected by members of the Sinaloa Cartel in Mexico. 3 such vessels containing cocaine en route to Mexico from Colombia were intercepted by the US in international waters between July 2015 and March 2016. Several men have been arrested in connection with these operations and extradited to the US.
ALGERIA CHARGES EX-TUNISIA PRESIDENTIAL CANDIDATE WITH SMUGGLING MIGRANTS
On 14 September, the Middle East Monitor reported that the Algerian judiciary has charged former Tunisian presidential candidate, Nabil Karoui, and his lawmaker brother, Ghazi, of smuggling migrants and entering the country illegally. It is said that the Karoui brothers have been investigated in money laundering and tax evasion cases since 2017.
MALTA: 4 CHARGED WITH LAUNDERING DRUG MONEY THROUGH SPORTS BETTING
On 14 September, Malta Today reported that 4 men have been remanded in custody on charges of laundering some €21,000 of drug money through sports betting.
EU IS PLANNING TO ASK COMPANIES SELLING PRODUCTS IN THE EU SUCH AS PALM OIL, SOYA OR COFFEE TO PROVE THAT THEY ARE NOT CONTRIBUTING TO DEFORESTATION – BUT LAW OMITS FRAGILE GRASSLANDS AND WETLANDS
On 14 September, the EU Observer and EurActiv reported on leaked documents, saying that the European Commission has pledged to introduce a law linked to deforestation but campaigners said a leaked impact assessment reveals “significant omissions” in the plans, including the exclusion of endangered grasslands and wetlands, as well as products that raise environmental concerns, such as rubber and maize.
IRANIAN TANKER SPOTTED IN SYRIA DISCHARGING DIESEL FOR LEBANON
On 14 September, L’Orient Today reported that an Iranian tanker is discharging diesel in Syria’s Baniyas port which is destined for neighbouring Lebanon. Unable to deliver directly by sea to Lebanon the vessel went instead to Baniyas in Syria for land transfer.
UK NOTICE TO EXPORTERS 2021/12: THE NEW EU DUAL-USE REGULATION
On 14 September, the Department for International Trade published a new Notice to Exporters saying that the new EU dual-use Regulation EU 2021/821 is now in force in Northern Ireland (which, although part of the UK, remains a part of the EU customs territory under the Brexit agreement). New applications for dual-use items from Northern Ireland will need to comply with this Regulation.
UK: THE BORDER OPERATING MODEL FOR IMPORTS
On 14 September, the Cabinet Office published an updated guide on how the border with the EU will work after the transition period ended on 31 January. Traders and hauliers must take the steps outlined in the Border Operating Model.
CONSULTATION ON IMPLEMENTING THE UK IVORY ACT: SUMMARY OF RESPONSES AND GOVERNMENT RESPONSES
On 14 September, DEFRA published a summary of responses to the consultation on the implementation of the Ivory Act 2018 (the “Act”). The consultation ran from 9 March to 4 May. This document also sets out the Government’s response to the consultation. Respondents included those involved in the antiques trade, museums and galleries, professional musicians and music sector organisations, and NGO focussed on wildlife and conservation.
ILLEGAL GAMBLING OPERATION ACROSS 28 COUNTRIES SEES 1,400 ARRESTS AND SEIZURE OF $7.9 MILLION IN CASH
A news release from Interpol on 14 September advised that during the UEFA European Football Championship hundreds of specialized officers across 28 countries were targeting organised crime groups looking to earn millions from illegal gambling and related money laundering activities. Operation SOGA VIII (short for soccer gambling) led to thousands of raids and the arrest of some 1,400 suspects across Asia and Europe. Authorities seized $7.9 million in cash, as well as computers and mobile phones connected to nearly $465 million in bets. Participating countries were Austria, Azerbaijan, Bahrain, Belgium, Brunei, Cambodia, China, Croatia, Czech Republic, Finland, France, Germany, Hungary, India, Ireland, Italy, Malaysia, Maldives, Philippines, Poland, Portugal, Romania, Russia, Singapore, Spain, Switzerland, UK, Vietnam.
US CUSTOMS OFFICERS SEIZE $57 MILLION IN COUNTERFEIT DESIGNER WATCHES
On 13 September, WTQV reported that US Customs and Border Protection officers assigned to the Port of Louisville had seized 32 separate shipments containing counterfeit designer watches worth $57.84 million. A total of 2,168 designer watches determined to be counterfeit originated from Hong Kong and were destined for several addresses across the US.
FINNISH CUSTOMS DETECT PROHBITED ETHYLENE OXIDE IN FOODSTUFFS
On 13 September, the Helsinki Times reported that controls by Customs detected ethylene oxide in several foodstuffs. During monitoring, ethylene oxide was found in five lots of seeds and nut products. Ethylene oxide was found in sesame seeds, nut products containing sesame seeds as well as in ecological psyllium powder.
AFGHANISTAN: TERRORIST SANCTIONS REGIME – AN ANALYSIS
On 14 September, an article from the Eurasia Review said that at least 17 of these 33 members of the new interim government are individuals included in the UN Security Council (UNSC) Consolidated List.
SOUTH AFRICA RAISES PROFILE AS COCAINE TRAFFICKING HUB
On 14 September, an article from Insight Crime reported that South Africa has made a rapid succession of large cocaine seizures in recent months, illuminating how the country and region now play a significant role as transit points for Latin American cocaine. It also says that local media has identified the suspected head of the recently dismantled cocaine syndicate as an Israeli national and known fugitive with an Interpol Red Notice issued in Belgium for cocaine trafficking. Most of the cocaine then transits onwards, facilitated by the country’s excellent transport infrastructure, high-level police corruption and resource shortages in the area of drug control.
IS THE DOMINICAN REPUBLIC MAKING GAINS IN ANTI-CORRUPTION FIGHT?
On 13 September, Insight Crime posed this question after the dismantling of a drug trafficking and money laundering network implicating government officials, with the 20 officials arrested including Juan Maldonado Castro, the head of Comunidad Digna (Dignified Community), a government-run organization fighting poverty.
UK DATA PROTECTION LAW REFORM ADVOCATES RISK-BASED ‘PRIVACY MANAGEMENT’
An article from Out-Law on 10 September said that post-Brexit UK Government plans to strip a series of “administrative burdens” from data protection law include a move that would enshrine the concept of more flexible, risk-based ‘privacy management’ into legislation.
SURVEY: ILLICIT ACTIVITY AFFECTS UK BUSINESS CONFIDENCE DESPITE CONFIDENCE IN UK CONTROLS
A release on Mondo Visione on 14 September advised that a survey by Kroll has revealed that companies in the UK are some of the most confident when it comes to their bribery and corruption risk strategies, yet illicit activity persists. Its Global Fraud and Risk Report shows that the majority of UK respondents agreed that bribery and corruption risk was given sufficient board-level attention in their organisation and that they were more confident in their internal record-keeping (only 24% ranked it as their top internal threat compared to 31% globally). Additionally, firms in the UK were more likely to be using data analytics to proactively detect bribery and corruption risk (92% vs. 86% globally). However, they are less likely to have conducted an enterprise-wide bribery and corruption risk assessment in the last 5 years, highlighting that almost a quarter are not capturing the full picture of risks facing their business at any one time.
COLOMBIAN-AUSTRALIAN CRYPTO GROUP SUES COMMONWEALTH BANK OVER SCAM WARNING
On 13 September, the Sydney Morning Herald reported that the bank has been accused of defaming a Colombian-Australian remittance service – Colcambios Australia – using cryptocurrencies, after the bank told its customers using the service they were possible victims of a scam before closing their accounts.
RISK OF DETENTION FOR ANCHORING IN INDONESIAN WATERS
On 14 September, Hellenic Shipping News reported that there has been a rise in the number of vessels detained in Indonesian waters by the Indonesian Navy, particularly in the area east of Bintan Island. These waters are close to major shipping lanes and are sometimes mistakenly taken for the outer port limits of Singapore.
BERMUDA: CRYPTOCURRENCY EXECUTIVE AGREES TO EXTRADITION TO FACE US MONEY LAUNDERING CHARGES
On 14 September, the Royal Gazette reported that an Australian cryptocurrency executive living in Bermuda – Gregory Dwyer, a senior employee at the cryptocurrency derivative exchange platform BitMEX – has agreed to be extradited to the US to face charges in connection with alleged money laundering. An indictment in October 2020 alleged that the firm’s exchange was used by hackers to launder stolen money and by people in countries under US sanctions, including Iran; that it solicited and accepted customers in the US, despite not being registered with the CFTC; and that it continued to try and attract US business after it incorporated itself in the Seychelles in an attempt to avoid US oversight.
US: 14 DEFENDANTS INDICTED, INCLUDING THE ENTIRE ADMINISTRATION OF THE COLOMBO ORGANISED CRIME FAMILY
A news release from the US DoJ on 14 September advised that a federal court in New York has unsealed a 19-count indictment charging 14 defendants, including 10 members and associates of the Colombo crime family of La Cosa Nostra and a member of the Bonanno organised crime family, with various offenses including labour racketeering involving multiple predicate acts of extortion conspiracy, attempted extortion and extortion, extortionate collection of credit conspiracy, extortionate collection of credit and money laundering conspiracy.
GAMBLING STOCKS TUMBLE AS MACAU LAYS PLANS TO INCREASE SCRUTINY
On 14 September, BNN Bloomberg reported that casino stocks fell in the US after Macau laid plans to step up scrutiny of operators and increase local ownership, signalling tighter control over the world’s largest gambling hub amid Chinese efforts to clamp down on money laundering and currency outflows. It says that authorities also proposed increasing scrutiny on so-called junkets that service high-rollers and extend credit to them, including raising entry barriers for junket operators as well as allowing background checks. This is part of an ongoing clampdown on so-called VIP punters in Macau over concerns that the high-stakes betting there, in convertible Hong Kong dollars, can be an illicit channel of currency outflow and money laundering.
UK LAW COMMISSION ANNOUNCEMENT RE DIGITAL TRADE DOCUMENTS COULD BE TIPPING POINT
On 14 September, Insurance Marine News reported that law firm Reed Smith has said that a recent announcement by the Law Commission with regard to the acceptability of digital trade documents could turn out to be a tipping point for the growing acceptance of electronic bills of lading and other shipping trade documents. The statement was made during a webinar on technological developments in the shipping industry – part of London International Shipping Week 2021.
RANSOMWARE LESSONS FOR A NATION HELD HOSTAGE
On 12 September, an article on Lawfare says that while the ransomware phenomenon is quite new, ransoms themselves are not new, and, indeed, the US has a long track record on this painful issue. In the article, the Air Force Academy’s Danielle Gilbert examines ransomware with this track record in mind, drawing on the history of hostage-taking to identify ways to manage this problem.
WHERE DID THE $5 TRILLION SPENT ON AFGHANISTAN AND IRAQ GO?
On 11 September, the Guardian carried an article posing this question, and saying that private military contractors outnumbered US troops on the ground during most of both conflicts, while defence industry stocks soared. In Iraq and Afghanistan, the US military relied to an unprecedented degree on private contractors for support in virtually all areas of war operations. Contractors supplied trucks, planes, fuel, helicopters, ships, drones, weapons and munitions as well as support services from catering and construction to IT and logistics. The article says that, by Summer 2020, the US had 22,562 contractor personnel in Afghanistan – roughly twice the number of US troops. Not even the financial crisis of 2008 could interrupt the spending spree.
A COMPLEX COMPLIANCE TASK: MITIGATING UBO RISK IN THE GULF REGION
On 31 August, a blog post from Windward says that, according to FATF, the UAE has 39 different company registries. Many of these exist to help promote economic growth in the various free trade zones (FTZ). However, it says, the expansion of the FTZ and the country’s myriad of company registries have created ample opportunity for exploitation. Complex company structures and unidentified third parties are employed by bad actors to conceal illicit funds and trade-based money laundering (TBML) schemes. It does conceded that countries in the Gulf have recently introduced a range of measures to strengthen their efforts to manage risk, including UBO requirements. The article is concerned with the used of concealed ownership of vessels
THE BIMCO THE AIS SWITCH-OFF CLAUSE
A blog post from Windward on 26 August was concerned with a new clause released by BIMCO – one of the largest of the international shipping associations representing shipowners – concerning AIS manipulation. In 2020, OFAC had issued an advisory stating that the shipping industry should develop provisions “in the form of an AIS ‘switch-off’ clause”, with the intention was that it would help shipowners, charterers, and operators to block high-risk business. The new clause is designed to be incorporated into shipping contracts. The clause recognises that there may be legitimate reasons for the interruption of a ship’s AIS signal, so for a charterer to terminate the charter party for a breach of the SOLAS Guidelines on use of AIS by an owner, the charterer will have to prove that there was intent by the owner to hide the signal.
WHO IS ALESKANDR FRANCHETTI, THE RUSSIAN ARRESTED IN PRAGUE AND WANTED BY UKRAINE FOR HIS ACTIONS IN CRIMEA?
On 14 September, Rferl reported that in Prague information about the middle-aged Russian man arrested for his alleged actions during Moscow’s seizure of Crimea in 2014 is hard to come by. However, the article seeks to provide the detail.
3 FLORIDA RESIDENTS HAVE BEEN CHARGED IN MIAMI FOR ALLEGED VIOLATIONS OF US SANCTIONS ON IRAN AND MONEY LAUNDERING
A news release from US DoJ on 14 September advised that Mohammad Faghihi, 52, his wife Farzeneh Modarresi, 53, and his sister Faezeh Faghihi, 50, operated Florida company Express Gene. It is alleged that between October 2016 and November 2020, Express Gene received numerous wire transfers from accounts in Malaysia, China, Singapore, Turkey, and UAE, totalling almost $3.5 million. It is alleged that some of the money received was used by Express Gene and its principals to purchase genetic sequencing equipment from US manufacturers and ship them to Iran without a license from OFAC.
US COURT JAILS GHANAIAN FOR 40 MONTHS FOR INTERNET FRAUD
On 14 September, the People’s Gazette reported that Richard Yaw Dorpe, 37, has been convicted after the FBI indicted him of crimes including money laundering, romance scams and other fraudulent schemes targeted at US senior citizens. He was extradited from Ghana in January.
Any modest contributions for my time and ongoing expenses are welcomed! I have a page where you can do so, and where one-off contributions start as low as $3, at https://www.buymeacoffee.com/KoIvM842y