OTHER THINGS YOU MAY HAVE MISSED – SEPTEMBER 16

Panama Covid-19 update – the EU has said that it will recognise the digital vaccination certificates issued in Panama, so now we can at least travel to France, Spain etc. Perhaps not the UK, however, as Panama remains on its Red List. Interestingly, today it was reported that Panama’s own Red List of 20 high-risk countries’ travellers also includes the UK (as well as notably the US as well), although other Western European countries (if you don’t count Greece) are not on the list, which says something, I guess.

Incidentally, I noticed that all the staff inside the British Embassy today appeared to be wearing masks, something I am not sure would see in all offices in the UK itself (despite the UK perhaps being in reality a higher risks place than Panama).

Meanwhile, today sees a further fall in active cases, but alongside a further 373 new cases and 6 new fatalities (plus a further death added to totals that occurred earlier). There are now 4,327 active cases, with 72 in ICU and 232 in other wards.

16 SEPTEMBER 2021

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FORMER CRYPTOCURRENCY FUND MANAGER SENTENCED TO 7½ YEARS IN PRISON

On 15 September, the Wall Street Journal reported that Stefan Qin, 24, a cryptocurrency hedge-fund manager who lied about returns on his $90 million fund and siphoned money from its accounts to cover a lavish lifestyle was sentenced to 7½ years in prison.  Prosecutors said he ran the fund, Virgil Sigma Fund LP, like a Ponzi scheme for 3 years until its implosion in late 2020.

https://www.wsj.com/articles/ex-cryptocurrency-fund-manager-sentenced-to-7-years-in-prison-11631736989

GLENCORE: CORRUPT OIL TRADER TURNS ON COLLEAGUES IN AFRICA BRIBERY CASE

On 16 September, KYC360 reported on Anthony Stimler, who left Glencore PLC in 2019, who is now helping a US DoJ investigation into the company and numerous former colleagues and concerning corruption in the extraction and trading of commodities.

https://kyc360.riskscreen.com/news/corrupt-oil-trader-turns-on-colleagues-in-massive-africa-bribe-case/

FINANCIAL CRIME, PAYMENT FRAUD AND THE ROLE OF DIGITAL IDENTITY

Refinitiv has produced this White Paper which draws on the support of key industry stakeholders and subject matter experts to provide an overview of the current landscape, emerging threats and insights into how fraud controls can be improved.  It looks at the current situation and emerging threats, current limitations and new technologies, the role of digital identities, collaboration and data-sharing, and challenges and barriers to combatting the threats.

https://resourcehub.refinitiv.com/436593globalthirdpartyrisk/436593-Risk-PaperEPAFinCrime

WHAT’S THE DIFFERENCE BETWEEN BLACKMAIL AND EXTORTION?

On 15 September, an interesting article from Hassan Elhais in the UAE posed this question, and explained how to distinguish between the two types of crime.

https://www.mondaq.com/crime/1110968/what39s-the-difference-between-blackmail-and-extortion

DEEP FAKE AUDIOS AND VIDEOS: A HUGE RISK TO ANY COMPANY – “SEEING IS NO LONGER BELIEVING”

On 15 September, a 40-minute video webinar from AML Grey Matters said that some companies have already fallen victim to a fake audio of a CEO requesting significant funds to be wired urgently.  With some private banks and wealth managers having policies to arrange wires on behalf of their clients without a second sign-off after a phone call and an email – something which can be easily faked if a client or company becomes a target.

https://www.youtube.com/watch?v=BoMTh1G3MTc&list=PLvyP7E7vlqPlkpw4VS0EIn3tsGQyjQjXc&index=3&t=10s

https://www.statista.com/chart/25782/working-hours-needed-at-minimum-wage-to-escape-poverty

US: 8 PEOPLE CONVICTED OF EXPORT OFFENCES DENIED EXPORT PRIVILEGES

The EU Sanctions blog reported on 16 September, the Department of Commerce’s Bureau of Industry and Security has issued orders denying export privileges to 8 people who were all separately convicted of export violations between August 2018 and February 2020. Those affected have been denied export privileges for periods of between 5 and 10 years from the date of their convictions.

https://www.europeansanctions.com/2021/09/8-people-convicted-of-export-violations-denied-export-privileges-by-bis/

EU PARLIAMENT RESOLUTION CALLS FOR A NEW EU STRATEGY TO PROMOTE DEMOCRACY IN RUSSIA AND CHANGES TO THE EU SANCTIONS ON RUSSIA

On 16 September, a news release from the EU advised that MEP had adopted a resolution saying that the EU must distinguish between the Russian government and the Russian people, step up work with partner countries and civil society to strengthen pro-democracy tendencies in Russia, and impose sanctions, when necessary, counteract the flow of dirty money and support human rights activists.

https://www.europarl.europa.eu/news/en/press-room/20210910IPR11925/meps-call-for-new-eu-strategy-to-promote-democracy-in-russia

EU PARLIAMENT SETS OUT ITS VISION FOR A NEW EU STRATEGY ON CHINA

On 16 September, the EU Parliament announced it had adopted a new report on relations with China which, inter alia, said that the EU should address  human rights violations in Xinjiang, Inner Mongolia, Tibet and Hong Kong; more  resources were needed to monitor and tackle Chinese disinformation; China should allow independent investigation into origins and spread of COVID-19; and, where 5G and 6G networks are involved, one should exclude companies that do not fulfil security standards

https://www.europarl.europa.eu/doceo/document/TA-9-2021-0382_EN.pdf

https://www.europarl.europa.eu/news/en/press-room/20210910IPR11917/parliament-sets-out-its-vision-for-a-new-eu-strategy-on-china

UK FINANCE REPORT ON THE FINANCIAL CRIME RISKS FROM CRYPTOASSETS

On 16 September, a release on Mondo Visione advised that UK Finance (a trade association for the UK banking and financial services sector), in conjunction with financial crime compliance firm Plenitude, had released a report looking at the financial crime risk posed by cryptoassets and how to manage it appropriately.  It is said that the report aims to support financial institutions as they navigate the transitional period as countries move to regulate cryptoassets’ AML/CFT measures.  It also considers how the financial and cryptoasset sectors could partner and work together on a more collaborative basis.

https://www.ukfinance.org.uk/system/files/Cryptoassets-report-FINAL.pdf

IMF WARNINGS TO VANUATU ON AML/CFT AND EU BLACKLISTING

On 16 September, Market Screener reported that an Article IV report by the IMF on Vanuatu included a warning that risks for Vanuaru are substantial and “tilted to the downside”.  This is despite strong receipts of the Economic Citizenship Programs (ECP) and donor support which have helped mitigate the impact of the pandemic on fiscal and external balances.  However, recent hurricane and volcano damage, plus the pandemic have seen threats to the economy grow, with growing concerns on risks to the ECP with the recent loss of a key correspondent banking relationship.  Lack of transparency and effective supervision framework for state enterprises could negatively affect the business environment and fiscal management. Issues concerning AML/CFT and EU blacklisting related to tax transparency could accelerate de-risking by foreign firms and impede foreign direct investment.  These are said to be in addition to the ever-present risk related to further natural disasters.

https://www.marketscreener.com/news/latest/Vanuatu-2021-Article-IV-Consultation-Press-Release-Staff-Report-and-Statement-by-the-Executive-D–36444546/

TAKING CASH IN AND OUT OF THE UK

A reminder that changes have been made to controls on the import and export of cash (of €10,000 or more) following the end of the Brexit transition period.  You must declare cash of £10,000 or more to UK customs authorities if you carry it between Great Britain (England, Scotland and Wales) and another country. You must also declare cash of £10,000 or more if you carry it from Great Britain to Northern Ireland – but you do not need to declare any amount of cash if you’re carrying it from Northern Ireland to Great Britain.  You must declare cash of €10,000 or more if you carry it between Northern Ireland and any non-EU country, but you do not need to declare cash if you’re carrying it between Northern Ireland and an EU country.  You must declare cash of £10,000 or more if you carry it from Great Britain to Northern Ireland, but you do not need to declare any amount of cash if you’re carrying it from Northern Ireland to Great Britain.

[Well, that’s quite straightforward, isn’t it?  Just like most post-Brexit arrangements…]

https://www.gov.uk/bringing-cash-into-uk

https://www.gov.uk/government/publications/notices-to-be-made-under-the-cash-controls-amendment-eu-exit-regulations-2019

ITALY HAS INFRINGED EU LAW BY EXEMPTING FROM EXCISE DUTY FUELS USED FOR PRIVATE PLEASURE CRAFT, CHARTERED AND USED BY END USERS FOR NON-COMMERCIAL ACTIVITIES

A news release from the EU Courts on 16 September advised of judgment in a case, saying that the fact that the chartering of a vessel constitutes a commercial activity for the person making that vessel available to another does not justify the tax exemption in question.

https://curia.europa.eu/jcms/upload/docs/application/pdf/2021-09/cp210157en.pdf

ARMENIA AND EUROPOL SIGN AGREEMENT TO COMBAT CROSS-BORDER SERIOUS ORGANISED CRIME

On 16 September, a news release from Europol advised that it and Armenia have signed a strategic cooperation agreement to expand cooperation to combat cross-border criminal activities. The agreement will enable both partners to work on some key areas such as migrant smuggling, cybercrime, drug trafficking, asset recovery, money laundering, organised property crime and trafficking in human beings.

https://www.europol.europa.eu/newsroom/news/armenia-and-europol-sign-agreement-to-combat-cross-border-serious-organised-crime

FATF PUBLISHES CHILE AML/CFT MUTUAL EVALUATION REPORT

On 16 September, FATF published the report already released by FATF-style regional body, GAFILAT.

https://www.fatf-gafi.org/publications/mutualevaluations/documents/mer-chile-2021.html

DEMOCRATIC REPUBLIC OF THE CONGO (SANCTIONS) (EU EXIT) (AMENDMENT) REGULATIONS 2021

These UK regulations amend the legislation implementing the relevant UN sanctions in the UK and come into force on 7 October.

https://www.legislation.gov.uk/uksi/2021/1041/contents/made

DoJ ANNOUNCES MADOFF PONZI SCHEME VICTIM PAYOUTS HAVE REACHED $3.7 BILLION

On 16 September, the Washington Examiner reported that the DoJ has announced on that the Madoff Victim Fund began distributing $568 million in additional pay outs to those affected by the Bernard L Madoff Investment Securities LLC (BLMIS) fraud scheme, marking the seventh distribution the MVF has made.  This brings the total amount of MVF’s distribution to $3.7 billion, with the goal of reaching the approximately $4 billion that victims lost from the collapse of BLMIS.

https://www.washingtonexaminer.com/news/madoff-victim-fund-distributes-568-million-to-victims

UK: TOP SPORTS LAWYER DENIES CENTRAL ROLE IN FOOTBALL TRANSFER PAYMENTS

On 16 September, the Law Society Gazette reported that the lawyer said that she should not be held responsible for historic payments made to third parties which allowed football transfers to go through.  She is alleged – along with the London firm at which she worked – to have caused the client account to be used as a banking facility for 5 transactions from 2011 to 2013, and was answering the allegations before the Solicitors Disciplinary Tribunal.

https://www.lawgazette.co.uk/news/top-sports-lawyer-denies-central-role-in-football-transfer-payments/5109825.article

KENYAN EX-MINISTER SENTENCED FOR OLYMPICS GRAFT

On 16 September, the Daily Mail reported that a Kenyan court has sentenced former sports minister Hassan Wario to 6 years in jail, or to pay a hefty fine after being convicted of embezzlement at the Rio Olympics.  He was one of 6 Kenyan officials charged with abuse of office and the misappropriation of $545,000 during the Rio Games in 2016.

https://www.dailymail.co.uk/wires/afp/article-9997861/Kenyan-ex-minister-given-hefty-sentence-Olympics-graft.html

WHAT DOES THE FUTURE HOLD FOR THE UK’S MONEY LAUNDERING REGULATIONS?

On 16 September, a Commentary from RUSI posed this question, saying that the UK government is reviewing its Money Laundering Regulations, and it is not alone.  Around the world AML regimes are evolving – how will the UK’s compare? In In July 2021, a further action was added to the country’s Economic Crime Plan – Action 33, which calls for a review of the UK’s Money Laundering Regulations and the Office of Public Body Anti-Money Laundering Supervision (OPBAS) Regulations.

https://rusi.org/explore-our-research/publications/commentary/what-does-future-hold-uks-money-laundering-regulations

27 SEPTEMBER DEADLINE LOOMING FOR EU STANDARD CONTRACTUAL CLAUSES (SCC)

On 16 September, an article from Alston & Bird reminded one that on 4 June, the European Commission issued modernised SCC under the GDPR for data transfers from controllers or processors in the EU/EEA (or if otherwise subject to the GDPR) to controllers or processors outside the EU/EEA (and not subject to the GDPR).  From 27 September, the modernised SCC will replace the 3 sets of SCC that were adopted under the 1995 Directive that was the predecessor of the GDPR.

https://www.alstonprivacy.com/september-27-deadline-looming-for-eu-standard-contractual-clauses/

UK: NEW EXPERT GROUP TO INCREASE CONFIDENCE AND STANDARDS IN E-SIGNATURES

A news release from the MoJ on 16 September advised of the establishment of an industry working group of experts to improve standards, reliability and security in electronic signatures.  It will seek to improve standards, reliability and security in electronic signatures and other means of legally executing documents, and to address best practice in this area.

https://www.gov.uk/government/news/new-expert-group-to-increase-confidence-and-standards-in-e-signatures

TAX LOST IN UK AMOUNTS TO £35 BILLION – ALMOST HALF, SAY CAMPAIGNERS, DUE TO FRAUD

On 16 September, the Guardian reported that HMRC has said that said the tax gap – the difference between the expected income for the exchequer and actual receipts – was estimated to have jumped by about £2 billion in the 2019-20 financial year from the period a year earlier.  It said the figure represented a 5.3% shortfall of theoretical tax liabilities due, compared with 5% in 2018-19.  Campaigners said the amount of tax lost to fraud was at least £15.2 billion, but that billions of pounds more were likely to have been shifted away from the UK to tax havens by multinational companies.

https://www.theguardian.com/politics/2021/sep/16/tax-lost-in-uk-amounts-to-35bn-almost-half-say-campaigners-due-to

SOUTH KOREA BECOMES TRANSIT POINT FOR MEXICAN METHAMPHETAMINE

On 16 September, Insight Crime reported that a ton of Mexican methamphetamine found in South Korea and suspected of being bound for Australia has shown how Mexican synthetic drugs continue to make inroads in the Asia-Pacific.  Korean outlets have reported at least some of the drugs were destined for the domestic market.  Mexican methamphetamine is globalizing, with increasingly large quantities appearing not just in Europe but also Australia and East Asia.

https://insightcrime.org/news/south-korea-becomes-transit-point-mexican-methamphetamine/

NDA BREACH AND PROTECTING YOUR SENSITIVE INFORMATION: WHAT IS THE POSITION AFTER BREXIT?

An article from Eversheds Sutherland on 16 September reviewed the situation, pointing out that a non-disclosure agreement (NDA) only has teeth if the provider of the confidential information is able to get urgent relief to compel the recipient of their confidential information from misusing it.  It asks what the apparent loss of interim or final injunctions obtained in England having effect throughout the EU.  It sets out some key factors to consider from a dispute resolution perspective when entering into NDA in a post-Brexit world.

https://www.eversheds-sutherland.com/global/en/what/articles/index.page?ArticleID=en/Brexit/Breach_of_Non-Disclosure_Agreements

IRISH REVENUE PUBLISHES LATEST LIST OF TAX DEFAULTERS

On 14 September, the Revenue Commissioners published the latest list of tax defaulters and covering the period 1 April to 30 June. 

https://www.revenue.ie/en/corporate/press-office/press-releases/2021/pr-091421-revenue-list-tax-defaulters.aspx

TRANSPARENCY INTERNATIONAL ANNUAL IMPACT REPORT AND ACCOUNTS 2020-21

Transparency International’s report includes a focus on corruption in the UK, saying that the organisation has seen momentum growing considerably this year towards achieving our long-term goals of beneficial ownership registers across the UK and its territories, as well as increased corporate transparency.  Looking ahead, it says that its objectives in the short term includes advocating for increased corporate transparency, pursuing change that discourages business from facilitating corrupt practices globally, and advancing accountability.  It also refers to continuing to work towards transparency, and highlighting the devastating impact of corruption on health care and its dangerous links to conflict and insecurity.

https://www.transparency.org.uk/sites/default/files/pdf/publications/Transparency%20International%20UK%20Annual%20Imapct%20Report%20and%20Accounts%20ye%2031%20March%202021.pdf

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SWITZERLAND: CORRUPTION FOR DUMMIES

On 14 September, the human rights group in Switzerland, Public Eye, has developed a satirical handbook for white collar criminals, in an effort to demonstrate the shortcomings of the Swiss systems.  Citizens are also invited to “bribe” the Swiss Minister of Finance to convince him to combat corruption.

https://www.publiceye.ch/en/media-corner/press-releases/detail/corruption-for-dummies-public-eye-offers-advice-to-kleptocrats-on-how-to-best-use-swiss-financial-services

The handbook is at –

https://swisscorruption.ch/en/

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HOME OFFICE PLANS FOR THE HIGH SEAS IN THE NATIONALITY AND BORDERS BILL

advised that the Nationality and Borders Bill contains new maritime enforcement powers, as the Home Office seeks to extend its activity, beyond the UK territory, beyond UK territorial waters, and into international waters and into foreign waters. In so doing it seeks powers to stop, board, divert, and detain foreign ships and ships without nationality.  It explains the current legislation allowing immigration action at sea, initially dating from a 2016 Act [I recall a Border Force cutter commander complaining that, at the time, having been diverted from anti-smuggling they had no powers to act against a vessel suspected of carrying illegal immigrants until they or the vessel touched UK soil…].

Currently, broadly speaking, immigration powers – in relation to UK waters as regards a UK ship, a ship without nationality, a foreign ship, and a ship registered under the law of another British territory (e.g. the Isle of Man) can only to be exercised for the purpose of preventing, detecting, investigating or prosecuting various immigration-related criminal offences. 

The new Bill seeks to modify existing maritime enforcement powers and to add new ones. These include the ability to act in foreign or international waters.  In addition, the definition of “ship” is broadened so as to encompass even the small inflatable and other flimsy craft that might be involved.  The Bill also includes new powers to seize and dispose of a ship and its property where there are reasonable grounds to suspect that it has been used in the commission of a relevant immigration-related criminal offence and the ship is in UK waters or otherwise in the UK. 

The author of the article asserts, rightly, that the proposede powers raise issues as to their compatibility with international law commitments by which the UK is bound, such as international maritime law, human rights law, and the Refugee Convention. Those issues are important and deserve discrete consideration.

https://www.ein.org.uk/blog/footsteps-sir-francis-drake-home-office-plans-seas-nationality-and-borders-bill

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FATF: AML/CFT CONSOLIDATED ASSESSMENT RATINGS

On 16 September, following the issue of the mutual evaluation report for Chile, FATF has released an updated consolidated schdule of all AML/CFT ratings to date.

https://www.fatf-gafi.org/media/fatf/documents/4th-Round-Ratings.pdf

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IRANIAN ILLICIT PROCUREMENT SCHEME TO ACQUIRE CONTROLLED SPECTROMETRY SYSTEMS

On 16 September, the Institute for Science and International Security in the US published a paper on a recent case where the German Federal Prosecutors Office issued an arrest warrant for a German-Iranian citizen who is accused of illegally exporting a multitude of laboratory equipment, including 4 spectrometers, in 3 separate cases, to Iran.  It says that, given the nature of the items involved, the Iranian procurements violated not only German law and EU sanctions Regulations, but appear to have also violated the regulations of the procurement channel of the Joint Comprehensive Plan of Action (JCPOA).  Referring also to earlier cases, it says that the recent case highlights the continued effort of Iran to break trade control laws and sanctions of other countries to procure items for its nuclear and ballistic missile programmes, and that Iran continues to actively recruit sympathetic or persuadable individuals to acquire commodities for its sensitive programmes. It also highlights that Iran continues to lack the domestic capability to produce certain sophisticated measuring equipment and analytical instruments, such as spectrometry systems essential for a uranium enrichment program, and thus, is forced to seek these items elsewhere.

https://isis-online.org/uploads/isis-reports/documents/Iranian_Illicit_Procurement_Scheme_of_Spectrometry_Systems_Busted_September_16_2021_Final.pdf

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OFAC DESIGNATES AL-QAIDA FINANCIAL NETWORK IN TURKEY

On 16 September, OFAC announced that it had designated 4 Turkish and an Egyptian national operating in Turkey and who provided a range of financial and travel facilitation services to al-Qaida. 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20210916_33

https://home.treasury.gov/news/press-releases/jy0358

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OFAC SANCTIONS SIGNIFICANT DRUG TRAFFICKING ORGANISATION

On 16 September, OFAC announced that it had identified Zulma Maria Musso Torres (Musso Torres) as a significant foreign narcotics trafficker pursuant to the Foreign Narcotics Kingpin Designation Act.  Musso Torres (aka “La Patrona” or “La Señora”) is the leader of an international drug trafficking organisation (DTO) primarily based in Santa Marta, Magdalena, Colombia.  OFAC has designated members of his organisation, which includes his 2 sons and 2 Colombian entities – Exclusive Import Export SAS and Poligono Santa Marta SAS.

https://home.treasury.gov/system/files/126/20210916_musso_torres_chart.pdf

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20210916

UK: CHAMPERTY AND LITIGATION FUNDING

On 15 September, an article from Omni Bridgeway was concerned with a recent case in England involving the question of champerty and of funding assigned claims held in a special purpose vehicle (SPV), possibly owned by the funders themselves.  It explains champerty and the associated common law rule of maintenance, saying that a person is guilty of maintenance if he supports litigation in which he has no legitimate concern without just cause or excuse, and that champerty occurs when the person maintaining another seeks a share of the proceeds of the action.  It says that people speak of champerty being an aggravated form of maintenance.  It explains that the case law regarding maintenance and champerty is really anchored in the decision of the House of Lords in a 1994 case.  It observes that champerty and maintenance issues that are specific to the common law are to be contrasted with the approach taken by civil law legal systems, where no such rules exist, but where one relies simply on the more general legal doctrines underlying tortious acts, i.e. fairness and reasonableness. 

https://omnibridgeway.com/insights/blog/blog-posts/blog-details/global/2021/09/15/champerty-pops-up-again!

 

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CORPORATE CRIMINAL LIABILITY AND A RESPONSE TO THE UK LAW COMMISSION’S DISCUSSION PAPER – PART 1: SOME POINTS OF PRINCIPLE

On 15 September, BCL Solicitors LLP published this article, explaining that the Law Commission had been tasked with considering options to reform the law on when and how companies should be held liable for criminal offences; and that earlier this year it published a discussion paper and invited responses to 13 questions.

https://www.mondaq.com/uk/corporate-crime/1111438/corporate-criminal-liability-a-response-to-the-law-commission39s-discussion-paper-part-one-some-points-of-principlehttps://www.mondaq.com/uk/corporate-crime/1111494/tom-mcneill-on-corporate-criminal-liability-video