On 25 September, the Brussel Times reported that grand corruption and state capture are still widespread in Ukraine despite EU action, according to a special audit report published by the European Court of Auditors (ECA). It is said that despite varied support the EU has offered to Ukraine, oligarchs and vested interests continue to undermine the rule of law in Ukraine and to threaten the country’s development. It is also said that, as regards petty corruption, it is important to solve it too but considering the amounts at stake, the focus has to be on grand corruption. Ukraine has taken some important steps since 2014 to raise levels of transparency and reduce the space for corrupt practices.
Day: September 25, 2021
Polish copper giant signs deal with US firm for small nuclear reactors
On 24 September, EurActiv reported that KGHM had signed a MoU with NuScale Power of the US for the development of at least 4 small nuclear reactors to power its plants. KGHM is one of the world’s biggest copper and silver producers and is the second largest consumer of electricity in Poland, which is the most coal-reliant country in the EU. Several Polish companies have signalled an interest in small nuclear reactor technology in recent months. The global nuclear industry is increasingly focusing its attention on small modular reactors (SMR), shifting away from bigger, more powerful structures.
Iran and Venezuela strike oil export deal
On 25 September, Devdiscourse reported that Venezuela has agreed to a key contract to swap its heavy oil for Iranian condensate that it can use to improve the quality of its tar-like crude, with the first cargoes due within a week. The deal between state-run firms Petroleos de Venezuela (PDVSA) and National Iranian Oil Company (NIOC) deepens the cooperation between the 2 countries – both subject to US sanctions.
OLAF report about John Dalli presented in his daughters’ money laundering case
On 24 September, the Times of Malta reported that a report by the European Anti-Fraud Office about former EU Commissioner John Dalli now forms part of the records of the money laundering case against his daughters. They were originally charged in 2018 alongside 4 foreign nationals with misappropriation of funds, fraud, making a false declaration to a public authority and falsification of documents, in connection with an alleged $600,000 Ponzi scheme, which saw elderly American investors lose all their funds.
OTHER THINGS YOU MAY HAVE MISSED- SEPTEMBER 24
Pnama Covid-19 update – 5 more fatalities reported today, with the total to date nearing 7,200 at 7,197. Another 265 new cases reported, but none where I am, I think. There are now 3,763 active cases, with 61 in ICU and 232 in other wards. Total reported cases to date come to 465,736, well over 10% of the estimated total population of the country.
Note – as you can probably guess, I am still on this quiet, and today quite wet, island. Very few people on the ferry this morning, but that will be different tomorrow, aspeople flock to the island for the weekend. Mindyou, I saw some people sitting under their sunshades on the beach in the rain today- like British holidaymakers back home sitting on the promenade and eating ice cream whilst watching the rain…
24 September 2021
HMRC Publishes Tax Gap Statistics for 2019/2020
In an announcement confusingly dated 27 September, KPMG reported that the latest report on the tax gap (i.e. the difference between the total amount of tax that should, in theory, be paid and the total amount of tax actually paid in the financial year) was published on 16 September. It says that the latest data shows the highest tax gap in three years and reverses an otherwise medium-term decline. The current reported data pre-dates the onset of the COVID-19 pandemic so its effect on the tax gap remains to be seen. The article briefly analyses the data.
EU Guidance on Dual-Use Export Compliance
On 24 September, the EU Sanctions blog reported that a new Recommendation from the EU Commission recommends that Member States and exporters take account guidance for compliance programs in relation to the new EU dual-use export Regulation. The guidance on the EU website includes that on internal compliance programmes (ICP).
El Salvador’s Bitcoin Folly
A commentary on the Project Syndicate website on 23 September asserts that while many aspects of cryptocurrencies are baffling, not least the success of a joke like Dogecoin, El Salvador’s recent adoption of Bitcoin as legal tender alongside the US dollar is perhaps the strangest and potentially most worrying example of all.
https://www.project-syndicate.org/commentary/el-salvador-dangers-of-adopting-bitcoin-as-legal-tender-by-jeffrey-frankel-2021-0-on-financial-crime/
US returns stolen ancient artifacts to Iraq in repatriation ceremony
A news release from US Immigration and Customs Enforcement on 24 September advised that the US had returned a rare cuneiform tablet bearing a portion of the epic of Gilgamesh, a Sumerian poem considered one of the world’s oldest works of literature, to the Republic of Iraq, following a US Customs investigation. The artefact came from modern day Iraq, was smuggled in the US and was subsequently seized, having been acquired by Hobby Lobby Stores Inc, an arts-and-crafts retailer based in Oklahoma City, for display at the Museum of the Bible.
https://www.ice.gov/news/releases/us-returns-stolen-ancient-artifacts-iraq-repatriation-ceremony
Philippines Implements New POGO Tax
On 23 September, iGB reported on a new law imposing additional taxes on Philippine Offshore Gaming Operators (POGO). It imposes a 5% tax on the gross gaming revenue of online gaming operators – who primarily target the Chinese market – while foreigners employed in online casinos and their service providers are now required to pay 25% income tax.
https://igamingbusiness.com/philippines-implements-new-pogo-tax
UK: Lottoland Operator fined £760,000 by Gambling Commission
On 23 September, iGB reported that the fine is for money laundering and social responsibility failings which occurred between October 2019 and November 2020, and the Commission has also issued the operator with a formal warning. The AML failings consisted of inadequate analysis of customer bank statements to verify an address, not restricting customer accounts following a source of funds request and allowing customers to register third-party debit cards to their account.
https://igamingbusiness.com/lottoland-operator-fined-760000-by-gambling-commission
EU Aims to Deny Tax Breaks to Multinationals With Shell Entities
On 23 September, KYC 360 reported that the EU will make an official proposal to deny companies tax benefits linked to the use of shell entities, a top tax official has said.
https://kyc360.riskscreen.com/news/eu-aims-to-deny-tax-breaks-to-multinationals-with-shell-entities/
1MDB Casts Shadow on Ex-Swiss Bank CEO’s Money-Laundering Trial
On 24 September, Bloomberg reported that Eduardo Leemann, the former boss of Falcon Bank, a defunct Zurich private bank that was mired in the multibillion-dollar 1MDB scandal, faces a trial accused of money laundering for a Gulf businessman involved in the affair. He is accused of using his position to launder €133 million in illicit proceeds for Khadem Al-Qubaisi.
THE INTRODUCTION AND THE IMPORT OF CULTURAL GOODS (REVOCATION) REGULATIONS 2021
These UK Regulations revoke EU Regulation 2019/880 on the introduction and the import of cultural goods insofar as it applied and formed part of the law of the UK. However, revocation of the Regulation as retained EU law does not affect its continued application in respect of Northern Ireland in consequence of its inclusion in the Protocol on Ireland/Northern Ireland in the European Union Withdrawal Agreement. It is said that, although the UK Government supports the stated aims of the Regulation and recognises the importance of tackling the illicit trade in cultural goods, and in particular preventing the proceeds of that trade from being used to fund terrorism, it says that it considers that the requirement for businesses and importers to ensure the legal provenance of cultural goods which they bring into the UK (as set out, for example, in codes of conduct for art market businesses and museums), and the measures already available to border authorities to prevent cultural goods being brought into the UK when there is information or evidence that they have been unlawfully removed from another country, are sufficient. The UK maintains that the revocation will not adversely affect our ability to prevent unlawfully removed cultural goods being brought into the UK.
https://www.legislation.gov.uk/uksi/2021/1087/pdfs/uksiem_20211087_en.pdf
Court Jails Ugandan Government Official and Orders Him To Pay $5.4 million
On 24 September, Channels TV reported that a Ugandan anti-corruption court sentenced a government official, Godfrey Kazinda, to 40 years in prison and ordered him to pay $5.4 million in compensation for looting a donor-funded programme to help rebuild the country’s conflict-battered north following the ravages of a decades-long insurgency by the notorious Lord’s Resistance Army.
https://www.channelstv.com/2021/09/24/court-jails-ugandan-govt-official-orders-him-to-pay-5-4m
Ex-Pastor of Orange County Church Sentenced to 14 Years in for Orchestrating $33 Million Con that Defrauded Investors
A news release from US DoJ on 24 September advised that Kent R.E. Whitney, 39, the former pastor of the Westminster-based Church of the Healthy Self was sentenced today to 168 months in federal prison for orchestrating a church-based investment scam that took in more than $33 million.
US: 2 Charged in Airline Baggage Scam Involving Over $550,000 in False Claims
A news release from US DoJ on 24 September advised that it is alleged that the defendants submitted over 180 claims to commercial airlines, including American, Alaska, Southwest, United, and JetBlue, requesting over $550,000 in reimbursement for luggage that falsely alleged had been lost.
Podcast: FATF’s Unintended Consequences – The Past
On 24 September, FATF released this podcast, the first of a 3-part series which considers FATF’s past, delving into the standard-setter’s efforts in relation to non-profit organisations, money service businesses, and correspondent banking.
https://rusi.org/podcasts/financial-crime-insights/episode-23-fatfs-unintended-consequences-past
How Contraband Chicken is Flooding Paraguay
On 24 September, Insight Crime reported that a large influx of smuggled chicken meat from Argentina into Paraguay has overwhelmed the local market and is threatening to put local farmers out of business. It is said to make up 70% of chicken consumption in Paraguay, says to the country’s poultry farmer association, Avipar. Chicken smuggling is not just a Paraguay problem. Last April, InSight Crime reported on how Mexican chickens and eggs were increasingly being smuggled into Guatemala.
https://insightcrime.org/news/fowl-play-how-contraband-chicken-is-flooding-paraguay/
Kenya High Court clears cabinet minister Dr. Lomuro of money laundering charges
On 24 September, Radio Tamazuj reported that the Kenyan Anti-Corruption and Economic Crimes Court division of the High Court has cleared cabinet affairs minister Dr Martin Elia Lomuro of money laundering charges brought against him by the Asset Recovery Agency (ARA). ARA froze his bank accounts in June.
Man Extradited to US from Czech Republic to Face Charges for Wire Fraud and Money Laundering Involving Charging Students for Non-existent Lessons
A news release from US DoJ on 24 September advised that Michael Lawson, 49, was indicted in 2013 on 6 counts of wire fraud and 6 counts of international money laundering. Lawson was the owner of several internet-based companies that matched art and music teachers with students in need of lessons throughout the US. It is said that Lawson started renewing students’ contracts for music lessons without the students’ knowledge and consent, and started charging the students’ credit cards for the lessons that they had not requested.
China: Former chairman of the top liquor-maker sentenced to life in prison for bribery
On 23 September, CNBC reported that the former chairman of China’s top liquor maker, Kweichow Moutai, was sentenced to life in prison for taking bribes. Yuan Renguo was sentenced for accepting cash and properties worth more than $17.48 million while working at Kweichow Moutai between 1994 and 2018.
https://www.cnbc.com/2021/09/24/former-kweichow-moutai-chair-sentenced-for-life-xinhua-reports.html
DeSnake: He Escaped the Dark Web’s Biggest Bust but Now He’s Back
On 23 September, Wired carried an article saying that AlphaBay’s former number 2 administrator, security specialist, and self-described co-founder, who went by the name DeSnake is said to be back, 4 years after the dark web market’s demise, He appears to be back online and has relaunched AlphaBay under his own leadership. In an extended chat interview, DeSnake told Wired how he walked away unscathed from the takedown of AlphaBay, why he has resurfaced now, and what his plans are for the resurrected, once-dominant online black market.
https://www.wired.com/story/alphabay-desnake-dark-web-interview/
UK Government Publishes National Assessment on Proliferation Risk
On 24 September, RUSI reported on the assessment issued the previous day, noting that it cited work by RUSI. It says that the UK is one of a small but growing number of countries to have conducted a national PF risk assessment to date; RUSI hopes that the UK’s proliferation financing risk assessment can help inform the efforts of other states preparing to undertake their own.
World’s largest advertising firm will pay more than $19 million to resolve allegations that officials used bribery to win lucrative contracts
On 24 September, Capital.com reported that WPP will pay more than $19 million as part of a settlement with the SEC to resolve allegations that WPP officials used bribery to win lucrative contracts in high-risk international markets. London-listed WPP has agreed to pay the settlement without admitting or denying charges that it violated the anti-bribery, books and records, and internal accounting controls provisions of the FCPA.
https://capital.com/advertising-giant-to-pay-19m-to-settle-bribery-allegations
Petrofac to Plead Guilty to UK Bribery Charges
On 24 September, the Wall Street Journal reported that the British energy services company Petrofac said it had reached a plea agreement with SFO in relation to an investigation into the company’s failure to prevent bribery. It was accused of failing to prevent former Petrofac employees from offering or making payments to agents involved in projects in Iraq, UAE and Saudi Arabia, with the offers or payments were made between 2011 and 2017.
https://www.wsj.com/articles/petrofac-to-plead-guilty-to-u-k-bribery-charges-11632513183
Montenegro Capital’s Ex-Mayor Indicted for Money-Laundering
On 24 September, Balkan Insight reported that the Montenegrin Higher Court has confirmed the indictment of the former mayor of Podgorica, Slavoljub Stijepovic, for assisting in money laundering as part of a criminal organisation in a case known as ‘Envelope’. The Special State Prosecutor initially filed the charge in February 2019. Stijepovic is now an adviser in President Djukanovic’s office and an official with the Democratic Party of Socialists.
https://balkaninsight.com/2021/09/24/montenegro-capitals-ex-mayor-indicted-for-money-laundering/
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