OTHER THINGS YOU MAY HAVE MISSED – SETEMBER 29

Panama Covid-19 update – finally caught up with yesterday’s data. 232 new cases and 2 new fatalities, with active cases down to 3,240, with 51 in ICU and 230 in other wards. The RT rate, it seems, is 0.82.

Update of the update – On 29 September, another 262 new cases and 4 more fatalities were reported. Active cases rose, to 3,314, while ICU numbers rose to 54 and the patients in other wards rose by 1 to 231.

29 September 2021

NEW EU DIRECTIVE: WHAT AREAS CAN A WHISTLEBLOWER REPORT INVOLVE?

On 22 September, Taylor Wessing published an article which, as the deadline for implementation of the EU Directive approaches, discusses the material scope of the Directive.  A previous article considered the personal scope of the Directive.  The areas which, within the meaning of the EU Directive, require special protection against breaches are very broadly defined – and are listed in the article.  However, it notes that the Directive has a broader context, taken to cover all national and EU rules which regulate the rights and obligations in the areas indicated.

https://www.taylorwessing.com/en/insights-and-events/insights/2021/03/who-can-be-a-whistleblower

https://www.taylorwessing.com/en/insights-and-events/insights/2021/09/in-which-areas-can-a-whistleblower-raise-concerns

A REVIEW OF CYBER FRAUD INVOLVING PAYMENTS INTO FRAUDULENT BANK ACCOUNTS IN MAINLAND CHINA

On 27 September, Clyde & Co published an article about international trade-related cyber fraud incidents in which the assistance of the firm was sought in the recovery of funds wrongfully paid into a third-party bank account opened in China.  The article reviews the common approaches used by fraudsters to take advantage of such bank accounts, and offers guidance on effective remedies for recovering the funds as well as precautions to minimise such risks.

https://www.clydeco.com/en/insights/2021/09/cyber-fraud-in-international-trade-precautions-and

INTERNATIONAL SALE OF GOODS: TERMINATION OF CONTRACT FOR “MATERIAL BREACH” – WHAT EXACTLY IS “MATERIAL”?

An article from Stephenson Harwood on 27 September posed this question.  It says that if the parties have expressly defined what they mean by a material breach, then this should not give rise to much uncertainty if one party wishes to terminate.  However, the article considers what happens if “material breach” is left undefined, as it is a question which the firm says that it has been asked by traders quite often in recent times.  Such a breach goes to the root of the contract, or deprives a party of substantially the whole benefit of the contract, and will entitle the innocent party to terminate for what is known as “repudiation”.  Whether a breach is material is a question of fact, and the common denominator in every case analysis is that a material breach must be substantial.

https://www.shlegal.com/docs/default-source/news-insights-documents/termination-for-material-breach—what-exactly-is-material-august-2021.pdf?sfvrsn=977be85b_0

GERMANY: N26 DIGITAL BANK FINED FOR DELAYED MONEY LAUNDERING REPORTS

On 29 September, Market Watch reported that BaFin has issued a fine of €4.25 million to digital bank N26 for delayed reporting of fewer than 50 instances of suspicious money laundering activity.  In May, BaFin ordered N26 to implement internal safeguards to prevent money laundering and terrorist financing, including by rectify deficiencies in IT monitoring and CDD.

https://www.marketwatch.com/story/n26-fined-for-delayed-money-laundering-reports-by-german-finance-regulator-271632898886

US SANCTIONS SPUR CHINA AND RUSSIA TO BUILD UP CROSS-BORDER LINKS

On 29 September, Nikkei Asia reported that a 2,200-metre rail bridge across the Amur River, between China and Russia, was completed in August, part of a push to deepen economic ties between the 2 countries.  Once the bridge begins operations early next year shipping of goods will become much faster.  It is said that the countries’ shared rivalry with the US has spurred greater cooperation, and that they aim to nearly double bilateral trade by 2024.  Major Russian exports to China include natural gas and lumber, while Chinese exports include appliances and machinery.

https://asia.nikkei.com/Politics/International-relations/U.S.-sanctions-spur-China-and-Russia-to-build-up-cross-border-links2

SEC TO AMEND WHISTLEBLOWER AWARD RULES

On 23 September, the Wall Street Journal reported that the SEC hhadas approved amendments to the rules governing monetary awards made to whistleblowers who voluntarily report potential wrongdoing.  The SEC said that the new rules would add clarity to its whistleblower programme, which was started in 2011, and bring efficiency and transparency to the award determination process.  A whistleblower can receive an award totalling between 10% and 30% of the fines levied in SEC civil enforcement actions that result from their tip, assuming the fines total more than $1 million. 

https://www.wsj.com/articles/sec-votes-to-amend-whistleblower-award-rules-11600877179

TECH COMPANIES HAVE BLOCKED MORE THAN 11.6 MILLION TRANSACTIONS FOR ENDANGERED WILDLIFE ONLINE

On 28 September, the NGO TRAFFIC provided an update saying that companies signed up to its Coalition to End Wildlife Trafficking Online had removed or blocked over 11.6 million listings for endangered species and associated products from their online platforms to date.  These listings included live tigers, reptiles, primates and birds for the exotic pet trade, as well as products derived from species like elephants, pangolins and marine turtles. 

https://www.traffic.org/site/assets/files/15737/coalition_2021_progress_update_2_pager-english.pdf

https://www.endwildlifetraffickingonline.org/

UN PROBES ZIMBABWE SANCTIONS

On 29 September, Bulawayo 24 and others reported that the UN will deploy a special rapporteur to Zimbabwe to probe the impact of sanctions on the country and determine if the government was not using them as an excuse for the prevailing economic crisis.  He is expected to be in Zimbabwe 18 to 28 October at the invitation of government.  Zimbabwe has been under US sanctions since 2001 and, in February, the EU renewed its sanctions, imposing an arms embargo and a targeted asset freeze against the Zimbabwe Defence Industries.  The UK government also slapped an asset freeze and travel ban on 4 Zimbabwean senior security sector officials. 

https://bulawayo24.com/index-id-news-sc-local-byo-209682.html

PROBE INTO CONTAINER SMUGGLING AT MOMBASA PORT

On 29 September, Business Daily reported that police have opened investigations into a suspected container smuggling racket at the port of Mombasa believed to be depriving Kenya of tax revenues.  The Directorate of Criminal Investigations (DCI) is said to be targeting 3 top executives of the Kenya Ports Authority (KPA). 

https://www.businessdailyafrica.com/bd/economy/dci-probes-container-smuggling-mombasa-port-3566564

PROVISIONAL LIQUIDATOR OF ZAMBIA’S KONKOLA COPPER MINES CHARGED WITH MONEY LAUNDERING

On 29 September, Devdiscourse reported that Zambia’s previous government had handed control of Konkola Copper Mines (KCM) to the provisional liquidator in May 2019, triggering a legal battle with Vedanta Resources, KCM’s parent company.

https://www.devdiscourse.com/article/law-order/1749100-provisional-liquidator-of-zambias-konkola-copper-mines-charged-with-money-laundering

https://www.marketscreener.com/quote/stock/VEDANTA-LIMITED-37569657/news/Vedanta-Provisional-liquidator-of-Zambia-s-Konkola-Copper-Mines-charged-with-money-laundering-36544838/

US: 5 TAKEAWAYS FROM DoJ NATIONAL ENFORCEMENT ACTION – INCLUDING CONTINUED FOCUS ON OPIOIDS AND TELEMEDICINE

On 28 September, an article from Mintz.com said that the DoJ has released its latest national enforcement action related to health care fraud in which it filed criminal charges against 142 defendants.  The National Enforcement Action, which alleges losses of $1.4 billion due to false or fraudulent billings, follows similar DoJ “take downs” over the last several years in that it focuses on telemedicine providers and the opioid crisis. The article provides 5 takeaways from the National Enforcement Action.  The takeaways include noting that over one-third of the defendants in the National Enforcement Action were charged in the Southern District of Florida alone. 

https://www.mintz.com/insights-center/viewpoints/2146/2021-09-27-five-takeaways-dojs-latest-national-enforcement-action

https://www.justice.gov/opa/pr/national-health-care-fraud-enforcement-action-results-charges-involving-over-14-billion

IRELAND: BENEFICIAL OWNERSHIP OF TRUSTS – CLOCK TICKING ON FILINGS TO CENTRAL REGISTER

On 29 September, Irish law firm Matheson said that 2021 regulations require trustees of express trusts to file beneficial ownership information in a newly created Central Register of Beneficial Ownership of Trusts.  The Revenue Commissioners will operate the CRBOT and have established a trust register portal on Revenue’s Online Service (ROS) to facilitate registrations.  Trustees ought to continue maintaining beneficial ownership registers but must now do so within a wider legislative framework.  The article explains what types of trusts are affected and who is regarded as a beneficial owner.  It also explains what a trustee or beneficial owner has to do.  For pre-existing trusts, information must be filed by 23 October, i.e. 6 months from the commencement of the Regulations.  For any trusts created after the commencement of the regulations, beneficial ownership information must be filed within 6 months of creation of the trust.  Information may be disclosed to An Garda Síochána (police), the Revenue Commissioners, a competent authority or the Criminal Assets Bureau.   A competent authority includes the Central Bank of Ireland, the Minister for Justice, Equality and Law Reform and any other competent authorities prescribed by regulations – and the information provided to such Irish authorities can in turn be shared with corresponding authorities in other EU Member States.

https://www.matheson.com/insights/detail/beneficial-ownership-of-irish-trusts-latest-update

BULGARIA: CUSTOMS OFFICERS FIND OVER 500,000 CONTRABAND CIGARETTES

On 29 September, Novinite reported that customs officers found more than 500,000 contraband cigarettes in wooden panels in a truck with Turkish registration.  Documents for the cargo – packaging foil and 3 pallets with wooden panels from Turkey – showed it to be destined for the UK.

https://www.novinite.com/articles/211461/Bulgaria%3A+Customs+Officers+Found+over+500%2C000+Pieces+of+Contraband+Cigarettes

DUTCH GOVERNMENT CONSIDERING BAN ON RANSOM PAYMENTS BY INSURERS

On 28 September, Out-Law reported that the Dutch government is reportedly considering banning insurance companies from paying ransom payments to hackers, in order to take away the financial incentive for criminals engaged in ransomware and other hacking attacks.

https://www.pinsentmasons.com/out-law/news/dutch-government-considering-ban-on-ransom-payments-by-insurers

BRAZIL’S SANTA CATARINA BECOMING COUNTRY’S MDMA HUB

On 28 September, Insight Crime reported that authorities have made Brazil’s largest ever-seizure of ecstasy in the southern state of Santa Catarina in the latest example of how the production of the synthetic drug is spreading rapidly in the country.  It is said that the southern state is the epicentre of MDMA production in the country. It is also said that Latin American consumption of MDMA has long been fed by production in Belgium and the Netherlands, the world’s synthetic drug super-producers – but that the emergence of domestic manufacturing in Brazil is therefore an important shift in the global narcotics trade.

https://insightcrime.org/news/brazil-santa-catarina-becoming-country-mdma-hub/

SYRIA AND US POLICY

On 20 September, the US Congressional Research Service published a briefing about the relationship and sanctions imposed since 2011. It considers developments in 2021.

https://sgp.fas.org/crs/mideast/IF11930.pdf

TRAFIGURA PAID A RETIRED ANGOLAN GENERAL $390 MILLION FOR SHARES IN AN INTERNATIONAL FUEL SUPPLIER IT CONTROLS

On 28 September, Swissinfo reported that the deal in June 2020 provides a glimpse into the costs of unwinding one of the Swiss commodity trader’s most lucrative yet controversial relationships.  It involved Leopoldino Fragoso do Nascimento — widely known as “General Dino” – who was a military adviser to Angola’s former President José Eduardo dos Santos and one of the most powerful businessmen in the country during the final decade of the leader’s 38-year rule.  It is said that partnerships with Dino’s Cochan Holdings LLC helped Trafigura dominate the supply of petroleum products in Angola. 

https://www.swissinfo.ch/eng/trafigura-paid–390m-in-share-deal-with-angola-s–general-dino-/46984516

SFO LAUNCHES MONEY LAUNDERING PROBE INTO £150 MILLION LEASEHOLD INVESTMENT SCHEMES

On 29 September, City AM reported that the SFO has launched a fraud and money laundering investigation into 2 companies that are suspected of having misled investors into funnelling around £150 million into fraudulent leasehold schemes across the UK.  It is suspected that they fraudulently mislead investors into purchasing leaseholds for student accommodation in Leicestershire, Lancashire, Staffordshire and West Yorkshire between 2014 and 2019.

https://www.cityam.com/sfo-launches-money-laundering-probe-into-150m-leasehold-investment-schemes/

https://www.sfo.gov.uk/2021/09/29/sfo-announces-investigation-into-150m-investment-schemes-after-dawn-raid/

TERRORIST FINANCING TRENDS IN AL-HOL AND ROJ DETENTION CAMPS IN SYRIA

On 29 September, the Combating Terrorism Center published a report about detention facilities holding Islamic State-affiliated adults and minors in north-eastern Syria, saying that camps like Al-Hol actually serve as a valuable hub for the region’s violent extremists and criminal networks. The report details how individuals, networks, and groups inside and outside Al-Hol and Roj camps raise, use, move, manage, store, and obscure funds for and from alleged Islamic State detainees held in the facilities. One of the uses  of the funds is for detainees paying smugglers to facilitate their escape.  The report makes the case that funds moving into, around, and out of Al-Hol and Roj camps enable some traditional terrorism financing issues and invite risks to the region by injecting funds that embolden facilitation networks involving violent extremists, criminals, and corrupt officials.

https://ctc.usma.edu/wp-content/uploads/2021/09/Cash-Camps.pdf

INTERNATIONAL CYBER CAPACITY BUILDING: GLOBAL TRENDS AND SCENARIOS

On 23 September, the EU Institute for Security Studies published a report about international cyber capacity-building projects which involve countries, companies and organisations helping each other across borders to develop functioning and accountable institutions that respond effectively to cybercrime and to strengthen a country’s cyber resilience.  Such projects take many forms – such as advising government teams that respond to national cybersecurity incidents, helping countries design and run public awareness campaigns about staying safe online and training police to investigate cybercrime.  This report identifies 4 trends in cyber capacity-building and extrapolates their development to explore 4 potential scenarios that can inform capacity builders’ strategic decision making.

https://www.iss.europa.eu/content/international-cyber-capacity-building-global-trends-and-scenarios

THE UK ECONOMIC CRIME LEVY: A FAIR CONTRIBUTION TOWARDS TACKLING ECONOMIC CRIME OR A FURTHER TAX ON THE OVERBURDENED REGULATED SECTOR?

An article from Field Fisher on 29 September asked this question about a programme the stated aim of which was to raise £100 million per year from those business that contribute to the risk of economic crime to fight such economic crime.  The levy will be collected by HMRC, the FCA and the Gambling Commission and the first payments are to be made in 2023/24 (a year later than originally planned).

https://www.fieldfisher.com/en/services/fraud-financial-crime-and-investigations/fraud-corporate-crime-blog/the-economic-crime-levy-a-fair-contribution-toward

PODCAST: JAPAN’S “GHOSN SHOCK”

In the latest TRACE podcast, Hans Greimel and William Sposato, journalists and authors, join the podcast to discuss their new book: Collision Course: Carlos Ghosn and the Culture Wars That Upended an Auto Empire.  They cover Ghosn’s rise to hero status in Japan, his ultimate fall—arrest, detention and escape from the country—and the many compliance challenges raised by this strange story.

https://www.traceinternational.org/resources-podcast

NORTH KOREAN SANCTIONS EVASION: IDENTITY LAUNDERING FOR SHIPPING EXPLAINED

On 13 September, Windward published an article saying that identity laundering challenges standard compliance measures and regulations. This practice makes use of advanced tools to confound the ability to verify the true identity of a vessel. Perhaps one of the most unsettling characteristics of laundering is that the IMO, which has long been a single source of truth for establishing vessel identities, is defrauded to obtain a false registered identity.  To understand just how tricky these schemes are, th article takes one through the case of the Kingsway. This vessel underwent a sophisticated identity laundering operation to avoid international sanctions for almost 3 years. 

https://windward.ai/blog/north-korean-sanctions-evasion-identity-laundering-explained

CHINA RELEASES “FACT SHEET” ON US INTERFERENCE IN HONG KONG

On 28 September, Crowell & Moring reported that on 24 September, the Chinese Ministry of Foreign Affairs released the “Fact Sheet: U.S. Interference in Hong Kong Affairs and Support for Anti-China, Destabilizing Forces” which sets out a comprehensive chronological list of events detailing the US “interference” in Hong Kong. 

https://www.crowell.com/files/Fact-Sheet-US-Interference-in-Hong-Kong-Affairs-and-Support-for-Anti-China-Destabilizing-Forces.pdf

https://www.crowell.com/NewsEvents/AlertsNewsletters/all/China-Releases-Fact-Sheet-on-US-Interference-in-Hong-Kong

EU FIGHT AGAINST MIGRANT SMUGGLING AND EXPLOITATION

On 29 September, the EU said that, a year on from the adoption of the proposal for a New Pact on Migration and Asylum, the Commission is presenting a Report on Migration and Asylum.  The Commission is also adopting a renewed EU action plan against migrant smuggling and a Communication on the application of the Employers Sanctions Directive – involving sanctions against employers who hire irregular migrant workers.  One of the targets of the action is “state-sponsored” migrant smuggling where a State artificially creates and facilitates irregular migration, using migratory pressure as a tool for political purposes. The actions of Belarus using migratory pressure at the EU’s external borders are said to exemplify this.  It is explained that, in the case of migrant smuggling, migrants willingly engage in the irregular migration process by paying for the services of a smuggler to cross an international border.  On the other hand, trafficking in human beings refers to people being trafficked for exploitation purposes – and note that trafficking in human beings does not necessarily take place across borders.  Migrant smuggling and trafficking in human beings are often linked, as smuggled persons can become victims of traffickers for labour, sexual or other exploitation purposes.

https://ec.europa.eu/commission/presscorner/detail/en/fs_21_4909

https://ec.europa.eu/commission/presscorner/detail/en/qanda_21_4907

US-SWISS DUAL NATIONAL PLEADS GUILTY TO BANK FRAUD CHARGES IN CONNECTION WITH INVESTMENT FRAUD SCHEME

On 29 September, a news release from the US DoJ announced that Lawrence Paul Schmidt (aka Lawrence Schmid), 61, formerly of Washington DC, has pleaded guilty to bank fraud after being extradited from the UK in late 2020 in connection with federal charges related to an investment fraud scheme.  From 2008, Schmidt created several investment entities and related corporations through which he solicited funds, and between June 2008 and April 2014, he raised over $22 million in funds, which he then comingled and transferred between the various entities and his personal accounts.  He knew that by January 2014 the bank accounts for the various entities contained insufficient funds to meet the companies’ financial obligations and, by March 2014, the approximate combined balance of all the entities’ bank accounts was just $8,600.

https://www.justice.gov/usao-dc/pr/us-swiss-dual-national-pleads-guilty-bank-fraud-charges-connection-investment-fraud

SOUTH AFRICA: REPORT IMPLICATES FORMER HEALTH MINISTER AND OTHERS IN COVID CONTRACT SCANDAL

In its 30 September edition, Anadolu said that a new report investigating corruption in South Africa’s Health Ministry is said to have implicated former Health Minister Zweli Mkhize, who resigned last month for interfering in the awarding of a $10 million coronavirus communications contract. 

https://www.aa.com.tr/en/africa/report-implicates-former-south-african-health-minister-others-in-coronavirus-contract-scandal/2378559

NEW ZEALAND:  FINANCIAL MARKETS AUTHORITY (FMA) HAS ESCALATED ITS ENFORCEMENT APPROACH TO NON-COMPLIANCE WITH AML/CFT RULES

On 29 September, a release from Mondo Visione advised that a new report covers the regulator’s monitoring of the country’s AML/CFT Act over the past 3 years (1 July 2018 – 30 June 2021).  The FMA is one of 3 supervisors under the AML/CFT Act, along with the Reserve Bank of New Zealand (RBNZ) and Department of Internal Affairs (DIA). The FMA supervises around 750 reporting entities under the Act, two-thirds of which define themselves as financial advice providers.  The report says that the most common areas of concern were inadequate and outdated AML/CFT programmes and entity self-risk assessments, as well as insufficient CDD by entities.  It is said that the FMA intends to continue monitoring firms’ processes, with more in-depth assessments of how they add new customers, as well as their monitoring of accounts and transactions, and reporting of suspicious activity to the FIU.

https://mondovisione.com/media-and-resources/news/new-zealand-financial-markets-authority-steps-up-enforcement-of-anti-money-laund/

https://www.fma.govt.nz/assets/Reports/AMLCFT-monitoring-report-2021.pdf

UK: ECONOMIC CRIME LEVY TO APPLY TO ART MARKET PARTICIPANTS

On 29 September, law firm Mishcon de Reya contains key considerations for Art Market Participants (AMP).  It warns that the basis used to calculate an entity’s levy liability may disproportionately impact AMP as businesses that provide both goods and services.  It says that there is now a short technical consultation running until 15 October, at which point the legislation will be included in the 2021-22 Finance Bill. 

https://www.mishcon.com/news/economic-crime-levy-to-apply-to-art-market-participants

HEAD OF MAJOR RUSSIAN CYBERSECURITY COMPANY DETAINED IN TREASON CASE

On 29 September, Rferl reported that Russian security agents have raided the Moscow offices of Group-IB, a leading Russian cybersecurity company known for its work in tracking down hackers and fighting theft and cyberfraud.  The company’s founder and chief executive, Ilya Sachkov, was detained on charges of state treason.  In addition to Moscow, the company now has headquarters in Singapore, London, New York, and Dubai.

https://www.rferl.org/a/group-ib-sachkov-cybersecurity-treason/31483812.html

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

UK FINANCIAL CRIME GUIDE: A FIRM’S GUIDE TO COUNTERING FINANCIAL CRIME RISKS

The FCA in the UK has published this Guide which provides practical assistance and information for firms of all sizes and across all FCA-supervised sectors on actions they can take to counter the risk that they might be used to further financial crime. Its contents are drawn primarily from FCA and FSA thematic reviews, with some additional material included to reflect other aspects of the FCA financial crime remit.  It says that effective systems and controls can help firms to detect, prevent and deter financial crime, and this Guide provides guidance on financial crime systems and controls, both generally and in relation to specific risks, including money laundering, bribery and corruption and fraud. 

https://www.handbook.fca.org.uk/handbook/FCG.pdf

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

OFAC: US AND QATAR TAKE COORDINATED ACTION AGAINST HIZBALLAH FINANCIERS

On 29 September, the US Treasury advised that OFAC and the Government of Qatar both designated in coordinated actions a major Hizballah financial network based in the Arabian Peninsula. 

https://home.treasury.gov/news/press-releases/jy0381

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20210929

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

MALAWI: SOUTHERN AFRICA WILDLIFE TRAFFICKING KINGPIN SENTENCED TO 14 YEARS IN PRISON

On 28 September, the Environmental Investigation Agency reported that Chinese national Yunhua Lin was the head of the ‘Lin-Zhang gang’, which had been operating out of Malawi for at least a decade.  He was arrested in August 2019.  He was sentenced to 14 years for dealing in rhino horn, and 6 years for money laundering – the sentences will run concurrently. 

https://eia-international.org/news/yunhua-lin-notorious-kingpin-of-wildlife-crime-syndicate-is-jailed-for-14-years-in-malawi/

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

FIU REPORT SHOWS LIBERIA IS PRONE TO MONEY LAUNDERING

On 29 September, Front Page Africa reported that the FIU has uncovered that the risks of money laundering in the financial sector and among the ‘Designated Non-Financial Business Professionals (DNFBP) are high, and contained in the National Risks Assessment (NRA) report on ‘Money Laundering and Terrorist Financing in Liberia’.  The NRA report, of which highlights are summarised in the article, is the first of its kind in Liberia, and is poised to provide stakeholders and the world on the risks Liberia faces when it comes to money laundering and terrorist financing.  Now the FIU will launch an AML strategy and action plan on mitigating the risks relating to money laundering in Liberia.  The report named corruption and bribery, illicit drug trafficking and tax evasion, among others, as the most committed predicate offences in Liberia.  The FIU called for a tiered risk-based approach to be adopted in the financial sector.

https://frontpageafricaonline.com/front-slider/financial-intelligence-units-report-shows-liberia-is-prone-to-money-laundering/

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

PANAMA IN WORLD WAR 2: PART 8 – SNAPSHOT SUMMARIES OF AIRCRAFT UNITS INCLUDING THE BRAZILIANS

Part 9 – the Canal and the expansion of US activity prior to Pearl Harbor and just after

https://raytodd.blog/2021/10/01/panama-in-world-war-2-part-9-the-canal-and-the-expansion-of-us-activity-prior-to-pearl-harbor-and-just-after/

Part 7 – Air bases

https://raytodd.blog/2021/09/27/panama-in-world-war-2-part-7-airfields-and-air-bases/

Part 6 – Introduction of radar and the role(s) of Pan American

https://raytodd.blog/2021/09/26/panama-in-world-war-2-part-6-the-introduction-of-radar-and-the-roles-of-pan-american/

Part 5 – Naval defences 

https://raytodd.blog/2021/09/21/panama-in-world-war-2-part-5/

Part 4 – The Third Locks project, barrage balloons and sea mines 

https://raytodd.blog/2021/09/19/panama-in-world-war-2-part-4/

Part 3 – The defences 

https://raytodd.blog/2021/09/15/panama-in-world-war-2-part-3/

Part 2 – Panama in 1939 

https://raytodd.blog/2021/09/11/panama-in-world-war-2-part-2/

Part 1 – Introduction 

https://raytodd.blog/2021/09/04/panama-in-world-war-2-part-1-introduction/  

OTHER THINGS YOU MAY HAVE MISSED – SEPTEMBER 28

Panama Covid-19 update – it has been reported that all of the 284,000 workers who were suspended last year, must have their contracts reactivated with effect from 1 November. However, it is also reported that of those workers who have already had their contracts of employment reactivated, between 3% and 6% have been laid off. In other news, the health ministry reported that a total of 2,248 schools are now open and that 92% of teachers are vaccinated.

28 September 2021

THE WAYS IN WHICH FRAUDSTERS WORK AND HOW TO SPOT THEM (PART 1)

On 24 September, DWF LLP published the first in a planned series of articles.  The first is concerned with ‘Burner phones’, which are frequently used by criminals and wrongdoers to commit fraud.  They are not registered to the user and are typically discarded once the fraud has been perpetrated. The problem which fraud victims face is how to prove who owned the phone?  It highlights a recent case where the courts made an order requiring the mobile phone company to identify by triangulation the location of the user, and so help to link the alleged fraudster to the crime.

https://dwfgroup.com/en/news-and-insights/insights/2021/9/catching-fraudsters-little-known-litigation-tricks-part-1

CAROUSEL FRAUD – IS THE RIDE OVER?

On 20 September, an article from Bright Line Law considers a recent Court of Appeal decision in the UK Post-Brexit, and says that the future of carousel fraud remains in the balance.  The case involved a typical carousel (or MTIC) fraud, The fraud itself was a classic carousel fraud, in which mobile telephones were acquired from the EU, by a UK company, without payment of VAT; traded within the UK through a series of companies, with VAT being charged, before being re-exported, with fraudulent claims for VAT refunds involved in the purported trading were made. The importer, who would be liable for the VAT involved, in each case disappeared without accounting for VAT.  It also notes that, worryingly, that while the number of missing traders peaked in 2006, there was an uptick in June this year, and that only time will tell whether carousel fraud is about to spiral out of control once more.  It says there is (or was?) hope that fresh carousel frauds may be scuppered by Brexit, as such MTIC frauds traditionally exploited the cross-border EU VAT regime.

https://s3.amazonaws.com/documents.lexology.com/04b9ef1c-7916-4596-bff5-7fae76964c94.pdf?AWSAccessKeyId=AKIAVYILUYJ754JTDY6T&Expires=1632828938&Signature=GeDb7f5N9YOfE%2B8Kwrgz3wS3i0o%3D

COGNIZANT IS PREPARING TO PAY $95 MILLION TO SETTLE A LAWSUIT THAT ACCUSED THE IT SERVICES COMPANY OF DEFRAUDING SHAREHOLDERS OVER BRIBERY IN INDIA

An article from Rahman Ravelli Solicitors in the UK on 23 September explained that the  lawsuit was brought as a result of allegations that Cognizant had concealed bribes to officials in India; and that preliminary settlement of the proposed class action was submitted to the federal court in the US, and will require a judge’s approval.

https://www.mondaq.com/uk/white-collar-crime-anti-corruption-fraud/1114586/with-cognizant-paying-millions-to-end-a-shareholder-lawsuit-niall-hearty-of-financial-crime-specialists-rahman-ravelli-outlines-events-that-led-to-the-settlement

HELICOPTER MAKER DEFRAUDED THE US MILITARY AND FACING AT LEAST $36 MILLION IN DAMAGES TO THE GOVERNMENT AND WHISTLEBLOWERS

On 27 September, the Wall Street Journal reported that Arizona helicopter maker backed by financier Lynn Tilton defrauded the US military, awarding $36 million in damages to the government and whistleblowers, an amount that could be tripled under a federal law.  The case involved MD Helicopters Inc and its relationship with Colonel Norbert Vergez, an Army procurement officer involved in awarding contracts to the company in 2011 and 2012. After retiring from the Army, he went to work in 2013 for Tilton’s management firm Patriarch Partners LLC and later for MD Helicopters directly.

https://www.wsj.com/articles/lynn-tilton-backed-army-contractor-hit-with-36-million-verdict-in-fraud-case-11632771635

AUSTRALIA: ILLICIT TOBACCO TASKFORCE CALLS FOR REPORTS OF SUSPICIOUS ACTIVITY

On 27 September, a news release from AUSTRAC explained the role of the Illicit Tobacco Taskforce (ITTF), an Australian Border Force (ABF)-led multiagency taskforce established in 2018.  The ITTF is focused on investigating, prosecuting, and dismantling international organised crime groups who use the proceeds of illicit tobacco to fund criminal activities.  It says that collaboration between AUSTRAC’s Fintel Alliance and industry partners has improved the ITTF’s understanding of the illicit tobacco payment methods which criminals use. It has also assisted with identifying criminal associates, their assets, and confiscating the proceeds of crime.  It asks that is someone identifies indicators of potential activity involving illicit tobacco, they should submit accurate and timely suspicious matter reports to AUSTRAC.

https://www.austrac.gov.au/illicit-tobacco-taskforce-tackles-illicit-tobacco-trade

AMLD5 AND PREPAID CARDS: WHAT HAS CHANGED?

On 28 September, The Paypers carried an article which considers changes with regards to the EU 5th AML Directive on prepaid card transactions represent key information for the payments ecosystem, especially on the way it could impact the payment acceptance rate.  It said that AMLD5 limits the possibilities for anonymous prepaid cards and gives FIU wider access to information through closer cooperation between Member States. Relations with high-risk third countries are subject to harmonised rules for enhanced CDD. It notes that, with regard to prepaid cards, AMLD5 lowers the €250 limit to €150. For cash redemption and withdrawals, the limit is lowered from €100 to €50, and the €50 limit now also applies to remote payment transactions where the amount paid exceeds €50 per transaction.  The article concedes that the tightened controls may reduce fraud, but come at the cost of increased compliance burdens on obliged entities and less anonymity for customers. 

https://thepaypers.com/expert-opinion/amld5-and-prepaid-cards-what-has-changed–1251776

UK WARSHIP SPOTS POTENTIAL VIOLATIONS OF NORTH KOREA SANCTIONS IN EAST CHINA SEA

On 27 September, NK News reported that the warship captured video and photographic evidence of vessels potentially violating U.N. sanctions against North Korea, the Ministry of Defence said.  HMS Richmond, a Type 23 Royal Navy frigate from the UK Carrier Strike Group, was conducting an intelligence-gathering mission in the East China Sea.

https://www.nknews.org/2021/09/uk-warship-spots-potential-violations-of-north-korea-sanctions-in-east-china-sea/

DROPPING OF UK COURT ORDER DOES NOT MEAN PAKISTAN POLITICIAN ACQUITTED OF MONEY LAUNDERING CHARGES

On 28 September, BOL News reported that an adviser to Prime Minister Imran Khan has said that a recent order by a court in the UK quashing a order freezing assets did not mention PML-N President Shehbaz Sharif. Akbar and he had not been acquitted of money laundering charges.  The NCA in the UK had said that it did not find evidence regarding “suspicious bank transactions”.

https://www.bolnews.com/latest/2021/09/shehbaz-has-not-been-acquitted-of-money-laundering-charges-shahzad-akbar/

https://www.dawn.com/news/1648944/uk-court-order-doesnt-mention-shehbaz-says-shahzad-akbar

PARAGUAY AND US CAPTURE LEADER OF INTERNATIONAL MONEY LAUNDERING NETWORK

On 28 September, Diálogo reported that, in August, the Paraguayan and US governments carried out a coordinated action against the money laundering network of Kassem Mohamad Hijazi, a Brazilian citizen of Lebanese descent allegedly involved in funding Hezbollah terrorism.  Forces raided his offices in Ciudad del Este, Paraguay, in the Tri-Border Area between Argentina and Brazil.  A few hours after Hijazi’s arrest, OFAC imposed anti-corruption sanctions against Hijazi, as well as his first cousin Khalil Ahmad Hijazi and one of his associates, Paraguayan businessperson Liz Paola Doldán González.

https://dialogo-americas.com/articles/paraguay-us-capture-leader-of-international-money-laundering-network/#.YVMIzDHMKUk

DANISH GAMBLING OPERATORS REMINDED OF THEIR MONEY LAUNDERING ACT DUTIES

On 27 September, SBC News reported that Denmark’s gambling authority has reminded licensed incumbents of their duties to report suspicious AML activities to its FIU.  The warning comes as FIU updates its list of AML indicators that must be reported on by Danish licensed-or-registered businesses working within high-risk compliance sectors such as banking, trading, insurance and gambling.  In another notice the authority warned licence-holders of their obligations to ensure that employees are aware of the ‘anonymous whistle-blower scheme’ made available to report AML infringements.

https://www.sbcnews.co.uk/latestnews/2021/09/27/danish-operators-reminded-of-their-money-laundering-act-duties/

OECD ASSESSMENT OF GREECE FOR BRIBERY OF PUBLIC OFFICIALS

On 28 September, Tovima reported that Greece is to undergo an evaluation by the OECD from 28 September over the implementation of the Convention for the Suppression of Corruption of Foreign Officials. 3 OECD officials, 2 assessors from Korea and 2 assessors from Lithuania (prosecutors and senior civil servants) will have working meetings with more than 80 representatives of the public and of the private sector.

https://www.tovima.gr/2021/09/28/international/oecd-assessment-of-greece-for-bribery-of-public-officials

INTERPOL FLAGGED SOUTH KOREANS ARRESTED IN DA NANG, VIETNAM

On 28 September, VN Express reported that 2 South Korean men sought by Interpol for fraud and assault and battery have been arrested in Da Nang.  They will be deported back to South Korea.

https://e.vnexpress.net/news/news/interpol-flagged-south-koreans-arrested-in-da-nang-4363413.html 

330 ARRESTS DURING EU-WIDE JOINT ACTION DAYS

A news release from Europol on 28 September advised that Spain, supported by Europol, coordinated an Europe-wide joint action days targeting facilitation of illegal immigration, drug trafficking and trafficking of firearms. The operation took place between 15 and 18 September and involved operational activities involving 27 countries (17 EU Member States and 10 non-EU countries) were also supported by Eurojust, Frontex, INTERPOL and other international organisations.  The 330 arrests related to different crimes including drug trafficking, the facilitation of illegal immigration, document fraud and the trafficking of firearms. 

https://www.europol.europa.eu/newsroom/news/330-arrests-during-eu-wide-joint-action-days

UK: CORRUPT OLIGARCHS ESCAPE AS McMAFIA LAW LEFT UNUSED FOR 2 YEARS

On 28 September, the Evening Standard reported that campaigners fighting “dirty money” warn that Unexplained Wealth Orders introduced to target the illicit assets of the super-rich are turning into a damp squib.

https://www.standard.co.uk/news/corrupt-oligarchs-escape-as-mcmafia-law-left-unused-for-two-years-b957364.html

RIO TINTO BEING INVESTIGATED BY FCA OVER CLAIMS IT MISLED MARKET ABOUT ITS SPRAWLING £5 BILLION COPPER MINE IN MONGOLIA

On 26 September, the Daily Mail reported that the minining company is being investigated by the Financial Conduct Authority over claims it misled the market about its sprawling £5 billion copper mine in Mongolia’s Gobi Desert.  It is said to be questioning those previously linked to the project, and other authorities are also said to be looking into the allegations, including the SEC.

https://www.thisismoney.co.uk/money/markets/article-10030687/Rio-Tinto-investigated-Financial-Conduct-Authority.html

HOW ART DEALERS, REAL ESTATE AGENTS, AND HEDGE FUNDS ENABLE CORRUPTION

On 26 September, an article in Foreign Policy says that private investment companies such as hedge funds and private equity firms are only one sector among 10 types of white-collar professions whose loose rules pose grave dangers to US national security.  Referring to new research by the author of the article, it says that others are real estate title insurers, company formation agents, art dealers, lawyers, accountants, covert public relations firms, real estate agents, luxury car sellers, and cryptocurrency businesses. Highly non-transparent and insufficiently regulated, these financial professions have a long record of being used by hostile regimes and their cronies to weaponise corruption, launder funds, or skirt sanctions. 

https://foreignpolicy.com/2021/09/26/corruption-regulation-professions-art-real-estate-hedge-funds/

PODCASTS: THE US NAVY “FAT LEONARD” SCANDAL

A series of podcasts looks at the massive scandal that has hit the US Navy.  The The corruption scandal involved bribery and a ship support contractor. The Washington Post called the scandal “perhaps the worst national-security breach of its kind to hit the Navy since the end of the Cold War”. 

https://fatleonardpodcast.com/

https://en.wikipedia.org/wiki/Fat_Leonard_scandal

WEBCAST: AML GUIDANCE FOR TRUST AND COMPANY SERVICE PROVIDERS

In the UK, the Solicitors Regulation Authority has produced a half-hour video, one of a series produced by the SRA on a wide range of interests.

https://www.youtube.com/watch?v=QzVI_uXrKSg

https://www.youtube.com/channel/UCDy90s-6Tap4mJ3xnwumz4Q

UK DELAYS DECISION ON EXTRADITION OF MIKE LYNCH TO US OVER AUTONOMY CASE

On 28 September, the Daily Telegraph reported that the Home Secretary has put back her verdict on whether to approve Lynch’s extradition until 29 November, following vocal campaigning from Tories ahead of the Conservative Party Conference.  A court in July ruled that Lynch, founder of the former FTSE 100 company Autonomy, should be sent to the US to answer fraud charges over its £11 billion sale to Hewlett Packard in 2011.

https://www.msn.com/en-gb/news/uknews/priti-patel-delays-decision-on-us-extradition-of-mike-lynch

https://uk.news.yahoo.com/uk-home-minister-delays-decision-211839663.html

TAXATION OF THE DIGITALISED ECONOMY

On 28 September, KPMG released its latest update of the newsletter detailing direct and indirect taxation developments

https://tax.kpmg.us/content/dam/tax/en/pdfs/2021/digitalized-economy-taxation-developments-summary.pdf

THE RISKS OF DOING FORENSICS ON THE CHEAP

An article in The Crime Report in the US on 22 September is concerned with the demise of the internally-regarded UK Forensic Science Service in 2012.  It was replaced by a system of competitive tendering, and with the police services also determined to undertake certain basic scientific tasks themselves – by bringing these in house they thought that they could further save money and reduce the burden on their budgets.  It is said that this new and cheaper approach has been in place for 9 years and has been subjected to comment by critics and supporters alike.  The article considers the problems, including the collapse of one leading provider.  It is said that, until now, There has never been a properly constituted academic analysis of what these changes have meant to UK forensic science provision and what the impact has been.  Now, the article says, a new report does this.

https://thecrimereport.org/2021/09/22/the-perils-of-doing-forensics-on-the-cheap/

https://policinginsight.com/features/analysis/marketisation-and-forensic-science-provision-the-impact-on-strategy-analysis-and-contextual-information/

SME360X – A TOOL FOR SME TO MEASURE THEIR IMPACT – BOTH POSITIVE AND NEGATIVE – ON NATURE AND THE ENVIRONMENT

On 28 September, the International Chamber of Commerce announced this new tool – a blockchain-based digital tool for small- and medium-sized companies to measure and value their impact on the environment. This innovative platform is designed to provide a sustainability score for SME to compare their performance based on a global sustainability benchmarking system. The soft launch of the platform took place during the SDG Business Forum.  The ICC says that there are many external risks that threaten the survival of businesses everywhere – for example, a company’s factory location that was relatively risk-free when it was set up decades ago could now be facing extreme risks from stressed water resources and severe shifts in weather patterns; or a ban on single-use plastics could threaten the survival of a company; or community protests could lead to the shutdown of an industrial operation.  ICC says that SME360X is designed to help its users identify the environmental risks that are most material to their business.

https://iccwbo.org/resources-for-business/small-and-medium-sized-enterprises-smes/icc-sme360x

VENEZUELA’S ENDLESS CRISIS – A MAFIA STATE SLIDES TOWARD ANARCHY

On 28 September, Foreign Affairs carried this article which argues that the Venezuelan regime is not just a military dictatorship but also a criminal enterprise.  It says that army generals run most of the rackets today; generals control everything from the well-stocked Caracas bodegones — high-end retailers where every kind of imported good is readily available for US dollars — to much murkier sectors, such as the blood-soaked trade in coltan, a rare earth element, from the jungles of the south.  Then there is the involvement of Colombian criminals and rebels, such as FARC.  It is said that Venezuela may seem stable from day to day, but it is inherently volatile.

https://www.foreignaffairs.com/articles/venezuela/2021-09-28/venezuelas-endless-crisis

https://www.statista.com/chart/25862/countries-with-the-highest-cost-of-living-plus-rent-index-in-2020

US JUDGE CLEARS WAY FOR EXTRADITION OF FORMER PERUVIAN PRESIDENT TOLEDO

On 28 September, Reuters reported that a judge cleared the way for the former Peruvian President to be extradited to Peru on corruption charges, saying evidence of criminality presented in his case were “sufficient”.  Peruvian authorities allege that Toledo, while serving as president between 2001 and 2006, negotiated bribes with Brazilian conglomerate Odebrecht SA.

https://www.reuters.com/world/americas/us-judge-clears-way-extradition-former-peruvian-president-toledo-2021-09-28

US: 4 DEFENDANTS INDICTED FOR LAUNDERING TARGET GIFT CARDS PURCHASED BY FRAUD VICTIMS

A news release from US DoJ on 28 September announced that a grand jury had returned an indictment against 4 California-based defendants for their alleged roles laundering fraud proceeds stored on gift cards.  They were charged with conspiring to launder proceeds of wire fraud that were stored on gift cards issued by retailer Target.  Through purchases, returns and other transactions at multiple Target stores, the defendants and their co-conspirators sought to conceal the fact that the gift cards had been originally funded with fraudulent proceeds. 

https://www.justice.gov/opa/pr/four-defendants-indicted-laundering-target-gift-cards-purchased-fraud-victims

OFFSHORE FINANCIAL SERVICE EXECUTIVES AND A SWISS FINANCIAL SERVICES COMPANY CHARGED WITH CONSPIRACY TO HELP LARGE-VALUE US TAXPAYER-CLIENTS CONCEAL MORE THAN $60 MILLION

A news release from US DoJ on 28 September announced that from 2009 to 2014, 6 individuals, and  Swiss-based Allied Finance Trust AG allegedly defrauded the IRS by concealing income and assets of certain US taxpayer clients with undeclared bank accounts located at Privatbank IHAG, a Swiss private bank in Zurich, Switzerland, and elsewhere. They are said to have used a scheme called the “Singapore Solution” to conceal the bank accounts of the clients, their assets, and their income from US authorities. 

https://www.justice.gov/opa/pr/indictment-unsealed-against-six-individuals-and-foreign-financial-service-firm-tax-evasion

13 MEN ARRESTED – SUSPECTED OF TRAFFICKING ROMANIANS TO WORK AS BUILDERS IN THE UK

On 28 September, the Daily Mail reported that 13 men suspected of trafficking Romanians to work as builders in the UK have been arrested in London and Romania.  A total of 54 men and a boy were found sleeping in ‘extremely cramped conditions’ and have now been taken into care.  The alleged victims were found housed in multi-occupancy addresses with mattresses covering the floor.

https://www.dailymail.co.uk/news/article-10037531/Thirteen-men-suspected-trafficking-Romanians-arrested-dawn-raids-London-Romania.html

INDONESIA DETAINS TANKER CREW IN ESCALATING DISPUTE WITH CAMBODIA OVER OIL CARGO

On 28 September, RFA reported that Indonesia, Cambodia, and a Bahamas-flagged oil tanker are embroiled in an escalating quarrel over nearly 300,000 barrels of crude oil that Cambodia alleges was stolen by the ship’s crew.  An Indonesian court has sentenced the captain to 15 days in prison for anchoring his ship in local waters without permission’ then authorities detained the tanker’s 19 other crew members for questioning, in response to an Interpol red notice issued by Cambodia.  The Singapore-based company that owns the ship said Cambodia’s claim that the oil cargo was transported illegally was “without foundation”.  Cambodia has requested that the oil be returned, but the Indonesian navy said it would be up to the judiciary to decide what to do with the cargo.  

https://www.rfa.org/english/news/cambodia/tanker-09282021171505.html

https://insurancemarinenews.com/insurance-marine-news/indonesia-arrests-crew-of-tanker-caught-up-in-cambodian-charter-dispute/

HOW REMITTANCES HELD UP DURING THE COVID-19 PANDEMIC

On 18 September, a post on VOX from the Centre for Economic Policy Research says that, despite early predictions of a large collapse, remittance flows to developing countries have been surprisingly resilient during the COVID-19 pandemic. This post describes how migrants appear to have responded positively to rising COVID-19 infection rates in their home countries despite economic challenges in host countries.  Fiscal stimulus in host countries played a role in keeping remittances buoyant.  Travel restrictions, on the other hand, seem to have positively affected official remittance flows, suggesting such restrictions led migrants to use formal channels to send remittances instead of informal channels.

https://voxeu.org/article/defying-odds-remittances-held-during-covid-19-pandemic

ISLE OF MAN REQUESTS DNFBP TO REPORT DEALINGS WITH MALTA

In its latest DNFBP Newsletter for September carried an article reminding registered persons that Malta has been removed from FATF List C (Equivalent jurisdiction list) and placed on List B (Jurisdictions that may pose a higher risk) due to FATF determining that it had not made sufficient progress on their action plan.  If they have not done so already, any registered persons with business relationships or customers connected to Malta should provide the FSA with details of those business relationships, highlighting whether simplified measures have been used and, if so, explaining which measures.

https://www.iomfsa.im/media/2888/september-2021-dnfbp-newsletter.pdf

HOW TO STRENGTHEN TRADE AND LABOUR COMPLIANCE WITH TECHNOLOGY AMID INCREASING CUSTOMS ENFORCEMENT

On 15 September, Global Trade Magazine published an article which says that as the world is slowly recovering from the pandemic and constraints in both materials and labour are creating unprecedented supply chain challenges, recent government actions are also generating often unexpected hurdles.  For example, the US, Australia and Germany have recently proposed or enacted regulations or legislation aimed at ensuring companies take affirmative steps to prevent and eliminate forced labour in both their direct and indirect supply chains.  As supply chains have grown more complex with additional tiers, the risk of exposure to potential human rights issues has grown as well.  It says that developing or improving trade and labour compliance procedures often requires a multifaceted and customised approach, and that, for example, blockchain and digital token technology can provide immutable certification throughout the supply chain.  It warns that without a way to ensure compliance, merchandise detained will not have sufficient documentation to rebut the presumption of a “reasonable indication” of the involvement of forced labour, which could lead to devastating losses of merchandise, exorbitant storage fees while admissibility is assessed, forced export or costly and protracted litigation.

https://www.globaltrademag.com/how-to-strengthen-trade-and-labor-compliance-with-technology-amid-increasing-customs-enforcement/

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