Panama Covid-19 update – from Monday, 4 October, more areas have their curfews lifted. At the same time, the launch of “Black Week” (and vaccination for visitors) is said to show Panama is targeting visiting consumers – Panama was pre-Covid a big tourist destination for shopping from the rest of Latin America with many malls, for example, including the largest (Albrook) in all of Latin America.
Meanwhile, today has seen 262 new cases added, for the second day running, and with 2 new fatalities. With 3,295 active cases, 54 are in ICU, but numbers in other wards have fallen from 231 to 201.
30 SEPTEMBER 2021
UK: ILLEGALITY DEFENCE FURTHER EVOLVES INTO NATURAL JUSTICE
An article from Gatehouse Chambers on 28 September says that, in the past, as a matter of public policy, a transaction affected by illegality could not be relied upon as enforceable. Then, in 2016, a Supreme Court decision gave a modern formulation, taking a new policy-based approach. The article then considers a recent case about the rights of tw2o mortgage lenders over 2 properties charged to them as security. This new case appears to complicate the situation, with the Chambers remarking that while natural justice was the winner in this case, as is often the case at law, this came at the cost of certainty, and it is more likely that cases involving aspects of illegality will be the more likely to be fought to trial.
SOUTH AFRICA RAISES PROFILE AS COCAINE TRAFFICKING HUB
On 28 September, Dryad Global reported that South Africa is a crucial nexus in the global cocaine trade, with a rapidly expanding domestic market, routes to destinations in Europe and emerging connections to nascent cocaine markets like Australia and Hong Kong. The drug is, it says, almost exclusively supplied – mostly in shipping containers – by Brazil’s strongest criminal group, the First Capital Command (Primeiro Comando da Capital – PCC), which controls the port of Santos. The PCC has made efforts to arrange drug trafficking deals in the region, including in South Africa’s neighbour of Mozambique.
SECURITY WARNING UPDATE FOR SHIPPING IN THE RED SEA, PERSIAN GULF AND WESTERN INDIAN OCEAN
On 30 September, Dryad Global reported that, on 1 September, the US Maritime Administration (MARAD) issued a revised advisory to US-flagged commercial vessels operating in the Persian Gulf, Strait of Hormuz, Gulf of Oman, Arabian Sea, Gulf of Aden, Bab el-Mandeb Strait, Red Sea, and Western Indian Ocean. It warns of heightened risks and that threats may come from a number of different sources including, but not limited to, unmanned aerial vehicles (UAV), limpet mines, explosive boats, and pirates – and/or from difficulties with communications or navigation systems.
RUSSIA IS DELAYING APPOINMENTS TO UN PANELS OF EXPERTS ON SANCTIONS
On 30 September, Reuters reported that Russia is delaying the appointment of panels of independent experts to monitor violations of UN sanctions on South Sudan, the Democratic Republic of Congo (DRC) and the Central African Republic (CAR). Until the Security Council agrees to appointments for the new mandate of these panels, the experts cannot start work and their efforts to track sanctions violations are hampered. Russia is also delaying a replacement appointment of one expert to the panel monitoring sanctions on Somalia. In some cases, the mandate of the expert panels has already expired.
NICOLAS SARKOZY SENTENCED TO 1 YEAR OF HOUSE ARREST OVER ILLEGAL CAMPAIGN FUNDING
On 30 September, Politico reported that the former French President Nicolas Sarkozy was sentenced for knowingly exceeding spending limits during his failed 2012 presidential campaign.
SOUTH AFRICA: SMUGGLED EXPLOSIVES ARE THE KEY INGREDIENT FOR ILLEGAL MINING
On 27 September, an article from ENACT Africa said that curbing the trafficking of explosives is essential to combating illegal mining syndicates. It says that getting hold of explosives for use in mining operations is essential and it is also extremely dangerous. Criminal syndicates controlling illegal mining operations obtain explosives from 2 sources – the black market; and from legal mines and blasting operations. It is pointed out that South Africa consumes around 300 million tons of explosives annually in legal mining operations, road building and construction. Aside from the threat of corruption and outdated laws, poor controls and tracking of the supply chain of commercial explosives presents a significant challenge to law enforcement. For instance, explosives cartridges and detonators aren’t individually marked, making it easier to conceal in the supply chain before reaching the end-user.
BUSINESS AND HUMAN RIGHTS: SWISS COMPANIES FACE NEW DUE DILIGENCE OBLIGATIONS
On 29 September, LALIVE published an article saying that, on 29 November 2020, the Swiss people accepted the Responsible Business Initiative (RBI) in a referendum by 50.7%, but it was rejected by a majority of cantons, thus failing the double majority threshold required for an initiative to become law. However, a counterproposal, which imposes new reporting and due diligence obligations for companies, was put forward and, as no referendum was held against it, it will now become law. It could enter into force by the end of the year and companies will most likely be required to comply with its provisions as from January 2023.
US: FINE FOR TEXAS ELECTRONICS COMPANY OVER AEROSPACE SHIPMENTS TO RUSSIA
On 29 September, the Austin Business Journal reported that Vorago Technologies Inc will pay the US government up to $497,000 after admitting to shipping memory chips to Russia without the required licence. It has also entered into a non-prosecution agreement with the DoJ over the export violations. The company, which makes semiconductors for use in space, oil exploration and production and other harsh environments has agreed to the payment as part of an settlement with the Department of Commerce’s Bureau of Industry and Security. It is said that, using a Bulgarian front company, it sent “radiation-hardened silicon (SRAM) wafers” to Russia from 2014 to 2019. The current CEO blamed a prior chief executive.
UK: EORI NOW A REQUIREMENT FOR EXPORT LICENCE APPLICATIONS
On 29 September, the Institute for Export and International Trade reported that the UK Government has announced that traders must now include their Economic Operator Registration and Identification (EORI) number when applying for an export licence.
NORWAY CHARGES PROFESSOR WITH VIOLATING SANCTIONS ON IRAN
On 30 September, Asharq al Aswat reported that an unnamed German-Iranian professor at a Norwegian technical university had been charged with violating sanctions on Iran by inviting 4 guest researchers from the Islamic Republic and giving them access to a laboratory in 2018-19. A Norwegian prosecutor said the visiting researchers had access to knowledge that could be useful to Iran’s nuclear programme.
MONEYVAL HOLDS THE ANNUAL TYPOLOGIES MEETING
On 28 September, the Council of Europe reported that more than 60 delegates representing 28 MONEYVAL members and 5 observers attended the annual MONEYVAL Typologies meeting which took place virtually on the 28 September. It is said that MONEYVAL is finalising a typologies report on the issue of Covid-related risks, which provides an overview of the measures that supervisors took to continue their AML/CFT monitoring under the restrictions generated by the pandemic.
UK: GUIDANCE ON THE USE OF THE POWERS IN THE PROCEEDS OF CRIME ACT 2002
On 30 September, the Home Office issued updated guidance under section 2A of the Act for the NCA, SFO, FCA, HMRC, the CPS and the Public Prosecution Service in Northern Ireland.
TURKEY HAS PUT INTO FORCE AN AGREEMENT WITH MALTA TO COOPERATE ON INVESTIGATING FINANCIAL CRIMES
On 30 September, the Anadolu Agency reported that Turkey’s Financial Crimes Investigation Board (MASAK) and Malta’s FIAU will cooperate in the “exchange of financial intelligence related to money laundering, associated predicate offenses, and terrorism financing” under an MoU. Under the agreement, the 2 financial investigation bodies will freely share with each other the most information possible that they have available, either spontaneously or upon request.
UK: UPDATED GUIDANCE IN RELATION TO HONOURS FORFEITURE THAT APPLIES TO DECEASED RECIPIENTS ACCUSED OF CRIMINAL ACTS
On 30 September, the Cabinet Office issued a news release saying that new guidance had been issued about honours forfeiture that applies to deceased recipients accused of criminal acts. It is noted that Orders of Chivalry are living orders and individuals cease to be a member when they die. They therefore cannot be removed posthumously. A new policy allows for a formal statement to be published in instances where forfeiture proceedings would have been initiated had the deceased recipient been living and convicted in a court of law.
NCA AND EUROPOL SIGN UP TO A NEW WORKING ARRANGEMENT
On 29 September, a news release from the NCA advised that the NCA Director and the EUROPOL Executive Director have signed a working arrangement between the NCA and Europol which will sit under the UK-EU Trade and Cooperation Agreement. The Working and Administrative Arrangement, complements and implements the TCA by providing further clarity on how cooperation should be undertaken at operational level.
EUROPE: 9 TAKEN INTO CUSTODY OVER ATM ATTACK TUTORIALS AND STRING OF EXPLOSIVE ATTACKS
On 30 September, a news release from Europol advised that a joint investigation team (JIT) between the Dutch and German authorities has taken down an organised crime group specialised in explosive attacks against ATM. A total of 9 suspects have been taken into custody as a result of this 18-month investigation coordinated by Europol and Eurojust. The criminals were producing step-by-step tutorials on how to blow up cash machines, and have been linked to at least 15 ATM attacks in Germany. It is said that explosive attacks against ATMs are a growing concern.
MEXICO’S GEODUCK CLAMS LATEST CASUALTY OF ASIAN DEMAND
On 29 September, Insight Crime reported that Mexican geoduck clam populations are suffering as legal harvests are threatened by rampant poaching, which has driven the species onto the endangered species list; with the legal sector being pushed out by poachers who operate with little fear of repercussion. Mexican fishing authorities assert that the clam’s status as a luxury seafood dish in Asian markets is fuelling a perhaps irreversible decline.
UK: HIGH COURT HOLDS CLIENTS IN CONTEMPT FOR FAILING TO PAY SOLICITORS £2.3 MILLION FEES
On 30 September, Legal Futures reported that 2 clients who owe their solicitors £2.3 million in outstanding fees, costs and interest have been found guilty of 14 charges of contempt of court. The solicitors acted for an Omani husband and wife between 2006 and 2009 – including litigation relating to the husband being placed in the OFAC sanctions list, due to his involvement with the Zimbabwean regime.
EU: ARTIFICIAL INTELLIGENCE IN CRIMINAL LAW
On 30 September, a briefing from the EU Parliament Research Service says that the use of artificial intelligence (AI) in a broad range of areas is the subject of wide debate at EU level. Establishing an EU approach to AI is one of the European Commission’s digital priorities, as illustrated by the proposal on an artificial intelligence Act. Despite the great opportunities they offer, AI applications can also entail significant risks to people’s fundamental rights. At the October plenary session, the European Parliament is due to debate an own-initiative report on the use of AI by the police and judicial authorities in criminal matters.
REFORMING EU POLICY ON HARMFUL TAX PRACTICES
On 30 September, a briefing from the EU Parliament Research Service says that EU policy reform on harmful tax practices (HTP) has been pushed up the agenda for several reasons: the significant loss of revenue due to tax evasion and tax avoidance while Member States are addressing the huge economic impacts of the pandemic, public and parliamentary pressure, and several high-profile revelations of questionable tax-related practices. An own-initiative procedure was launched in Autumn 2020 by the Subcommittee on Tax Matters (FISC), and a vote on the report of the Economic and Monetary Affairs Committee (ECON) is expected in the October plenary session of the EU Parliament.
THE RISE OF ONE-TIME PASSWORD INTERCEPTION BOTS
On 29 September, the Krebs on Security blog carried a post saying that new research reveals a number of competitors have since launched bot-based services that make it relatively easy for crooks to phish OTP from targets. Many websites now require users to supply both a password and a numeric code/OTP token sent via text message or email.
DOMINICAN REPUBLIC NARCOS LAUNDER MONEY THROUGH GAS STATIONS
On 29 September, Dominican Today reported that a prosecution has revealed that among the illicit operations carried out by the members of an alleged network dismantled by the authorities included money laundering through gas stations.
UP TO 10 SUSPICIOUS BOXING MATCHES AT 2016 OLYMPICS
On 29 September, the Guardian reported that a major investigation into boxing at the 2016 Games has identified 7 to 10 suspicious matches where bout manipulation is likely to have taken place. A press conference in Lausanne is said to be set to reveal details of the first stage of an investigation into amateur boxing.
LIBERIAN REGISTRY BECOMES WORLD’S LARGEST FLAG FOR TANKERS
On 30 September, Seatrade Maritime News reported that, with the recent addition of 2.7 million gross tonnage of new tankers, the Liberian tanker fleet now stands at 57.4 million gross tonnage, making Liberia the world’s leading tanker flag in terms of gross tonnage.
BOLIVIA REQUESTS ARREST OF AÑEZ REGIME’S ECONOMY MINISTER
On 30 September, TeleSUR reported that Bolivia’s Special Anti-Crime Force (FELCC) has requested the arrest of former Economy Minister Jose Luis Parada for the irregular contracting of a $346 million loan with the IMF during the coup-born regime led by Jeanine Añez (2019-2020). This case is also said to implicate the former “Interim” president Añez and Guillermo Aponte, the former president of the Bolivian Central Bank (BCB). Previously, Carlos Schlink, the former Vice Minister of Finance, was detained.
BOLIVIA: GOLD DISPLACES GAS AS MAIN EXPORT TO DATE IN 2021
On 29 September, TeleSUR reported that gold production, increasing rapidly, along with natural gas, accounted for 45% of the country’s exports in the January-August 2021 period. Bolivian metallic gold is exported mainly to India, UAE, Turkey, the US, Hong Kong, and Canada. Sales of natural gas, to Brazil and Argentina, totals 21%.
MANAGING TRANSFER PRICING AND CUSTOMS RISKS OF CROSS-BORDER TRANSACTIONS
On 29 September, a report from KPMG in Switzerland says that compliance from both transfer pricing and customs perspectives remains challenging – prices of goods in cross-border transactions are of interest to both transfer pricing and customs authorities, but their respective approaches differ, and this could require close cooperation within multinational entities when setting and documenting prices and communicating with various authorities. It says that compliance requires close cooperation between teams responsible for all taxes, including customs.
OFAC: 4 MORE PANAMANIAN ENTITIES REMOVED FROM SDN LIST
On 30 September, OFAC advised that 4 entities based in Panama had been removed from the SDN List, where they had been placed for reasons said to be connected to drugs trafficking. The entities include WAKED INTERNACIONAL PANAMA SA. The companies were removed from the OFAC list because they no longer exist, the US Embassy in Panama has said, the companies having been dissolved. The 4 companies were part of a group of 68 companies designated in May 2016 for being linked to an alleged network led by Abdul and Nidal Waked, and 7 other people were also included in the list, all relatives or lawyers of the alleged ringleaders.
COMPLIANCE OBLIGATIONS FOR CONTRACTORS SELLING TO THE US GOVERNMENT
A blog post on 30 September from Bass Berry & Sims links to an article for Risk Management on 27 September which outlined the ever-growing list of compliance obligations for businesses that sell goods and services to the US federal government. It is said that new regulatory requirements include such as obligations relating to cybersecurity and counterfeit parts; and others, such as the mandatory disclosure requirement, continue the trend of the government relying on third parties, whether it be whistleblowers or contractors themselves, to police the procurement system. The article highlighted key areas of evolving provisions to address beyond the overarching ethics and compliance programme.
2 MORE MEXICAN NATIONALS ARE SENTENCED AFTER PLEADING GUILTY TO INTERNATIONAL TIMESHARE TELEMARKETING SCAM
A news release from the US DoJ on 30 September advised that the 2 had pleaded guilty pleaded guilty to conspiracy to commit wire fraud. From at least January 2016, they conspired together and with others to commit wire fraud in connection with a telemarketing scheme that targeted and victimised persons in the US, Canada and South America. As part of the elaborate scheme, the conspirators made unsolicited phone calls to owners of resort timeshare properties to induce them into paying fees associated with the bogus sale of their property. They misrepresented the existence of a buyer for their timeshare and solicited money from the victims to facilitate the sale. The defendants in the case were all based in Mexico.
US: NIGERIAN NATIONAL CHARGED WITH MONEY LAUNDERING FOR PONZI INVESTMENT FRAUD CONSPIRACIES
A news release from US DoJ on 30 September announced that Tochukwu Abel Edeh, 31, a Nigerian national previously residing in Jacksonville, Florida, had been indicted on one count of money laundering conspiracy and one count of conspiracy to conduct an unlicensed money transmitting business. He is said to have managed used car dealerships and currency transfer services in Texas, Florida and Nigeria. This included a trading company as well as a cryptocurrency and e-commerce firm, both of which were based in Nigeria, through which Edeh exchanged Bitcoin and other cryptocurrencies for profit. It is alleged that Edeh conspired with others to launder and transmit proceeds of Ponzi-style investment fraud schemes based in Nigeria.
MAJOR AML AMENDMENTS TAKE EFFECT IN HONG KONG
On 30 September, STEP reported that Hong Kong’s Securities and Futures Commission (SFC) has issued amended AML guidelines addressing areas identified in the FATF September 2019 mutual evaluation report. The SFC held a consultation on its plans in September 2020 and the resulting draft proposals were published on 15 September this year, and the legislation comes into effect from 30 September.
PROPOSAL TO COUNTER IUU FISHING WITH MARITIME ENFORCEMENT GROUPS
An article from US Naval Institute says that there is an emerging crisis in the Pacific, fuelled by the war on fish. Illegal, unreported, and unregulated (IUU) fishing, and the worst effects are on vulnerable coastal states without sufficient resources to police their territorial waters. To counter this threat, the article proposes that the US should expand US Coast Guard presence and foster a cooperative maritime strategy with nation-states less able to defend themselves or their resources. It must leverage the unique capabilities of the Coast Guard and provide a deliverable force package to combatant commanders around the world. Agile Maritime Enforcement Groups (MEG) are needed to deploy across the globe. A national security cutter (NSC) – a type of ship used by the USCG – would be the nucleus of the MEG, and would operate with 2 Sentinel-class fast response cutters which could be refuelled and resupplied as required at sea by the NSC.
OFAC SANCTIONS CONSIDERATIONS FOR THE CRYPTO SECTOR (PART 3)
On 30 September, a blog post on the Compliance and Enforcement blog from the Program on Corporate Compliance and Enforcement at the New York University School of Law if the third part of a 3-part series. Part I provided an overview of sanctions compliance issues for the cryptocurrency industry, and Part 2 discussed blocked coins, blocked persons, and sanctioned regions. Part 3 deals with other restricted transactions, blocking and rejecting transactions and the associated compliance considerations.
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