Panama Covid-19 update – as the holiday month of November comes along, the health ministry has announced that the vaccination programme will be suspended from 2 to 7 November.
Today, 173 new cases and no fatalities; with 2,257 active cases – 32 in ICU and 157 in other wards.
27 OCTOBER 2021
PANAMA-FLAGGED SHIP ATTACKED BY PIRATES AND RESCUED BY RUSSIAN NAVY
On 26 October, Newsroom Panama reported that the container ship MSC Lucia had been attacked in the Gulf of Guinea, but that the pirates involved had been removed by marines from the Russian Navy supply ship Akademik Pashin.
US SUPPLANTS CHINA IN BITCOIN MINING AFTER CHINA CRACKDOWN
On 27 October, the Wall Street Journal reported that the US is fast becoming the new global hub for bitcoin mining following a government crackdown in China. More than a third of the global computing power dedicated to mining bitcoin is now drawn from machines in the US, up from less than a fifth last spring.
US BANS CHINA TELECOM OVER NATIONAL SECURITY CONCERNS
On 27 October, the Wall Street Journal reported that the Federal Communications Commission had revoked the licence that allows China’s largest telecom operator to do business in the US., citing national security concerns. The FCC said it was taking action against the state-owned China Telecom’s US business because the company was “subject to exploitation, influence, and control by the Chinese government”.
SEAGATE REPORTEDLY BROKE US EXPORT CONTROLS BY SUPPLYING HUAWEI
On 26 October, the Wall Street Journal reported that Seagate Technology Holdings PLC supplied a substantial share of the Chinese company’s estimated $800 million worth of annual purchases of hard-disk drives after tighter restrictions took effect in September 2020, according to the report by Republicans on the U.S. Senate Committee on Commerce, Science and Transportation. The report cited market research by banks, disclosures by the company and committee staffer interviews with Seagate officials.
US: STATISTICS ON EXPORT LICENCES TO HUAWEI AND SMIC SHOWING MAJORITY OF LICENCE APPLICATIONS WERE APPROVED
An article from Foley Hoag LLP on 26 October said that the Department of Commerce’s Bureau of Industry and Security (BIS) had provided export licence statistics related to Chinese firms Huawei and Semiconductor Manufacturing International Corporation (SMIC). Between 9 November 2020 and 20 April 2021, BIS approved 113 export licences involving Huawei out of 169 applications received. It points out that both Huawei and SMIC were added to the Commerce Department’s Entity List in 2019 and, since then, an export licence is required to export to these entities any item controlled under the Export Administration Regulations, which is essentially all US-origin products and technology – and such licence applications are supposedly subject to a presumption of denial standard of review by BIS, but the reality is apparently just the opposite.
SRI LANKA: AROUND 400 VEHICLES IMPORTED INTO THE COUNTRY DESPITE THE BAN ON VEHICLE IMPORTS DURING THE COVID PANDEMIC
On 27 October, the Sri Lanka Mirror reported that the Customs authorities had written to the Ministry of Finance inquiring whether around 400 vehicles that were imported to the country despite the ban on vehicle imports during the Covid pandemic, should be confiscated or not. There are said to be more than 300 luxury vehicles in the port premises at Colombo.
LATVIAN MUNICIPALITIES SHOULD IMPROVE MONEY LAUNDERING AND SANCTION VIOLATION PREVENTION CAPABILITIES
On 27 October, the Baltic News Network reported that an audit looked at 18 municipalities, 13 ministries and 12 central state institutions, their internal control systems, money laundering and sanction risk prevention practices. Auditors found that most municipalities and institutions do not have an internal control system to manage these risks. Additionally, the public sector does not have sufficient methodology training or guidelines.
ABU DHABI COURT JAILS 8 FOR FRAUD AND MONEY LAUNDERING
On 27 October, The National reported that 8 people have been found guilty of money laundering and fraud by the Abu Dhabi Criminal Court, and their sentences range from 7 to 10 years. 4 Emirati men, 3 Syrian men and an Ethiopian woman were convicted. They fraudulently acquired cars and laundered money by transferring ownership to themselves and selling the cars using cheques linked to empty bank accounts.
On 27 October, HMRC published a collection that brings together a list of Freeport maps, the Freeport tax site locations legislated for within them, and a statement on the designation process. These geographical areas are where businesses can benefit from tax reliefs to bring investment, trade and jobs to regenerate regions across the country that need it most.
A research briefing from the House of Commons Library on 27 October says that accounting and audit failures periodically turn the spotlight on a range of problems with the industry, and the audit of large companies in particular. It lists major problems identified, and says that there were several major reviews of how the audit industry works – and how it might be improved – in 2018 and 2019, each recommending significant reform. In March the Department for Business, Energy and Industrial Strategy published a White Paper setting out proposals to make wide-reaching changes to the roles and responsibilities of directors, shareholders, auditors and the audit regulator, in an attempt to drive up standards. Reforms proposed included increased accountability for directors, a new audit regulator, requiring a clearer operational separation of the audit and non-audit activities of firms, and mandatory shared audits for FTSE 350 companies between the Big Four and smaller competitors. A consultation on these proposals closed in July.
UK REGULATOR REVEALS ACTIVE TRADE FINANCE MONEY LAUNDERING PROBES
On 27 October, Global Trade Review reported that the FCA has said it has 3 open investigations under money laundering and terrorist financing regulations which involve trade finance activity. One of the investigations was opened in 2020, 2 were opened in 2021 and all 3 remain active. It did not identify any probes that were opened before 2020.
JAILED LIVERPOOL DRUG SMUGGLER HIT WITH CONFISCATION ORDER OF OVER $300,000
A news release from the NCA on 27 October advised that Gary Swift, 55, from Liverpool, has been given a confiscation order totalling £328,071 after being jailed for 19½ years in January 2020 for attempting to smuggle £60 million of cocaine on a yacht.
UK – PREPARING FOR FINANCIAL CRISES: CRISIS LOOKOUT OPTIONS PAPER
On 27 October, the Foreign, Commonwealth & Development Office issued a paper which outlines what would be required to establish a ‘crisis lookout’ function, to provide financial decision-makers with timely risk information – to help countries improve their disaster and financial risk forecasting. It is said that such a function could play an important role in understanding and comparing the potential financial cost of crises.
SENIOR US OFFICIAL SAYS EFFORTS TO ENFORCE EXPORT CONTROLS AND ECONOMIC SANCTIONS ARE EXPECTED TO INCREASE AND EXPAND IN THE COMING YEARS
On 27 October, Sandler Travis Rosenberg reported that a senior US official said recently that federal efforts to enforce export controls and economic sanctions are expected to increase and expand in the coming years. The firm suggests that exporters should take steps now to review and ensure their compliance.
PODCAST: THE LONG JOURNEY OF THE FALSIFIED MEDICAL PRODUCT
This podcast from the SHERLOC project at the UN Office of Drugs & Crime looks at the complexities of the falsified medical products market and deep-dives into the crimes committed by an Irish company. This company was counterfeiting medical labels by transporting Indian oncology-indicated medical products across 3 continents, illegally relabelling them as Irish-produced and selling falsified medical products to the global market.
US CUSTOMS OFFICERS SEIZE NEARLY 300 FAKE SPORTS CHAMPIONSHIP RINGS
On 26 October, Cincinnati.com reported that customs officers in Cincinnati recently seized nearly 300 fake championship rings for sports teams such as the Los Angeles Dodgers. Various consignments came from Singapore, Saudi Arabia and UAE.
FREIGHT TRAFFIC BETWEEN GREAT BRITAIN AND DUBLIN DROPS BY A FIFTH
On 27 October, the Guardian reported that freight traffic from Great Britain to Dublin Port has dropped by a fifth since Brexit while business with the EU has leapt by more than a third. Exporters and importers in Ireland have been avoiding the Holyhead-Dover-Calais route over the past nine months, bypassing Great Britain on one of the dozens of new ferry services to the continent that have opened up since 1 January. The article is based on a report from Dublin Port.
AFTER A YEAR OF SILENCE, ARE EU CYBER SANCTIONS DEAD?
On 27 October, an article in Lawfare posed this question in reference to a sanctions package in response to malicious cyber activities that constitute an external threat to the EU or its Member States. To date, only 8 individuals and 4 organisations have been sanctioned by the EU for various campaigns. By comparison, since April 2015, the US Treasury has sanctioned on a combined 99 individuals and 59 entities, including 13 individuals and 19 entities in 2021 alone. It is argued that the EU non-use of cyber sanctions over the past year is indicative of a flawed process.
SWITZERLAND: PARLIAMENT TO PROBE INTERIOR MINISTER BLACKMAIL AFFAIR
On 25 October, Swissinfo reported that a parliamentary sub-committee will examine the role of the police and judiciary in prosecuting a woman for attempting to blackmail Swiss interior minister Alain Berset, and if they violated due process of the law because of Berset’s status.
In the latest TRACE podcast, first released in February, Etelle Higonnet of the National Wildlife Federation takes us through the complex and intersecting problems raised by the cocoa industry: environmental degradation, child labour and extreme financial disparities that prevent most cocoa farmers from ever tasting the chocolate they grow.
NEW ZEALAND: POLICE SEIZE JET SKI, YACHT AND FIREARMS LINKED TO BIKER GANGS
In its 28 October edition, Stuff reported that ajet ski and a yacht are among the items seized from a property during the sweeping police raid named Operation Chestnut. Arrests included one individual with links to the Filthy Few, Hells Angels, Head Hunters, Black Power and Mongrel Mob gangs.
MAN MAKING $40,000 A YEAR BOUGHT $32 MILLION IN VANCOUVER REAL ESTATE
On 27 October, Pique News Magazine carried an article saying that the Commission of Inquiry into Money Laundering in British Columbia examined one instance in which a low-income man, a Chinese national, and his family bought $32 million worth of housing in Vancouver after transferring $114 million from largely obscure offshore accounts. The money is said to be from Hong Kong-based depositors with connections to organized crime and the Chinese Communist Party.
SOUTH AFRICA: ALLEGED UNDERWORLD BOSS NAFIZ MODACK SLAPPED WITH TAX FRAUD CHARGES
On 27 October, Times Live reported that alleged Cape Town underworld boss Nafiz Modack has appeared in court on charges of racketeering, fraud, money laundering, uttering and contravention of the VAT Act. Modack, his mother Ruwaida, younger brother Yaseen, Revenue Service employee Faried van der Schyff, and 4 others, appeared in court. It is alleged that they were involved in a scheme involving the submission of false information via the e-filing system, initially on VAT returns and subsequently on documents which purported to substantiate repayment claims. Modack is separately still fighting for bail in a magistrate’s court where he faces charges relating to orchestrating the murder and attempted murder last year.
ECJ CONFIRMS AG’S OPINION THAT PERPETUAL LICENCE OF SOFTWARE IS A “SALE OF GOODS” FOR THE PURPOSES OF THE COMMERCIAL AGENTS DIRECTIVE
On 14 October, Field Fisher reported that the European Court of Justice had confirmed the Advocate General’s Opinion that a perpetual licence of software is a “sale of goods” for the purposes of the Council Directive 86/653/EEC.
EU REPORT ON EXPORT AUTHORISATIONS PURSUANT TO THE EU ANTI-TORTURE REGULATION
On 27 October, the European Studies Unit at Liege University said that on 22 October the European Commission issued a report, pursuant to Article 26 of Regulation (EU) 2019/125 (known as the Anti-Torture Regulation), on the export of goods in 2020 that could be used for torture or for capital punishment (e.g. the number of applications received, the goods and countries concerned by these applications, and the decisions taken on these applications). The EU Regulation involved the trade in certain goods which could be used for capital punishment, torture or other cruel, inhuman or degrading treatment or punishment.
FOSSIL FUEL COMPANIES CLAIMING $18 BILLION AGAINST GOVERNMENT CLIMATE ACTION IN SECRET COURTS
On 18 September, Global Justice Now reported that 5 fossil fuel companies are suing the UK and other governments for more than $18 billion for taking climate action that could harm their profits, in to secretive courts. It says that TC Energy, RWE, Uniper, Rockhopper, and Ascent are suing governments through investor-state dispute settlement (ISDS), a system of corporate courts that operates outside of a country’s domestic legal system as it is built into trade and investment treaties. 4 of the cases are under the Energy Charter Treaty (ECT), an energy investment agreement that includes ISDS, which the UK and EU are signed up to. TC Energy’s case against the US is under the former North American Free Trade Agreement (NAFTA).
On 27 October, Rferl reported that Ukrainian prosecutors have opened a terrorism financing investigation after it emerged that the country’s state-owned export-import bank lent tens of millions of dollars to companies owned by Serhiy Bryukhovetskiy, a businessman with interests in parts of eastern Ukraine controlled by Moscow-backed separatists.
The Egmont Group of FIU has published a public version of its July 2021 report which came in the wake of UN research showing that there has been a 320% rise in attacks conducted by individuals affiliated with extreme right-wing (ERW) movements and ideologies the previous 5 years. It is said that FIU indicate a need for more background information and knowledge on the phenomena of ERW extremism and terrorism to be able to identify relevant money flows. However, analysis found that domestic authorities are taking this threat into account and that solutions are found for combating ERW terrorism financing, but that some room for improvement exists. The report includes case examples, and identifies key lessons and best practices highlighted. Among the things it recommends is to widen the scope of the national risk assessment (NRA) and, if needed, explicitly analyse the threat of ERW terrorism financing.
On 25 October, a news release advised that the OECD Working Group on Combating Bribery in International Business Transactions has recognised significant progress of Latvia in the implementation of Phase 3 assessment recommendations, achieving and demonstrating obvious results in successful investigation and further progress of bribery criminal cases of foreign officials. It is said that Latvia has fully or partially fulfilled 35 of the 44 recommendations made by the Working Group. The Working Group also gave a positive assessment of the proactive approach Corruption Prevention and Combating Bureau (KNAB) to detecting bribery cases of foreign officials, attracting additional human resources.
On 26 October, Krebs on Security reported that the FBI had raided the Florida offices of a Chinese provider of point-of-sale devices used by millions of businesses and retailers globally. It is said that the investigation involved also included the US Customs and Border Protection and the Naval Criminal Investigative Services (NCIS). The post claims that an unnamed source had said that the FBI and MI5 had been conducting an intensive investigation into PAX.
On 27 October, an article from Insight Crime says that a recent incident illustrates how these smaller, private vessels have become a favoured modus operandi to move cocaine between Latin America and lucrative European markets. In 2021, a string of seizures has shown how commonly yachts and sailboats are used to move cocaine to Europe.
On 27 October, FATF published 3 reports saying that it is exploring the opportunities that technology can offer to improve AML/CFT efforts.
Theopportunities and challenges of new technology to help the private sector and supervisors implement AML/CFT measures more efficiently
This FATF project aims to increase awareness of and identify opportunities to leverage emerging and existing technology-based solutions. It identifies the conditions, policies and practices that can help support the adoption of new technologies that contribute to the efficiency and effectiveness of AML/CFT. It also examines regulatory obstacles or other factors impeding the successful adoption of new technologies.
2. Therole of data pooling, collaborative analytics and data protection, taking stock of technologies that facilitate advanced AML/CFT analytics within regulated entities or collaborative analytics between financial institutions, while respecting national and international data privacy and protection legal frameworks
This project examines commercially available or emerging technologies that facilitate advanced AML/CFT analytics within regulated entities. It also looks at technologies that allow collaborative analytics between financial institutions, while respecting national and international data privacy and protection legal frameworks.
3. Therole of big data and advanced analytics in transforming the capabilities of operational agencies in detecting and investigating money laundering and terrorist financing and understanding money laundering/terrorist financing risks.
This project will help operational agencies to harness technology to strengthen their operational capability and resilience. It focuses on the questions of how to identify appropriate tools and technologies, and optimise their use at different stages of the AML/CFT workflow. It examines how to remove barriers to any successful digital transformation. It also covers issues concerning secured, effective, and efficient data communication and information sharing within public sector, and between public and private sectors.
On 27 October, FATF published a report which represented the first phase of its work was a stocktake, to consolidate previous analysis of these phenomena by FATF and other stakeholders, including expert bodies, in order to identify and understand to what extent, and in what manner, these unintended consequences are occurring. Next, FATF will identify and consider potential options to mitigate these unintended consequences. The results of the first phase of this project will also inform FATF’s work on the strategic review, which aims to make FATF more timely, targeted and effective at holding countries to account.
Another article in the Business Crime & Proceeds of Crime Update from 5 St Andrews Hill on 27 October is concerned with the position of constructive trusts in POCA confiscation proceedings. It says that a recent case involving a convicted fraudster who targeted elderly and vulnerable investors by selling them a variety of largely worthless investments is a salutary reminder of the difficulties that can arise in the application of complex areas of law within confiscation proceedings.