OTHER THINGS YOU MAY HAVE MISSED – NOVEMBER 13

Panama Covid-19 update – another day without fatalities, the fourth this month, with another 222 new cases. 1,756 active cases include 25 in ICU and 103 in other wards. There are also 81 people quarantined in so-called “hospitality hotels”.

13 NOVEMBER 2021

STANFORD INTERNATIONAL BANK AND HSBC

On 10 November, Morton Fraser provides an update on the court case in which HSBC was fighting application of the Quincecare duty of care by the liquidators of Stanford International Bank Ltd, the investment bank owned and run by Robert Allen Stanford which was essentially an enormous Ponzi scheme and a fraud on the many holders of Certificates of Deposit.  In essence, it is alleged that HSBC should have known the SIB was a scam.  The case, involving rulings on 2 points, is now set to reach the UK Supreme Court.

https://www.morton-fraser.com/knowledge-hub/stanford-international-bank-saga-rumbles

UKRAINE SANCTIONS SHIPPING COMPANY CITED FOR INVOLVEMENT IN VENEZUELAN OIL EXPORTS

On 3 November, Forwarder Law reported that the National Security and Defense Council of Ukraine on 30 October imposed sanctions on FIDES SHIP MANAGEMENT of Odesa. The sanctions have been imposed for 3 years and come after the US imposed sanctions on 4 tankers, FIDES SHIP MANAGEMENT held the position of commercial manager of the vessels.

http://forwarderlaw.com/2021/11/03/ukraine-sanctions-shipping-company/

ECUADORIAN COURT FREEZES EX-PRESIDENT’S BANK ACCOUNT IN PROBE

On 13 November, Al Jazeera reported that Ecuador’s Attorney General’s Office has said that court it had frozen the bank accounts of many business leaders and former government officials, including former President Rafael Correa (2007-2017) and members of his -administration, who were sentenced last year for breaking campaign finance laws.  They were accused of accepting $7.5 million in bribes. 

https://www.aljazeera.com/news/2021/11/13/ecuadorian-court-freezes-ex-presidents-bank-account-in-probe

https://www.aljazeera.com/program/talk-to-al-jazeera/2021/11/13/ecuadors-rafael-correa-exiled-and-convicted

IRELAND: 2 JAILED FOR THEIR PART IN A PANDEMIC UNEMPLOYMENT PAYMENT (PUP) FRAUD MASTERMINDED BY THE HEAD OF THE NIGERIAN CRIME GANG, KNOWN AS BLACK AXE

On 13 November, the Irish Examiner reported that the gang had planned to secure up to €1 million from their elaborate fraud, but in the end, only managed to get €183,000.  Health workers were sent bogus jury summonses requesting further information and that was then used to set up bank accounts from which the PUP claims were made. The men were caught after a routine traffic stop.

https://www.irishexaminer.com/news/munster/arid-40743138.html

TAIWAN AND INDONESIA COOPERATE TO ARREST 48-MEMBER FRAUD RING

On 13 November, Taiwan News reported that police in Indonesia received assistance from Taiwan in detaining 48 suspects in a fraud ring which included 4 Taiwanese nationals as its victims.  The group consisted of 46 Chinese and 2 Vietnamese.  It is reported that the suspects used social media to target potential victims in Taiwan and China, later switching to messaging apps like WeChat and Line. They would set the victims up for a honey trap, record footage and then blackmail them.

https://www.taiwannews.com.tw/en/news/4344284

PODCAST: THE CHALLENGES OF THE CULTURE OF TRANSPARENCY IN VENEZUELA AND LATIN AMERICA

Baker McKenzie has released the first episode of the second season of its Compliance Podcast from the firm’s Caracas office, featuring Diego Castagnino, a Venezuelan lawyer and professor with extensive experience in corporate and arbitration issues. In this conversation, Diego presents his perspective from the private sector and from the academy to help us understand the challenges of the culture of transparency in Venezuela and Latin America. In Spanish.

https://www.bakermckenzie.com/en/insight/publications/2020/06/venezuela-compliance-podcast

HOW THE LEGITIMATE ART MARKET CAN BE EXPLOITED FOR PURPOSES SUCH AS SANCTIONS EVASION AND MONEY LAUNDERING

On 27 October, the EU Institute for Security Studies published a briefing which examines 4 ways in which the art market serves illicit groups: money laundering; financial accumulation in safe havens like freeports; commercialisation through galleries and auction houses of cultural objects tainted by illegality; and use of cultural objects as collateral and/or payment for drugs or weapons. It assesses the structural factors that facilitate these processes, particularly the market’s commercial, valuation, authentication, transport and legitimation dynamics.

https://www.iss.europa.eu/content/compliant-or-complicit-security-implications-art-market

GERMANY SEEKS ARREST OF SWISS SENIOR PANAMA PAPERS LAWYER

On 11 November, ICIJ reported that Swiss attorney Christopher Zollinger, 52, is wanted for his role in controversial decisions by the offshore law firm Mossack Fonseca.  He is alleged to have aided tax evasion and for his involvement in founding an alleged criminal organisation.  While Zollinger left Mossack Fonseca years before the 2016 Panama Papers investigation, leaked records apparently reveal that he was involved in many of the law firm’s controversial decisions, including its work for a sanctioned Syrian businessman.

https://www.icij.org/investigations/panama-papers/germany-seeks-arrest-of-senior-panama-papers-lawyer/ 

ONTARIO APPLIED TO SEIZE LUXURY $3.6 MILLION TORONTO CONDO TIED TO ALLEGED CRYPTOCURRENCY FRAUD

On 11 November, CTV News reported that the Ontario government has applied to seize a luxury $3.6 million condo in downtown Toronto, alleging in a court application it was part of a lavish lifestyle made possible through a multi-million-dollar cryptocurrency fraud scheme.  Authorities say that Kevin Hobbs and a partner raised $33.7 million at their Vancouver-based company, Vanbex, promoting a cryptocurrency called “Fuel” and what they called innovative “smart contracts”.

https://toronto.ctvnews.ca/ontario-applied-to-seize-luxury-3-6-million-toronto-condo-tied-to-alleged-cryptocurrency-fraud-1.5661965

PODCAST: A CONVERSATION ABOUT INTERNATIONAL COOPERATE TAXATION

In October, ECIPE released this podcast.  Tax havens, transfer pricing, digitalisation, what do these terms all mean and how are they related to one another? With the rise of multinational companies and their activities spreading all across the world, it has become unclear who should tax these companies and how.  In this podcast, a professor of Economics for the Solvay Business School at the Université Libre de Bruxelles is interviewed about international cooperate taxation.

https://ecipe.org/podcast/episode-63/

BORIS JOHNSON’S £25,000-A-WEEK MARBELLA HOLIDAY VILLA ‘IS LINKED TO ZAC GOLDSMITH TAX EVASION CASE IN SPAIN THAT HAS LANDED HIS PROPERTY FIRM WITH £20 MILLION BILL’

On 13 November, the Daily Mail reported that according to Spanish court papers, the Torre Tramores estate near Marbella is linked to 2 of the Goldsmith family’s property businesses, which were ordered to pay €24 million in unpaid taxes and fines.  It says that Johnson is likely to now face questions over whether he knew the home was linked to an investigation by the Spanish tax authorities.  

https://www.dailymail.co.uk/news/article-10197851/Boriss-Marbella-holiday-villa-linked-Zac-Goldsmith-firms-ordered-pay-20m-unpaid-taxes.html

JERSEY: BIGGEST BENEFIT FRAUD COUPLE ARE JAILED

On 13 November, the Jersey Evening Post reported that a couple who falsely claimed more than £144,000 in income support in Jersey’s biggest ever benefit fraud have been jailed for 3 years.

https://jerseyeveningpost.com/news/2021/11/13/islands-biggest-benefit-fraud-couple-are-jailed/

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IMF – VIRTUAL ASSETS AND AML/CFT: SOME LEGAL AND PRACTICAL CONSIDERATION

On 14 October, the IMF published an edition of its Fintech Notes, which offer practical advice from IMF staff members to policymakers on important issues.  Despite the advantages, it says that virtual assets are susceptible to criminal abuse. Some of their features — in particular their varying degrees of anonymity or pseudonymity — raise new challenges for country authorities. Criminals have misused these features to facilitate fraud, theft, money laundering and terrorist financing, amongst other crimes.

https://www.imf.org/-/media/Files/Publications/FTN063/2021/English/FTNEA2021002.ashx

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UK: CIOT AND ATT AML/CFT SUPERVISION REPORT 2021

The Chartered Institute of Taxation (CIOT) and the Association of Taxation Technicians (ATT) are, along with 21 other professional bodies, government appointed AML supervisors.  As AML supervisors it is their responsibility to ensure that tax advisory and accountancy firms run by our members understand the AML/CFT risks facing their business and how to mitigate them, and comply with their AML/CFT obligations. Each year they submit a report to HM Treasury giving detailed information about its supervisory activities for inclusion in the Treasury annual report on AML/CFT supervision. The report includes themes arising from the year’s supervision, statistics, and links to available guidance.

https://assets-eu-01.kc-usercontent.com/220a4c02-94bf-019b-9bac-51cdc7bf0d99/a00ac16b-b3ed-43cc-bd73-c736f14f650d/AML%20SUPERVISION%20REPORT%20FINAL.pdf

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HIDING IN PLAIN SIGHT? DISGUISED COMPLIANCE BY TERRORIST OFFENDERS

On 9 November, the European Policy Center published a Discussion Paper that examines how terrorist prisoners engage in ‘disguised compliance’, whereby they successfully deceive the professionals involved in their de-radicalisation.  As evidence emerges across Europe that this tactic is a growing threat and that terrorist prisoners are actively misleading those concerned with their rehabilitation to gain the opportunity to attack again, this paper provides practical recommendations on how this growing risk can be tackled.  The authors found that current approaches to the risk management of violent extremists are reactive, generic and mechanistic. They rely too much on collaboration and devalue frontline professional intuition.  It advocates an assertive blended approach that includes new technologies and integrity- and ‘sense-checking’ by a team of practitioners.

https://www.epc.eu/content/PDF/2021/Disguised_compliance_by_terrorist_offenders.pdf

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US SANCTIONS AGAINST CHINESE 5G: INCONSISTENCIES AND PARADOXICAL OUTCOMES

In October, the European Centre for International Political Economy (ECIPE) published this article, saying that US sanctions against Chinese 5G have been inconsistently applied for the supply of critical technologies and participation in standard-setting. Huawei may have been weakened, but it says that the sanctions have also helped Chinese state-owned companies like ZTE and defence contractors.

https://ecipe.org/blog/us-sanctions-against-chinese-5g/

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IMPACT OF THE COVID-19 PANDEMIC ON BUSINESS REGISTRIES

The European Business Registry Association has published a report in collaboration with its sister organisations – the Association of Registers of Latin America and the Caribbean (ASORLAC), the Corporate Registers Forum (CRF) and the International Association of Commercial Administrators (IACA).  They conducted case study research about the impact the COVID-19 pandemic has had on business registries.

https://ebra.be/wp-content/uploads/2021/10/FINAL-REPORT-on-Case-study-research_Sept-2021.pdf

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OECD REPORT DISMISSES 3D PRINTING TRADE THREAT

On 13 November, Hellenic Shipping News reported that a high-level OECD report on 3D printing technologies has concluded that it is premature to suggest that 3D printing technology will ‘replace’ trade, dispelling the hyped warning of the same over the past few years.  The report is an OECD Trade Policy Paper on 3D printing and international trade and asking what is the evidence to date? 

https://www.hellenicshippingnews.com/oecd-dismisses-3d-printing-trade-threat/

https://read.oecd.org/10.1787/0de14497-en?format=pdf

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COMPLIANCE OFFICER BULLETIN (OCTOBER 2021)

Baker McKenzie has released the latest edition of this excellent publication from the lawyers in its London and US offices. In this edition there are comprehensive updates on –

  • Reviewing the EU and UK AML regime proposals: What firms need to know;
  • Emerging themes in the DPA landscape and SFO position;
  • Developments on the Cum-Ex dividend scandal;
  • Cyber risk in financial services;
  • A Guide to spotting — and stopping — authorised push payment (APP) fraud;
  • US AML developments: US Anti-Money Laundering Act of 2020; and
  • The Quincecare duty of care: Where are we now?

https://www.bakermckenzie.com/-/media/files/insight/publications/2021/11/compliance-officer-bulletin-october-2021.pdf

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