OTHER THINGS YOU MAY HAVE MISSED – DECEMBER 20

Panama Covid-19 update – well, it happened, inevitably…On Sunday, the Ministry of Health discovered the first confirmed Omicron case in a 50-year-old man – and authorities are also said to be monitoring 6people who had contact with the infected man during his trip from South Africa where he had traveled for work reasons as he is part of the staff of a mining project being developed here. All 7 are in quarantine, but the Minister asked the population to redouble biosafety measures, such as hand washing, the use of masks, and physical distancing.

Meanwhile, active cases are up by “only” 57 today to 4,149. There were no fatalities but 252 new cases were reported. Numbers in ICU are unchanged at 19, but other wards have more patients at 127.

Incidentally, the big flag atop Ancon Hill at half-mast today, marking the anniversary of the 1989 US invasion.

20 DECEMBER 2021 

NFT: A NEW FRONTIER FOR MONEY LAUNDERING?

On 2 December, RUSI published a Commentary says that non-fungible tokens are the latest craze in the digital and traditional art markets – and asks can we mitigate the money laundering risks?

https://rusi.org/explore-our-research/publications/commentary/nfts-new-frontier-money-laundering

CELL COMPANIES/SEGREGATED PORTFOLIO COMPANIES – A COMPARISON

Mourant has produced a comparison chart comparing the laws of, and practice in, the BVI, the Cayman Islands, Guernsey and Jersey. 

https://www.mourant.com/news-and-views/guides/guides-2021/cell-companies-segregated-portfolio-companies–a-comparison.aspx

UK-EUROJUST WORKING ARRANGEMENT

On 20 December, the Home Office published the working Arrangement between the UK and Eurojust which came into effect on 17 December and deals with on serious and organised crime and terrorism.

https://www.gov.uk/government/publications/uk-eurojust-working-arrangement

EU SINGLE MARKET SCOREBOARD 2021

On 20 December, the EU published the latest Scorecard which shows that, despite improvements in certain areas, better implementation of Single Market rules is needed on the ground. 

https://ec.europa.eu/commission/presscorner/detail/en/IP_21_6937

EXPORTING FROM GREAT BRITAIN TO THE EU FROM JANUARY

On 20 December, a post on the GOV.UK blog summarised information and links and saying that goods exported through border locations will be subject to full customs controls, with either a pre-lodged export declaration or an arrived export declaration.

https://taxagents.blog.gov.uk/2021/12/20/exporting-from-great-britain-gb-to-the-european-union-eu-from-jan-2022/

US SANCTIONS NOT BINDING ON LITHUANIAN RAILWAYS

On 20 December, LRT reported that OFAC has officially confirmed that US sanctions against Belaruskali, one of the world’s largest potash fertiliser producers and exporters, are not binding on Lithuania’s state-owned railways.

https://www.lrt.lt/en/news-in-english/19/1568321/us-sanctions-not-binding-on-lithuanian-railways-us-treasury-says

UK: CRACKDOWN ON DIRECTORS WHO DISSOLVE COMPANIES TO EVADE DEBTS

On 20 December, The Insolvency Service published updated information saying that rogue directors who dissolve their companies and avoid paying liabilities to staff, creditors and the taxpayer can now be disqualified from being a director.  The Insolvency Service has been granted new powers to tackle unfit directors who dissolve companies to avoid paying their liabilities.

https://www.gov.uk/government/news/crackdown-on-directors-who-dissolve-companies-to-evade-debts

UK: CALL FOR EVIDENCE ON UMBRELLA COMPANY MARKET

On 20 December, HM Treasury published a news release, with a call for evidence invites views from stakeholders on the role that umbrella companies play in the labour market, and how they interact with the tax and employment rights systems.  It sets out the concerns that have been raised by some stakeholders, as well as government action already taken to tackle tax non-compliance and improve protection for workers.  The survey closes on 22 February.

https://www.gov.uk/government/consultations/call-for-evidence-umbrella-company-market

OECD: MODEL RULES FOR DOMESTIC IMPLEMENTATION OF 15% GLOBAL MINIMUM TAX

On 20 December, the OECD published detailed rules to assist in the implementation of a landmark reform to the international tax system, which will ensure Multinational Enterprises (MNE) will be subject to a minimum 15% tax rate from 2023.

https://www.oecd.org/newsroom/oecd-releases-pillar-two-model-rules-for-domestic-implementation-of-15-percent-global-minimum-tax.htm

ASIA: THOUSANDS OF FIREARMS DESTROYED FOLLOWING COUNTER-TERRORISM OPERATION

A news release from INTERPOL on 20 December advised that a recent INTERPOL-led operation codenamed Trigger-Salvo saw law enforcement from 10 countries in Central, East and SE Asia coordinate in a series of border enforcement actions aimed at preventing firearms trafficking and detecting any links with terrorism and organised crime.  

https://www.interpol.int/News-and-Events/News/2021/Asia-Thousands-of-firearms-destroyed-following-counter-terrorism-operation

SAINSBURY’S AND OTHER EUROPEAN SUPERMARKETS WILL STOP SELLING SOME OR ALL BEEF PRODUCTS ORIGINATING IN BRAZIL OVER CONCERNS OVER LINKS TO DEFORESTATION

On 17 December, the Bureau of Investigative Journalists reported that Sainsbury’s, along with Lidl Netherlands and others, took action after new research into “cattle laundering” involving JBS, Brazil’s largest meat business.  Repórter Brasil, working with the campaign group Mighty Earth, tracked beef products linked to deforestation – including beef jerky, corned beef and fresh meat – from Brazil to European supermarket shelves.

https://www.thebureauinvestigates.com/stories/2021-12-17/supermarkets-drop-brazil-beef-over-links-to-deforestation

EUROJUST CASEWORK ON COUNTER-TERRORISM: INSIGHTS 2020 – 2021

On 17 December, Eurojust published this report which presents the tangible results achieved (including seizures, confiscations, arrests and convictions) thanks to Eurojust’s coordination of counter-terrorism cases.

https://www.eurojust.europa.eu/publication/eurojust-casework-counter-terrorism-insights-2020-2021

On 16 December, Global Financial Integrity has documented the international problem of “trade misinvoicing” — when importers and exporters deliberately falsify the declared value of goods on the invoices they submit to their customs authorities in order to illicitly transfer money across international borders, evade tax and/or customs duties, launder the proceeds of criminal activity, circumvent currency controls, and hide profits in offshore bank accounts.  It says that it is important to note that while the term “illicit financial flows’’ (IFF) tends to include many types of activities, such as tax evasion, smuggling, etc, this report only focuses on trade misinvoicing, or the trade-related aspects of illicit financial flows. It does not address all forms of IFF. 

https://gfintegrity.org/report/trade-related-illicit-financial-flows-in-134-developing-countries-2009-2018/

SOUTH KOREA RANKS 9th IN WORLD ARMS EXPORTS

On 20 December, the Yonhap News Agency reported that South Korea was the world’s 9th largest arms exporter in the 2016-2020 period, accounting for 2.7% of the world’s total defence exports, according to an annual government report.

https://en.yna.co.kr/view/AEN20211220004200325?section=national/defense

https://www.visualcapitalist.com/mapped-economic-freedom-around-the-world/

VANCOUVER – NEW INSTITUTE DEVOTED TO ANTI-CORRUPTION AND AML EFFORTS SEEKS TO REPAIR A REPUTATION TAINTED BY THE ‘VANCOUVER MODEL’ OF CHINESE MONEY SMUGGLING

On 20 December, the South China Morning Post reported that the backers of a new anti-corruption institute want to flip the script, and make Vancouver a model for AML and corruption compliance.  The Vancouver Anti-Corruption Institute (VACI), launched this month, is the brainchild of veteran crime investigator Dr Peter German.

https://www.scmp.com/news/china/diplomacy/article/3160485/vancouver-became-byword-money-laundering-fuelled-chinese-cash

FORMER OIL EXECUTIVE APPEALS BRITISH UNAOIL BRIBERY CONVICTION

On 20 December, Yahoo Finance reported that Paul Bond, 69, convicted in the UK over how oil contracts were secured in post-occupation Iraq lodged an appeal, in another potential blow to one of the SFO’s most high-profile bribery cases.  The appeal by the former manager at Dutch energy services company SBM Offshore follows the decision by the Court of Appeal to overturn the conviction of his former co-defendant Ziad Akle, once a Unaoil manager for Iraq over disclosure failings.

https://uk.finance.yahoo.com/news/former-oil-executive-appeals-british-192300207.html

SEC: FRAUD CHARGES AGAINST 5 RUSSIAN NATIONALS OVER MULTI-YEAR HACKING AND TRADING SCHEME

A release on Mondo Visione on 20 December, advised that the SEC had announced fraud charges against 5 Russian nationals for engaging in a multi-year scheme to profit from stolen corporate earnings announcements obtained by hacking into the systems of 2 US-based filing agent companies before the announcements were made public.  The filing agents assist publicly-traded companies with the preparation and filing of periodic reports with the SEC, including quarterly reports containing earnings information.

https://mondovisione.com/media-and-resources/news/sec-charges-five-russians-in-80-million-hacking-and-trading-scheme/

US CHARGES EXTRADITED KREMLIN-LINKED RUSSIAN BUSINESSMAN WITH CYBERCRIMES AND NAMES 4 OTHER RUSSIAN SUSPECTS

On 20 December, Rferl reported that US authorities have unveiled charges against Russian businessman Vladislav Klyushin, who was extradited from over his alleged involvement in a global scheme to trade on hacked confidential information.

https://www.rferl.org/a/us-charges-russian-klyushin-extradited/31618166.html

https://www.statista.com/chart/26424/top-destination-and-origin-countries-of-international-migrants

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ISRAELI COMPANIES EXPORTED CRUISE MISSILES TO CHINA WITHOUT PERMIT

On 20 December, the Jerusalem Post reported that 3 Israeli companies have been indicted for exporting cruise missiles to China without a licence.  It is alleged thatEphraim Menashe, the owner of the Solar Sky company, brokered a deal with entities from China who were competing for a tender to provide cruise missiles to the Chinese military.  It is said that the deal was handled by Zion Gazit and Uri Shachar, owners of a security consulting company which deals in consulting and mediation between foreign investors and Israeli tech companies; and that Menashe also hired Zvika and Ziv Naveh, the owners of Innocon, which produces UAV for intelligence purposes, and other people who worked to produce cruise missiles and all their parts.

https://www.jpost.com/israel-news/article-689286

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FinCEN ANALYSIS REVEALS UPWARD TREND OF SAR RELATED TO WILDLIFE TRAFFICKING

On 20 December, FinCEN advised a Financial Threat Analysis on wildlife trafficking threat patterns and trend information identified in Bank Secrecy Act (BSA) data.   The report aims to further inform efforts to combat wildlife trafficking and the associated movement of illicit proceeds, which are estimated to be between $7 and $23 billion per year and account for a quarter of all wildlife trade.  FinCEN said that it was calling attention to this threat because of –

  • its strong association with corruption and transnational criminal organisations, 2 of FinCEN’s national AML/CFT priorities;
  • a need to enhance reporting and analysis of related illicit financial flows; and
  • wildlife trafficking’s contribution to biodiversity loss, damage to fragile ecosystems, and the increased likelihood of spreading of zoonotic diseases. 

https://www.fincen.gov/news/news-releases/fincen-analysis-reveals-upward-trend-sars-related-wildlife-trafficking

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OFAC: 2 SANCTIONS DELETIONS AND OTHER ENTRIES UPDATED

On 20 December, OFAC advised that 2 Croatian entries listed under the Global Magnitsky sanctions regime had been removed from the SDN List.  At the same time, various Hong Kong, Iran and terrorism sanctions entries have been amended.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20211220

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BAHAMAS: REAL ESTATE, GAMING, MONEY TRANSMISSION HIGHEST AML/CFT RISKS

On 20 December, the Nassau Guardian reported that the Central Bank of The Bahamas (CBOB) and Group of Financial Services Regulators’ (GFSR) Bahamas AML/CFT Report for 2019 to 2020 reveals that The Bahamas’ real estate, gaming and money transmission sectors have the highest AML/CFT risks of those sectors regulated by the CBOB and GFSR.

https://thenassauguardian.com/real-estate-gaming-money-transmission-highest-aml-cft-risks-says-report/

The Report is at –

https://www.centralbankbahamas.com/news/press-releases/group-of-financial-services-regulators-gfsr-bahamas-2019-2020-aml-cft-report?N=C

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US: VIEWS ON PROPOSALS TO IMPROVE BANKING ACCESS FOR ENTITIES TRANSFERRING FUNDS TO HIGH-RISK COUNTRIES

On 16 December, the Government Accountability Office published a report saying that money transmitters and non-profits that transfer funds to recipients in countries at high risk for money laundering or terrorist financing have reported bank account closures and delays or denials of requests to transfer funds.  Banks cited the high costs of conducting the due diligence necessary to ensure funds distributed in high-risk countries are not used for illicit purposes, and also cited heightened scrutiny they receive from regulators when banking higher-risk money transmitters and non-profits and uncertainty about regulatory expectations for conducting due diligence.  The GAO spoke to banks and other stakeholders about proposals to improve banking access.  For example, most believe that an enhanced federal role in humanitarian transfers would help ensure money reaches its intended recipients, but it may also discourage high-risk countries from enacting needed reforms.

https://www.gao.gov/products/gao-22-104792

PARAGUAYAN RAIDS HIGHLIGHT US INTERMEDIARIES’ ROLE IN MONEY LAUNDERING IN TRI-BORDER AREA

On 17 December, the Foundation for the Defense of Democracies reported that Paraguayan authorities have raided the offices of a dozen US-linked companies and their accountants tied to suspected Paraguayan drug kingpin and linked to the Tri-Border Area (TBA) of Argentina, Brazil, and Paraguay.  It is said that this reflects the growing role of US import-export businesses in conducting suspicious transactions with their TBA counterparts.  It is said that TBA trade-based money laundering schemes heavily rely on US-based companies, many of which are located in Florida.  The raid and the evidence it may yield could offer important data to US investigators about the activities of major Latin American money launderers in the US.

https://www.fdd.org/analysis/2021/12/17/paraguayan-raids-tba-money-laundering/

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US CUSTOMS ISSUES WITHHOLD RELEASE ORDER ON BRIGHTWAY GROUP OVER FORCED LABOUR CONCERNS

A news release from US CBP on 20 December advised that CBP personnel at all US ports of entry will detain disposable gloves produced in Malaysia by Brightway Holdings Sdn Bhd, Laglove (M) Sdn Bhd, and Biopro (M) Sdn Bhd (collectively, Brightway Group).   This is based on information that reasonably indicates the use of forced labour in that entity’s manufacturing operations.

https://www.cbp.gov/newsroom/national-media-release/cbp-issues-withhold-release-order-brightway-group

EBA PAVES THE WAY FOR SETTING UP AN AML/CFT CENTRAL DATABASE

On 20 December, the European Banking Authority advised that it has published its draft Regulatory Technical Standards (RTS) on a central database on AML/CFT in the EU.  The European Reporting system for material CFT/AML weaknesses (EuReCA) will be a key tool for coordinating efforts to prevent and counter money laundering and terrorism financing in the EU.  The EBA will use EuReCA to provide information on risk affecting the EU’s financial sector. It will also share information from the database with competent authorities as appropriate, to support them at all stages of the supervisory process, and in particular if specific risks or trends emerge.  EuReCA will be an early warning tool, which will help competent authorities to act before the risk crystalise. As such, EuReCA will be key to strengthening AML/CFT supervision and to coordinating efforts to prevent and counter money laundering and terrorism financingin the EU.

https://www.eba.europa.eu/eba-paves-way-setting-central-database-anti-money-laundering-and-countering-financing-terrorism

 

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