OTHER THINGS YOU MAY HAVE MISSED – FEBRUARY 11

Panama Covid-19 update – numbers continue to slowly fall, though with another 2,111 new cases and 13 new fatalities added today. The number of recorded active cases has shown another big fall, down over 3,400 but still relatively high at 28,256. There are 66 patients in ICU and 479 in other wards.

11 FEBRUARY 2022

BVI COMMISSION OF INQUIRY

The purpose of the Commission is to establish whether there is evidence of corruption, abuse of office or other serious dishonesty that has taken place in public office in recent years and, if so, what conditions allowed this to happen. This will ensure that BVI governance is working in a fair and transparent manner for the people of BVI. The Commissioner will report his findings and recommendations to the Governor.  Having been granted 2 extensions, the Commission’s report is now due in April. It has heard allegations of systemic corruption, cronyism, jury intimidation and misuse of public funds.  Allegations aired at the hearings range from unaudited spending on a $40 million Covid stimulus fund, the handing out of contracts worth close to £100,000 to politically connected people, a £10 million land development deal, the selective granting of BVI citizenship or “belonger” status, handing out of Crown Property and drug running.

https://bvi.public-inquiry.uk/

https://www.theguardian.com/world/2021/oct/24/bvi-inquiry-hears-claims-systemic-corruption-jury-intimidation

SEC SAYS IT WON’T LIMIT WHISTLEBLOWER PAYOUTS

The Wall Street Journal reported that the SEC proposes changes to 2 amendments adopted during Trump administration that it says could have been used by future commission to reduce awards.  They address concerns that they would discourage tipsters from coming forward

https://www.wsj.com/articles/sec-says-it-wont-limit-whistleblower-payouts-11644522072

SCHEME TO OBTAIN MICROWAVE, COUNTER-DRONE SYSTEMS ALLEGED BY US PROSECUTORS

On 3 February, Kharon reported that a UK man pleaded guilty and prosecutors unsealed a related indictment against an Iranian national.  The scheme involved sending goods through the UAE and obscuring the intended Iranian end-users.  Both industrial microwave systems and counter-drone systems have potential civil and military uses.

https://brief.kharon.com/updates/scheme-to-obtain-microwave-counter-drone-systems-alleged-by-us-prosecutors

PANAMA: ARREST OF FORMER JUSTICE OFFICIAL WHO GAVE ADVICE TO A CRIMINAL GANG LINKED TO A COLOMBIAN DRUG CARTEL

On 10 February, Newsroom Panama reported that the former official, a woman aged 36, provided advice on the defence strategy to the members of the network, which is allegedly linked to the Clan del Golfo, from Colombia.

https://www.newsroompanama.com/news/arrest-ofjustice-official-who-fed-information-to-drug-network-arrested-1

https://www.laestrella.com.pa/nacional/220210/aprehenden-exfuncionaria-panamena-judicial-presunto-vinculo-clan-golfo

GERMAN POLITICIAN SET UP A STATE-BACKED FOUNDATION WITH RUSSIAN ENERGY COMPANY GAZPROM LAST YEAR TO HELP AVOID US SANCTIONS

On 10 February, Reuters reported that the Klima- und Umweltschutz (Climate and Environment Protection Foundation) was set up in January 2021, when the Nord Stream 2 pipeline was virtually complete, by the government of Mecklenburg-Vorpommern.  The regional government injected €200,000 into the Foundation, and also endowed with €20 million from Nord Stream 2 AG, a Switzerland-based company owned by Gazprom PAO.  Nord Stream 2 said it would give the Foundation a further €2 million each year. 

https://www.reuters.com/business/energy/how-german-climate-fund-set-out-help-russia-dodge-us-sanctions-2022-02-10/

SPAIN: GUARDIA CIVIL SAID IT HAS DISMANTLED A DRUGS TRAFFICKING RING SIMULATING BOAT DAMAGE IN ORDER TO BE TOWED INTO PORTS

On 11 February, Euro Weekly reported that once in Spanish waters the gang would radio in that they have been the victim of damage or an accident, according to the police.   The drugs were unloaded little by little and stored in a hiding place awaiting reshipment abroad. Another excuse used what the boat had “been the victim of an attack by orcas while crossing the Strait of Gibraltar”.

https://www.euroweeklynews.com/2022/02/11/drugs-ring-simulating-boat-damage-to-aid-smuggling-bust/

https://www.thelocal.es/20220211/spain-police-bust-gang-that-faked-orca-attacks-to-smuggle-drugs/

AUSTRALIA: FORMER MULTI-MILLIONAIRE RACEHORSE OWNER DAMION FLOWER JAILED FOR AT LEAST 17 YEARS FOR DRUGS SMUGGLING

On 11 February, the Riverine Herald reported that Flower, 49, and Qantas baggage-handler To’Oto’O Mafiti, 53, were arrested in May 2019.  Flower relied on his knowledge of airports to import more than 200 kg of cocaine.

https://www.riverineherald.com.au/national/damion-flower-jailed-for-at-least-17-years/

PROPOSED EU GREEN JET FUEL MANDATE RISKS INCENTIVISING FRAUD

On 11 February, EurActiv reported that a cap should be placed on the amount of low-carbon jet fuel produced from used cooking oil, according to a European Parliament MEP in charge of the EU aviation fuel legislation proposal.  The legislation would greatly boost the amount of sustainable aviation fuel (SAF) used in planes departing from EU airports. It sets mandatory percentages of SAF that must be blended with kerosene, which increase over time.  Questions have been raised over the quality of used cooking oil refined in the EU, with imports under particular scrutiny.

https://www.euractiv.com/section/alternative-renewable-fuels/news/proposed-eu-green-jet-fuel-mandate-risks-incentivising-fraud-mep-warns/

FAILED COUP PUTS SPOTLIGHT BACK ON GUINEA-BISSAU’S ROLE IN COCAINE TRADE

On 11 February, FX Empire reported that, in October, the President told French radio that drug trafficking and corruption were over in Guinea-Bissau, a country that has struggled to shake off its reputation as a “narco state” of West Africa.  This was followed by what was described it as a failed coup in February as an attempt possibly linked to the drugs trade.

https://www.fxempire.com/news/article/failed-coup-puts-spotlight-back-on-guinea-bissaus-role-in-cocaine-trade-895707

US: 5 DEFENDANTS CHARGED IN $8.4 MILLION “BOILER ROOM” FRAUD AND MONEY LAUNDERING SCHEME

A DoJ news release on 9 February alleged that the defendants operated boiler rooms overseas and shell companies in the US to defraud victims around the world of millions of dollars.  The scam involved a boiler room operation in Thailand that lied to investors and told them the boiler room was in fact a Manhattan-based investment firm.

https://www.justice.gov/usao-sdny/pr/five-defendants-charged-84-million-boiler-room-fraud-and-money-laundering-scheme

UK: ETHICAL BRAND TONY’S CHOCOLONELY FINDS 1,700 CHILD LABOURERS IN SUPPLY CHAIN

On 6 February, City AM reported that anti-slavery chocolate brand Tony’s Chocolonely has admitted that 1,700 child labourers were involved in its supply chain last year.  In the cacao industry children are forced to undertake hazardous tasks such as using machetes and spraying harmful pesticides. The company revealed that the majority of cases were identified at 2 new partner co-ops which had a child labour prevalence rate of 50.5% between them. Among the company’s 5 existing partners the prevalence rate was far lower at just 3.9%.

https://www.cityam.com/ethical-brand-tonys-chocolonely-finds-1700-child-labourers-in-supply-chain/

SWITZERLAND: BANQUE PICTET FACES FURTHER MONEY LAUNDERING ALLEGATIONS

On 10 February, Newswires reported that the Al Rushaid Group of companies has lodged a $350 million civil claim against Swiss bank, Banque Pictet & Cie SA in the Swiss courts.  Banque Pictet is already being investigated over other claims.  3 individuals were convicted in 2015 in Geneva for money laundering.  They had received kick-backs and bribes from several suppliers when placing orders for contracts for equipment for offshore drilling in Saudi Arabia; and, in 2013 in the High Court of Justice in London found that the payments received by the same 3 individuals were bribes.

https://www.einnews.com/pr_news/562744762/banque-pictet-faces-further-money-laundering-allegations

FORMER MEXICAN FEDERAL POLICE COMMANDER SENTENCED TO 10 YEARS’ IMPRISONMENT FOR DRUG TRAFFICKING CONSPIRACY

A news release from US DoJ on 9 February advised that Ivan Reyes Arzate, a former Mexican Federal Police Officer and Commander of the Mexican Federal Police’s Sensitive Investigative Unit (SIU), was sentenced in the US to 10 years’ imprisonment for participating in a drug trafficking conspiracy.

https://www.justice.gov/usao-edny/pr/former-mexican-federal-police-commander-sentenced-10-years-imprisonment-drug

US: GAMBINO CRIME FAMILY CAPTAIN SENTENCED TO 37 MONTHS IN PRISON AND ORDERED TO PAY $1 MILLION IN RESTITUTION FOR RACKETEERING CONSPIRACY

A news release from US DoJ on 10 February advised that Andrew pleaded guilty to the charge in January 2021, admitting his participation in various predicate acts of wire fraud and money laundering.  It was said that, as a captain in the Gambino crime family, Campos has engaged in multiple fraud and money laundering schemes and maintained the corrosive influence of organised crime in the construction industry.

https://www.justice.gov/usao-edny/pr/gambino-crime-family-captain-sentenced-37-months-prison-and-ordered-pay-1-million

CHINA IS POISED TO FURTHER CONSOLIDATE THE ADMINISTRATION OF THE FINANCIAL INDUSTRY AND BOLSTER THE NATION’S CAPACITY TO FIGHT MONEY LAUNDERING

On 11 February, China.org reported that the People’s Bank of China, the Ministry of Public Security, the National Supervisory Commission and another 8 agencies jointly issued an action plan in January on combating money laundering.  An operation targeting money laundering, which will run from January 2022 to December 2024, was also launched.

http://www.china.org.cn/business/2022-02/11/content_78042346.htm

SPAIN: EX-IRA DUO CLEARED OF MONEY LAUNDERING

On 11 February, the Irish Times reported that Spain’s Supreme Court has quashed the convictions of 2 former IRA members found guilty of money laundering.  Husband and wife Donna Maguire and Leonard ‘Bap’ Hardy were convicted in 2019, having been arrested on the Canary Islands 4 years earlier.  Both were previously convicted in relation to a failed mortar attack on a British army barracks at Osnabruck, Germany, in 1989.  Their lawyers say the court found that evidence from British authorities “was not evidence which could be used in a Spanish court to ground a conviction”.

https://www.irishnews.com/news/northernirelandnews/2022/02/11/news/spainclears-ex-ira-duo-of-money-crime-2586730/

WHAT WE HAVE AND HAVEN’T LEARNED ABOUT TERRORISM FINANCING

On 10 February, a post in Lawfare contained a review of a new book, saying that the author, a former Canadian intelligence officer, makes an important contribution by expanding the focus of how terrorist groups raise, transfer, and spend money, to also explore how they store and invest assets.  This enlarged aperture allows her to better unpack the organisational incentives of terrorist groups to invest assets as a means to grow resources and even hedge against inflation.  She achieves this goal by “propos[ing] a common lexicon to describe the full range of activities in which terrorists engage in terms of financing”.

https://www.lawfareblog.com/what-we-have-and-havent-learned-about-terrorism-financing

UN REPORT GIVES LITTLE GROUNDS FOR OPTIMISM ABOUT DPRK MISSILE DEVELOPMENT

On 11 February, NK Pro reported that a recent burst of testing shows North Korea’s commitment to military modernisation, a UN Panel of Experts draft report says.  The latest Panel report covers N activities from 4 August to 28 January, and the period includes 6 of out 7 North Korean missile launches last month, all but the final test of a Hwasong-12 intermediate-range ballistic missile.

https://www.nknews.org/pro/key-un-report-gives-little-grounds-for-optimism-about-dprk-missile-development/

JAPAN: SECOND AUTONOMOUS CONTAINER SHIP BEGINS TRIALS

On 11 February, Loadstar reported that a domestic Japanese feeder ship is being retrofitted for autonomous shipping as part of the Designing the Future of Full Autonomous Ships (DFFAS) project.  The pilot project, sponsored by the Joint Technological Development Programme for the Demonstration of Unmanned Ships under the Nippon Foundation, is testing the feasibility of unmanned navigation through crowded waters.

https://theloadstar.com/japans-second-autonomous-box-ship-begins-trials/

US: EXECUTIVE ORDER PROTECTING CERTAIN PROPERTY OF DA AFGHANISTAN BANK FOR THE BENEFIT OF THE PEOPLE OF AFGHANISTAN

On 11 February, OFAC announced a new Executive Order that provided that all property and interests in property of DAB that are held, as of the date of this order, in the US are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in, accordance with the EO.

https://home.treasury.gov/system/files/126/afghanistan_bank_eo.pdf

ISLE OF MAN: NEW RUSSIA SANCTIONS REGULATIONS

A news release from the Isle of Man on 11 February said that new regulations came into force on 10 February to toughen and expand the UK’s sanctions regime against Russia.  It means the UK can now impose sanctions on Russian businesses and individuals in a wide range of economic and strategically significant sectors, such as the chemical, defence, extractives, ICT and financial services industries.

https://www.gov.im/news/2022/feb/11/financial-sanctions-russia/ 

INCREASING US GOVERNMENT ENFORCEMENT IN INSIDER TRADING OF COMMODITIES

On 11 February, an article from Akin Gump says that while the DoJ and SEC have a long history of applying anti-fraud laws to insider trading, the increasing use of commodities laws to penalise insider trading is a relatively recent development.  The firm says that it expects to see additional actions brought under commodities laws for insider trading given the CFTC interpretation of its anti-fraud regulations to be guided by precedents under virtually identical SEC rules.  It says that Government enforcers are looking to hold traders liable for their duty to maintain confidential material, non-public information regarding companies’ futures trading plans.

https://www.jdsupra.com/legalnews/increasing-government-enforcement-in-3640997/

NETHERLANDS: CHIEF NATIONAL POLICE INSPECTOR SUSPECTED OF ORGANISED CRIME INVOLVEMENT

On 11 February, NL Times reported that a 47-year-old chief inspector of the national unit of the Dutch police force had been arrested on suspicion of violating breaking confidentiality rules, corruption and participation in a criminal organisation.  He is suspected of having leaked highly confidential information to a criminal organisation.

https://nltimes.nl/2022/02/11/chief-national-police-inspector-suspected-organized-crime-involvement

FCA: CONVICTION OF FORMER CHIEF FINANCIAL OFFICER OF REDCENTRIC PLC ON 4 CHARGES CONCERNING THE MAKING OF FALSE AND MISLEADING STATEMENTS TO THE MARKET

On 11 February, a release on Mondo Visione said that, following a prosecution brought by the FCA against 3 former employees of Redcentric PLC, the former CFO has been found guilty today of 4 charges concerning the making of false and misleading statements to the market.  Redcentric, an IT service provider and AIM-listed company, issued false and misleading unaudited interim results in November 2015, and false and misleading audited final year results in June 2016. Both materially overstated Redcentric’s cash position. When the true position was revealed, shareholders suffered immediate losses in the value of their shares.

https://mondovisione.com/media-and-resources/news/former-cfo-and-finance-director-guilty-of-misleading-investors-in-case-brought-b/

ALLEGED LEADER OF THE PANAMAN’S BIGGEST GANG CAPTURED IN COSTA RICA

On 11 February, La Estrella reported the capture of the alleged leader of the Baghdad gang, Jorge Rubén Camargo Clarke, aka ‘Cholo Chorrillo’, in Costa Rica with his wife.  In Panama, National Police had offered a reward of $50,000 to anyone who gave information that would allow them to find the location and capture of Camargo.  Panama wanted ‘Cholo Chorrillo’ for his alleged connection with crimes related to drug trafficking, gangsterism, money laundering, illicit association to commit a crime and homicides; however, it escaped the country last year.

https://www.laestrella.com.pa/nacional/220211/capturan-costa-rica-cholo-chorrillo-presunto-lider-banda-bagdad

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https://www.buymea3coffee.com/KoIvM842y

UK: 29 AMENDMENTS TO SANCTIONS REGIMES

On 11 February, HM Treasury advised that 29 entries have been amended in the new version of the consolidated list. 11 amendments have been made to entries under the Afghanistan financial sanctions regime; and 18 amendments have been made to entries under the ISIL/Al-Qaida financial sanctions regime. 

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1054471/Notice_ISIL__Da_esh__and_Al-Qaida_110222.pdf

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1054470/Notice_Afghanistan_110222.pdf

NFT, MONEY LAUNDERING AND TERRORIST FINANCING

On 9 February, a report from ACFCS says that a recent US Treasury report opened up serious attention at the government level on NFT (Non-Fungible Tokens) from a money laundering and terrorist financing perspective. It says that the financial crime risks – and AML controls – related to NFT, fraud, the art world and crypto value blockchains have also risen in recent months for financial institutions after recent historic changes in the US to transform the compliance regime of the country from pleasing federal regulators to serving law enforcement.

https://www.acfcs.org/acfcs-special-contributor-report-it-starts-with-art-nfts-money-laundering-and-terrorist-financing/

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UK SINGLE TRADE WINDOW DISCUSSION PAPER

On 11 February, the Cabinet Office reported that said that a Single Trade Window is a key commitment within the 2025 Border Strategy. The Government has committed £180 million to build a UK Single Trade Window which will reduce the cost of trade by streamlining trader interactions with border agencies.  The discussion paper sets out a number of questions which we are seeking stakeholder views on to help inform early design work.

https://www.gov.uk/government/publications/uk-single-trade-window-discussion-paper

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EU AMENDS LIBYAN SANCTIONS REGULATIONS RELATING TO SAADI QADHAFI 

EU Regulation 2022/183/EU amended the listing following the decision of the relevant UN Sanctions Committee on 28 January.

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv%3AOJ.L_.2022.030.01.0001.01.ENG&toc=OJ%3AL%3A2022%3A030%3ATOC

https://eur-lex.europa.eu/legal-content/EN/AUTO/?uri=uriserv:OJ.L_.2022.030.01.0115.01.ENG&toc=OJ:L:2022:030:TOC

UK: PEOPLE WITH SIGNIFICANT CONTROL (PSC) GUIDANCE

On 9 February, Companies House released updated guidance on what are sometimes called ‘beneficial owners’.

https://www.gov.uk/guidance/people-with-significant-control-pscs

DETERMINING A PSC – WHAT CRITERIA NEEDS TO BE SATISFIED?

On 8 February, an article from Herrington Carmichael LLP considers the assessment criteria for the determination of a PSC status. A PSC is an individual who falls into one or more of several categories in relation to a company, and which are detailed in the article.

https://www.herrington-carmichael.com/determining-a-psc/