OTHER THINGS YOU MAY HAVE MISSED – MAY 30

Panama Covid-19 update – the fifth wave continues, with 5 new fatalities reported today, alongside 1,842 new cases. Active cases now stand at 27,280, with 38 in ICU and 215 in other wards.

30 MAY 2022

BASEL INSTITUTE ON GOVERNANCE ANNUAL REPORT

On 30 May, the BIS issued its annual report.  Among other things it says it has noticed an encouraging new trend in how government leaders are responding to the Basel AML Index – our flagship tool for assessing money laundering and terrorist financing risks in jurisdictions around the world.  Also, anti-corruption Collective Action, a cornerstone of the Basel Institute’s mission for nearly 20 years, is now widely acknowledged as an effective approach to stimulate and facilitate public-private and other multi-stakeholder collaboration on corruption and governance issues.

https://baselgovernance.org/sites/default/files/2022-05/Annual%20Report%202021.pdf

GREECE AND IRAN AT LOGGERHEADS OVER TANKER SEIZURES

On 30 May, Seatrade Maritime News reported that a stand-off has developed between Greece and Iran over the seizure of oil tankers in the waters of Greece and the Persian Gulf.

https://www.seatrade-maritime.com/tankers/greece-and-iran-loggerheads-over-tanker-seizures

8 TRADERS ARRESTED IN TANZANIA FOR SMUGGLING GOLD

On 29 May, LatestLY reported that 8 traders have been arrested in Tanzania’s north-western in connection with smuggling out of the country an unspecified amount of gold.  In 2019, Tanzania set up government-controlled minerals trading centres in efforts aimed at curbing illegal exports of gold and other precious metals.

https://www.latestly.com/agency-news/world-news-eight-traders-arrested-in-tanzania-for-smuggling-gold-3764087.html

A PUBLIC CAMPAIGN “STOP SMUGGLING” TARGETS CITIZENS OF BOSNIA AND HERZEGOVINA (BIH) 

On 30 May, the Sarajevo Times reported that the Indirect Taxation Authority (ITA) has launched a public campaign “Stop Smuggling”, whose goal is to enable all citizens of Bosnia and Herzegovina (BiH) who have any information about the evasion of indirect taxes and illegal trade in goods, especially tobacco products, to report it.  Citizens can also send a photo and location where cigarettes and tobacco are illegally sold.

https://sarajevotimes.com/bih-starts-stop-smuggling-campaign/

SRI LANKA: AN EXHAUSTED ECONOMY BURDENED BY SMUGGLING

On 30 May, the Daily FT reported that, with governments and authorities focused on the multiple crises at hand, there has been an apparent rise in smuggling after a brief lull during months of pandemic pressure.  Cigarettes are the most popular contraband item. 

https://www.ft.lk/opinion/An-exhausted-economy-burdened-by-smuggling/14-735471

LEBANON QUESTIONS CAR TYCOON GHOSN AFTER INTERPOL NOTICE

On 30 May, Yahoo News reported that a judge had questioned disgraced auto tycoon Carlos Ghosn in Beirut, days after Lebanon received a wanted notice for him from Interpol.  The French prosecutor’s office in the Paris suburb of Nanterre said last month that it issued an international arrest warrant for the former head of Nissan and Renault and four other people based on an investigation opened in 2019 into money laundering and abuse of company assets.  It was the second Red Notice that Lebanon received in the case; the first was issued in January 2020, a few days after Ghosn fled Japan for Lebanon in a gripping escape.  Lebanon does not extradite its citizens. 

https://news.yahoo.com/lebanon-questions-auto-tycoon-ghosn-112322031.html

FRAUDSTER OWING £76 MILLION FACES JAIL THREAT FOR ‘EXTRAVAGANT’ PARTIES

On 30 May, the Evening Standard reported that Gerald Smith, a fraudster who flew round the world despite owing taxpayers tens of millions of pounds is facing a new prison term after using secret accounts to splash out on “extravagant” parties and meals.  The spending took place even though he had been banned by a judge from disposing of any assets and now faces up to 2 years in prison for breaching this order.

https://www.standard.co.uk/news/uk/jetsetting-fraudster-gerald-smith-faces-jail-serious-fraud-office-claridges-b1003176.html

NCA LEADS INTERNATIONAL COALITION TACKLING CHILD SEXUAL ABUSE

On 30 May, a news release advised that the National Crime Agency is the chair of the Virtual Global Taskforce (VGT) – an international collective of law enforcement agencies from 12 countries working to tackle child sexual abuse.

https://www.nationalcrimeagency.gov.uk/news/nca-leads-international-coalition-tackling-child-sexual-abuse

COLOMBIA AND PANAMA DISMANTLE EX-FARC DRUG TRAFFICKING NETWORK

On 27 May, OCCRP reported that authorities have dismantled a drug trafficking ring that used semi-submersible vessels to move tonnes of cocaine from the Pacific Coast to Central and North America, and the operation disrupted the supply along one of the region’s main cocaine corridors.

https://www.occrp.org/en/daily/16386-colombia-and-panama-dismantle-ex-farc-drug-trafficking-network

EU DATA PROTECTION GUIDANCE BRINGS WELCOME NEWS FOR UK SUPPLIERS

On 30 May, an article from Out-Law says that new guidance issued by the European Commission will be welcomed by UK-based suppliers involved in complex post-Brexit data transfer arrangements, but the guidance highlights a data protection “compliance gap” in relation to other data transfers, according to experts.  The EU has published a new Q&A on Standard Contract Clauses (SCC).

https://www.pinsentmasons.com/out-law/news/eu-data-protection-guidance-uk-suppliers

START OF TRIAL OF KAZAKHSTAN’S EX-HEALTH MINISTER ON EMBEZZLEMENT CHARGES

On 26 May, Rferl reported that former Kazakh Health Minister Elzhan Birtanov, removed in 2020 amid a surge in coronavirus cases, has gone on trial on embezzlement charges. He and former Deputy Health Minister Olzhas Abishev, are suspected of embezzling about $1.2 million that had been allocated by the government for the digitisation of the Health Ministry.

https://www.rferl.org/a/kazakhstan-minister-birtanov-embezzlement-charges/31870074.html

US WINS LATEST LEGAL BATTLE TO SEIZE RUSSIAN YACHT IN FIJI

On 26 May, AP reported that the US won the latest round of a legal battle to seize a $325-million Russian-owned superyacht Amadea in Fiji, with the case now appearing headed for the Fiji Supreme Court.  The US argues that the Cayman Islands-flagged luxury yacht is really owned by the sanctioned Russian oligarch Suleiman Kerimov, an economist and former Russian politician.

https://apnews.com/article/russia-ukraine-new-zealand-fiji-a6ec81d0ce055648fd07f2df0aa93a9c

MIGRANT FRUIT PICKERS IN UK CHARGED THOUSANDS IN ILLEGAL FEES

On 27 May, the Bureau of Investigative Journalists reported on a joint investigation by the Bureau and the Guardian about 150 Nepalese workers who came to work at a farm in Herefordshire as part of the government scheme, many of them claiming to have paid agents working for a UK-licensed recruitment company.  The findings suggest that the underfunding of labour enforcement, combined with the rapid expansion of the seasonal worker scheme – which aims to plug shortages created by Brexit and Covid-19 – could be putting thousands of migrant labourers at risk of exploitation.  Any additional recruitment fees are illegal under UK law and can result in a labour provider being stripped of its licence.

https://www.thebureauinvestigates.com/stories/2022-05-27/migrant-fruit-pickers-charged-thousands-in-illegal-fees-to-work-on-uk-farms

CAN THE WEST BRING KLEPTOCRATS TO JUSTICE?

An article from Transparency International on 25 May posed this question, saying that a new report finds that, from layers of secrecy to legal challenges to the complexities of international cooperation, governments targeting the illicit wealth of Russian elites face myriad obstacles – despite their strong pledges to act decisively following the invasion of Ukraine.

https://www.transparency.org/en/news/reality-check-western-sanctions-russia-kleptocrats-assets-justice

SUSPICIOUS CHINESE FUNDS SHOULD HAVE RAISED ‘ALARM BELLS’ AT CANADIAN BANKS

On 30 May, an article from OCCRP reported that, for 8 years, Chinese property developer Chen Runkai used hundreds of wire transfers to move tens of millions of dollars into accounts at Canadian banks –– a technique experts say is a hallmark of money laundering.  However, Canada’s biggest banks accepted the money without flagging it to the country’s financial regulator, and only one financial institution acted: the Vancouver arm of Switzerland’s UBS bank filed a SAR in 2012 after noting massive flows of unexplained money into a Chen family account.

https://www.occrp.org/en/37-ccblog/ccblog/16389-suspicious-chinese-funds-should-have-raised-alarm-bells-at-canadian-banks-experts

NEW NFT OF LOOTED AFRICAN ART RELEASED

On 30 May, the Art Law & More blog from Boodle Hatfield reported that a new NFT project has been released which seeks to find an alternative form of restitution of African looted art.  The project, titled “Looty”, plans to (legally) make NFT of artifacts known to have been looted from Africa and sell them, with 20% of the proceeds going to a fund to provide a young African artist with a grant.

https://artlawandmore.com/2022/05/30/new-nfts-of-looted-african-art-released/

RUSSIA INTRODUCES RUBLE-BASED PAYMENT PROCEDURE FOR IP-RELATED CONTRACTS

On 30 May, Baker McKenzie reported that, on 27 May, a new Decree provided that Russian persons (the Russian state, regional state authorities, municipalities and Russian residents) are instructed to make payments for the use of intellectual property to foreign IP right-holders (including penalties, fines and other payments) by transferring funds in rubles to a special O-type bank account opened in the name of the foreign IP right-holder. 

https://sanctionsnews.bakermckenzie.com/russia-introduces-ruble-based-payment-procedure-for-ip-related-contracts/

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UK MUST TAKE ACTION ON 4 FRONTS TO TACKLE DIRTY MONEY AND ECONOMIC CRIME

A report from the Policy Institute at King’s College London in March was by Labour MP Margaret Hodge, a former Chair of the House of Commons Public Accounts Committee.  She argues that the UK needs –

  • Greater transparency, to better follow money flows in the financial sector and expose decision-making to scrutiny in the public sector;
  • To reinforce the pillars of accountability that support our democracy – from an independent judiciary and civil service to a powerful parliament and robustly independent media;
  • Stronger financial and constitutional regulation to prevent and punish financial crime and corrupt behaviour in the public domain; and
  • Better enforcement to police our systems more effectively.

Hodge says such steps are needed because financial malpractice in the UK has flourished due to a culture of deregulation and light-touch enforcement which is now seeping into British politics. 

https://www.kcl.ac.uk/policy-institute/research-analysis/losing-our-moral-compass

https://www.kcl.ac.uk/policy-institute/assets/losing-our-moral-compass-corrupt-money-and-corrupt-politics.pdf

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EU ADDS 2 PERSONS AND 1 ENTITY TO AL-QAIDA/ISIL SANCTIONS LISTS

EU Regulation 2022/836/EU adds Faruq AL-SURI (aka Samir Hijazi, Samir ‘Abd al-Latif Hijazi, Abu Hammam Al-Shami, Abu Humam Al-Shami, Abu Hammam Al-‘Askari) and Sami AL-ARIDI (aka Abu Mohammad Al-Shami, Abu Mahmud Al-Sham, Abu Mahmud Al-Shami, Sami Al-Oride, Sami Al-Oraidi, Sami Al-Oraydi, Sheikh Dr. Sami Al-Uraydi), as well as Hurras AL-DIN (HaD) (a.k.a. Hurras al-Deen, Huras-al-Din, Guardians of Religion, Tanzim Hurras Al-Din, Tandhim Hurras Al-Deen, Sham Al-Ribat, Al-Qaida in Syria, AQ-S) to its sanctions lists.

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv%3AOJ.LI.2022.147.01.0001.01.ENG&toc=OJ%3AL%3A2022%3A147I%3ATOC

https://eur-lex.europa.eu/legal-content/EN/AUTO/?uri=uriserv:OJ.LI.2022.147.01.0003.01.ENG&toc=OJ:L:2022:147I:TOC

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UK RUSSIA SANCTIONS GENERAL LICENCE ALLOWS CERTAIN ACTIVITIES RELATED TO THE PROVISION OF CIVILIAN TELECOMMUNICATIONS SERVICES AND NEWS MEDIA SERVICES

A General Licence issued on 30 May is concerned with continued business operations involving the provision of civilian telecommunication services, business operations involving the provision of news media services, and an institution may process payments in accordance with these permissions.  The Licence runs to 30 May 2024.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1079707/30.05.2022_INT20221875276_Telecoms_and_News_General_Licence_Publication_notice.pdf

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JERSEY PUBLISHES RISK OVERVIEW OF VIRTUAL ASSETS SECTOR

On 27 May, Jersey published its first National Risk Overview of the Virtual Asset sector in Jersey.  It is noted that Jersey is not currently aligned to the FATF Standards but that new legislation will resolve this.  It also noted that the sector in Jersey remains small, meaning that the risks relating to money laundering and terrorist financing are perceived to be limited, although there is some indirect exposure where business is carried on with entities who themselves deal with virtual assets directly.  It warns that a conservative approach has served as a mitigating factor but has also discouraged authorities and firms from developing a deeper understanding of the sector, and the risks it can present. 

https://www.jerseyfsc.org/news-and-events/the-government-of-jersey-publishes-risk-overview-of-virtual-assets-sector/

https://www.step.org/industry-news/jersey-risk-assessment-finds-virtual-asset-aml-risk-low

https://www.gov.je/Industry/Finance/Pages/NationalRiskAssessmentVASPs.aspx

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BOEING AND THE CORRUPTION OF THE DEFERRED PROSECUTION AGREEMENT

On 25 May, the Harvard Law School Forum on Corporate Governance posted an article, based on a recent paper by the author, considers the DPA entered into by the US DoJ and Boeing in January 2021.  The DoJ alleged that Boeing had misled the Federal Aviation Administration about its new model 737 MAX airliner, which had markedly different flight characteristics than its predecessors.  Had the FAA known more, it would have almost certainly mandated more extensive flight simulator training.  This failure to alert the FAA to these changes may have been a proximate cause of 737 MAX crashes in 2018 and 2019 that killed 346 passengers.  Boeing was in trouble, and it needed a gentle, quiet exit with little publicity. But the penalty also had to look sufficiently tough that it would not strike the public as a sell-out. This was a difficult balance to strike.  It concludes that what should concern one is the ability of a large public corporation to manipulate the DPA negotiation process to present itself in a very favourable and misleading light.  Moreover, because judicial oversight is limited and courts are not constitutionally permitted, at present, to reject a DPA that they consider inadequate reforms limiting their use need to be adopted by the DoJ. The post warns that contemporary practice with respect to public corporations in the criminal justice system has reached the point where the DoJ is offering virtually all carrots and no sticks.

https://corpgov.law.harvard.edu/2022/05/25/nosedive-boeing-and-the-corruption-of-the-deferred-prosecution-agreement/

The Paper on which the post is based is at –

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4105514

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UN LIBYA SANCTIONS: HUMANITARIAN TRAVEL EXEMPTION FOR 3 LISTED INDIVIDUALS

On 27 May, a news release advised that the relevant Sanctions Committee on Libya had decided to grant a humanitarian travel exemption, effective from 1 June through 30 November, to Safia Farkash Al-Barassi; Aisha Muammar Muhammad Abu Minyar Qadhafi; and Mohammed Muammar Qadhafi.  Accordingly, these 3 individuals may undertake unlimited travel for humanitarian purposes during the above-mentioned timeframe.

https://www.un.org/press/en/2022/sc14912.doc.htm

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UN AMENDMENT OF AL-QAIDA/ISIL SANCTIONS LISTS

On 27 May, the UN issued 2 news releases advising of a total of 6 entries on the Al-Qaida/ISIL sanctions list being amended.  ARIS SUMARSONO, MOCHAMMAD ACHWAN and MUHAMMAD SHOLEH IBRAHIM (Indonesians); MOUNIR BEN DHAOU BEN BRAHIM BEN HELAL (Tunisian); IBRAHIM ABDALLAH BAKR AL KHUWAYT; and AMIR MUHAMMAD SA’ID ABDAL-RAHMAN AL-SALBI (Iraqis).

https://www.un.org/press/en/2022/sc14914.doc.htm

https://www.un.org/press/en/2022/sc14913.doc.htm

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UK RUSSIA SANCTIONS GENERAL LICENCE – PAYMENTS TO/FOR CHARITIES AND INTERIM MANAGERS AND TRUSTEES

On 30 May, HM Treasury issued a new General Licence which expires on 30 May 2023.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1079599/GENERAL_LICENCE_CC_20220530_.pdf

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