Panama Covid-19 update – still it goes on, with 2 of our household now testing positive – although, somehow I was negative while my wife was positive (as the Americans say, “go figure”). Meanwhile, another 3,244 new cases reported today, with test results still above 20% positive, and hopsitalisations and the number of active cases all up again. 4 new fatalities were reported today, with 27,476 active cases, of which 35 are in ICU and 289 in other wards.
On a personal level, it seems my long weekend break away is off – unless I go on my own…
8 JUNE 2022
BASEL INSTITUTE ON GOVERNANCE ANNUAL REPORT 2021
BIS has released its latest annual report, with an emphasis on anti-corruption, AML and asset recovery.
LEGAL AMENDMENTS BOOST SEYCHELLES’ ABILITY TO RECOVER ILLICIT ASSETS
A post from the Basel Institute on Governance on 31 May reported that a recently amended law will allow the country’s anti-corruption commission to more effectively prosecute corruption and associated money laundering cases, as well as to seize and confiscate proceeds of crime. The changes made include an amendment to the 2020 AML Act to cure an important loophole – it was not possible to prosecute someone for money laundering where the property that they were laundering originated from a criminal offence that took place before the Act came into force.
US: PROPOSED AMENDMENT TO IMPROVE THE CAPABILITY OF LITIGATING HUMAN RIGHTS ABUSES COMMITTED ABROAD
A post on the Transnational Litigation Blog on 1 June was concerned with a Bill in the US senate which seeks to amend the Alien Tort Statute in the light of Supreme Court decisions which narrowly limited who can be sued and for what. The new law would correct this by implementing a jurisdictional standard and restore the Statute’s applicability to human rights abuses committed abroad. It is argued that the change provides Congress an opportunity to more effectively address modern human rights violations, many of which occur within increasingly complex global supply chains and which amplify the disadvantages small US businesses face at home and abroad. The proposed amendment, if passed, would provide greater redress to victims while also levelling the playing field to promote a domestic and global economy built on fair competition.
US FEDERAL COURT SUSTAINS FRAUD CLAIM FOR FAILURE TO DISCLOSE SEC INVESTIGATION
On 6 June, an article from McDermott Will & Emery says that companies under an SEC investigation have to decide whether the investigation should be publicly disclosed. In general, it says, public companies under investigation are not required to disclose the existence of the investigation to the public. However, even without an independent duty to disclose, case law dictates that if a company speaks on an issue, it has a duty to tell the whole truth. It warns that failure to disclose the existence of the investigation may result in the sustaining of fraud claims in private litigation for not disclosing an SEC investigation.
NETFLIX AND BLACKROCK CEO AMONG THOSE NEWLY SANCTIONED BY RUSSIA
On 7 June, the Wall Street Journal reported that a handful of prominent US CEO, including Black Rock’s Larry Fink and the bosses at Delta Air Lines, Netflix and Universal Pictures, have landed on a fresh list of sanctions Russia has imposed in retaliation for sanctions imposed by the US and its allies.
OVER 90 OPERATIONS IN GEORGIA SUSPENDED ON SUSPICION OF RUSSIA SANCTIONS CIRCUMVENTION
On 8 June, Agenda in Georgia reported claims by the Finance Minister that more than 90 operations have been suspended by the Georgian customs service in the country on suspicion of violations of sanctions imposed by the international community against Russia due to its invasion of Ukraine.
OTHER SANCTIONS-RELATED HEADLINES
On 8 June, Nikkei Asia reported that China and India have increased Russian oil purchases as prices decline due to Western import bans, the latest data shows, creating a loophole that allows Moscow to secure export revenue.
On 7 June, Undercurrent News, which covers the fishing industry, reported that Russia had suspended an agreement with Japan over operation of Japanese fishing boats in waters near the disputed north-western Pacific islands.
BINANCE RESPONDS TO REUTERS’ MONEY LAUNDERING ALLEGATIONS
On 7 June, Coin Telegraph reported that cryptocurrency exchange Binance had published a lengthy response to an article from by Reuters that claims that the exchange has been a “hub for hackers, fraudsters and drug traffickers”. Binance says that the article’s allegations are not only untrue but are also attempts by certain interested parties to “mislead the general public” by spreading disinformation.
LEGAL PRIVILEGE IN AUSTRALIA
On 8 June, Bird & Bird published a guide on key concepts and recent case law developments on the law of legal professional privilege and without prejudice privilege in Australia.
HMRC URGES CUSTOMERS TO LEAVE TAX AVOIDANCE SCHEME PROMOTED BY LONDON-BASED FIRM
On 8 June, a news release from HMRC names Peak PAYE Ltd as a tax avoidance promoter and urges individuals to withdraw from using it. Individuals using a tax avoidance scheme provided by Peak PAYE Ltd are urged to withdraw from it and to contact HMRC as soon as possible.
EU MEMBER STATE TAX AUTHORITIES STEP UP TAX ENFORCEMENT EFFORTS IN SUPPORT OF ‘FREEZE AND SEIZE’ TASK FORCE
On 8 June, the EU reported that the EU Commission and Member State tax authorities have set up a subgroup on tax enforcement in the “Freeze and Seize” Task Force to step up their efforts against sanctioned Russians and Belarusians individuals and companies, as well as their associates. It will help unearth possible tax crimes and recover unpaid taxes, while facilitating the implementation of EU sanctions. In particular, it will check for the presence of sanctions-listed persons and entities in tax files; intensify or undertake new tax audits or investigations regarding such persons and entities; share information on those persons and entities with each other and with third countries within the boundaries of existing tax law frameworks; increase screening efforts on tax refunds and repayments to avoid any circumvention of the asset and fund freezes laid down in EU sanctions regulations; and ensure a high level of vigilance regarding any intermediary acting for such persons and entities in view of the already existing prohibition to offer certain services to trusts and similar legal arrangements.
AML: WHICH TRUSTS IN THE UK REAL ESTATE SECTOR MUST REGISTER BY 1 SEPTEMBER
On 7 June, an article from Hogan Lovells reported that trustees holding UK real estate must generally register the trust with HMRC following the extension of the Trust Registration Service (TRS). The UK Government has extended the rules and brought many non-taxable trusts with a UK nexus into scope. The article details what trusts are affected.
UK: TOP CRIMINAL BARRISTER SUSPENDED OVER ‘LAMENTABLE’ DISCLOSURE FAILINGS
On 8 June, the Law Society Gazette reported that a leading criminal silk whose ‘lamentable’ failure to disclose key evidence led to a conviction for perverting the course of justice being overturned has been suspended for a year.
THIRD COUNTRIES ALIGN WITH EU CYBER SANCTIONS AND SANCTIONS ON SOUTH SUDAN
On 8 June, a news release advised that North Macedonia, Montenegro, Serbia, Albania, Bosnia and Herzegovina, Iceland, Liechtenstein, Norway, Ukraine and Moldova have agreed to align their laws with the amended sanctions. Another news release advised that North Macedonia, Montenegro, Albania, Bosnia and Herzegovina, Iceland, Norway and Ukraine have agreed to align with the extension of existing restrictive measures under the cyber sanctions regime for 3 years tol 18 May 2025, and the listings by 1 year to 18 May 2023.
GUATEMALAN MINISTERS CHARGED FOR ALLOWING NICKEL MINE TO POLLUTE ENVIRONMENT
On 8 June, OCCRP reported that Guatemalan authorities charged current and former high-ranking officials involved with one of the largest nickel mines in Central America which OCCRP exposed as a major polluter of the air and the country’s largest lake. The current Minister of Energy and Mines, Alberto Pimentel Mata, and his predecessor Luis Chang Navarro, have been accused.
RUSSIAN STATE DUMA VOTES TO QUIT EUROPEAN COURT OF HUMAN RIGHTS
On 8 June, Eurasia Review reported that the Duma has passed a pair of Bills to end the jurisdiction of the European Court of Human Rights (ECHR) in the country. They must be signed by President Vladimir Putin in order to become law.
MEXICAN TRAFFICKERS FIND NEW CRIMINAL OPPORTUNITIES IN SPAIN
On 7 June, Insight Crime reported that a Mexican drug trafficking ring with connections to the country’s cartels operated marijuana plantations and cocaine processing labs in Spain, demonstrating how Mexican crime groups are embedding themselves further in Europe’s booming drug trade. It says that more than 200 officers conducted raids across the central Spain provinces of Madrid and Guadalajara, ending in the arrest of 2 dozen people and the seizure of 1 ton of marijuana and 37 kg of cocaine.
HOW TO STRENGTHEN INTERNATIONAL LAW ENFORCEMENT COOPERATION FOR DETECTING, INVESTIGATING, AND PROSECUTING CRIMINAL ACTIVITY RELATED TO DIGITAL ASSETS
On 6 June, the US Attorney General published a report which explains steps that law enforcement and regulatory partners have already taken steps to combat the illicit use of digital assets, but says that efforts must evolve to meet the challenge. The report recommends expanding operational and capacity building efforts with international partners; increasing information sharing, coordination, and deconfliction; and closing regulatory gaps across jurisdictions.
KROLL 2022 ANTI-BRIBERY AND CORRUPTION BENCHMARKING REPORT
The report follows a survey of 700 executives conducted earlier this year across the globe, and is said to offer thoughtful insights into the state of anti-bribery and corruption (ABC) programs worldwide for the 11th consecutive year. The survey found that despite these challenges and uncertainties, companies on average continue to be confident in the efficacy of their ABC programs and seek innovative ways to bolster their defences.
ITALY: ELABORATE STING TARGETS COLOMBIAN DRUG GANG, TONNES OF COCAINE SEIZED
On 7 June, Yahoo News reported that Italian police have seized 4.3 tonnes of cocaine with a street value of €240 million, carrying out an elaborate sting against the Colombian Clan del Golfo drugs gang. Colombian authorities said last November they were focused on breaking up the gang, whose network extends to 28 countries around the world, after the capture of the group’s leader, Dairo Antonio Usuga, alias “Otoniel”, in October.
US: WEBSITES THAT LISTED MORE THAN 20 MILLION SOCIAL SECURITY NUMBERS FOR SALE, SEIZED AND DISMANTLED IN INTERNATIONAL OPERATION
On 7 June, a news release from US DoJ announced the seizure of the SSNDOB Marketplace, a series of websites that operated for years and were used to sell personal information, including the names, dates of birth, and Social Security numbers belonging to individuals in the US. The SSNDOB Marketplace has listed the personal information for approximately 24 million individuals in the US, generating more than $19 million in sales revenue.
EUROPEAN COURT OF JUSTICE: PRECEDENT ON THE LIABILITY FOR INDIRECT REPRESENTATIVES FOR IMPORT VAT
A post from Baker McKenzie on 7 June is said to be of particular interest to traders in the UK post-Brexit, who have had to appoint indirect representatives to import goods on their behalf into the EU market. It notes that the ECJ has ruled that indirect representatives would only be liable for the payment of duties and not VAT. Hence, the indirect customs representative cannot be held liable for payment of import VAT, jointly with the importer, in the absence of national provisions designating him or recognising him, explicitly and unequivocally, as being liable for that tax.
HOW RUSSIA’S ‘RICHEST’ LAWMAKER USED HIS PARTNER’S SECRET COMPANIES TO OWN 2 YACHTS AND A SEYCHELLES VILLA
On 6 June, an article from ICIJ says that the Paradise Papers reveal how billionaire Andrei Skoch financed the acquisition of luxury assets including a yacht now targeted by US sanctions, while offshore law firm Appleby disregarded his alleged ties to Russian criminal groups.
UK: JAILED PENSIONER WHO TRAFFICKED FIGHTER JET PARTS TO IRAN ORDERED TO PAY £700,000
A news release from HMRC on 8 June advised that a man who trafficked fighter jet parts to Iran in shipments he claimed were goggles, wheelbarrows and gloves, has been ordered to pay back £700,000 under a POCA order. Retired company boss Alexander George, 80, was jailed in 2018.
RUSSIA IMPOSES TRAVEL BANS ON A FURTHER 61 US CITIZENS
On 8 June, EU Sanctions blog reported that those targeted are US officials (including Secretary of the Treasury Janet Yellen) and businesspeople who operate within the media, finance, aviation and shipping industries.
PODCAST: “FAT LEONARD”
The latest TRACE podcast is a repeat from May 2017 in which Craig Whitlock of the Washington Post describes the sleaze and corruption that compromised the top ranks of the US Navy 7th Fleet.
UK: MAN JAILED FOR SELLING ILLEGAL FOOTBALL STREAMING BOXES ORDERED TO PAY £1 MILLION
On 8 June, the Guardian reported that a man jailed for selling illegal devices providing unauthorised streams of Premier League matches has been ordered to pay back almost £1 million. Steven King was found guilty of conspiracy to defraud in 2019 and sentenced to 7 years and 4 months in prison, and has now been told to forfeit the proceeds of his criminal activities.
DECISION ON LIFTING EU SANCTIONS AGAINST ALISHER USMANOV AND SISTERS EXPECTED SOON
On 8 June, the Guardian reported on a legal challenge at the European court of justice by the businessman once described as one of Vladimir Putin’s “favourite oligarchs”. Usmanov, and his sisters Saodat Narzieva and Gulbakhor Ismailova, each filed separate legal appeals in April.
HOW A BELGIAN ARISTOCRAT UNDER INVESTIGATION FOR MONEY LAUNDERING MOVED MILLIONS INTO COLOMBIA
On 8 June, OCCRP carried a report saying that a Belgian called Henri De Croÿ was accused of masterminding a scheme that hid hundreds of millions from tax authorities on behalf of rich clients in Europe. Reporters found him in Cartagena, busy investing money in a series of luxury properties. Originally convicted in 2012, his conviction was overturned on appeal in 2015, but now prosecutors in 3 countries are investigating once more. He is said to have used wire transfers and prepaid cards to shift money into Colombia, according to documents in a 2018 Dubai Papers leak.
SUMMIT OF THE AMERICAS: AN OPPORTUNITY TO ADDRESS CHINA’S GROWING INFLUENCE OVER LATIN AMERICA’S MINERAL RESOURCES
On 8 June, a post from Lawfare says that the Summit of the Americas in Los Angeles this week provides a prime opportunity for the US Government to work with its like-minded partners in the region to address a major strategic challenge: China’s growing influence over Latin America’s critical and natural mineral resources. It says that, in the past 2 decades, Chinese-owned companies have ramped up their investments in the extraction and processing of so-called “critical minerals” in Latin America — including lithium and nickel; including in South America’s so-called “lithium triangle,” the region spanning parts of Argentina, Chile, and Bolivia that account for roughly 56% of the world’s lithium resources.
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