Panama Covid-19 update – 2,080 new cases and 1 new fatality reported today. Testing continues to provide a high percentage of positive results, with 15,285 active cases – 33 in ICU and 212 in other wards.
21 JUNE 2022
US OCEAN SHIPPING REFORM ACT ADDRESSES SUPPLY CHAIN CHALLENGES AND CARRIER SHIPPING PRACTICES
On 21 June, Thompson Hine LLP published an article saying that President Biden has signed into law the Ocean Shipping Reform Act of 2022 (OSRA), a package of US shipping law reforms that address supply chain disruptions, rising ocean shipping costs, and inadequate vessel service. OSRA increases the Federal Maritime Commission’s (FMC) authority to address the operating practices of the global ocean shipping lines that service our nation’s seaports.
UPDATE: WHITE HOUSE FOCUS ON SHIPPING REFORM ACT 2022 MOVES TO THE NEXT PHASE
On 16 June, UK P+I Club reported that, 2 months after the Ocean Shipping Reform Act 2022 was introduced into the US Congress, a Federal Maritime Committee (FMC) Fact Finding Final Report was published at the end of May. The report, which summarised the investigation into the supply chain bottle necking at ports in the US and sky rocketing costs of freight and demurrage during the Covid-19 pandemic. The Act aims to level the playing field for US exporters and importers by providing the FMC the tools it needs to improve oversight over international ocean carriers, Congress has unanimously passed. Once signed in by the President, the Act will allow the FMC the regulatory oversight of these new changes to ocean shipping.
THE IMPACT OF EU AND US SANCTIONS ON PUBLIC PROCUREMENT
An article from Reed Smith on 17 June reported that an updated FAQ on the EU’s public procurement directives was issued on 2 June to provide businesses with greater clarity on the EU restrictions on public procurement, the essence of which is to prevent European public funds going to Russian contractors. After considering the EU position, the article goes on to say that the Federal Contracting for Peace and Security Act, if passed into law, would prohibit the US federal government from entering into any contracts with companies that are conducting business with Russia.
https://www.reedsmith.com/en/perspectives/2022/06/the-new-world-order
GERMANY: SANCTIONS – NEW LEGAL FRAMEWORK FOR EFFECTIVE SANCTIONS ENFORCEMENT ENTERS INTO FORCE
On 20 June, an article from Openhoff & Partner published an article about the German Sanctions Enforcement Act I, [Sanktionsdurchsetzungsgesetz 1] the first part of the previously planned 2-part legislative package has now entered into force. It also says that a second Sanctions Enforcement Act is expected to be enacted in the coming months, which aims to establish a register for assets of unclear origin and for sanctioned assets, and to introduce an independent administrative procedure for clarifying assets of unclear origin. In addition, a special whistleblower office is going to be created.
UK: REFORMING CORPORATE CRIMINAL LIABILITY – THE LAW COMMISSION’S OPTIONS PAPER
On 16 June, Herbert Smith Freehills published an article about the paper from the Law Commission on 10 June, described as the next stage in the potential reform of the UK’s corporate criminal liability laws. The review followed frequently aired concerns that the current law falls short in adequately holding corporations – especially large companies – to account, particularly for economic crimes such as fraud. The article outlines the context in which the Paper has arisen; the scope of the Commission’s review; the Commission’s 10 proposed options for reform; and the firm’s analysis of the impact of the Paper.
THAILAND LEGALISES CANNABIS
On 16 June, an article from Sydney Criminal Lawyers reported that Thailand had legalised both cannabis and hemp nationwide, with the ability for unlimited homegrow, as well as establishing both boutique and larger businesses specialising in cannabis products or the manufacturing of goods containing the substance. However, a ban continues on cannabis extracts that contain 0.2% or more tetrahydrocannabinol (THC), which is the psychoactive component of the plant. Cannabis must be consumed at home and not in public; and technically, recreational use still appears to be illegal.
KALININGRAD: ROW ERUPTS OVER GOODS BLOCKED FROM ENTERING RUSSIAN TERRITORY
On 21 June, the BBC reported on the row over Lithuania’s ban on some goods being transported by rail to the Russian enclave of Kaliningrad. Kaliningrad – which has no land border with Russia – was annexed from Germany in 1945 and remains of strategic importance to Russia.
https://www.bbc.com/news/world-europe-61878929
https://www.theguardian.com/world/2022/jun/21/why-is-kaliningrad-row-russia-lithuania
SOVCOMFLOT HAS WORKED AROUND SANCTIONS TO KEEP SAILING
On 20 June, Maritime Executive reported that the Russian state-owned tanker and gas carrier operator, has reportedly found workarounds to address most of the challenges created by sanctions against Russia – but remains in technical default on portions of their western debt.
https://www.maritime-executive.com/article/sovcomflot-has-worked-around-sanctions-to-keep-sailing
SOVCOMFLOT SAYS ITS FLEET IS FULLY COVERED BY RUSSIAN INSURERS
On 21 June, Insurance Marine News says that Russia’s state-run Sovcomflot has said that it had insured all its cargo ships with Russian insurers and that the cover met international rules.
PROSECUTORS SECURE PROPERTIES AND FUNDS IN GERMANY’S FIRST RUSSIA SANCTIONS CASE
On 20 June, MSN reported that German prosecutors have seized several apartments belonging to a Russian lawmaker. It is said to be the first case in Germany that assets have not only been frozen due to sanctions, but actual real estate has been seized. Renters living in the seized properties will be allowed to stay in their apartments, but will now have to pay their rent directly to the district court in Munich.
MPs CALL FOR PROSECUTION OF PROMOTERS OF ABUSIVE TAX SCHEMES
On 21 June, Accountancy daily reported that an all-party group on anti-corruption and responsible tax is currently seeking an amendment to the second Economic Crime Bill to allow for more straightforward criminal prosecution of promoters and enablers of abusive tax schemes.
https://www.accountancydaily.co/mps-call-prosecution-promoters-abusive-tax-schemes
See also –
TARGETING THE ENABLERS OF INEFFECTIVE TAX AVOIDANCE: SUPPLEMENTARY PAPER ON QUESTIONS OF PRINCIPLE AND LEGAL ANALYSIS
https://raytoddblog.files.wordpress.com/2022/06/3ed4c-enablers_follow-up_final.pdf
UK: POST OFFICE OPERATORS WRONGLY ACCUSED OF EMBEZZLEMENT DUE TO FAULTY ACCOUNTING SOFTWARE, MAY BE DISQUALIFIED FROM A COMPENSATION SCHEME
On 21 June, the Guardian reminded one that more than 700 branch managers were convicted of fraud between 2000 and 2014 after Horizon, a new computer system installed by the Post Office, showed apparent shortfalls in their accounts. Hundreds more were ordered to pay sums of up to 5 figures after being accused of stealing Post Office funds. Those who have failed to meet a deadline for compensation claims may lose out and the National Federation of Subpostmasters (NFSP) has campaigned unsuccessfully for the scheme to be reopened with no cut-off date so that late claims can be considered.
UK: MINING GIANT GLENCORE HAS PLEADED GUILTY TO 7 BRIBERY OFFENCES
On 21 June, LBC reported that Glencore admitted 5 counts of bribery and 2 of a failure of a commercial organisation to prevent bribery on behalf of the company at a hearing at London’s Southwark Crown Court. Glencore had, via its employees and agents, paid bribes of more than $28 million for preferential access to oil, including increased cargoes, valuable grades of oil and preferable dates of delivery; and these actions were approved by the company across its oil operations in Nigeria, Cameroon, Ivory Coast, Equatorial Guinea and South Sudan. The bribery charges date from March 2012 to April 2016.
https://www.lbc.co.uk/business/d8943975b9334b3c8ace9fcf22720462/
UK: HOW TO BRING A CIVIL FRAUD CLAIM
On 21 June, Rahman Ravelli published an article which outlines the procedures and the issues in civil fraud cases.
https://www.rahmanravelli.co.uk/articles/how-to-bring-a-civil-fraud-claim/
UK: THE CROWN DEPENDENCIES
On 20 June, the House of Commons Library published a briefing paper on the Bailiwick of Jersey, the Bailiwick of Guernsey and the Isle of Man, which are not part of the UK but are self-governing dependencies of the Crown.
https://researchbriefings.files.parliament.uk/documents/CBP-8611/CBP-8611.pdf
UK: GOVERNMENT HAS DECIDED NOT TO CONTINUE THE ADDITIONAL CABOTAGE RIGHTS
On 21 June, the Department for Transport published the outcome of its consultation on ending or extending the temporary suspension of road transport cabotage controls in the UK (introduced to help cope with the post-Brexit shortage of lorry drivers). It is said that analysis suggests that the take-up of the additional cabotage rights has been low. The qualitative feedback from the consultation responses was that, while the use of the additional cabotage rights has been low in overall terms, the rights were helpful in some sectors in the run-up to Christmas 2021. On the other hand, some UK haulage operators reported that the impact of the additional cabotage rights on their businesses was greater than expected.
WHY THE UK SHOULD EXPAND ITS BOSNIA SANCTIONS LIST
On 20 June, a Commentary from RUSI says that while Bosnian Serb separatism has been put on hold for now, there are other actors destabilising the country who should be added to the UK’s sanctions regime. It argues that only a determined response by the UK and others major powers in the West can put a stop to the destructive policies pursued by hard-line politicians.
UK: ABSOLUTE PRIVILEGE PROTECTS PRE-ACTION PROTOCOL LETTERS
On 21 June, Legal Futures reported that a High Court master has ruled that absolute privilege applies to communications within pre-action protocols and protects them from defamation claims, so as to enable a “free and frank exchange of information”.
https://www.legalfutures.co.uk/latest-news/absolute-privilege-protects-pre-action-protocol-letters
CREDIT SUISSE: FRESH LEGAL WORRIES LINKED TO FORMER ROGUE BANKER
On 19 June, Swissinfo reported that Russian oligarch Vitaly Malkin plans to sue Credit Suisse for losses caused by a former employee of the bank. He also wants Credit Suisse to look in more detail into the activities of a former employee and to find out what happened to his money in 2007-2008.
NO CHICKEN, NO TORTILLAS – HOW MEXICAN CITIES ARE DEPRIVED OF STAPLE FOODS
On 17 June, Insight Crime reported that almost all the chicken vendors in one city had closed after a number of their peers were threatened and killed by a criminal group after the chicken industry had been at the centre of an ongoing feud. For smaller, locally entrenched criminal groups, extorting essential businesses is a no-brainer. But things can rapidly spin out of control with local populations suffering most, and when 2 criminal groups go to war, targeting these businesses and forcing them to shut down can deprive a rival of much-needed income.
https://insightcrime.org/news/mexican-cities-deprived-staple-foods/
US ASKS EUROPE TO TONE DOWN INSURANCE REFUSALS ON RUSSIAN OIL CARGO
On 20 June, Insurance Marine News reported that the Biden Administration has quietly to ask the EU and the UK to soften the recently-announced ban on marine insurance for Russian oil cargoes, according to the Financial Times. When it takes effect it will cut Russian energy exporters off from the Lloyd’s market and from the International Group of P&I Clubs. The FT said that the Biden administration was asking its European partners to soften the marine insurance ban so that it allowed some Russian oil exports, but only for cargoes sold below a certain price threshold.
Research shows how the wealth held by the top 1% since the year 1900 diverges from the development in 2 other countries, the UK and France. As the share of 1% wealth decreased significantly in Europe and finally bottomed out, 1% wealth in the US first decreased slightly in the first half of the 19th Century before starting to rise again at the beginning of the 1980s – reaching 39% again in 2014 – the latest available year with the OECD.
https://www.statista.com/chart/27638/net-wealth-held-by-top-1-percent
OFAC: THE VIETNAM GAS AND CHEMICALS TRANSPORTATION CORPORATION AND VO NGOC PHUNG AND CARLOS ERIK MALPICA FLORES FROM ITS SANCTIONS LISTS
On 21 June, the EU Sanctions blog noted that OFAC had made these changes to its sanctions lists. The Vietnam Gas and Chemicals Transportation Corporation and Vo Ngoc Phung were designated in 2018 for alleged involvement with Iranian oil shipments, and Carlos Erik Malpica Flores is the nephew of the Venezuelan first lady (and has reportedly been delisted as an effort to improve US-Venezuelan relations).
https://www.europeansanctions.com/2022/06/ofac-makes-iran-and-venezuela-de-listings/
NO SURPRISE: REPORT FINDS LOGISTICS COSTS SPIKED IN 2021
On 21 June, Freightwaves reported that an annual report on the US business logistics system, confirmed empirically what everyone already knew: 2021 was nirvana or a nightmare depending on what one does for a living. Total logistics costs, which measure how much was spent on transportation, warehousing and ancillary services such as support and administrative, soared 22.4% last year to nearly $1.85 trillion, according to the report – equal to equal to 8% of US GDP.
https://www.freightwaves.com/news/no-surprise-report-finds-logistics-costs-spiked-in-2021
CORPORATE GOVERNANCE: CHANGE IS ON THE WAY FOR REGULATION OF COMPANY DIRECTORS’ LIABILITIES IN THE UK
On 21 June, Field Fisher reminded on that the UK Government has announced that it would be launching a major overhaul of the UK corporate governance regime in order to improve financial reporting and controls. These proposals came in the wake of high-profile accounting scandals over the past few years. Initial proposals included making directors of large companies more accountable for serious failings in financial reporting, such as significant errors in the company accounts, as well as requiring large companies to publish an annual resilience statement showing how the business would be mitigating both short and long-term risks. It does say that the Government plans to publish draft legislation containing its corporate governance reforms in the next 12 months, meaning that these reforms are only likely become law within the next 2 years. The changes include the Financial Reporting Council being replaced with a more powerful regulator called the Audit, Reporting and Governance Authority.
https://www.fieldfisher.com/en/insights/corporate-governance-change-is-on-the-way-for-regu
UK PLANS TO STRENGTHEN REGULATION AROUND INTEREST-FREE BUY NOW, PAY LATER (BNPL) CREDIT AGREEMENTS
On 21 June, Fintech Futures reported that, under the plans, lenders will be required to carry out affordability checks to ensure loans are affordable to customers and rules will be amended to make sure advertisements are “fair, clear and not misleading”. Providers will need to be approved by the Financial Conduct Authority (FCA).
https://www.fintechfutures.com/2022/06/bnpl-regulation-by-uk-gov-set-to-protect-millions/
US: POST-ROE STATES ADVISED TO FIGHT ABORTION LIKE ORGANISED CRIME
On 21 June, The Crime Report carried an article about model legislation proposed by so-called pro-life activists which would mirror organised crime statutes to charge anyone “aiding and abetting” an abortion with conspiracy under “RICO-style laws”, modelled on the federal Racketeer Influenced and Corrupt Organizations Act that lays out charges for activity performed “as part of an ongoing criminal enterprise”. It would make it illegal for organizations or individuals to help connect patients with abortion care and resources over the phone or online, ban websites that provide information about abortions and criminalise funding groups that pay for patient travel costs from operating in the state.
UPDATE ON FCPA ENFORCEMENT: FIRST HALF OF 2022 SEES MAJOR ENFORCEMENT ACTION
On 21 June, Bass Berry & Sims produced an article on developments over the first half of the year, saying that, often working in coordination with its enforcement counterparts in other parts of the world, the DoJ and SEC have resolved 3 notable matters against companies, and pursued 1 individual enforcement matter.
https://www.bassberrygovcontrade.com/fcpa-enforcement-first-half-2022-sees-major-enforcement-action
IRAN PREPARES ENRICHMENT ESCALATION AT FORDOW PLANT
On 20 June, Reuters claimed an exclusive on a report from the UN that Iran is escalating its uranium enrichment further by preparing to use advanced IR-6 centrifuges at its underground Fordow site that can more easily switch between enrichment levels.
WHY DOES THE UK HAVE SUCH A PROBLEM WITH FRAUD?
A post from the Institute of Chartered Accountants in England & Wales on 21 June says that Britain has long had a problem with fraud, but in the past few years the scale and complexity of fraudulent activities has increased to even more worrying levels. The latest data from the Office for National Statistics (ONS) shows that for the year ending December 2021, compared with the pre-coronavirus year ending December 2019, there has been an 18% increase in total crime, but a 54% rise in fraud and computer misuse offences.
LONDONGRAD: HOW THE CITY BECAME A MONEY LAUNDERING HAVEN
A post from the Institute of Chartered Accountants in England & Wales on 20 June asked which key factors have conspired to make the UK capital synonymous with financial crime?
NEW ALBANIAN AIRPORT RAISES CRONYISM AND ENVIRONMENT CONCERNS
On 21 June, a report from OCCRP says that environmentalists have warned that Vlora airport will irreparably damage a key Mediterranean wetland. Questions are also being raised about the politically connected consortium behind the lucrative airport deal. The consortium is led by a company owned by controversial Kosovar businessman and politician Behgjet Pacolli, a personal friend of Albania’s prime minister who allegedly has connections to organised crime figures. It is alleged that the government changed the bidding criteria to favour the winning consortium at the last minute, and accuses the Public Procurement Agency of illegal decision-making and fabricating documents.
https://www.occrp.org/en/investigations/new-albanian-airport-raises-cronyism-environment-concerns
ITALY’S NEW MUSEUM HIGHLIGHTS ILLEGAL ANTIQUITIES TRADE
On 21 June, OCCRP reported that a new museum in Rome shines a light on a pervasive form of organised crime – the global illegal antiquities trade. Works of art stolen, dispersed, sold or illegally exported will find in the Museum a place to transit and be exhibited for a limited period of time before returning to their territory of origin. It is said that 211 of the 260 artifacts to be displayed were rescued as the result of work by the Manhattan District Attorney’s antiquities anti-trafficking unit.
https://www.occrp.org/en/daily/16471-italy-s-new-museum-highlights-illegal-antiquities-trade
MONTENEGRO: POLICE PROBE MURDER OF HIGH-RANKING MEMBER OF A CRIMINAL CLAN
On 21 June, OCCRP reported that authorities have launched an investigation into the recent murder of a high-positioned member of one of the country’s criminal clans – Škaljari. An unknown attacker killed Milić Minja Šaković. It says that the 3 mafia groups, formerly members of the same gang, smuggling drugs from South America into Europe, split in 2014 after a botched cocaine deal in Spain, resulting in a violent rupture that drew in other Serbian and Montenegrin criminal groups.
USING CBDC ACROSS BORDERS: LESSONS FROM PRACTICAL EXPERIMENTS
The Basel Institute on Governance has published a paper saying that its innovation hub is leading practical experiments to show how central bank digital currencies (CBDC) could help deliver faster, cheaper and more transparent cross-border payments. It says that the experiments demonstrate that common systems encompassing multiple CBDC are operationally feasible and could bring efficiencies – but policy, legal, governance and economic questions remain.
https://www.bis.org/publ/othp51.pdf
A VISION FOR THE FUTURE MONETARY SYSTEM
On 21 June, the Basel Institute on Governance published a paper saying that central bank digital currencies (CBDC) and fast payments systems could enhance efficiency and financial inclusion, while buttressing data privacy. It warns that recent turmoil affecting crypto is a reminder of cryptocurrencies’ financial vulnerabilities, but their deeper structural inadequacies have been apparent for some time. The report examines the structural limitations of crypto and decentralised finance (DeFi), outlining the inherent risks in their design.
WHAT IT WILL TAKE FOR THE GUPTAS TO FACE CORRUPTION CHARGES IN SOUTH AFRICA
An article in The Conversation on 21 June speculates when the brothers may ultimately set foot on South African soil to face charges of money laundering and other financial crimes.
MEXICO: ARMED PIRATES ROB OFFSHORE PLATFORM IN BAY OF CAMPECHE
On 21 June, Insurance Marine News reported that armed pirates struck on a second offshore platform in the Gulf of Mexico, hitting a platform operated by Pemex in the Bay of Campeche, Mexico. They forced the crew to help them load goods onto their 3 vessels before departing. 10 armed robbers boarded a platform at the Rebombeo pumping complex. Late last month, an armed group boarded an offshore vessel near an oil field off Tabasco, making off with thousands of dollars’ worth of equipment; and in late January, another group of pirates robbed the Ku Sierra platform in the Bay of Campeche, part of Pemex’s core Ku-Maloob-Zaap field complex.
GAFILAT: BEST PRACTICES PAPER ON USE OF FIU REPORTS BY LAW ENFORCEMENT
The FATF-style body for Latin America, GAFILAT, has published this best practice paper (in Spanish) on the format, dissemination and proper use of reports from FIU by law enforcement.
IN THE ‘AGE OF DISRUPTION’, SHIPPERS ARE ON THE HUNT FOR “ELASTIC” FREIGHT FORWARDERS
On 21 June, the Global Trade Review reported that shippers need freight forwarders that enable “elastic” operations — the ability to rapidly scale operations up and down in response to market conditions. Basically, companies with “inelastic” operations aren’t responding quickly enough to either disruptions or rising demand, adding further stress to a gridlocked supply chain.
Any modest contributions for my time and ongoing expenses are welcomed! I have a page where you can do so, and where one-off contributions start as low as $3, at
https://www.buymeacoffee.com/KoIvM842y
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