Panama Covid-19 update – in the news today, Panama received UN recognition for the response, attention and information platforms related to COVID, based on a QR Code. This QR code was used by shops and establishments to control capacity. The recognition was in the form of an award for Excellence in Public Service.
Meanwhile, today’s figures show no sign of an easing of the current wave; although hospitalisations and deaths remain (thankfully) low. However, 3 new fatalities reported today, alongside 2,130 new cases. 16,258 actives cases, with 38 in ICU and 193 in other wards.
23 JUNE 2022
SPECIFIC FRAUD RISK RATHER THAN GENERAL RED FLAGS ARE NEEDED TO INVOKE THE QUINCECARE DUTY
On 21 June, an article from MacFarlanes is concerned with a recent High Court case in England that is said to demonstrate that the scope of the Quincecare duty is narrow, and that there is a distinction between being on notice of a specific fraud, and general financial crime “red flag” factors which only give rise to a general suspicion of fraud. The latter will not be sufficient to invoke the Quincecare duty and underpin a claim. It is said that the judgment contains useful discussion of the standards expected of financial institutions with respect to their own customers.
HOW ILLEGAL FISHING OFF CAMEROON’S COAST WORSENS MARITIME SECURITY
On 17 June, an article from Dryad Global contends that, in Cameroon there is growing awareness that there’s a direct relationship between illegal and unregulated activity in the fisheries sector, and maritime security in the waters off the country’s coast. Earlier this year the European Commission called out the country for failing to control vessels engaged in illegal fishing under the country’s flag. It also pointed to weak governance, including poor knowledge of the scale of illegal fishing. The author of the article says research shows that both artisanal and industrial fishing vessels are being intercepted and used for smuggling fuel, arms, other contraband and illegal migrants.
SWITZERLAND: THE POWERS OF A FOREIGN BANKRUPT COMPANY AND THE FOREIGN BANKRUPTCY ADMINISTRATOR IN CASE OF FRAUD
On 21 June, an article from Monfrini Bitton Klein starts by saying that when a foreign company is defrauded and goes bankrupt, several connections with Switzerland may exist and several proceedings may therefore be necessary in Switzerland, not only to establish the liability of legal entities and individuals, but above all to recover funds to reduce the damage caused. This will involve, for example, civil and criminal proceedings against Swiss banks and their employees who participated in the fraud or in the laundering of its proceeds. The article considers the implications, saying that the bankruptcy of a foreign company with links to Switzerland is likely to trigger numerous administrative, civil or criminal proceedings; and that Swiss law offers several legal avenues to obtain compensation in case of fraud.
GAMBLING OPERATOR TIPWIN REPORTED TO DANISH POLICE OVER MONEY LAUNDERING FAILINGS
On 23 June, iGB reported that the Danish gambling regulator has reported German gambling operator Tipwin to the police for violating the Money Laundering Act. It is reported that the operator hadnot prepared a risk assessment of its sale of retail bets until 16 May, there was a lack of written policies on its retail offering, and it did not have any written business procedures and controls for its land-based offering in relation to money laundering until 25 May.
CHINESE, MIDDLE EASTERN AND WESTERN BANKS HAVE PROVIDED BANKING SERVICES TO IRAN’S SANCTIONED ENERGY AND INDUSTRIAL SECTORS
On 22 June, the Wall Street Journal reported that, through a network of proxy companies, foreign exchange houses and intermediaries, Iran holds bank accounts that collectively transact tens of billions of dollars a year in trade that is otherwise banned under US sanctions. HSBC and Standard Chartered are among the institutions that provided services to companies that handled banned trade on behalf of major Iranian exporters. While it is said that there is no evidence that the banks are complicit in permitting the sanctioned Iranian transactions, senior bank compliance officers said companies registered outside of Iran that secretly maintain bank accounts for Iranian companies could escape controls meant to catch money laundering.
WHY THE CONDUCTOR VALERY GERGIEV IS NOT ON THE EU SANCTIONS LIST
On 22 June, an article in Opera Wire reported that the Foreign Minister had told the Dutch Parliament said he did not meet the criteria for designation. While not listed, he has stood down or been fired from a number of posts, and has recently been conducting full-time in Russia where he is leading the Stars of the White Night Festival.
UK: FCA HAS FINED GHANA INTERNATIONAL BANK £5.8 MILLION FOR FAILINGS IN ITS AML CONTROL FAILINGS
On 23 June, Reuters reported that the FCA had said that the bank provided correspondent banking services to other lenders, and that between January 2012 and December 2016 the bank did not adequately perform the additional AML checks required. Following a visit by the FCA in 2016 the bank voluntarily agreed not to take on new customers.
UK: EXPLAINING THE SECONDARY LEGISLATION FOR THE REGISTER OF OVERSEAS ENTITIES – PART 1
A blog post from Companies House on 23 June provided an update on the progress of the Register of Overseas Entities. It says that this new register forms part of the government’s strategy to combat economic crime, while making sure that legitimate businesses continue to see the UK as a great place to invest. It says that a significant milestone has been reached as secondary legislation has been laid before Parliament.
UK: CAR WASH SLAVERY RINGLEADERS JAILED FOR 25 YEARS
A news release from the NCA on 22 June advised that a couple who kept vulnerable people as slaves and made them work for free at a car wash business in Bristol have been jailed for a total of 25 years following a NCA investigation. Maros Tancos and Joanna Gomulska were the ringleaders of a modern slavery and human trafficking operation in Bristol, persuading vulnerable people to travel from Slovakia to work for them. Tancos would use his links to orphanages and camps in Slovakia to recruit victims, promising them transport, a place to live and food, and a better life.
UK: 2 BROTHERS FROM THE BRADFORD AREA HAVE AGREED TO PAY THE NCA APPROXIMATELY £4.3 MILLION FOLLOWING A CIVIL RECOVERY INVESTIGATION INTO THEIR MULTI-MILLION-POUND PROPERTY PORTFOLIO.
On 22 June, a news release from NCA advised that Parvez Akhtar (55), known locally as ‘Boney’, and his brother Zaheer Akhtar Nazir (50) have been property developers in the area for over 30 years. In its case at the High Court the NCA alleged the brothers used their property portfolio to launder hundreds of thousands of pounds worth of criminal monies on behalf of other prolific criminals; and alleged that Akhtar has been involved in a range of serious criminality since the 1990s including international VAT fraud, money laundering and fraud.
GERMANY: CUSTOMS DOG SNIFFS OUT HUNDREDS OF ENDANGERED SEAHORSES AT AIRPORT
On 22 June, Newsweek reported that officers found more than 800 endangered seahorses being smuggled through an airport to be used as “natural viagra” by bogus healers. The 5 kg of dried seahorses had been stashed in a freight package going through Germany’s Leipzig/Halle Airport when they were found by a sniffer dog.
HOW IRISH CUSTOMS SEIZED OVER €50 MILLION IN HIGH SEA OPERATIONS LAST YEAR AS DRUG MOVEMENTS SEE MAJOR INCREASE
On 23 June, the Irish Sun carried an article saying that the number of seizures of drugs over the last 3 years have also increased.
NETWORK THAT TRAFFICKED OVER 30 TONNES OF IVORY YET TO FACE JUSTICE
On 22 June, OCCRP reported that, despite charges of illicitly trafficking over 30 tonnes of ivory for over a decade now, the alleged members of one of Africa’s largest wildlife-trafficking networks have by and large managed to evade conviction. It is alleged that Liberian national Moazu Kromah — aka ‘Kampala Man’ — is believed to stand at the head of this criminal organisation. Despite his arrest in 2017, his extradition to the US in 2019, and his guilty plea for 3 wildlife-trafficking offences in March, the speed at which his case was processed has raised troubling concerns as to when the network as a whole will face justice for their actions.
US: FEDERAL MARITIME COMMISSION $2 MILLION PENALTY FOR OCEAN CARRIER OVER UNREASONABLE DEMURRAGE AND DETENTION FEES ON CARGO CONTAINERS
On 22 June, Sandler Travis Rosenberg reported that the carrier had violated the FMC Rule from May 2020 on unreasonable demurrage and detention fees on cargo containers.
SRA REPORTS £161 MILLION OF SUSPECT TRANSACTIONS BY LAW FIRMS TO NCA
On 23 June, Legal Futures reported that the Solicitors Regulation Authority (SRA) reported £161 million worth of suspect transactions, in 39 SAR, involving the profession to the NCA during the 18 months to April 2022, with failures to check the source of funds the main trigger. In the previous year, the SRA made 26 SAR, involving transactions worth over £200 million.
SINGAPORE TO AMEND FINANCIAL CRIME RULES FOR BUSINESS SERVICE PROVIDERS
On 23 June, Out-Law reported that the Accounting and Corporate Regulatory Authority (ACRA) has proposed corporate governance and regulatory changes to boost compliance with global standards. It is consulting on proposals designed to tackle recommendations by FATF relating to the combating of money laundering, terrorism financing and financing of proliferation of WMD. The package also seeks to tackle the risks arising from the abuse of nominee arrangements when creating shell companies to facilitate money laundering, and to impose new qualification requirements on individuals who serve as nominee directors on a business basis. The consultation closes on 19 July.
UK: FCA IS USING DATA TO TACKLE ONLINE FRAUD FASTER BY SCANNING APPROXIMATELY 100,000 WEBSITES CREATED EVERY DAY TO IDENTIFY THOSE THAT APPEAR TO BE SCAMS
A release on Mondo Visione on 23 June advised that, as part of an update on its data strategy, where the FCA identifies fraudulent websites, it is proactive in requesting the website host shut them down, though it does not have the powers to force them to. Between May 2021 and April 2022, the FCA added 1,966 possible scams to its consumer warning list – over a third more than during the same period the previous year. The release details other parts of the strategy.
THE POLITICAL ECONOMY OF HUMAN SMUGGLING AND TRAFFICKING IN NORTH AFRICA AND THE SAHEL
On 22 June, the Global Initiative Against Transnational Organised Crime reported a programme involving series of briefs which underscore the rebounding importance of smuggling from and through Libya, Tunisia, Niger, Chad and Mali and the ways in which dynamics are intensifying as the COVID-19 pandemic ebbs and a rough peace is maintained in Libya. This is a monthly monitoring programme focused on the political economy of human smuggling and trafficking in North Africa and the Sahel.
EU: SUCCESSFUL ACTION AGAINST VAT FRAUD IN TRADE OF USED CARS
A news release from Eurojust on 22 June advised that, supported by Eurojust, authorities in Lithuania, Hungary, Slovakia and Latvia have undertaken a successful operation against large-scale VAT fraud involving the sale of used cars from the US. The managers of 5 companies who allegedly acted together may have avoided paying at least €4 million in taxes to the Lithuanian authorities. The suspects may have used non-operating companies registered in Slovakia and Hungary.
EU LEADERS TO KEEP SANCTION PRESSURE ON RUSSIA, WITH GOLD FLAGGED AS NEW TARGET
On 21 June, EurActiv reported that a draft document showed gold among assets that may be targeted in a possible next round of measures. It notes that several sectors including gas remain largely untouched as EU governments avoid measures that could damage their own economies more than Russia’s. Gold is a crucial asset for the Russian Central Bank, which has faced restrictions on accessing some of its assets held abroad because of Western sanctions.
HOW RUSSIA CAN BEAT EU SANCTIONS
On 21 June, an article from Politico says that Western-made tech and machinery are vital for both military and civilian use, as well as to maintain exports of oil and gas to countries like India where they are not banned. Moscow is likely to try to import restricted goods through new trade routes, using torturous methods to avoid or evade Western scrutiny. The list of countries seen as potential weak spots for sanctions enforcement and compliance is varied and Putin will find willing partners deep inside Europe and beyond.
A DISTURBING MARKET IN ILLEGAL SURFACE TO AIR MISSILES GROWS WORLDWIDE
On 21 June, OCCRP reported on a disturbing trend of another type of weapon proliferating worldwide – shoulder-mounted surface-to-air missile launchers. It refers to a report from the Small Arms Survey which has identified reports of illicit MANPADS in 32 countries and territories on 5 continents since 2011.
ALL-TIME FCPA SETTLEMENTS TOP $24 BILLION
On 23 June, a post on the FCPA Blog reported that, so far in 2022, there have been 4 FCPA enforcement actions totalling $865 million in penalties and disgorgement; and that pushes all-time FCPA resolutions over $24 billion since 1977.
CONTAINERS LOST AT SEA INCREASED 400% IN 2020 – 2021
On 22 June, Seatrade Maritime News reported a 4-fold increase in the number of containers lost overboard during the 2020 – 2021 compared to the previous 2-year period. 3,133 containers were lost overboard in the 2020 – 2021 period compared to 779 in the previous period. Meanwhile, Loadstar reported that that the World Shipping Council is to increase its carrier surveys on container losses to annual events rather than tri-annual surveys.
PHILIPPINE OFFICIALS DESIGNATE 11 INSURGENTS `TERRORISTS’
On 16 June, ABC News reported that the Philippine government has designated a former peace negotiator and 5 other suspected communist rebel leaders as “terrorists” to allow the freezing of their financial assets. The latter are commanders of the Abu Sayyaf, a small but violent Muslim militant group in the country’s south, and they have been linked to the Islamic State. 6 rebel leaders are accused of membership in the Communist Party of the Philippines, its armed wing the New People’s Army and related organisations were led by Luis Jalandoni, a former Roman Catholic priest.
CHANGES, INCLUDING INCOMING RULE CHANGES, LOOK SET TO MARK THE END OF THE PASSENGER AIR FREIGHTER
On 23 June, Loadstar reported that a dearth of capacity at the onset of Covid, and high demand for air cargo, saw aviation safety authorities tweak the rules to allow the carriage of cargo in passenger cabins – on seats, or with seats removed. However, the European regulator has indicated that there is no likelihood of an extension. Looking at other regulators, it says that the FAA ended the exemptions for US carriers on 31 December and China was thought to have ended the exemptions, but in Hong Kong there seems to be a continuing flexible approach.
UP TO 220,000 UK TRADERS HAVE YET TO REGISTER FOR THE GOVERNMENT’S NEW CUSTOMS DECLARATION SYSTEM AS THE DEADLINE LOOMS
On 23 June, Loadstar reported on the looming 30 September deadline for the switch to the CDS, as HMRC terminates support for the Customs Handling Imports and Exports Freight platform (CHIEF).
THE RISING THREAT TO CENTRAL AFRICA: THE 2021 TRANSFORMATION OF THE ISLAMIC STATE’S CONGOLESE BRANCH
In the June issue of CTC Sentinel an article argues that the Congolese branch of the Islamic State’s Central Africa Province (ISCAP-DRC), locally known as the Allied Democratic Forces (ADF), is a rising threat to the region. Its modi operandi evolved in 7 key areas — from a surge in IS-supported propaganda to its first use of suicide bombings — that have contributed to the group’s escalating terror campaign in Congo and abroad. Together, these changes have enabled the ADF — already the deadliest group in eastern Congo — to become bolder and a more lethal terrorist organisation, poised to further export its operations to the region. This article seeks to unpack the ADF’s transformation within the wider context of the overall operations of ISCAP-DRC last year.
THE LIMITED 2022 FAR-RIGHT FOREIGN FIGHTER MOBILISATION TO UKRAINE
An article in the June issue of the CTC Sentinel says that, given the significant presence of far-right fighting units and far-right foreign fighters on both sides of the conflict in Ukraine since 2014, there was concern that the February 2022 Russian invasion might result in large flows of foreign fighters (including right-wing extremists) to far-right-linked units on both sides of the conflict. However, flow of foreign fighters into Ukraine has been much smaller than anticipated; and, despite the efforts of some extreme-right ‘influencers,’ the 2022 conflict has, for the most part, not energized Western right-wing extremists, nor persuaded them to travel.
BUYER BEWARE ON AN ACQUISITION: SETTLING ALLEGATIONS COSTS MANUFACTURER $5.2 MILLION
On 23 June, an article from Bass Berry & Sims reported that Numet Machining Techniques, a Connecticut-based machined parts manufacturer for commercial and military aerospace engines, recently agreed to pay $5.2 million to settle alleged violations of the False Claims Act (FCA) for misrepresenting its size standard following an acquisition. It seems that, following the acquisition, Numet Machining no longer qualified as a “small business concern” due to its affiliation with the other businesses; however, it continued to bid on, and win, contracts using an improper “small business” designation. The article explains that the Small Business Administration (SBA) procurement programs in the US are designed to promote and protect the small business community and investigating cases of false size status representations is a priority for the Department of Defense.
FATF-STYLE BODY APPROVES MUTUAL EVALUATION REPORT ON UZBEKISTAN
On 3 June, the Eurasian Group on Combating Money Laundering and Financing of Terrorism, a FATF-style regional body (FSRB) announced the outcome of its recent Plenary, at which it approved an MER on Uzbekistan. The Plenary also heard about the 3rd follow-up report on Tajikistan without technical compliance re-rating under and noted the progress made by Tajikistan in development of its national AML/CFT system.
JAPAN: ENGLISH TRANSLATION OF FSA AML/CFT GUIDANCE
Now available is an English translation of the Financial Services Agency Guidelines. These were issued on 22 November.
FinCEN ISSUES NEWS RELEASE DETAILING FATF FINDINGS ON JURISDICTIONS WITH AML/CFT DEFICIENCIES
On 23 June, a news release from FinCEN detailed the results of the recent FATF Plenary.
ISLE OF MAN ISSUES A LICENCE FOR THE IMPORTATION AND DISPENSING OF CANNABIS-BASED PRODUCTS FOR MEDICINAL USE
On 23 June, a news release advised that the Department of Health and Social Care had awarded a licence for the importation and dispensing of cannabis-based products for medicinal use (CBPM) on Island. This means that Island residents with private prescriptions for medicinal cannabis products will be able to have their prescriptions fulfilled locally for the first time, by the pharmacy holding the licence.
UK: ILLEGAL CANNABIS FARMS CLAIMS – A GROWING ISSUE FOR INSURERS
On 23 June, DAC Beachcroft issued an article about an escalation of cannabis farm claims related to landlord or property claims. It explains that, in addition to the risk cannabis farms pose to those who are recruited to maintain them; these farms frequently degrade the spaces they are found in. The farms have been identified in both domestic settings and in a wide range of commercial properties with the former being the preferred location. Landlords are often left with the bills resulting from the damage caused by the tenants, which includes modifying the supply of electricity into the property so that usage isn’t recorded.
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