OTHER THINGS YOU MAY HAVE MISSED – JULY 1

Panama Covid-19 update – the President has announced that, from 11 July, face masks will no longer be mandatory, expet on public transport and in health establishments. While this may be understandable, despite the fact that cases (and deaths) continue, and the situation (given vaccination and prior infections) is very different than a year or more ago, the excitement of some to the reaction (chiefly, it seems, Americans on social media) is a little puzzling – surely a thin face mask was a relatively modest burden (and given the traffic and air pollution in the city, perhaps face masks should be as in widespread use as parts of Asia).

Incidentally, this news came on the same day that the Minister for Health warned that the Omicron BA.5 strain is expected in Panama soon – and this strain, like BA.4, appears to be much more able to reinfect even those who had recently had Covid (the so-called “immunity escape” problem – said to be th e reason for the current state of play in the UK).

As an illustration of the ongoing situation, where roughly 1 person in every 285 is infected (the UK, already with BA.4 and BA.5 is said to be around 1 in 17), 4 new fatalities were reported today and 1,626 new cases; with 15,080 active cases – 30 in ICU and 170 in other wards.

1 JULY 2022

VENEERS OF GOVERNANCE: LESSONS FROM LIBERIA’S GROWING VULNERABILITY

On 30 June, an article from ENACT Africa looked at Liberia and unpacks how the international community’s efforts to strengthen Liberia’s state institutions have created pathways for corruption; and that Liberia is entering a period of enhanced vulnerability which may lead to a resurgence in crime. 

https://enact-africa.s3.amazonaws.com/site/uploads/2022-06-29-veneers-of-governance-paper.pdf

IS KENYA BECOMING A REGIONAL ETHANOL SMUGGLING HUB?

On 2 June, an article from ENACT Africa posed this question, explaining that ethanol is a by-product in the process of sugar production and is used in the cosmetic and alcohol production industries.  Smuggling ethanol in East Africa is made easier through a trio of factors: weak border controls, widespread corruption and vast ungoverned boundaries between countries.  It is reported that smuggling ethanol from Uganda had led to a high demand for empty 200-litre drums in western Kenya.  It is also brought in from Tanzania, and ethanol meant for the international market can also be diverted into the domestic market.  It is argued that stemming the smuggling of ethanol from the region and into Kenya will not only prevent the increasing manufacture of illicit alcohol that leads to deaths, but will enable Kenya to earn revenue that’s currently lost to smugglers.

https://enactafrica.org/enact-observer/is-kenya-becoming-a-regional-ethanol-smuggling-hub

THE TRANSNATIONAL ORGANISED ILLICIT VEHICLE TRADE IN ETHIOPIA

On 24 June, ENACT Africa reported that Ethiopia’s tax system is making cars unaffordable for ordinary citizens – in addition to customs duty, a car importer in Ethiopia pays 5 other different forms of tax.   Together this adds up to more than 500% of a vehicle’s import price based on the type of vehicle, its age and engine capacity.  The tax system is considered the leading factor in the organised transnational illicit trade of vehicles into Ethiopia.   Cars come either from the countries of manufacture, such as Japan, via the UAE; or from neighbouring countries illegally avoiding customs checkpoints.

https://enactafrica.org/enact-observer/ethiopias-car-trade-driven-by-the-need-to-evade-taxes

STEMMING THE TIDE OF TUNISIA’S ILLICIT FINANCIAL FLOWS – IT LOSES ABOUT $1.2 BILLION A YEAR TO ILLICIT FINANCIAL FLOWS

On 24 June, ENACT Africa reported that Tunisia’s authorities need to fully reform its anti-corruption policy to halt the illegal outflows that are crippling its economy.  Representing around 3% of the country’s GDP, the flows are the movement of money or capital unlawfully earned and illegally transferred out of the country.  It is said that Tunisia has a comprehensive institutional framework to ensure accountability, integrity and transparency in theory, but little is done in practice; and actions are needed to fully reform its anti-corruption policy.

https://enactafrica.org/enact-observer/stemming-the-tide-of-tunisias-illicit-financial-flows

CHILD TRAFFICKING FOR THE PURPOSES OF FORCED LABOUR IN COCOA-PRODUCING COUNTRIES

On 28 June, a Paper from ENACT Africa examined this complex crime.  Child labour is a serious problem in the cocoa industry in Côte d’Ivoire and Ghana, with children often trafficked from neighbouring countries to work in the cocoa fields. 

https://enact-africa.s3.amazonaws.com/site/uploads/2022-06-28-child-labour-in-cocoa-industry.pdf

RUSSIA TRANSFERS SAKHALIN-2 OIL AND GAS OPERATION TO NEW OPERATOR WITHOUT COMPENSATION

On 1 July, Nikkei Asia reported that Russia has ordered that the assets of Sakhalin-2, an oil and natural gas development project in Russia’s Far East, be transferred to a newly established Russian corporation without compensation.  This has raised concerns in Japan that Mitsui & Co and Mitsubishi, the 2 Japanese participants, may now be excluded from the oil and gas project.  Sakhalin-2 is one of the world’s largest integrated, export-oriented, oil and gas projects, as well as Russia’s first offshore gas project. Sakhalin Energy Investment Company Ltd, the project operator, is owned by Gazprom, Shell, Mitsui and Mitsubishi.

https://asia.nikkei.com/Politics/International-relations/Russia-transfers-Sakhalin-2-to-new-operator-without-compensation

https://www.shell.com/about-us/major-projects/sakhalin/sakhalin-an-overview.html

https://www.theguardian.com/business/2022/jul/01/shell-may-have-to-abandon-3bn-investment-in-russian-gasfield

GERMANY: 5 KEY ASPECTS MULTINATIONALS SHOULD KNOW ABOUT THE ANTI-BRIBERY AND ANTI-CORRUPTION LAW

On 30 June, an article from DLA Piper outlined 5 key aspects of the German Anti-Bribery and Anti‑Corruption law (the ABAC law) that multinationals may not be aware of but which they should keep in mind when it comes to bribery and corruption in connection with a corporate client in Germany.  The law provides for severe sanctions that apply to any international company operating in Germany.

https://www.dlapiper.com/en/us/insights/publications/2022/06/global-anticorruption-perspective-q2-2022/germany-5-things-multinationals-should-know/

FRANCE STRENGTHENS ITS WHISTLEBLOWING REGIME: 3 KEY CHANGES

On 30 June, an article from DLA piper says that France’s new whistleblowing law places France at the fore in terms of whistleblower protection; and that it not only transposes the EU whistleblowing Directive into French law, strengthening the country’s previous regime, but actually goes beyond the directive’s requirements. The new provisions will enter into force on 1 September, and an upcoming decree will set out terms and conditions of the new provisions.  The article considers 3 important aspects of the new law.

https://www.dlapiper.com/en/us/insights/publications/2022/06/global-anticorruption-perspective-q2-2022/france-strengthens-whistleblower-law/

IMPLEMENTATION STATUS OF THE EU WHISTLEBLOWING DIRECTIVE IN MEMBER STATES

https://s3.amazonaws.com/documents.lexology.com/9e92db82-aff2-4ff6-bb95-033182b8f71a.pdf?AWSAccessKeyId=AKIAVYILUYJ754JTDY6T&Expires=1656676804&Signature=h%2F2QnwVgriYea%2B7LstKG3f3yL18%3D

STRENGTHENING THE ROLE OF UN SCR 1540 IN COUNTERING PROLIFERATION FINANCING

On 24 June, an article from RUSI argues that UN Security Council Resolution 1540’s finance-related provisions can and should play a more prominent role.  This year, a UN Committee is set to conclude a comprehensive review of the resolution’s implementation.  The review will examine successes and challenges in global implementation of UNSCR 1540 and will assess whether adjustments to the resolution and the Committee’s mandates may be needed. 

https://rusi.org/explore-our-research/publications/rusi-newsbrief/strengthening-role-unscr-1540-countering-proliferation-financing

MAN JAILED FOR 2 YEARS FOR ROLE IN SMUGGLING 4.2 MILLION CIGARETTES INTO NEW ZEALAND

On 1 July, Radio New Zealand reported that the man was arrested as part of Operation Odin, in mid-2020, on charges linked to 2 shipments totalling 4.2 million cigarettes. 3 Malaysian nationals and a Chinese national were identified as having roles in the enterprise, which included setting up a shell company, retrieving the smuggled cigarettes, distributing them and then laundering the cash proceeds.

https://www.rnz.co.nz/news/national/470169/man-jailed-for-two-years-for-role-in-smuggling-4-point-2m-cigarettes-into-nz

PARAGUAY: LAUNDERING SCANDAL AFFECTS BANK ON EVE OF AML/CFT EVALUATION

On 30 June, Joy.com in Paraguay reported that Paraguay is awaiting a report from FATF-style regional body Gafilat on the situation in the country re money laundering and financing of illicit activities.  However, it is said that there are concerns over the situation involving Atlas bank and the Central Bank of Paraguay (BCP).  The concerns involve questions about dirty money and a tax investigation that detected a millionaire banking operation involving a powerful drug trafficker; with allegations that the bank ignored warning signs.

https://www.hoy.com.py/nacionales/evaluacion-de-gafilat-en-etapa-final-paraguay-espera-no-entrar-a-temida-lista-gris

INDIA: ENFORCEMENT DIRECTORATE ARRESTS 2 MORE ASSOCIATES OF DELHI MINISTER IN MONEY LAUNDERING CASE

On 1 July, Times Now and Times of India reported that the ED had arrested 2 businessmen in connection with the case against Delhi minister Satyendar Jain, who was arrested on 30 May, and is the minister without portfolio in the Aam Aadmi Party-led Delhi government.

https://timesofindia.indiatimes.com/city/delhi/money-laundering-case-ed-arrests-2-aides-of-delhi-minister-satyendar-jain/articleshow/92592945.cms

NEW ZEALAND: MOTHER AND SON FINED $3 MILLION AFTER MONEY LAUNDERING CONVICTION APPEAL FAILS

On 1 July, Stuff reported that the pair had their appeal to overturn a conviction for money laundering dismissed.  In 2020, they were the first people to be sentenced for offending under the Anti-Money Laundering and Countering Financing of Terrorism Act.  They were found guilty of transferring $53 million for a Chinese-Canadian businessman in 2015-16. The son was fined $180,000, the mother $202,000, and Jiaxin Finance Ltd, a money remittance company of which the son is the sole director and shareholder, was fined $2.55 million.

https://www.stuff.co.nz/business/129149028/mother-son-fined-3m-after-appeal-of-money-laundering-conviction-fails

EU COUNCIL REQUESTS EUROPEAN PARLIAMENT CONSENT TO ADD THE VIOLATION OF SANCTIONS TO THE LIST OF EU CRIMES

A news release on 30 June advised that the EU had requested the European Parliament’s consent on a decision to add the violation of restrictive measures to the list of ‘EU crimes’ included in the Treaty on the Functioning of the EU.  A decision to add the violation of restrictive measures to the list of ‘EU crimes’ will allow, as a second step, the adoption of a Directive containing minimum rules concerning the definition of criminal offences and penalties for the violation of EU restrictive measures.  This will ensure a similar degree of sanctions enforcement throughout the EU and will dissuade attempts to circumvent or violate EU measures.

https://www.consilium.europa.eu/en/press/press-releases/2022/06/30/sanctions-council-requests-european-parliament-consent-to-add-the-violation-of-sanctions-to-the-list-of-eu-crimes/

SFO DROPS 4-YEAR CRIMINAL PROBE INTO CHEMRING

On 1 July, the Evening Standard reported that the probe into defence contractor for suspected bribery, corruption and money laundering had been closed.

https://www.standard.co.uk/business/serious-fraud-office-drops-chemring-corruption-probe-b1009573.html

SANTANDER PREDICTS A DOUBLE-DIGIT YEAR-ON-YEAR SURGE IN CELEBRITY-ENDORSED CASES IN 2022

On 1 July, Infosecurity reported that the leading high street lender has urged social media users to beware of cryptocurrency fraud after predicting a double-digit year-on-year surge in celebrity-endorsed cases in 2022.  It warned of an 87% surge in cases by the end of 2022 compared to 2021 figures, with users typically tricked into investing in fraudulent schemes by spoofed celeb endorsements online.

https://www.infosecurity-magazine.com/news/santander-warns-of-87-surge-uk/

THE RISE IN AUTHORISED FRAUD

On 1 July, an article from Professional Security Magazine said that while the recorded incidence of unauthorised fraud fell in 2021, authorised fraud (where someone pays money from their account, whether conned in a romance fraud or by a scam invoice, or by a criminal impersonating the CEO, among other cons, including APP fraud) went up 39% to £583.2 million.

https://www.professionalsecurity.co.uk/news/commercial-security/rise-in-authorised-fraud/

GOVERNMENT CONSULTATION CONFIRMS PLANS TO CHANGE UK DATA PRIVACY REGIME

On 30 June, an article from Littler said that the UK Government is proposing to amend its data privacy regime to make it easier for employers to comply with its requirements.  However, it notes that it is possible that, if the EU determines that this lessens the UK’s data privacy protections, it could revoke the UK adequacy decision re transfers of personal data to and from the EU.  It says that the main concern is whether any “dilution” will impact the adequacy decision which the EU granted to the UK.  The UK Government does not think this will be an issue, but time will tell whether the EU agrees with the UK government’s view.

https://www.jdsupra.com/legalnews/uk-to-shift-away-from-gdpr-government-8060212/

NIGERIA: CUSTOMS INTERCEPTED A MASSIVE SHIPMENT OF DONKEY SKINS

On 1 July, OCCRP reported that Nigeria’s Customs Service had seized 2,820 donkey skins which were to be smuggled out of the country.  The global trade in donkey skins has been driven by demand in China, where they are used as an ingredient in Ejiao, a traditional Chinese remedy.

https://www.occrp.org/en/daily/16522-nigeria-customs-intercepted-a-massive-shipment-of-donkey-skins

MAJOR ISRAELI CRIME BOSS SENTENCED TO MORE THAN 3 LIFETIMES

On 1 July, OCCRP reported that Yitzhak “Itzik” Abergil, the don of the so-called Abergil crime family in Tel Aviv, had been sentenced to 3 life times plus 15 years in prison for drug trafficking and murder.

https://www.occrp.org/en/daily/16521-major-israeli-crime-boss-sentenced-to-more-than-three-lifetimes

ITALIAN BUSINESSMAN ARRESTED FOR LAUNDERING NDRANGHETA MONEY

On 1 July, OCCRP reported that, in a coordinated cross-border effort by Italian, Romanian, Bulgarian, and Swiss authorities, police arrested an Italian businessman suspected of laundering money for the Italian ‘Ndrangheta mafia and seized assets worth over €4 million.  Alberto Danele Pizzichemi, 52, is said to be closely connected to the ‘Ndrangheta, and is alleged to have been involved in fraudulently moving millions of euros connected to 2 electric power plants in Romania, Swiss bank transfers, luxury real estate in Bulgaria, and investments worth €15 million in U.S. securities transferred between foreign companies.

https://www.occrp.org/en/daily/16520-italian-businessman-arrested-for-laundering-ndrangheta-money

COORDINATED ACTION AGAINST THE USE OF PROHIBITED SUBSTANCES IN CYCLING RACES

A news release from Europol on 1 July announced that law enforcement and judicial authorities in France, Belgium, Spain, Croatia, Italy, Poland and Slovenia had carried out a coordinated action against the use of prohibited substances in cycling races. Based on a request from the French authorities, the Danish Police have also carried out searches at one of the Tour de France hotels in Copenhagen.

https://www.europol.europa.eu/media-press/newsroom/news/doping-crackdown-in-cycling

US DOJ CHARGES 6 WITH CRYPTOCURRENCY FRAUD OFFENCES

On 30 June, a release on Mondo Visione advised that the DoJ had announced criminal charges against 6 defendants in 4 separate cases for their alleged involvement in cryptocurrency-related fraud, including the largest known Non-Fungible Token (NFT) scheme charged to date, a fraudulent investment fund that purportedly traded on cryptocurrency exchanges, a global Ponzi scheme involving the sale of unregistered crypto securities, and a fraudulent initial coin offering (ICO).  

https://mondovisione.com/media-and-resources/news/us-justice-department-announces-enforcement-action-charging-six-individuals-with/

TAXING CRIME: A WHOLE GOVERNMENT APPROACH TO FIGHTING CORRUPTION, MONEY LAUNDERING AND TAX CRIMES

This e-book from the Stolen Assets Recovery Institute focuses on the benefits of interagency cooperation between tax authorities and law enforcement agencies working on preventing, detecting, and recovering the illicit financial flows derived from tax evasion, corruption, and money laundering.  It argues that huge benefits would accrue from enhancing interagency cooperation and exploring synergies.  Interagency cooperation has an important strategic role to play not only in the context of investigations, but also at the prosecution stage.

https://star.worldbank.org/sites/default/files/2022-06/Taxing%20Crime_0.pdf

SOUTH AFRICA: PRESIDENT RAMAPHOSA’S ANTI-GRAFT CREDENTIALS AND “FARMGATE”

On 27 June, World Politics Review said that President Cyril Ramaphosa rose to power 5 years ago pledging to pursue a policy of “radical economic transformation” and to stamp out corruption in the country’s politics.  His anti-graft credentials have drawn a sizable number of critics, and now a new “Farmgate” scandal has created yet another political headache, half a year ahead of the ANC national conference, which will determine his fate as the party’s president.  The scandal involves a seemingly unreported theft of a large sum of cash from his Phala Phala game farm in February 2020.

https://www.worldpoliticsreview.com/trend-lines/30639/south-africa-corruption-scandal-could-determine-ramaphosa-s-fate

https://www.dailymaverick.co.za/article/2022-06-12-ramaphosas-farmgate-scandal-a-timeline-of-what-we-know-and-dont-know-so-far/

https://www.statista.com/chart/23098/investment-in-space-ventures

EU GUIDANCE NOTE ON SANCTIONS AND HUMANITARIAN AID

On 1 July, the EU Sanctions blog reported that the EU had released a guidance note on the provision of humanitarian aid in compliance with EU sanctions.  It provides an overview of EU sanctions, the function of humanitarian exceptions (including exemptions and derogations), compliance obligations and due diligence.

https://www.europeansanctions.com/2022/07/new-eu-commission-guidance-on-humanitarian-aid-and-sanctions-compliance/

https://ec.europa.eu/info/sites/default/files/business_economy_euro/banking_and_finance/documents/220630-humanitarian-aid-guidance-note_en.pdf

UK FINANCIAL REGULATORS TO HAVE DIRECT OVERSIGHT OF CRITICAL THIRD PARTIES

On 1 July, an article from Pillsbury said that, under a proposed new regime, UK financial regulators will be granted a range of powers over third parties that provide critical services to the finance sector.  Details are expected in a Discussion Paper, which will seek views from the industry on the most effective and proportionate way to proceed.  It points out that, Brexit notwithstanding, the new UK announcement comes shortly after the European Parliament and the EU Council reached a provisional agreement on the EU Digital Operational Resilience Act (DORA).  Like the new UK proposal, DORA seeks to bring critical third parties, such as cloud-service providers, within the regulatory perimeter. 

https://www.pillsburylaw.com/en/news-and-insights/uk-financial-regulators-oversight-third-parties.html

NIGERIAN SENATOR JAILED FOR 7 YEARS FOR MONEY LAUNDERING

On 1 July, the Premium Times reported that Nigerian senator, Peter Nwaoboshi, has been sentenced to 7 years in prison by the Lagos Division of the Court of Appeal.  The court also ordered that the senator’s companies, Golden Touch Construction Project Limited and Suiming Electrical Limited, be wound up. 

https://www.premiumtimesng.com/news/headlines/540219-nigerian-senator-jailed-seven-years-for-money-laundering.html

PRIVY COUNCIL CONFIRMS THAT A BANK’S “QUINCECARE DUTY” DOES NOT EXTEND TO THIRD PARTIES

On 29 June, a briefing from Cains in the Isle of Man reported on a recent case before the Privy Council in the UK.  The Court is the final court of appeal for the Isle of Man, and in this case the claimants were investment funds based in the Cayman Islands and it involved bank accounts held in the name of an Isle of Man incorporated entity and maintained by the Royal Bank of Scotland International Limited.

https://www.cains.com/privy-council-confirms-that-a-banks-quincecare-duty-does-not-extend-to-third-parties/

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OBJECTIVES FOR THE FATF DURING THE SINGAPORE PRESIDENCY 2022-2024

On 1 July, FATF issued a news release saying that FATF will prioritise work on strengthening asset recovery; countering illicit finance of cyber-enabled crime; increasing effectiveness of global AML measures; and reinforcing FATF Partnerships with FATF-style regional bodies like MONEYVAL and GAFILAT.  During the Singapore Presidency FATF will continue its core work of identifying and analysing money laundering and terrorist financing methods and trends, developing and refining the FATF Standards, and evaluating and supporting the assessments of countries within the Global Network.

https://www.fatf-gafi.org/media/fatf/documents/Singapore-Presidency-Priorities.pdf

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US WILL USE TRADE, ECONOMIC, AND OTHER AUTHORITIES TO ADDRESS ILLEGAL, UNREPORTED, AND UNREGULATED (IUU) FISHING, WHICH CAN INVOLVE FORCED LABOUR AND HUMAN TRAFFICKING

On 1 July, Sandler Travis Rosenberg reported that a new Presidential directive commits the US to promoting worker-centred trade policies and working to ensure that fishery supply chains are free from forced labour.  It outlines the planned actions, including investigations and information-sharing.

https://www.strtrade.com/trade-news-resources/str-trade-report/trade-report/july/wros-penalties-import-restrictions-among-efforts-to-combat-illegal-fishing

https://www.hstoday.us/featured/national-security-memorandum-outlines-interagency-plan-to-combat-global-threat-of-illegal-fishing/

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DATABASE OF CORPORATE NETWORKS BEHIND INDUSTRIAL FISHING VESSELS

C4ADS is promoting its Triton database, saying that a lack of transparency in the fishing industry has allowed the ultimate beneficial owners of industrial fishing vessels to hide behind complex corporate ownership structures, hampering traceability efforts and preventing true accountability for fisheries crimes.  Triton analyses the ownership structures of the world’s industrialised fishing fleets, revealing the linkages between fishing vessels at sea and the companies who profit from their activities.

https://triton.fish/

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MALTA COURT SAYS GADDAFI MILLIONS AT BANK OF VALLETTA MUST BE RETURNED TO LIBYA

On 28 June, Malta Today reported that a court has ordered the return of €96 million held by late son of Libyan dictator in Bank of Valletta to the Libyan State.  Gaddafi’s millions were historically managed by the former Labour Party treasurer, Joe Sammut.  The cash funded Muatassim Gaddafi’s playboy lifestyle, with millions held in his various American Express and Visa credit card accounts.  The 3 accounts at Bank of Valletta were held in the name of Capital Resources, a company owned by Gaddafi. 

https://www.maltatoday.com.mt/news/court_and_police/117566/malta_court_says_gaddafi_millions_at_bank_of_valletta_must_be_returned_to_libya#.Yr758hXMKUk

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UN ADDS 1 NAME TO NORTH KOREA SANCTIONS LISTS

On 30 June, the UN advised that Pak Chun, a former DPRK Ambassador to Egypt, had been added to sanctions lists

https://www.un.org/press/en/2022/sc14957.doc.htm

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