The protests in Panama continue, but still we are personally little affected, aside from no bananas in the local Super 99 store… I did notice the Metro buses seemingly on the “wrong” routes, presumably rerouted to avoid protests (probably outside the big city centre university?).
Despite our good fortune, others are obviously suffering, and the Tourism Authority of Panama (ATP) has set up a WhatsApp line forthe reports of stranded tourists, due to street closures in different parts of the country. Given that tourist arrivals in the first quarter of 2022 were 350% up on pandemic-hit 2021.
Speaking of the pandemic, the Ministry of Health (Minsa) has now lifted the mandatory use of masks on international aircraft and ships – though they remain required on domestic flights. Minsa has also released statistics for the week of 10 to 16 July, with active cases at the end of the week, with 9 new fatalities and 7,966 new cases added during the week. At the end of the week, 32 patients were in ICU and 164 in other wards. Testing results remain stubbornly high, at 16.4%.
19 JULY 2022
US: GEMS AND JEWELLERY WORTH UP TO $100 MILLION STOLEN IN HEIST ON ARMOURED VAN
On 18 July, Sky News reported that estimates in the value of the haul from the robbery in California vary wildly, with 18 victims reporting more than $100 million in losses, while a Brink spokesperson said the items valued less than $10 million. A spokesperson for the company explained the apparent discrepancy, saying that vendors who transport goods between jewellery shows typically under-insure their merchandise because they cannot afford to insure it fully.
TRADE-BASED MONEY LAUNDERING: THE PAPER TRAIL
An article in Global Trade Review on 13 July says that there is growing evidence that organised criminal groups are exploiting documentary trade finance as a means of moving illicit cash. The prevalence of paper documents and manual processes creates opportunities for forgery, it is said, and restrictions on information-sharing means money launderers can take advantage of knowledge gaps between banks. Historically, warnings over TBML have largely focused on open account transactions, where banks have limited oversight of the underlying goods being moved; and a US Government report published in late 2021 said that better access to trade documentation does not, in and of itself, guarantee that risks are lower. Efforts to digitalise trade documentation are accelerating, but paper remains prevalent. Documents are not necessarily standardised, each bank has its own policies and procedures for handling those documents, and difficulties come with the sheer volume of documents that accompany a trade finance transaction. It is argued that the documentary part of trade-based money laundering is ideal for money laundering layering, as you can add layers and layers and make it difficult for someone to follow the flow of funds from the originator to the ultimate beneficiary, It warns that, even with digital documentation and systems, as money laundering techniques become more complex, and the layering process involves a greater number of different banks, companies and documents, it becomes more difficult for a single entity to spot unusual patterns of activity. It refers to a project in Singapore and a platform known as Cosmic, which is being developed by the Monetary Authority of Singapore (MAS) alongside 6 major commercial banks.
CANADA: PROPOSED REDUCTION OF THE CRIMINAL INTEREST RATE WILL HAVE IMPLICATIONS FAR BEYOND LOANSHARKING
On 14 July, an article from Aird & Berlis LLP is concerned with a Bill to reduce the “criminal interest rate” in Canadian law. It warns that the impact of such a change would be wide-ranging and affect loans that both lenders and borrowers might never have expected to approach an illegal rate of interest. The current criminal interest rate is an effective rate that exceeds 60% per annum., and the original aim of the law appears to have been to address loansharking – with unlicensed street lenders offering credit at exorbitant interest rates and employing intimidation and violence to enforce their contracts. It explains that a court will not enforce illegal agreements on public policy grounds, and that an agreement that provides for an effective interest rate over 60% would similarly be illegal. One point made is that a new, lower criminal interest rate a new criminal interest rate of 22.5% could mean that credit card companies across the country could find themselves receiving payments or partial payments of interest at criminal rates.
PROBLEMS FOR THE KURDISH OIL AND GAS SECTOR IN IRAQ
A Commentary from War on the Rocks on 18 July was concerned with problems for Kurdistan’s oil and gas sector — the financial lifeline of the region. It points out that the Kurdish provinces have been de facto separated from Iraq since the end of the first Gulf War in 1991, a 2005 Iraqi Constitution established it as a semi-autonomous region, but that document left a great deal of ambiguity as to exactly which rights and privileges would be accorded to the region, a lacuna that continues to this day. The so-called “disputed territories” include, notably, the oil-rich province of Kirkuk. The latest problems arise from Iraqi supreme court decisions about the ownership and control of the production and export of Iraq’s natural resources. The threat of legal action and blacklisting of Kurdish oil could mean international companies, and perhaps transporters of the oil, refusing to be involved.
OVERSUPPLY OF TEU CONTAINERS AFTER ‘PANIC’ ORDERING
On 19 July, Seatrade Maritime News reported that container prices are plummeting as panic ordering of boxes during the pandemic has brought oversupply to the market.
CONGESTION SHIFTS TO US EAST COAST PORTS
On 19 July, Seatrade Maritime News said that congestion at US West Coast ports hit the headlines last year as it reached record levels, but that anew report says that the port congestion situation in the US had morphed from primarily impacting the West Coast to impacting all coastal ranges, with many more vessels waiting at facilities on the East Coast.
2 FORMER TOP REPUBLICAN DONORS ACCUSED WITH OPERATING A FRAUDULENT $27 MILLION INVESTMENT SCHEME INVOLVING ILLEGAL POLITICAL CONTRIBUTIONS TO HELP FOREIGN NATIONALS GAIN ACCESS TO PRESIDENT TRUMP AND OTHER POLITICIANS
On 18 July, the Wall Street Journal reported that business partners Sherry Xue Li and Lianbo Wang are accused of conspiring to make hundreds of thousands of dollars in donations in their own names with money from foreign nationals, including many from China.
CRYPTOCURRENCIES LAYOFFS AFFECT RISK AND COMPLIANCE STAFF AT BIG EXCHANGES
On 19 July, the Wall Street Journal reported that, with the rapid drop in cryptocurrency prices, the fortunes of companies have changed almost overnight, prompting layoffs; and that some of the largest cryptocurrency exchanges have cut staff, including in risk and compliance. Compliance experts said reducing such staff at crypto companies could carry regulatory and reputational risks as the sector continues to face regulatory scrutiny in the US. It cites Coinbase, where a hub of former employees includes compliance analysts, paralegals for marketing, investigations analysts, financial-crimes-investigations analysts and a compliance and AML manager in India. It is also said that the firm also rescinded several job offers, including for a KYC onboarding associate and compliance associates. Nevertheless, the article says that the demand for legal and compliance staff continues, particularly among start-ups, as these businesses navigate an evolving regulatory environment.
LIBYA’S OIL CHIEF REJECTS SACKING AND SAYS GOVERNMENT MANDATE EXPIRED
On 13 July, Reuters reported that the situation raises the prospect of an open struggle for control of the state energy producer. The head of Libya’s National Oil Corp (NOC) said Prime Minister Abdulhamid al-Dbeibah’s mandate to govern had expired and warned him not to touch NOC. He accused the UAE of being behind a series of Libyan oil blockades and his sacking.
INDIAN CENTRAL BANK DECISION TO LET IMPORTERS PAY WITH RUPEES AND EXPORTERS BE PAID IN RUPEES
On 12 July, Reuters reported that the Reserve Bank of India had said that it had put in place a mechanism for international trade settlements in Indian rupees with immediate effect. This move is likely to make trade easier with Russia and South Asian neighbours, and will help a long term goal to internationalise the currency, experts said.
ETHIOPIA: RELIEF AID CHIEF ARRESTED ON SUSPICION OF CORRUPTION
On 13 July, Africa News reported that the head of Ethiopia’s national humanitarian agency was arrested on suspicion of corruption. Mitiku Kassa, head of the National Disaster Risk Management Commission (NDRMC), a government agency in charge of risk prevention and victim assistance, is said to have been arrested by the federal police.
PERU WANTS US HELP TO STOP COCAINE TRAFFICKING PLANES
On 13 July, Reuters reported that Peru wants to secure a deal with the US as soon as possible to help it tackle the use of aircraft to smuggle cocaine at a time when coca cultivation has been growing. It is said to seeking “non-lethal” support in intercepting planes transporting illegal drugs.
RUSSIA’S NUCLEAR FUEL DOMINANCE IMPEDES WESTERN ENERGY INDEPENDENCE
On 19 July, Nikkei Asia reported that Russia’s large share in the nuclear fuel market presents a major challenge for Western nations as they try to achieve energy independence from Moscow by moving away from oil and gas. It is reported that the US and Europe source 20% of enriched uranium from Russia.
MALTA: NEW FIAU PUBLICATION TO GUIDE BANKS ON THE USE OF CASH
On 18 July, Ganado Advocates reported that the AML regulator, the Financial Intelligence Analysis Unit, recently issued a new guidance note, primarily targeting the banking industry players but also other subject persons carrying out activities involving cash deposits and/or withdrawals, aimed to provide a blueprint for the compliance of AML obligations.
DENMARK IS NO LONGER ALLOWED TO EXPORT ITS CHEESE AS FETA
On 15 July, an article from Dutch law firm Ploum reported that feta cheese has been designated by the European Commission as having protected designation of origin (PDO) protection. However, for more than 20 years, the European Commission and Denmark have been at loggerheads in the ‘battle’ over the sale of cheese from Denmark under the name feta. A recent European Court of Justice ruling held that products that are produced in the EU and are only intended for export to non-EU countries are also covered by the prohibition and hence dairy producers in Denmark must immediately stop producing and exporting their cheese under the name feta.
RUSSIAN ENVOY SAYS NORTH KOREA COULD SEND WORKERS TO BREAKAWAY UKRAINIAN STATES
On 19 July, NK News reported that North Korea could help the 2 breakaway republics in eastern Ukraine by sending workers to help with reconstruction, Russia’s ambassador to the DPRK has said, despite UN sanctions that forbid such activities. He also said that Korean partners are interested in purchasing spare parts and units manufactured in Donbas and reconstructing their production facilities, although this would breach UN sanctions.
BRAZIL: THE MILLIONAIRE SMUGGLING BUSINESS BEHIND THE THEFT OF HERBICIDES
On 19 July, California 18 reported on the illegal herbicides trade in Brazil involving paraquat, which Brazil banned in September 2020, but which is available and used in Argentina. Brazilian farmers, given the porosity of the border, acquire it from Argentina and also Paraguay, where they can be marketed freely. It is said that seizures of agrochemicals have increased by 1,400%, according to the Federal Revenue.
CHINESE COURT ORDERS DUTCH COLLECTOR TO RETURN SMUGGLED 1,000-YEAR-OLD MUMMIFIED BUDDHA STATUE
On 19 July, Global Times reported that the court had ordered the return of a 1,000-year-old Buddha statue with the remains of a mummified monk inside, in the possession of Oscar Van Overeem and seemingly ending 7 years of litigation. The statue was stolen in December 1995, and the Dutch art collector claimed that he bought the statue in 1996 in Amsterdam, but it is said that he did not provide the corresponding trading proof, according to the court.
TUNISIAN AUTHORITIES HAVE QUESTIONED ENNAHDA PARTY LEADER RACHED GHANNOUCHI ON ACCUSATIONS OF MONEY LAUNDERING
On 19 July, the Anadolu Agency reported that Ghannouchi appeared before an anti-terrorism judge to answer questions regarding suspicious financial transactions within the “Namaa Tounes” charity, Tunisia’s state news agency reported. On 6 July, Tunisian authorities froze the financial assets of Ghannouchi and 9 other people, including his son and former Prime Minister Hamadi Jebali.
BELFAST: 10 SENTENCED OVER £20 MILLION MONEY LAUNDERING SCHEME
On 18 July, the BBC reported that the 6 men and 4 women are Chinese nationals and all of them lived in Belfast at the time of the offences. The offences were uncovered during an investigation by the NCA which involved a number of UK-based financial institutions and on behalf of an organised criminal gang.
US SENATE LOGJAM THREATENS OECD CORPORATE TAX DEAL
On 19 July, the Irish Times reported that new doubts have emerged after Joe Manchin, a US Democratic senator from West Virginia, said that he would block the passage of President Joe Biden’s key climate and tax legislation, including elements of the OECD deal, through the Senate.
ARGENTINA PUBLISHES LIST OF LOW- AND NO-TAXATION JURISDICTIONS
In an article dated 20 July, STEP reported that Argentina’s tax administration has published a list of low- or no-tax jurisdictions for the purposes of tax implications under the Income Tax Law (Ley de Impuesto a las Ganancias).
SWISS PROSECUTORS TO CHALLENGE ACQUITTAL OF FOOTBALL CHIEFS BLATTER AND PLATINI
On 19 July, Yahoo News reported that State prosecutors in Switzerland confirmed they have started the appeal process against the acquittal of former football chiefs Sepp Blatter and Michel Platini over a suspected fraudulent payment.
UK REGISTER OF OVERSEAS ENTITIES TO GO LIVE ON 1 AUGUST – IMPACT ON FINANCE TRANSACTIONS
On 18 July, Dentons published an article saying that Companies House has confirmed that it intends to open the UK register of overseas entities on 1 August. This article sets out to explain how the introduction of this register will affect finance transactions involving UK real estate.
MULTIPLE THAI DEMOCRACY ACTIVISTS WERE TARGETED BY A PEGASUS SPYWARE ATTACK
On 19 July, Jurist explains that Pegasus is a spyware for cell phones that allows the perpetrator of the attack to see texts, calls and in some cases, end-to-end encrypted messages, sent through applications such as WhatsApp. A report claims that several activists, both high- and low-profile, as well as funders of Thailand’s pro-democracy movement, have been targeted by Pegasus attacks.
UK: AI SYSTEMS WILL HAVE TO IDENTIFY A LEGAL PERSON TO BE HELD RESPONSIBLE FOR ANY PROBLEMS UNDER PROPOSALS UNVEILED BY THE GOVERNMENT
On 18 July, the Law Society Gazette reported that the proposed ‘pro innovation’ regime will be operated by existing regulators rather than a dedicated central body along the lines of that being created by the EU, the government said.
BRAZIL IN THE REGIONAL AND TRANSATLANTIC COCAINE SUPPLY CHAIN: THE IMPACT OF COVID-19
An Insight from the UN Office on Drugs and Crime considers the effect of the pandemic on the drugs supply trade in Brazil. Amongst its findings are that the cannabis and cocaine markets were impacted in very different ways; but that diversification of maritime routes exiting Brazil continued.
US CUSTOMS TRADE ENFORCEMENT MEASURES ACCELERATED IN THE FIRST HALF OF FISCAL YEAR 2022, HIGHLIGHTING THE CONTINUING NEED FOR IMPORTERS TO DEVELOP, IMPLEMENT, AND MONITOR EFFECTIVE COMPLIANCE PROGRAMS
An article from Sandler Travis Rosenberg reported that, according to statistics recently made available by CBP, the agency is on pace to exceed its FY 2021 numbers in a few areas – including increases of 8.8% in the value of import safety seizures, 42.9% in withhold release orders (WRO), and 52.5% in cargo detentions related to WRO.
ITALIAN POLICE THWART ILLEGAL SALE OF ARTEMISIA GENTILESCHI PAINTING
On 19 July, the Guardian reported that Italian police have prevented the potential illegal sale by a Viennese auction house of a 17th Century painting by the baroque artist Artemisia Gentileschi. The carabinieri art squad said dealers had allegedly described the work as being painted by a follower of Gentileschi, and not the artist herself, in order to fraudulently obtain export permission from Italian authorities.
OVER THE PERIOD 1974 TO 2019 ADDITIVE COSTS REPRESENTED BETWEEN 35% (IN AIR TRANSPORT) AND 45% (IN VESSEL) OF TOTAL TRANSPORT COSTS
On 19 July, a post from VOX at the Centre for European Policy Research said that, although transport costs have decreased substantially over the past 2 centuries, they are still far from negligible. It argues that in addition to standard ad valorem transport costs, there is an important role for additive costs in trade models. In addition to the increase in additive costs, accounting for additive transport costs helps characterise the downward trend in total transport costs since the 1970s and suggests that the gains from trade over the period have been larger than generally assumed.
WHAT LIES BEHIND SRI LANKA’S COLLAPSE?
A post from the LSE on 19 July says that corruption, the preferential treatment of connections, dependence on debt finance, and explosive borrowing from China have combined to push Sri Lanka into economic collapse. It is argued that, even if an acceptable caretaker government gets formed, the depths to which the economy has sunk, the degradation of institutions, and a sense of impunity among the elite will make recovery a protracted and painful process.
EU PROSECUTOR LAUNCHES PROBE INTO BRIBERY IN CROATIA
On 18 July, OCCRP reported that the EPPO had said that it was investigating 3 Croatian nationals who are suspected of bribery linked to a $23.91 million EU-co-financed waste water project.
NEW ZEALAND: APPEAL DISMISSED IN THE FIRST CRIMINAL PROSECUTION UNDER ANTI-MONEY LAUNDERING AND COUNTERING FINANCING OF TERRORISM ACT
A news release from the Department of Internal Affairs advised that an appeal against convictions in New Zealand’s first criminal prosecution under the Anti-Money Laundering and Countering Financing of Terrorism Act was dismissed by the Court of Appeal on 1 July. The case involved Jiaxin Finance, its sole director Qiang Fu and his mother Fuqin Che, after Jiaxin Finance failed to keep adequate records and report suspicious transactions by Canadian businessman Xiao Hua Gong, also known as Edward Gong, which totalled over $53 million.
SOMALIA’S MARITIME POLICY: SHAPING A NEW SECURITY AGENDA IN THE INDIAN OCEAN
Risk Intelligence has produced a new White Paper about a new maritime policy in Somalia, shifting the emphasis away from piracy, and towards regulating its maritime domain and building a blue economy – although many challenges remain. The White paper outlines the challenges to its implementation, and reflects on its implications for the regional maritime security agenda going forward.
WHY ARE DRUG NAMES SO LONG AND COMPLICATED? A PHARMACIST EXPLAINS THE LOGIC BEHIND THE NOMENCLATURE
On 19 July, an article from The Conversation explains that there is a rhyme and a reason to drug names. All prescribed medications follow a standard nomenclature that describes what the drug is made of and how it functions.
UK: INFORMATION COMMISSIONER’S OFFICE 3-YEAR PLAN: AN EMPHASIS ON THE “PERSONAL” ELEMENT OF “PERSONAL DATA”
A post from Field Fisher on 18 July said that the plan, known as “ICO25”, ICO25 is currently in the consultation phase and is open for feedback until 22 September. It is said that the draft report emphasises the “personal” element of “personal data”, and after a 6-month listening exercise, the ICO is said to see its purpose as empowering individuals through information. The plan sets out 4 strategic enduring “objectives” to support this purpose. The post examines these and other elements of the draft plan.
RUSSIA: HOW A RUINOUS IMPERIAL WAR HAS STRENGTHENED HIS RULE AT HOME
On 15 July, Foreign Affairs published an interesting article which starts by saying that people are going about their usual lives, and the economy continues to function, and there are no shortages of consumer goods; so far. Survey data seems to show that Russians do not seem to be seriously concerned about the economic effects of the conflict: half of respondents say sanctions will strengthen the country and stimulate development, and another quarter say sanctions will have no negative effect on growth. Putin’s approval rating is high, and above pre-war levels. At present, many Russians seem remarkably sanguine about their collective future.
TERRORIST FINANCING AND TECHNOLOGY: UNDERSTANDING APPROACHES AND ANTICIPATING RISKS
On 11 July, the Global Project on Extremism and Technology published an article saying that, over the last 2 decades, there has been considerable focus in the international community on countering the financing of terrorism (CTF or CFT). This article lists why CFT matters for finance companies and says that technology companies need to better understand both how terrorists finance their activities and the CTF approaches, and where vulnerabilities and risks lie. Increasingly, terrorists are adopting new technologies to finance their activities, coordinate their plans, and support their organisations.
A MAJOR OVERHAUL OF THE US AML LAWS IS ANOTHER STEP CLOSER
On 15 July, ICIJ reported on the House of Representatives had passed a bipartisan Bill (the “ENABLERS Act”) that would force middlemen like trust companies and lawyers to more closely scrutinise the source of money and assets flowing into the country’s financial system. The Bill was approved as part of the annual National Defense Authorization Act.
HMRC ANNUAL REPORT AND ACCOUNTS 2021 TO 2022
HMRC has published its annual report to year-ending 31 March. In its initial reaction, Accounting Web noted that the effect of Covid ran throughout the report, but that the area that has garnered the most headlines has been around error and fraud. HMRC pointed out that it prevented more than 100,000 ineligible claims and over 65,000 suspicious claims from being paid out. HMRC says that it has recovered £760 million by the end of financial year. For the various Covid-related support schemes. the total value of error and fraud across the full 2-year lifecycle is estimated to be between £3.2 billion and £6.4 billion. HMRC said the likely error and fraud rate was between 3.3% and 6.5% with a most likely estimate of 4.6%.
US OPIOID OVERDOSES SURGED IN 2020 – ESPECIALLY AMONG PEOPLE OF COLOUR
On 19 July, the Guardian reported that overdose death rates surged among Black, American Indian and Alaska Native individuals in 2020, the US Centers for Disease Control and Prevention (CDC) has said. The CDC said the increase in deaths was largely driven by illegally produced fentanyl and its analogues. The US recorded 91,799 drug overdose deaths in 2020, about a 30% increase from 2019, according to the CDC.
UK OFFICIALS RAISED CONCERNS OVER RWANDA POLICY, DOCUMENTS IN COURT CASE SHOW
On 19 July, the Guardian reported that the Home Office pushed through its policy of sending asylum seekers to Rwanda despite repeated concerns from UK government officials, it has emerged from documents submitted to a High Court hearing, and ahead of a full hearing later this year into the lawfulness of the policy.
Meanwhile, a BBC Radio programme on 19 July, introduced by a Rwandan national, looks at what’s happening in the country of her birth, which she fled as a child during the genocide of 1994. It asks, is this country a developmental model for the rest of the continent – or an autocratic and ruthless state?
US: OPERATOR OF AIRCRAFT SUPPLY BUSINESSES PLEADS GUILTY IN $7 MILLION FRAUD SCHEME
A news release from US DoJ on 19 July announced that Kyle J Wine, 47, had pleaded guilty to fraud and money laundering offenses stemming from a $7 million scheme related to his commercial aircraft supply businesses. Wine used victims’ money to purchase aircraft airframes and engines, sold the aircraft airframes and engines, hid the resulting profits from his investors, and diverted invested funds for his personal use.
US: 3 MEN CHARGED IN ECUADORIAN BRIBERY AND MONEY LAUNDERING SCHEME
A news release from US DoJ on 19 July advised that a federal grand jury in Florida had returned an indictment charging a Florida man and 2 Ecuadorian citizens, who reside in Costa Rica, for their alleged roles in a bribery and money laundering scheme to obtain business from Ecuadorian state-owned insurance companies – Seguros Sucre SA and Seguros Rocafuerte SA.
ILLICIT FENTANYL AND CHINA’S ROLE
On 18 July, the US Congressional Research Service published a briefing paper, as “primer” on the issue. It says that US counter-narcotics policy has included a focus on reducing fentanyl and fentanyl precursor flows from China. Despite some early successes, it says, cooperation with China appears to have waned in recent years, consistent with an overall deterioration in US-China relations.
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