Before we start, here is Al Jazeera’s take on the current protests in Panama –
I somehow managed to miss this demo…
20 JULY 2022
ISLE OF MAN CYBER-SECURITY STRATEGY
On 20 July, the Office of Cyber-Security & Information Assurance (OCSIA) published this Strategy for 2022-2027. The updated cyber-security strategy is said to focus on awareness and education, building on the actions of the first strategy to provide practical and targeted guidance and advice to residents and businesses.
UK: AROUND 80% OF CRYPTOASSET COMPANIES THAT SOUGHT TO REGISTER FOR A LICENCE WERE EITHER DENIED OR WITHDREW THEIR APPLICATION UNDER SCRUTINY
On 20 July, the Wall Street Journal reported that the annual report from the FCA which, in the year to March, operated a new legal regime to review crypto firms to ensure they are protecting against financial crimes.
IRELAND: CENTRAL BANK BULLETIN TO VASP OUTLINING ITS REGULATORY EXPECTATIONS AND SETTING OUT RECURRING WEAKNESSES IN, VASP REGISTRATIONS
On 14 July, Irish law firm William Fry published an article saying that the Central Bank had issued a bulletin to virtual asset service providers outlining its regulatory expectations and setting out recurring weaknesses in, VASP registrations.
CANADA: PONZI SCHEME PARTICIPANTS ORDERED TO RETURN PAYMENTS THAT WERE “TOO GOOD TO BE TRUE”
On 11 July, an article from Gardiner Roberts LLP, referring to a recent court case, said that investors in a scheme that seems too good to be true should be aware that they may be liable to return the funds under principles of unjust enrichment or bankruptcy preference laws. In this case, after the business involved collapsed, a trustee in bankruptcy was appointed and brought several actions against individuals and companies who received payments in 2012 and 2013, which included commission payments and interest on promissory notes.
UK: SELLERS’ FALSE DUE DILIGENCE RESPONSES AMOUNTED TO FRAUDULENT MISREPRESENTATIONS
On 15 July, an article from MacFarlanes LLP said that in a recent High Court case, the court examined whether false responses given by sellers to a buyer’s due diligence enquiries amounted to fraudulent misrepresentations. The court found that the sellers had made fraudulent misrepresentations, even though most had been dishonest.
MOBILE POINT OF SALE OR mPOS
CHANGES IN THE SWEDISH DUAL-USE REGULATIONS
On 19 July, Baker Mckenzie reported on amendments from 1 August to the Swedish dual-use regulations in order to strengthen the control of dual-use products and technical assistance. The article reviews the changes and says that, in particular, companies affected should be aware of the extended requirement to notify the National Inspectorate of Strategic Products (ISP), as the threshold for notifying the ISP has been lowered where the goods or technical assistance involved is or may be intended for WMD programs, military end-use in a country subject to an arms embargo or use as components for munitions that have been exported from the EU without an authorisation.
6 SANCTIONS QUESTIONS FOR PRIVATE EQUITY COMPANIES TO CONSIDER
On 18 July, Latham & Watkins laid out in Q&A format 6 things a private equity might or should ask in respect of Russian sanctions. These involved dealing with Russia, selling assets there, parent company liability and the personal liability of individuals.
A NEW EU TRADE INSTRUMENT TO BAN PRODUCTS MADE BY FORCED LABOUR: WHAT DO WE KNOW SO FAR?
On 14 July, an article from Bird & Bird pointed out that forced labour is explicitly prohibited by the EU Charter of Fundamental Rights, and said that MEP and NGO have voiced their demands for the EU to come forward with a specific legislative measure to address forced labour, which is now expected after the Summer break. Reviewing development since the Commission President announced plans for such a measure in September 2021, the article says that, according to a provisional European Commission agenda, a legislative initiative for a “Forced labour products ban” could be presented on 13 September, with this date, subject to change, coinciding with the September European Parliament Plenary session in Strasbourg.
EUROPEAN COURT OF JUSTICE CLARIFIES CONCEPT OF “RELATED PERSONS” FOR CUSTOMS PURPOSES
On 18 July, an article from Bird & Bird in the UK reported on an ECJ decision issued in June which it says provides more clarity on the concept of related persons, which allows customs authorities to disregard the transactions value and instead use different valuation methods to determine the customs value of imported goods. It explains that EU customs law provides for an exhaustive list in determining when (legal) persons are related and in which situations customs authorities can substantiate such a relationship. If the persons involved were found to be “related”, then customs authorities could use – as an alternative customs value method – prices of comparable goods available in their national database, although the goods might not be exactly similar.
SINGAPORE STRAIT ARMED ROBBERIES RISE IN FIRST HALF OF 2022
On 20 July, Seatrade Maritime News reported that the half year report from the ReCAAP Information Sharing Centre (ISC) said there were a total of 42 incidents of armed robbery in Asian waters – an 11% increase on 2021.
RECOGNISING AND ENFORCING CHINESE JUDGMENTS IN US COURTS
On 19 July, a post in the Transnational Litigation Blog said that it has become routine for courts in the US to recognise and enforce Chinese judgments, subject to the same limits that are applied to judgments from other countries. However, it says that last year a New York court threatened to upset this positive trend. It goes on to says that the case raises important questions about whether US courts should assess the adequacy of foreign legal systems when reviewing foreign judgments and how this should apply to China in particular.
US DISRUPTS NORTH KOREAN RANSOMWARE CAMPAIGN AGAINST HOSPITALS
On 19 July, the Wall Street Journal reported that US law enforcement recently disrupted a campaign that targeted hospitals and other medical facilities in the US, in a DoJ operation that included the cryptocurrency seizure of about a half-million dollars in ransom payments, and the Deputy AG has said that recovered funds would be returned to victims.
BANKS TURN TO AI TO HELP DODGE ENFORCEMENT SPOTLIGHT
On 20 July, the Wall Street Journal reported that an increase in AI offerings is driving a shift in what enforcement agencies could expect from financial institutions and corporations in the US. It is said that the more stringent compliance expectations of President Biden’s administration have prompted companies that are lagging to try to catch up. The new AI-focused offerings are designed to reform the laborious approach to compliance that has long prevailed at many financial institutions and other entities, and are intended to enable continuous check-ups on customers and transactions for money-laundering issues and sanctions violations.
ODEBRECHT: HOW A BRAZILIAN GIANT CONQUERED PANAMA
On 19 July, El Universo in Ecuador told the story of the Brazilian construction company’s involvement in Panama, the jailing in the US of the 2 sons of former President Martinelli who, as President, granted the company at least 12 public infrastructure projects 2009-2014 and valued at more than $5 billion.
SWIFT AND SANCTIONS
On 19 July, Investopedia provided a brief outline about Society for Worldwide Interbank Financial Telecommunications, commonly known as SWIFT, and how sanctions involving it work.
RIO TINTO AGREES TO PAY ADDITIONAL $613 MILLION TO SETTLE DISPUTE WITH AUSTRALIAN TAX OFFICE
On 20 July, the Guardian reported that Rio Tinto has agreed to pay the Australian Taxation Office an additional $613 million to settle disputes over its financing arrangements and marketing hubs in Singapore, on top of $378 million the global mining giant had previously paid over the same dispute.
US: ENHANCED EXPORT REGULATORY ENFORCEMENT
On 19 July, an article from Snell & Wilmer reported that the Bureau of Industry and Security of the US Department of Commerce had released a memorandum that announced a stricter Administrative Enforcement Program. The article says that companies should be aware of the BIS guidance and the heightened enforcement environment due to ongoing national security threats precipitated by illicit acquisition of US technology. It is said that the most noteworthy recent BIS policy changes are the publication of administrative charging letters, and the elimination of the “No Admit, No Deny” settlement agreements. Another point emphasised is that, in an attempt to resolve the backlog of pending administrative matters, BIS will offer non-monetary settlement agreements in limited instances.
RUSSIA (SANCTIONS) (OVERSEAS TERRITORIES) (AMENDMENT) (No. 2) ORDER 2022
This Order makes the necessary amendments to the Principal Order of 2019 to give effect in the relevant British Overseas Territories to the changes made to the Russia sanctions regime by amending regulations. It applies to various territories, including Anguilla, the Cayman Islands, the Turks and Caicos Islands and BVI.
UK: STRATEGIC LAWSUITS AGAINST PUBLIC PARTICIPATION (SLAPPs) – GOVERNMENT PROPOSALS
On 20 July, a news release from the MoJ says that courts will be able to dismiss lawsuits seeking to stifle free speech earlier under government reforms to protect the UK legal system from abuse. The proposals include a new mechanism to allow courts to throw out baseless claims quicker and a cap on costs to prevent the mega-rich, such as Russian oligarchs, from using expensive litigation as a weapon to silence their critics.
DESPITE DENIALS, ABRAMOVICH COMPANIES HAVE SUPPLIED MATERIALS FOR RUSSIAN MILITARY
On 20 July, OCCRP reported claims that Abramovich’s Evraz group of companies supplied Russia’s National Guard and provided steel and explosives products to weapons manufacturers that supply the Russian military, contrary to the company’s denials of doing business with the country’s armed forces.
INTERPOL: FROM FAKE COVID-19 TESTS TO HAZARDOUS ERECTILE DYSFUNCTION TABLETS, THE 94-COUNTRY OPERATION PANGEA XV TARGETED ILLICIT PHARMACEUTICALS AND MEDICAL PRODUCTS TRADED ONLINE
On 20 July, a news release from INTERPOL said that over just 1 week in June, 94 INTERPOL member countries representing every continent launched a coordinated crackdown on illicit online pharmacies in Operation Pangea XV. Globally, law enforcement made more than 7,800 seizures of illicit and misbranded medicines and healthcare products, totalling more than 3 million individual units.
BELGIAN LUXURY CAR PURVEYOR ARRESTED IN SPAIN FOR MONEY LAUNDERING
A news release from Europol on 20 July advised that a suspect who is believed to have laundered millions of euros in illicit profits has been arrested following an investigation by the Belgian Federal Judicial Police and the Spanish National Police. It is alleged that cash from the drug trade would be first collected in Belgium, before being used in another European country to purchase luxury vehicles with a price tag in excess of €100 000. Through the purchase of such expensive vehicles, the criminals were effectively converting the illicit cash into assets which would serve to disguise the origin of the money. These cars were then exported to other countries where they were first rented out, before being sold off.
US CUSTOMS SEIZES NEARLY 120,000 PAIRS OF COUNTERFEIT DIABETIC SOCKS
On 19 July, WTKR reported that the consignment had arrived in a shipping container from Turkey in June and was destined to an address in Virginia and, if these socks were authentic, they would be worth $1.9 million.
BELGIAN CUSTOMS CONDUCT MAJOR MARITIME ANTI-DRUG TRAFFICKING OPERATION
On 19 July, the Brussels Times reported that Belgian customs, with the assistance of France, Germany, the Netherlands, Spain, the UK, and Frontex, conducted a major operation to intercept drugs entering Belgium from the sea. A total of 82 ships were checked during the crackdown, resulting in 13 seizures.
UK DATA PROTECTION AND DIGITAL INFORMATION BILL: IN DETAIL
On 20 July, Out-Law published this guide, saying that significant changes are proposed as the UK Government seeks to demonstrate advantages of Brexit, but there remains an open question over whether the UK reforms will diverge too far from the standards applicable under the EU GDPR and risk the continued free flow of personal data – and the resultant trade that supports – between the EU and UK.
US STATE DEPARTMENT HAS DEMOTED INDONESIA IN ITS LATEST ANNUAL REPORT ON EFFORTS TO COMBAT HUMAN TRAFFICKING, BUT PROMOTED THAILAND
On 20 July, Eurasia Review reported that, also in SE Asia, Malaysia remained at the bottommost tier and the Philippines stayed at the top tier in the Department’s 2022 Trafficking in Persons Report. In South Asia, Bangladesh stayed at the second tier, with the State Department saying that while it didn’t fully meet the minimum standards for eliminating trafficking, it was making significant efforts to do so.
CASE HIGHLIGHTING THE REGULAR USE OF PRIVATE CRAFT FOR TRANSATLANTIC DRUG TRAFFICKING
On 19 July, an article from Insight Crime says that 2 Argentine restaurateurs residing in Spain are wanted for allegedly using yachts to send cocaine between South America and Europe. The men are accused of running a drug trafficking operation that has been sending annual cocaine shipments across the Atlantic by yacht.
EU ENGAGEMENT IN AFGHANISTAN: INSIGHTS AND EMERGING LESSONS
A Brief from the EU Institute for Strategic Studies on 12 July Brief does not aim to provide an exhaustive overview of the events and developments that have shaped the EU’s role in Afghanistan since the overthrow of the Taliban in 2001; but rather draws on roundtable consultations with senior Afghan and EU policy practitioners to identify 5 key insights from the EU’s engagement in Afghanistan over the past 20 years.
THE QUAD PROMISES ACTION ON ILLEGAL, UNREGULATED, AND UNREPORTED (IUU) FISHING
On 6 July, Windward reported that a joint statement released by “the Quad” – leaders of Australia, India, Japan, and the US – promises efforts to combat IUU fishing, included in the Indo-Pacific Partnership for Maritime Domain Awareness (IPMDA), designed to work with regional partners to respond to humanitarian and natural disasters. It explains that the new IPMDA program plans to share commercially-available satellite data to alert SE Asian countries about possible intrusions.
PODCAST: COLLABORATIVE INVESTIGATIVE JOURNALISM WITHOUT BORDERS
At the TRACE Prize for Investigative Reporting award ceremony last month, former prosecutor and National Observer columnist Sandy Garossino led a conversation with ICIJ’s Spencer Woodman, Bellingcat’s Aric Toler, and 2022 Prize winners Hans Peterson Hammer of Göteborgs-Posten and Lilia Saúl Rodriguez of the OCCRP. They discuss the evolution, impact and future of cross-border collaborative investigative journalism.
COURT VARIES ACCOUNT FREEZING ORDERS TO ALIGN WITH SANCTIONS LICENCE GRANTED BY OFSI IN RESPECT OF DESIGNATED PERSON,
On 20 July, the EU Sanctions blog reported that a magistrates’ court had varied 2 AFO obtained by the NCA against 2 companies that have been managing the financial and security needs of Petr Aven. In June, OFSI had granted a basic needs licence which involve funds to be paid to and from the accounts over which the NCA was seeking account freezing orders.
US: PILOT PROGRAM SEES 2 OPEN GENERAL LICENSES ISSUED AUTHORISING THE RETRANSFER AND REEXPORT OF DEFENCE ARTICLES SUBJECT TO ITAR WITHIN OR BETWEEN AUSTRALIA, CANADA, AND THE UK
On 20 July, Torres Trade Law reported that, on 13 July, the US Department of State Directorate of Defense Trade Controls (DDTC) had issued 2 OGL. Like General Licenses issued by OFAC, these apply if the transaction meets the stated requirements, without specific application to DDTC. They take effect on 1 August 1 and are valid for 1 year.
UPDATE TO ISLE OF MAN RUSSIA SANCTIONS LAW
On 20 July, a news release from the Isle of Man advised that the Russia Sanctions (Application) (No. 10) Regulations 2022 come into operation on 20 July and apply, with suitable amendments, 2 sets of recent UK regulations, ensuring that Isle of Man sanctions law in this area is aligned with that of the UK.
UK: PILOT OF “CONTACTLESS” DIGITAL BORDER TO LAUNCH IN 2 YEARS
On 20 July, a news release from the Home Office advised of plans to begin the rollout of secure “contactless” border crossings, as part of a wide-ranging announcement on the future the UK Border. The Home Office is set to begin testing technologies that would allow some passengers to enter the UK and undergo automated border screening without going through an eGate or speaking to a Border Force officer.
CANADA: CULLEN COMMISSION OVERVIEW
On 20 July, Dentons provided an article with an overview of the findings of the Cullen Commission of Inquiry into Money Laundering in British Columbia, which was released in its final form in June. The Report provides analysis and regulatory recommendations that target industries vulnerable to money laundering in British Columbia. It says that the key message of the Report is clear and unequivocal: money laundering is a significant issue in British Columbia and more regulatory oversight is required to tackle the problem.
US: BILL WOULD BAN FEDERAL CONTRACTS WITH BUSINESSES OPERATING IN RUSSIA
Included in the National Defense Authorization Act recently approved by the House of Representatives is a revised version of the “Federal Contracting For Peace And Security Act”, a post from Baker McKenzie reports. This would prohibit the federal government from entering into, extending, or renewing contracts with contractors that conduct business operations in Russia during its war against Ukraine, with certain exceptions and exemptions summarised in the post.
CANADA HAS AMENDED ITS SANCTIONS MEASURES IMPOSED ON RUSSIA TO EXPAND THE SCOPE OF THE EXISTING PROHIBITION ON SERVICES TO RUSSIA
On 20 July, a post from Baker McKenzie advised that Canada had further amended its Russia sanctions on 14 July. It has added services incidental to manufacturing, except to the manufacture of metal products, machinery and equipment; and those incidental to the manufacture of metal products, machinery and equipment. It also extended controls to 8 new sectors – involving the manufacture of: basic metals; fabricated metal products, except machinery and equipment; computer, electronic and optical products; electrical equipment; machinery and equipment not elsewhere classified; motor vehicles, trailers and semi-trailers; and other transport equipment – and to land transport and transport via pipelines.
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