OTHER THINGS YOU MAY HAVE MISSED – JULY 26

In the week  of 13 to 23 July,  the Ministry of Health reported 17 deaths from Covid-19 with  174 people hospitalised, with 144 in the wards and 30 in ICU. A total of 38,320 tests were carried out with a 16.4%  positivity.

Meanwhile, the protests continue, with calls for a further reduction in petrol prices to $3 a gallon. However, in Chiriqui, the centre of much of the unrest, there were reports of counter-protests by locals, calling for an immeditae reopening of the Pan-American Highway (the one that runs from Alaska to Tierra del Fuego – except for the break in the Darien). However, fruit and veg is now getting through to the shops. On a personal note, having once more rearranged a planned trip to the interior, I couldn’t help noticing at least 2 buses setting off to our planned destination as we passed the central bus station today, perhaps indicating the roads there were clear (although a news report told of a blockage at Chorrera, which is on the way there).

26 JULY 2022

NEW ITAR EXPORT RULES FACILITATE US DEFENCE TRADE WITH THE UK, CANADA AND AUSTRALIA

On 22 July, an article from Steptoe & Johnson LLP advised on 2 new General Licenses from the State Department’s Directorate of Defense Trade Controls (DDTC) which authorise reexports to or retransfers within the UK, Canada, and Australia of certain types of defence articles, services and technical data controlled under the International Traffic in Arms Regulations (ITAR).  They are valid for 1 year from 1 August.  Explaining their details, the article says that they are a major step forward in facilitating defence trade with these 3 key US allies.

https://www.steptoeinternationalcomplianceblog.com/2022/07/new-itar-rules-facilitate-defense-trade-with-the-u-k-canada-and-australia/#page=1

US CUSTOMS: “CHANGE IS COMING”

On 25 July, an article from Harris Bricken summarised key takeaways from a recent Trade Facilitation and Cargo Security Summit which represent some major changes that will affect those involved in trade. 

https://harrisbricken.com/chinalawblog/u-s-customs-change-is-coming/#page=1

US OCEAN SHIPPING REFORM ACT BECOMES LAW

On 24 July, HFW reported on OSRA, describing it as a package of US shipping law reforms that addresses supply chain disruptions, rising ocean shipping costs, and issues related to vessel service.  It grants the Federal Maritime Commission (FMC) increased authority to address the operating practices of global ocean shipping lines operating in US ports.  The article provides an overview of some noteworthy changes enacted in the new legislation.  These include those affecting demurrage and detention changes, and a prohibition on common carriers, marine terminal operators, and ocean transportation intermediaries from retaliating against a shipper for filing a complaint or for patronising another carrier.

https://www.hfw.com/downloads/004219-HFW-Changes-on-the-horizon-as-the-US-Ocean-Shipping-Reform-Act-becomes-law.pdf

Seatrade Maritime News has an explainer about the new demurrage and detention rules –

https://www.seatrade-maritime.com/containers/new-us-demurrage-and-detention-rules-what-you-need-know

US: CEO OF CRYPTO INVESTMENT PLATFORM PLEADS GUILTY TO ICO FRAUD

On 25 July, the Wall Street Journal reported that Michael Alan Stollery, 54, Titanium Blockchain Infrastructure Services Inc’s founder and chief executive, had pleaded guilty for his role in a cryptocurrency fraud scheme that involved raising about $21 million in an initial coin offering (ICO).

https://www.wsj.com/articles/titanium-blockchain-ceo-pleads-guilty-to-fraud-11658795919

UK PRIVATE MARITIME SECURITY COMPANIES (PMSC) GUIDANCE

On 25 July, the Department for International Trade published a set of updated guidance for the export and holding of controlled goods, maritime anti-piracy operations, and floating armouries etc.

https://www.gov.uk/government/collections/maritime-anti-piracy-guidance-and-forms

THE NEED FOR STRICTER REGULATIONS BEFORE INDIA INTRODUCES CENTRAL BANK DIGITAL CURRENCY (CBDC) IN 2023

On 25 July, an article in the Jurist says that in June the Reserve Bank of India’s (RBI) deputy governor confirmed the government’s plan to adopt Central Bank Digital Currency (CBDC) gradually during fiscal year 2023, and that the CBDC would be introduced into the Indian economy through a 3-step approach.  The idea would first be tested for its practicality, followed by a pilot project and a subsequent full-fledged launch.  The article aims to analyse money laundering through cryptocurrency, as well as the insufficiency of regulations governing them. It concludes with a suggested amicable resolution for the introduction of CBDC into the economy.

https://www.jurist.org/commentary/2022/07/dhvani-shah-cryptocurrency-regulations-india/

NO MORE RANSOM PORTAL: 136 FREE TOOLS FOR 165 RANSOMWARE VARIANTS PROVIDES KEY TO UNLOCKING ENCRYPTED FILES AS WELL AS INFORMATION ON HOW TO AVOID GETTING INFECTED IN THE FIRST PLACE

On 26 July, an article from Europol marked the 6th anniversary of the portal launched by Europol, the Dutch National Police (Politie) and IT security companies.  It initially offered 4 tools for unlocking different types of ransomware and was available only in English.  It says that over 188 partners from the public and private sector have joined the scheme, regularly providing new decryption tools for the latest strains of malicious software.  

https://www.europol.europa.eu/media-press/newsroom/news/hit-ransomware-no-more-ransom-now-offers-136-free-tools-to-rescue-your-files

10 ARRESTS AND 1,150 TONNES OF ILLEGAL PESTICIDES SEIZED AS PART OF OPERATION SILVER AXE VII

A news release from Europol on 26 July said that the Operation took place between 25 January and 25 April and involved law enforcement authorities from 31 countries (25 EU Member States and 6 third-party countries).  The operation identified the new trends emerging on the EU black market for plant protection products, and the operational activities focused on ports, airports and other entry points where the import and export of illegal and counterfeit pesticides could be detected.  These actions led to 10 arrests, the seizure of 1,150 tons of illegal and counterfeit pesticides and the targeting of a factory where pesticides were being counterfeited.  It says that the increase in seizures of production equipment and raw materials shipped to Europe suggests a rise in counterfeiting activities within the EU.  The operation detected a number of modi operandi.

https://www.europol.europa.eu/media-press/newsroom/news/production-of-fake-pesticides-rise-in-eu

THE UK’S NORTHERN IRELAND PROTOCOL BILL

On 25 July, the EU Parliament Research Service published a briefing paper says that the UK Government introduced the ‘Northern Ireland Protocol bill’ in the House of Commons on 13 June.  If enacted, the Bill provides that certain provisions of the Northern Ireland Protocol would no longer ‘have effect in the UK’.  The main fields concerned are customs and movement of goods, regulation of goods, State aid, and the application of EU law.  On 15 June, the EU relaunched the infringement procedure against the UK for failing to properly implement the Protocol that it had paused in 2021.

https://www.europarl.europa.eu/RegData/etudes/ATAG/2022/733607/EPRS_ATA(2022)733607_EN.pdf

HONG KONG: CIVIL REMEDIAL ORDERS TO COMPENSATE ENTITIES AND VICTIMS OF MARKET MISCONDUCT AND OTHER VIOLATIONS

An article from Dentons on 26 July says that the Securities and Futures Commission may apply to the High Court for a wide range of remedial orders to compensate entities and victims of market misconduct and other violations as prescribed under the Securities and Futures Ordinance (SFO).  It explains that the SFC successfully obtained compensation under section 213 of the SFO for aggrieved public investors who were victims of investment fraud.

https://hongkong.dentons.com/en/insights/articles/2022/july/26/hong-kong-courts-granted-civil-remedies-to-victims-of-investment-fraud

THE SURPRISINGLY DIVERSE WORLD OF ANTI-CORRUPTION POLICIES

On 26 July, a post on the FCPA Blog said that the Blog had benchmarked 15 anti-bribery policies from some of the world’s largest and best-known companies that cover an estimated 4.2 million employees.  It says that, with an unexpected amount of variety among the policies, it detailed are some interesting things said to have been learned.

https://fcpablog.com/2022/07/26/the-surprisingly-diverse-world-of-anti-corruption-policies/

CAMBODIA: MODERN SLAVERY IN THE MEKONG’S CASINOS

On 25 July, an article from the Global Initiative Against Transnational Organised Crime says that COVID-19 travel restrictions decimated the tourism industry worldwide, and in SE Asia’s popular casino hubs, the sharp drop in visitor numbers, especially gamblers from China and Thailand, has fostered an alarming new organised crime phenomenon – modern slavery in cyber-fraud schemes.  It is estimated that tens of thousands of people, primarily from the Mekong region, but also India and Ukraine, are reportedly being held against their will and forced to operate sophisticated cyber scams, and the exploited workers say they are imprisoned in complexes by Chinese criminal groups.

https://globalinitiative.net/analysis/modern-slavery-mekong-casinos/

UNAOIL: MAN JAILED OVER A £4.9 MILLION BRIBERY CONSPIRACY HAS HAD HIS CONVICTION QUASHED BY THE COURT OF APPEAL

On 22 July, the BBC reported that Stephen Whiteley, the former Iraq territory manager for energy company Unaoil, was jailed in July 2020 over an alleged plot to pay bribes to secure oil infrastructure contracts in Iraq.  He is the third man to have his conviction overturned in the case.

https://www.bbc.com/news/uk-england-humber-62255934

HOW MUCH MONEY DO SHIPPING CEO MAKE?

On 26 July, American Shipper published an article saying that managing ships is big business. It should come as no surprise that bosses of ship-operating companies are highly compensated.  What may surprise you, it says, is that the CEO with the largest fleets don’t necessarily earn the highest compensation.

https://www.freightwaves.com/news/how-much-money-do-shipping-ceos-make-heres-their-2021-pay-info

https://www.visualcapitalist.com/worlds-largest-container-shipping-companies-2022/

OFAC ISSUES GENERAL LICENSES ON WINDING DOWN RUSSIA-RELATED SECURITIES TRANSACTIONS

On 25 July, Fried Frank reported on 2 new General Licenses from OFAC, and 2 new FAQ and 2 amended FAQ on the scope of the licenses and related matters.

https://www.findknowdo.com/news/07/25/2022/ofac-issues-general-licenses-winding-down-russia-related-securities-transactions

AS SRI LANKA’S RULING RAJAPAKSAS FLED, PANDORA PAPERS REVEALED TIES TO UAE PROPERTIES

On 13 July, the ICIJ published an article saying that when Sri Lankan President Gotabaya Rajapaksa attempted to flee his country in the face of economic and political crisis, he chose the UAE as his preferred destination, underscoring the ruling Rajapaksa family’s ties to the Persian Gulf financial hub.  The hidden assets of some Rajapaksa family members were revealed last fall in the Pandora Papers.

https://www.icij.org/investigations/pandora-papers/as-sri-lankas-ruling-rajapaksas-flee-pandora-papers-reveal-ties-to-uae-properties

US: FORMER UAW OFFICIAL SENTENCED FOR EMBEZZLING OVER $2 MILLION IN UNION FUNDS

A news release from US DoJ on 26 July advised that Timothy Edmunds, the former Financial Secretary Treasurer of Local 412 of the United Auto Workers union, has been sentenced to 57 months in prison after convictions for embezzling $2.1 million in union funds and for money laundering.  The Judge also ordered Edmunds to pay $1,963,740.29 in restitution to UAW Local 412 and a fine of $1 million.  Between 2011 and 2021, he served as the Financial Secretary Treasurer of Local 412 of the International Union, United Automobile, Aerospace, and Agricultural Workers of America, headquartered in Warren, Michigan, and representing approximately 2,600 members.

https://www.justice.gov/usao-edmi/pr/former-uaw-official-sentenced-57-months-prison-embezzling-over-2-million-union-funds

PANAMA: COURT CONFIRMS SUSPENSION OF IMMUNITY OF EX-PRESIDENT MARTINELLI

On 26 July, La Estrella de Panama reported that the magistrates of the Electoral Tribunal had upheld the suspension of the criminal jurisdiction of former President Ricardo Martinelli.  Martinelli is one of those involved in the Odebrecht affair, involving alleged money laundering, and is now expected to be involved in the rescheduled preliminary hearing of the Odebrecht Case, which will be held from 12 to 30 September.

https://www.laestrella.com.pa/nacional/220726/tribunal-electoral-mantiene-suspension-fuero-penal-expresidente-martinelli

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LESSONS IN PRIVATE-PRIVATE FINANCIAL INFORMATION SHARING TO DETECT AND DISRUPT CRIME

A Discussion Paper from RUSI is concerned with a survey of both AML and fraud prevention private-private information-sharing platforms, and explores 15 different initiatives across the US, UK, Singapore, the Netherlands, Switzerland, Estonia and Australia.  It identifies that various capabilities are being demonstrated by platforms – from data-driven development of economic crime typologies, to joint transaction monitoring, to adverse databases, to joint investigations, to messaging capabilities.

https://www.future-fis.com/uploads/3/7/9/4/3794525/rusi_ffis_survey_-_lessons_in_private-private_financial_information_sharing_to_detect_crime.pdf

Summary –

https://www.future-fis.com/lessons-in-private-private-financial-information-sharing-to-detect-and-disrupt-crime.html

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ARISING AGAIN: THE ROLLS-ROYCE BRIBERY SCANDAL THAT SENT THAI NATIONAL AIRLINE INTO NOSEDIVE

On 23 July, an article from Thai PBS says that a bribery scandal involving Thailand’s national airline and engine manufacturer Rolls-Royce is back in the media spotlight after the Thai anti-graft agency concluded that their engine procurement deal 3 decades ago was “unlawful”.  The National Anti-Corruption Commission (NACC) found that 2 top executives of Thai Airways International (THAI) at that time violated a 1959 law against corruption in state organisations and agencies when the national flag carrier purchased Rolls-Royce engines.  NACC has resolved to indict former finance minister Thanong Bidaya, who oversaw the deal as board chairman, and Kaweepan Ruengpaka, who was the airline’s vice-president for finances at the time.

https://www.thaipbsworld.com/the-rolls-royce-bribery-scandal-that-sent-thai-national-airline-into-nosedive/

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KOREAN DOOMSDAY SECT GETS RICH IN FIJI WITH GOVERNMENT HELP

On 25 July, a report from OCCRP says that the Grace Road Church believes a nuclear-tinged Judgment Day is rapidly approaching — and that Fiji is the post-apocalyptic promised land from which they’ll feed humanity.  But despite repeated accusations of abuses, including ritual beatings and forcing members to perform unpaid labour, they’ve received a warm welcome from the Fijian government.  It says that the group is widely seen as enjoying the favour of Fiji’s authoritarian government. It has been lauded by Fiji’s powerful prime minister and received millions in loans from the state-backed Fiji Development Bank.

https://www.occrp.org/en/investigations/korean-doomsday-sect-gets-rich-in-fiji-with-government-help

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FATF: RISK-BASED APPROACH GUIDANCE FOR THE REAL ESTATE SECTOR

On 26 July, FATF published a report saying that real estate is a popular choice for investment, but it also attracts criminals who use real estate in their illicit activities or to launder their criminal profits.  FATF assessments show that the real estate sector often has poor understanding of these risks and regularly fails to mitigate them.  The revised guidance highlights the importance for the sector to increase its understanding of the money laundering and terrorist financing risks it faces. Vulnerabilities include exploitation by PEP, the purchase of luxury real estate, the use of virtual assets, the use of anonymous companies and gatekeepers as instruments to launder the proceeds of crime.  FATF has updated its guidance for a risk-based approach for the real estate sector with input from the private sector, including through a public consultation in March-April 2022 (a summary of responses is also published).

http://www.fatf-gafi.org/media/fatf/documents/recommendations/RBA-Real-Estate-Sector.pdf

http://www.fatf-gafi.org/publications/fatfrecommendations/documents/summary-public-consultation-rba-real-estate.html

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REPORT: MOLDOVA – A REVIEW A DECADE FOLLOWING MASSIVE FRAUDS OF PUBLIC FUNDS FROM THE FINANCIAL, BANKING AND INSURANCE SECTORS

On 13 July, the Independent Anti-Corruption Advisory Committee (CCIA) published its report intended to provide a comprehensive analysis of corruption in the financial, banking and insurance systems, seen in the broader context of systemic fraud in these sectors, embezzlement and money laundering.  The report comes 10 years after the reported theft of $1 billion out of the Moldovan banking system and the laundering of more than $20 billion through Moldovan banks.  The publication seeks to illustrate the many ways in which legal amendments, questionable appointments of heads of institutions, lack of genuine independence of oversights institutions and the absence of stronger actions in respect of red flags, resulted in a “captured state”.  This is the first report of the CCIA. Future ones will assess the mandate of anti-corruption institutions, the financing of political parties and corruption in state-owned enterprises.

https://ccia.md/en/2022/07/13/the-offshore-republic-10-years-after-the-embezzlement-of-money-from-financial-banking-insurance-system-in-moldova/

The Report, in English and Romanian, is at –

https://ccia.md/en/reports/

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UK: RUSSIA SANCTIONS – 42 NEW NAMES ADDED, PLUS 1 CORRECTION

A Notice from HM Treasury on 26 July advised that 41 new individuals (including Syrians allegedly involved recruiting fighters to take part in the war in Ukraine) and 1 new entity (the AL-SAYYAD COMPANY FOR GUARDING AND PROTECTION SERVICES LTD) had been added to the Russia sanctions lists.  In addition, 1 existing entry for an individual had been corrected.

The Isle of Man followed suit.

https://www.gov.im/news/2022/jul/26/financial-sanctions-russia/

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1093779/Notice_Russia_260722.pdf

https://www.gov.uk/government/news/uk-sanctions-russian-officials-propping-up-putins-proxy-administrations-in-ukraine

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UK: SYRIA SANCTIONS – 5 NAMES ADDED AND 1 ENTRY CORRECTED

A Notice from HM Treasury on 26 July advised that 4 new individuals and SANAD PROTECTION AND SECURITY SERVICES had been added to the consolidated list and are now subject to an asset freeze.  In addition, the existing entry for the SYRIAN PETROLEUM COMPANY had been amended.

The Isle of Man followed suit.

https://www.gov.im/news/2022/jul/26/financial-sanctions-syria/

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1093775/Notice_Syria_260722.pdf

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KPMG IS FINED $17.3 MILLION IN UK FOR AUDIT SHORTFALLS

On 25 July, the Wall Street Journal reported that the audit and accounting regulator, the Financial Reporting Council, has fined KPMG LLP and sanctioned 5 former employees for providing false and misleading information in relation to two audits, one of them of the now-defunct Carillion PLC.  The fine was reduced from £20 million to acknowledge KPMG’s own reporting of misconduct as well as its cooperation with the regulator.  4 of the accounting firm’s former employees were fined and banned from the auditing profession for varying numbers of years, while a fifth was “severely reprimanded”.

https://www.wsj.com/articles/kpmg-is-fined-17-3-million-in-u-k-for-audit-shortfalls-11658779773

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UK SANCTIONS: PROFESSIONAL AND BUSINESS SERVICES TO RUSSIAN CLIENTS

On 22 July, an article from Stephenson Harwood LLP explained the new ban on providing certain business services to Russian clients.  Broadly speaking (there are exceptions), these include accountancy services, consulting services, and PR services.  The article also compares these UK sanctions to EU ones, finding that they are similar but not identical to the EU sanctions, and highlighting the differences.

https://www.shlegal.com/insights/uk-sanctions-professional-and-business-services-to-russian-clients

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