PANAMA AND ITS WARTIME DEFENCES – A PARTIAL INTRODUCTION

PANAMA AND ITS DEFENCES – A PARTIAL INTRODUCTION

In the late 1930s, as international tensions increased and more attention was paid to the defences of the Panama Canal Zone, it became obvious that they were inadequate and required urgent improvement.  Among the many problems was that the coastal artillery, designed to keep attacking vessels at bay, mostly dated from World War 1 and was vulnerable 9or even unprotected) from air attack, there was a lack of effective harbour nets and booms, and both the equipment and disposition of the air element of the defences was much less than optimum.

In the 1930s, the strength of the existing defences of Panama, Hawaii, and Alaska varied, but the Canal Zone had possibly the strongest defences any of these three US outposts[1].  However, the defences of both Hawaii and the Panama Canal, seemingly substantial, had mostly been designed and built in the days before the aeroplane became an important weapon and, for many years, it had been apparent that the Hawaiian Islands and the Canal were more vulnerable to air attack than to naval bombardment[2].

As early as 1924, in his annual report, the Secretary of War at the time had stated that the defences at the Canal and on Oahu in Hawaii were wholly inadequate due to an insufficient number of personnel and a lack of ammunition storage.[3]

However, at the end of Fiscal Year 1938[4], the Secretary of War, in a report to the President, stated that, “We must greatly augment our air forces and our antiaircraft artillery installations in the Panama Canal Zone.  The Panama Canal must be made impregnable”.[5]

The original defences of the Canal, designed and installed during World War 1, were intended to protect against a naval attack and/or an associated landing of troops from the sea[6].  This included the heavy guns of the Coastal Artillery at the Atlantic and Pacific ends of the Canal[7] and a Mobile Force of troops with light artillery for close-in defence and to counter a landing. 

The Harbor Defense Command in the Canal Zone was part of the US Army Coastal Artillery Corps, and had been established in 1925[8].  It controlled the forts, inshore and harbour minefields and other coastal defences.  In addition to the Continental US, there were such Commands in Hawaii, Puerto Rico, the Philippines, as well as in the Canal Zone.  After the 1940 Destroyers for Bases Agreement with the UK, further overseas Commands would be established in Newfoundland, Bermuda and Trinidad, continuing until disestablished in 1946.  Like the Coast Artillery Corps itself, the remaining Harbor Defense Commands would be disestablished in 1950.

Pre-war defences for the Canal Zone mirrored that generally applied to harbour defences in the US, which were intended to have three purposes –

  • To protect the defended area against invasion and capture;
  • To protect the area from naval bombardment, and shipping from submarine or surface torpedo attack; and
  • To cover the seaward approaches sufficiently far out to enable the Navy to emerge and meet an attack.

Primary responsibility for the defence of the Canal lay with the US Army, and its local geographical command known as the Panama Canal Department[9].  This Department was responsible for the defence of the Canal Zone – including the land areas, coastal defences, harbour, and air and sea defences within medium bomber range (the distance to which its bomber force could reach).  It was also responsible for the laying, maintaining, and clearing of harbour defence minefields that were to be placed at the Canal entrance in event of a war – being separate and different from sea mines that might be laid in the open sea by the Navy.  In defending against landings at either end of the Canal, it was meant to coordinate with forces of the US Navy.  In January 1934, the Panama Canal Department consisted of 419 officers and 8,884 enlisted men.  This manpower level was considered at the time to be too low, and by 1936 enlisted strength had been increased to 12,990[10].  By September 1939, numbers had not significantly increased; but this figure grew by 1 January 1940 to 19,500, and 40,000 by December 1941[11]

As they had evolved, the defences of the Canal can most easily be seen as being divided into –

  • Defence from attack from the sea – such as from shelling, torpedo attack on the lock gates or use of blockships;
  • Defence from air attack – from seaborne aircraft or aircraft based in neighbouring states (long-range bombing from hostile Axis countries being impossible due to the distances involved – at least in 1939, and in fact for the entirety of the war);
  • Defence from ground attack – from forces landed by sea (or possibly by air) in the Canal Zone or the surrounding Republic of Panama[12];
  • Defence against sabotage – by saboteurs attacking vulnerable assets (such as lock gates, power stations, and the dams on the rivers that fed the Canal) or by blocking the locks with sunken vessels; and
  • The struggle against German U-boats in the Caribbean and the approaches to the Canal (fortunately, Japanese submarines did not prove a threat on the Pacific approaches and Italian boats operated in the Atlantic but did not enter into the east Caribbean).

According to a joint Army/Navy plan drawn up in 1935, defensive roles were divided between Army, Navy, and the Panama Canal Administration as follows –

  • Army – (including the US Army Air Corps) to defend the Canal from sabotage and hostile attacks;
  • Navy – to patrol the coastal zone and control and protect shipping therein; and
  • Panama Canal Administration – to protect, operate and maintain the Canal, its adjuncts and appurtenances to ensure continuous service at the required levels[13].

The new strategies for protection of the Canal developed in the 1930s envisaged a three-layer defensive arrangement –

  1. An extended defensive line to intercept ships and aircraft before they reached and/or were able to threaten the Canal;
  2. A “close-in line of resistance” to prevent landings on the coasts; and
  3. Local defences, including delaying positions for a final defensive action should the first two defence layers be breached[14].

The Army had the responsibility of providing land-based defences (including anti-aircraft defences), with the Navy tasked with offshore defence, providing armed guards for ships in transit through the Canal (although initially it would be Army personnel that was used for this task, with US Marines only taking over the role in 1942) and maintaining harbour patrols at either end of the Canal.

During the 1930s, in view of Japan’s growing power and the poor state of US defences and armaments, and with the independence of the Philippines scheduled for 1946, the War Department General Staff concluded that the US should not attempt to hold an attack in the western Pacific.  Alaska, Hawaii, and Panama, as a “strategic triangle”, would instead form the main line of defence, and this formed of the latest version of its War Plan ORANGE in 1938[15].  In pre-war planning, while the US Navy was primarily concerned about defending the outlying US territories, the Army remained focused on defending a zone encompassing the Alaska-Oahu-Panama triangle.[16]  Enemy forces could be expected to make raids on Hawaii, Alaska, and the West Coast of the US, and it was feared that the Panama Canal might be wrecked by sabotage or by naval and air raids[17].

In October 1938, following the Munich crisis, President Roosevelt announced that he would spend another $300 million on armaments and told reporters that he would probably ask Congress for $500 million.  In fact, three months later, he asked Congress for $552 million for defence expenditure to prepare the country for possible war.  Part of the plans included expanding defences and fortifications in the Pacific and the Caribbean (including in the Canal Zone).[18]

THE BIG GUNS

Despite the fact that, for the most part, coastal defences would become something of an irrelevance during World War 2[19], between the wars they remained seen as a key and a widely-supported Army role.  However, it was recognised that they had to be supported with defences against air attack and against ground forces landed at unfortified places. 

In the Bay of Panama, on the Pacific coast, some of the guns would be installed on what should be a continuing reminder to locals and visitors alike of the former defences installed by the US to guard the Canal – the Amador Causeway.  This stretches out some 1.9 miles (3 km) into the Pacific Ocean, away from the noise and pollution of Panama City.  In the former island of Perico, now home to a small marina and a research centre of the Smithsonian Institute, one can even see the remains of the tracks used by a 14-inch (355 mm) railway gun, and on the small hill above what used to be another, smaller gun emplacement.

During the construction of the Canal, a huge amount of waste material (particularly from the Culebra Cut[20]) was used the create a breakwater that eventually linked the mainland to one of the small offshore islands, Naos, with work completed in 1912.  This site was named Fort Amador[21] and Fort Grant[22].  In due course, this causeway was extended from Naos to further small islets, Culebra and Perico, ending in the island of Flamenco[23].  It eventually covered over 344 acres (139.2 hectares) and carried not only artillery[24] (chiefly in Fort Grant, which officially also encompassed two slightly distant and unconnected islands, the largest of which was Taboga), but other facilities, including a large tank farm.  On Flamenco alone, there were no less than four batteries[25]

The Causeway effectively guarded the Pacific entrance to the Canal, and any vessel approaching the entrance would be exposed to fire from its batteries (as well as those on the opposite shore and on Taboga – it and its smaller sister, Taboguilla, having been acquired by the US Army for this purpose) for a considerable time before reaching the start of the Canal.

Construction of gun batteries at Fort Sherman and Fort Randolph at the Atlantic end of the Canal, and at Fort Grant and Fort Amador, had begun as early as 1913[26], with additional batteries for coastal defence added in the late 1920s[27], such as at Fort DeLessups on the Atlantic side and Fort Kobbe, across the water from the Causeway, at the other end.   Naval bases were also established at Coco Solo near the city of Colón at the Atlantic end of the Canal, and part of the Fort Grant/Fort Amador installations at the Pacific end were set aside for naval use[28].

As said, the defences put in place to protect the Canal during World War 1 were chiefly to protect it from a naval attack – Germany being the only realistic enemy (and given that the bulk of the Imperial German Navy ended up being bottled up in Kiel for most of the war, perhaps proving not to be a very realistic one[29]).  They were originally authorised in 1911, at a cost then of $14.1 million, which included the installation of submarine mines.  By 1917, the defences and the troop levels reached their peak for World War 1.  However, some augmentation of the defences continued postwar.  For example, Fort Randolph, a coastal artillery fort on Margarita Island at the Caribbean end of the Canal, was only completed in April 1920, being then equipped with 14-inch calibre (355 mm) M1920 railway guns.

While there were some replacements, and some improved weapons, received following World War 1, between 1929 and 1939 many of the large guns were placed in caretaker status due to funding shortages, only being restored to operational capability from 1939.

However, two 14-inch (355 mm) railway guns were added to the defences between the wars, with these being considered to be useful due to their relative mobility using the Panama Railroad that ran across the isthmus.  Received in 1928, these were still in place in 1941 (including, as already noted, for use on the Causeway).

In 1939, there were 11 coastal gun batteries at the Atlantic end of the Canal, and 12 at the Pacific.[30]  However, as the war progressed and the perceived danger of air attack became the primary concern, the heavy mortar batteries dating from World War 1, which were virtually defenceless against air attack, were stripped and the mortars removed in 1943[31].  Even the large guns – the 16-inch and 14-inch coastal artillery – were to be used rarely, even for practice, with the last such firing taking place in 1944 and, following this, they remained unmanned and were finally removed between 1946 and 1948.

THE ARMY

A factor which influenced the defence arrangements, at least until the eve of World War 2, was the difference in terrain between the Atlantic (Caribbean) and Pacific coasts.  The Pacific side of the Canal was geologically different from the Caribbean side and was seen as needing different solutions to the same problems[32].  The possibility of hostile forces establishing a beachhead and moving overland to the Canal was not entirely discounted, but the absence of suitable landing places on the Caribbean side, and the thick jungle of the Pacific lowlands, were counted on to discourage any such attack, and the Army disposed its forces accordingly[33].

Another factor to be borne in mind when considering the status of the defences of the Canal Zone at the outbreak of World War 2 was the US policy of isolation and non-involvement following World War 1, and the effect this had on the funding and size of the Army.  Not only had this been Government policy, but there was a strong popular feeling against foreign entanglements, with many people feeling that they had been duped into participating in World War 1. 

The US Government worked on the assumption that war could be avoided and/or that the US Navy would keep any would-be foe at bay.  Following World War 1, the Army was initially reduced to about 19,000 officers and 205,000 enlisted men, being intended as a force which was to be able to defend the Continental US, its overseas territories and possessions.   However, in January 1921, Congress further reduced the Army’s strength to 175,000, and a year later it limited the regular Army to just 12,000 commissioned officers and 125,000 enlisted men – this being not much larger than the army that the defeated Germany was allowed under the Versailles Treaty.  The size of the US Army was to remain at about the same level until 1936, and the budget for the War Department was fixed after the early 1920s and until then at around $300 million per year. 

In the 1920s, US defence plans had not been aggressive in any sense (if one leaves to one side interventions in Central America) and, aside from maintaining garrisons in its overseas possessions — notably in the Philippines, Hawaii, and the Canal Zone — the Army’s responsibility was limited to the defence of Continental US.  For this task the Army leadership considered that it needed a force considered large enough to administer, organise and train a civilian reserve, meet minor emergencies, and absorb the first shock of any hostilities[34].  The National Defense Act 1920 specified that the Army was to have forces adequate to garrison its overseas outposts (including in China) and possessions, as well as providing enough for 11 full-strength divisions at home ready for homeland defence or prompt deployment to overseas trouble spots.  A large and well-trained force of National Guard and reserve divisions was expected to be available to meet needs for a large-scale war.  However, Congress and successive Administrations refused to provide the resources to put these plans into practice.

As a result, in the interwar years, there were just two understrength divisions overseas, with garrisons in the Philippines and Hawaii, and two artillery regiments in the Canal Zone.  There were also two half-strength divisions on the Mexican border.  After these basic requirements, and other commitments and functions, were met, the remaining troop strength would have been sufficient only for a single full-strength division, plus some additional ancillary units.  Consequently, each of the nine divisional structures comprising this residual force had on average little more than the strength equivalent to a battalion, and were spread across the US, devoting most of their efforts to supporting and training the National Guard. 

The foregoing meant that, allied with the lack of funds for transportation, no one in the Army, except for the overseas garrisons and frontier forces, received any training or field experience above the small-unit level.  Thus, the reality was that there was no possibility that the Army of the 1930s could be prepared for a serious war, whether small or large.

It was not all bad news, however, and there were a few areas in which important efforts did take place between the wars, and these included coastal defence, what became known as radar, and in communications intelligence[35], all of which would a role in the Panama’s part in World War 2. 

The Mobile Force in the Canal Zone was activated on 16 February 1940 and, according to the new doctrine, the plan to defend the Canal Zone involved using these troops as part of a mobile defence in depth beginning at the beaches, and not preparing and holding static defence positions.  The Atlantic side was considered the least likely invasion route because the few landing areas there were too small to allow the discharge of numerous forces simultaneously[36].

THE NAVY

While the US Navy did relatively better from the defence budget between the wars, naval expansion was also restricted, in large part by agreements made in the Washington Naval Conference 1921-22 and the Kellogg–Briand Pact of 1928.  The latter outlawed the use of war as a means of policy and gave the US a clear rationale for limiting its armed forces.  Until the mid-1930s, unlike the Army, the Navy did increase in size, but only within the terms of international agreements.

By the 1930s, the Army had recognised the inadequacy of the harbour defences in the Canal Zone, with the existing gun batteries having little or no protection against air attack, and with many capable of being outranged by more modern naval armament.  As early as 1923, the War Department had determined that either a larger naval fleet or a much larger number of aircraft would provide better protection, but the cheapest option (and hence the one that was chosen) continued to be a reliance on coastal artillery and submarine mines (as explained, the latter also controlled by the Army’s Harbor Defense Command).

As we have seen, the US Navy was seen before World War 2 as the mainstay of the country’s defence (much in the same way as the Royal Navy had been seen in Britain), but the US never built up its force even to the naval limits permitted under the Washington agreements. 

Then, in 1934, funding was received in the form of the National Industrial Recovery Act (part of the New Deal of the Roosevelt Administration[37], primarily aimed at increasing productivity and job creation in US industry, with bolstering the country’s defences rather a secondary justification).  This provided the Navy with $237 million for warship construction.  As a consequence, the Navy ordered 20 destroyers, four submarines, four light cruisers and two aircraft carriers.

Further improvements followed the Vinson–Trammel Act of 1934 which allowed for the construction of 102 new warships over the following eight years, but still keeping the US within the terms of the Washington Agreements (which, of course, the German and Japanese governments did not faithfully adhere to).  However, the Act ensured that as US ships became obsolete, they were replaced.  Thus, by 1937, the US Navy was to have aircraft carriers, cruisers, destroyers and submarines all under construction, and by 1939 it possessed 15 battleships.

However, as of 1939, few of the Navy’s assets were actually based in the Canal Zone.  Even by December 1941, its resources in the Canal area consisted of only two old destroyers and a gunboat, plus six older submarines, three converted yachts and five subchasers for patrol and escort duties, a minesweeper, and 12 patrol flying boats with their tender vessel. 

These resources were assigned to the 15th Naval District, headquartered at Balboa, which had responsibility for “the waters adjacent to the Canal Zone exclusive of the area between the inner limits of the defensive sea areas established at the Atlantic Entrance and the Pacific Entrance of the Panama Canal”.

In 1939, in the Canal Zone, there were several Naval shore establishments, some of which were directly linked to defence of the Canal and Canal Zone.  The Navy maintained a Naval Air Station for patrol aircraft and a submarine base at Coco Solo on the Atlantic end of the Canal[38] – the site having been originally established as a Naval Air Station for flying-boats in 1918[39].

A review by the Hepburn Board in 1938[40] had recommended an increase in the air facilities in the Canal Zone sufficient to accommodate no less than seven squadrons of patrol aircraft, with a supporting establishment capable of complete engine overhaul, and the establishment of a further naval station at Balboa, on the Pacific end of the Canal, to support submarines, destroyers, and smaller craft.  Congress approved the programme as recommended in May 1939, and partial financing was provided in the 1940 Appropriation Bill.  Development of the bases recommended by the Hepburn Board began immediately, and early contracts were awarded in June and July for work in the Canal Zone[41].

What naval forces were available were intended to protect the Panama Sea Frontier.  This was a patrol and threat area covered both Pacific and Caribbean regions.  It stretched from the Mexico/Guatemala border out to the Galapagos Islands and down to a point at 5° of latitude on the coast of South America.  On the other side, it stretched from the Mexico/British Honduras border to Punta de Gallinas in Colombia on the north coast of South America, and around 90 miles (144.8 km) west of Aruba.  In doing so, the Panama Sea Frontier encompassed the coastlines of British Honduras, Guatemala, Honduras, Nicaragua, Costa Rica, Panama and Colombia.

The Bureau of Ordnance at the Navy Department was aware of the inadequacy of the nets and booms defences used during World War 1 to protect US harbours, but it was not until 1940 that funds were made available to improve such defences, with 10 harbours to receive nets, including Balboa in the Canal Zone, and with the Chief of the Ordnance Bureau estimating that it would two to three years to obtain the necessary materials and install the defences. In December 1940 , the Chief of Naval Operations (CNO) of the US Navy ordered the laying and tending of a net and boom defence at Cristobal, to prevent the enemy from entering the Atlantic end of the canal using submarine or surface craft [42].

Early in 1940, the General Board of the Navy and the Army-Navy Joint Board had studied the subject of the defence of the Pacific approaches to the Canal and reached the conclusion that preparations must be made for the operation of constant air patrols over a wide area to the west of Panama.  It recommended that patrol squadrons of seaplanes, supported partly by tenders and partly by shore installations, be based near Guayaquil on the Ecuadorian coast, in the Gulf of Fonseca in Nicaragua, and in the Galapagos Islands, with the latter as the key installations.  They were to be fortified by both the Army and the Navy, under a programme directed by Army engineers[43].  Such “advance bases” were to be a vital element of the Canal’s defence structure during the coming war.

THE AIR FORCE

Until 1947, the “Air Force” was a part of the US Army, as the US Army Air Corps[44] (USAAC) until 1941, and the US Army Air Force (USAAF) until 1947.  As with the rest of the Army, it had suffered from limited budgets, and hence limited numbers of aircraft and men, during the period between the wars.  In the Canal Zone, it also suffered from a limited number of suitable airfields, with many that the rainy season (which was most of the year) would make difficult to use (or useable)[45]

In 1929, Summer manoeuvres in the Canal Zone demonstrated the superiority of a carrier attack force over land-based defences, and were (from the viewpoint of the Navy) a great success.  Despite the defenders knowing the day of the planned mock attack and having as many aircraft as the attacking fleet, the “enemy” was able to come within 150 miles of the Pacific end of the Canal before launching bombers in the pre-dawn darkness from the carrier USS Saratoga and carrying out a successful simulated attack. 

In 1939, a study by the Army and maintenance engineers considered how vulnerable the Canal Zone would be to air attack, how much damage could be done by high-explosive bombs of various sizes, and how large an enemy force would be required to put the Canal out of action.  A replica of one level of the Miraflores Locks was built at Rio Hato in the Republic, and this was attacked by aircraft using bombs of different sizes from different heights, with aircraft making attack runs from 4,000 to 15,000 feet (1,220 to 4,500 metres)[46].  This exercise concluded that installations were vulnerable, that a relatively small force was required (well within the capabilities of several foreign powers), and the best protection was an adequate air defence.  The outcome was forwarded to the War Department in March 1939, with the commander of the resident 19th Wing urging a reorganisation of the air defences.[47]

As the budget for the armed services was increased from 1935, it having been belatedly recognised felt that the existing forces would find it difficult to defend the US as a result of the past years of insufficient investment, the USAAC benefited and it would have around 1,600 aircraft by the late 1930s.  However, many of these were, or would prove to be (including in the light of combat experience in Europe), obsolete or obsolescent, and even some of the newer types, particularly the fighters (the Curtiss P-36 and P-40, for example, which were among the first modern types deployed to Panama) being considered less capable than the best British, German and Japanese types.

Ray Todd

Panamá City,

Republic of Panamá

18 August 2022


[1]  https://history.army.mil/html/books/010/10-6/CMH_Pub_10-6.pdf

[2]  https://history.army.mil/html/books/010/10-6/CMH_Pub_10-6.pdf

[3]  US Global Defense Posture, 1783–2011 by Stacie L Pettyjohn (RAND Corporation, 2012): https://www.jstor.org/stable/10.7249/j.ctt24hrv8.15

[4]  The US Government “fiscal year” runs from 1 October of one calendar year through until 30 September of the next.

[5]  Air Defense of the Panama Canal, 1 January 1939 – 7 December 1941 (Army Air Forces Historical Office), January 1946: https://www.afhra.af.mil/Portals/16/documents/Studies/1-50/AFD-090602-096.pdf

[6]  The original defences were drawn up by the Panama Fortifications Board, itself set up by an Army-Navy Joint Board, which made its recommendations in 1910 and proposed a total of 42 large-calibre guns and mortars manned by 12 coastal artillery companies.

[7]  The coastal artillery was manned by the US Army Coast Artillery Corps, the Army Corps responsible for coastal, harbour and anti-aircraft defences from 1901 to 1950.

[8]  This was in succession to predecessor organisations dating from 1895, with their immediate predecessors being the Coast Defense Commands, which dated from just before World War 1.

[9]  “Department” was an obsolete term within the Army, having been mostly used prior to World War 1.  While, in 1920, most Departments were redesignated as Corps Areas, those in Hawaii, the Philippines and the Canal Zone continued to use the old name.  The Panama Canal Department existed from 1917 until disestablished in 1947.

[10]  https://weaponsandwarfare.com/2019/11/18/panama-canal-zone-defences-i/

[11]  The peak was reached in November 1942, with 68,000 men (although the War Department had announced a curtailing of assignments to the Panama Canal Department in July 1942, setting a cieling for ground forces of 47,000 – despite the Commanding General of the Caribbean defense Command expressing concerns that this reduced troop levels below that required to guarantee the safety of the sector). The new cieling made units available for transfer out, to more active theatres.

[12]  The doctrine for defence against landings was transformed with the wide acceptance by the Army of a 1920 proposal of a flexible mobile defence-in-depth doctrine.  In Hawaii in particular, where the threat of Japanese attempts to seize the island of Oahu could not be altogether dismissed, very effective invasion defences were developed.  The same idea was adopted in the Canal Zone.  However, in the Philippines, a lack of forces to defend the many stretches of practicable landing areas on Luzon made effective defence using this concept impossible.

[13]  https://digitalcommons.fiu.edu/cgi/viewcontent.cgi?article=3672&context=etd

[14]  https://apps.dtic.mil/dtic/tr/fulltext/u2/a388262.pdf

[15]  https://history.army.mil/html/books/010/10-6/CMH_Pub_10-6.pdf  In 1939, the five so-called Rainbow plans officially replaced the earlier war plans of the 1920s and 1930s, including Plan Orange, which had anticipated war with Japan.  Rainbow 5, which was destined to be the basis for US strategy, assumed that the US was allied with Britain and France and provided for offensive operations by US forces in Europe, Africa, or both: https://archive.org/details/eagleagainstsuna0000spec/page/59/mode/2up).

[16]  US Global Defense Posture, 1783–2011 by Stacie L Pettyjohn (RAND Corporation, 2012): https://www.jstor.org/stable/10.7249/j.ctt24hrv8.15

[17]  The Corps of Engineers: The War Against Japan by Karl C. Dod (Center of Military History, US Army, Washington DC), 1987: https://history.army.mil/html/books/010/10-6/CMH_Pub_10-6.pdf

[18]  https://www.mslucohistory.com/uploads/1/0/9/4/109471507/hemispheric_reactions_chapter.pdf

[19]  For example, those in the Philippines and Normandy did not prevent defeat, and famously those in Singapore could not prevent the fall of that colony.

[20]  The Culebra Cut (called the Gaillard Cut from 1915 to 2000, in honour of a US officer who had led the excavation, and who died a month after the breakthrough there in 1913), is an artificial valley that cuts through the Continental Divide and it was one of the great engineering feats of its time.  Culebra is the name for the mountain ridge it cuts through and was also originally applied to the cut itself.  After the Canal was handed over to Panama in 1999, the name was changed back to Culebra (Corte Culebra in Spanish).

[21]  Named for the first President of Panama, Manuel Amador Guerrero.

[22]  Named as US President Grant, who had ended his transit of the isthmus there in 1852.

[23]  Later an important radar site, there remains a radar station on Flamenco, adjacent to a marina, cruise liner terminal, shops and restaurants.

[24]  During World War 2, such artillery gradually fell out of use; for example, the Fort Amador batteries became disused (and buried) from 1943.

[25]  Something of which one can still find today, although derelict and overgrown: https://www.panorama2go.com/en/military-fortifications-of-the-isthmus-of-panama/

[26]  President Woodrow Wilson had declared the Canal’s neutrality in 1915, but it is said that political and military pressure compelled him to nevertheless militarise the Zone.  In 1916, when Mexican revolutionary Pancho Villa and his guerrillas “invaded” US territory, troops dispatched to pursue him came from the detachments based in the Canal Zone. Among the officers who were part of the chase were two young lieutenants, Dwight Eisenhower and George Patton.

[27]  On opening in 1914, there was a Panama Canal Guard Force, including a US Marine Corps battalion, an Army infantry regiment and three companies of Coastal Artillery, a total of 797 men, though numbers and composition increased considerably as the war progressed: https://ufdc.ufl.edu/AA00022175/00001/pageturner#page/29

[28]  https://ufdc.ufl.edu/AA00022175/00001/pageturner#page/31

[29]  During the war, commerce raiders (both warships and converted merchantmen) did threaten Allied shipping, as did U-boats, but neither was a realistic significant threat to the Canal, particularly as the US did not enter the war until 1917, by which time such threats had diminished.  A German squadron had been present in the Pacific, and defeated a Royal Navy force in the Battle of Coronel in 1914, only then to be annihilated by a pair of British battlecruisers in a subsequent battle off the Falkland Islands in the South Atlantic later the same year.  That was the last German naval force of any significance to come anywhere near Panama, and again years before the US entry into the war.

[30]  https://apps.dtic.mil/dtic/tr/fulltext/u2/a388262.pdf

[31]  Probably the only US 12-inch mortars to see action were those fired from Corregidor during the Japanese attack on the Philippines in 1942.

[32]  https://digitalcommons.fiu.edu/cgi/viewcontent.cgi?article=3672&context=etd

[33]  https://www.ibiblio.org/hyperwar/USA/USA-WH-Guard/USA-WH-Guard-12.html

[34]  The Army and Its Air Corps Army Policy toward Aviation 1919–1941 by Lt Col. Dr James P Tate, USAF (Ret) Air (University Press Maxwell Air Force Base, Alabama), 1998: https://www.airuniversity.af.edu/Portals/10/AUPress/Books/B_0062_TATE_ARMY_AIR_CORPS.pd

[35]  What we now term COMINT.

[36]  https://en.wikipedia.org/wiki/Panama_Canal_Department

[37]  Aimed at encouraging recovery from the Great Depression.

[38]  Also known as Upham Naval Air Station, as the translation of Coco Solo (“One Coconut”) was apparently seen as unflattering.

[39]  The initial improvements in 1940 included enlarging the submarine and air facilities at Coco Solo.  The site is now part of two large container terminals.

[40]  This Board was established in 1938 and reviewed America’s national defence structure during the deteriorating international situation. The “Hepburn Board Report” was the basis for the massive Navy  Shore Establishment expansion that took place prior to World War 2.  The Report was published in December 1938.

[41]  https://www.ibiblio.org/hyperwar/USN/Building_Bases/bases-18.html

[42]  https://www.navycthistory.com/NSGStationsHistory.txt

[43]  https://www.ibiblio.org/hyperwar/USN/Building_Bases/bases-18.html

[44]  It had originally been the US Army Air Service 1918-26.

[45]  Even the second permanent Army airfield at Albrook Field, which opened in 1932, had, until hard surface runways were laid down in 1939, runways considered unsuitable for all-weather flying. 

[46]  Security and Defense of the Panama Canal 1903-2000 by Charles Morris, Panama Canal Commission: https://original-ufdc.uflib.ufl.edu/AA00047733/00001/6j

[47]  Air Defense of the Panama Canal, 1 January 1939 – 7 December 1941 (Army Air Forces Historical Office), January 1946: https://www.afhra.af.mil/Portals/16/documents/Studies/1-50/AFD-090602-096.pdf

OTHER THINGS YOU MAY HAVE MISSED – AUGUST 18

A fifth case of monkey pox has been reported, described as a Panamanian, 57, who resides abroad, and entered Panama on 11 August.

in other news, the Superintendency of Non-Financial Subjects has established guidelines and guidelines on the obligations for the prevention of money laundering and financing of terrorism for lawyers and accountants. It doesn’t seem to be on the website (yet): https://ssnf.gob.pa/

18 AUGUST 2022

US: ART DEALERS, OTHER NON-BANK ENTITIES SUBJECT OF NEW BANK SECRECY ACT AMENDMENT

On 9 August, Barnes & Thornberg LLP published an article about the ENABLERS Act, passed by the House of Representatives in July, that would regulate professional services firms, art dealers, trust companies, and other market intermediaries as “financial institutions” under the Bank Secrecy Act (BSA) and requires them to report client information to the US Government.  This is described as the most significant update to US AML regulations since the PATRIOT Act was passed in 2001.  It says that, if the Act is enacted market participants, including accountants, attorneys, trust companies, art dealers, and others will face heightened reporting, client screening, along with other BSA provisions traditionally applicable to banks and other financial institutions. 

https://btlaw.com/en/insights/blogs/government-relations/2022/art-dealers-other-non-bank-entities-subject-of-new-bank-secrecy-act-amendment#page=1

US: DEFENDING RICO CLAIMS IN THE BUSINESS CONTEXT 

On 17 August, Brownstein Hyatt Farber Schreck LLP published Part 3 of its series of articles on RICO claims.  Part 1 described why a plan to defend against potential claims under the Racketeer Influenced and Corrupt Organizations Act should be in every business’s toolkit; and Part 2 explained that one of the best tools businesses have in that toolkit is moving to dismiss a RICO claim early because the plaintiff failed to allege that his purported injuries are sufficient to convey what is known as “RICO standing. In Part 3 the firm reminded businesses to not forget individual state’s RICO laws.

https://www.bhfs.com/insights/alerts-articles/2022/defending-rico-claims-in-the-business-context-part-iii

BELGIUM:  NEW AML REGULATION FOR REAL ESTATE AGENTS

On 12 August, Seeds of Law published an article saying that, on 1 July, a new regulation repealed the old 2013 AML regulation.  It does not introduce many new changes but gives a clearer picture of how real estate agents must comply with the obligations under the Anti-Money Laundering Law of 2017 and addresses a number of aspects relating to due diligence.  It also defines high risk factors that apply to customers ( and transactions and adds additional high risk factors to the list contained in an annex to the Law.

https://seeds.law/en/news-insights/real-estate-agents-and-the-fight-against-money-laundering/

AUSTRALIA TO IMPOSE AN IMPORT BAN ON RUSSIAN-ORIGIN GOLD

On 18 August, the EU Sanctions blog reported that the Australian Department of Foreign Affairs and Trade had published draft legislation to impose an import ban on Russian-origin gold in unwrought, semi-manufactured or powder forms.

https://www.europeansanctions.com/2022/08/australia-to-adopt-import-ban-on-russian-origin-gold/

A TAX AVOIDANCE PROMOTER BASED IN THE SHARD HAS BEEN NAMED BY HMRC

On 18 August, HMRC named ContractorCare Ltd as a tax avoidance promoter, along with PAYEme Ltd, and Gateway Outsource Solutions Ltd.  Customers are being urged to withdraw from the published schemes and contact HMRC as soon as possible.

https://www.gov.uk/government/news/london-landmark-tax-avoidance-scheme-named

https://www.gov.uk/government/publications/named-tax-avoidance-schemes-promoters-enablers-and-suppliers

REFLECTIONS ON THE UK’S ECONOMIC CRIME PLAN 2019–2022

On 18 August, a Commentary from RUSI says that the UK’s first Economic Crime Plan brought together the machinery of government, and that the second plan now needs to deliver the goods.  It says that if the first ECP delivered some basic system maintenance in the form of legislative and policy reform, ECP2 needs to be about converting those reforms into tangible, real-world outcomes; and this won’t be easy and will require bigger systemic reforms.

https://rusi.org/explore-our-research/publications/commentary/its-wrap-reflections-uks-economic-crime-plan-2019-2022

UK: FRAUDSTER JAILED FOR FALSIFYING QUALIFICATIONS TO SECURE A TOP NHS JOB SHOULD HAVE TO PAY BACK SOME OF THE WAGES HE UNLAWFULLY RECEIVED

On 18 August, the Law Society Gazette reported on a hearing of the Supreme Court at which a POCA confiscation order for around £97,000 was made.  It was said the case raised an important issue on the confiscation regime laid down by POCA 2002, and in particular what payments should be ordered against a so-called ‘CV fraudster’ who had nevertheless performed his job satisfactorily.

https://www.lawgazette.co.uk/news/cv-fraudster-must-repay-some-wages-supreme-court-rules/5113460.article

CJEU GIVES A WIDE DEFINITION OF WHAT CONSTITUTES PROCESSING OF SENSITIVE PERSONAL DATA

On 15 August, an article from Bird & Bird reported that on 1 August, the CJEU in Grand Chamber handed down a decision on the scope of Article 9 GDPR. Article 9 defines what constitutes “special categories of personal data”.  The decision is said to have raised a few interesting points.

https://www.twobirds.com/en/insights/2022/global/what-is-in-a-name-cjeu

UK AMENDED RUSSIA SANCTIONS GENERAL LICENCE

On 17 August, the UK amended its General Licence which covers payments to and from insurers and designated persons.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1098989/General_Licence_INT-2022-2009156_Amendment_Final.pdf

IRAN IN ADVANCED STAGE OF TALKS TO JOIN RUSSIA’S MIR PAYMENT SYSTEM

On 17 August, Eurasia Review reported that Iran is in a very advanced stage of talks to join Russia’s Mir payment system.  Russia established Mir, which means both “peace” and “world” in Russian, in 2017 as an alternative to international financial services like Visa and Mastercard.  Several countries have seen use of the system, including Cuba, South Korea, some former Soviet republics and Turkey, and reports have suggested that the UAE also plans to join Mir.

https://www.eurasiareview.com/17082022-iran-in-advanced-stage-of-talks-to-join-russias-mir-payment-system/

HMRC REVEALS ALMOST HALF OF THOSE FALLING FOUL OF AML REGULATIONS ARE PROPERTY COMPANIES

On 17 August, Estate Agent Today reported that HMRC recently published a list of businesses that have received penalty notices for failure to meet their AML obligations, and almost half were in the property sector.  Of 79 businesses that had breached AML regulations between April and December last year, more than 30 were estate agents, commercial property firms, valuers and auction houses. 

https://www.estateagenttoday.co.uk/sponsored-content/2022/8/as-hmrc-reveals-almost-half-of-those-falling-foul-of-aml-regulations-are-property-firms-estate-agents-are-urged-to-get-their-compliance-in-order-or-face-the-consequences

4 MORE PEOPLE IN SINGAPORE CHARGED OVER WIRECARD CASE, TAKING TOTAL TO 7

On 17 August, Channel News Asia reported that the arrests come after investigations by the Singapore Police Force’s Commercial Affairs Department into the activities of 2 Singapore subsidiaries of the German company Wirecard AG.  The 4 people allegedly conspired to dishonestly misappropriate money from the company.

https://www.channelnewsasia.com/singapore/wirecard-case-4-more-people-charged-singapore-2885511

INSIDER TRADING SAID TO OCCUR IN 10% TO 25% OF CRYPTOCURRENCY LISTINGS

On 17 August, Coin Telegraph reported that a study had found abnormal levels of return in a sample of tokens just before their listing announcement on Coinbase.

https://cointelegraph.com/news/study-insider-trading-occurs-in-10-to-25-of-cryptocurrency-listings

NETHERLANDS EXTRADITES RUSSIAN CRYPTO MONEY LAUNDERING SUSPECT TO US

On 18 August. NL Times reported that Denis Mihaqlovic Dubnikov, 29, is accused with others of laundering money obtained as the result of ransomware attacks in the US and elsewhere.

https://nltimes.nl/2022/08/18/netherlands-extradites-russian-crypto-money-laundering-suspect-us

UKRAINE WAR MAKES A SLEEPY GREEK PORT A US ARMS HUB

On 18 August, the New York Times reported that the flow of US military supplies through Alexandroupoli in north-eastern Greece has angered Russia and Turkey.  Now, companies with ties to Russia and the US are competing for control of the port.

https://www.nytimes.com/2022/08/18/world/europe/greece-port-russia-ukraine-weapons.html

UK: MUSEUM REPATRIATES OVER 70 BENIN ARTEFACTS TO NIGERIA

On 18 August, Art Law & More from Boodle Hatfield reported that the Horniman Museum and gardens will transfer the ownership of 72 objects to the Nigerian government, including its collection of Benin bronzes.  The Nigerian government made a request for the objects in January 2022.  In February 1897, about 10,000 objects were stolen during a military incursion into Benin City.

https://artlawandmore.com/2022/08/18/horniman-museum-repatriates-over-70-benin-artefacts-to-nigeria/

US TREASURY SANCTIONS TORNADO CASH AND TURNS UP HEAT ON MIXERS

On 17 August, Crowell Moring reported that, although OFAC’s action marks the second instance it has sanctioned a virtual currency mixer — it sanctioned Blender.io in May 2022 — this is the first time that OFAC has designated a non-entity software protocol.  Tornado Cash is a “smart contract” that allows users to anonymise the origins, destinations, and counterparties for virtual currency transactions. 

https://communications.crowell.com/e/louwkwuptufscw/25061c25-7434-42d0-9a1b-75bbedd8cd6c

https://www.visualcapitalist.com/ranked-top-10-countries-by-military-spending/

NORTH KOREAN SANCTIONS EVASION – THE MOVIE

The RAND Corporation has produced an hour-long video documentary in which experts chronicle the historical background and rationale for the sanctions, which aimed to constrain or alter North Korea’s proliferation activities, and discuss the threats posed by North Korean proliferation.  Experts also describe the importance of sanctions enforcement and the tactics, techniques, procedures, and entities that North Korea has used to evade sanctions.  A 2-minute trailer is also available online.

https://www.rand.org/pubs/research_reports/RRA1537-2.html

SOUTH KOREA’S AML WATCHDOG GOES AFTER 16 CRYPTO EXCHANGES OPERATING WITHOUT REGISTRATION

On 18 August, ZyCrypto reported that South Korea’s AML authority, the Korea Financial Intelligence Unit (KoFIU), part of South Korea’s Financial Services Commission, is taking action against over a dozen crypto exchanges from overseas that have been doing business in the country without proper registration.  South Korea’s efforts to clamp down on the crypto industry have escalated following the May collapse of the Terra ecosystem, founded by Korean-born Do Kwon.

https://zycrypto.com/south-koreas-aml-watchdog-goes-after-16-crypto-exchanges-operating-without-registration/

BINANCE ADDRESSES ALLEGED COMPLIANCE NEGLECT AND SAYS KYC EFFORTS COST THE EXCHANGE BILLIONS

On 18 August, ZyCrypto reported that, after a Reuters report allegedly linked Binance to money laundering schemes involving the top darknet and hacking groups, some members of Binance’s compliance team are said to have cleared the air on the allegations, highlighting some extra efforts put into compliance exercise and how this high scrutiny has also cost the exchange a fortune.

https://zycrypto.com/binance-addresses-alleged-compliance-neglect-says-kyc-efforts-cost-the-exchange-billions/

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UK: SANCTIONS – 2 SANCTIONS GENERAL LICENCES AMENDED

On 18 August, HM Treasury advised that one allows UK designated persons to make certain permitted payments to UK insurers from a frozen bank account, and allows UK insurers to receive these payments – this applies to all UK autonomous sanctions regimes, not just those on Russia.  The other allows the continued business operations of Evraz’ North American subsidiaries, and has now been extended until 31 March 2023. 

https://www.gov.uk/government/collections/ofsi-general-licences

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1098990/Publication_nottice_amendment_INT2022-2009156.pdf

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1077828/20.05.2022_Russian_Travel_Publication_Notice.pdf

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US: 2 JUDGES WHO ORCHESTRATED A SCHEME TO SEND CHILDREN TO FOR-PROFIT JAILS IN EXCHANGE FOR KICKBACKS ORDERED TO PAY MORE THAN $200 MILLION TO VICTIMS

On 17 August, NBC News reported that the judges in Pennsylvania shut down a county-run juvenile detention centre and accepted $2.8 million from the builder and co-owner of 2 for-profit jails; and one, who presided over juvenile court, pushed a zero-tolerance policy that guaranteed large numbers of children would be sent to the facilities.

https://www.nbcnews.com/news/us-news/judges-sent-children-profit-jails-kickbacks-ordered-pay-200-million-da-rcna43538

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OUTSOURCING CIVIL RECOVERY LITIGATION TO PRIVATE LAW FIRMS: A VIABLE RESPONSE?

An article from RUSI on 18 August posed this question in a paper which explores the potential benefits and risks of expanding the use of the civil recovery mechanisms in Part 5 of the Proceeds of Crime Act 2002 in the UK, via outsourcing of the litigation phase of proceedings to private law firms in return for a share of the proceeds recovered.  It seeks to summarise the issues to ensure they are considered in a balanced way, rather than taking a firm position.

https://static.rusi.org/322_EI_Asset_Recovery.pdf

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OTHER THINGS YOU MAY HAVE MISSED – AUGUST 17

With dengue present in the country, and to now apparently no vaccine etc for it, it was interesting to read that, in Japan, Takeda Pharmaceutical has completed clinical trials of such a vaccine, and is expected to be approved for use in Indonesia soon. It is said that the company has also applied for approval in Europe, Asia and South America.

Meanwhile, the small and medium sized pharmacies which closed their doors on Monday reopened after reaching an agreement with the Government on the 30% discount that was established for 170 medicines.

At the International Book fair today, which large, busy and interesting – although seemingly every primary and secondary schoolchild was also there!

17 August 2022 

FREEPORTS AND CHARTER CITIES

On 15 August, an article in Byline Times was concerned with a recent explosion of false claims about Freeports and “Charter Cities”.  In the UK post-Brexit, 8 “freeports” are being developed, and these combine features of long-familiar Enterprise Zones, regional development policy and ‘classical’ free zones.  It is said that there have been claims that the ‘real’ agenda behind Brexit was to introduce ‘Charter Cities’ into the UK, whereby an outside country, or a private corporation or conglomerate, would be granted control of a city or other zone in a developing country and run it on, typically, low tax, low regulation lines.

https://bylinetimes.com/2022/08/15/beware-the-charter-cities-conspiracy-theory/

RUSSIAN SUPERYACHTS CHANGING FLAGS AND BEING RE-REGISTERED AS “HOUSEBOATS”

On 16 August, Superyachjt News from e-Sysman reported that a number of Russian-owned superyachts had changed their flags to unusual jurisidictions (Sierra Leone, Malaysia, Palau) from the more normal ones (Cayman Islands, Isle of Man) and, bizarrely, changed their type to “houseboats”.  It was unclear what the reason for this is, or the legal or other consequence the change in description might have.

https://www.youtube.com/watch?v=klHiDZcbjDk

ISLE OF MAN: RUSSIA SANCTIONS GENERAL LICENCE FOR THE PURPOSE OF MAKING ENERGY AVAILABLE FOR USE IN MONGOLIA

On 17 August, the Isle of Man followed the UK in issuing a General Licence naming 4 Russian banks and concerned with permitting payments to a sanctioned bank or any subsidiary for the purpose of making energy available for use in Mongolia.  

https://www.gov.im/news/2022/aug/17/financial-sanctions-russia-general-licence/

RUSSIA’S VIOLATIONS OF AVIATION RULES MEANS THE UN MAY NOT BE ABLE TO CONTINUE LEASING RUSSIAN AIRCRAFT

On 16 August, Pass Blue reported that Russia has recently violated certain rules of the International Civil Aviation Authority, which ensures flight safety standards.  The country has until 14 September to remedy its rule-breaking, but if it is not resolved, the UN may not be able to continue leasing Russian aircraft, which provides a chunk of transport services to crucial UN operations.

https://us4.campaign-archive.com/?e=6d2f7d6f12&u=5d5693a8f1af2d4b6cb3160e8&id=1aff26473d

APPROXIMATELY $7.1 BILLION IN US-FUNDED PLANES, TRUCKS AND WEAPONRY HAS BEEN SEIZED BY THE TALIBAN

On 16 August, Breaking Defense reported that the Inspector General report says that the total includes $923 million in aircraft, $4.1 billion in ground vehicles and $511.8 million in weapons, all of which had been provided to the Afghan military.

https://breakingdefense.com/2022/08/in-afghanistan-7-1b-in-planes-trucks-weapons-seized-by-taliban-since-withdrawal-dod-watchdog

THE EXTRATERRITORIAL APPLICATION OF US STATE WAGE AND HOUR LAWS

On 16 August, the Transnational Litigation Blog published this post saying that such laws generally set a minimum wage and require employers to pay overtime. When a company headquartered in one state hires an employee to perform work in a foreign country, however, it is not always clear which jurisdiction’s laws will apply.  The post provides an overview of a recent court decision, and argues that this decision is problematic across 3 dimensions.

https://tlblog.org/the-extraterritorial-application-of-wage-and-hour-laws

US: EX-CONGRESSMAN INDICTED ON FRAUD CHARGES

On 16 August, the Wall Street Journal reported that former Democratic congressman Terrance John “TJ” Cox, 59, from California has been accused by the DoJ of having created off-the-books business accounts to solicit and steal roughly $2 million.

https://www.wsj.com/articles/ex-congressman-indicted-on-fraud-charges-11660687938

US APPROVES NEARLY ALL TECH EXPORTS TO CHINA, DATA SHOWS

On 16 August, the Wall Street Journal reported that, of the total $125 billion in exports from the US to China in 2020, officials required a licence for less than half a percent, and approved 94%, or 2,652 applications, for exports of technology to China.  In 2021, that approval rate decreased to 88%, but changes in data compilation methods between the 2 years make comparisons difficult.  A former Pentagon analyst argues that the high rate of approvals for licences to sell tech with potential military use is evidence of significant policy failure.

https://www.wsj.com/articles/u-s-approves-nearly-all-tech-exports-to-china-data-shows-11660596886

SANCTIONS DISPUTE OVER SHIPS COMES BEFORE IRISH HIGH COURT

On 16 August, RTE reported that the effects of some EU and US economic sanctions against Russia over its invasion of Ukraine, have ended up in the High court arising from a bid by a Cypriot shipping company, and related entities, to purchase vessels it currently leases from an Irish registered company that is ultimately owned by the Russian State.

https://www.rte.ie/news/business/2022/0816/1316107-sanctions-dispute-over-ships-comes-before-high-court/

SMUGGLED PICASSO PAINTING ALLEGEDLY FOUND AFTER ARREST OF DRUG TRAFFICKERS IN IRAQ

On 17 August, Asharq al Aswat reported that Iraqi authorities claim to have discovered a Picasso work “worth millions of dollars” during a drug raid in Diyala, a central province east of Baghdad.

https://english.aawsat.com/home/article/3820986/smuggled-picasso-painting-found-after-arrest-drug-traffickers-iraq

RWANDA: POLICE SEIZE OVER 6 TONNES OF SMUGGLED LITHIUM

On 16 August, The New Times reported that 2 people have been arrested after being intercepted while transporting 6.6 tonnes of lithium, allegedly extracted from a mine in Ngororero District.  It was being transported to Kigali when the suspects’ truck was intercepted.

https://www.newtimes.co.rw/news/police-seize-over-six-tonnes-smuggled-lithium

INDIA: ACTOR JACQUELINE FERNANDEZ NAMED AS ACCUSED IN LAUNDERING CASE

On 17 August, NDTV reported that in a supplementary chargesheet filed by the Enforcement Directorate, actor Jacqueline Fernandez has been accused of money laundering.  Providing a timeline of the case, the ED alleged that the actor was aware that gifts made were bought using swindled money. 

https://www.ndtv.com/india-news/timeline-actor-jacqueline-fernandez-named-as-accused-in-laundering-case-3261624

LIBERIA: PRESIDENT SUSPENDS 3 GOVERNMENT OFFICIALS BASED ON SANCTIONS ISSUED BY OFAC

On 16 August, Jurist reported that President Weah had suspended Nathaniel McGill, Sayma Syrenius Cephus and Bill Twehway.  The sanctions label all 3 officials as foreign persons who serve as current government officials responsible for or complicit in, or directly or indirectly engaged in corruption.  Since Weah suspended them, their principal deputies will now serve as acting officials in their place.

https://www.jurist.org/news/2022/08/liberia-president-suspends-three-government-officials-over-suspected-corruption/

GERMAN PROSECUTORS DECLINE TO INVESTIGATE GERMAN CHANCELLOR OLAF SCHOLZ FOR HIS INVOLVEMENT IN A CUM-EX TAX SCANDAL

On 16 August, Jurist reported that prosecutors from the Attorney General’s office said they found no evidence that Scholz aided or abetted anyone involved in the scandal.

https://www.jurist.org/news/2022/08/german-prosecutors-decline-to-investigate-chancellor-in-tax-scandal/

IRISH AUTHORITIES REFER REPORT INTO ALLEGED CONFLICTS OF INTEREST AT PLANNING AUTHORITY TO THE DIRECTOR OF PUBLIC PROSECUTIONS (DPP)

On 16 August, Jurist said that the report was on the management of alleged conflicts of interest and relevant disclosures by the former deputy chairman of An Bord Pleanála and 3 specific planning decisions, including a case where the board refused permission for a housing development outside Cork on a site near property owned by a company in which the former deputy chairman had a quarter share.

https://www.jurist.org/news/2022/08/irish-authorities-refer-report-on-corruption-in-planning-body-to-prosecutors-for-review/

140 KG OF KRATOM LEAVES SEIZED BY KUWAIT AIRPORT CUSTOMS

On 16 August, the Arab Times reported that the Airport Customs department seized 140 kg of kratom leaves coming in from an Asian country.  The leaves contain a chemical called mitragynine, which works like opioids such as morphine and is generally found in SE Asia. 

https://www.arabtimesonline.com/news/140-kgs-of-kratom-leaves-seized-by-kuwait-airport-customs/

SOUTH KOREA: SAMSUNG HEIR PARDONED AFTER DOING TIME FOR BRIBERY

On 15 August, The Register reported that South Korean president Yoon Suk Yeol had issued a widely anticipated pardon for Samsung heir and vice chairman Lee Jae-yong.  Lee was already out of jail on parole after spending 18 months in prison.

https://www.theregister.com/2022/08/15/samsung_heir_pardoned/

13 PEOPLE ARRESTED AS SINGAPORE AND MALAYSIA POLICE BUST SYNDICATES LINKED TO VARIOUS SCAMS

On 16 August, Channel News Asia reported that the syndicates were involved in money laundering activities and were “crippled” as a result of the arrests, Singapore police said in a news release.  9 of the arrests were made following raids carried out in Malaysia.  The scam syndicates are believed to be linked with reports in Singapore involving more than 60 victims of investment scams, job scams, fake gambling platform scams, sexual services scams, sextortion, government officials impersonation scams and loan scams.

https://www.channelnewsasia.com/singapore/singapore-malaysia-police-bust-syndicates-money-laundering-scams-13-arrested-2883941

4 ARRESTED OVER RUSSIAN MONEY LAUNDERING PLOT IN THE SOUTH OF TENERIFE

On 15 August, the Canarian Weekly reported that Guardia Civil and the State Tax Administration Agency (AEAT) have dismantled an organisation accused of laundering “black” money from Russia through a Spanish company that acquired a nightclub in Adeje in the south of Tenerife to convert it into a luxury shopping centre.

https://www.canarianweekly.com/posts/Four-arrested-in-Russian-money-laundering-plot-in-the-south-of-Tenerife

UK: THE MAKING OF A HOUSING BENEFIT MILLIONAIRE

On 15 August, the BBC reported that an investigation has uncovered property sales worth more than £120 million linked to a successful developer and a charity he helped set up.  The charity, My Space Housing Solutions, has claimed tens of millions of pounds of public money to house vulnerable people and works mostly across the north of England.  The charity supports vulnerable adults – people with learning difficulties, fleeing domestic violence, or recovering from substance abuse. It can claim housing benefit on their behalf.  In the past decade there has been substantial growth in the sector, accompanied by accusations of exploitation.

https://www.bbc.com/news/uk-62497015

RUSSIAN BUYER OF CANADIAN OIL COMPANY ACCUSED OF PAYING KICKBACKS TO FORMER UKRAINIAN PM

On 17 August, Global News reported claims that a Russian energy billionaire, Igor Makarov, was able to buy a majority stake in a Canadian oil and gas company without any regulatory scrutiny, despite a longstanding battle in a US federal court over his alleged role in schemes involving international money laundering, kickbacks and a disgraced former Ukrainian prime minister.  He has been accused by US authorities of paying at least $28.5 million in kickbacks to former Ukrainian prime minister Pavel Lazarenko in 1996 for exclusive rights to sell gas in Ukraine.

https://globalnews.ca/news/9055869/canadian-oil-co-russian-oligarch-kickbacks-us-accusations/

US ASSERTS INDIA HID RUSSIAN ORIGIN OF FUEL SHIPPED TO US

On 16 August, Insurance Marine News reported that the US has informed India of its concern that India was being used to export fuel made from Russian crude. The Russia-sourced oil was thought to have been subject to ship-to-ship (STS) transfers on the high seas, thus enabling the oil to be supplied to the US without appearing to contravene the country’s sanctions against Russia.

https://insurancemarinenews.com/insurance-marine-news/us-asserts-india-hid-russian-origin-of-fuel-shipped-to-us-india-central-bank/

THE GLOBAL MINIMUM TAX LIVES ON: THE US HAS ABANDONED IT FOR NOW BUT WILL LIKELY COME AROUND

On 17 August, an article from Foreign Affairs said that last year, more than 135 countries signed an agreement to transform international taxation by requiring profitable companies to pay at least 15% in corporate tax, regardless of where they reported their profits.  Unfortunately, although U.S. leadership was pivotal in forging this agreement at the OECD, US lawmakers have come up short, and the US will not be party to the agreement, since the agreement required all signatories to enact changes to their tax codes.

https://www.foreignaffairs.com/united-states/global-minimum-tax-lives

CANADA: $122 MILLION RUSSIAN ASSETS FROZEN SINCE FEBRUARY

On 17 August, the EU Sanctions blog reported that the RCMP has said that approximately $122 million in assets were frozen by Canada and approximately $290 million in financial transactions were blocked.

https://www.europeansanctions.com/2022/08/canada-says-122-million-frozen-under-russia-sanctions-since-february/

PODCAST: FAT LEONARD: AN UPDATE

In the latest TRACE podcast, Tom Wright joins the podcast to discuss the latest developments in the ‘Fat Leonard’ story of bribery and corruption involving the US Navy in the Far East, summarised from his lively podcast series of the same name.  Tom recorded hours of interviews with Leonard Glenn Francis and so brings fresh insight to this lengthy saga as we await Leonard’s sentencing in response — 7 years later — to his 2015 guilty plea.

https://www.traceinternational.org/resources-podcast

INTERNATIONAL COURT REJECTS RUSSIAN ATTEMPT TO STAY ARBITRATION PROCEEDINGS AFTER ITS LEGAL TEAM RESIGNED AFTER SANCTIONS IMPOSED

On 17 August, the EU Sanctions blog reported that the Hague Court of Appeal rejected Russia’s application to annul the decision of the Permanent Court of Arbitration in March on arbitration that had been ongoing since 2015.  The arbitration is brought by Privatbank against Russia over investments in Crimea that were expropriated by Russia.

https://www.europeansanctions.com/2022/08/pca-tribunal-rejects-application-to-stay-privatbank-arbitration-because-of-effect-of-sanctions-on-legal-team/

https://www.statista.com/chart/28004/eu-energy-inflation-rates/

GERMAN TROOPS SPOT RUSSIAN FORCES IN MALI AS FRENCH PULL OUT

On 16 August, EurActiv reported that German troops spotted several dozen presumably Russian security forces at Gao airport in northern Mali on the day the last French soldiers wrapped up their operations and left the town.  Fighters from the Wagner Group, a Kremlin-linked private military company, have been supporting the Malian army in its fight against Islamist insurgents since late last year.  Mali is struggling to stem an Islamist insurgency that took root after a 2012 uprising and has since spread to neighbouring countries.

https://www.euractiv.com/section/global-europe/news/german-troops-spot-russian-forces-in-mali-as-french-pull-out/

GIBRALTAR: PRIVY COUNCIL CONSIDERS APPEAL BY CONVICTED DRUG TRAFFICKER CHALLENGING INTERNATIONAL ARREST WARRANT

On 17 August, the Gibraltar Chronicle reported that the Judicial Committee of the Privy Council in London, the ultimate appeals court for Gibraltar, is to hear an appeal by a Croatian drug dealer who is challenged the warrant executed in Gibraltar and his extradition to Croatia.  He argues that he should serve any custodial sentence in Gibraltar.

https://www.chronicle.gi/privy-council-considers-appeal-by-convicted-drug-trafficker-challenging-international-arrest-warrant/

VIDEO: US CIVIL AND CRIMINAL FORFEITURE

On 17 August, AML RightSource released a video in which Stef Cassella returns to the AML Conversations series to discuss civil and criminal forfeiture.  He explains how it’s used, common misunderstandings about this law enforcement and prosecutorial tool, and also delves into his work which aims to improve its functionality worldwide.

https://www.amlrightsource.com/news/asset-forfeiture-global-expert-stef-cassella

HONG KONG TRADE DEVELOPMENT COUNCIL CHAIRMAN WELCOMES FURTHER OPENING UP OF THE CITY 

On 17 August, HKTDC reported that the  Hong Kong business community has welcomed authorities’ move to relax COVID-19 prevention requirements for arrivals, who from 12 August will need to stay in a quarantine hotel for 3 days followed by 4 days of self-isolation.

https://hkmb.hktdc.com/en/ojfdy2eo/market-spotlight/easier-entry-to-hk-welcomed

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A PRIMER ON FORUM NON CONVENIENS IN US COURTS

On 10 August, the Transnational Litigation Blog published this post which explained that, under the doctrine of forum non conveniens, a judge may dismiss a case on the understanding that the case would be better heard in another sovereign’s court.  The post describes the current federal doctrine of forum non conveniens; the variety of US state court doctrines; and the history of the doctrine within the US, including its traditional limitation to cases involving no local parties.  It notes that, despite its fancy-sounding Latin name, it is a relatively modern phenomenon in US courts.

https://tlblog.org/a-primer-on-forum-non-conveniens

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UK: ENTAIN TO PAY RECORD £17 MILLION FOR WIDE-RANGING FAILINGS

On 17 August, iGB reported that the Gambling Commission had ordered Entain to pay a record £17 million after it identified a series of social responsibility and AML failings across its online and land-based businesses. The failings relate to LC International Limited (LCI), which runs Entain’s online brands including Ladbrokes.com, Coral.co.uk and Foxybingo.com, and Ladbrokes Betting & Gaming Limited (LBG) land-based business, which operates 2,746 betting shops across Great Britain.  In a separate article, iGB reported that the Gambling Commission chief executive said Entain could potentially lose its licence in Great Britain if the group continues to breach rules and regulations in the market.

https://igamingbusiness.com/legal-compliance/entain-to-pay-record-17m

https://igamingbusiness.com/legal-compliance/entain-risks-losing-licence-over-further-breaches-says-rhodes/

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EXPORT CONTROL: POST-SHIPMENT ON-SITE INSPECTIONS AND STOCKPILE MANAGEMENT ASSISTANCE

One of 2 publications from SIPRI on 17 August, this is concerned with post-shipment on-site inspections and international assistance in physical security and stockpile management (PSSM) of exported material.  On-site inspections allow exporting states to check exported military materiel to ensure that the importer is complying with its commitments, while PSSM assistance aims to improve states’ weapons and ammunition management systems. However, both instruments allow foreign specialists to visit a state’s weapons and ammunition storage facilities and enable information gathering to assess their integrity and identify possible diversion risks.  The Policy Brief highlights how building informal linkages between these instruments could contribute towards establishing more comprehensive forms of post-shipment cooperation.

https://www.sipri.org/sites/default/files/2022-08/pb_2208_post-shipment_on-site_inspections_and_stockpile_management_assistance.pdf

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GOOD PRACTICE GUIDE ON POST-SHIPMENT ON-SITE INSPECTIONS OF EXPORTED MILITARY MATERIEL

The Stockholm International Peace Research Institute has issued a new guide, saying that, to prevent the diversion of exported military materiel, an increasing number of states have conducted post-shipment on-site inspections (i.e. physical inspections of exported military materiel on the territory of the importing state) or have introduced measures to allow for them to take place.  The Good Practice Guide is aimed at states that are in the process of developing post-shipment on-site inspections or are considering their future adoption. 

https://www.sipri.org/sites/default/files/2022-08/sipri_2208_gpg_on-site_inspections.pdf

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