OTHER THINGS YOU MAY HAVE MISSED – AUGUST 20

There are now reported to be up to 7 cases on monkeypox in Panama, with 2 new cases. Both the latest patients are said to be in hospital isolation because they do not have suitable isolation arrangements at home.

20 AUGUST 2022

PANAMA HOPES TO EXIT FATF GREY LIST IN SEPTEMBER

On 19 August, Newsroom Panama reported the comments of the Vice-Minister of Finance, re a plenary session of FATF scheduled for September, where significant progress and evidence will be presented so that Panama can get out of the list, which it has been on since 2019.  He said that it has already fulfilled 11 of the 15 points of the FATF action plan.

https://www.newsroompanama.com/business/panama-hopes-to-exit-financial-task-force-gray-list-next-month

US ANNOUNCES CRACKDOWN ON FIREARMS, AMMUNITION SMUGGLING TO HAITI AND THE CARIBBEAN

On 19 August, a news release from US Immigration and Customs Enforcement advised on Homeland Security Investigations (HSI) efforts to curb the increased flow of weapons, weapon parts and ammunition to Haiti and the Caribbean. It is said that, over the last 3 months, HSI has seen a substantial increase in the number of weapons, along with a serious increase on the calibre and type of firearms, being illegally trafficked.

https://www.ice.gov/news/releases/hsi-announces-crackdown-firearms-ammunition-smuggling-haiti-caribbean

FLORIDA: 85 PEOPLE ARRESTED AFTER AS AUTHORITIES DISMANTLED AN INTERNATIONAL DRUG TRAFFICKING RING

On 19 August, My Panhandle reported that the investigation began in September 2020 following an investigation into an incident where a man crashed his vehicle into a gas station and killed a person inside.  It was found that the man and some of his family members had helped smuggle large amounts of meth through airports in checked luggage.  The sheriff’s office said 85 suspects were arrested and charged with a total of 355 felonies and 93 misdemeanours.

https://www.mypanhandle.com/news/local-news/85-arrested-in-takedown-of-international-drug-smuggling-ring-12-8m-in-drugs-guns-seized/

CENTRAL BANK OF THE UAE GUIDANCE FOR LICENSED FINANCIAL INSTITUTIONS ON THE RISKS RELATING TO PAYMENTS

On 19 August, an article from White & Case was concerned with this guidance, said to be to assist LFI in understanding their statutory obligations, and which applies to all natural and legal persons licensed and/or supervised by the Central Bank.  It is said that it appears that the Central Bank’s increased enforcement appetite reflects its commitment to increase efforts to assist in combatting money laundering offences in the UAE following the UAEs addition to the FATF grey list.  The article goes on to consider the new guidance in some detail.

https://www.whitecase.com/insight-alert/aml-cft-guidance

FAR-RIGHT ONLINE FINANCING AND HOW TO COUNTER IT

This publication from the Global Center on Cooperative Security examines the online financing and support systems associated with US anti-authority and racially or ethnically motivated (AAREM) violent extremists.  It focuses on the threat as manifest in the US and to a lesser extent the transnational dimensions of AAREM violent extremist financing. Clear linkages between US and transnational violent extremists, especially within white supremacist and neo-Nazi circles, also extend to the world of financing.  It concludes with several policy solutions to better combat the financial support systems of AAREM violent extremists.

https://www.globalcenter.org/wp-content/uploads/2022/07/GCCS_PB_Far-Right-Online-Financing-How-to-Counter-It-2022.pdf

GHANA HAS DEVELOPED A MARITIME POLICY: HERE IS WHAT IT MEANS

On 19 August, Defence Web reported that Ghana has an abundance of marine resources. They include fisheries, hydrocarbon reserves, inland waterways and ports that are located along important international shipping lanes.  In addition, 70% of Ghana’s trade is carried by sea through its ports in Tema and Takoradi – and the Port of Tema is the largest container port in West Africa and Ghana.  Ghana has developed a comprehensive National Integrated Maritime Strategy.  It warns that the policy is destined for failure without adequate political will from the highest echelons of government and without the necessary resources (financial, human resource, equipment and technology) to support strategies and actions plans.  It outlines 6 strategic objectives that focus on safety, security, marine environmental protection, blue economy development, capacity building and cooperation.  It also provides a framework for implementation and sustainability.  This includes calls for the allocation of resources funded from the national budget.

https://www.defenceweb.co.za/sea/sea-sea/ghana-has-developed-a-maritime-policy-here-is-what-it-means/

UK: INSOLVENCY SERVICE HAS ISSUED A CALL FOR EVIDENCE TO DETERMINE WHAT PERSONAL INSOLVENCY SHOULD LOOK LIKE IN THE 21st CENTURY

An article from the Institute of Chartered Accountants in England & Wales on 18 August says that every year more than 100,000 people enter a personal insolvency solution. But the current regime, which has been in place since 1986, has not changed substantially or been reviewed for a long time.  The most recent major change was the addition of Debt Relief Orders, which came in after the 2008 financial crisis. The call for evidence runs to 23 October.

https://www.icaew.com/insights/viewpoints-on-the-news/2022/Aug-2022/Is-the-personal-insolvency-framework-fit-for-purpose

https://www.gov.uk/government/consultations/call-for-evidence-review-of-the-personal-insolvency-framework

UK: WHAT THE REGISTER OF OVERSEAS ENTITIES MEANS FOR ACCOUNTANTS

An article from the Institute of Chartered Accountants in England & Wales on 16 August considers what the Economic Crime (Transparency and Enforcement) Act 2022 and guidance issued by the Department of Business, Energy and Industrial Strategy.  ICAEW is concerned about the responsibilities and expectations placed on professional accountants with regards to verification. 

https://www.icaew.com/insights/viewpoints-on-the-news/2022/Aug-2022/What-the-Register-of-Overseas-Entities-means-for-accountants

UK: POLICE, CRIME, SENTENCING AND COURTS ACT 2022 FACTSHEETS

On 20 August, the Home Office issued a number of updated factsheets, these include –

  • One on the management of terrorist offences – the Act will give the police 3 new powers to manage the risk posed by terrorist offenders and terrorist risk offenders.  It will also make a number of changes to Multi-Agency Public Protection Arrangements (MAPPA) in order to improve the management and supervision of terrorist and terrorist risk offenders.

https://www.gov.uk/government/publications/police-crime-sentencing-and-courts-bill-2021-factsheets/police-crime-sentencing-and-courts-bill-2021-management-of-terrorist-offenders-factsheet

  • Extraction of information from electronic devices – the law is strengthened to ensure that there is a consistent approach to requesting information from phones and other electronic devices, and that in all cases, requests to victims and witnesses (and others) are only made when necessary and proportionate.  There are new statutory powers that ensure that the police can obtain digital evidence whilst providing additional safeguards so that only information that is relevant to the investigation is take – and a new statutory code of practice that will provide practical guidance to authorities on the use of the powers.

https://www.gov.uk/government/publications/police-crime-sentencing-and-courts-bill-2021-factsheets/police-crime-sentencing-and-courts-bill-2021-data-extraction-factsheet

https://www.gov.uk/government/publications/police-crime-sentencing-and-courts-bill-2021-factsheets

MEXICO’S EX-ATTORNEY GENERAL ARRESTED OVER DISAPPEARANCE OF 43 STUDENTS IN 2014

On 20 August, the Guardian reported that Mexico’s former attorney general, Jesús Murillo, has been arrested in relation to the disappearance of 43 students in 2014, the most prominent individual held so far in the notorious case that has haunted the country ever since.  He faces charges of forced disappearance, torture and obstruction of justice in the abduction and disappearance of the student-teachers in the south-western state of Guerrero.  There are 83 more arrest orders for soldiers, police, Guerrero officials and gang members in relation to the case.

https://www.theguardian.com/world/2022/aug/20/mexicos-ex-attorney-general-arrested-over-disappearance-of-43-students-in-2014

GIBRALTAR PREPARES FOR FIRST AUCTION OF A RUSSIAN OLIGARCH’S DETAINED SUPERYACHT

On 20 August, the Guardian reported on the case of the 65-metre superyacht Axioma.  It is be to benefit US investment bank, JP Morgan, which claims the yacht’s billionaire owner, Dmitry Pumpyansky, owes it more than $20 million.  It was arrested after docking in Gibraltar in March.  JP Morgan said the fact the billionaire had been subjected to sanctions meant the terms of a loan had been breached because it legally could not accept loan repayments from Pyrene, and it asked the Gibraltar courts to detain and sell the yacht.

https://www.theguardian.com/world/2022/aug/20/gibraltar-prepares-for-first-auction-of-a-russian-oligarchs-detained-superyacht

VIETNAM APPROVES NATIONAL ACTION PLAN ON AML

On 20 August, the Emirates News Agency reported on the National Plan of Action on prevention and control of money laundering, terrorism financing and financing of the proliferation of WMD for the 2021-2025 period. 

https://vietnamlawmagazine.vn/national-action-plan-on-anti-money-laundering-approved-48900.html

SOUTH AFRICA ACTS TO STAVE OFF ‘GREY LISTING’ BY FATF

On 20 August, IOL reported that the Cabinet has taken urgent steps to ensure South Africa is not “grey listed” with the approval of important amendment Bills aimed at plugging gaps in the country’s AML/CFT laws.

https://www.iol.co.za/business-report/economy/govt-acts-to-stave-off-greylisting-by-anti-money-laundering-watchdog-f064269f-4fa0-4b8f-a2fa-981e28906e03

CANADA: PUBLIC NOTICE OF ADMINISTRATIVE MONETARY PENALTIES

FINTRAC in Canada publishes its list of persons or entities that have been imposed an administrative monetary penalty.  Notices remain on FINTRAC’s public website for 5 years.

https://fintrac-canafe.canada.ca/pen/4-eng

CANADA: CALGARY MAN CONVICTED IN MULTIMILLION DOLLAR PONZI SCHEME SENTENCED TO 10 YEARS

On 19 August, CTV reported that Arnold Breitkreutz was convicted in June of fraud for what the Crown described as a multimillion-dollar scheme in which investors believed they were putting money into safe first mortgages.  His company, Base Financial, instead loaned to an oil-and-gas promoter and used in a risky oil play in Texas that secured against oil-and-gas leases and equipment.

https://calgary.ctvnews.ca/calgary-man-convicted-in-multimillion-dollar-ponzi-scheme-to-be-sentenced-1.6033709

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JAPAN MAKES ARRESTS OVER SUSPECTED BRIBERY INVOLVING THE 2020 TOKYO OLYMPICS

On 17 August, ESPN reported that a former Tokyo Olympic organizing committee board member and 3 people from a clothing company that was a surprise sponsor of the 2020 Games have been arrested for suspected bribery. 

https://www.espn.co.uk/olympics/story/_/id/34411298/japan-makes-arrests-bribery-suspicions-tokyo-olympics

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PANAMA – DEFENDING THE HARBOURS IN 1940-41

PANAMA – DEFENDING THE HARBOURS IN 1940-41

As explained previously, the US planning for harbour defences before World War 2 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.

While, in general, close-in defence of the Panama Canal, its locks and the harbours in the Canal Zone was the responsibility of the US Army (as was such “coastal” defence in the Continental US), the US Navy retained responsibility for certain aspects, this including taking over responsibility from troops for the Transit Guard aboard ships using the Canal from February 1942, using its marines.  Other responsibilities included underwater installations, including the anti-torpedo and anti-submarine defences; and from 1942, the indicator loop underwater submarine detection system[1] (of which more below).

In 1939, funds were authorised for improvement of the Canal Zone’s defences included provision of underwater protection against submarines and torpedoes, including those dropped by aircraft.

By July 1941, anti-submarine nets had been installed to protect the outer reaches at the entrance to the Colón breakwater and in the area of La Boca at the other end of the Canal.  However, the attacks by torpedo-armed aircraft on the Italian fleet at Taranto, and subsequently the Japanese attack on Pearl Harbor, demonstrated that shallow water and short locks were no longer a guarantee of security from air-launched torpedoes.  Immediately following the Pearl Harbor attack, on 8 December 1941, the War Department issued instructions for the Commanding General of the Army’s Panama Canal Department to put in place all underwater harbour defence measures, in coordination with the Navy. 

It was felt that traffic in the Canal’s main channel, and in Gatun and Miraflores Lakes, were vulnerable to torpedo attack.  Then, in March 1942, a technical report said that the Japanese had developed a new type of torpedo which effectively rendered existing defences obsolete, and this resulted in proposals to upgrade and strengthen the nets protecting the Miraflores and Pedro Miguel Locks[2].  Another net was installed on 8 December 1942, to protect Madden Dam, which had been completed in 1935 and was vital in regulating water levels in Lake Gatun.  This 800-feet (244 metres) long net had a depth of 40-feet (12.2 metres).

However, on 30 May 1943, a net installed to protect the Miraflores Spillway, alongside the Miraflores Locks, came free only two days after being installed, and went over the spillway.  This incident led to a recommendation that such spillway nets should be abandoned due to the strong currents involved.

Another proposal, in June 1943, but one which was not pursued, was to provide for a more proactive defence by fitting a net equipped with pre-installed depth charges on the approach to the Gatun Locks.

As the Canal Zone, or rather its offshore islands, was used as a base for PT boats during the war, and the US was a major use of such light coastal motor torpedo craft, it may not be surprising that the War Department in February 1942 highlighted the threat from attacks on harbours, fleet anchorages etc using fast-moving, shallow-draught torpedo boats. 

To counter the threat from torpedo boats, there were recommendations for the use of existing weapons.  For ranges up to 2,000 yards (1,829 metres), 37 mm or 40 mm guns (intended for anti-aircraft defence) with a director or remote control systems was proposed.  It was decided to relocate existing fixed seacoast or anti-aircraft 3-inch (76.2 mm) guns, supported by additional 60-inch (152.4 cm) searchlights, linked by telephone to harbour defence command posts.  At Balboa harbour, the Army deployed 13 75mm (3-inch) field guns.  Latterly, the 3-inch guns would be replaced by more modern 90 mm weapons.

However, it had also been decided that anti-aircraft defences should not be adversely affected by changes made to combat small craft, and some of the sites for the protection of vital installations did not permit their dual use.   On the Atlantic end of the Canal, Limon Bay was usually crowded with waiting vessels, and at the Pacific end many ships were anchored further out, outside the defensive minefield, making protection of such vessels difficult.  At Thatcher Ferry alone[3], providing protection for the vessels at anchor required the siting of at least five gun batteries.

Despite the difficulties involved, in October 1942, the Coastal Artillery Command reported that all armament was well placed for defence against torpedo boats (and low-flying torpedo-launching or mine-laying aircraft)[4].

There is little available information on the US Navy Loop Stations and the indicator loop system which apparently operated along the Panama coast[5].  It had been claimed that there is, or was, about 850 nautical miles (1,574 km) of 8-inch (20.3 cm) cable running down the full length of both coasts of Panama, and that the main cable had several 2-inch (5.08 cm) feeder cables running back to the mainland. 

The indicator loop system relied on the magnetic properties of submarine hulls.  Loops of cable were laid on the ocean floor in shipping channels and when a submarine passed overhead an induced current was produced and this can be detected on the galvanometers at the nearby shore station.  Even if wiped or degaussed (as many vessels were during World War 2, to reduce the risks from magnetic mines), submarines still have sufficient magnetism to produce at least a small current in a loop.[6] 

The first installation in the US was made at Cape Henry, Virginia in Summer 1941, after which the necessary equipment (loops, hydrophones, etc) was installed in practically every major and medium-sized Continental US harbour in the few months following August 1942.  By the end of 1942 systems were also being shipped to the South Pacific.  It was installed in the 15th Naval District in the Canal Zone, as well in Australia and South America and, at the time of its surrender, several units were ready in California to be shipped to Japan.  In the Canal Zone, the control stations were at Cristobal on the Atlantic side at Fort Sherman; and at Balboa on the Pacific side at Fort Amador.[7]

While the Navy would deploy mines in the open sea, the Army had its own mines, which were used to defend harbours and waterways, including those in the Canal Zone.  Unlike the minefields of the Navy, those of the Army were controlled, and could be detonated on command from a shore station.  One of the obvious advantages of such a controlled minefield was that a shipping channel could be completely mined, and yet still usable for friendly shipping, with the mines only being used or activated if or when a threat emerged.

The US Army had what was called the Army Mine Planter Service (AMPS), dating back to 1918, and which laid the minefields.  Like the gun defences, it came under the Coastal Artillery Corps, which installed and maintained all underwater minefields forming part of the US coastal defences – including those in the Canal Zone and Manila Bay in the Philippines.

Rather than being detonated merely by contact (although they could be set to do so), Army minefields were connected to the shore via a series of electrical cables. Main cables from shore went to a junction box, with each junction box typically supporting 19 mines[8]

Of course, establishing an effective controlled minefield involved a fairly large investment in infrastructure ashore, plus the trained personnel and vessels to lay (or “plant”) and operate and maintain the minefield, with other smaller vessels also needed for various tasks, such as to lay cables[9].  The minefield would actually only be planted (using specialist Army-run mine planter vessels[10]) when hostilities are imminent (in the Canal Zone, this took place in 1940) and hence storage and maintenance facilities ashore would also be needed for the mines (with, naturally, a separate magazine to hold the explosives).  It required a complex organisation, with wharves for the “mine planting” ships, tramway tracks to facilitate the movement of the mines from storage to the wharf, and storage for many miles of electrical cable, in addition to other specialised equipment and facilities.  If electricity supplies were not available, power generation facilities would also be needed.

However, the Army’s sea mines did offer a more flexible and proactive defence arrangement for a harbour or channel.  Generally speaking, such controlled minefields could be fired one of three ways – 

  • By command detonation, controlled by a central control (known as the mine casemate).  This control centre also needed communications to its observation stations, as well as plotting tables and plotters to track any enemy and decide which mines to detonate etc.  In addition, for use at night, searchlights would be required to track and illuminate targets;
  • By contact (as with an ordinary mine), where visibility was impaired for some reason; or
  • By delayed contact, where the mine itself served as a sensor, informing the control centre when contact had been made – so that detonation could be ordered or delayed for a few seconds (which could have advantages involving where damage to the ship might be caused).  This method also allowed the mine commander discrimination in his targets, so that, for example, he could ignore a small scouting vessel in favour of a better target.

The state of the Canal Zone defences was summarised by the Commandant of the 15th Naval District to the Chief of Naval Operations (CNO) in Washington on 10 July 1941, in response to a letter of 3 July which had asked if the measures taken by the Army and Navy were adequate to prevent sabotage.  The Commandant said he did not think the measures were adequate and mentioned that protection from the water left much to be desired, with a need for a harbour police, which was not employed due to lack of men and boats (and even if it existed, he said, would not be a sure cure).  He also complained about Army discipline, and said that the transit guards aboard ships passing through the Canal were “wholly ineffective and futile” (despite the Army employing 20-30 officers and 500 men for the task, who were said to be “working hard but to no effect”).[11]

Interestingly, while the harbour defences of the Canal Zone were not tested during World War 2, there was one planned attack that would have bypassed them, another possible attack that might have done so – both involving aircraft, and a third type of attack (actually planned for New York harbour) which would have tested them, and likely found them wanting.  The latter template was offered by a plan using Italian-built two-man midget submarines to attack shipping in the docks in New York.  The Italians had made several successful attacks in the Mediterranean using frogmen and “human torpedoes” – and the midget submarines to be used in New York were more capable.  Preparation and training got underway, but the plan was aborted in 1943 after the intended large Italian submarine mothership, based in Bordeaux, was sunk by the Royal Navy when on trials in the Bay of Biscay[12].

As it was, although German U-boats did attack and sink vessels in the approaches to the Atlantic end of the Canal, they did not venture into the inshore waters themselves.  The defences did not suffer the embarrassment of neighbouring Costa Rica, where a U-Boat entered Port Limon in mid-1942 and sank a merchant ship in the harbour[13].

Ray Todd

Panamá City

Republic of Panamá

19 August 2022


[1]  Developed by the Royal Navy and first tested at the end of World War 1, these used long lengths of cable on the sea floor to detect submarines.  The system was used by the British during World War 2, both in home ports and in various Dominion and Allied countries.  By 1942, the US had adopted the technology: http://indicatorloops.com/loopworks.htm

[2]  These locks are at the Pacific end of the Canal, the Gatun Locks are at the Atlantic end.

[3]  As the name suggest, where a ferry service operated.  This was close to the Pacific entrance to the Canal, and where the Bridge of the Americas (opened in 1962) now lies, linking the North and South America land masses.

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

[5]  http://indicatorloops.com/panama.htm

[6]  http://indicatorloops.com/usnlrs.htm

[7]  Ibid.

[8]  DC current was used to monitor and test the mines, as well as signal to the shore that contact had been made. AC current would then be used to detonate the mine.

[9]  https://xbradtc2.com/tag/coastal-artillery/

[10]  The Army maintained one such mine planter ship in the Canal Zone (although two were used to plant the minefield in the Canal Zone in 1940).  The Army ships are “mine planters”, as opposed to “minelayers”, which are the ships used by the Navy.  Mine planters had to be of a fairly substantial size, despite being purely for coastal use, as they had to be able to carry several mines, plus the equipment (booms etc) to deploy or recover them. 

[11]  https://ncisahistory.org/wp-content/uploads/2019/12/Canal-Zone-Response-to-CNO-on-Preparations-to-Prevent-Sabotage-Jul-10-1941.pdf

[12]  https://www.youtube.com/watch?v=_c0iy2ylz-E

[13]  The U-Boat involved, U-161, was lost with all hands off Bahia, Brazil 3 months later, after an attack by a US Navy patrol bomber.