2022 APG AML/CFT YEARLY TYPOLOGIES REPORT

On 13 August, the FATF-style regional body (FSRB), the Asia-Pacific Group, published a typologies report to share information on regional typologies, including information on money laundering and terrorist financing trends and a compendium of case studies.  The Report includes 236 case studies and observations from 22 APG members and 9 observers, said to be a significant increase from previous years, and reflecting the strong support for the report receives from the APG community of governments and organisations, and its utility to a wide audience globally.  It includes a brief focus chapter on the illicit financial flows (IFF) from illegal, unreported and unregulated fishing (IUU).  It also collates summaries of typologies research projects completed by FATF, other FSRB and APG observer organisations.

http://www.apgml.org/includes/handlers/get-document.ashx?d=d2972f3d-aa22-4b7f-ac9e-848cd26e9461

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PANAMA – READY IN 1939?

PANAMA – READY IN 1939?

If it were not for the Panama Canal, would Panama be anything other than another Central American state, with excellent coffee, bananas and pineapples, but otherwise of little significance.  Yes, the route across the narrow isthmus, and the railway from one side to another, would have been of some use, but would have had nothing less the importance and usefulness of the Canal.

When it achieved independence from Colombia in 1903, with overt US assistance, almost the first thing it did was to give away part of its territory to the possession and control of another country, ceding what became the Canal Zone to the US Government, and with the entire Republic of Panama becoming a protectorate of the US (a situation not changed until the 1936 Treaty amended the situation with effect from 1939[1] – it was only in March 1939 that the US Legation in Panama was upgraded to the status of an Embassy, with a US Ambassador).

The Hay-Bunau-Varilla Treaty of 1903 (negotiated, it should be noted, by a Frenchman and not the Panamanians) granted to the US the use, occupancy and control of what became the Canal Zone, and in perpetuity[2].  This grant was for the land and land under water, for the construction, maintenance, operation, sanitation and protection of the Canal.

The Canal Zone consisted of a strip of land stretching 5 miles either side of the Canal, plus various adjustments, a total area of some 553 square miles (1,430 square kilometres).  Its official status was that of an unincorporated territory of the US.

The Canal saw its first transit in August 1914, just as war was breaking out in Europe, this meaning that it was only officially opened to the free movement of civilian shipping in July 1920.  During World War 1, Panama was an ally of the US, entering the war at the same time as the US in 1917, and seeing even less war-related activity than in World War 2 (the Imperial German Navy being by then bottled up in port).

The 1903 Treaty also extended to US control of the trans-isthmus railway (and its shipping line) and provided that –

“If it should become necessary at any time to employ armed forces for the safety or protection of the Canal, or of the ships that make use of the same, or the railways and auxiliary works, the United States shall have the right, at all times and in its discretion, to use its police and its land and naval forces or to establish fortifications for these purposes”[3]

It might be noted that the 1901 Hay-Pauceforte[4] and the 1903 Hay-Bunau-Varilla Treaties implied, but did not specifically give, the right for the US to fortify the Canal Zone.   Nevertheless, it was obviously important that it have defences, and Article 3 of the 1903 Treaty gave the US all powers, rights, and authority in the Canal Zone, and it took it that there was a right to fortify it.  It certainly was to use this provision as a reason, or pretext, for the extensive defences it was to construct[5].

As with its other US insular possessions[6], following a period of military government, the US Congress passed an Act for the Canal Zone.  This Panama Canal Act[7] provided that the Canal Zone government was to be an independent agency of the US, established by Congress and administered under the supervision of the President by a designated Governor.  This Governor would have formal control and jurisdiction over the Canal Zone and operate it as a civil state (although, in fact, at least until World War 2, the Governor would always be a US Army officer – and that, in the event of war, he ceded most control to the Commanding General in the of the Panama Canal Department, as the US Army command in the Canal Zone was known).  Congress further enacted a statutory Bill of Rights for the Canal Zone, as it also did in its other insular possessions[8].

In 1933, President Roosevelt set out his Good Neighbor Policy with Latin America and, in the same year, at the Seventh Inter-American Conference in Montevideo, the US expressed a qualified acceptance of the principle of non-intervention in other states’ affairs; and in 1936 it was to adopt this principle without reservation.[9]  Following a period of negotiation, the new Hull-Alfaro Treaty between the US and Panama in 1936 addressed many of the latter’s concerns over the terms and use of the 1903 Treaty.  There was also in 1936 a joint statement from President Roosevelt and Panamanian President Harmodio Arias Madrid, stating that US rights in the Canal Zone applied only for the purposes of “maintenance, operation, sanitation, and protection” of the Canal.  The clarification, along with a clear recognition of Panama as a sovereign nation, rather than a US protectorate, was seen as being significant.[10]

Of importance for what was to happen in the lead up to, and during, World War 2 was that the new Treaty was to formally abrogate the 1903 Treaty provisions relating to the US guarantee of the Republic’s independence and the US right of intervention[11].  Instead, it substituted a process of negotiation and the purchase of land outside the Canal Zone in place of the former right of expropriation.

As the Treaty revisions radically altered the special rights enjoyed by the US in Panama, the US Senate (and the US military) was reluctant to accept the changes.  Only after an exchange of interpretative diplomatic notes had permitted the Chairman of the Foreign Relations Committee to advise his colleagues that Panama was willing to permit the US to act unilaterally for the defence of the Canal, did the US Senate finally give its consent on 25 July 1939.[12]

From the opening of the Canal to 1 July 1939, the eve of the outbreak of World War 2 in Europe, some 104,417 ocean­going vessels of over 300 net tons (and 8,199 of less than 300 tons) had passed through the Canal, carrying 499,077,200 cargo-tons of freight; and the total tolls amounted to $453,­046,857.91, on a net capital investment of $509,008,594.38 (which included $128, 991,063 compound interest on construc­tion funds from 1904-20).[13]

In the late 1930s, additional construction had been either completed or planned, including extra water storage and additional locks.  In 1935, the Madden Dam was created to prevent the flooding of the Chagres River, which flows into Gatun Lake – a major part of the Canal, and a man-made lake of 166 square miles (430 square km), formed by damming of the Chagres River and other smaller rivers.  The original idea for a third set of locks was also a part of the plans in hand or recommended in 1939.[14]

With the outbreak of World War 2 in Europe, the initial reaction was to proclaim and maintain the neutrality of the Canal – as had been the case in 1914.  However, there were fears of its safety from sabotage or assault, and the potential dangers it faced appeared much greater than in the first war.   Panama and the US therefore swiftly concluded an Executive Agreement reaffirming the Lansing-Morales Protocol of 1914, concerned with restricting access by belligerent nations’ vessels etc to the Canal Zone or the waters of the Republic.[15]

The Proclamation of Neutrality by President Roosevelt in 1939 was followed by another prescribing regulations concerning the neutral status of the Canal Zone[16], with other orders and proclamations following, so that the situation was soon almost as tightly controlled as during World War 1 in 1917-18 – although initially the regulations only specified Germany, France, Poland, UK, India, Australia and New Zealand[17] as belligerents.[18]

During the late 1930s, in heightened international tensions, the US took steps to improve the security and defences of the Canal.  Sabotage was a major concern.

Until the mid-1930s, except during World War 1, the locks had been guarded by the Canal Zone Police, not to prevent sabotage, but as part of its normal law and order function.  1934 maneuvres saw the use of the Army in the role, when a company of the 14th Infantry Regiment was employed.  This exercise proved the inadequacy of existing safeguards against sabotage and the Governor asked the Commanding General of the Panama Canal Department to place  military gaurds at each set of locks, spillways and powerhouses.

The Military Lock Guard was therefore established under a directive issued on 28 July 1934, with one company from each of the 33rd and 14th Infantry Regiments (with around 100 men from each).  The specific sites named in the directive were the Miraflores Locks and its diesel-electric plant, the Pedro Miguel Locks, the Gatun Locks, and the Madden Dam and hydro-electric plant.

The military shared protection of the facilities with the Canal Zone Police.  The latter was responsible for checking civilians entering, while the military controlling access of military personnel.  The police did not operate between 2300 and 0600, when the locks were not in operation (regular 24-hour operations did not start until the 1960s).  In 1936, the local civilian watchmen used on the Canal were placed under the administration of the Canal Zone Police and Fire Division, and in 1941 they were formally transferred to that Division.  During the war, of course, Army guards were used (supplemented by the Canal Zone Police), but the end of the war in 1945 saw civilian watchmen being reinstated, with a new force having responsibility for lock security, and backed up by the Canal Zone Police[19]

The guard on the locks was supplemented by the Utility Guard.  The number and type of facility included under its protection expanded from 1939, to include such things as filtration plants and, in 1940, transformer substations, the Panama Canal’s Mechanical Division yards at Balboa and Cristobal, the Mount Hope and Balboa (fuel) Tank Farms and even the length of the Panama Railroad.  The Saddle Dams at Madden Lake were also guarded[20].  The guard on the locks was supplemented by the Utility Guard.  The number and type of facility included under its protection expanded from 1939, to include such things as filtration plants and, in 1940, transformer substations, the Mechanical Division yards at Balboa and Cristobal, the Mount Hope and Balboa Tank Farms and even the length of the Panama Railroad.  The Saddle Dams at Madden Lake were also guarded[21].

From 16 February 1941, the Panama Canal Department’s Mobile Force would be given the role of protecting the locks and other facilities.[22]

A report from the commanding general of the Pacific Sector of the Canal Zone in early 1939 once again commented on the inadequacy of security.  The guard was seen as inadequate, in terms of numbers and equipment (e.g. a shortage of automatic weapons).  The military at the time considered that raids mounted from Panamanian territory were a strong possibility.  It should be remembered that, at the time, Panama was far less developed than it is now, with a much smaller population[23], and far more of the country covered by jungle and forest.

Armed guards were placed on ships in transit through the Canal from 1939[24], after a review that year found that protection from potential sabotage attacks was still inadequate, and the Canal authorities at the time considering that the greater risk came from sabotage caused by or from a transiting vessel[25].  Initially, the Canal authorities exempted from the inspection and guard requirements all US flag vessels, foreign passenger liners on regular runs and carrying more than 25 passengers, and British or French cargo ships that were “known to the Canal” and on a regularly scheduled voyage[26].  However, the War Department immediately insisted on the regulations being applied without distinction, and without regard to the “nationality, size or character” of the vessel.  Ships of war “of foreign powers with whom we are on diplomatically friendly relations” were the only exceptions the War Department recognised.  The only discretion the War Department permitted the local commanders was in the size of the armed guard.[27]  After 1940, the rules and procedures were revised, with additional personnel involved and tighter controls imposed and, from 1942, the US Navy took over responsibility for this “Transit Guard”, using Marines[28].

From 21 September 1939, a joint board consisting of an officer from the Panama Canal Department, the Department’s Atlantic and Pacific Sectors and the Canal authorities would meet regularly to discuss security requirements during the expansion of facilities in and around the Canal.

It might be noted that there was no mention of the involvement of Panama’s Policia Nacional or Panamanian armed forces in the foregoing.  The US authorities jealously guarded their rights in and over the Canal Zone, and in any case the US Army had a very low opinion of the fighting ability of any Panamanian forces.  Indeed, US defence plans made only marginal reference to the Panamanians at all.  Panama had possessed no army since 1904 and its police force was not taken seriously by the US as a fighting unit.   In 1942, a US Army estimate judged that the men of the National Police had little confidence in their officers and that “if a battle were to turn against them, the majority would run…”.  The US Army saw the National Police only as an internal security force, and there was no suggestion that they should be trained to participate in Canal defence alongside US troops[29].

To summarise, in 1939, the Canal had improving, but still sorely inadequate, defences (particularly its air defences), security was being tightened amid fears of sabotage, and the US had yet to acquire the additional defence sites outside the Canal Zone that would be essential.  The relationship between the US and Panamanian Governments, which had seen some improvement following the 1936 treaty revisions, had worsened, following the election of a President who had used anti-Americanism as part of his nationalist platform.  The Panamanian people had seen some improvement since the dark days of the early and mid-1930s, when the Great Depression had hit them hard, as money flowed into the Canal Zone to finance the defence improvements and from an increase in military and naval personnel, with greater commercial and employment possibilities.

While, as in 1914, the US, and hence Panama, remained neutral as war broke out in Europe, the potential threats facing the Canal – from both Germany and Japan appeared far greater than those faced in World War 1.

Ray Todd

Panamá City

Republic of Panamá

14 August 2022


[1]  In 1931-32, a nationalist movement allowed Harmodo Arias Madrid to become President, following a coup in 1931, and he visited Washington in 1933, meeting Roosevelt and coming away with a commitment to review the 1903 Treaty.  After 110 meetings during 1934-36, the 1936 Hull-Alfaro Treaty was signed – although, as mentioned, it took until 1939 for the US Senate to finally ratify it.  It had been ratified by the National Assembly of Panama, despite dissenting lawmakers maintaining that one could not trust the Americans to abide by the new commitments.

[2]  https://www.dipublico.org/100531/panama-usa-convention-for-the-construction-of-the-isthmian-ship-canal-1903/  The Hay-Bunau-Varilla treaty contained the same financial terms which had been previously offered to Colombia for use of the territory involved.

[3]  https://www.dipublico.org/100531/panama-usa-convention-for-the-construction-of-the-isthmian-ship-canal-1903/

[4]  This Treaty between the US and Great Britain was an essential legal preliminary to the US building the Canal, as there was a need to override an 1850 agreement between the two countries which had committed them to a jointly-run canal with no fortifications.

[5]  The US Government was to maintain its position that the 1903 Treaty had had the effect of ceding sovereignty over the Canal and Canal Zone to the US.  For example, in 1975, it was emphasised in the Congress that “The Canal Zone is not a ‘leased’ area, as so often misstated in the press and n reference works, but a grant in perpetuity under our full sovereign rights, power and authority and, in fact, constitutionally acquired domain of the United States” (US 94th Congress, 1st Session, 121 CONG. REC. H10417 (1975))

[6] Insular possessions of the US are defined as American territories outside the customs territory of the US, and they now include the US Virgin Islands, Guam, American Samoa, Wake Island, Midway and Johnston Atoll.

[7]  The Panama Canal Act of 24 August 1912 (incorporated into the Canal Zone Code with effect from 19 June 1934).

[8]  https://www.fedbar.org/wp-content/uploads/2016/06/Panama-Canal-Zone-pdf-1.pdf

[9]  http://countrystudies.us/panama/11.htm

[10]  https://apps.dtic.mil/dtic/tr/fulltext/u2/a210486.pdf

[11]  The US military intervened in Panama twice in the period between the wars. In 1021, naval squadrons demonstrated on both sides of the isthmus to bring to an end a war between Panama and Costa Rica over a boundary dispute (the Coto War of 21 February to 5 March). In 1925, strikes and rent riots led to the landing of about 600 US troops to keep order and protect US interests: https://www.marines.mil/Portals/1/Publications/Panama%20Study_2.pdf

[12] In an Exchange of Notes between the US Secretary of State and the Panamanian Ministry in Washington DC of 1 February 1939 it was recognised that the “the holding of manoeuvres or exercises by the armed forces of the United States in territory adjacent to the Canal is an essential measure of preparedness for the protection of the neutrality of the Canal”: (Neutrality, Belligerency, and the Panama Canal by Norman J Padelford, The American Journal of International Law, Vol. 35, No. 1, January 1941).

[13]  https://www.usni.org/magazines/proceedings/1940/october/discussions-comments-and-notes

[14]  https://www.latimes.com/world/mexico-americas/la-fg-panama-canal-timeline-20160622-snap-htmlstory.html

[15]  Neutrality, Belligerency, and the Panama Canal by Norman J Padelford (The American Journal of International Law, Vol. 35, No. 1, January 1941)

[16]  A Proclamation Prescribing Regulations Concerning Neutrality in the Canal Zone, 5 September 1939.

[17]  A later Proclamations of Neutrality by the US made reference to vessels of South Africa, Canada, Norway, Belgium, Netherlands and Italy.

[18]  Neutrality, Belligerency, and the Panama Canal by Norman J Padelford (The American Journal of International Law, Vol. 35, No. 1, January 1941)

[19]  The military was to return to the security role in 1950-52, during hostilities in Korea.

[20]  In November 1941, an exercise involving the Mobile Force demonstrated that a raiding party could attack to Dam, but that it would take an estimated 6,000 lb (2,725 kg) of TNT to rupture the Saddle Dam, which breach would anyway take weeks to drain the Lake.

[21]  In November 1941, an exercise involving the Mobile Force demonstrated that a raiding party could attack to Dam, but that it would take an estimated 6,000 lb (2,725 kg) of TNT to rupture the Saddle Dam, which breach would anyway take weeks to drain the Lake.

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

[23]  Half a million or less, compared to well over 4 million today.

[24]  Supplied by the Army, the guard also included 2 US Navy personnel who oversaw the helm and telegraph engine controls for the engine(s).

[25]  Suggested threats were such a vessel ramming lock gates, sinking itself in the locks or main channel, or dropping explosives, perhaps timed to explode much later, overboard.

[26]  In August and September 1939, about 68% of the ships passing through the Canal were vessels of US, British, French, or Dutch registry.

[27] Lower risk vessels would carry a guard consisting of just 2 soldiers. https://www.ibiblio.org/hyperwar/USA/USA-WH-Guard/USA-WH-Guard-12.html

[28]  According to the Commandant of the 15th Naval District (the US Navy command for the Canal Zone), in a letter to Washington in July 1941, the transit guards on the ships passing through the Canal were “wholly ineffective and futile” (despite the Army employing 20-30 officers and 500 men “working hard but to no effect”): Security and Defense of the Panama Canal 1903-2000 by Charles Morris, Panama Canal Commission: https://original-ufdc.uflib.ufl.edu/AA00047733/00001/6j

[29] Wasting Asset: The U.S. Re-Assessment of the Panama Canal, 1945-1949 by John Major (Journal of Strategic Studies), 2008.

OTHER THINGS YOU MAY HAVE MISSED – AUGUST 14

Some good news, perhaps particularly for the ongoing talks following the recent weeks of protests, as the pace of inflation slowed in Panama in July, with a fall of 1.2% compared to the previous month, which took the year-on-year figure to 3.5%. The largest effect came from an 8.2% drop in the transport group part of the basket of prices used to determine the inflation figure. The figure for the end of 2021 had been 2.6%.

14 August 2022

10 AIRCRAFT BELONGING TO RUSSIAN OWNERS OR CONTROLLED BY THE RUSSIAN FEDERATION REMAIN GROUNDED AT GERMAN AIRFIELDS

On 14 August, Ukrinform reported a Deutsche Welle story saying that they are mostly business jets or aircraft used for charter flights.

https://www.ukrinform.net/rubric-economy/3549955-ten-russian-planes-stuck-in-germany-due-to-sanctions.html

NGO SAYS AUSTRALIAN MINING COMPANY’S MYANMAR SALE ‘POSES MONEY LAUNDERING RISK’

The Mizzima website reported on 14 August that NGO Justice for Myanmar has expressed concern that there is a money laundering risk in Myanmar the airline MAI’s transaction with an Australian mining company – Australian Stock Exchange-listed mining company Mallee Resources Limited (ASX:MYL), formerly Myanmar Metals.

https://www.mizzima.com/article/ngo-says-australian-mining-companys-myanmar-sale-poses-money-laundering-risk

US: REPUBLICAN SENATORS REQUESTING INFORMATION ON DEA STRATEGY TO FIGHT DRUG NETWORKS, CARTELS AND NARCOTICS SMUGGLING

On 12 August, Homeland Preparedness News reported that a group of Republican senators have requested details on the DEA moves to crack down on illegal narcotics and their suppliers.  Citing the ongoing opioid crisis, the senators blamed a mix of issues at the southern border, social network-fuelled sales and precursor chemicals from China.

https://homelandprepnews.com/stories/78017-republican-senators-looking-into-dea-strategy-to-fight-drug-networks-cartels-and-narcotics-smuggling/

UK: FAQ ON THE ECONOMIC CRIME ACT

On 12 August, CMS Law provided a set of FAQ on the Economic Crime (Transparency and Enforcement) Act 2022, which provides for the setting up at Companies House of a register for overseas entities that own certain property registered at the Land Registry or Land Register of Scotland.  The Act affects the UK, but the FAQ relate to England, Scotland and Wales only. 

https://www.cms-lawnow.com/-/media/lawnow/pdfs/roaq/faqs-on-the-impact-on-english-scottish-and-welsh-real-estate-of-the-economic-crime-act.pdf?rev=e64fa441-8b63-46f0-a36b-87b1aa8ac5da&la=en&hash=20A74BE6B4836B4081CC8B4898B3682A36DD1A8F

ROBERT BROCKMAN: BILLIONAIRE ACCUSED OF USING BERMUDA TRUST FOR TAX EVASION DIES

On 12 August, the Royal Gazette reported that Robert Brockman, 81, a billionaire charged with tax evasion and money laundering through a web of offshore entities in Bermuda and Nevis has died.  He was indicted in 2020 in what has been called the largest tax evasion case against an individual in the US.

https://www.royalgazette.com/court/news/article/20220811/billionaire-accused-of-using-bermuda-trust-for-tax-evasion-dies/

BANGLADESH: THE OVERLOOKED LINK BETWEEN FOREIGN CURRENCY RESERVE CRISIS AND MONEY LAUNDERING

On 14 August, The Business Standard published an article which argues that the decrease in export income against import expenditure is regarded as the main reason for the currency reserve crisis – but one of the most important causes behind this is money laundering that’s still prevalent in the country.  The money laundering referred to is largely trade-based money laundering.

https://www.tbsnews.net/thoughts/overlooked-link-between-foreign-currency-reserve-crisis-and-money-laundering-475230

INDIA REGULATOR PROBES AT LEAST 10 CRYPTO EXCHANGES ON MONEY LAUNDERING ALLEGATIONS

On 10 August, Coindesk reported that India’s Enforcement Directorate (ED) is investigating at least 10 crypto exchanges for allegedly assisting foreign companies launder money via crypto, according to the Economic Times.

https://www.coindesk.com/policy/2022/08/11/indias-ed-probes-at-least-10-crypto-exchanges-on-money-laundering-allegations-report/

US: A LOOK AT THE CHIPS-RELATED PORTIONS OF CHIPS+ ACT

On 9 August, an article from CSIS considers the CHIPS and Science Act of 2022, known colloquially as CHIPS+.  It concentrates on the parts dealing with semiconductors, saying that, while enjoying broad bipartisan support, the CHIPS provisions of the legislation stipulate $52 billion toward renewing the heavily outsourced US semiconductor manufacturing sector and bolstering US chip research and development activities.  The provisions seek to lessen US reliance on foreign manufacturing sources, while investing in a local workforce and spurring innovation at home.  It reveals that the US is home to just 12% of the world’s semiconductor manufacturing capacity (down from roughly 40%t in 1990).  It also points out, while the funding for semiconductor-related incentives appropriated by Division A of the CHIPS and Science Act has received significant media coverage, Division B authorizes around $200 billion in funding to support the US science and innovation infrastructure.

https://www.csis.org/analysis/look-chips-related-portions-chips

ZIMBABWE: 97 COMPANIES (72 IN REAL ESTATE) FINED OVER PARTICIPATION IN OR AIDING ILLICIT TRANSACTIONS

On 14 August, Pindula reported that 97 companies have been fined as much as $300 000 by the FIU for offences including neglecting to undertake money laundering assessment risks.  Those affected come under the designated non-financial businesses and professions (DNFBP) heading and include real estate agents (72 of them), corporate trusts, accounting and auditing firms, law firms, car dealers and casino operators.  Dealers in precious stones and precious metals are said to make up the second-largest category.

https://news.pindula.co.zw/2022/08/14/97-companies-fined-as-much-as-300-000-over-participation-in-or-aiding-illicit-transactions/

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JERSEY: BANK FINED £500,000 FOR AML/CFT BREACH

On 14 August, the Jersey Evening Post reported that Lloyds Bank Corporate Markets Jersey has been fined almost half-a-million pounds for breaching the Island’s financial services regulatory requirements.  Jersey FSC said that LBCM failed to adequately identify the correspondent banking relationship and to apply appropriate controls in relation to AML/CFT systems.  The relationship was with an overseas incorporated bank and operated between 2006 and October 2021.

https://jerseyeveningpost.com/news/2022/08/14/bank-fined-500k-for-regulatory-breach/

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PANAMA – THE VITAL BACKWATER

PANAMA – THE VITAL BACKWATER

One thing that everyone seemed to agree upon in the 1930s was the vital importance of the Panama Canal to the defence of the United States.  In its isolation, the US, protected by the vast Atlantic Ocean and the even larger Pacific Ocean, with a friendly neighbour to the north and no threatening ones to the south, the US Navy could be relied upon to keep any would-be enemy at bay.  The Canal allowed the Navy to redeploy its fleets from one coast to the other more easily and quickly, avoiding the long voyage around Cape Horn.  Without it there was the risk of the US Navy being outgunned by an opponent and unable to bolster its forces using vessels from the other ocean

Even by the 1930s, aviation was not sufficiently developed to consider an airborne assault on the Continental USA – either by bombing or by aircraft carrying troops, so any attack would have to be from the sea.  At worst, the Navy could hold any belligerent off so as to give the relatively small US Army time to organise and grow.

For this reason, during the period between the wars when defence budgets were thin, the Navy did best.  Where funds went to the Army, much of this went into coastal defences, for which the Army was responsible.  The Army would protect the harbours and bases while the Navy protected the country.

The Canal Zone in Panama, garrisoned and protected by Army, was regarded as having probably the best defences of any US territory or possession.  This was seen as essential, not just because it facilitated the movement of the US fleet from one side of the Continental US to the other, but also due to the Canal’s importance in US and global trade. 

In the late 1930s, as the threat of war from either Germany or Japan became more obvious, there were urgent attempts to improve and reinforce the defences in the Canal Zone.  In 1939, these still relied heavily on shore-based long-range artillery in coastal batteries, much of which was inadequately protected against enemy air attack.  Originally put in place during World War 1, the shore batteries were designed to deter enemy warships from getting close enough to bombard the Zone, or to land troops.

Air defences were recognised as being insufficient, despite the supply of additional, and more modern, fighter aircraft, with a lack of radar, and a shortage of suitable long-range patrol aircraft to detect an approaching enemy force at distance.  Furthermore, defences were concentrated in the narrow Canal Zone, for most of its length just 10 miles wide, seemingly leaving the remainder of the Republic of Panama open to being used as a route or base for any attacker.

As was also the case at Pearl Harbor, in the years immediately before the outbreak of war in Europe, as well as in the months following, sabotage was seen as perhaps the greatest risk.  This could come from enemy agents already in the country, or infiltrated from the sea, or from vessels passing through the Canal carrying saboteurs or explosives aboard them.

Several of the Latin American countries were thought (or known) to harbour pro-German tendencies – and even Panama’s own President, who took office in 1940, had nationalist policies, had spent time in Germany and was thought to be at least ambivalent in his attitude to that country.  It was feared that an enemy could use a base in a nearby country as a base to mount such an air attack – with there being a heavy German involvement in the air services of several South American states, including neighbouring Colombia.  There is some evidence of German preparations in Colombia that could have facilitated such an attack.

Furthermore, in the 1930s, the Japanese community effectively ran the fishing industry in Panama, and there were some lurid tales published about spying activities undertaken by boats of the fishing fleet.  There was, in fact, some basis for these tales.

In exercises during the 1930s, the US Navy had shown that a carrier-based force could successfully mount an attack on the Canal – even when the defenders knew that the attack was coming. 

Of course, even by 1939-40, Germany did not have a large naval fleet, with no aircraft carrier at the time (although one was laid down in 1936, largely completed, with construction abandoned in 1940, remaining unfinished[1]), and was probably not capable of launching a sea-based attack on the Canal – especially if it and its Italian ally (which had a more substantial fleet) had to also cope with the French and British navies.  However, Japan did have such a fleet, and fears of a conflict with Japan grew steadily through the 1930s.

While the distances involved in any Japanese attack were considerably greater than one from the west (and far greater than that involved in the audacious attack on Pearl Harbor), the approaches to the Canal through the Pacific were seen to be more open, lacking the screen of islands that was present in the more confined Caribbean.  Hence, it was conceivable that any attacking fleet could close more easily without detection.  Of course, this was what happened when the Japanese attacked Pearl Harbor, although, as said, the distances involved in that attack, though considerable, were far less than the distances involved in any attack on the Canal.

Notwithstanding the “Good Neighbor” policy adopted by the Roosevelt Administration towards Latin America in the 1930s, and some improvement in relations between the US Government and the Panamanian Government following the 1936 revisions of the 1903 Treaty arrangements involving the Canal (although it took until 1939 for the US Senate to finally ratify the amendments – the US Army being opposed to the changes), there remained the fear that the Canal could become trapped in a surrounding hostile environment in the event of a war.  The large numbers of civilians and dependents in the Canal Zone (not to mention the servicemen) could even, it was feared, become hostages should the Canal Zone be overrun.  The likelihood of there being large numbers of American prisoners or hostages was said to have loomed large in the minds of decision makers in Washington[2] (and, in fact, in 1941, an evacuation of non-essential civilians took place[3]).

The Canal Zone, it has to be remembered, was only a narrow sliver of territory; extending roughly 5 miles each side of the centreline of the Canal, and with the isthmus through which it cut itself only around 40-50 miles wide.  It was recognised that any effective defence of the Canal and Canal Zone would require bases and deployment outside the Zone itself and, at least until the 1936 Treaty revisions, the US had always taken the view that this could be done as and when necessary, and under the 1903 Treaty additional territory could be added to the Zone if required for the operation or security of the Canal.  The new agreement required cooperation between the two countries, rather than granting the US a peremptory right of acquisition[4].

However, when war did come, and the expansion of defences outside the Canal Zone became an imperative, it proved more problematical and, eventually, it needed the Panamanian President to be removed, in an internal coup which the US did nothing to prevent or oppose, to pave the way for the agreement on the necessary new bases in 1942.  This provided for the areas involved to be occupied by US forces for a year following the end of hostilities[5].

One of the results of pre-war diplomatic moves by the US, intended to counteract any potential Axis (particularly German) influence or sympathies in Latin America, was the Declaration of Panama of September 1939, which had seen Central American states (a number of which, including Panama, had leaderships with some pro-German sympathies) align with the US in the creation of a maritime security zone (the Pan-American Security Zone)[6].  An unstated element of the Declaration was a willingness to accept US leadership in the defence of the region.[7].  As it was, this led directly to the establishment of the Neutrality Patrol and restricted German U-boat activity in much of the western Atlantic Ocean.

The Declaration of Panama confirmed the neutrality of the participating states, banned belligerent nations’ submarines from entering their ports, demanded the cessation of subversive activities within their countries, and announced the formation of a maritime security zone which was to extend over 300 nautical miles (560 km) on either side of the Americas (except for Canada and the colonies and possessions of European states) – this area was subsequently to be policed by the US Navy Neutrality Patrol. 

However, Panama was absent from bilateral military staff discussions, it being suggested that this was because it would deal directly with the Commanding General of the Panama Canal Department, the Army command in the Canal Zone[8].

The greatest irony was to be that the Canal suffered no real direct threat at all during the years 1939-45 – if one discounts activities of the U-boats in the Caribbean[9] and, even from as early as 1943, defences and troop numbers were to be run down.  For example, some of the coastal artillery was effectively stood down and some parts of the defences removed in 1943-44. 

There was a serious German U-boat campaign in the Caribbean, and the Japanese Navy did hatch a plan to mount an air attack on the Canal using aircraft launched from submarines (the submarines and aircraft were built, but came too late in the war for the operation to take place), but for the troops actually stationed in Panama and the Canal Zone (as opposed to sailors and aircrew, who did encounter dangers in and over the surrounding seas) the greatest risk would turn out to be disease and illness.

The Canal’s greatest single importance from a US Navy perspective, that of being able to transfer parts of the US Navy from one side of the country to the other, was to be in large part negated by, firstly, the Two Ocean Act of 1940 and the resulting large-scale expansion of the Navy and, secondly, the fact that some of the newer and larger battleships and aircraft carriers built or planned would be unable to use the Canal anyway.  These factors contributed to the so-called Third Locks project, to make the required expansion of the Canal. being shelved).

Furthermore, a study undertaken during the war showed that, at least in theory, the railway in Panama, which also extended across the isthmus and, in one form or another, had been operating since the middle of the 19th Century, could have handled the cargo handled by the Canal (albeit with greater difficulty, delay and cost), with an oil pipeline having already removed the need for tankers to make a full transit of the Canal.

Hence, by at least 1944, what had been seen as recently as 1941 as a vital component in the Allied war effort had become to a degree a backwater.  Of course, the traffic using the Canal was of enormous importance, and would continue to be so, and even in 1945 many thousands of troops were being transferred to the Pacific theatre – until the war came to a sudden end in August.  However, in terms of naval or military actions it turned out to be one of the quietest of the world’s war zones.

This has meant that, in modern day Panama, and unlike in Europe, and with the US forces having long departed, there appears to be little or no knowledge, nor indeed interest, in what happened during World War 2. 

Ray Todd

Panamá City, Republic of Panamá

13 August 2022


[1]  The incomplete vessel was scuttled in 1945, recovered by the Soviets, only to hit a mine on its voyage

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

[3]  Which, incidentally, had an unfortunate effect on security involving censorship efforts – see the Chapter on the Canal Post Office and wartime censorship.

[4]  In order to ensure the US Senate ratified the Treaty, in February 1939, the Panamanian Government made two concessions: that the US Army could carry out manoeuvres in Panamanian territory and that it could take unilateral defence measures to protect the Canal if there was not enough time to consult with the Panamanian Government. 

[5]  An attempt in 1947 to extend use of many of the sites postwar led to protests and a political crisis in Panama.

[6]  For a map showing the maritime security zone see: http://images.library.wisc.edu/FRUS/EFacs/1939v05/reference/frus.frus1939v05.i0004.pdf#page=21

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

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

[9]  It did not even suffer the embarrassment that Costa Rica did, when a U-boat attacked shipping actually inside one of its harbours.

OTHER THINGS YOU MAY HAVE MISSED – AUGUST 13

After the Decree was signed providing for a 30% reduction in the price of 170 medicines, the National Union of Pharmacy Owners (Unprofa) has threatened that 450 small and medium size pharmacies might close their doors in response, from 15 August. A spokesman said that at no time were they consulted about the action taken by the Government regarding the price of medicines and said that, if the discount is maintained, it will be the end of many small and medium-sized pharmacies.

Meanwhile, the health ministry has confirmed the third case of monkeypox. The patient is reported to have been in contact with a foreigner.

13 August 2022

DRAFT CONVENTION ON THE EFFECT OF JUDICIAL SALES OF VESSELS

On 21 July, the UK P+I Club reported that the United Nations Commission on International Trade Law (UNCITRAL) approved on 30 June a draft convention on the effect of judicial sales.  The Draft Convention will now be put to the UN General Assembly to consider signature.  The object of the draft Convention is to achieve international recognition by one country of orders by the courts of another country for the judicial sale of a vessel.  It is said that problems often arise in the deleting and re-registration of vessels, and in other situations where judicial sale orders made in one country were not recognised in other countries. 

https://www.ukpandi.com/news-and-resources/legal-content/legal-articles/draft-convention-on-the-effect-of-judicial-sales-of-vessels-approved-by-uncitral/

RUSSIA IS SCOURING THE GLOBE FOR WEAPONS TO USE AGAINST UKRAINE

On 9 August, Bloomberg reported that that a merchant ship under US sanctions travelled from Syria to Russia late in July, said to be carrying military vehicles to bolster the war in Ukraine.  This is said to underline Russian efforts to tap resources for the invasion that’s now in its sixth month, as supply lines strain under the pressure of Europe’s largest military campaign since World War 2. 

https://www.bloomberg.com/news/articles/2022-08-09/russia-is-shopping-around-the-world-for-military-weapons-for-its-war-in-ukraine#xj4y7vzkg

THE AFRICAN CONTINENTAL FREE TRADE AREA (AFCFTA) BUSINESS INDEX

On 11 August, a post from the Brookings Institution said that to better understand how African businesses are approaching the landmark agreement that is the AfCFTA and, more importantly, how the AfCFTA can best support those businesses through trade, the UN Economic Commission for Africa (ECA) created the AfCFTA Country Business Index (ACBI).  This enables relevant policymakers to identify bottlenecks in intra-African trade at a country level, which informs the barriers impeding effective AfCFTA implementation from the perspective of the private sector.  It aims to inform African policymakers on the trade barriers and guide AfCFTA national strategies.  The ACBI aims to ensure that the African Continental Free Trade Area delivers on its projected sustainable development promises, especially for women-owned and small- and medium-sized businesses (SME).  The post goes on to discuss the ACBI methodology. 

https://www.brookings.edu/blog/africa-in-focus/2022/08/11/the-afcfta-country-business-index-understanding-private-sector-involvement-in-the-afcfta

The ACBI, published in February, contains summary results for Angola, Côte d’Ivoire, Gabon, Kenya, Namibia, Nigeria, and South Africa. 

https://repository.uneca.org/bitstream/handle/10855/47540/b12000322.pdf?sequence=1&isAllowed=y

BANGLADESH; $8 BILLION BEING LAUNDERED USING GOLD EACH YEAR

On 13 August, United News of Bangladesh reported claims by the Bangladesh Jewellers Association that this sum is being laundered each year using gold smuggling, and is calling for tough action to address the problem.  It claims that Bangladesh is used as a transit country to neighbouring ones.

https://unb.com.bd/category/bangladesh/tk-73000-cr-being-laundered-through-gold-smuggling-annually-bajus/98753

LEBANESE ART DEALER WHO EXPOSED SMUGGLING ACCUSED OF ARTEFACT THEFT

On 13 August, The Times reported that George Lofti, 81, a Lebanese antiques collector who helped to expose the theft of a golden Egyptian coffin has been accused of smuggling millions of dollars of looted artefacts into the US.  An arrest warrant has been issued after he allegedly tried to use his connections to give his stolen goods a sheen of legitimacy, according to law enforcement agents.

https://www.thetimes.co.uk/article/art-dealer-who-exposed-smuggling-accused-of-artefact-theft-29zvk8xrk

CANADA: HONORARY CONSUL FOR UKRAINE ACCUSED OF PROFESSIONAL MISCONDUCT OVER LAND DEALS LINKED TO DRUG TRAFFICKER

On 12 August, Tri-City News reported that a Vancouver lawyer who serves as honorary consul for Ukraine in British Columbia committed professional misconduct related to 15 real estate deals referred to him by a convicted drug trafficker.  It is said that Lubomir (Mir) Ihor Huculak failed to make reasonable inquiries about the legitimacy of the deals.

https://www.tricitynews.com/bc-news/ukraine-honourary-consul-should-have-seen-money-laundering-red-flags-5692625

SHAREHOLDERS ASKING FOR HUMAN RIGHTS IMPACT ASSESSMENT REPORTS MAY OFFER WAYS TO PREVENT WEAPONS HEADING TO CONFLICTS

On 10 August, a Commentary on the Inkstick website suggested that recently 2 large US armaments suppliers were pressed to adopt shareholder proposals highlighting a need for due diligence and human rights impact assessment procedures to better address the damage their weapons cause.  Though the moves failed they attracted considerable support, signalling that the approach offers promise to prevent — or at least make more difficult — the funnelling of weapons to irresponsible actors or those that harm civilians.

https://inkstickmedia.com/when-shareholders-ask-weapons-manufacturers-questions

OPERATION STARTS TO RELOAD CONFISCATED OIL ONTO IRANIAN TANKER IN GREECE

On 12 August, Lloyds List reported that the oil was seized by the US from the Lana (ex-Pegas) in April, but was ordered by Greek authorities to be returned after Iran hijacked 2 Greek tankers in retaliation.  The vessel was sanctioned by the US in February for ties to a state-owned Russian bank, not for carrying Iranian crude.  The tanker was initially Russian-flagged and had 19 Russian crew members on board at the time it was seized, and was among 5 vessels designated by the US on 22 February under sanctions against Promsvyazbank.  The tanker, which was reportedly carrying 115,000 tonnes of Iranian oil when it was seized, has been flying the Iranian flag since 1 May.

https://lloydslist.maritimeintelligence.informa.com/LL1141923/Operation-starts-to-reload-confiscated-oil-onto-Iranian-tanker-in-Greece

URUGUAY BECOMING ARMS TRAFFICKING HUB BETWEEN ARGENTINA AND BRAZIL

On 12 August, Insight Crime reported that Uruguay has been making regular seizures of weapons smuggled in from Argentina, indicating that the country is becoming a preferred transit hub for arms traffickers.  While a link to Brazil was not mentioned in the most recent case, that country is a frequent destination for arms trafficked through Uruguay.  It says that Argentine gun runners have long supplied Brazilian gangs, primarily via Paraguay.

https://insightcrime.org/news/uruguay-arms-trafficking-destination/

UK: PUBLIC SECTOR FRAUD AUTHORITY LAUNCHED WITH £180 MILLION TARGET FOR FIRST YEAR

On 8 August, Local Government Lawyer reported that the UK Government has launched the Public Sector Fraud Authority and set it a target of £180 million of identified fraud benefits in its first year.  It is said that the authority will be made up of counter-fraud and data experts, “using best-in-class tools and advanced analytics to help departments and public bodies protect public money”.  The Cabinet Office said the authority, backed by £25 million of new funding, would modernise the Government’s counter fraud response.

https://www.localgovernmentlawyer.co.uk/litigation-and-enforcement/400-litigation-news/51302-public-sector-fraud-authority-launched-with-180m-target-for-first-year

UNCTAD SPELLS OUT ACTIONS TO CURB CRYPTOCURRENCIES IN DEVELOPING COUNTRIES

On 10 August, the UN Committee on Trade and Development published an article saying that it had released 3 policy briefs that delve into these risks and costs, including the threats cryptocurrencies bring to financial stability, domestic resource mobilisation and the security of monetary systems.  One examines the reasons for the rapid uptake of cryptocurrencies in developing countries, including facilitation of remittances and as a hedge against currency and inflation risks.  Another one focuses on the implications of cryptocurrencies for the stability and security of monetary systems, and to financial stability.  The third discusses how cryptocurrencies have become a new channel undermining domestic resource mobilisation in developing countries.  UNCTAD urges authorities to take a number of actions to curb the expansion of cryptocurrencies in developing countries.

https://unctad.org/news/unctad-spells-out-actions-curb-cryptocurrencies-developing-countries

CEO OF SECURITY COMPANY PLEADS GUILTY TO INTERNATIONAL BOILER ROOM FRAUD SCHEME

A news release from US DoJ on 10 August advised that ROGER RALSTON, the CEO of DirectView Holdings Inc, a Florida-based video surveillance and security company, had pleaded guilty to one count of conspiracy to commit wire fraud for defrauding elderly victims in connection with the fraudulent sale of stock and fake carbon credits as part of an international telemarketing scheme that caused nearly $16 millionin losses, 2009-15.  

https://www.justice.gov/usao-sdny/pr/ceo-security-company-pleads-guilty-international-boiler-room-fraud-scheme

US CRIMINAL JUSTICE DATA: HUMAN TRAFFICKING

On 10 August, the Congressional Research Service published a briefing paper saying that, while some estimates of the incidence of human trafficking exist, comprehensive data on human trafficking within the US are not available. 

https://crsreports.congress.gov/product/pdf/R/R47211

US GUN CONTROL: STRAW PURCHASE AND GUN TRAFFICKING PROVISIONS

On 9 August, the Congressional Research Service published a briefing paper concerned with straw purchases, which are illegal firearms transactions in which a person serves as a middleman by posing as the transferee, but is actually acquiring the firearm for another person.  It says that straw purchases are unlawful under 2 existing laws.  However, prosecutions under those provisions have sometimes been characterised as mere paperwork violations and, hence, inadequate in terms of deterring unlawful gun trafficking.  It explains that gun trafficking entails the movement or diversion of firearms from legal to illegal channels of commerce in violation of the Gun Control Act 1968 (GCA).

https://crsreports.congress.gov/product/pdf/IF/IF12190

UK: NOTICE TO IMPORTERS 2952: BELARUS IMPORT SANCTIONS

On 9 August, the Department for International Trade issued an updated Notice about import prohibitions in force on certain goods originating or consigned from Belarus imported into the UK, including Northern Ireland.

https://www.gov.uk/government/publications/notice-to-importers-2952-belarus-import-sanctions#full-publication-update-history

OMAN: 14,000 BAGS OF CHEWING TOBACCO SEIZED

On 8 August, TJI reported that the Consumer Protection Authority (CPA) has taken legal action against an expatriate found to be in possession of over 14,000 bags of chewing tobacco.  The circulation of chewing tobacco is banned in Oman.

https://www.tobaccojournal.com/news/14000-bags-of-chewing-tobacco-seized/

NORTH KOREA’S INCREASING USE OF CRYPTO HEISTS TO FUND NUKES WORRIES THE US

On 9 August, an article in The Hill said that the Biden administration’s deputy national security adviser for cyber and emerging technology said this recently during an event hosted by the Center for a New American Security (CNAS).  She referred to taking multiple steps to counter Pyongyang’s cyber threats, including imposing sanctions against criminal groups and seizing stolen digital assets.  A UN report this year found that between 2020 and 2021, North Korean-backed hackers stole more than $50 million in digital assets to fund the country’s missile programme.  Although North Korea has shifted most of its cyberattack focus to the financial industry to generate income, it still uses hacks to target government institutions, especially ones in South Korea.

https://thehill.com/policy/technology/3590126-north-koreas-increasing-use-of-crypto-heists-to-fund-nukes-worries-us/

RUSSIA NEEDS MORE COMMERCIAL DRONE PILOTS FOR ITS WAR IN UKRAINE

An article in Vice on 10 August referred to an event which aims to bring together drone operators from across the country and formalize a combat training system for commercial drone pilots to help Russia’s war in Ukraine.  Commercial drones have become an important part of modern war.  IS pioneered bombing with commercial drones, and both Russia and Ukraine have been using quad-copters and other small-scale drones to spy on enemy lines and drop small munitions.  But Russia has had a hard time of late finding commercial drones to use in its war effort.  The other problem is a lack of pilots and enthusiasts. Russia’s drone laws are complicated and cities like Moscow have closed airspaces that require a special permit to fly.

https://www.vice.com/en/article/epzv4w/russia-commercial-drone-pilots-ukraine-war

SAUDI ARABIA: EXPATRIATE CONVICTED OF MONEY LAUNDERING FOR ATTEMPTING TO SMUGGLE $297,000 OUT OF COUNTRY 

On 13 August, Riyadh Daily reported that an expatriate of African nationality attempted to remove the funds via the ing Abdulaziz International Airport.  A court ordered confiscation of the seized amounts, imprisonment for 2 years, and his deportation from the country after serving his sentence.  The Public Prosecution Office submitted an objection to appeal the verdict, calling for a stiffer penalty for the offender.

http://alriyadhdaily.com/article/3eae9493e6374fb2bf2a0fdebe6cc2ed

BANGLADESH BANK SAYS BFIU REPEATEDLY SOUGHT INFO ON MONEY LAUNDERERS FROM SWISS BANKS

On 13 August, the Daily Star reported that BFIU had repeatedly sought information from different countries on various issues, including illegal money transactions from Bangladesh.  All kinds of initiatives were taken to collect information about money laundering from the country, a spokesman of the Bank said, adding that BFIU, the country’s financial intelligence agency, has also sent several letters to Swiss banks.

https://www.thedailystar.net/business/economy/news/bangladesh-bank-says-bfiu-repeatedly-sought-info-money-launderers-swiss-banks-3094216

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MYANMAR: THE TOXIC RARE EARTH MINING INDUSTRY AT THE HEART OF THE GLOBAL GREEN ENERGY TRANSITION

On 9 August, a report from Global Witness says that the processes used to extract heavy rare earths are wreaking an environmental toll to meet Chinese and global demand.  A 6-month investigation followed the outsourcing of the toxic industry across the Chinese border into Myanmar.  It says that a mountainous area, the Kachin Special Region 1, has become the main source, despite the mining being illegal.  Among the claims is that entities are registered as domestic businesses, but act as fronts for illegal Chinese investment and take a cut of the profits.

https://www.globalwitness.org/en/campaigns/natural-resource-governance/myanmars-poisoned-mountains/

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DETECTING AND REPORTING THE ILLICIT FINANCIAL FLOWS TIED TO ORGANIZED THEFT GROUPS (OTG) AND ORGANIZED RETAIL CRIME (ORC)

This White Paper from ACAMS in May says that high-profile “smash-n-grab” robberies, and nationwide cases involving major retailers in Chicago, Los Angeles, and San Francisco have made headlines; and recent hearings by the US Congress, that discuss and debate proposed legislation, target the ability of criminal organisations to resell the stolen goods online with relative anonymity.  ORC is a low-risk, high-reward business line for transnational criminal organisations’ portfolios that presents a significant financial and public safety risk.  However, criminal organisations need to launder the nearly $70 billion of illicit proceeds gained from ORC activities annually, and financial institutions should ensure proper controls are in place to detect and report illicit activities tied to or involving ORC.

https://www.acams.org/en/media/document/29436

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PARAGUAY: VICE-PRESIDENT VELAZQUEZ RESIGNS AFTER US SANCTIONS

On 12 August, Deutsche Welle reported that Paraguay’s Vice-President, Hugo Velazquez said he would offer his resignation to his party and retire from the presidential race, following the US decision to blacklist him from entry over “significant” acts of corruption.   The US alleges Velazquez’s close associate Juan Carlos Duarte offered a bribe to a public official in Paraguay with the intent to “obstruct an investigation that threatened the Vice President and his financial interests”; and Duarte is also accused of breach of trust in his capacity as a legal advisor to the Yacyreta Bi-National Entity hydroelectric plant, a joint venture between Paraguay and Argentina.  The US also blacklisted the immediate family members of both men.  Duarte also said he would resign and added that he planned to cooperate in the investigation.

https://www.dw.com/en/paraguay-vice-president-velazquez-resigns-after-us-sanctions/a-62794445

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EU RUSSIA SANCTIONS – CLARIFICATION ON THE CARRIAGE OF CERTAIN CARGOES INCLUDING COAL AND FERTILISERS

On 12 August, the UK P+I Club issued a Circular advising that, on 10 August, the EU had published updated FAQ clarifying the application of provisions relating to the carriage of certain cargoes from Russia, including coal and other solid fossil fuels as well as certain types of fertiliser.  These clarifications are said to have a significant impact on the carriage of these commodities by EU entities and the provision of insurance for carriage to any entity regardless of their domicile.  It notes that the sanctions provisions were subject to a wind-down period in any event until 10 July and 10 August for sale contracts concluded before 9 April.  It says that the involvement of an EU entity in the carriage of Russian fertilisers and coal or other solid fossil fuels to any destination whatsoever and whether inside or outside the EU would be in breach of EU sanctions; and that the sanctions prohibitions include insurance and reinsurance services and prevent any entity subject to the jurisdiction of the EU from providing insurance and reinsurance for the carriage of Russian fertilisers and coal and other solid fossil fuel cargoes regardless of destination. 

https://www.ukpandi.com/news-and-resources/circulars/2022/circular-09-22-eu-sanctions-clarification-published-on-the-carriage-of-certain-russian-cargoes-including-coal-and-fertilisers/

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