Just to mention that in the news today it was reported that the Colón Free Zone (CFZ), the largest free zone in the Americas, has reported a turnover of $12.398 billion for the first 7 months of the year. This is apparently an increase of 20% over pre-Covid 2019.
In more good news (I think), the inflation rate, which was over 6% only a few weeks ago, is now said to only around 2.1% – due, it seems to fuel and other subsidies introduced recently.
22 SEPTEMBER 2022
UK: NATIONAL CRIME AGENCY CONFIRMS THAT LAWYERS WERE AMONGST THOSE ARRESTED IN A SANCTIONS-EVASION CRACKDOWN
In its Financial Crime Time newsletter of 20 September, law firm RPC reported that at least 10 individuals have been arrested on suspicion of assisting others to evade sanctions. The arrests made are said to range from lawyers and solicitors through to those who are registered with the security industry association, and to include a variety of sectors, from private schools to estate agents to auction houses to solicitors.
UK: MORE THAN 16,000 BUSINESSES THAT RECEIVED GOVERNMENT-BACKED COVID-19 BOUNCE BACK LOANS (BBLS) HAVE GONE BUST WITHOUT REPAYING THE MONEY
Also in the Financial Crime Time newsletter of 20 September, RPC reports a Freedom of Information request and a potential cost to the taxpayer of £500 million. With to date, 260 directors having been disqualified with their companies still having loans outstanding, the prospect of the government being able to successfully recover these loans is slim. Despite this, the Insolvency Service has only brought 1 prosecution to date – meanwhile, another entry on the newsletter warns of planned cuts to law enforcement in the UK.
HOW TO MITIGATE AGAINST A FORCE MAJEURE EVENT
On 20 September, HFW reported that the Russian invasion of Ukraine has turned the spotlight onto 2 particular types of clause in commodities contracts: sanctions and force majeure, and that a large number of affected commercial parties triggered the force majeure clauses in their contracts. A risk is that English courts and arbitration tribunals will interpret such clauses strictly and narrowly, against the party seeking to rely on them. In English law, a party affected by a force majeure event generally has an obligation to mitigate the effect of that event. Where the obligation begins and ends, however, has proved difficult to judge for commercial parties. It says that a recent decision of the Commercial Court (unrelated to the Ukraine war) has attracted particular interest because it required first the arbitral tribunal and then the Commercial Court to interpret a force majeure provision in light of the application of sanctions, and offers some guidance on mitigation.
GREENWASHING AND THE LAW IN THE UK
On 21 September, an article from Stewarts examined the existing regulatory landscape in the UK. It notes that there is currently no specific anti-greenwashing legislation in the UK, and that consequently there is currently no legal definition of greenwashing in England and Wales. However, businesses falsely advertising products as ‘green’ or sustainable may be caught by existing laws including for misrepresentation or consumer protection laws which prevent false advertising.
SWITZERLAND: ADDITIONAL TRANSPARENCY OBLIGATIONS FROM OF 1 JANUARY
On 20 September, an article from Walder Wyss Ltd was concerned with new transparency requirements for “associations” (vereine) being introduced from 1 January. It notes that certain charitable or non-profit associations will now be subject to mandatory registration in the Commercial Register. Additionally, all associations subject to registration are obliged to keep a register of members and must be able to be represented by a person domiciled in Switzerland – although an 18-month transition period applies.
COLOMBIA: THE NAVY IS TAKING ON GANGS IN THE COUNTRY’S BIGGEST PORT
On 16 September, Dryad Global reported on the situation in Buenaventura, Colombia’s biggest port, where 40% of the country’s international trade takes place and said to be the departure point of most of the cocaine destined for the US. It is said that 2 gangs have been fighting for months over control of Buenaventura’s drug trafficking trade, and other illegal activities such as micro-trafficking, extortion and kidnappings, making it one of the most violent cities in the country. The article reports that the military has tried to assert some state control by coming out in force in several neighbourhoods.
IMPUNITY FOLLOWS OFFSHORE ATTACKS IN MEXICO
On 19 September, Dryad Global reported on the apparent impunity with which criminal gangs have acted re thefts from shallow-water oil platforms and support vessels involved in Mexico’s offshore oil and gas industry. The number of attacks on offshore platforms and services vessels has doubled this year to 22, compared with 11 last year, with 4 attacks carried out on a single night in June – although, following a peak of 273 incidents in 2017, attacks have declined since 2020. While criminals previously targeted remote and minimally-staffed platforms, recent attacks have included larger complexes, as well as the newly-launched Ichalkil field operated by Lukoil.
AUSTRALIA: SRI LANKAN FISHERMEN AND PEOPLE SMUGGLING
On 21 September, ABC News carried an article saying that key Australian government tool to combat people smuggling from Sri Lanka can be easily dodged by perpetrators, with the GPS trackers provided to the Sri Lankan government to monitor fishing trawlers being easily removed. June saw the highest number of illegal boat interceptions by Australian Border Force since 2013, and all were from Sri Lanka, and more than 1,000 Sri Lankans have tried to reach Australia by boat this year. It is also reported that official sources have told ABC that they are investigating the brother of a Sri Lankan government MP over allegations of people smuggling to Australia.
FAT LEONARD: MALAYSIAN CRIMINAL IN US NAVY SCANDAL RECAPTURED
On 22 September, the BBC reported that a Malaysian businessman who scammed the US Navy in its biggest fraud scandal ever has been recaptured after he escaped house arrest. Leonard Glenn Francis, aka “Fat Leonard”, was captured in Venezuela attempting to board a flight to Russia. Interpol says he entered the country from Mexico via a stopover in Cuba and he is due to be extradited back to the US.
WIRECARD: REPORTER WARNS OF LACK OF EQUALITY OF ARMS AGAINST COMPANIES WITH PRACTICALLY UNLIMITED RESOURCES
On 22 September, the Press Gazette carried an interview with Dan McCrum, who led the Financial Times reporting on the Wirecard scandal, who said that said he hoped publishers realised the “brand benefit” of investigative journalism, and that the 6-year Wirecard saga demonstrated the importance of editors.
A FRESH APPROACH TO COUNTERING ILLICIT FINANCIAL FLOWS IS NEEDED TO COUNTER NEW AND EMERGING THREATS
On 22 September, a Policy Brief from RUSI said that a taskforce had developed a set of principles and actions that US and UK governments must implement to better detect and disrupt illicit finance linked to corruption and kleptocracy. These are said to be grounded in 3 underlying principles which should be the foundation of any future transatlantic response to illicit finance: honesty; cross-border collaboration; and ambition.
UK: WITNESSES CAN GIVE EVIDENCE IN CRIMINAL TRIALS FROM OUTSIDE THE UK VIA WHATSAPP WHEN IT IS ‘IN THE INTERESTS OF JUSTICE’
On 21 September, the Law Society Gazette reported that the Court of Appeal has said that the messaging platform, which uses end-to-end encryption, is ‘capable of being regarded as sufficiently secure’ for giving evidence in open court. The use of WhatsApp is permissible under temporary provisions contained in the Coronavirus Act 2020 and also under the new regime of ‘expanded powers’ in the Police, Crime, Sentencing and Courts Act 2022.
NIGERIAN AUTHORITIES RAID CYBERCRIME TRAINING CENTRES
On 22 September, OCCRP reported that Nigerian authorities raided several schools which specialised in teaching internet fraud and arrested 2 owners and 7 students. Cybercrime, known in Nigeria as ‘yahoo-yahoo’, is a flourishing industry that attracts many young people who are looking for any kind of jobs in a country with a 33.3% unemployment rate.
NIGERIA SEIZES RECORD 1.8 TONNES OF COCAINE
On 22 September, OCCRP reported that Nigeria’s law enforcement snatched 1.8 tonnes of cocaine in what officials described as the biggest seizure in the history of the country’s anti-drug agency. The drug was discovered in a warehouse in a quiet estate in Lagos’ Ikorodu neighbourhood.
NEW REFORMS TO ENSURE UK RETAINS POSITION AS A LEADER IN INTERNATIONAL ARBITRATION
On 22 September, the Law Commission in the UK has published a consultation paper which contains provisional law reform proposals to ensure that the Arbitration Act 1996 remains state of the art. Arbitration is a major area of activity, and the Chartered Institute of Arbitrators, headquartered in London, has more than 17,000 members across 149 countries. Industry estimates suggest that international arbitration has grown by about 26% between 2016 and 2020, with London the world’s most popular seat. The Arbitration Act 1996 provides a framework for arbitration in England and Wales and Northern Ireland, and it has been 25 years since the Act came into force. The Commission says that this anniversary presents a good opportunity to revisit the Act, to ensure that it remains state of the art, so that it provides an excellent basis for domestic arbitration, and continues to support London’s world-leading role in international arbitration.
AN ACCUSED MEXICAN DRUG TRAFFICKER SUING NETFLIX AND TELEMUNDO FOR ROYALTIES OVER PORTRAYALS OF DRUG TRAFFICKERS ON TV
On 21 September, Insight Crime reported that Sandra Ávila Beltrán, once dubbed Mexico’s “Queen of the Pacific”, is demanding the streaming platform and TV channel pay her 40% of the royalties for the Spanish-language show “Queen of the South,” co-produced by Netflix and Telemundo, marking the latest legal battle surrounding portrayals of drug traffickers on TV.
FATCA LEGISLATION AND ITS APPLICATION AT INTERNATIONAL AND EU LEVEL
On 22 September, a briefing from the EU Parliament Research Service provides in-depth analysis which updates a previous report commissioned by the European Parliament’s Policy Department for Citizens’ Rights and Constitutional Affairs and describes the most relevant developments in the period 2018-2022 in chronological order and then draws conclusions which include a systemic view of the current institutional dynamics, a provisional legal analysis on the basis of existing rules and policy suggestions. FACTA is the Foreign Account Tax Compliance Act and a previous report considered the unilateral extraterritorial reach of FATCA legislation of the US, and the chief concern of the reports is how FACTA interacts with EU data protection laws.
MORE QUESTIONS THAN ANSWERS? THE EU NEW AML AUTHORITY
On 22 September, a post from the LSE said that the EU is set to establish a new Anti-Money Laundering Authority next year. The post says that while the new authority is a step in the right direction, there remain more questions than answers over how it will function and where it will be based. The new Anti-Money Laundering Authority (AMLA) is now supposed to be established by 1 January, although it is only expected to be operational by the beginning of 2024, to be fully staffed by 2025, and to directly supervise financial institutions as of 2026. As a result, it is said, a number of key questions remain.
INDIA: THE ABG SHIPYARD MONEY LAUNDERING CASE
On 22 September, Business Standard provided an update on the case, saying that the Enforcement Directorate had attached (restrained) assets involving dockyards, agricultural lands, commercial properties and bank deposits. The case involves alleged bank loan fraud linked to money laundering, and the latest action comes a day after the CBI arrested the founder of the company, Rishi Kamlesh Agarwal.
US DoJ FORMS NATIONAL NETWORK OF PROSECUTORS FOCUSED ON CRYPTO CRIME
On 16 September, the Wall Street Journal reported that the DoJ is to use more than 150 federal prosecutors across the country to bolster law enforcement’s efforts to combat the rise in crypto crime. The Digital Asset Coordinators Network is intended to designate subject-matter experts in US Attorneys’ offices on the complex technical and legal complications posed by cryptocurrency cases.
US: CLOTHING WHOLESALER AGREES TO PLEAD GUILTY TO VIOLATING DRUG TRAFFICKING LAW AND COMMITTING $6.4 MILLION CUSTOMS FRAUD
A news release from US DoJ on 20 September advised that a clothing wholesale company, Ghacham Inc, which does business under the “Platini” brand name, has agreed to plead guilty to federal criminal charges for undervaluing imported garments in a scheme to avoid paying almost $6.4 million in customs duties and for doing business with a woman in Mexico who has ties to the Sinaloa drug cartel. According to court documents, Ghacham Inc. imported clothing from China and submitted fraudulent invoices to US Customs and Border Protection that undervalued the shipments, allowing it to avoid paying the full amount of tariffs owed on the imports.
CAMBODIA SCAMS: LURED AND TRAPPED INTO FRAUD FACTORY SLAVERY IN SOUTH-EAST ASIA
On 21 September, the BBC reported on thousands of workers who have fallen prey to human traffickers running job scams in SE Asia, with governments across Asia – including Indonesia, Vietnam, Malaysia, Hong Kong and Taiwan – issuing warnings. Lured by adverts promising easy work and extravagant perks, many are tricked into travelling to Cambodia, Myanmar and Thailand. Once they arrive, they are held prisoner and forced to work in online scam centres known as “fraud factories”.
CANADA: LUXURY CARS SEIZED FROM 23-YEAR-OLD ‘CRYPTO KING’ AS INVESTORS TRY TO RECOUP MILLIONS
On 21 September, CBC reported that Tw2o McLarens, 2 BMWs and a Lamborghini make up just a few of the $2 million worth of assets seized from a 23-year-old from Whitby, Ont., as his investors try to recoup millions of dollars they handed over to the self-described “Crypto King”. Creditors are working to unravel where at least $35 million provided to Pleterski and his company AP Private Equity Limited for cryptocurrency and foreign exchange investments ended up.
US: DoJ CLARIFIES AND REFINES ITS POLICIES FOR CORPORATE CRIMINAL ENFORCEMENT
On 22 September, a post from the Compliance and Enforcement blog from the Program on Corporate Compliance and Enforcement at the New York University School of Law reacted to a speech by Deputy Attorney General Lisa O Monaco detailing significant changes to the Department of Justice’s corporate prosecution policies.
INDONESIA’S ELECTRIC VEHICLE BATTERIES DREAM HAS A DIRTY NICKEL PROBLEM
A post from the Brookings Institution on 21 September says that the country is the world’s largest nickel miner, and is making moves to become a key player in the electric vehicle supply chain. It says that for EV manufacturers struggling to source nickel in a tight market, Indonesia has become a key supplier in the past year. However, its production is particularly carbon intensive and environmentally damaging, which creates an awkward challenge for EV manufacturers.
OFAC DETERMINATIONS TARGET RUSSIAN QUANTUM COMPUTING
On 22 September, the EU Sanctions blog reported on 2 Determinations issued by OFAC that allow for sanctions to be imposed on any person/entity determined to operate or have operated in the quantum computing sector of the Russian economy; and prohibit the export, reexport, sale or supply (directly or indirectly) from the US or by a US person/entity, wherever located, of quantum computing services to any person/entity located in Russia.
SCIENTISTS AT AMERICA’S TOP NUCLEAR LAB WERE RECRUITED BY CHINA TO DESIGN MISSILES AND DRONES, REPORT SAYS
On 21 September, NBC News reported that at least 154 Chinese scientists who worked on government-sponsored research at the US foremost national security laboratory over the last 2 decades have been recruited to do scientific work in China — some of which helped advance military technology that threatens US national security — according to a new intelligence report it has obtained. It is said to describe what it calls a systemic effort by the government of China to place Chinese scientists at Los Alamos National Laboratory, where nuclear weapons were first developed.
MYSTERY DRONE BOAT WASHES UP NEAR HOME OF RUSSIA’S BLACK SEA FLEET
On 21 September, The Drive reported that Russian authorities on the occupied Crimean Peninsula claimed to have destroyed an unmanned surface vessel, or USV, near the city of Sevastopol. Pictures showing what could be the maritime drone in question, which has a number of features that could point to being an uncrewed explosive-laden suicide boat, washed up on a beach have emerged on social media.
UK SANCTIONS ON RUSSIA: INSURANCE AND OTHER SERVICES FOR RUSSIAN OIL SHIPMENTS
On 22 September, Field Fisher published a briefing saying that services affected would include technical assistance, financial services – notably including insurance and re-insurance – and brokering services. The measure will also prohibit the shipping of Russian oil by UK ships. It is said that the UK is working closely with the US, EU and G7 partners to align their respective measures to reduce the compliance burden on industry. The exact timing of the introduction of these measures is unclear and will depend on further progress in ongoing consultations between the G7 and oil importing countries on the operation of the price cap. But they are expected to come into force before the end of the year.
SPANISH COURT OF AUDITORS CITES PANAMANIAN FUGITIVE WHO EMBEZZLED $5.1 MILLION
On 22 September, La Estrella de Panama reported that the Tribunal de Cuentas in Spain has cited a Panamanian accountant, Omar Antonio Guevara Barrios, who allegedly used his position to embezzle $ 5.1 million from la oficina técnica de cooperación de España en Panamá. He has been a fugitive for more than 2 years. Currently Guevara Barrios is described as one of the 100 most wanted Panamanians.
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