Sanctions, proliferation, money laundering, export and trade control news etc
Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section
On 22 July, HM Treasury reported on a call for evidence which supports the review which will aim to assess the UK’s anti-money laundering and counter terrorist financing regulatory (OPBAS) regulations and supervisory regimes. The document considers 3 themes –
the overall effectiveness of the regimes and their extent (i.e. the sectors in scope as relevant entities);
whether key elements of the current regulations are operating as intended; and
the structure of the supervisory regime including the work of OPBAS to improve effectiveness and consistency of PBS supervision.
Also on 22 July, HM treasury issued a call for evidence invites views and evidence on the steps that the government proposes to take to amend the Money Laundering Regulations and which will allow the government to make some time-sensitive updates to the Regulations, which are required to ensure that the UK continues to meet international standards set by FATF, whilst also strengthening and ensuring clarity on how the AML regime operates. This consultation also closes on 14 October.
On 22 July, a Notice from HM Treasury advised that 2 Colombians (including Alex Nain SAAB MORAN), an Iraqi, an Equatorial Guinean national and a Zimbabwe national had been added to the UK’s human rights sanctions list.
On 22 July, OCCRP reported that a British national, Neil Perry Smith, 58, was extradited to the US and charged for his role in the decades-long smuggling operation of Subhash Kapoor, a New York art dealer who specialised in looted antiquities from Central and SE Asia.
Panama Covid-19 – first day of an open call in 8 districts (including ours) where anyone can turn up to be vaccinated, with long queues seen – particularly of younger people, it is reported. The vaccination sites operate from 0700 to 1800.
Today, another 1,144 new cases reported and 7 new fatalities. However, while the numbers in hospital show a small rise, the overall numbers of active cases has fallen again, to 13,065. There are 134 in ICU and 643 in other wards.
US-GERMAN DEAL ON RUSSIA’S NORD STREAM 2 PIPELINE EXPECTED
On 20 July, the Wall Street Journal reported that the Biden administration will effectively waive US longstanding opposition to the pipeline, Nord Stream 2. Germany under the agreement will agree to assist Ukraine in energy-related projects and diplomacy. This would resolve a long-standing dispute over the $11 billion pipeline, now 98% complete, being built under the Baltic Sea to carry gas from Russia’s Arctic region to Germany.
SECOND-HAND LEASE CAR TRADE NEXT TARGET IN DUTCH FIGHT AGAINST MONEY LAUNDERING
On 20 July, the NL Times reported that Dutch government and banks are turning their attention to the second-hand lease car market in the fight against money laundering, to make it more difficult for car dealers to deposit large amounts of cash.
UK: CORPORATE CRIMINAL LIABILITY – CHANGE IS COMING
On 12 July, Shoosmiths LLP published an article about prospective changes to corporate law in the UK, saying that in November 2020 the Law Commission announced that it was due to investigate the wider position on corporate criminal liability (i.e. not limited to economic crime) and at the beginning of June it launched a consultation. The consultation closes on 31 August. An options paper will follows analysing the effectiveness of the current law and recommending improvements. It is anticipated that the outcome and options paper will be delivered to government in late 2021. 2 partners at the firm comment on what might transpire.
On 19 July, Mayer Brown also published an article about the Law Commission consultation which focused on the so-called “identification principle”. The Law Commission previously reviewed the law in this area in 2010 and found that there was “no pressing need for reform of the identification doctrine”. However, it is said, given the development of case law since that previous review, the Commission now considers that the assumptions on which that conclusion was made are no longer true. The principle means that the requisite “directing mind and will” is typically limited to directors and executive officers – individuals who are rarely involved in the day-to-day decisions in which financial crime-related offences have their origin – making if difficult to achieve prosecutions.
HOW ISRAEL USED NSO SPYWARE AS DIPLOMATIC CALLING CARD
On 20 July, the Financial Times reported, in the light of the exposé carried by the Guardian and others, that Israel has used bilateral security arrangements, including the likes of the NSO software, as a entre into agreements with other Middle East states. While NSO refutes the suggestion, the article points to the legal and licensing support provided by the government.
OCCRP reports that 3 current presidents, including France’s Emmanuel Macron, as well as 3 sitting prime ministers, had their numbers selected for Pegasus. 7 former prime ministers and the King of Morocco were also selected.
UK: A DOZEN ‘NATIONAL TREASURES’ SAVED FOR THE NATION AFTER EXPORT LICENCE BLOCKS
On 21 July, the Antiques Trade Gazette reported on the latest annual report on the operation of the export controls on objects of cultural interest. Due to the pandemic, the latest report covers 2 years. Although 12 treasures were bought by institutions after export licences were not approved, 20 were not saved across the 2 years. Art, antiques and collectables that are deemed ‘cultural goods’, that are more than 50 years old and exceed a certain value, require an individual licence for export out of the UK. If the item meets any of certain criteria the export of the object can be temporarily stopped and a licence denied to give UK museums and institutions the opportunity to acquire the important item via fundraising.
EU: 15,000 TONNES OF ILLEGAL FOOD AND BEVERAGES OFF THE MARKET IN 18 MONTHS
On 21 July, a news release from Europol advised about a coordinated operation with Interpol which targeted trafficking of counterfeit and substandard food and beverage between December 2019 and June 2021. The 72 countries involved included 26 EU Member States. Examples cited include fake honey and alcohol abd illegal horsemeat.
SOUTH AFRICA: DEFENCE INTELLIGENCE LAYS OUT MARITIME SECURITY THREATS IN AFRICA
On 21 July, Defence Web carried an article saying that the Defence Intelligence division of the South African National Defence Force (SANDF) has detailed some of the main threats and challenges facing South African navies and maritime security issues in Africa. It noted that the maritime environment around Africa is beset with various forms of maritime crime.
2-YACHT GLASGOW TYCOON WHO LIVED LUXURY LIFE JAILED FOR £300,000 TAX FRAUD
On 21 July, Glasgow Live reported that Joseph Quinn, 64, was a businessman living the highlife with 2 yachts and 3 houses but has now been jailed over a near £300,000 fraud. He portrayed himself as a charity hero who enjoyed a lavish lifestyle, but in reality he was a conman scamming cash using bogus claims for VAT repayments.
WRONGFUL AND FRAUDULENT TRADING – WHAT IS THE DIFFERENCE?
On 21 July, Lawyer Monthly carried a short article on the difference between wrongful and fraudulent trading under English law. It warns that both type of offence can lead to potential disqualification from company directorship for up to 15 years. In general, any form of trading offence will be detrimental to a company and the reputation of the directors.
On 21 July, the Law Commission, which advises on amendments to, and new, legislation, published its annual report. Reporting on its activities in the last 12 months, it says that it released 8 reports since the last annual report covering leasehold reform, consumer sales contracts and modernisation of the communications offences among other projects. It has also published a wide range of consultations including on coal tips in Wales, electronic trade documents, intimate image abuse, hate crime laws and weddings during the year.
UK LAW COMMISSION: REFORMS TO PROTECT VICTIMS OF ONLINE ABUSE AND SAFEGUARD FREEDOM OF EXPRESSION ANNOUNCED
On 21 July, the Law Commission, which advises on amendments to, and new, legislation, published a report which recommends reforms to the communications offences to target serious harms arising from online abuse, while more effectively protecting the right to freedom of expression. It also recommends new harm-based offence and a number of new offences, including offences to tackle cyberflashing, the encouragement or assistance of serious self-harm and sending knowingly false communications.
LUXEMBOURG ADOPTS A NEW LAW ON CASH ENTERING OR LEAVING THE COUNTRY
On 21 July, CMS Law reported that any bearer of cash in any form and by any means (including cash, bearer negotiable instruments, certain highly liquid goods as well as prepaid cards) with a value of €10,000 or more, to, via or from the country, or entering or leaving the EU through the country, is subject to the filing of an accompanied cash declaration. In the same way, the sender or the recipient of the cash or their representative must file a declaration for the disclosure of unaccompanied cash with a value of €10,000 or more, entering, transiting via or leaving the country or entering or leaving the EU through the country. This implements the requirements of amended EU law in Luxembourg.
In the latest TRACE podcast, author and business radio host Jim Campbell discusses his recent book about Bernie Madoff, his Ponzi scheme and his lack of remorse, based on extraordinary access to Madoff and members of his family and team.
On 21 July, the Protos website reported that cryto miners have moved to Kazakhstan as the local industry in China endures sweeping crackdowns. It became the third-largest contributor to global Bitcoin mining hashrate in April, behind China and the US.
PERU: NEW MONEY LAUNDERING INVESTIGATION AGAINST FUJIMORI’S HUSBAND
On 21 July, TeleSUR reported that the Peruvian Attorney General’s Office has opened a second investigation into alleged money laundering against Mark Villanella, the husband of former presidential candidate Keiko Fujimori. It is said that the Car Wash case team will investigate the brokerage service contracts provided by Villanella MVV Real Estate. It is said that the new investigation arises from the criminal process that Villanella and Fujimori face for irregular financing of the Fuerza Popular party in previous electoral campaigns.
EXTRADITED ISRAELI FUGITIVE SENT TO PRISON FOR CONDUCTING ILLEGAL GAMBLING BUSINESS, MONEY LAUNDERING, AND FAILURE TO APPEAR
A news release from US DoJ on 21 July advised that Orel Gohar, 30, formerly of San Francisco, has been sentenced to 2½ years in prison. It is reported that Gohar participated in operating an organization that installed and maintained illegal video slot machines at businesses open to the public across Northern California. On pretrial release, he fled from by charter jet through Mexico, France, and Israel. He was arrested in Israel in December 2019.
CALL-CENTRE SCAM: INDIAN POLICE PUSH FOR EXTRADITION OF GANG’S UK-BASED HANDLER
In its 22 July edition, the Hindustan Times reported that, after busting a fake call-centre scam targeting foreign nationals with the arrest of 39 people, police are now looking to extradite the gang’s handler from the UK. It is said that a UK-based handler provided them with the phone numbers of targets in exchange for a 40% cut per fraud. The fraudsters posed as officials from HMRC.
US: TURKISH NATIONAL INDICTED FOR WIRE FRAUD AND ILLEGALLY EXPORTING DEFENCE ARTICLES TO TURKEY
A news release from US DoJ on 21 July advised that Arif Ugur, 52, a Turkish national, has been indicted in Boston in connection with his scheme to illegally export defence technical data to foreign nationals in Turkey for the fraudulent manufacturing of various US military parts. He was the sole managing partner of the Anatolia Group Limited Partnership, a domestic limited partnership registered in Massachusetts and bid on and acquired numerous contracts to supply the DOD with a variety of machine parts and hardware items intended for use by the US military. Having manufacturing facilities in the US or elsewhere. Instead, Ugur contracted with a Turkish manufacturer to make the parts and then passed them off to DoD as if they had been manufactured by Anatolia in the US; and shared technical specifications and drawings of various parts and components with employees of the Turkish manufacturer so that they could produce the parts.
THE UK STILL LACKS A COHERENT INTERNATIONAL ILLICIT FINANCE STRATEGY
On 21 July, a Commentary from RUSI calls for a clearer, more achievable vision to the international dimensions of the UK Economic Crime Plan, saying that the current strategy displays a lack of focus and is not focusing on what is most appropriate for tackling the UK’s role in facilitating illicit finance. It is proposed that the UK should leverage its leading intelligence capability to genuinely contribute to efforts to identify & seize illicit finance.
On 21 July, HM Treasury issued a Notice advising that JSC AGAT – ELECTROMECHANICAL PLANT, being named as one of a number of Belarusian defence companies on the website of the government authority – the State Authority for Military Industry of the Republic of Belarus (SAMI).
Panama Covid-19 update – first the good news, the Rt rate is now below the important 1 figure, just, at 0.99. The number of active cases have also dropped, despite patients in the ICU rising by 1 and others in hospital by 10. 1,089 new cases were reported today, and 6 new fatalities. There are 13,133 active cases, with 135 in ICU and 638 in other wards.
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20 JULY 2021
US IMPOSES BARRIERS ON SALES OF SATELLITE DATA
On 19 July, Breaking Defense reported that a new National Reconnaissance Office (NRO) policy limits its pool of potential commercial remote sensing vendors to US companies — eschewing even companies based in allied nations with US operations legally approved to sell weapons to the DoD. Procurement of commercial imagery for operational support shall be limited to US-owned, US-operated and US-controlled companies.
IRELAND: GARDAÍ IDENTIFY THE 4 TIERS OF MONEY LAUNDERING GANG
On 19 July, the Irish Independent reported that gardaí had established the 4 separate tiers of a money laundering gang involved in moving millions of euro obtained by organised frauds through bank accounts across the country, and with “literally hundreds of people involved in this organisation throughout Ireland”. The 4 tiers are labelled Mules, herders, managers and directors.
DANISH PENSION FIRMS CENSURED FOR FAILURE TO IDENTIFY MONEY LAUNDERING RISKS
On 19 July, IPE reported that 6 Danish pension providers have been ordered to revise their risk assessments regarding money laundering, after the country’s financial watchdog followed through on a tightening of the regulations at the end of last year. The FSA said it had conducted an investigation into the risk assessments of life insurance and pension companies regarding money-laundering in the fourth quarter of 2020, involving risk assessments of 10 firms. At the beginning of November last year, the FSA issued a revised version of the guidelines on the Money Laundering Act, which included changes to the rules on collection and control of identity information on real owners.
UK: CALL TO INVESTIGATE ‘SHOCKING’ CITY FINANCING OF BELARUS REGIME
On 20 July, Open Democracy reported that the FCA had been urged to investigate the listing of Belarusian sovereign bonds on the London Stock Exchange. It is claimed that banks that underwrote the listing of $1.25 billion in Belarusian government bonds in London in 2020. It is said that the City of London hosted a series of investor promotion events for Belarus in the run-up to the listing, and in June 2019 the then Belarusian prime minister, Siarhei Rumas, was hosted by both the Lord Mayor of the City of London and at a ‘Belarusian Capital Markets Day’ at the London Stock Exchange.
On 19 July, iGB reported that the Ministry of Finance and National Revenue Administration have issued a warning against participating in or offering illegal online gambling. It is reported that the Polish authorities keep a blacklist of almost 15,000 illegal gambling sites, with new domain names added on most days.
AUSTRALIA: ATO DATA-MATCHING PROGRAM — LIFESTYLE ASSETS
On 14 July, Wolters Kluwer Australia published an article explaining that the Australian Tax Office (ATO) ATO will acquire lifestyle assets data from insurance policies for 2020–21 through to 2022–23 for a series of assets where the value is equal to or exceeds nominated thresholds. The various uses for this information is listed, including profiling to provide compliance staff with a holistic view of a taxpayer’s wealth, and possible compliance issues with income tax, CGT, FBT, GST and superannuation obligations, and to generally help ensure that individuals and businesses are fulfilling their tax and superannuation reporting obligations.
US AIR FORCE FOCUSES EFFORTS ON DETERRING ACQUISITION FRAUD
On 16 July, Reed Smith LLP reported that the USAF is taking aim at bad actors who are engaged in corruption and acquisition fraud related to government contracting. It has involved contracting officials and law enforcement personnel signing a MoU to foster stronger relationships and information-sharing to curtail acquisition fraud and misconduct.
FBI STING CATCHES A MEXICAN MAN TRYING TO SELL FAKE ARTWORKS IN NEW YORK
On 20 July, the Art Law & More blog from Boodle Hatfield published a post has arrested Angel Pereda, 49, for attempting to fraudulently sell artworks he claimed to be by renowned twentieth-century artists.
US: WILL “STOPRANSOMWARE.GOV” ACTUALLY STOP RANSOMWARE?
On 19 July, an article from Foley Hoag LLP said that, in response to the spate of ransomware attacks, the US has launched a new website. It says that, of course, a website alone is not going to stop the legions of hackers across the globe who are profiting from ransomware attacks. In fact, nothing will completely stop ransomware attacks. But if this encourages some potential targets to harden their defences, then that’s a good thing.
FORMER BRITISH OVERSEAS TERRITORY FIRST MINISTER JAILED FOR GROOMING AND SEXUALLY ABUSING 5 GIRLS
On 19 July, a news release from NCA advised that David Brandt, 78, former First Minister of the British overseas territory of Montserrat has been jailed for 15 years, after he was convicted of sexually exploiting five girls including 2 13-year-olds. He groomed the girls by giving them money, phone credit and used one girl, aged 15, to recruit others to abuse.
TAIWAN DETAINS 20 FRAUD SUSPECTS AFTER VIDEO CALL FROM ENGINEER IN US
On 20 July, the Taiwan News reported that police had detained 20 suspects in Taiwan after a Chinese-American engineer accused them of fraud in a videoconference. The engineer contacted police in Taipei by video call in March last year, reporting that he had received repeated phone calls from people posing as delivery service agents and as judicial personnel.
ANGOLA SIGNS DEAL WITH SWITZERLAND TO SPEED UP ASSET RECOVERY
On 20 July, Survey 54 reported that Angola and Switzerland have signed a memorandum of understanding on mutual legal and judicial assistance in criminal matters, which should give “greater speed” to asset recovery by the Angolan state.
BULGARIA: ANNUAL MONITORING REPORT OF THE ANTI-CORRUPTION FUND
On 20 July, BTA said that the report says that, in 2020, problems with the fight against political corruption in Bulgaria worsened. The report states that the new sentences have ended only in acquittals, resulting in a balance of 13 acquittals and 3 convictions. There was not a single case of corruption penalised by a custodial sentence and between 2018 and 2020 there was not a single conviction.
SOUTH AFRICA: FORMER POLICE OFFICER SENTENCED TO 50 YEARS IMPRISONMENT FOR CORRUPTION
On 20 July, The South African reported that former Warrant Officer Frederick de Bruin, 50, was sentenced to a total of 50 years imprisonment for corruption, stealing a state laptop and police docket and defeating the ends of justice.
UAE ROYAL RESELLING RUSSIA’S VACCINE FOR MORE THAN DOUBLE THE PRICE
On 19 July, OCCRP reported that the Moscow Times has reported an opaque deal Russia made with a royal Emirati family to deliver vaccines to the developing world. It says that the agent responsible for distributing Sputnik V vaccines is a mid-ranking Dubai royal who spearheads energy projects in Sub-Saharan Africa. It says that the selling price is steep, quoting Pakistan paying $22.50 per dose and Guyana $24 – although Russia had advertised a selling price of $9.95 per dose.
POLICE IN BOSNIA ARREST SUSPECTED MEMBER OF MONTENEGRIN CRIMINAL CLAN
On 19 July, OCCRP reported that police in Bosnia and Herzegovina had arrested a Montenegrin man internationally wanted for murder and believed to be a member of one of the 2 most dangerous criminal clans. 3 local police officers were also arrested for helping him hide from authorities. Local media identified him as Miloš Božović, member of the Škaljari clan from Montenegro.
On 19 July, Lloyds Loading List reported that freight association BIFA has reiterated need for traders to get ready for even greater challenges from January 2022 than those of January 2021, ‘because there are more new processes to master – and levels of UK import traffic exceed exports by a considerable margin’.
DUTCH CUSTOMS SEIZE 3 TONNES OF COCAINE SHIPPED IN PUREED BANANA VATS
On 19 July, Fresh Plaza reported that Customs officials at Rotterdam port have seized 3 tonnes of cocaine hidden in vats of banana puree and the container was on its way from Ecuador to a company in Basel in Switzerland.
UK: FRAUDSTER JAILED FOR DUPING OVER 200 VICTIMS IN MILLION-POUND FAKE CAR SALES SCAM
On 16 July, a news release from the CPS advised that Ravinder Singh Randhawa, 30, a fraudster posing as a car salesman has been jailed for defrauding over 200 unsuspecting car buyers out of more than £1 million. He was imprisoned to 9 years for 22 offences of fraud and 1 offence of money laundering at Exeter Crown Court. He was the leader of the fake car selling operation, posing as a legitimate salesman to persuade his victims to pay large sums of money for second-hand vehicles. He often sold the same vehicle more than once.
US DRUG DEATHS EXPLODE – FUELLED BY MEXICO PRODUCTION OF SYNTHETICS
On 19 July, OCCRP reported that the US saw a record toll in drug overdose deaths last year, driven in part by 2 powerful synthetic drugs mass-produced in Mexico and then smuggled over the border. Mexican crime groups have also increased the trafficking of methamphetamine to the point that they’ve become the “primary producers and suppliers” of the methamphetamine that is widely available in the US. The manufacturing of methamphetamine took off in Mexico after the US government clamped down the sale of precursor chemicals needed to make the drug, including pseudoephedrine and ephedrine.
HUMAN SMUGGLERS PROFIT FROM DESPAIR OF HAITIAN MIGRANTS IN BRAZIL
On 20 July, OCCRP reported that Government officials in Brazil say smugglers are moving Haitian migrants across the country’s border with Peru, as many of them take a first step in the perilous journey north toward the US. The surge has led Brazil’s national police to launch 2 operations to stop the smuggling of people in the region. It is said that the latest operation comes several months after Haitians – many of whom had spent years in Brazil – amassed near the Brazilian border, due to the pandemic-induced economic slowdown and rising anti-migrant sentiment.
On 20 July, the EU Parliament Research Service produced a briefing paper about a new Regulation which introduces greater transparency into dual-use export control by increasing the level of detail Member States will have to provide on exports, licences, licence denials and prohibitions. The EU Parliament has called on the Commission to publish a handbook before the entry into force of the new rules, to assist EU businesses with the interpretation of the new rules, especially more guidance for companies on how to go through the process of due-diligence. The Parliament is also calling for better acknowledgment of fundamental rights as licensing criteria, notably for cyber-surveillance.
SHIPPING: NEW BIMCO CLAUSE CLARIFIES CONTRACTUAL POSITION ON AIS SWITCH-OFF
On 20 July, Hellenic Shipping News reported that BIMCO has published a new charter party clause to help tackle potential abuse by sanctions busters of the Automatic Identification System (AIS) which is mandatory for all ships to use under regulations for the Safety of Life at Sea (SOLAS).
On 20 July, The Negotiator reported that a new app to provide AML/CFT training has been launched to help overcome the lack of understanding about AML regulation. The interactive gamified training simulations mean players have to really demonstrate understanding at each stage of the playthrough in order to advance forward and ultimately be certified.
INDONESIAN FORMER FISHERIES MINISTER JAILED FOR BRIBERY IN LOBSTER EXPORTS
On 18 July, Mongabay reported that former fisheries minister Edhy Prabowo has been sentenced to 5 years in jail for taking bribes to lift a ban on lobster larvae exports in 2020. It is said that anti-corruption experts were left disappointed by the relatively low sentence, given his status as a high-profile active government official at the time. Lobsters are among Indonesia’s top fisheries commodities, but the illegal export of lobster larvae cost the country some $62 million in lost revenue in 2019 alone, and depleted the wild population.
On 20 July, KPMG published the findings of its survey which engaged export and sanctions professionals at multinational firms to gather their input on a variety of business-critical issues. Amongst its findings are that compliance professionals are managing multiple export regimes — and KPMG says that it anticipates that regulations in these jurisdictions will be tightening; and that the importance of ensuring personnel remain educated through comprehensive ongoing training is highlighted.
On 20 July, the Global Public Policy Institute published a report based on a review of existing investigations into dozens of chemical weapons attacks as well as a collection of primary source imagery related to 53 incidents compiled by the research team. GPPI says that it aims to provide a reference guide for understanding the evolution of the Syrian chemical weapons complex. It says that, in Syria, most chemical attacks are executed using domestically produced munition designs, including weapons containing highly volatile and dangerous nerve agents. Whether spent or intact, the munitions tell one a lot about the nature and evolution of the Syrian chemical weapons program as well as its operational integration into the government’s conventional war machinery.
OFAC: VENEZUELA-RELATED GENERAL LICENSE 5G AND UPDATED FAQ
On 20 July, OFAC issued new General License 5G – Authorizing Certain Transactions Related to the Petróleos de Venezuela, S.A. 2020 8.5 Percent Bond on or After October 21, 2021. It also released an updated version of FAQ 595, which explains what the License permits.
UNCOVERING THE WEB OF ILLEGAL WILDLIFE TRADERS OPERATING ON SOCIAL MEDIA
On 11 July, The Independent carried an article saying that, like many legal industries, the illegal wildlife trade has adapted in the 21st Century to operate online. It looks at the criminals using mainstream social media sites to sell their products.
VIDEO: GLOBAL TRADE CONTROLS – EXPLORING SOME ESSENTIAL TOPICS AND WHAT THEY MAY LOOK LIKE UNDER THE BIDEN ADMINISTRATION
On 19 July, a video webinar from TRACE and TASA (the Trace Anti-bribery Specialist Accreditation) provides a top-level overview of recent key changes to US export control, economic sanctions and national security regulations, and practical tips on how to manage risks associated with these developments. Utilising a case study approach to address potential new risk areas, the speakers also highlight what areas of your business you should now be revisiting to ensure your ongoing compliance with new, updated regulations.
2 ROMANIANS CHARGED IN INTERNATIONAL ONLINE AUCTION FRAUD THAT TARGETED US CITIZENS
On 20 July, Universul reported that 2 Romanians have been charged in connection with an online auction fraud scheme that targeted victims in the US. The indictment alleges that to August 2020, they and others devised a scheme to entice victims in fraud scheme that targeted victims in the US to purchase vehicles and other high-value items online that items didn’t exist. As a result, victims suffered a combined loss of approximately $9 million.
RUSSIAN TRAFFIC OFFICER WITH GOLDEN TOILET IS ARRESTED AFTER POLICE UNCOVER MASSIVE BRIBERY SCHEME
On 20 July, Sky News in the UK reported that police colonel Alexei Safonov is accused of leading a criminal gang that accepted millions of roubles in bribes from cargo transporters. He and 6 other people were arrested in the southern region of Stavropol. He is believed to have led a criminal gang which issued permits to grain cargo transporters in exchange for bribes.
MISSISSIPPI PHARMACIST PLEADS GUILTY TO MORE THAN $180-MILLION HEALTH CARE FRAUD SCHEME
A news release from US DoJ on 20 July advised that it is alleged that David “Jason” Rutland, 42, a pharmacist and co-owner of various compounding pharmacies, admitted that he participated in a scheme to defraud TRICARE and other health care benefit programmes by distributing medically unnecessary compounded medications.
EU 2021 RULE OF LAW REPORT – THE RULE OF LAW SITUATION IN THE EUROPEAN UNION
On 20 July, the EU released this report which looks at the state of developments across the EU. It covers justice systems, the anti-corruption framework, media pluralism and media freedom and other institutional checks and balances – consolidating the exercise started by the 2020 report while further deepening the Commission’s assessment. It also develops further on the impact and challenges brought by the COVID-19 pandemic. The country chapters, which form an integral part of this report, analyse new developments since the first report and the follow up to the challenges and developments identified in the 2020 Report.
LIABILITY TO THIRD PARTIES FOR INJURY CAUSED BY ALLEGEDLY IMPROPERLY LOADED FREIGHT
On 20 July, Benesch produced an article saying that the possibility of a shipper being found liable to a third party who is injured by allegedly improperly loaded freight is an evolving one. From a US perspective, at least one federal district court has found that a shipper does owe a duty to third parties to properly inspect and secure freight.
US SIGNALS AGGRESSIVE APPROACH ON FORCED LABOUR AND NEW RISKS FOR COMPANIES
On 20 July, an article from Arent Fox follows the US Senate passage of the Uyghur Forced Labor Prevention Act. It says that companies should be aware that such developments may impact the ability to fulfil contracts, stock shelves, and source materials for manufacturing. It lists the industries thought to be at risk from forced labour involvement. It also identifies the highest-value imports from Xinjiang in 2021.
On 20 July, Foley & Lardner LLP published an article saying that on 14 July the Mexican Federal Register contained the Executive Order creating the National Customs Agency of Mexico (ANAM), with ANAM acting as a decentralized administrative agency of the Ministry of Finance. The current Tax Administration Service (SAT) powers related to customs services and inspection, application and compliance of laws, and regulations governing the importation and exportation of goods, will cease and become part of the newly created ANAM. ANAM will also be in charge of coordinating the activities with the armed forces and national security institutions to preserve the homeland security in the country’s ports, similar to the Customs and Border Protection of the US.
INVESTIGATION FINDS EVIDENCE EQUIPMENT SENT BY LITHUANIA-BASED COMPANY USED AT CRIMEAN POWER PLANTS
On 20 July, Rferl reported that equipment delivered to Russia by a Lithuania-based company ended up being used at power stations in Crimea despite EU sanctions. Run Engineering shipped equipment to a Russian company contracted to supply water filters to 2 plants being constructed in Crimea. They were shipped to Russian company Voronezh-Aqua. The items had been acquired by Run Engineering from a German-based Inge, a subsidiary of US-based DuPont. The same Crimean plants were at the centre of an scandal after German engineering company Siemens said its power turbines had been installed at them without its knowledge in 2017, also in violation of EU sanctions. It is said that the filters were despatched on the same day that Run Engineering’s licence to export such goods was revoked due to suspicions by Lithuanian law enforcement that the company’s equipment could end up in Crimea.
CANADA: THE JOURNALISTIC SOURCES PROTECTION ACT AND SEARCH WARRANTS
On 13 July, a Bulletin from law firm Davies Ward Phillips & Vineberg LLP was concerned with this Act, which came into force in 2017and follows the quashing by a court in Quebec of a number of search warrants on the basis that they had been improperly authorised under the general Criminal Code regime instead of under the specific regime introduced by the JSPA. The JSPA was intended to protect the confidentiality of journalistic sources, and to provide a measure of protection to the right of journalists to privacy in their gathering or dissemination of information.
UK: SFO SECURES 2 MORE DPA WITH COMPANIES FOR BRIBERY ACT OFFENCES
A news release from the SFO on 20 July advised that the SFO had had approved SFO 2 separate Deferred Prosecution Agreements entered into with 2 UK-based companies for bribery offences. The DPA share a common Statement of Facts. The criminal conduct saw bribes paid in relation to multi-million-pound UK contracts. The unnamed companies will pay a total of £2,510,065, comprising disgorgement of profits and a financial penalty. These are the eleventh and twelfth DPA secured by the SFO under the Bribery Act 2010.
SPAM KINGPIN PETER LEVASHOV SENTENCED TO TIME SERVED IN US
On 29 July, the Krebs on Security blog reported that the Russian nation, who is described as “a prolific purveyor of malicious and junk email, and the creator of malware strains that infected millions of Microsoft computers globally”, has been in custody since his extradition to the US and guilty plea in 2018. He was facing up to 12 more years in prison. Instead, he will go free under 3 years of supervised release and a possible fine.
On 20 July, the Cyprus Mail reported that an EU report has said that Cyprus has made some progress toward tweaking its justice system, but there remains work to be done on improving transparency and accessibility to public documents, mechanisms to combat corruption, and full disclosure of the assets of elected officials. The report also refers to important reforms remain pending – such as setting up an anticorruption agency, protection of whistleblowers, regulation of lobbying and asset disclosure for elected officials. It also says that the investigation of corruption cases continued, with the manipulation of sports competition stands out as a particular risk area, although adjudication of corruption cases remains low. It also mentions the inquiry launched into the citizenship-by-investment scheme, looking into allegations of corruption involving foreign individuals and high-ranking officials.
On 20 July, an article from NAVEX Global says that, with less than 6 months now to go until the 17 December deadline for Member States to transpose the Whistleblower Protection Directive, progress is still very mixed. Only Denmark has completed the transposition of the Directive, with the new Whistleblower Protection Act passed on 24 June.
On 20 July, the EU issued a news release as a Q&A on the EU AML/CFT package and its 4 legislative proposals. It is said that these 4 proposals together constitute an ambitious set of measures to modernise the EU’s AML/CFT regime.
On 19 July. Elliptic carried an article which follows a real case involving the REvil ransomware – from initial infection and negotiation, through to the cryptocurrency payment and laundering of the funds.