On 16 May, HM Treasury advised that OFSI had updated guidance documents to reflect changes to sanctions legislation. The changes involve a new reporting requirement from 16 May on designated persons under Regulation 38A of The Republic of Belarus (Sanctions) (EU Exit) Regulations 2019; and new immigration measures from 5 June under regulation 5 of the Counter-Terrorism (Sanctions) (EU Exit) Regulations 2019.
On 16 May, OFAC advised that it was imposing sanctions on 2 Russian individuals and 3 Russia-based entities for facilitating weapons transfers between Russia and the Democratic People’s Republic of Korea (DPRK).
2,211 fewer ships transited the Canal between October and April due to the drought.
In other news, the Supreme Court of Justice has declared unconstitutional a 2022 Law which prohibits the use, import, and marketing of electronic cigarettes, tobacco vaporisers, and other similar devices with or without nicotine. Apparently, this means that the Law must return to the National Assembly to be considered once more.
On 15 May, OFAC advised that it had sanctioned Ali Yagoub Gibril and Osman Mohamed Hamid Mohamed for leading the Rapid Support Forces’ (RSF) war campaign.
On 15 May, OFAC advised that it was targeting the Ortega-Murillo regime’s repression of the Nicaraguan people and its ability to manipulate the gold sector and profit from corrupt operations. It is doing so by imposing sanctions on 3 Nicaragua-based entities, the Training Center of the Russian Ministry of Internal Affairs in Managua (RTC); Compania Minera Internacional, Sociedad Anónima (COMINTSA); and Capital Mining Investment Nicaragua, Sociedad Anónima (Capital Mining).
The EU Intellectual Property Office has published this report which focuses on the results of EMPACT Operation JAD PIRATES I, a Frontex coordinated operation, tackling the smuggling of counterfeit goods at the external borders of the EU. It says that a significant variety of counterfeit product categories were detected, including excisable commodities and non-EU-compliant goods.
EU Regulation 2024/1338/EU also prohibits the export, sale, transfer or supply to Iran of further components that could be used in the development and production of UAV.
Well, maybe it wasn’t flu after all, as feel better, though weak, today. It might have been a dose of Covid – but apparently the current symproms for Covid and flu are so similar that only a test can confirm if its the former.
Interesting story in the newspapers today, about ex-President Martinelli’s former secretary, who is a fugitive from Panamanian justice in Italy. He fled there and, although arrested in 2021, Italy refused to extradite him, as Panama had not ratieid the extradition treaty (Italy had done so). It is claimed that the National Assemblt deliberately failed to ratify the treaty, so that he could not be extradited. He is now complaining that his wife has kept their daughter in Panama, The child was actually born in Italy. However, it seems that the courts in Panama upheld the wife’s claim for custody and that the Italian authorities were notified of the fact. In March 2023, the former secretary was sentenced to 10 years in prison for money laundering in the so-called “Blue Apple” case. That case involved Blue Apple Services, which had apparently been formed by members of the government, allegedly for the purpose of disguising or laundering money obtained through bribery linked to various construction projects. It has been described as the biggest corruption case since the Odebrecht case.
On 14 May, OFAC advised that it had designated 1 Russian individual and 3 Russia-based companies involved in an attempted sanctions evasion scheme in which an opaque and complex supposed divestment could have unfrozen more than $1.5 billion worth of shares belonging to US-designated Russian oligarch Oleg Deripaska.
On 14 May, a news release advised that the EU Council had decided to broaden the scope of the EU framework for restrictive measures in view of Iran’s military support of Russia’s war of aggression against Ukraine. The EU will now be able to target persons and entities supplying, selling or otherwise being involved in transferring Iran’s missiles and UAV.
Well, I never got around to getting that influenza shot and now, ironically after detailing the latest statistics yesterday, it seems I have the flu… So, this a bit of labour, and let’s hope I can nevertheless keep going.
It seems the elections on 5 May had a 77.7% turnout, the largest since the end of the dictatorship in 1989.
in other news, a health update tells us of an increase in hospitalisations due to influenza, with a total of 24 patients confined. meanwhile, Covid-19 hasn’t totally gone away, with 28 new cases reported in the last week, 49 active cases, with 1 in ICU and another 24 hospitalised. There were 2 further deaths reported.
Missed publishing yesterday, as at Mexican circus until late! So, 2 days’ worth today.
In other news, we are told that the idea of a rival canal across Nicaragua has resurfaced. The recent original plan from 2012-13 saw a Chinese businessman behind the scheme, but that fell through.
On 11 May, an investigation by RFerl claims that major Japanese, US, and Taiwanese companies rank among the Top 5 manufacturers on a list of more than 2,000 electronic components that Ukraine says Russia has used in 5 types of warplanes it has deployed in its full-scale invasion.
On 10 May, Politico reported that Malta’s Deputy Prime Minister Chris Fearne has resigned from government and ended his candidacy to be the country’s next European Commissioner.
As detailed beloew, one of the Mossack Fonseca pair has died, just as the court case involving their firm has ended in Panama, as the verdict is awaited. Ramón Fonseca Mora was 71 and came to fame, or infamy, depending on your view, in the wake of the “Panama Papers” leaks.
Meanwhile, another local name facing serious legal action has lost the partial immunity offered by being a National Assembly member for the ruling PRD. The legal protection available for members meant that her current case would have been heard by the Supreme Court, but having lost her seat in the recent election, and not obtained any other qualifying post that might have extended the protection, her case will now be heard by the ordinary court system. The case involved a man arrested in 2009 with 68 kg of gold at Tocumen Airport, the man then hiring the politician and lawyer in 2013 to undertake his defence.
Meanwhile, ratings agency Moody says that the new government will have to deal with the deterioration of the country’s fiscal situation, the closure of the Cobre Panama mine, the reduction of transits through the Canal due to the drought, salaries of public officials and the public pension system. Moody had downgraded Panama’s credit rating in October.
Spent the middle of the day on a lovely near-100 year old sail training vessel of the Spanish Navy. It was interesting to note that she was built to a British design, with Southampton-based naval architects. She was undertaking a round-the-world cruise to mark her centenary. I also noted that a Chilean vessel I was lucky enough to Visit a few years back was built in the 1950s to the same design. I just wonder if some of the many miles of rope aboard the vessel came from the ropery at Chatham, still in operation after some 400 years.
On 9 May, ICIJ reported that Fonseca had been hospitalised since early April, shortly before the start of a trial involving him and 26 others (including Fonseca’s partner in the law firm Mossack Fonseca, Jürgen Mossack) and stemming from the Panama Papers disclosures in 2016.
On 1 May, Global Financial Integrity announced a report which identifies 25 cases in which illegal, allegedly illicit or suspicious funds were funnelled into commercial property in the US over approximately the last 20 years, with a total value of property exceeding $2.6 billion. 14 involved either PEP or oligarchs who typically have especially close relationships with foreign government officials. It said that weak or non-existent reporting requirements by professions involved in the purchase of commercial real estate contributed to the ease with which illicit funds were laundered.
On 8 May, FinCEN advised that it had issued an Advisory to assist financial institutions in detecting potentially illicit transactions related to Islamic Republic of Iran-backed terrorist organisations. The Advisory highlights how certain terrorist organisations receive support from Iran and describes several typologies these terrorist organisations use to illicitly access or circumvent the international financial system to raise, move, and spend funds. These terrorist organisations include Lebanese Hizballah, Hamas, the Palestinian Islamic Jihad, the Houthis, and several Iran-aligned militia groups in Iraq and Syria. It also provides red flags that may assist financial institutions in identifying related suspicious activity.
On 8 May, the Global Sanctions blog reported that Sberbank had sold its Switzerland-based subsidiary in September 2022, and it is now renamed TradeXBank.
On 8 May, In Depth News reported that the United Nations Office on Drugs and Crime (UNODC) has decided to launch a global Action against Human Trafficking and Migrant Smuggling. UNODC will highlight the links between trafficking and smuggling and also other forms of organised crime such as cybercrime, money laundering, drug trafficking, firearms trafficking, and corruption. A global network of specialised prosecutors to be established by the end of this year will focus on a “follow-the-money” approach to tighten money laundering safeguards and identify links with corruption, and other forms of organised crime.
Firstly, in the district of Balboa today (the old “capital” of the US Canal Zone) saw this new memorial to employees of the Panama Canal who lost their lives in the Covid-19 pandemic. I have not seen or heard of any such memorials elsewhere.
It is reported that First Quantum, owners of the huge copper mine that triggered protests last year, and a move to close it and other such mines in Panama, hope that the new President means it can look forward to talks with Panama’s new government to find a resolution to the dispute.
As a couple of dispute over election results continue (in one case a mayoral seat was won with literally a handful of votes), one independent candidate became the most successful candidate, in terms of the number of votes and proportion of the vote in his district, with nearly 65,000 votes. To achieve this it is said he spent just $10,000…
Finally, on a walk today we wandered past the riot police depot, deliberately, as I wanted to photograph the little men in the depot’s walls…very odd.
On 7 May, the Times of Malta and others reported that Joseph Muscat and ex-minister Konrad Mizzi were to be charged with accepting bribes and corruption; while Chris Fearne and Edward Scicluna to be charged with defrauding the government through deceit. Several others are also facing charges, including Muscat’s former chief of staff, Keith Schrembri.
On 7 May, OFAC advised that it had designated Dmitry Yuryevich Khoroshev, a Russian national and a leader of the Russia-based LockBit group, for his role in developing and distributing LockBit ransomware. This designation is the result of a collaborative effort with the DoJ, Federal Bureau of Investigation, the UK NCA and other international partners. The DoJ has also unsealed an indictment and the UK and Australia are also announcing the designation of Khoroshev.
On 7 May, MONEYVAL released the sixth enhanced follow-up report on Slovenia, saying that Slovenia has improved its measures for tackling terrorist financing. As a result of legislative amendments to the terrorist financing offence, the country has been re-rated on this recommendation from “partially compliant” to “largely compliant”. Out of the 40 FATF Recommendations, Slovenia currently has 11 Recommendations rated “compliant” and 29 Recommendations rated “largely compliant”. Slovenia is no longer required to report under MONEYVAL’s 5th round of evaluations.
On 7 May, MONEYVAL published the second follow-up report on Georgia, saying that Georgia had requested a reassessment of 9 FATF Recommendations contained in its comprehensive 2020 Mutual Evaluation Report. Georgia is rated “compliant” on 7 Recommendations, “largely compliant” on 22 Recommendations, “partially compliant” on 10 Recommendations, and “non-compliant” on 1 Recommendation. Georgia will remain in enhanced follow-up and will continue to report back to MONEYVAL on progress to strengthen its implementation of AML/CFT measures. Georgia is expected to report back within 1 year’s time, in December 2024.
Well, the election is over and, as expected, Mulino won, albeit with a minority result (around 34%), and with a National Assembly with only 13 members from his RM party. In fact, the largest single group is of unattached independents, with 21 members – compared to just 5 following the 2019 election.
Apparently, once voting papers are counted they are destroyed by burning…unfortunately it appears that at one polling station officials managed to get things the wrong way around…
I am only glad I was roped into helping with the vote, as my wife, on site for 6 am, did not return home until 2 am the next morning!
Election day in Panama today, and crowds of people at the 2 polling stations in schoools near us. The newspapers reported that 14% of voters, some 431,000 people, had already voted by 10 am. My wife was in place at the nearest polling station at 6 am. Polls close at 4 pm, after which only allow voters who are in the queue and the members of the respective polling station staff who have not voted where they belong to vote.
After concerns expressed on social media about there being a dress code for voters, with questions about voting in flip-flops and shorts. The Electoral Tribunal has explained that people can dress how they like, and that even those wearing party badges and caps can enter, as long as they do no canvassing etc inside the polling station.
Election day tomorrow, with a bit of gloom cast by an article by a retired mining engineer explaining how whoever becomes President may be hamstrung by the fallout from the copper mine dispute, if the new Government does not reinstate the project…
A quite day, as wife has to be early tomorrow, as an election observer and having to be on site by 6…
For myself, collected 2 t-shirts, 2 baseball caps and a flag from various candidates’ supporters. Something for my memorabilia draw.
In other news, the Panama Canal is undertaking a small-scale desalination project over 6 months in Colón Province on the Caribbean coast. It is said that the project addresses the need to implement long-term solutions to ensure the quantity and quality of water in the lakes of the Panama Canal, which also supply the population’s fresh water, as well as being needed for the operation of the Canal.
This Methodology was amended in April and sets out the assessment process which focuses on two distinct areas: effectiveness and technical compliance. The 2013 FATF Methodology for assessing compliance with the FATF Recommendations and the effectiveness of AML/CFT systems and the Procedures for the FATF Fourth Round of AML/CFT Mutual Evaluations will continue to apply to countries being evaluated under the previous round of evaluations and related follow-up processes.
Unlike Britain, there does seem to be a hint of election fever here, at least in the media – although I didn’t notice much of it on a trip out today. The US Embassy has asked US citizens in the country to exercise caution when traveling this Sunday, and avoid any demos etc. One hopes that the fact that the sale of alcohol is banned from midday tomorrow until midday on Monday may help to cool the temperature.
At the last moment, the Supreme Court has cleared ex-President Martinelli’s replacement, Mulino, as a candidate; though it criticised the Tribunal Electoral for its actions, accusing it of exercising “undue influence”.
As well as alcohol being banned, from midnight tonight all political campaigning is prohibited, and there will be no more polls published. The latest poll continues to show Mulino ahead, with the next 3 of the other 8 candidates having ratings roughly equal in total to Mulino’s.
Meanwhile, we are told that 95% of Panamanians residing abroad and registered in the Registry of Voters Residing Abroad (RERE) have voted. Voting is not compulsory here, though it was during the dicatorship years – when they clipped your ID card to show you had voted.
Both CNN and the Guardian in the UK have run features on the election, the latter referring to a “backdrop of social unrest and drought”. Meanwhile, Transparency International refers to an election which “intensifies the ongoing political crisis, fueled by social inequality and corruption protests in recent years”. Transparency International notes that corruption is a leading concern among voters.
Finally, the latest Covid-19 statistics show a further 45 new cases and 1 new fatality in the 2 weeks to 27 April, and 22 of the 35 active cases being in hospital (though none in the ICU).
On a personal note, visited the former US Army’s Fort Amador, left long more or less derelict, now being developed. It was nice to note that the bars, restaurants and boutique hotel are largely using the original buildings – rather than adopting the usual Panamanian fashion of demolishing a building of character and replacing it with some anonymous edifice that soon begins to look shabby.
The Spring edition of the Bulletin of the International Academy of Financial Crime Litigators carried an article about this new US legislation, including a helpful chart comparing it to the FCPA and domestic bribery offences.
On 3 May, FATF published an updated consolidated schedule of all AML/CFT evaluation results to date, following the release of several new MONEYVAL reports – links to which are also provided.
As the election gets even closer, something that is unlikely to have been seen before – a feature article in the Irish Times on the election; or rather on the person not a candidate, but nevertheless dominating it.
Supermarket magnate driving Panama’s politics from embassy storeroom
Meanwhile, the Supreme Court is in the third day of meeting to decide if ex-President Martinelli’s proxy candidate, Mulino, can actually take part in the election. Given that the vote is on Sunday, this all seems a bit late in the day. The claim is that his candidacy is unconstitutional, but we’ll see.
On 2 May, OFAC advised that it had designated 5 individuals for helping US-designated Hizballah money exchanger Hassan Moukalled and his company, CTEX Exchange, evade sanctions and facilitate illicit activities in support of Hizballah. These individuals, including 2 co-founders of CTEX Exchange and 2 of Moukalled’s sons, operate 2 companies in Lebanon and UAE that are being concurrently designated.
On 2 May, MONEYVAL issued this report. It says that, since December 2022, Lithuania has improved its national AML/CFT co-ordination framework, particularly in relation to proliferation financing. FATF Recommendations 6 (targeted financial sanctions related to terrorism and terrorist financing), 7 (targeted financial sanctions related to proliferation) and 28 (regulation and supervision of designated non-financial businesses and professions (DNBP)) were also assessed, however these remained rated Partially Compliant. Out of the 40 FATF Recommendations, Lithuania currently has: • 9 Recommendations rated Compliant • 27 Recommendations rated Largely Compliant • 4 Recommendations rated Partially Compliant Lithuania is expected to provide an oral report to MONEYVAL in May 2024, and a written report in December 2024 on further progress made towards strengthening its AML/CFT system.
On 2 May, MONEYVAL issued this follow-up report, saying that, since November 2022, Cyprus has improved the virtual asset service providers (VASP) regime with only a few minor deficiencies remaining. In addition, several measures to assess terrorism financing risk exposure by the non-profit sector and strengthen oversight activities have been taken, although these have not yet been fully implemented. Whilst FATF Recommendation 8 remains Partly Compliant, the country has been re-rated on Recommendation 15 from Partially Compliant to Largely Compliant. Overall, Cyprus has made progress in addressing most of the technical compliance shortcomings identified in its 2019 Mutual Evaluation Report. Out of the 40 FATF Recommendations, Cyprus currently has:
Cyprus has reached the general expectation of having remedied most of the technical compliance deficiencies at the end of its third year of follow up. It is expected to report back by May 2025 to MONEYVAL on further progress made towards strengthening its AML/CFT system.
On 2 May, MONEYVAL published an enhanced follow-up report. It says that whilst FATF Recommendations 1, 2, 15 and 24 remain rated Partly Compliant, the country has been re-rated on recommendations 10, 17, 22, 23, 32 and 40 from Partially Compliant to Largely Compliant and from Partially Compliant to Compliant on Recommendation 13. Overall, Croatia has made progress in addressing the technical compliance shortcomings identified in its 2021 Mutual Evaluation Report. Out of the 40 FATF Recommendations, Croatia currently has: • 5 Recommendations rated Compliant • 23 Recommendations rated Largely Compliant • 12 Recommendations rated Partially Compliant Croatia remains under MONEYVAL’s enhanced follow-up procedure and is expected to report back to MONEYVAL on further progress made towards strengthening its AML/CFT system in December 2024.
On 2 May, HM Treasury advised that, as well as being re-styled and moved into a digital format, this update communicates a change in policy in how OFSI applies its guidance to cases. OFSI will now always apply the most recent iteration of its Enforcement guidance to cases. The guidance now also better explains how we apply and split the ‘case factors’ that OFSI uses to assess suspected breaches of financial sanctions. It introduces 2 new distinct case factors, “Knowledge, intention and reasonable cause to suspect” and “Cooperation” that were previously included more generally in the guidance.
Happy May Day, a public holiday here, as in most of Europe, though not in the UK, which moves it to some convenient Monday… Traffic and the city quite quiet today as a result.
The latest data on the avergae food basket shows around 4.5% increase on March 2023, though this is down from the 5.4% recorded in December. Depending on where you shop, apparently, the “basket” varied between $274 and $333. The basket does not include household cleaning or personal care products, nor are other household costs, such as water, electricity and housing.
I’m not sure if such a feature would be run in Britain, but Ellas has published a feature on the would-be first ladies of the Presidential candidates.
On 1 May, CGAP (a global partnership of more than 30 leading development organisations) published a post on the revision of FATF Recommendation 16 and the “Travel Rule”. It says that, whatever the final revisions are, they will have a bearing on the accessibility of payments for low-income customers. It is therefore critical that the financial inclusion community makes its voice heard and supports FATF in this delicate revision – a process that should ideally also be informed by a regulatory impact assessment.
On 1 May, OFAC advised that it is taking action to target Russia’s military-industrial base and chemical and biological weapons programs as well as companies and individuals in third countries that help Russia acquire key inputs for weapons or defence-related production. The almost 300 targets being sanctioned by both Treasury and the State Department include sanctions on dozens of actors that have enabled Russia to acquire desperately needed technology and equipment from abroad. Among the actual or potential targets of the sanctions are –
foreign financial institutions that conduct or facilitate significant transactions, or provide any service, involving Russia’s military-industrial base;
external suppliers for cotton cellulose and its highly flammable byproduct, nitrocellulose, which are key explosives precursors;
3 Russia-based entities and 2 individuals involved in procuring items for military institutes involved in Russia’s chemical and biological weapons programs;
2 Russia-based entities involved in natural gas-related construction projects, Neftegazstroy and Aktsionernoe Obshchestvo Vnipigazdobycha;
Russian, Chinese and Hong Kong businesses involved in the Russian UAV procurement network;
individuals and entities that are part of the procurement network of Russian defense procurement firm Radioavtomatika LLC and its front company, Novastream Limited, to acquire foreign electronic components;
PRC-based entities were designated for operating or having operated in the technology sector of the Russian Federation economy;
PRC companies providing support to Russian defence entities;
Belgium- and Türkiye-based machine tool procurement networks;
Hong Kong-, Slovakia-, and UAE-based electronics procurement networks;
The supply chain supporting KAMAZ, Russia’s largest truck manufacturer, one of the world’s top 20 heavy duty truck producers, and a supplier of armoured vehicles to Russia’s military;
Evgenii Stanislavich Petrov and what is termed the Petrov procurement network;
Yevgeni Aliyev, a procurement agent, and the Aliyev network of intermediaries that places orders on behalf of Russian end-users with close ties to the Russian miliary;
Türkiye-based electronics supplierAlpha Impex Ithalat Ve Ihracat Dis Ticaret Limited Sirketi;
various individuals in the leadership of Russia-based sanctioned entities;
a number of entities, being Russia-based persons designated for operating or having operated in the defence and related materiel sector of the Russian Federation economy;
a number of entities, being Russia-based persons designated for operating or having operated in the technology sector of the Russian Federation economy; and
3 entities designated for operating or having operated in the transportation sector of the Russian Federation economy.
OFAC also issued 3 new General Licenses 95 (Authorizing Civil Aviation Safety and Wind Down Transactions Involving Limited Liability Company Aviakompaniya Pobeda), 96 (Authorizing Limited Safety and Environmental Transactions Involving Certain Blocked Persons or Vessels), and 97 (Authorizing the Wind Down of Transactions Involving Certain Entities Blocked on May 1, 2024).
On 1 May, HM Treasury published a report for 2020 to 2022 on AML/CFT supervision, and one for 2022-23. They include supervisory and enforcement data on both the Statutory and Professional Body Supervisors, highlighting any notable changes in supervisory activity and any fines that supervisors have issued. In one report the 2 years have been combined to address delays in reporting that developed during the pandemic and ensure data is available as close to the relevant period as possible.
On 1 May, OFSI advised that the FAQ are designed to offer easily accessible responses to commonplace compliance questions, and should always be viewed alongside existing guidance and legislation, which take precedence.
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