Deutsche Bank headquarters raided over money laundering

November 29th, 2018

The Frankfurt headquarters of Deutsche Bank, Germany’s biggest bank, have been raided by prosecutors in a money laundering investigation.

According to Germany’s public prosecutor, two staff members have allegedly helped clients launder money from criminal activities.

In 2016 alone, more than 900 customers were served by a Deutsche Bank subsidiary registered in the BVI, generating a volume of EUR 311 million, the prosecutors allege.

The investigation was sparked by revelations in the 2016 “Panama Papers” – an enormous amount of information leaked from a Panamanian law firm called Mossack Fonseca.

 

UK frustrated by Cayman silence on Money Laundering

October 2nd, 2018

The National Crime Agency are frustrated by a lack of co-operation by the authorities in the Cayman Islands.

The law enforcement agency said that it was “asking for information we don’t get”. It says it has also significantly stepped up efforts to seize dirty Russian money coming into the United Kingdom. Also, the agency launched investigations into British-based lawyers and accountants suspected of facilitating money laundering.

The NCA leads the UK fight against money laundering and criminal money, which it estimates could be worth up to £ 1 billion a day.

A number of investigations have led it to Cayman-registered offshore companies, which is a British Overseas Territory in the Caribbean and one of the world’s largest financial centres.

Donald Toon, director of the National Crime Agency, revealed that the Cayman Islands authorities had not co-operated when he had asked for information on who owned these firms. “The Cayman government is entirely aware of the UK concerns,” he said.

In recent years, the spotlight has been on tax havens linked to the UK following a series of global investigations involving nearly 100 media organisations, including the BBC. The Paradise Papers exposed how wealthy and corrupt individuals used complex offshore structures to cover their tracks. There were concerns that criminals were finding new tax havens where they could exploit lax regulation and hide their links to corrupt assets.

 

Former Malaysian prime minister arrested by anti-corruption agency

September 25th, 2018

According to anti-corruption agency’s statemenent, Malaysia’s former prime minister Najib Razak faces further charges of abuse of power over the multimillion dollar looting of a state investment fund after his arrest on September 19.

Razak was detained at its office over the transfer of 2.6 billion ringgit (£477 million) into his bank account. He will be taken to court in order to face several charges under Section 23 of the Malaysian Anti-Corruption Commission Act.

Razak was earlier charged with multiple counts of criminal breach of trust, corruption and money laundering over the scandal at the 1Malaysia Development Berhad (1MDB) state fund, just months after his shocking electoral defeat. He has pleaded not guilty and his trial is due to start next year. He set up 1MDB when he took power in 2009 to promote economic development, but the fund amassed billions in debt and is being investigated in the United States and several other countries for alleged cross-border embezzlement and money laundering. Public anger over this scandal led to the stunning ouster of Mr Razak’s long-ruling coalition in national polls and ushered in the first change of power since independence from Britain in 1957. The new government reopened investigations stifled under Mr Razak’s rule and barred him and his wife from leaving the country. Also, police seized jewellery, handbags and other valuables estimated at more than 1.1 billion ringgit from properties related to him.

Razak, 65, has accused Malaysia’s new government under prime minister Mahathir Mohamad of seeking political vengeance and vowed to clear his name at his trial. According to his claims, the money was a political donation from Saudi Arabia’s royal family.

Portugal issues Legal Regime on the Beneficial Ownership Central Register

September 19th, 2018

The Ministerial Order 233/2018, which regulates the Legal Regime on the Beneficial Ownership Central Register, was issued in Portugal.

On August 21, was issued the Ministerial Order 233/2018, which regulates the Legal Regime on the Beneficial Ownership Central Register (BOCR Legal Regime). However, the regulations are still not complete, since the forms for compliance of the disclosure requirements under the BOCR Legal Regime must still be published on the website of the Justice sector. In addition, it requires that such forms will include the circumstances indicating of the status of beneficial owner that must be taken into account when filling out the form.

The first beneficial owner declaration for the companies already in existence on 1 October 2018 must be made between 1 January 2019 and 30 April 30 2019.

The obligations under this legal regime must be fulfilled by filing the said form.

5th EU Anti-Money Laundering Directive published

July 20th, 2018

On June 19th, 2018, the 5th EU Anti-Money Laundering Directive (AMLD 5) was published in the official journal of the European Union.

The AMLD5 modifies the 4th Anti-Money Laundering Directive (AMLD4) released only in 2015. The EU Commission proposed the revised AMLD in July 2016 as part of its Action Plan against terrorism announced in February 2016, after the attacks in Paris and Brussels, and as a reaction to the Panama Papers published in April 2016. The plan to implement the changes by January 2017 resulted overambitious; a final compromise text was reached only in December 2017. The new directive entered into force on July 9th, 2018. Member states are obliged to transpose the modified regulations into national law by latest January 20th, 2020.

The above mentioned Anti-Money Laundering Directive includes the following:

  • it extends the scope to virtual currency platforms and wallet providers, tax related services and traders of art;
  • grants access to the general public to beneficial ownership information of EU based companies;
  • makes it an obligation to consult the beneficial ownership register when performing AML due diligence;
  • obliges member states to create a list of national public offices and functions that qualify as politically exposed (PEP);
  • introduces strict enhanced due diligence measures for financial flows from high-risk 3rd countries;
  • ends the anonymity of bank and savings accounts, as well as safe deposit boxes and creates central access mechanisms to bank account and safe deposit boxes holder information throughout the EU;
  • makes information on real estate holders centrally available to public authorities;
  • lowers thresholds for identifying purchasers of prepaid cards and for the use of e-money;
  • enhances the powers of the FIUs and facilitates cooperation and information exchange among authorities.

 

OECD says Switzerland must do more to tackle bribery and protect whistleblowers

May 30th, 2018

Switzerland must urgently do more to protect whistleblowers and stop money laundering and bribery.

After a year-long investigation, the Organisation for Economic Co-operation Development (OECD) said that companies, lawyers and trustees operating in Switzerland must face tougher penalties for perpetrating or facilitating bribery taking place abroad.

The OECD said Switzerland “presents a specific risk of corruption” because of a large number of public international organisations and an outsized financial sector providing services for overseas clients. Despite hosting international industries which have significant potential for corruption, such as commodities trading, Switzerland has no legal framework to protect whistleblowers.

The organisation also found out that not a single case of foreign bribery has been brought to local Swiss law enforcement agencies in any of its cantons by a whistleblower. Internationally, company insiders who alert authorities to wrongdoing are seen as vital in the battle against corruption. They have been instrumental in a number of recent high-profile data leaks that have shone a light into the sometimes shady world of offshore finance.

Long famed for its secretive banks and as a hub for clandestine financial activity, Switzerland has been attempting to clear up its image in recent years after a string of scandals, but the latest report found an “almost universal mistrust” of whistleblowers in the country, stemming from “extremely entrenched opinions on this matter that point to strong, deep-rooted cultural resistance to people who support suspicions of wrongdoing”.

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UK to crackdown on century-old loophole being used for money laundering

May 10th, 2018

According to the government of the United Kingdom, Scottish Limited Partnerships (SLPs) are being exploited by overseas criminal gangs. Initially, SLPs were introduced in 1907 to help Scottish farmers.

The government research revealed that one laundering scheme used 100 different SLPs to shift USD 80bn in Russian money in just 4 years.

The proposals are the latest in ministers’ attempts to crack down on dirty money as part of a wide-ranging response to Russia in the wake of the Salisbury nerve agent attack.

The plans are aimed to ensure that SLPs are being used only by legitimate businesses, users will have to prove they have a genuine connection to the UK and are running a company or maintaining an address in Scotland. Under the current rules, anyone in the world is able to register an SLP. The proposed changes will mean that anyone setting up a limited partnership will have to pass anti-money laundering checks.

While many SLPs are owned by legitimate businesses, government research suggests others have been part of complex attempts to launder the proceeds of criminal activities.

UK to force offshore centres to make public the owners of companies

May 4th, 2018

The UK parliament made a decision to force its overseas territories to make public the owners of companies registered in their jurisdiction, if necessary through an order in council.

Most of British news organizations celebrated this as a victory for transparency campaigners and a major push against offshore secrecy, while the constitutional concerns expressed by the majority of overseas territories’ leaders about British MPs legislating the affairs of largely autonomous territories received very little attention.

The Guardian acknowledged that there may be legitimate reasons to use offshore jurisdictions. “But kleptocracy – egregious and globalized grand corruption – is enabled by anonymous companies, which strip the fingerprints off stolen money and, having done so, hide it under the cover of supposedly respectable corporations. Once all traces of the money’s origin have been removed, the thieves can spend it on New York property, European passports or western politicians, and they do it in vast quantities,” the Guardian said. Accordingto the article, “many of these companies came from the British Virgin Islands, Gibraltar, Anguilla and the other pink dots left on the map of the world, which is why Tuesday’s vote in parliament was so celebrated”.

Also, the Guardian connected Tuesday’s decision directly to the Panama and Paradise Papers.

British tabloid The Daily Mirror attacked one of the few politicians who spoke up on behalf of the overseas territories. It said that Conservative MP Geoffrey Cox “defended tax havens in Parliament after a GBP40,000 Cayman Islands payday” stating the “millionaire MP” had failed to mention in Tuesday’s House of Commons debate that he once represented former Cayman Islands Premier “McKeeva Bush in a corruption trial over his use of government credit cards in casinos.” IT is worth reminding that Mr. Bush was found not guilty in the trial.

News agency Bloomberg welcomed the United Kingdom’s move in a commentary stating it would “let the sunshine in on tax havens” but cautioned that the new transparency would have to be backed by enforcement. It said that corporate anonymity is what had made the British Overseas Territories a huge attraction for overseas money. Open registers “should sow seeds of panic in the offshore financial ecosystem, which has played a central role in recent money laundering and tax evasion scandals.”

The Financial Times analyzed why British Overseas Territories “fear” that the transparency push could “undermine their positions as leading offshore financial centers.”

The potential for legal action by Cayman and Bermuda against an order in council was discussed. However, Tory MP Mr. Mitchell said this was unlikely to be successful. He said that the jurisdictions have to do this by 2020.

US politicians question Trump ties to Panama real estate project

March 4th, 2018

The United States politicians question Trump ties to scandal-struck Panama real estate project. The Panama City project is said to have earned the President between USD 30-50 million.

Two members of Congress have asked the Trump Organisation to reveal if it knew about allegations that real estate agents and investors linked to a project bearing the President’s name in Panama, had ties to money laundering and drugs. Democratic congresswoman Norma Torres and congressman Eliot Engel asked if the company, founded by Donald Trump and run by his sons Eric and Donald Trump Jr since their father entered the White House, was aware of the claims relating to the Trump Ocean Club International Hotel and Tower in Panama City. They asked what due diligence was done on investors and agents involved in the project, which has earned Mr Trump between USD 30 and 50 million for lending his name to it.

The Trump Organisation have not responded to enquiries immediately.

Seychelles to chair AML meeting in August 2018

January 19th, 2018

Seychelles is gearing up to hold this year’s Eastern and Southern Africa Anti-Money Laundering Group meeting in August while also preparing to take up the presidency of the group, the jurisdiction’s finance minister said.

To prepare for the high-level meeting, Seychelles’ Ministry of Finance is holding frequent meetings with all involved parties to ensure the event goes smoothly from start to finish.

The Seychelles’ Minister for Finance, Trade and Economic Planning, Peter Larose, said: “It is important that we plan ahead. I had to call on a number of parties to be able to assist as this is about Seychelles. We need to showcase Seychelles’ style of management, governance system and show the world that we are a capable, responsible and accountable government”. He said that the guests will have the opportunity to witness the competitive edge of Seychelles as part of the global village. Minister also noted that discussions in this year’s meeting will focus on our compliance with international best practices including preventing money-laundering, tax evasion and combatting the financing of terrorism. “It is part and parcel of our commitment to share information within the group and Africa, and with the rest of the world,” said Larose.

The aim of the group is to combat anti-money laundering by implementing recommendations of the Financial Action Task Force on Money Laundering (FATF). The organisation sets standards and promotes effective application of AML legal and regulatory measures.