FATF removes Kenya from blacklist

July 8th, 2014

The Global Financial Action Task Force has removed Kenya from its monitoring process under the ongoing Anti-Money laundering and combating the Financing of Terrorism AML/CFT regime that has been under review since June 2009.

In a statement Treasury Cabinet Secretary Henry Rotich says that the Financial Action Task Force (FATF) team is satisfied with the way Kenya has substantially addressed its action plan on addressing money laundering, combating the financing of Terrorism and proliferation. Also, the team is satisfied with political commitment and institutional capacity to continue implementing the Task Force’s reforms in Kenya.

On the basis of an on-site visit the team, the global body established in 1989 to set international standards on money laundering and combating the financing of terrorism concluded that Kenya has established the legal and regulatory framework in order to address deficiencies identified in February 2010.

Germany seizes tax evasion info

June 22nd, 2014

German customs authorities in the Port of Hamburg have confiscated documents that may contain information about the accounts of suspected tax evaders. This was reported by German media on June 21.

Two containers with around 14,000 documents inside were confiscated at the end of May, with some coming from a branch of private bank Coutts, a subsidiary of the Royal Bank of Scotland, in the Cayman Islands, newspaper Welt am Sonntag said in an advance copy of an article due to be published on Sunday.

It was also reported that customs authorities confiscated a container of Coutts documents from the Cayman Islands on May 20. Since then, finance experts had been evaluating the information and searching for evidence of tax evasion.

A spokesperson for Coutts told Reuters: “We are not aware of any investigation into our Trust Company or its papers and we are working with the authorities to allow these papers to continue on their way.”

EU adopts European Tax Compliance Activities

June 1st, 2014

The European Commission has adopted the 1st annual program for its new anti-fraud regime Hercule III. Over the year 2014, EUR13.7 million will be made available to support EU member states in their enforcement activities that include fighting fraud and fiscal crime.

This program will allow member states to finance specific projects and purchase of technical equipment by national authorities, as well as to tackle smuggling and other activities affecting the EU’s financial interests. Under Hercule III, EU countries will be able to apply for more funding. They could receive funding of up to 80% of the overall costs for actions to strengthen the technical and operational capacity of customs and law enforcement agencies. In exceptional and duly justified cases, the funding could be increased to 90%.

Also, the European Commission will pay for access to specialized databases for use by member states’ customs and tax authorities. Funds will be allocated for training activities and seminars and conferences for customs and police staff.

According to Tax Commissioner Algirdas Šemeta, “Fighting fraud and corruption in the EU must really be a partnership. Hercule III means that member states will have significant financial support in catching fraudsters and protecting taxpayers’ money. Thanks to the work program adopted today, many useful anti-fraud projects can now be put into practice.”

US to toughen Money Laundering Sanctions against North Korea

May 31st, 2014

US lawmakers moved to toughen sanctions against North Korea by targeting money laundering and human rights violations, voicing impatience with the hardline regime.

The House Foreign Affairs Committee approved the bill hours. Previously, Japan, a US ally that has usually championed a hard line on North Korea, unexpectedly eased sanctions after talks.

The House bill would create a blacklist of officials judged to be involved in human rights abuses after a damning report by a UN commission likened abuses by Kim Jong-Un’s regime to those under Nazi Germany.

While the United States already maintains sweeping sanctions against North Korea, the proposed law would seek to make the totalitarian state radioactive for banks from third countries by asking the Treasury Department to consider designating Pyongyang a money-laundering concern.

This move is inspired by the freezing of USD 25 million in North Korean funds in 2005 on US money-laundering and counterfeiting charges at the Banco Delta Asia in the Chinese territory of Macau. Hard-up Pyongyang refused to comply with a denuclearization deal until it received the funds.

The sanctions bill would also re-impose strict restrictions on export licenses that were loosened in 2008 when the President Bush controversially took North Korea off a list of state sponsors of terrorism because he intended to sign a final denuclearization agreement.

Ex-Guatemala President sentenced in US for Money Laundering

May 26th, 2014

Former Guatemalan President Alfonso Portillo has been sentenced to 5 years and 10 months in prison for money laundering.

Besides the prison sentence, Portillo will have to return the USD 2.5 million he accepted as a bribe from the Government of Taiwan so that Guatemala would maintain diplomatic relations with Taipei. Also, he will have to pay a fine of up to USD 500,000.

Portillo was extradited to New York in May 2013 from Guatemala to face charges of conspiring to launder money he obtained illegally during his 2000-2004 mandate.

Portillo laundered the bribe money through U.S. and European banks.

Having initially denied the accusations, he entered a guilty plea in March after reaching an agreement with prosecutors. This agreement allowed him to avoid a 20-year prison term.

Portillo, 62, had received the money from Taiwan between December 1999 and August 2002. The USD 2.5 million was paid to him through 5 cheques.

Of the money, USD 1.5 million were deposited in accounts that he, his wife and daughter had in Spain’s BBVA bank in Paris. Part of that money was later laundered through banks in Switzerland, Luxembourg and other offshore jurisdictions.

Money Laundering in sports: Football, Gambling, and Money Laundering

May 23rd, 2014

Recently, Springer Publishing issued a title to explore football and sports as a cover for money laundering and other financial crimes. The new book is called Football, Gambling, and Money Laundering: A Global Criminal Justice Perspective. Its author Fausto Martin De Sanctis explores how sports are a robust and growing front for a number of illegal activities.

On June 12, São Paulo, Brazil begins hosts the 2014 FIFA World Cup. The event will be held the 20th time, and this is one of the largest sporting competition on worldwide. However, behind competition and the glitz, and glamor, there may be money laundering and other financial crimes taking place.

Sports is not only a path to fame for athletes, a source of national pride for fans and a past time for many, but also a convenient cover for corrupt enterprises. The book shares on how crimes take place, how they are able to flourish, what steps are currently being taken and what should be done to confront sports-related financial crimes.

As an authoritative reference on the topic, Football, Gambling, and Money Laundering will appeal to academics, law enforcement officials, judges, prosecutors and law makers alike. The book identifies possible loopholes in existing international legislation for money laundering in sports, and describes proposals to prevent and monitor illegal gambling activities, specifically in football. Exposing a side of sports that is often left hidden to the world, this new title is also written in an accessible way, even for non-experts.

Fausto Martin De Sanctis holds a Doctorate in Criminal Law from the University of São Paulo’s School of Law (USP) and an advanced degree in Civil Procedure from the Federal University of Brasilia (UnB) in Brazil.

Vatican says bank needs ‘corrective measures’

May 19th, 2014

The Vatican’s financial watchdog agency said that “corrective measures” were necessary at the Holy See’s troubled bank to continue the path toward financial transparency and compliance with international anti-money laundering norms.

According to Financial Intelligence Authority Director Rene Bruelhart, a long-awaited investigation of the bank, known as the Institute for Religious Works, included looking into its practice of not disclosing the names of the true account holders in its transactions with Italian banks. He said that the main problems identified in the inspection concerned the bank’s procedures for identifying high-risk activities, and that more detail was necessary.

He said over the coming weeks, he would discuss a proposed action plan with bank managers “to take certain corrective measures to have a full implementation (of the Vatican’s anti-money-laundering law) in the IOR.”

The majority of the 202 new cases stemmed from transactions at the Vatican bank, which is reviewing each of its accounts to make sure it is clean and that the bank has complete information on the client.

Anti-tax Evasion Agreement reached by HK and US

May 11th, 2014

On May 9, 2014, the U.S. Treasury Department announced that Hong Kong has reached an information-sharing agreement with the United States under a new law meant to combat offshore tax dodging by Americans.

Set to take effect on July 1, the Foreign Account Tax Compliance Act of 2010 (FATCA) will require foreign banks, investment funds and insurers to hand over information to the U.S. Internal Revenue Service about accounts with more than USD 50 000 held by Americans.

Foreign firms that do not comply face a 30% withholding tax on their U.S. investment income and could effectively be frozen out of U.S. capital markets.

This Hong Kong’s inter-governmental agreement (IGA) must be finalized by the end of the year.

FATF moves meeting from Moscow

May 5th, 2014

The Financial Action Task Force (FATF) announced its decision not to hold a planned meeting in Moscow in June due to the continuing Ukraine crisis.

A summit meeting of the Paris-based Financial Action Task Force (FATF) was to be held in Moscow in June, in part because the group’s current head is Vladimir Nechaev, chief of Russia’s anti-money laundering agency. However, on May 4, national anti-money laundering agencies belonging to FATF received a notice from the group saying the meeting would be held in Paris instead.

According to the announcement, “It became apparent that it would be difficult to ensure full attendance of FATF delegations at the scheduled plenary in Moscow but there was widespread support for the work of the FATF to continue uninterrupted”.

The meeting will now take place during the week of June 22 to 27 at the Paris conference center of the Organization for Economic Cooperation and Development.

Offshore Deal Activity increases in 2013

February 20th, 2014

According to Appleby’s latest Offshore-i report, offshore deal volumes rose steadily throughout 2013 reaching a total 12-month value surpassed only 3 times in the last decade.

The total value of deals in 2013 hit USD 151 billion. Out of this USD 151 billion, USD 47.9 billion was recorded in the 4th quarter – up 32% from the previous quarter.

There were 11 USD 1 billion+ deals in Q4 2013, almost double the number in the previous quarter, including 2 worth over USD 2 billion. The average deal size in the final quarter of last year was USD 79 million.

Q4 2013 was a breakout year for Bermuda with the value of deals done on its shores doubling; its full-year total nearly equalled that of the Cayman Islands.

Offshore ranks 6th among world regions for deal volume in Q4 2013, 5th for deal value, and 3rd for average deal size. Only North America and South and Central America record larger average deal sizes.

Appleby pointed out that 29% of deals are completed by offshore buyers, 47% by investors, and 25% by companies from the rest of the world.