Anti Money Laundering Blog

India and Qatar will share information on money laundering and terror threats as well as exchange defence experts for the security of the Arabian Gulf region. This is conditioned by 2 new agreements that were signed between India and Qatar during the visit of Indian Prime Minister Manmohan Singh’s to Qatar.

One agreement is about security and law enforcement, while another is about defence cooperation.

The agreement on security and law enforcement provides the framework for sharing of information and database on threats that terrorists impose, on money laundering and on drug smuggling. This document was signed by Minister of State for External Affairs E. Ahamed and Qatar’s Minister of State for Internal Affairs Sheikh Abdullah Bin Nasser Bin Khalifa Al-Thani.

The agreement on defence cooperation provides a structure for training programmes by India and Qatar, as well as exchange of goodwill missions and experts between the two countries. It was signed by Defence Secretary Vijay Singh and the Chief of Staff of the Qatar Armed Forces Hamad Bin Ali Al-Attiyah.

Both agreements were signed on November 10, 2008.

It happened so that there was no law on anti money laundering and terrorism financing in Burundi and Rwanda. However, the law was long awaited.

At last, anti-money laundering and counter-terrorist financing law has been passed by both the Lower and Upper Chambers of Parliament in Rwanda. It will come into effect and become law soon if assented by the President.

This was caused by financial experts who have expressed fears that financial stability and economic prosperity can be threatened money laundering and terrorist financing.

As the law is going to be implemented, a Financial Intelligence Unit (FIU) is also to be formed in order to deal with receiving, keeping, processing, analyzing and disseminating information regarding suspicious financial transactions.

Governor Central Bank, Francois Kanimba, said that anti-money laundering and counter-terrorist financing face serious challenges in Rwanda. These challenges include the advanced science and technology, rapid economic development, and financial business innovation.

On October 29, 2008, the UK’s independent non-governmental body Financial Services Authority (FSA) announced that the same day it fined Sindicatum Holdings Limited (SHL) GBP 49 000.

The FSA also fined SHL’s money laundering reporting officer (MLRO), Michael Wheelhouse, GBP 17 500 as he did not have appropriate anti-money laundering systems and controls in place that would verify and record the identities of the customers. It should be noted that this was the 1st time the FSA has imposed a fine on a money laundering reporting officer.

A number of failings was detected by the FSA. The failings included the following:
- SHL failed to implement adequate procedures aimed to verify its customers’ identities;
- SHL failed to verify adequately the identities of a significant number of its customers;
- SHL failed to keep adequate records of the verification of its customers’ identities;
- SHL’s MLRO, Michael Wheelhouse, failed to take reasonable steps to implement adequate procedures for controlling risk of money laundering.

Head of retail enforcement at the FSA, William Amos, said that it is crucial to the integrity of the United Kingdom’s financial markets to ensure that regulated firms are not used by criminals for money laundering. He also said that senior management must implement and follow procedures that meet the requirements made by the FSA. According to Amos, this fine is a warning to firms and individuals about the importance to comply with the FSA’s rules and the Authority “will not hesitate to clamp down on failures, where necessary”.

When deciding on the amount of the fine for Sindicatum Holdings Limited, the FSA took into consideration the limited financial resources of the firm as well as its ability to pay the penalty. Otherwise the penalty is said to have been significantly larger.

The group of 9 persons have been charged with handling a million-dollar drug and money laundering operation in southeastern Virginia.

According to the Newport News Daily Press, 8 members of this group lived in the Newport News area. It is alleged that the head of the drug operation was William Foreman who was assisted by Quentin Haley and Bryan Robbs. Robbs was from Costa Mesa, California, the other two were from Newport News.

A federal grand jury charged the 3 with laundering the proceeds of drugs. Shavonda York of Hampton, Perry Lee Bowen Jr. of Chesapeake and Richard Wiggins Jr. of Newport News were charged with money laundering. A 72-year-old defendant, Margarette Bullock Powell, was charged with wire fraud.

Chairman of the Economic and Financial Crimes Commission (EFCC), Mrs Farida Waziri, has addressed Nigerian banks urging them to live up to their responsibility by providing the anti-graft agency true information on money laundering activities in the banking sector.

According to Mrs Waziri, cooperation with the EFCC in the fight against money laundering is in the interest of banks. She also added that the Commission was poised to reveal the genuine facts on the banking sector in order to protect the economy of Nigeria.

This was said on October 28 when a delegation of the Chartered Institute of Bankers of Nigeria (CIBN) led by  Dr. Erastus Akingbola paid her a visit in her office in Abuja. The EFCC chair said that the visit was timely, and that the banking sector was crucial in the economy. Mrs Waziri said that unfortunately corruption and money laundering was sometimes organized by the banks as when there is a money laundering case there is always an insider connection.

Recently, media discussed the threat posed by mobile banking from a personal BlackBerry or iPhone. It appeared that mobile banking might cause threats to financial institutions because criminals look for a possibility to hide their money laundering or fraud crimes behind handheld devices. It should be noted that handheld devices are relatively anonymous.

According to Steve Solberg, Senior Product Manager for Fraud at Fortent, the risk and compliance specialist, moving from cash and checks to electronic payments and now to mobile banking is a very rapid change in the payments industry, and it not only provides increased convenience and value for customers but also present new elements of risk and fraud for them.

It is projected that the mobile banking channel will explode in the next 5 years. In the United States, it is predicted to increase from 1.1 million customers in 2007 to 42.3 million in 2012.

Mobile initiatives may take off even quicker in Hong Kong, South Korea, and Brazil, as companies there tend to offer everything through mobile devices – services from payments to stock trading.

However, it should be taken into consideration that mobile banking is still in its infancy, and therefore banks are working to protect themselves and their customers from possible money laundering.

The Indian Banks’ Association (IBA) has joined efforts with 10 banks in order to improve the customer verification system and monitoring of transactions. This is made to check money laundering activities in India.

A working committee has been set up by IBA. The committee was headed by ICICI Bank Senior General Manager Sanjay Chaugle. Its task was preparing revised guidance notes on know your customer (KYC) and anti-money laundering operations.

Monitoring of transactions and record keeping in a more automated manner was given a particular attention. Record keeping is automated by means of creating a database for names to filter defaults. The focus will be put on a software that detects suspicious transactions.

The recent focus on anti-money laundering operations and know your customer is part of India’s efforts to join the Financial Action Task Force (FATF). India is going to share details of the legislation amendments with FATF by the end of the year 2008 in order to pave its way for the entry into this group by next year.

In June, the Financial Action Task Force (FATF) has issued a report and issued it on its website.

This is the 19th Annual Report of the FATF.

This report summarises advances made by the FATF in combating money laundering and terrorist financing. These are as follows:

- Financial Action Task Force policies on admission of new members and observers.
- Statements regarding the anti-money laundering/counter-terrorist financing risks posed in certain countries and areas.
- Evaluations of the anti-money laundering/ counter-terrorist financing systems of:
Canada;
Finland;
Hong Kong,
the United Arab Emirates
China;
Qatar;
Russia;
Singapore.
- Guidance on implementation of financial prohibitions to combat the threat of proliferation of WMD.
- Best practices for fighting trade-based money laundering.
- Guidance aimed to assist low capacity countries.
- Typologies reports on: TF methods; money laundering and TF vulnerabilities of commercial websites and internet payment systems; and, Proliferation financing.
- Report on national money laundering threat analysis strategies that assists countries with developing threat assessments.
- Closer work with the private sector.

A 30-year-old man who spent more than GBP 1 million on luxury cars and holidays has been put to prison for money laundering. Kerry Reed was sentenced to 3 years in prison at Kingston Crown Court.

According to the court, Reed bought cars including 7 Range Rovers, 4 Porsches, 2 Ferraris and 2 Lamborghinis between 2004 and 2007. Part of the GBP 1 008 147 that was spent by him between April 2004 and May 2007 went on jewellery, designer clothes and socialising. Police said that each of his cars was bought with large cash deposits and kept for no more than 6 months.

Since 2003, Reed had no legitimate income registered with HM Revenues and Customs. When questioned by police, he himself gave his status as unemployed and could offer no reasonable explanation for his wealth.

A confiscation hearing is scheduled to take place on December 19.

Unity Bank Plc has decided to educate its staff skills in the area of anti-money laundering, anti-terrorist financing and know-your-customer procedures.

A statement from the bank explained that educating the staff is in fulfillment of the bank’s high ethical stance and national economic wellbeing. According to the statement, Officers of the Nigerian Financial Intelligence Unit are collaborating with Unity Bank for the extensive training.

Unity Bank will train 900 staff in these areas of its operations. 300 of them underwent the training in April and June while the remaining 600 were trained in August.