Archive for August, 2007

Russia’s President proposes anti money-laundering zone around Afghanistan

Sunday, August 26th, 2007

In the middle of August, Russia’s president Vladimir Putin proposed to Asian leaders to set up financial security belts around Afghanistan with a view to counter money laundering. Also, he called for holding a special security conference on Afghanistan.

Recently, Putin was on a visit to Kyrgyzstan at a summit of the Shanghai Cooperation Organization (SCO), which has Russia, China, Kyrgyzstan, Kazakhstan, Uzbekistan and Tajikistan as its members and India, Pakistan, Iran and Mongolia as observers.

According to Putin, it is important to go on forming anti-drug security belts around Afghanistan, and these belts can be complemented with financial security belts supervised by financial monitors of SCO. He said that this will increase the effectiveness of measures used to fight both money laundering and drug trafficking.

As SCO member states want to ensure stability in Afghanistan, Putin proposed to hold a special conference aimed at discussing means of helping Afghanistan. He suggested that foreign ministers of SCO countries could make corresponding preparations.

In accordance with the World Drug Report, more than 90% of the world’s illegal opium production used to produce heroin is carried out in Afghanistan.

Afghanistan’s president Hamid Karzai asked SCO to prioritize measures against drug-trafficking, which is a major financial source for terrorism.

Terrorist Financing in India is a vital threat

Tuesday, August 21st, 2007

The threat of terrorist financing in India is considerable as this country is the world’s largest recipient of inward remittances. It is obvious that remittances from non-resident Indians have a positive affect on the country’s economy. Nowadays non-resident Indians transfer about USD 25 billion a year to their families residing in India. Now Mexico and China have become ex-leaders as regards remittances.

While positively affecting India’s economy, such amounts also increase the risk of exploiting India’s inward remittance system for terrorist financing.

According to the statistics provided by the US National Counterterrorism Centre, since 2001 terrorist attacks in India have claimed more lives than anywhere else. Therefore, to fight international terrorism, it is important to reduce the flow of funds and money to terrorist organizations.

Indian intelligence officials state that terrorists ore and more often use regular banking channels and wire transfers to send money. Inward remittances are send to India by varied means, the most common of them are electronic wire/ swift, personal cheques, traveler’s cheques and hawala.

The modern inward remittance system is vulnerable to terrorist activities, and that is why many Indian banks are implementing systems that increase the scrutiny of remittances, identify suspicious transactions and comply with anti-money laundering standards.

COMESA discusses money laundering

Friday, August 17th, 2007

COMESA – the Common Market for Eastern and Southern Africa – countries have had a 3-day meeting in order to discuss a regional integration that can defy money laundering in Africa. This seminar was held at the COMESA Secretariat in Lusaka on August 8-10.

COMESA, established in 1993, held the seminar consisting of 10 participants, which are the Seychelles, Kenya, Madagascar, Tanzania, South Africa, Rwanda, Sudan, Uganda, Zimbabwe and Zambia.

According to acting COMESA Secretary General Sindiso Ngwenya, money laundering can damage the financial harmonization program if it is not blocked in an effective way.

The participants of the seminar highlighted that fruitful discussion and collaboration are necessary in order to work out a concrete policy to help the region fight the problem.

New consultation on Money Laundering to be launched in Jersey

Monday, August 13th, 2007

Jersey’s Council of Ministers is thinking about extending the tools and controls needed to prevent the jurisdiction from being used for money laundering or financing terrorism. 

This move is part of the preparation for the review of Jersey’s performance as a financial centre to be conducted by the International Monetary Fund (IMF) in 2008. 

To assess how Jersey, Guernsey and the Isle of Man comply with international standards in anti-money laundering and countering the financing of terrorism, the IMF representatives will visit these jurisdictions in 2008.

According to the Jersey government, much preparatory work for the IMF assessment has been completed, and even more work is planned. In May 2007, approved by the Council of Ministers, the Anti-Money Laundering and Countering the Financing of Terrorism Strategy Group, issued 2 consultation papers on proposals to update and extend Jersey’s anti-money laundering framework in order to comply with the international standards. In July 2007, one more consultation paper was issued to suggest further changes to be made in Jersey to bring its regulations in line with international standards.

EC directive to limit client privacy of Czech Banks

Thursday, August 9th, 2007

 According to the global financial analyst Ernst & Young, the privacy rights of clients Czech banks may soon be limited by a new law against money laundering.

This was said by Ernst & Young on July 23 in its study dealing with exploring the readiness of Czech banks to comply with a European Commission (EC) directive aimed to prevent banks from being used for money laundering and terrorist financing and to tighten bank security. The EC directive requires that all EU member states implement corresponding legislation by the end of 2007. So, it is prompting the implementation of systematic and technological reforms by EU financial institutions.

The Czech Republic has not passed a bill to comply with the directive yet. Currently, the bill is under consideration at the Legislative Council. It is expected to be passed into law by December 15, 2007.

In 1996, an anti-money laundering law has come into force in the Czech Republic, but 11 amendments have made its interpretation confusing. Not to make further amendments to the legislation, the Finance Ministry drafted a new bill in order to replace the 1996 law.

The bill redrafts some client protection protocols allowing banks to exchange information related to questionable transactions and curtailing the ongoing investigation of customers not directly connected with suspicious accounts.

Anti–Money Laundering conference scheduled in Cayman

Sunday, August 5th, 2007

The Association for Certified Anti–Money Laundering Specialists (ACAMS) is planning its internationally recognised CAMS certification examination and preparation seminar to be held in the Cayman Islands that will be offered in autumn in conjunction with the Global Compliance Solutions 3rd Annual Anti–Money Laundering & Compliance Conference.

According to a press release, anti-money laundering professionals representing banking institutions, law enforcement and government sectors of the Caribbean will be able to to prepare for the examination and to take it on October 6-7, 2007. When passing the examination, they will get the CAMS designation which is the premier certification globally recognised in the anti-money laundering field.

Karen O’Brien, spokesperson for the Global Compliance Solutions 3rd Annual Anti-Money Laundering & Compliance Conference, expressed her excitement regarding the partnership with ACAMS this year. According to her, the CAMS Preparation Seminar and Examination is a natural extension to the annual Anti-Money Laundering conference. She also said that competent and certified anti-money laundering specialist are in demand in Cayman and throughout the region.

ACAMS has awarded 3 000 professionals the CAMS designation. It also should be noted that in a 2006 report by the US Government Accountability Office, the CAMS procedure was indicated as part of the recommended training process for anti-money laundering regulators from the Office of the Comptroller of the Currency and from the Federal Deposit Insurance Corporation.

Cyberlaundering evolves. E-Fencing

Wednesday, August 1st, 2007


E-fencing is a relatively new term in the world of financial crime. This new type of crime has emerged on online auction sites like eBay and definitely involves money laundering.

How it works? The numbers from stolen credit cards are taken by criminals take and spent to buy gift cards online. After that, Then the gift cards are immediately offered for sale at a large discount on the websites. Many people find such offer to be a great bargain and therefore buy gift cards and use them or sell to other unsuspecting people. So, the mechanism is just as simple as that.

Such a simple scheme is very effective and the problem is growing fast as the stolen credit card number can be easily converted into an item that can be easily sold. Even after the card is canceled, the gift card purchase is usually neither discovered, nor canceled. So, by this method the usable life of the stolen credit card number is extended past its cancellation by the owner.

This type of crime is evolving fast for a number of simple reasons – it is anonymous, safe, profitable and less risky than other similar types of crime.

This is why people should be extremely cautious when something offered is too good to be true, because it can be connected with a fraud, a counterfeit, or other criminal act. So, buying something obviously below cost is dangerous and could lead to serious circumstances.