Anti Money Laundering Blog

In April 2007, the Government of the British Virgin Islands and the Financial Services Commission published Handbook on International Co-operation and Information Exchange: A Guide for Law Enforcement Officials and Regulators.

Accoding to the handbook, a financial crime includes offences involving money laundering, terrorist financing and misconduct/misuse of information related to financial market. So, the Guide discusses international co-operation paying much attention to one of the most serious financial crimes – money laundering.

The document compiled in the BVIÂ provides not only general information on international co-operation and information exchange, but also describes some key treaties and institutional initiatives regarding international co-operation.

Some treaties outlined in the Handbook have already been discussed previously as they are inevitable part of anti-money laundering processes. These are FATF 40 recommendations, International Monetary Fund and World Bank initiatives and some others.

On September 13, Japanese police arrested 4 men in Tokyo who allegedly were opening bank accounts used for money laundering by one or more overseas crime groups. According to the police, gangster Manabu Fukuda, travel executive Christopher Ariri Noguchi, a former Nigerian national living in Saitama Prefecture, and 2 other Japanese men opened bank accounts knowing that they would be used for money laundering.

Chiba Prefectural Police located east of Tokyo have confirmed that about JPY 1.3 billion has been remitted from 6 countries, including the US and Germany, to about 100 bank accounts opened by the suspects from December 2004 to October 2006.

It is also investigated by police whether the suspects have broken the organized crime law.

Earlier this month, Saitama Prefectural Police arrested 5 Japanese and one Nigerian man for allegedly being involved in money laundering on behalf of US crime syndicates.

A possible relationship between the two above-mentioned cases is being investigated. 

A subsidiary of Japanese banking giant Mitsubishi UFJ Financial Group Inc., UnionBanCal Corp., was fined by US authorities as it failed to implement effective anti-money laundering measures. A fine issued to the company was USD 31.6 million.

According to a UnionBanCal statement, the San Francisco-based bank, which operates Union Bank of California, will pay USD 21.6 million to settle forfeiture claims by the US Department of Justice, and a further USD 10 million in civil penalties to a US banking regulator.

Transactions conducted between May 2003 and April 2004 through several UnionBanCal accounts were considered to be related to drug trafficking. These accounts were held by Mexican financial institutions.

In a statement, the bank’s president and CEO Masaaki Tanaka said that UnionBanCal will go on working with the regulators in order to ensure that its focus on compliance is effective and responsive and that such failures will not be repeated in future.

On September 8, 2007, President General of Pakistan Pervez Musharraf announced Anti-Money Laundering Ordinance 2007 aimed at placing an effective mechanism to prevent money laundering, detect suspicious transactions and combat terrorist financing.

The government of Pakistan has satisfied a demand of the international community for introducing a financial system with legal backing aimed to control money laundering. The proposed anti-money laundering bill has been discussed at National Assembly Standing Committee on Finance and Revenue as well as at different forums.

In accordance with the Ordinance, a Financial Monitoring Unit is to be established in order to monitor suspected transactions and check them for money laundering in Pakistan. Under the provisions of the Ordinance, the act of money laundering is a serious punishable offence.

It is worth noting that the Ordinance specifies the role played by government departments, banks, regulatory bodies as well as investigating agencies for checking movement of illegal funds through the financial systems. Also, the procedure of checking the suspicious accounts transactions through the banking system has been elaborated by it.

In order to crack down on money laundering and illegal sale of strategic dual-use items, 40 companies have been shut down in the United Arab Emirates.

The above-mentioned companies include both local and international ones. They were involved in money laundering and sale of dual use and dangerous materials that according to the Nuclear Non-Proliferation Treaty (NPT) and other UN resolutions were banned.

In the end of August, a law was introduced in the UAE in order to standardize the control over the trade of military equipment and strategic domestic-military dual-use items. In accordance with it, the export or re-export of “strategic goods,” including military equipment, chemical and biological materials and dual-use items used for both domestic and military purposes without a special license are prohibited. 

The names the 40 companies and the nationalities of owners were not disclosed. 

On September 4, 2007, 16 people were arrested in a series of morning raids carried out by British Customs and Revenue officers. This was a part of investigation of a suspected pounds GBP 20 million VAT fraud.

This operation came after a 21-month inquiry into so-called “carousel fraud” and money laundering. It covered a large territory as the addresses of the arrested were located all across England and Wales.

All the 16 people are now being questioned by police.

Customs officers think that they are part of an organised crime group that is dealing with “carouselling” of mobile phones across the European Union. “Carouselling” suggests buying low-volume, high value goods VAT-free from EU countries, and then selling these goods (e.g. mobile phones) in the UK without paying VAT.

According to estimations by Revenue and Customs, in 2005-2006 this type of fraud could cost GBP 2-3 billion.