Archive for December, 2007

FATF to work on global threat assessment

Sunday, December 30th, 2007

In the end of the year 2007, the Financial Action Task Force (FATF)Â has published its e-news that covered several topics. Among all, the FATF announced that in 2008 it plans to start working on a regular global threat assessment of money laundering and terrorist financing.

The new threat assessment planned by the FATF will be developed as a result of a process of enhanced surveillance of international money laundering and terrorist financing risks. The assessment should help not only governments but also the private sector to start acting in order to manage key international threats.

The FATF noted that the initiative builds on its existing typologies work as well as complements it. The organization also said it will support countries in establishing national threat assessments by means of developing and sharing national threat assessment strategies.

Fines and AML measures will cost Israel Discount Bank USD 46-47 million

Tuesday, December 25th, 2007

This week it emerged that the price being paid by Israel Discount Bank subsidiary Israel Discount Bank of New York in order to settle the money laundering case goes on to climb.

According to the Bank’s financial report for the 3rd quarter of 2007, the cost will reach USD 46-47 million, spread over 2005-2007.

In accordance with the settlement between Discount New York with the Banking Department of the State of New York and the Federal Deposit Insurance Corporation (FDIC), Israel Discount Bank of New York paid a fine of USD 16.5 million to the New York State Banking Department, FDIC and Finance Crimes Enforcement Network, for which the bank made a provision in 2006. Also, the bank suggests that the cost to implement the improvements and examinations will be USD 16.1 million in 2006 and USD 11.4 million in January-September 2007, as well as additionally USD 2-3 million through the end of the year.

Russian government sues Venezuelan magnate for USD 17 million

Friday, December 21st, 2007

A leading Venezuelan independent shipowner Wilmer Jose Ruperti Perdomo has been sued in the US Court and charged with committing huge fraud against companies that are owned by Russia. The total amount claimed from Ruperti accounts for USD 17.1 million.

It should be mentioned that Ruperti is a well-known member of a group of Venezuelan businessmen who do business with their government – the so-called Bolivarian Elite, and who are extraordinarily close to President Chavez. Also, Ruperti is considered to be a close associate of numerous Venezuelan Politically Exposed Persons.

The magnate controlling his Panamanian-domiciled companies, Sea Pioneer Shipping Corporation and PMI Trading Inc., is charged with a breach of his fiduciary duties, in earning secret profits and undisclosed covert payments, connected with charters of Plaintiffs’ oil tankers by Venezuela’s government-controlled petrochemical agency named PdVSA. Ruperti is charged with committing charter party fraud.

Charity or terrorist financing? Tips to identify

Monday, December 17th, 2007

Terrorist financing may often be carried out through charitable organisations, therefore compliance officers should be cautious as regards some tips to identify terrorist financing.

Below is the list of “red flags” of terrorist Financing carried out through charities:

– the name is very similar to the name of a well-known or long-established existing charitable organisation;
– the activities of the charity are regulated on a limited basis, or even are not regulated by local authorities;
– the entity has not been officially registered with regulators as a charity;
-Â the objective of the charity is either unknown or unclear from published materials;
– the charity has frequently changed physical address, mailing addresses, or often replaced staff;
– the extremely limited amount of information that can be obtained on the charity through the Internet or from other public source;
– trustees, officers and directors also hold similar positions in other charities;
– the charity is closely connected with a political or religious organisation or party;
– funds transfers to other countries;
– cash transfers to other non-charitable organisations;
– an attempt at an audit of charity funds fails;
– the end recipients of the funding as well as their aims and activities are unknown.

The presence of at least several of the points indicated above should be a reason good enough to initiate an immediate investigation of the charity.

Russian Central Bank recalls 3 licenses

Thursday, December 13th, 2007

On November 27, 2007, the Central Bank of Russia recalled the licenses of 3 Russian banks on the grounds that they violated anti-money laundering laws and regulations.

According to the information released to Russian financial media, these banks are Bank of Investment Capital, Bank of Saturn, and SamoletBank.

Bank of Investment Capital (Moscow), also named BikBank, allegedly failed to report suspicious transactions that involved BVI, Seychelles and UK companies as well as transferred R.14 million to banks in the Ukraine, Latvia, Moldova, Kyrgyzstan and Cyprus.

Bank of Saturn, also called Saturn Bank, MKB Saturn, Moscow Commercial Bank Saturn Ltd., and Bank Saturn (Moscow) reportedly did not comply with banking laws.

SamoletBank was charged with suspicious activity reporting violations, not complying with Central Bank orders, as well as cash violations.

PM of Thailand chairs AML conference

Sunday, December 9th, 2007

In the end of November, Prime Minister of Thailand Surayud Chulanont chaired the international conference on international cooperation against money laundering  at the Anoma Hotel in Bangkok.

This was the Financial Action Task Force (FATF) / Asia Pacific Group on Money Laundering (APG) Annual Typologies Meeting.

Surayud told the conference that it was a good occasion for members of the Financial Action Task Force on Money Laundering and Asia Pacific Group on Money Laundering to realise and evaluate the situation in the region. He also said that it is important for Thailand to be member of the group.

The issues under discussion at the conference were as follows:

– Money Laundering Threat Analysis Strategies,
– Weapons of Mass Destruction Proliferation Financing,
– Vulnerabilities in Gaming and Casino Sector,
– Vulnerabilities of On-line Commerce.

Malta gets a praise for anti-money laundering set-up

Wednesday, December 5th, 2007

Malta has been praised for its anti-money laundering set-up, however, a Council of Europe committee has called for the allocation of greater resources to the Financial Intelligence Analyses Unit (FIAU).

November 28, 2007, MONEYVAL, the Committee of Experts on the Evaluation of Anti-Money Laundering Measures, issued a report that analyses the implementation of international and European standards to fight money laundering and terrorist financing.

The evaluation report issued by MONEYVAL assesses levels of compliance with international regulations (FATF recommendations). Â

The main findings of the report are as follows:

– in 2005, Malta extended the money laundering criminal provision under the Prevention of Money Laundering Act to any criminal offence, and included terrorist financing there, so all the designated offences of the FATF Recommendations are covered;

– the Prevention of Money Laundering Regulations supplementing the anti-money laundering act did not require reporting of suspicious transactions connected with the financing of terrorism;

– despite the fact that the legal basis to prosecute money laundering is quite obvious, no final money laundering convictions had been secured since the 2nd evaluation;

– no prosecutions or investigations of the funding of terrorist activities have taken place yet;

– the FIAU was established under the Ministry of Finance in 2001, it became fully operational in 2002;

– the authorities of Malta have worked to bring together the competent authorities in Malta anti-money laundering framework;

– the Maltese authorities are expected to review and adopt a clearer legal framework regarding charities and Non Profit Organisations (NPOs).