Archive for April, 2008

Great Lakes region hides money laundering cartel

Wednesday, April 30th, 2008

According to the conclusion made by a team of researchers from the University of Dar es Salaam (UDSM), money laundering is kicking within the Great Lakes region. The researchers stated that the Great Lakes region money laundering cartel is part of the USD 500 billion illegal cash laundered globally. The origin of this money is to be searched in corruption, drug trafficking and gun smuggling.

The above-mentioned announcement is based on investigations carried under the auspices of the Great Lakes Peace and Security Network (PeSeNet), and ForDIA that covers Democratic Republic of Congo, Tanzania, Kenya, Uganda, Burundi and Southern Sudan.

It should be mentioned that the Great Lakes region has been a territory of prolonged armed conflicts, so this area is insecure and free jungle for laundered money, drugs, guns and massive plunder of natural resources.

In most cases, researchers have established criminal organisations carrying out dealing related to currency counterfeit, illegal foreign exchange, and illegal drugs.

6th OffshoreAlert Financial Due Diligence Conference held in US

Saturday, April 26th, 2008

On April 13 – 15, 2008, 6th OffshoreAlert Financial Due Diligence Conference entitled The Unexpurgated Offshore was held in the USA. The conference took place at the Fort Lauderdale Grande Hotel & Yacht Club in Fort Lauderdale, Florida.

The conference aimed to deliver comprehensive and independent information about the complex world of offshore finance. It provided information that might help reduce business risk, improve the efficiency of the capital, as well as make important new relationships with specialists and influential people.

The conference welcomed those who work, invest, or conduct any type of business in offshore financial centers or regulate business outside offshore centers.

This OffshoreAlert Financial Due Diligence Conference is the only one of the 6 that was devoted entirely to the subject of offshore centers as some of the most dynamic areas of global finance. The issues discussed at the conference included analyzing products and scrutinizing jurisdictions. Much attention was paid to regulatory regime, legislation, quality of civil and criminal justice, political stability,  international reputation, transparency, money laundering, corruption, fraud, tax exchange information agreements, mutual legal assistance treaties, cost, telecommunications, and many others issues.

FinCEN publishes SAR Analysis

Monday, April 21st, 2008

On April 2, 2008, the Financial Crimes Enforcement network, FinCEN, issued a detailed report for the insurance industry.

The Report titled An Assessment of Suspicious Activity Report Filings; April 2008, reviewed Suspicious Activity Report (SAR) filings in the industry. FinCEN’s document verifies that the majority of SAR filings in the insurance sphere are for money laundering. It highlights key findings of an assessment that was conducted in one-year period from May 2, 2006 to May 1, 2007 by insurance companies as regards suspected money laundering and other financial crimes.

Competition amongst offshore centers is their greatest threat

Thursday, April 17th, 2008

A US risk consultant based in North Carolina, Brendan Hewson, says that, in his opinion, the more financial industry rules and regulations are implemented by big countries, the better it is for offshore financial centers.

Hewson says that the greatest threat to established offshore centres like the British Virgin Islands, the Cayman Islands, the Bahamas and Bermuda is not the USA but competition among themselves as well as the threat posed by emerging financial centers like Singapore and Dubai. He suggests that, of the newer jurisdictions, Singapore and Dubai are the best-positioned to make changes in the offshore world at the expense of jurisdictions have some reputational problems.

Hewson suggests that the offshore center “with the biggest bulls-eye on its proverbial chest” currently is Bermuda. It is phenomenally financially successful and has peaked economically. However, according to Hewson, it will face a future decline caused by rampant political corruption and the real prospect of independence in the not-too-distant future. “There are striking similarities between what is currently taking place in Bermuda and what took place in the Bahamas in the 1960s and 1970s, when corruption, independence, and a lack of concern for the needs of international businesses contributed to a wave of insurers moving to Bermuda and banks to the Cayman Islands.”

Hewson thinks that the rival offshore centre that stands to benefit from Bermuda’s problems is Cayman that has professional expertise and intellectual capacity to compete with Bermuda, but its legislation is not good enough yet.

FATF issues Report on Terrorist Financing

Sunday, April 13th, 2008

On February 29, 2008, the Financial Action Task Force (FATF) issued Terrorist Financing Report.

This document is the study that examines the means terrorists use to raise funds and the wide range of methods they use to move money within a criminal organisation or between organisations. According to the FATF, “the adaptability and opportunism shown by terrorist organisations suggests that all the methods that exist to move money around the globe are to some extent at risk”.

The study covers and describes such problems as the terrorist requirement for funds, raising terrorist funds, moving terrorist funds, international response to terrorist financing, and policy implications.

The study identifies 4 areas to focus efforts on in order to strengthen counter-terrorist financing activities. These are addressing jurisdictional issues, outreaching to the private sector, building a better understanding across bith public and private sectors, as well as enhancing financial intelligence to use financial investigations for fighting terrorist financing.

The document was published on the FATF website on March 14, 2008.

FATF publishes Document on the FATF Standards in Low Capacity Countries

Wednesday, April 9th, 2008

The Financial Action Task Force (FATF) issued a new document called Guidance on Capacity Building for Mutual Evaluations and Implementation of the FATF Standards Within Low Capacity Countries on February 28, 2008. The Guidance was published on the website on March 7, 2008.

The Guidance that is provided within this document is mainly intended to support low capacity countries (LCCs) in implementing the FATF standards in a way that would reflect their national institutional systems. The document issued by the FATF talkes into account the money laundering and terrorist financing risks that LCCs face, as well as the limited resources these countries have.

The Guidance identifies many principles, specific mechanisms and procedures that can ensure “effective prioritisation” and implementation of the FATF standards regarding anti-money laundering and counter-terrorist financing.

Along with the guidance provided in the document, the FATF recommends LCCs to use FATF Methodology, Handbook for Countries and Assessors, and FATF and FSRB Mutual Evaluation Procedures Manuals.

Spain wants to blacklist tax haven Gibraltar

Saturday, April 5th, 2008

Spain claims that the British colony of Gibraltar must be blacklisted as a tax haven. Sapin also claims Gibraltar shelters corrupt businesses.

In the end of March, Spanish authorities asked the Organisation for Economic Cooperation and Development (OECD) to blacklist it i.e. to place it in the list of uncooperative territories because it fails to help investigate financial corruption. According to the Spanish Treasury Department, Gibraltar had not been forthcoming to help to clamp down on Spanish money launderers and tax evaders.

However, Peter Caruana, the Chief Minister of Gibraltar, disagrees with the claims of his government. The latest complaint is just one from a series of attacks by the Spanish government against Gibraltar and it is peculiar that it comes weeks after the authorities of the UK and Gibraltar were criticised by Spain for not securing a stricken ship in disputed waters off the peninsula. As a result, the vessel broke up and caused an oil spill on Spanish beaches.

To remind, Gibraltar was seized by the British in 1704. Spain has retained a constitutional claim and calls for its return. This issue has long been the hard point in the relations between Spain and Britain. In 2002, there was a referendum, and 99% of Gibraltarians voted to remain a British colony. In 2006, a historic agreement was signed by the UK, Spain and Gibraltar in order to solve the decades-long problems.

US lists UK among 50 main money laundering countries

Tuesday, April 1st, 2008

On March 21, 2008, the United States government has recently issued a list of countries that need to do more to combat money laundering. The US placed the United Kingdom alongside Colombia, Afghanistan, and Russia.
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In accordance with the US Department of State’s International Narcotics Control Strategy Report (INCSR) for 2008, the UK is one of more than 50 major money laundering countries. This is mainly due to its position as a leading global financial centre.

The INCSR indicates figures from the UK’s Serious Organised Crime Agency (Soca) which reveal that GBP 15 billion of dirty money is laundered in the United Kingdom annually. The report praises Britain’s high street banks for tightening their anti-laundering measures, however, it warns that criminals are increasingly using card fraud, cash-smuggling and bureaux de change in order to process the proceeds of their illegal activities.

Although the UK’s overall anti-money laundering and counter-terrorist financing regime is considered to be comprehensive and sound, the report recommends the UK government to bring in new legislation in order to keep a closer eye on transactions made by politically exposed persons who might use banks for funding foreign regimes.

A spokesman for the UK government said that the UK government takes the issue of money laundering very seriously, and aims to combat it both domestically and internationally.Â