Archive for April, 2010

New Policy to Fight Money Laundering in Iran

Monday, April 26th, 2010

On April 20, Governor of Central Bank of Iran (CBI) Mahmoud Bahmani discussed adoption of new approaches by CBI in fighting money laundering.

He said: “Gradually and upon entry of large bills to the economic system, Iran-checks, amounting to one million and half a million rials, will be collected from the market.” He added that, in the first phase, there will be an attempt to remove 500 000 rial Iran-checks from the market in order to control money laundering because large Iran-checks can cause problems as regards economic corruption and money laundering (they are not cross signed). According to Bahmani, “based on a new plan, banks will sell the remaining Iran-checks in the market with the signature of buyer so that if necessary they can be tracked down with this controlling system”.

Bahmani recalled that in the 1st half of 2009-2010 the industrial sector grew by 6.4% and the mine sector by 8.2%. However, growth of agro sector was negative – it decreased by 10% because of drought.

Money Laundering and Multinationals

Sunday, April 18th, 2010

As all the world makes attempts to fight money laundering, many countries are now requiring insurers to get additional information from their customers with a view to screen out possible launderers. For multinationals who are interested to do business in these countries, this means providing their insurers with a variety of documents obtaining the insurance they need.

It goes without saying that most multinationals are legitimate businesses and they are unlikely to use their insurer to launder money. Still, the insurance industry is vulnerable. In its National Money Laundering Strategy for 2007 report, the US government noted that the insurance industry has undergone a transformation and that it may appear increasingly attractive to money launderers. A range of investment services featuring financial products that can be purchased and subsequently transferred, redeemed, or sold, are now offered by agents and broker, which, according to the report, provides new opportunities for money laundering. The report says that numerous money laundering methods have been used to exploit insurance products, primarily life insurance and annuities.

To remind, some countries have been taking measures to crack down on the problem and improve their reputation in the international community. So, the governments of these countries are requiring insurers to obtain documents and take other actions to ensure not being used by criminal organizations to help launder illicit funds. Imposing these requirements on insurers is carried out by Mexico, Brazil, Argentina, Colombia and Malaysia.

For example, before getting insurance, multinationals with operations in Mexico must provide a number of documents including the following: a certified copy of the act of incorporation, federal taxpayer’s registry, a document that proves the address of the company in Mexico, a certified copy of the document showing the legal authority of the company’s representatives; a copy of the official identification of the legal representative, such as passport or card of military service. If the parent company in the US or Canada is included on the Mexican policy as a named insured or beneficiary, each non-Mexican company that is included under the admitted policy also will have to provide the insurer with similar documentation.

Swiss Money Laundering reports hit records

Thursday, April 8th, 2010

Record numbers of suspicious financial deals were reviewed by Swiss authorities in 2010. The financial deals under money laundering suspicion totaled CHF 2.23 billion (USD 2.1 billion). Most of the reports were forwarded to prosecutors.

It should be noted that for decades Switzerland was viewed as a safe haven for money of dubious origin. However, the country started to clean up its image by introducing anti-money laundering laws in 1998.

According to the legislation, it is obligatory for financial operators to report suspect transactions, regardless of the amounts involved. In 2009, Switzerland’s Money Laundering Reporting Office received a total of 896 reports on suspicious financial activities, which was a 5.3% increase from the previous year.

Judith Voney, a spokeswoman for the Money Laundering Reporting Office, said that there had been an upward trend in suspicious activity reporting in the past 3 years. She said: “The Swiss financial place has become very attentive and the quality of the reports is nowadays very good”. Also, she noted that it was impossible to make a direct link between the financial and economic crisis and the record number of suspect transactions, but crisis situations in general tend to lead to more fraud.

Stricter reporting requirements for suspected money-laundering were introduced in Switzerland in 2009. But the Money Laundering Reporting Office said that the reports were made before these rules were introduced. The banking sector accounted for 2/3 of all reports.