US BANK REGULATOR FINES EX-RABOBANK COUNSEL $50,000 FOR CONCEALING AML REPORT

On 24th July, KYC 360 reported that the OCC, regulator of national banks, has disclosed a $50,000 civil monetary penalty against Daniel Weiss, the former general counsel of Rabobank NA for concealing a critical report on the lender’s AML programme.  In 2018, the OCC and the California unit of the Dutch lender agreed a $368 million forfeiture order, in addition to a $50 million penalty that was credited toward an AML-related DoJ fine.  However, Weiss and other executives were aware of the bank’s troubles as early as 2012, when the institution’s incoming chief compliance officer informed them of previously unidentified compliance deficiencies, the OCC said.

https://www.riskscreen.com/kyc360/news/occ-fines-ex-rabobank-counsel-50000-for-concealing-aml-report/

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AML – SHELL COMPANIES, FRONT COMPANIES AND THE MISUSE OF REAL ESTATE

An outstanding article on Finextra on 23rd July discusses a case that took place in the UK which has strong similarities to the 1MDB case.  It too involved tactics used to defraud financial institutions and conceal the true owners and controllers of the scheme. This case involved the misappropriation of millions of pounds, involving in excess of 100 transactions over a 4-year period – and it took place almost 10 years before legal proceedings were initiated in the 1MDB case.  It is observed that despite the changes we’ve seen in the AML regulation of the sectors involved, the tactics used in this scheme have also been used in more recent cases like 1MDB, to launder the proceeds of crime.  In the case the miscreants managed to misuse the proceeds provided under the Agreement, using several different tactics, and in total over £100 million was misappropriated from the funding provided under the Agreement.  The article describes, with diagrams, each of the tactics used.  It seems that the scheme only came unstuck when the perpetrators were disqualified as directors in relation to a previous business they operated, and administrators who were subsequently appointed uncovered the scheme. The article highlights the red flags that should have alerted people to the scam and finally comments that assuming that all financial institutions apply the same standards of KYC and monitoring simply because they are regulated, can be a risky proposition.

https://www.finextra.com/blogposting/17537/aml—shell-companies-front-companies-and-the-misuse-of-real-estate

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HOW MIAMI, A MAJOR DESTINATION FOR VENEZUELAN GOLD, IS HELPING PROP UP MADURO’S REGIME

On 23rd July, the Miami Herald carried an excellent feature saying that Venezuelan gold production is rising dramatically — and shipments of the metal are being smuggled, often through neighbouring Colombia, into one of the world’s largest markets for gold: Miami.  Law enforcement in the US and Colombia are said to be targeting US and Colombian gold dealers and refineries suspected of supporting the illicit trade. Once the smuggled gold enters the US, refiners smelt it into a purer form and sell it to Fortune 500 companies. The metal can end up in a watch, a ring, a smartphone or a car.  The article details the routes the gold takes, through South America or across the Caribbean, but the article says that most of the Venezuelan gold coming through South Florida arrives at Miami International Airport in the form of crude bars, often disguised as Colombian gold and then it is shipped to precious metal dealers around the US.  The article also highlights the involvement of the ELN guerrillas in Colombia, and exploitation of mine workers in Venezuela, as well as the environmental damage caused.

https://www.miamiherald.com/news/nation-world/world/americas/venezuela/article230669164.html

 

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TURKISH SHIPPING COMPANY INVESTIGATED FOR IRAN SANCTIONS VIOLATIONS

Ahval on 23rd July reported alleged involvement of 2 vessels (the Agdash and the Agsu) believed to belong to the Turkish-owned Palmali Shipping in Iran sanctions violations.  In May, it was reported that OFAC had launched an investigation into the Istanbul-based Palmali Shipping for violating the US embargoes against Iran and Syria.  In March, it is reported, a report from OFAC listed the names of companies violating embargoes, the methods they used and the sanctions against them; and a ship named Shah Deniz belonging to Palmali Shipping was said to have shipped oil from Syria in 2016.  The ship, sailing under the Maltese flag, was sold to another company and renamed Zarifa Aliyeva after the incident, but Vesselfinder records show photographs of the ship with the name Palmali still on the sides.

https://ahvalnews.com/turkey-usa/turkish-shipping-firm-investigated-iran-sanctions-violations

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PARAGUAY – SOUTH AMERICA’S NEW PANAMA CANAL TO PASS THROUGH ‘GREEN HELL’

Bloomberg and others on 23rd July reported plans by Paraguay to turn its remote, sparsely populated north-west into an international transport hub and a key link between ports on the Atlantic and Pacific coasts of South America.  The Corredor Bioceanico would connect ports in Brazil and Chile.  It is reported that over the next year 12 months the government plans to tender at least $1.2 billion in public-private partnerships and turnkey projects, including 2 segments of the Corredor Bioceanico, and that might obtain funding from global capital markets.  The government’s plans are part of a larger nationwide building program that includes more than $6.8 billion for highways, water and waste projects.

https://news.bloombergtax.com/international-trade/south-americas-new-panama-canal-to-pass-through-green-hell

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