14th September 2019
MYANMAR STRUGGLES TO DEAL WITH MONEY LAUNDERING AND RELATED CRIME
On 14th September, Mizzima, which provides news on/from Myanmar, carried an article saying that one country that is struggling to deal effectively with decades-old criminal enterprises is Myanmar, due to a massive illegal drugs trade, criminal enterprises tied up with ethnic armed groups, terrorist elements, and allegations that members of the military and government are involved. Corruption has its main roots in the decades-long ethnic conflicts and the successive military regimes that have held power in Myanmar from General Ne Win’s 1962 coup up until a change of guard in 2011 and beyond. It says that it is no secret that the core problem lies in Myanmar’s illegal drug production and trafficking with the equivalent of billions of dollars being fed into the economy under a variety of guises. Recently, the director-general of the Ministry of Home Affairs’ Bureau of Special Investigation told the media that 90% of money laundering cases his bureau investigates are tied to drugs. No less than 32 types of drugs – made possible through the drug precursors illegally flowing over the border from China – worth millions of dollars including heroin, methamphetamine, ice and pseudoephedrine have been seized and destroyed by authorities in the last year. The recent report by the relevant FATF-style regional body said that higher-risk money laundering predicate offences include drug production and trafficking, environmental crimes including illegal resource extraction including jade, wildlife smuggling and illegal logging, human trafficking, corruption and bribery. The article examines some of the reasons for the failure to tackle the money laundering problems, including the fact that the Northern Shan state is described as a “narco state”, with problems dating back to the fleeing Chinese nationalists coming across the border in 1949 as it lost the civil war. The article refers to laundering of criminal proceeds through casinos, mineral extractions, banana and rubber tree plantations, real estate development and infrastructure undertakings, and to profits from the drug trade that may remain largely within the country for reinvestment – although the sizeable amount in billions of dollars would be stashed in regional financial centres. In particular, the article mentions casinos used to launder money, including one which has been designated by OFAC. Also mentioned as a complication is the “hundi” informal money exchange system that remains popular in Myanmar and with Myanmar expatriates. This operates like the better known “hawala” system. Myanmar is also a producer of military weapons, from assault rifles to howitzers – much of Chinese origin, with allegations that such weapons have been supplied to insurgent forces. The article remarks on impoverished border areas with China now appearing prosperous, fuelled (largely, it is claimed) by illegal trade and money laundering.
SOUTH KOREA: JUSTICE MINISTER’S COUSIN DETAINED FOR LINK TO SUSPICIOUS INVESTMENT
The Korea Times on 14th September reported that prosecutors have arrested a cousin of Justice Minister Cho Kuk at the centre of corruption allegations surrounding Cho and his family’s investment in a private equity fund. He was arrested at Incheon International Airport on embezzlement charges, according to officials. He is allegedly the de facto head of controversial private equity fund Co-Link PE. Despite the allegations, Cho was sworn in as justice minister and said that he will not interfere with the ongoing probe.
NEW RULES FOR ONLINE SHOPPING IN EU TAKE EFFECT
On 13th September, EU Business reported on the new EU rules on online shopping, which came into force on 14th September, and which should make it easier and safer for consumers to pay for goods and services online and to manage their personal finances. However, some stakeholders are still working to put these technological and practical changes in place, in line with a gradual approach suggested by the European Banking Authority. Electronic payments will be even more secure thanks to the introduction of “strong customer authentication” (SCA) which will improve the means of tackling online payments fraud.
FORMER ANDERLECHT FOOTBALL CLUB EXECUTIVE CHARGED IN MONEY LAUNDERING CASE
The Daily Mail reported on 13th September that a former executive of the club, Herman Van Holsbeeck, 64, a former player and coach, had been charged with money laundering, forgery and conspiracy connected to corruption in the transfer of footballers. It says that this new case is not linked to last years large-scale corruption case which saw raids across Europe.
INDIA: GOLDMAN SACHS EXECUTIVE EMBEZZLED MILLIONS TO PAY GAMBLING DEBTS
Calvin Ayre on 13th September reported that Goldman Sachs was trying to uncover how much damage may have been caused by a now former executive, Ashwani Jhunjhunwala, who was the VP of the company’s legal team in Bangalore, decided to use the company accounts as his personal piggy bank. He is alleged to have stolen a minimum of $5.3 million from the company.
A WTO REFORM AGENDA
The Brookings Institute in the US has produced a Working Paper saying that the WTO is in need of reform and developing e-commerce rules should be seen as part of WTO reform in 2 respects. The development of such rules will allow the WTO to demonstrate a capacity to remain relevant to the challenges and opportunities governing international trade today. Secondly, many of the issues that need to be addressed in a comprehensive outcome on e-commerce would contribute to broader WTO reform. The Working Paper proposes, among other things, that the WTO become a platform that can enable increased regulatory cooperation and encourage good regulatory practice. Such a result is needed to overcome many of the current barriers to e-commerce. Success in the e-commerce context would also position the WTO to better address regulatory barriers to trade more broadly. The Working Paper is focused on what is needed to support cross-border data flows, as well as the international regulatory cooperation and good regulatory practice that is required to provide an effective mechanism for digital trade governance, and envisions the WTO as a platform for addressing behind-the-border regulation that is an increasingly key barrier to digital trade.
BELGIAN FOREIGN MINISTER FACES CORRUPTION PROBE
On 14th September, Bloomberg reported a Financial Times story saying that Belgian Foreign Minister Didier Reynders, who is earmarked as the next EU Justice Commissioner, faces a probe on allegations over claims of corruption and money laundering in the Democratic Republic of Congo.
NORTH MACEDONIA PROSECUTOR DISMISSED OVER CORRUPTION SCANDAL
An AP report on 14th September says that lawmakers in North Macedonia have dismissed special prosecutor Katica Janeva, who was tasked with investigating high-level corruption after she was detained under suspicion of involvement in a high-profile graft scandal.
CANADA: INTELLIGENCE COMMUNITY REELING AFTER RCMP DIRECTOR ACCUSED OF VIOLATING OFFICIAL SECRETS ACT
On 13th September, CBC reported that Cameron Ortis, a civilian director general at the RCMP, faces charges under both Security of Information Act and Criminal Code. Federal departments across government are said to be conducting in-house damage assessments in the wake of his arrest. Ortis had some of the highest access to classified and allied information within the RCMP during his career.
This blog is primarily for my own use, to keep informed and up to date. However, if you would like to say thank you (and perhaps help me get a new, better laptop when I am away…) you can “buy me a coffee” at https://www.buymeacoffee.com/KoIvM842y