Month: January 2021

On 28 January, the Centre for European Policy Studies published a paper which sets out the following key recommendations for a new approach to the fight against money laundering.  It says that banks and other ‘obliged entities’ complete thousands of SAR on a daily basis yet only a handful are followed up on by FIU.  This could be due to lack of capability, capacity or even political direction.  Meanwhile, the breadth and means to launder money have also increased, facilitated by technological progress.  Unfortunately, the current AML regulations have brought little success.  The paper includes a chart detailing the effectiveness ratings (“Immediate Outcomes” markings) for EU states.

https://www.ceps.eu/ceps-publications/anti-money-laundering-in-the-eu/

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In December, the Luxembourg Ministry of Justice published this risk assessment, which says that the high adoption of virtual assets by criminals poses significant challenges to virtual asset service providers (VASP), financial institutions, supervisors and law enforcement agencies, and multiple factors have contributed to the need for a VASP vertical risk assessment.  The 2018 and 2020 Luxembourg National Risk Assessment (NRA) specifically mentioned virtual assets as an emerging and evolving risk.  This risk assessment describes the mitigating factors that VASP are obliged to implement to reduce risks as per the 2004 AML/CFT Law, and the different measures implemented by the regulators and prosecution authorities.  It provides a list of legal obligations for the VASP private sector and presents a list of more than 40 red flag indicators.  Additionally, FATF has published red flag indicators on 14 September which entities should take into account.  It says that the list of red flag indicators should support private entities in setting up appropriate transaction-monitoring processes and improving their reporting to the FIU.  The risk assessment is intended to be updated in the near future when a more complete view of the market becomes attainable.

https://media-exp1.licdn.com/dms/document/C561FAQFU27m5iGliqA/feedshare-document-pdf-analyzed/0/1611921300391?e=1612112400&v=beta&t=Q_lIi7cWIMBzeM-o_BV0oSf1DK7d5KvfuUswIqpO5os

 

 

 

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On 30 January, IOL reported that Cindy Saunders, 36, appeared in the Durban Magistrate’s Court, facing more than 140 counts including fraud, corruption, forgery, theft and money laundering, for allegedly defrauding millions from her previous employer in the shipping industry.  She was also the subject of a recent Carte Blanche expose in which emigrating South Africans have lost money and goods, including irreplaceable sentimental items, after entrusting their containers to Saunders to be shipped to their new home countries.

https://www.iol.co.za/ios/news/container-con-accused-in-court–e41584a8-041d-4b16-8688-33c71f078b1b

 

 

 

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On 29 January, Finance Colombia reported that police on the border with Ecuador arrested 2 Germans, 1 Polish and 1 Venezuelan illegally transporting 9 captured specimens of tarantulas that they had captured.  When stopped, the foreigners could not justify their possession of the wildlife. During the stop, plastic boxes containing 9 spiders and a spider egg were found.  According to Colombian prosecutors, the tarantula has a black market value of roughly $7,600. Prosecutors say one of the German suspects presented an authorization by a German museum, but foreign museums have no authority to contravene Colombian environmental laws.  Last year alone, 19,609 species of birds, mammals and reptiles were recovered by Colombian authorities, and 2,405 people were prosecuted.

https://www.financecolombia.com/german-polish-venezuelan-men-arrested-in-colombia-for-tarantula-smuggling/

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On 29 January, Metro reported that El Salvador has extradited the former president of the Salvadoran Football Federation (FESFUT), Reynaldo Vasquez, to the US to face charges of money laundering and fraud linked to a corruption scheme involving the Confederation of North, Central America and Caribbean Association Football (Concacaf).

https://www.metro.us/el-salvador-extradites-ex-soccer/

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On 29 January, the FATF-style regional body, CFATF, published this report, adopted at the December Plenary. The MER follows the on-site visit in September 2019.

Notably, the report mentions concerns about the Citizenship Investment Programme (CIP), which has seen publicity and criticism in recent months.  It also says that while the island’s National Risk Assessment assessed the overall terrorism financing threat as low, there is a concern that this assessment is not reflective of the jurisdiction’s overall understanding of its risk.  It says that Saint Lucia is an international financial centre and has a reasonable number of International Business Companies (IBC) and active international trusts with beneficial owners from across the world. This information was not considered in the National Risk Assessment from a terrorism financing perspective. It is also said that while the CIP is mentioned in the National Risk Assessment Summary Report and the money laundering vulnerability rating of “Medium High” was noted, the terrorism financing risk posed by the CIP, as a niche offering in Saint Lucia, was not considered in the National Risk Assessment – despite CIP being promoted globally, including in jurisdictions with known terrorist activity (although the authorities are said to have indicated CIP applicants are approved after a vigorous due diligence process).

https://www.cfatf-gafic.org/home/cfatf-news/702-fourth-round-mutual-evaluation-report-of-saint-lucia

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Anticoruptie in Moldova on 29 January claimed in a report that separatist regimes in Donbas and Transnistria boost economies with Russia’s involvement by mining cryptocurrencies to survive and flourish.  IT SAYS THAT separatist regimes in Donbas use cryptocurrencies in Kyiv. Ukrainian Secret Services, SBU, sporadically detains miners and cryptocurrency sellers. They are accused of participating in terrorist financing schemes in Donbas.  The sale and exploitation of cryptocurrencies are in a grey zone: they are not forbidden, but they are neither allowed. As there is no law regulating the market for virtual assets, there is also no company registered in Ukraine to handle these operations.  It also says that since 1999, the National Bank of Moldova has accused Transnistria of terrorist financing and money laundering.  As a result of these actions, the banking sector of Transnistria is wholly isolated from the international financial system In 2018, Transnistria legalised cryptocurrency mining after adopting the Law on the development of blockchain technology.

https://anticoruptie.md/en/investigations/economic/how-separatists-in-breakaway-regions-mine-cryptocurrencies-for-terrorist-financing-and-money-laundering

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The Tax Justice Network on 28 January said that the TJN has published its new study (in English and Spanish) on the vulnerability and exposure to illicit financial flows risk in Latin America.  It is the most comprehensive and systematic analysis of illicit financial flows risks in Latin America to date, and provides the basis for granular policy decisions. Illicit financial flows (IFF) are transfers of money from one country to another that are forbidden by law, rules or custom.  They encompass flows from both illegal origin capital (classic money laundering, arms, drugs, human trafficking, corruption) and legal origin capital (tax evasion and avoidance).  The report offers 3 broad policy recommendations to counter IFF more effectively –

• Broadening the availability of statistical data on bilateral economic relationships;
• Consider Latin American coordination on countering IIF risks; and
• Embed IFF risk analysis across administrative departments.

https://www.taxjustice.net/reports/vulnerability-and-exposure-to-illicit-financial-flows-risk-in-latin-america/

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On 28 January, PIE News in the UK said that West African political elites may be channelling an estimated £30+ millions of unexplained wealth into the UK education sector each year, a new report has revealed.  According a report from a Washington-based thinktank says that most of these illicit financial flows originate in from Nigeria and, to a lesser extent, Ghana. 

Millions in unexplained wealth entering UK education from W. Africa

The report from the Carnegie Endowment for International Peace is at –

https://carnegieendowment.org/2021/01/28/west-african-elites-spending-on-uk-schools-and-universities-closer-look-pub-83736

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On 29 January, ABC News reported that the president has unveiled anti-corruption measures to counter a groundswell of public disenchantment following a scandal involving the country’s defunct citizenship-for-investment programme.  The measures include establishing an anti-corruption task force under the direction of the attorney general and an “integrity service” tasked with vetting officials’ personal assets for potential conflicts of interest.

https://abcnews.go.com/International/wireStory/cyprus-unveils-anti-corruption-steps-quell-public-angst-75562447

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