On 28th February, the Royal United Services Institute announced that, building on the success of the ‘Financial Crime 2.0’ conference last November, RUSI’s Centre for Financial Crime and Security will be embarking on a 2-year research programme to update the AML framework to reflect today’s technological landscape. Regular updates on this new programme will be shared on the centre’s website. RUSI is said to have pleased that the Centre’s analysis was recently cited in the House of Commons Second Reading of the Sanctions and Anti-Money Laundering Bill. The Centre’s website outlining its aims etc, is at –
PAKISTAN CONFIRMS IT WILL BE ON FATF GREY LIST IN JUNE
Pakistan Today on 28th February reported that, after a week of uncertainty, Foreign Office Spokesperson Muhammad Faisal confirmed that the country will be added to the FATF watch list pertaining to terror financing and money laundering in June.
HOW WILL BEING ON THE FATF GREY LIST ACTUALLY IMPACT PAKISTAN?
In an article dated 1st March, The Diplomat poses this question, answering it by saying – economically, not much. But could it force a change in Pakistan’s approach to extremist groups? The article points out that some analysts have argued that the grey-listing will squeeze Pakistan’s economy and make it harder for the country to meet its mounting foreign financing needs, including potential future borrowings from the IMF. They have also argued that the grey-listing could lead to a downgrade in Pakistan’s debt ratings, making it more difficult to tap into the international bond markets. However, the factual evidence, both historic and current, suggests that these assertions are simply incorrect. Pakistan was on the FATF grey-list from 2012 to 2015, a period during which it successfully completed an IMF programme and raised over $5 billion from the international bond markets. During this period Pakistan’s imports and exports remained stable, evidence that the grey-listing did not raise any significant barriers to trade.
Tax News on 28th February reported that Coinbase, a virtual currency wallet and virtual currency exchange service provider, has confirmed it will soon transmit information on the transactions of 13,000 customers to the IRS, as a result of an earlier court ruling. The case follows a December 2016 summons received by the company from the IRS, which demanded that Coinbase produce a wide range of records relating to approximately 500,000 Coinbase customers, which it fought in court. After a long process, the Court issued an order providing that Coinbase should produce only certain limited categories of information from the accounts of approximately 13,000 customers.
CBS News reported on 28th February that Indonesia has seized a luxury yacht on Bali that is wanted by US authorities as part of a probe into alleged multibillion-dollar corruption involving Malaysian state investment fund, 1MDB – the 300 ft Equanimity. In June 2017, the US DoJ filed a civil case seeking recovery of $540 million in assets, including the yacht, that it says were stolen from 1MDB, a fund set up by Malaysian Prime Minister Najib Razak that was intended to promote economic development. Overall, the DoJ says more than $4.5 billion was stolen from the fund.
On 28th February, HM treasury issued a news release advising that 3 individuals and 1 entity had been removed from its North Korean sanctions lists, in accordance with EU Regulation 2018/285/EU.
Karti Chidambaram, son of ex-finance minister P Chidambaram, was arrested at the Chennai Airport in connection with INX Media money laundering case. It says that Karti Chidambaram is connected to the INX Media bribery case regarding various clearances given to the company. The allegation of money laundering dates back to May 2017 when a case was registered regarding irregularities in granting Foreign Investment Promotion Board (FIPB) clearance to INX Media. The CBI investigative agency had registered a case regarding alleging irregularities in granting the Foreign Investment Promotion Board (FIPB) clearance to INX Media in 2007, when Chidambaram senior was the finance minister.
CMS von Erlach PoncetAG on 26th February published a briefing which said that on December 18th the Federal Supreme Court rendered a landmark decision preventing the Swiss Federal Tax Administration (SFTA) from transmitting un-redacted bank files to the US IRS which contained information on third parties which had allegedly helped a US taxpayer to defraud the IRS, ad that that the names of bank employees and the attorney/notary who were involved with the setting up and management of the account, and likewise other information that would allow identification of those individuals, needed to be redacted. The article says that this decision comes as a surprise and marks a turning point in the protracted and heated discussion about the extent of information that the IRS may obtain by way of administrative assistance under the US-Switzerland Double Taxation Treaty. What is of particular interest to white collar crime practitioners, it says, is the emphasis put on the distinction between administrative assistance in tax matters versus legal assistance in criminal matters.