May 2018 aperio-intelligence.com FINANCIAL CRIME DIGEST | MAY 2018
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SPECIAL FEATURE 11 MALAYSIA’S PM-ELECT VOWS TO RE-OPEN 1MDB PROBENT?
Welcome to the May edition of the Financial Crime Digest, PRESS AND MEDIA 15 Aperio Intelligence’s monthly newsletter, an informative MONEY LAUNDERING | FRAUD | TERRORIST FINANCING summary of the most recent developments relating to the PRESS AND MEDIA 22 world of money laundering, fraud and terrorist financing, BRIBERY | CORRUPTION bribery and corruption, and sanctions. PRESS AND MEDIA 26 SANCTIONS [email protected] COUNTRY UPDATES 32
TECHNICAL UPDATES
US announces withdrawal from “defective” Iran nuclear deal
President Trump announces US in place for the duration of the relevant withdrawal from JCPOA wind-down periods. The US Treasury Office of Foreign Assets Control (OFAC) expects On 8 May, President Trump announced that all the US nuclear-related sanctions his decision to cease US participation in that had been lifted under the JCPOA will be the Joint Comprehensive Plan of Action re-imposed and in full effect from November (JCPOA). President Trump announced 2018. that, following a wind-down period, the US would begin re-imposing US nuclear-related US threatens “strongest sanctions in sanctions lifted as a result of the JCPOA. history”
Calling the nuclear deal “deeply flawed”, The President issued a National Security Photo: The Mercury News Presidential Memorandum (NSPM), directing President Trump argued that Iran was not the US Departments of State and of the in compliance with the basic objectives of the JCPOA, namely to restrict Iran from Treasury to commence steps necessary of US and allied prisoners in Iran. In a enriching weapons-grade uranium, although to establish a 90-day and a 180-day wind- speech in Washington, DC, Mike Pompeo, US both the US State Department and the down period for activities involving Iran that Secretary of State, threatened Iran with “the UN International Atomic Energy Agency were consistent with the US sanctions relief strongest sanctions in history” and vowed (IAEA) have repeatedly confirmed Iran’s provided under the JCPOA. Pursuant to the to use all economic and military pressure to compliance. Instead, the US Administration NSPM, the State Department revoked certain “crush” Iran’s operatives and proxies around has demanded further measures including statutory waivers issued to implement the the world. JCPOA sanctions relief, issued the necessary an indefinite moratorium on Iran’s nuclear statutory sanctions waivers to provide activities, an end to Iran’s involvement in for a wind-down period, and plans to take Syria and Yemen, measures to curb Iran’s continues on next page appropriate action to keep such waivers ballistic missile programme, and the release
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continues on next page the US move, pledging to avoid mentioning International companies react to US Iran’s missile programme and presence in the measures region, countering any US sanctions against In response to President Trump’s The Iran nuclear deal is widely viewed to have Iran, guaranteeing the purchase of oil from announcement, and despite assurances from been a significant diplomatic achievement Iran if impeded by the US, and the guarantee the EU, a number of international companies, of Barack Obama, President Trump’s of Iranian transactions through European including BP, Total, Maersk, Siemens and predecessor. banks. The Supreme Leader threatened to restart enrichment of uranium “without any Allianz have announced plans to cease Iranian Rift with European allies limitations” if the JCPOA was deemed no activities. Financial institutions in general longer useful to Iran. have remained wary of investing in Iran, even The US move has caused a rift with its with the JCPOA, although it has been reported European allies, who believe the JCPOA European commission president, Jean- that small German credit unions will continue represents the best option for achieving Claude Juncker, said the EU would begin to provide financing on Iranian projects. The nuclear non-proliferation; they have re- the “blocking process”, which aims to US, meanwhile, has taken steps to revoke affirmed their commitment to the deal. neutralise the extraterritorial effects of US sales licences to Iran in relation to Boeing President Emmanuel Macron of France said sanctions in the EU. The “blocking statute” and Airbus. of the JCPOA: “There is no alternative to is a 1996 regulation which prohibits EU the regime on nuclear non-proliferation… In companies and courts from complying with US imposes other sanctions measures the context of what we are living through, foreign sanctions laws, and has been used on Iran the 2015 agreement is what allows us to previously in relation to Cuba. The statute establish a constructive and demanding In the wake of President Trump’s stipulates that no foreign court judgments dialogue with Iran.” President Macron added: announcement, the US has also imposed based on these foreign sanctions laws have “This was not an agreement between the two sanctions on Iran’s Central Bank Governor, any effect in the EU. countries, I have repeated it time and again Valiollah Seif, accusing the central bank and and I have the impression that we will need Despite the rhetoric from EU leaders, German an Iraq-based bank of having moved “millions to repeat it time and again in the months to Chancellor Angela Merkel admitted that of dollars” for Iran’s elite Revolutionary come”. the EU was limited in what it could achieve. Guard, Quds Force (IRGC-QF). US Secretary of Treasury Steven Mnuchin said that Seif Iran demands conditions from European “We can see whether we can give small and had covertly funnelled money on behalf of governments medium-sized companies certain relief. That is being examined. As for compensating all the IRGC-QF, through Al-Bilad Islamic Bank Responding to the US announcement, Iran’s businesses in a comprehensive way for all “to enrich and support the violent and radical Supreme Leader Ayatollah Ali Khamenei set measures by the United States of America, agenda of Hezbollah”. A number of other out seven conditions for European powers, I think we cannot and must not create individuals linked to the central bank were also including filing a complaint at the UN against illusions”, she said. sanctioned.
The US and its Gulf partners (comprising Saudi Arabia, Bahrain, Kuwait, Oman, Qatar and United Arab Emirates) also announced sanctions targeting Lebanon’s Hezbollah leadership including its two top officials, Sayyed Hassan Nasrallah and Naim Qassem. Secretary Mnuchin said: “By targeting Hezbollah’s Shura Council, our nations collectively rejected the false distinction between a so-called ‘Political Wing’ and Hezbollah’s global terrorist plotting.”
The sanctions followed other measures taken against six individuals and three companies that the US said were funnelling millions of dollars to the IRGC-QF.
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TECHNICAL UPDATES
FinCEN issues exceptive relief on beneficial ownership obligations
In an interpretive ruling on new beneficial confirmation that the beneficial ownership ownership rules, the US Treasury information has not changed. Given the Financial Crimes Enforcement Network potential overheads required to obtain (FinCEN) has issued a ruling granting this confirmation, the interpretive ruling exceptive relief for 90 days for certain targets “certain financial products and financial products and services with services that automatically rollover or automatic rollovers or renewals. renew (i.e. certificate of deposit (CD) or loan accounts) and were established The original final rule, issued in May 2016, before the Beneficial Ownership Rule’s requires financial institutions to establish Applicable Date, May 11, 2018.” beneficial ownership information on customers down to a 25 percent level, or more on a “risk-based approach”. The new ruling covers annually renewable FinCEN’s interpretive guidance can be bank products which would require found HERE. a bank to obtain verbal or written
JMLSG publishes further amendments to guidance
The UK Joint Money Laundering Steering Group has issued revised versions of two of the sections in Part II of its Guidance – 12: Asset finance, and 17: Syndicated lending – on the prevention of money laundering and the financing of terrorism for the UK financial services industry. There are no changes to the revised text that was issued for comment.
The further amendments to JMLSG Guidance can be found here: 12: Asset finance 17: Syndicated lending
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TECHNICAL UPDATES
Hong Kong releases 2018 ML/TF Risk Assessment Report
The Hong Kong Financial Services and the Treasury Bureau has released its 2018 Money Laundering and Terrorist Financing (ML/TF) Risk Assessment Report, which assesses the risk and vulnerabilities faced by Hong Kong and steps taken to address those gaps.
The report assesses Hong Kong’s ability to combat money laundering as “medium-high”, based on a number of factors, including: its robust legal framework; high-level political commitment; close partnership between relevant Government bodies; a fair and efficient prosecution and judicial process; and good external and international cooperation.
The report notes the Hong Kong’s financial intelligence unit, the Joint Financial Intelligence Unit (JFIU) had experienced a growing number of Suspicious Transaction Reports (STRs), which it attributes to a growing awareness of AML/CFT issues, although the increased volume of reports has caused capacity issues for the JFIU.
Hong Kong has passed legislation on the disclosure of beneficial ownership information for companies – the Companies (Amendment) Ordinance 2018 – making it compulsory for companies registered in Hong Kong to maintain beneficial ownership information, through the maintenance of registers of significant controllers.
Licencing requirements cover companies The Hong Kong Joint Financial Intelligence Unit has involved in exchanging cryptocurrencies for experienced a growing number of STRs, which it cash, and Initial Coin Offerings may be subject to the regulation of the Securities and Futures attributes to a growing awareness of AML/CFT issues. Commission if they meet the statutory definition of “securities” under the Securities and Futures Ordinance. The report assesses Hong Kong to have a “moderate” risk of The 2018 Hong Kong Money Laundering and Terrorist Financing Risk Assessment Report can be terrorism, and a “medium-low” threat accessed HERE. of terrorist financing.
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TECHNICAL UPDATES
NCA issues national Strategic Assessment of Serious and Organised Crime
Britain’s National Crime Agency (NCA) has issued its fifth annual assessment of Serious and Organised Crime threats to the UK. Data presented in the report is sourced from a number of law enforcement agencies and other sources, including the National Cyber Security Centre (NCSC).
Presenting the assessment, Lynne Owens, Director General of the NCA, highlighted six key aspects of the report:
• The non-geographic locus of many threats
• The emergence of the dark web as an enabler
• A revised focus on illicit financial flows
• Overlaps between the threat areas
• The impact of technology
• A rapidly changing picture in certain areas.
The assessment shows that there are 4,629 active Organised Crime Groups (OCGs) in the UK, that had been identified by the end of 2017. Socio-economic factors such as familial relationships remain a key recruitment avenue, although the assessment indicates a greater propensity for individuals to move between OCGs. The report also highlights the role played by professional enablers, including accounts and solicitors, who are in demand from overseas OCGs in particular those based in Nigeria, Russia and Pakistan. Professional enablers are routinely used to launder money through corporate entities and high value goods including real estate.
The report also highlights the ongoing threat posed by cyber criminals, particularly Russian (or Russian- speaking) groups, as well as those based in China, North Korea, Iran and Syria. Cybercrime groups make use of illegal marketplaces, which trade data, malware and attack techniques. The assessment references Dark Web marketplaces, which have been targeted by a series of international law enforcement actions.
The National Strategic Assessment of Serious and Organised Crime 2018 can be found HERE.
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TECHNICAL UPDATES
British MP says Crown Dependencies must introduce public registers by end 2020
Andrew Mitchell, a British MP and former the same policy and to share the same minister who campaigned to lift the values… If they do not, then parliament veil of corporate secrecy in the 14 UK will seek to ensure that they do.” The overseas territories, has vowed to pursue crown dependencies were not brought a similar initiative against Guernsey, within the scope of the amendment to the Jersey and the Isle of Man. He said that sanctions bill, which affected UK overseas the three UK crown dependencies should territories, because they have a different be forced to public disclose who owns governance structure. companies incorporated there. Photo: Anthony Devlin/PA However, Margaret Hodge, a Labour Mr Mitchell said: “We are going to go MP and former minister, who proposed dependencies, each with significant after the crown dependencies. Now the amendment alongside Mr Mitchell, offshore financial centres, is likely to that parliament has made clear that argued that consistency between all the be met with significant resistance. The the overseas territories must introduce territories was required. The move to Cayman Islands has already signalled it public registers by the end of 2020, we establish public registers of beneficial will legally contest the amendment. expect the crown dependencies to adopt owners of companies in the UK crown
Sanctions and Money Laundering Act 2018
The Sanctions and Money Laundering Act received Royal Asset on 23 May. The Act puts in place legislation allowing the UK to dictate its own sanctions policy following its withdrawal from the EU.
Foreign Secretary Boris Johnson said the Act “will also provide us with the power to amend and update anti-money laundering and counter-terrorist financing legislation, allowing the Government to keep pace with changing international standards and practices, and help to protect the UK from money laundering and terrorist financing.”
The foreign secretary added that the Act includes a “Magnitsky amendment” under which individuals or entities complicit in human rights violations may be subject to sanctions.
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TECHNICAL UPDATES
Singapore regulators and banks issue AML best practice papers
The Singapore AML/CFT Industry Singapore’s ACIP, a collaboration between industry Partnership, or ACIP, is a collaboration between government agencies and government, has issued two best practice papers, including the Monetary Authority of dealing with trade-based money laundering and misuse Singapore (MAS), Customs and CAD, of legal persons. and financial institutions, audit firms, company service providers, law firms and professional advisors. The ACIP has prepared two best practice papers, on trade-based money laundering (TBML) and misuse of legal persons.
The papers contain best practices and risk mitigation measures of industry leaders in combating TBML and the abuse of legal persons, as well as the latest “red flags” and financial crime typologies. Both papers highlight some of the latest typologies that the working group members have observed, along with established mechanisms that criminals continue to use.
The papers identify a number of recurring typologies, including suspicious “round- tripping” of funds through companies controlled by the same or related individuals. In one case, the funds transferred purportedly related to the repayment of loans, although there appeared to be no underlying commercial rationale to support the transactions. According to an MAS spokesman, the case emphasises the need for banks to know their customers well, and be alert to any transactions or behaviours that An MAS spokesman also highlighted how may not be made available to the banks in are unusual or inconsistent with what they private investment funds (PIFs) can be order to safeguard the confidentiality of the know of their business activities, source of abused. Private banks often endorse a set investment strategy. funds or wealth, as well as their risk profile. of funds, for which they provide advisory services and for which due diligence has been Another emerging typology identified is the performed. use of entities with similar names to those The two best practice papers can be of established or well-known companies, to accessed here: However, their clients may also ask them make the bank believe that the entity is related Legal Persons – Misuse Typologies to hold assets in PIFs that are separately to, or even the same as, the legitimate one. and Best Practices set up by the client, which may offer trading A further recent typology involves the use of Best Practices for Countering Trade strategies and assets that the banks do not. “cloned” trade documents that look virtually Based Money Laundering For such PIFs, the full details of the funds identical to the genuine ones.
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TECHNICAL UPDATES
House of Commons Foreign Affairs Committee comments on Russian money laundering in the UK
The House of Commons Foreign Affairs Committee published a report entitled Moscow’s Gold: Russian Corruption in the UK.
The report states:
“The use of London as a base for the corrupt assets of Kremlin-connected individuals is now clearly linked to a wider Russian strategy and has implications for our national security. Combating it should be a major UK foreign policy priority. The assets stored and laundered in London both directly and indirectly support President Putin’s campaign to subvert the international rules-based system, undermine our allies, and erode the mutually-reinforcing international networks that support UK foreign policy. The size of London’s financial markets and their importance to Russian investors gives the UK considerable leverage over the Kremlin. But turning a blind eye to London’s the UK should work with EU partners, both • It calls on the Government to work with the role in hiding the proceeds of Kremlin-connected before and after leaving the EU, to identify EU, and with the US, to prohibit the purchase corruption risks signalling that the UK is not and sanction the individuals and entities of bonds in which a sanctioned entity has serious about confronting the full spectrum of on whom the Kremlin relies in carrying out acted as book runner. It also recommends President Putin’s offensive measures.” its acts of aggression—including, but not the Government seeks EU agreement to bar limited to, destabilisation of its neighbours, the European clearing houses from making The report makes a number of conclusions and disinformation campaigns, interference in available Russian sovereign debt. recommendations: democratic processes and assassination attempts on foreign soil. This should be • Regarding the proposed register of • It calls on the Government to investigate the done in close consultation with the US ownership of overseas companies gaps in the sanctions regime that allowed Treasury and intelligence agencies. Such owning UK real estate property, the report a company such as En+ (linked to now- sanctions should be linked to specific recommends legislation should be put in sanctioned oligarch, Oleg Deripaska) to desired changes in the Russian state’s place as early as possible, ideally enabling float on the London Stock Exchange, and to behaviour, and should be reviewed annually the register to be established before the work with the G7, whose markets dominate against progress towards those outcomes. Government’s target date of 2021. The the financial world, and other international report calls on the Government to review partners, to close those gaps as soon as • It welcomes the Government’s promise this timescale, with a view to expediting it or possible. to publish a list of individuals sanctioned setting out in more detail why the process specifically because of gross human rights needs to take so long. • It calls on the Government to broaden violations, comparable to the US Magnitsky its approach to sanctions by including list. It recommends this list should be In addition to the findings above, the Committee individuals closely connected to hostile published and maintained by the FCO and also noted that the report does not address regimes, where appropriate, while retaining should be distinct from the general list of the potential for misuse of Tier 1 investor visa the practice of linking sanctions relief to individuals under financial sanction that is programmes, and the purchasing of EU and UK specific actions. The report recommends maintained by HM Treasury. citizenship, which it said it may revisit in the future.
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SPECIAL FEATURE
Malaysia’s PM-elect vows to re-open 1MDB probe
By Ingrid Hampe Senior Analyst, Aperio Intelligence
For the first time since 1955, Malaysia’s ruling party Barisan Nasional (BN) has lost power. This occurred despite gerrymandering on an unprecedented scale and pre-election concessions to important voter groups, such as civil servants.
The incumbent party’s defeat against all odds can be directly attributed to former Prime Minister Najib Razak’s role in the high- profile 1MDB corruption scandal. A central promise of the newly elected government is to scrutinise the 1MDB case and bring hitherto protected party grandees to justice. The new PM’s commitment to cooperation with international law enforcement authorities will also accelerate the pace of investigations and asset recovery globally.
In 2015, the Wall Street Journal first broke the news that embezzlement on a colossal scale had taken place via Malaysia’s state development fund 1MDB under the premiership of Najib (2009-2018). In total, approximately USD 4.5 billion disappeared from public 1MDB accounts, according to US authorities. Najib is estimated to have personally pocketed USD 681 million. International press coverage on the 1MDB
continues on next page
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continues on next page THE GLOBAL SCOPE OF LAW ENFORCEMENT scandal intensified. The US Attorney General even took to YouTube to announce that the FBI sought to recover USD 1 billion in its largest kleptocracy case ever. Throughout 2016 and 2017, Najib and his associates came under investigation in multiple foreign jurisdictions (Switzerland, Hong Kong, the United States, Singapore, Luxembourg, the UAE and the Seychelles).
Yet, despite media attention and prosecutions in multiple jurisdictions, in Malaysia, the home of 1MDB, impunity remained the order of the day so long as BN retained power. Several senior officials were sacked or demoted to prevent any serious investigation of the issue. Najib also made use of executive privilege and the Official Secrets Act to withhold documents containing crucial information from Malaysia’s judiciary. In 2016, a farcical probe against Najib while he was still in office LUXEMBOURG - District Tribunal of Luxembourg cleared him of any wrongdoing. UAE - Unnamed authorities THAILAND - Police The unexpected change of government, HONG KONG - Police however, marks a watershed moment. The new PM Mahathir was elected on a AUSTRALIA - Australian Securities & Investments Commission promise to prosecute the culprits around UNITED STATES - Federal Bureau of Investigation | US Department of Justice 1MDB. As early as the weekend following UNITED KINGDOM - Serious Fraud Office the announcement of the election results (9 SWITZERLAND - Attorney General of Switzerland | Swiss Financial Market Supervisory Authority May), he placed Najib and his wife on a travel SINGAPORE - Monetary Authority of Singapore | Commercial Affairs Department / Suspicious Transaction blacklist to prevent their flight from any Reporting Office | Singapore Attorney General’s Chambers investigation. Malaysia’s attorney-general Mohamed Apandi Ali was suspended pending a probe into his role in the sham investigation that whitewashed the former The most important step, arguably, was in various currencies and took over three first couple. Mahathir’s decision to set up a new special 1MDB taskforce. By reinstating leading days to count despite the use of 11 The head of Malaysia’s Anti-Corruption Malaysian law enforcement officials, who automatic teller machines. In addition, 284 Commission (MACC), Dzulkifli Ahmad, also had been removed in 2015 and 2016 by the boxes of handbags as well as jewellery abruptly resigned. Mahathir further ordered Najib government over their insistence that were found. Police discovered the items the auditor-general to declassify a 1MDB 1MDB be properly investigated, Mahathir has during a raid on an empty luxury apartment report, which had been firmly restricted by demonstrated his resolve to tackle 1MDB in Kuala Lumpur. Two of Najib’s children the Official Secrets Act. Finally, the new seriously. live in separate apartments in the same finance minister Lim Guan Eng announced building indicating that the searched flat in a tweet that businessman Low Taek Jho Action soon followed Mahathir’s words. In might also belong to the Najib family, but (“Jho Low”), a close associate of Najib, late May, Malaysian police seized USD 29 police refused to confirm either the resident will be investigated by Malaysia’s Inland million in cash. The money was denominated or owner of the property. Revenue Board.
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SPECIAL FEATURE
International cooperation FINED FINANCIAL INTERMEDIARIES The decision not to disclose the subject(s) of the raid in Kuala Lumpur indicates that asset Falcon Private Bank Rothschild recovery (more than moral grandstanding) is a vital aspect of the new government’s anti- The Monetary Authority Authorities in corruption drive. As Mahathir explained: “We of Singapore (MAS) fined Luxembourg fined are not seeking revenge.” Indeed, Malaysia Falcon USD 4.3 million the local arm of the is in dire need of pecuniary restoration, for before withdrawing its Swiss private bank example from Luxembourg, which offered merchant bank status for “serious failures Rothschild USD 10.1 million for failing to talks to discuss how to repatriate illicit in AML controls and improper conduct by comply with AML regulations. Media reports profits of USD 100 million seized from senior management” in October 2016. The widely intimated that the fine was linked to Edmond de Rothschild, the private banking bank was ordered to close its operations in Rothschild’s involvement in 1MDB. and asset management group. Singapore. The negative press associated with Falcon’s banishment from one of Asia’s UBS Due to the previous government’s bailout foremost financial centres was a heavy blow of 1MDB, Malaysia faced a yawning fiscal and contributed to losses of USD 130 million MAS ordered UBS to pay deficit. Government debt now exceeds in 2016 by the Swiss private bank. Jens a fine just short of USD RM 1 trillion (~ USD 251 billion), the new Sturzenegger, who led Falcon’s Singapore 1 million for violating finance minister Lim declared. Furthermore, office for five years, was imprisoned for Singapore’s AML Mahathir’s government has a vested seven months. The Swiss financial market regulations. UBS was also reprimanded by interest in using recovered assets to restore supervisory authority Finma ruled that Falcon Switzerland’s financial regulator Finma. the fiscal balance because his other key must return USD 2.56 million in illegal profits. Coutts campaign promise was to forfeit USD 5 Falcon is owned by IPIC, the sovereign wealth billion in tax revenue by cancelling a highly fund of Abu Dhabi. unpopular 6 percent consumption levy. Finma ordered Coutts BSI SA to “disgorge unlawfully Given the global reach of financial networks generated profits” of and the cosmopolitan lifestyle of Malaysian BSI, another Swiss banking establishment, USD 6.6 million in February 2017. elites, international cooperation is crucial was also banned from Other fines for asset recovery. Whereas help from operating in Singapore Malaysian authorities was anything but in October 2016 for Singaporean regulators also imposed forthcoming during Najib’s premiership, breaches of AML rules. penalties of less than USD 1 million each to after the election the new government Two senior BSI wealth managers were issued the following banks: was inundated with renewed requests life-long prohibition orders preventing them • Credit Suisse for collaboration from international law exercising their profession in the city-state. In • UBS enforcement authorities. On 24 May, Switzerland, Finma ordered BSI to return illicit • United Overseas Bank the 1MDB Special Task Force held a profits of USD 95.8 million which were related • S tandard Chartered bilateral meeting with the FBI in the PM’s to 1MDB transactions. headquarters in Kuala Lumpur to discuss • De velopment Bank of Singapore cooperation on the fraud case. As expected, the process for returning misappropriated Photos: cryptocynews.com/ investhemel.co.uk/ bse.com.au/ rxrealty/ Country & Town House overseas assets to the Malaysian state was a core item on the agenda. In particular, law Najib’s fall from power, however, means that MACC official, Abdul Razak Idris, lodged an enforcement representatives discussed the many are no longer intimidated and have official complaint against Najib for allegedly process for returning assets seized in the US broken their silence. For example, a former conspiring with allies in the civil service to the Malaysian authorities. MACC deputy chief commissioner, who has to block the opening of a serious 1MDB been brought back into the fold by Mahathir, examination. The prospects for cooperation are good. The publicly denounced Najib for forcing him FBI had previously stated that witnesses into exile in the United States during the In addition to the United States, a MACC were too scared to testify on the 1MDB case. 1MDB investigation. Another high-ranking spokesman explained that the anti-graft
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continues on next page THE 1MDB TASK FORCE body enjoys close cooperation with law enforcement services in Britain, Belgium, Luxembourg and Switzerland. In a side jab, he pointed out that help from Saudi Arabia, Qatar and the United Arab Emirates, where leading royal princes are accused of wrongdoing in relation to 1MDB, was much less readily forthcoming. Tan Sri Abdul Gani Patail Tan Sri Abu Kassim Mohamed Datuk Seri Shukri Abdull Datuk Hamid Bador Attorney-General (2002-2015) MACC chief commissioner Deputy MACC chief Bukit Aman Special Branch (2010-2016) commissioner until deputy director until 2015 In an example of rare international resignation in 2016 cooperation with the private sector, the over 1MDB
Malaysian police also announced that it is in Photo: Malay Mail Photo: Malay Mail Photo: mstar.com Photo: nasionalis.my contact with the luxury bag brand Hermes in order to ascertain the value of hundreds of handbags from that label identified during Malaysia’s ‘new’ prime minister is not new to politics in the raid in Kuala Lumpur. the country, having been the leader of the BN party from Old demons? 1981 to 2003.
All this enthusiasm notwithstanding, it is gives it to you.” It is no coincidence then The fear remains that Mahathir’s pledge important to critically assess the record of that Mahathir’s son, Mokhzani, featured on to clamp down on corruption is only one the “new” PM Mahathir, who is not in fact Forbes’ list of Malaysia’s 50 richest in 2017 of many populist campaign promises such a fresh face in Malaysian politics. with an estimated net worth of USD 420 including: the revision of an unpopular 6 The nonagenarian ruled the country in an million. percent consumption tax, scrapping toll authoritarian fashion as the leader of the fees, reinstating fuel subsidies and raising establishment BN party from 1981 to 2003. In terms of political liberty, Mahathir’s record minimum wages. Mahathir’s style is a Despite his resignation, Mahathir continued does not fare well either. He ruled as an far cry from transparent governance and to meddle in Malaysian politics and finally authoritarian PM under whom politically- fair public procurement. Nevertheless, decided to break away from BN, founding motivated prosecutions were a feature. he harshly condemned the rapacious the opposition alliance Pakatan Harapan. One of these was against Anwar Ibrahim, corruption of his immediate predecessor While in office Mahathir oversaw average jailed on spurious sodomy charges in 1999. Najib. Whether this was mere political growth rates of 5-9 percent and transformed Surprisingly, though, the opposition icon, once posturing or genuinely reflected the the country from a primary raw materials Mahathir’s nemesis, is now his political ally. Malaysian people’s burning desire for exporter into a diversified multi-sector cleaner management remains to be seen. economy. His system, however, was widely The nonagenarian PM arranged a royal described as rife with crony capitalism, pardon for Anwar and promised that Anwar The numbers show that Malaysia is in need which the Financial Times defines as “an will succeed him within a couple of years. of urgent reform. According to calculations often inefficient and corrupt system of But will the peace between the two men by The Economist, in 2016 Malaysia was business in which family and friends are last? Interestingly, Mahathir appointed Abdul the most cronyism-ridden country in the favoured for government or company Gani to the newly established special 1MDB world after Russia: 99 percent of Malaysian contracts, even if better candidates are task force. This may be seen as an affront billionaires’ wealth, or 13 percent as a available”. Speaking to the New York Times to Anwar, because in 1998, Abdul Gani led share of national GDP, was earned in “crony in the1990s an economist for a foreign bank the prosecution in the politically motivated sectors” such as natural resources, real in Malaysia explained that under Mahathir sodomy case against him. Anwar and estate, infrastructure, or gambling. In 2014, “[t]here’s no real tendering on key projects human rights organisations even accuse Malaysia occupied first place in this ranking. […] Mahathir sits on a committee for key Abdul Gani of having personally fabricated Mahathir’s anti-corruption efforts must look projects. If he thinks you can deliver, he some of the evidence against Anwar. beyond the tip of the iceberg that is 1MDB.
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PRESS & MEDIA | MONEY LAUNDERING | FRAUD | TERRORIST FINANCING
EU Finance St Kitts and Bahamas to be removed Ministers’ meeting: from EU tax blacklist AML measures “not sufficient” Finance ministers from the European Union have agreed to the removal of St Kitts & Nevis and the Bahamas from the EU list of tax havens.
The countries had been added to the blacklist in March, after the EU deemed their tax rules and practices were not in line with EU standards. The two countries subsequently committed to changes, and EU ministers agreed they could be transferred from the blacklist to a so-called grey list of countries which have low levels of tax transparency, but which have nevertheless committed to becoming more transparent.
Jurisdictions on the EU blacklist (which still Photo: financeandmarkets.com/ includes Samoa, Palau, Trinidad and Tobago, Namibia, and the three US territories of Guam, American Samoa and the US Virgin Islands) Countries may be returned to the blacklist from European finance ministers have face stricter controls over their financial the grey list, if they make insufficient progress reportedly discussed measures to dealings with the EU. in addressing their commitments. strengthen EU oversight of money laundering following alleged wrongdoing at ABLV Bank in Latvia and Pilatus Bank in Malta. Art Dealers Association of America responds to
According to comments reported by one proposed measures to cover artworks under BSA official: “EU states agree that the existing anti-money laundering provisions are not sufficient”. Banks are free to move capital The Art Dealers Association of America on galleries – small businesses all across the across EU states and borders, but money (AADA) responded to the introduction country that do not have the infrastructures or laundering and associated financial crime of legislation which proposes that arts resources required to undertake the reporting controls largely remain a matter of national and antiques dealers are added to a list and attendant filings for something that has competence, which officials reportedly said of regulated businesses under the Bank not presented itself as a major problem.” The represents a mismatch that could hamper Secrecy Act (BSA). introduction of the bill follows a number of controls and create financial stability risks. high-profile recent cases involving artworks In a statement, the AADA said: “If passed, the including those smuggled from Iraq, art bought Daniele Nouy, the head of Euro zone banking new legislation would impose on ‘dealers of by Malaysian billionaire, Jho Low, as part of supervision, reportedly said the alleged art and antiques’ the same financial reporting the Malaysian 1MDB case, and a recent case wrongdoing at the two banks in Latvia and requirements that apply to major financial involving Matthew Green, a London-based art Malta, which was exposed by US authorities institutions under the Bank Secrecy Act”. dealer accused of having attempted to launder and not by EU watchdogs, was “very The statement added: “This could impose money obtained through securities fraud via embarrassing”. unnecessary and onerous regulatory burdens the sale of a Pablo Picasso painting.
15 aperio-intelligence.com FINANCIAL CRIME DIGEST | MAY 2018
PRESS & MEDIA | MONEY LAUNDERING | FRAUD | TERRORIST FINANCING
FINRA imposes fine in penny stock case
The Financial Industry Regulatory Authority (FINRA) has announced a penalty of USD 5.3 million against the Industrial and Commercial Bank of China Financial Services LLC (ICBCFS) for systematic AML compliance failures, including its failure to maintain a reasonable AML programme to monitor and detect suspicious transactions, as well as other violations, including financial record keeping, and operational violations.
The penalty relates principally to ICBCFS’s clearing and settling of penny stock shares transactions. Between January 2013 and September 2015, ICBCFS cleared and settled the liquidation of 33 billion shares of penny stocks, which generated USD 210 million for ICBCFS’s customers.
US claims Malta’s Pilatus Bank set up with criminal proceeds
US prosecutors have claimed in a court of an unrelated sanctions busting scheme filing that Seyed Ali Sadr Hasheminejad, involving Iran and Venezuela, according the former chairman and owner of Pilatus to US prosecutors. The Maltese Financial Bank in Malta, used nearly EUR 9 million Services Authority, which is currently of “criminal proceeds directly linked to investigating Pilatus Bank, said that: the Venezuela project” to “establish and “No ‘red flags’ cropped up during the capitalise the bank” in 2013. due diligence and authorisation process which would have indicated that any of Mr Sadr was arrested and charged with the companies or activities associated having organised a scheme to illegally with Mr Sadr were involved in any channel more than USD 115 million investigations or illicit activities”. from Venezuela to Iranian-controlled companies via western banks. Pilatus The due diligence was reportedly carried Bank is alleged to have been implicated out by the Maltese regulator, KPMG in a money laundering scheme linked and the Bank of Valetta. Pilatus Bank’s to high ranking government officials, initial share capital of EUR 8 million was established using the criminal proceeds deposited at the Bank of Valetta. Seyed Ali Sadr Hasheminejad/Malta today
16 aperio-intelligence.com FINANCIAL CRIME DIGEST | MAY 2018
PRESS & MEDIA | MONEY LAUNDERING | FRAUD | TERRORIST FINANCING
Business people and US lifts ban on sports betting officials convicted in Spain in money The US Supreme Court has lifted a ban on laundering case sports betting, ruling it unconstitutional. Judge Sam Alito said in his majority decision: “Just as Congress lacks the power to order a state legislature not to enact a law authorising sports gambling, it may not order a state legislature to refrain from enacting a law licensing sports gambling.”
Through a referendum in 2011 and a 2014 law, New Jersey legalised sports betting at casinos and racetracks. That law is expected to go into effect and sports bets could be accepted by the end of May. New York votes in 2013 approved a referendum allowing casino Sam Alito/ rightspeak.net expansion, including the right for four new casinos to offer sports betting. Through its repeal of the Professional and Amateur Sports to benefit significantly from the court decision, PM Mariano Rajoy/wikipedia Protection Act (PASPA), the Supreme Court with British companies including William Hill, opens the door for any state to legalise sports Paddy Power Betfair and GVC, the owner of betting. British bookmaking firms are expected Ladbrokes Coral, likely to compete. Political turmoil was triggered in Spain after the conviction of more than two dozen Spanish business people and officials in a major corruption scandal. UK regulator provides summary of annual The National Court’s decision represents a financial crime data major setback for Spanish Prime Minister Mariano Rajoy’s Popular Party, which was fined EUR 245,00 for its part in an illegal The Financial Conduct Authority has of which 3,600 had been made during the scheme, which involved kickbacks in return reported data on financial crime in previous year. In addition, more than 1.1 for government contracts, which took place the UK, based on submissions from million prospective customers were refused between 1999 and 2005. regulated firms through its annual services amid financial crime concerns. A further 370,000 existing customer relationships It is the first conviction of a Spanish political financial crime data return, launched at were exited for the same reason. The data is party. The scheme’s reported mastermind, the end of 2016. based on responses from 2,100 firms up to 31 Francisco Correa, a businessman, was An FCA spokesperson said that employees December 2017. sentenced to nearly 52 years in prison, while at all levels raised more than 920,000 internal Luis Barcenas, the Popular Party’s accountant suspicious activity reports to their money for three decades and a PP senator, received a laundering reporting officers. Firms also sent sentence of 33 years and was ordered to pay 13,000 2,117 terrorism related reports to the National more than EUR 44 million in fines. A former restraint orders Crime Agency. A total of 13,000 restraint orders health minister and a close aide to PM Rajoy, issued by FCA in 2017 were in place to freeze customer accounts, Ana Mato, was also fined for accepting gifts.
17 aperio-intelligence.com FINANCIAL CRIME DIGEST | MAY 2018
PRESS & MEDIA | MONEY LAUNDERING | FRAUD | TERRORIST FINANCING
Mexico’s banking France’s ex-budget minister found guilty of tax system “misplaces” fraud and money laundering
USD 18-20 million Former French Budget Minister Jérôme intra-bank transfers Cahuzac was found guilty by the Paris Court of Appeals on charges of tax fraud and money laundering. Cahuzac, who served under former President François Hollande, was sentenced by the Court Jérôme Cahuzac/ france24.com of Appeals to four years in prison, two of which are suspended. In addition, he was fined EUR 300,000. An FCA spokesperson said that employees Cahuzac is unlikely to serve his two-year at all levels raised more than 920,000 internal custodial jail sentence, but he will be barred suspicious activity reports to their money from holding public office for five years. The laundering reporting officers. decision came after an initial ruling in 2016, which sentenced Cahuzac to three years in Firms also sent 2,117 terrorism related reports prison, but which Cahuzac later appealed. to the National Crime Agency. A total of 13,000 restraint orders were in place to freeze The scandal first became public in 2012 due customer accounts, of which 3,600 had been to an investigation that reported Cahuzac’s made during the previous year. In addition, failure to declare money he kept in a Swiss more than 1.1 million prospective customers bank account. At the time of the investigation were refused services amid financial crime he denied the allegations, but was later forced concerns. A further 370,000 existing customer to admit the truth of the allegation. His hidden relationships were exited for the same reason. wealth had been estimated at EUR 3.5 million The data is based on responses from 2,100 in 2013 when he was forced to resign after only firms up to 31 December 2017. 10 months in office.
Mexico’s banking system has reportedly misplaced between USD 18-20 million, SRA takes disciplinary action against UK lawyer relating to ePayments and debit card who worked for daughters of Azeri president purchases. A partner at a City of London-based law Child & Child is reported to have set up an Mario Di Costanzo, who leads a Mexican firm has been referred to the solicitors offshore company, called Exaltation Limited, government commission said: “the identity disciplinary tribunal, according to a notice in the British Virgin Islands, on behalf of and recipients of some transactions made published by the Solicitors Regulation the Aliyeva sisters. The company’s details through SEPI (Mexico’s official electronic Authority (SRA). emerged as part of the leak of records from payments system) have not been identified.” the Panamanian law firm Mossack Fonseca, It was reportedly not known whether the Khalid Sharif, senior partner at Child & Child, known as the Panama Papers. The case apparent loss of funds was caused by faces allegations that he failed to ascertain against Mr Sharif is that he failed to take hackers, errors, or a scam. whether Leyla and Arzu Aliyeva, the daughters into consideration “a higher risk of money of President Ilham Aliyev of Azerbaijan, laundering” when he set up the offshore The incident follows an earlier reported were “reportedly linked with the proceeds of company via Mossack Fonseca’s Jersey cyberattack against three Mexican banks, crime” or were “politically exposed persons”. branch. The case is the first time the SRA has which aimed to gain access to the country’s The case against Mr Sharif is unproven taken action against a firm implicated in the electronic payments system. but if found guilty, he could be struck off. Panama Papers leaks.
18 aperio-intelligence.com FINANCIAL CRIME DIGEST | MAY 2018
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Cristina Fernandez formally charged with money laundering
Former Argentinian President Cristina received in exchange for public contracts. Fernandez de Kirchner (2007 – 2015), According to the investigators, the money together with her two children, Florencia was laundered through the fictitious renting and Maximo Kirchner, was convicted by of rooms at the Alto Calafate hotel which is Argentine federal judge Julian Ercolini on managed by Hotesur, a company owned by the charges of money laundering and illicit Kirchner family. Fernandez de Kirchner denied association. In an official statement, the the accusations and claimed that she was the court said that Ercolini had frozen the victim of political persecution by the current over bribery and corruption in connection family’s assets worth USD 32 million. government. with lucrative government contracts awarded to Lazaro Baez. She is also facing trial for The investigation was launched after Businessmen Cristobal Lopez and Lazaro defrauding the state by ordering the central Argentinian authorities found that various Baez were also prosecuted due to their senior bank to sell dollar futures at low prices which businessmen who won public contracts roles within a company that was founded by cost the state billions of dollars. Fernandez allegedly paid kickbacks to hotels owned by the Kirchners and used to obtain ownership claims all accusations against her are the de Kirchner family. The judge said that over several hotels in Santa Cruz province. At politically motivated and brought by the centre- Fernandez’s case may have been linked to a the time of the scandal, Fernandez de Kirchner right President Mauricio Macri, who came to money laundering ring that laundered bribes had already been charged in a separate case power in elections in November 2015.
Danske Bank censured over weak money laundering controls in Estonia
Danske Bank was criticised by Danish governance” that exposed the bank According to a recent report by the regulators over weak or near to non- to major compliance and reputational Estonian police’s Financial Intelligence existent anti-money laundering controls risks.Danske’s chief executive, Thomas Unit, over EUR 13 billion were laundered that encouraged a rise in criminal Borgen, stated that DFSA’s criticism was through the country’s banks between activities involving “vast amounts taken “very seriously” and that important 2012 and 2016, of which at least EUR 7.2 of money”. steps would be taken in order to ensure billion were transferred through non- compliance with anti-money laundering resident bank accounts through the sale The Danish Financial Supervisory regulations. of Russian stocks and bonds. Authority (DFSA) criticised Danske, the country’s largest bank, issuing Danske launched its own investigation The funds mostly originated in Russia, eight reprimands and eight orders over last year into allegations that its Estonian Moldova and Azerbaijan and were money laundering allegations relating branch was used between 2007 and 2015 transferred to dozens of jurisdictions and to its Estonian operations. The DFSA for money laundering activities from thousands of companies. stated that Danske suffered from countries that include Russia, Azerbaijan “serious weaknesses in the bank’s and Moldova.
19 aperio-intelligence.com FINANCIAL CRIME DIGEST | MAY 2018
PRESS & MEDIA | MONEY LAUNDERING | FRAUD | TERRORIST FINANCING
Former Halkbank executive sentenced to 32 months in prison following Iranian-sanctions conviction
The Times of Israel
Turkish banker Mehmet Hakan Atilla was to 32 months in prison, although he has minister to enhance the sanctions-busting found guilty of bank fraud, sanctions already spent 14 months in jail which scheme. evasion and other crimes by a US federal would count towards his sentence. jury. The prosecutors accused Atilla of During the trial, prosecutors argued that helping the Iranian government to gain The trial drew international media Atilla should receive a 20-year prison access to billions of dollars of assets that attention because of the connection to sentence for threatening national security. had been frozen by the US. Reza Zarrab, a Turkey-based high-profile Atilla’s lawyers asked for the sentence businessman accused of being a member to be reduced, stating that his role in Geoffrey Berman, the US Attorney for the of an international crime organisation. Zarrab’s money laundering scheme Southern District of New York, claimed was minimal. in a statement that Atilla was involved in Zarrab had previously been charged with the execution of an audacious scheme evading the US economic sanctions Judge Berman noted that during trial to undermine the US sanctions regime against Iran, including by running a money Atilla falsely testified on some matters against Iran by engaging in deceptive laundering scheme that involved several but stated that he was unlikely to commit transactions worth millions of dollars. Turkish ministers and President Recep any new crimes, earned no profits Atilla’s attorney confirmed that an appeal Tayyip Erdogan. Zarrab admitted during directly from the fraud and had “a far less would be submitted to challenge the court hearings that he paid over USD important role” in the fraud scheme court’s decision. Atilla was sentenced 50 million in bribes to Turkey’s finance than others.
20 aperio-intelligence.com FINANCIAL CRIME DIGEST | MAY 2018
PRESS & MEDIA | MONEY LAUNDERING | FRAUD | TERRORIST FINANCING
India’s CBI filed first charges in the country’s biggest banking fraud
India’s leading investigative agency, the the companies involved in the scandal Central Bureau of Investigation (CBI), filed between 2011 and 2017. The companies charges against 25 individuals in what allegedly used the letters as a form of bank has been described as the biggest fraud in guarantee to obtain buyer credits from India’s banking history. other banks.
Earlier this year, India’s Punjab National The 7,500-page charge sheet issued by Mubasher Info Bank (PNB), the second biggest state-run the CBI include diamantaires Nirav Modi lender and fourth-biggest bank, disclosed and his uncle Mehul Choksi, former CEO that two jeweller groups defrauded it of of PNB, Usha Ananthasubramanian, seriously affected PNB, whose share over USD 2 billion by using improperly former CEO of Allahabad Bank, and PNB value has fallen almost 44 percent since obtained bank guarantees. The CBI executive directors K V Brahmaiji Rao and the exposure of the fraud in February. investigators claim that PNB officials Sanjiv Sharan. A source cited by Indian This made PNB the worst performer of all fraudulently issued a large number of media said more people are expected to domestic banks listed on the Indian stock letters of undertaking to the owners of be charged soon. The scandal reportedly exchange over the same period.
Anbang’s founder sentenced to 18 years in prison for defrauding investors
Wu Xiaohui, the Chinese businessman central bank, the Chinese foreign exchange who founded Anbang Insurance Group and regulator and other governmental agencies. acquired the hotel chain Waldorf Astoria, was sentenced to 18 years in prison. Wu was convicted by the court in Shanghai for defrauding investors of more than USD 10 The verdict was announced on 10 May by the billion. The court found him guilty of diverting Shanghai First Intermediate People’s Court, billions of dollars from the sale of investment which also ordered the confiscation of Wu’s products to his own companies. assets worth USD 1.7 billion. In what the Chinese media called one of The prosecution was launched in February 2018 China’s biggest financial crime cases, Wu when the Chinese government seized Wu’s initially denied the charges against him. In company as part of a campaign against entities late March, however, he changed his attitude which had acquired too much debt by investing towards the court and an official summary in foreign assets. The Chinese government from the Shanghai court stated that he began announced that the company would be to express “deep remorse for his actions.” The overseen for a year by a group comprising shift in his attitude was linked by the media to Wu Xiaohui/ft its securities and banking regulators, China’s the possibility of lifetime imprisonment.
21 aperio-intelligence.com FINANCIAL CRIME DIGEST | MAY 2018
PRESS & MEDIA | BRIBARY | CORRUPTION
Brazil conducts major anti-corruption raid targeting money laundering ring linked to politicians
Brazilian authorities have recently including charges of embezzlement of over conducted one of their largest to BRL 224 million in the Car Wash corruption date operations in the fight against investigation in 2014, which was a starting corruption. At the beginning of the point for what is now one of the world’s largest month, the federal prosecutors in Rio anti-graft efforts. de Janeiro raided and issued arrests for 53 people linked to a powerful money- While the investigation is still ongoing, laundering ring, comprised of key authorities estimate that the international politicians, businessmen and money-laundering scheme moved more than money changers. USD 1.6 billion through offshore companies in 52 countries. The graft raids followed two plea-bargain testimonies given by money changers Consequently, prosecutors said they have Vinicius Claret and Claudio Barbosa, who were asked a court to order the confiscation of BRL involved in illegal transfers of money ordered 7.5 billion (USD 2.13 billion) in cash and goods by former Rio de Janeiro governor Sergio from those linked to the laundering ring, half Cabral. Cabral, a notorious former politician, of that to pay to the government the amount of money illegally moved over the past two has been sentenced to over 100 years in Sergio Cabral/ Wikipedia prison for several corruption convictions, decades and half to pay fines.
Glencore faces potential bribery investigation in the UK over its Congo dealings
The UK Serious Fraud Office (SFO) Glencore and Gertler have previously said intends to seek formal approval that their projects helped the Congolese for launching an official bribery economy by attracting investment and investigation into Glencore Plc and creating jobs in the country. Congolese mines its dealings with Israeli billionaire Dan are crucial to Glencore’s projected growth, Gertler and President Joseph Kabila, with Katanga Mining alone expected to president of the Democratic Republic account for a fifth of Glencore’s global copper of Congo. production next year.
According to sources quoted by Gertler and President Kabila have previously Bloomberg, the Anglo-Swiss mining giant been implicated in several others UK and US faces serious fraud charges. Head of bribery investigations. the NGO Global Witness, Peter Jones, claimed that the alleged fraud has cost the Congolese people over half a billion dollars in potential revenues.
22 aperio-intelligence.com FINANCIAL CRIME DIGEST | MAY 2018
PRESS & MEDIA | BRIBARY | CORRUPTION
Former Brazilian Minister José Dirceu sentenced to 30 years and nine months in prison for corruption
Photo: jornalggn.com
Top Chinese official jailed for life over USD 27 million bribery
Sun Zhengcai,one of the most powerful politicians in China, was found guilty of taking USD 27 million in bribes and sentenced to life in prison.
Sun Zhengcai was the Communist Party secretary for the city of Chongqing, and held one of the most powerful position in China. He was a member of the Central Politburo of the Communist Party of China. Until 2017, Photo: jornalggn.com Zhengcai was the youngest and the only sitting member of the Politburo prosecuted during Xi Jinping’s five-year campaign against Former Brazilian Minister of Staff José Diceu was convicted corruption. Before being arrested, Zhengcai José Dirceu, who served under former of receiving bribes from was considered as a potential successor President Luis Ignacio Lula da Silva, has to Xi Jinping. However, this year China’s been imprisoned for 30 years and nine a corruption scheme at government voted almost unanimously to end months for corruption. state-owned Petrobras the two-term limit on the presidency, allowing the president to rule for life. In early May, after Dirceu was the chairman and co-founder with Petrobras. Dirceu is facing charges of being under arrest for one year, Sun Zhengcai of the Workers Party (PT), which has corruption, money laundering and organised was found guilty of taking bribes amounting strong political influence in the country. He crime as part of the notorious Operation Car to USD 27 million and was given a sentence coordinated the campaign that brought Lula Wash. His arrest was ordered on 17 May of life imprisonment. The First Intermediate to power in 2002 and as Minister of Staff he 2018, after Dirceu’s last appeal in this case People’s Court of Tianjin Municipality stated was one of the most influential politicians. was rejected. that between 2002 and 2017 he had taken Lula himself is currently serving a 12-year advantage of various posts to provide help to sentence for bribery. He was earlier sentenced to 20 years and certain entities and individuals in bidding for ten months of imprisonment, subsequently and winning projects, in enterprise operation Dirceau was convicted of receiving bribes extended to 30 years and nine months. and in personnel promotion and arrangements. from a corruption scheme that operated at the However, appeals can still be lodged at higher state-owned Petrobras, uncovered in 2014. courts. The court decided that he should be The court also stated that he had accepted He was arrested in 2015 and convicted in imprisoned in Curitiba, the same city where money and property worth over 170 million May 2016, but was placed under house arrest Lula is serving his 12-year sentence. yuan, either by himself or together with in May 2017. According to the investigation, individuals connected to him. Zhengcai was the former minister received approximately Dirceu has denied all the allegations, claiming deprived of all political rights for life and all his USD 3.24 million in bribes from Engevix to be the victim of political persecution personal property was confiscated. for influencing the granting of contracts initiated by the Brazilian elite.
23 aperio-intelligence.com FINANCIAL CRIME DIGEST | MAY 2018
PRESS & MEDIA | BRIBARY | CORRUPTION
Macau billionaire Ng Several Italian politicians investigated for Lap Seng sentenced insider trading and corruption to four years’ imprisonment for Prominent Italian businessman The current investigation stems from Antonello Montante, a former leader Montante’s attempt to shield himself from bribing UN officials of the Sicilian branch of the Italian the Cosa Nostra investigation by bribing employers’ confederation Confindustria, numerous public officials to gain access has been placed under house arrest in to classified information. The network an investigation involving police and of informants included Arturo Esposito intelligence officials, as well as a former (the former head of the Italian internal president of the Italian senate. intelligence service), Renato Schifani (former president of the Italian senate) and at least In January 2016, an investigation was 8 high-ranking police officials involved in the opened against Montante regarding initial Cosa Nostra investigation. assistance to a mafia associate. The charges were dropped when prosecutors deemed Several individuals are accused of passing that while Montante certainly had links to classified information on the investigation Photo: Newsweek mafia, they could not prove he had provided and its subjects to Montante, and a total assistance. of 22 individuals have been put under investigation. Montante had presented Macanese billionaire Ng Lap Seng was In the investigation, Montante was suspected himself as a businessman dedicated to sentenced to four years in prison by a US of exchanging favours with the local Cosa preserving the integrity of corporations federal court. The real estate developer Nostra boss, Vincenzo Arnone. Following a against mafia practices. He had in that has been under house arrest in his raid on Montante’s house in January 2016, regard been given national responsibility for Manhattan apartment since shortly after a secret room was found with dossiers on compliance by Confindustria. He had also his arrest in 2015. over 40 individuals, containing confidential been appointed to the National Agency for information provided by several police the Administration of Seized and Confiscated Last July, Ng had been found guilty on officers. Assets, the state entity in charge of various charges including bribery and confiscated Cosa Nostra assets. money laundering. During the four-week trial, prosecutors found that he paid more than USD 1 million in bribes to Francis Lorenzo, former deputy ambassador from Panasonic to pay USD 280 million to resolve the Dominican Republic, and John Ashe, former UN General Assembly president and corruption probe ambassador from Antigua and Barbuda, whose support Ng needed in order to build a Panasonic Corp. has agreed to pay conference centre in Macau. During the trial, approximately USD 280 million to settle ordered to pay penalties of USD 965 million to Lorenzo pleaded guilty to bribery and money US allegations that executives of its in- resolve an investigation into corrupt payments laundering and testified against Ng. The flight entertainment unit hid payments to in Uzbekistan. Unlike the other two cases, centre was never built. consultants in Asia and the Middle East. Panasonic’s case did not include bribing foreign officials, although the company In addition to the imprisonment sentence The settlement is one of the largest US was accused of bribery. The investigation, given at the beginning of the month, US Foreign Corrupt Practices Act (FCPA) cases however, focused on payments to supposed District Judge Vernon Broderick ordered Ng under the Trump administration. Other recent consultants, who did little or no work for the to forfeit USD 1.5 million, representing assets cases include Keppel Offshore & Marine Ltd company. According to the government, used in his crime, and to pay USD 1 million in which agreed to pay USD 422 million to end a the payments were improperly recorded in criminal fines. bribery probe, and Telia Company, which was Panasonic’s regulatory filings.
24 aperio-intelligence.com FINANCIAL CRIME DIGEST | MAY 2018
PRESS & MEDIA | BRIBARY | CORRUPTION
Former Spanish First charges in the Leighton minister arrested on charges of corruption corruption case
The first charges have been brought The SFO investigation in this case was sparked against Australian company Leighton by an international investigation into corruption Holdings, which allegedly won a USD in the global oil industry in 2016 by Fairfax 733 million contract in Iraq by bribing the Media, a leading Australian media company. country’s high-ranking officials. It led to investigations into Unaoil and other corporations related to it, including Leighton On 23 May 2018, Britain’s Serious Fraud Office Holdings, Rolls Royce, KBR and Eni. (SFO) charged Ziad Akle and Basil al-Jarah, intermediaries hired in 2010 by Leighton to The charges were brought by the SFO after conclude an oil pipeline contract in Iraq. Both Fairfax Media revealed leaked banking Photo: ORAIN worked for Unaoil, a Monaco-based oil and documents relating to the Leighton bribery gas services company. They were charged scandal, which broke in 2012. The leaked with conspiracy to make illegal payments to banking records revealed that Cox, a chief Eduardo Zaplana, the former Spanish secure contracts in Iraq to Unaoil’s client BSM executive of Leighton Offshore until 2012, Minister of Employment and Social Offshore between 2005 and 2011. arranged the multi-million-dollar deal Security, was arrested in Valencia on using company funds. The Fairfax Media charges of bribery and the misuse Former Leighton Offshore managing directors investigation initiated in 2016 has led to of public funds, by order of Court of Peter Cox and Russell Waugh are suspected criminal charges and huge fines in the US and Instruction No. 8 of Valencia. of using intermediaries to bribe Iraqi officials, UK. However, in Australia, law enforcement including a deputy prime minister and two bodies have failed to bring any charges. Unaoil Zaplana was the People’s Party (PP) former oil ministers. has denied all allegations. spokesman in the Spanish Congress between 2004 and 2008. He stepped down in 2008 and moved to telecommunications company Telefonica, serving as a delegate for Europe on One of the wealthiest people in Kazakhstan regulatory issues. He also worked as a director arrested for corruption of its subsidiaries Telefonica O2 Europe and Telefonica O2 Czech Republic. In reaction Yerkyn Amirkhanov, one of the wealthiest to his arrest, Telefonica announced the individuals in Kazakhstan with a personal immediate cancellation of their collaboration. wealth estimated at USD 135 million, was In addition, PP announced the suspension of arrested on corruption charges. his party membership. According to the National Security Committee Zaplana was detained by Spanish Civil Guards (KNB), the investigation against Amirkhanov along with five individuals, including former was initiated in early May on suspicions of Police director general Juan Cotino and his paying a bribe to a government official. Court nephew Vicente Cotino. Zaplana is accused No. 2 of Esil district of Astana ordered him of transferring illicit funds from tax havens placed in custody for at least two months. to Spain. This money was allegedly received KNB found that Amirkhanov was in charge from kick-backs obtained from illegally of purchases for Сentrkazenergomontazh, a awarded contracts. Most of these would have Kazakhstan-based company involved in the occurred during the period in which Zaplana maintenance and installation of power station was the president of the Valencia regional infrastructure. The company is currently government between 1995 and 2002. Yerkyn Amirkhanov/ korporativnoe-upravlenie engaged in building a thermal power plant in Astana.
25 aperio-intelligence.com FINANCIAL CRIME DIGEST | MAY 2018
PRESS & MEDIA | SANCTIONS
US imposes sanctions Russian sanctions update on nine individuals and firms for acquiring Russian oligarch Oleg aircraft parts and Deripaska resigned from the board of EN+ and engines signalled his intention to reduce his stake below 50%
Several airlines allegedly linked to Iran’s Islamic Revolutionary Guard rather than the Hong Kong-listed Rusal or Corps (IRGC) have been targeted by US EN+. However, despite the steps taken by sanctions. the company, former US Treasury officials warned that it could take several months for The US Treasury blacklisted nine Iranian and EN+ to be fully exempted from US sanctions. Turkish individuals and entities as Specially Designated Global Terrorists for procuring In addition, Russia’s second largest bank jet engines and airplane parts for previously VTB announced that it has stopped lending sanctioned Iranian airlines Mahan Air, to Deripaska due to the sanctions. Renova Caspian Air, Meraj Air, and Pouya Air. Photo: salt images Group, owned by Russian oligarch Viktor Vekselberg, has also been taking steps before According to US Treasury Secretary the US sanctions come into force in June. Steven Mnuchin, by co-operating the four The company, sanctioned in April together companies, the sanctioned individuals Since a new set of Russian sanctions with Vekselberg, announced that it has paid and entities enabled the Iranian regime to was imposed by the US in April, Russian off all its debts to western banks, before transport weapons, fighters, and money businesses have been forced to take the ban on doing business with in the west to its proxies, including Hezbollah, and to measures to deal with the restrictions. becomes effective. support the Assad regime. The sanctions excluded Iran Air, the country’s flag carrier Russian oligarch Oleg Deripaska has resigned As a countermeasure to the US sanctions, with the largest fleet, and Aseman Airlines. from the board of EN+, the LSE-listed the Russian State Duma was presented company through which he owns his stake in with draft bill which, if passed, would make In response to the measures, spokesman the aluminium giant Rusal. This appears to it a criminal offence for Russians to comply of Iran’s Civil Aviation Organization Reza be one of Deripaska’s first steps aimed at with US and other foreign sanctions against Jafarzadeh said the sanctions would fail distancing himself from his businesses Russia, and to contribute to the imposition of to hinder the country’s aviation industry targeted by sanctions. He had previously the sanctions. Russian lawmakers later voted because Tehran is “well-equipped to work agreed to lower his stake in EN+ from 70% to postpone the second reading of the bill and around them”. to under 50%, in addition to resigning from the State Duma announced it would discuss the company’s board. He also announced he the its potential effects with businesses prior would not seek re-election as Rusal’s director. to proceeding with the legislation. He will be replaced in the role by French banker Philippe Mailfait, who currently Russian business lobby groups including serves as an independent director on the the Russian Union of Industrialists and board of EN+. Entrepreneurs have publicly opposed the bill, arguing that it would lead to unreasonable Steven Mnuchin, US Treasury Secretary, criminal prosecution of Russian and foreign stated that the main intent of the sanctions citizens, and could harm the investment was to target Deripaska, who is known to environment in the country. Photo: aviationiran.com be closely linked to president Vladimir Putin,
26 aperio-intelligence.com FINANCIAL CRIME DIGEST | APRIL 2018
PRESS & MEDIA | SANCTIONS
New sanctions against Venezuela
A day after Nicolás Maduro won the Venezuelan presidential election, the US imposed new sanctions against the country in order to stop Maduro from selling off government assets for personal gain.
The US administration and international observers condemned the election as unfree, and most of Venezuela’s opposition boycotted the vote.
President Trump signed an executive order introducing the new sanctions, which would ban US companies and citizens from buying debt or accounts receivable from the Venezuelan government. The restrictions include Petróleos de Venezuela, the government-owned oil company that owns Citgo Petroleum Corporation.
The order was designed to reduce Maduro’s options when it comes to corruption and abuse of power, in the context of a major crisis his country is facing. Venezuela is struggling with an economic collapse that has led to a humanitarian crisis. Citizens are leaving the country which is suffering from food shortages, soaring prices, a dysfunctional healthcare system and crime.
Shortly before the recent election, the Trump administration announced sanctions against Diosdado Cabello, a powerful Socialist Party politician, accusing him of drug trafficking, extortion, money laundering and embezzling government money. The US Treasury froze Cabello’s US assets and barred Americans from doing business with him. Cabello was considered by many to be the second most important man in Venezuela after Maduro. The US also sanctioned Cabello’s brother and wife, Venezuela’s minister of tourism. Another sanctioned individual is Rafael Alfredo Sarria, the alleged frontman for Cabello who helped him to channel illicit money through real estate and companies in Florida.
In early May, US Vice President Mike Pence also announced sanctions on three Venezuelans with ties to Maduro, designating them as narcotics kingpins and restricting their financial and travel access in a swipe at the country’s authoritarian government. The Treasury Department identified the individuals as Pedro Luis Martin Olivares, a former top official at Venezuela’s National Directorate of Intelligence and Prevention Services, and associates Walter Alexander Del Nogal Marquez and Mario Antonio Rodriguez Espinoza. 20 companies registered in Panama and Venezuela linked to the individuals were also designated.
European Union foreign ministers are calling for new presidential elections in Venezuela and are also preparing more targeted sanctions against individuals close to President Maduro. In retaliation for the US measures, Venezuela ordered the expulsion of two senior US diplomats in Caracas.
27 aperio-intelligence.com FINANCIAL CRIME DIGEST | MAY 2018
PRESS & MEDIA | SANCTIONS
President Trump agrees to lift sanctions on Chinese tech giant ZTE
The Trump administration has announced The US sanctions, introduced after ZTE that the Commerce Department has failed to respond to allegations of violating reached a deal with Chinese tech giant sanctions against Iran and North Korea, had ZTE to ease sanctions against the phone a highly negative impact on its operations. maker in exchange for changes at the Members of Congress from both parties company warned the presidential administration not to lift sanctions, arguing that the company The current sanctions, including a denial violated US law and posed a national order which prevents ZTE from buying parts security threat. ZTE, which is publicly traded from US companies, would be lifted under but co-owned by a Chinese state-owned several conditions: the company would have enterprise, had been sanctioned for breaking photo: androidpolice.com to pay a fine, hire US compliance officers a 2017 agreement covering the shipment and replace the current management team. ofUS goods to Iran and North Korea. In exchange, ZTE would be able to resume Journal, citing unnamed officials, reported business links with US companies. The deal The proposed deal is a result of recent that in exchange for easing the sanctions, was confirmed by President Donald Trump trade negotiations between Washington China would be willing to lower tariffs on US in several tweets. and Beijing. Reuters and The Wall Street agricultural products such as pork and wine.
US advocates for tougher EU sanctions against Russia
The US administration is urging European Even companies that were not directly leaders to impose stricter sanctions targeted have been impacted by the against Russia in response to the sanctions. The CEO of Russia’s biggest Kremlin’s efforts to undermine Western gold producer Polyus, whose shareholders democracies through cyber-attacks and include the son of the sanctioned oligarch disinformation campaigns. Suleiman Kerimov, said that the company has been suffering due to uncertainty among US officials are pushing Europe to take investors regarding the reach of sanctions. coordinated action against the actors behind between Trump and the Kremlin in the 2016 cyber-intrusions, and are advocating for new The EU remains divided over the idea of US presidential election, and the president’s anti-corruption measures at the national issuing tougher sanctions against Russia. ambiguous position toward Moscow. level. Some member states were also against the US measures introduced in April, which had European diplomats admitted that EU The current sanctions appear to have a negative impact on their investments as countries could not match the much harsher had an increasing effect on Russian they targeted some of the Russian oligarchs US approach towards Moscow, including businesses. The Russian oligarch Oleg with whom they do business. sanctions. Although the EU implemented Deripaska resigned from the board of Rusal, restrictive measures following the Russian producer of approximately 7% of the world’s The US administration appears to be annexation of Crimea in 2014, it has faced aluminium, to shield the company from tightening its policies against Russia to reluctance from several member states sanctions against him. counter allegations of potential collusion including Greece, Cyprus and Italy.
28 28 aperio-intelligence.com FINANCIAL CRIME DIGEST | MAY 2018
PRESS & MEDIA | SANCTIONS
US considering sanctions on Nord Stream II firms
The US has warned that it would impose If applied, the US sanctions could impact sanctions on the Nord Stream II pipeline Nord Stream II-linked companies in Austria, linking Russia and Germany, if the project France, Germany and the Netherlands. Royal proceeds. Dutch Shell Plc, BASF SE’s Wintershall unit, Uniper SE, OMV AG and Engie SA have agreed The US is against the project due to its to provide Russia’s Gazprom PJSC with potential to increase Europe’s dependency on financing for the project. Russian gas supplies. In addition, Russia could use the pipeline to install undersea surveillance Last summer, the US Congress passed the equipment in the Baltic Sea, according to Countering America’s Adversaries Through Sandra Oudkirk, US Deputy Assistant Secretary Sanctions Act (Caatsa), which places of State for Energy diplomacy. The EU sanctions on companies that invest in Commission is also opposed to the pipeline, Russian energy export projects. arguing that it could be against EU rules and Photo: EUobserver that it is a high-risk project.
Kiev publishes sanctions list synchronised with US Department of the Treasury
Kiev has published a sanctions list as well measures against the Russian State synchronised with the US Department Duma and Federation Council members. of the Treasury on Thursday, which now includes 756 legal entities and 1,748 The organisations newly-sanctioned by individuals. the Ukrainian government include Media Innovation Group LLC, the Kyiv-based The list was published on the website of the publisher of Ekonomicheskie Izvestia Ukrainian President Petro Poroshenko. magazine. Ukraine further extended sanctions against Russian media outlets for additional The sanctions list prepared by Ukraine’s three years, including Nashe Radio, REN-TV, Security and Defence Council was extended in TNT, NTV, ORT, 1tv, Rossiya 24, RTR accordance with US sanctions imposed in April. and Russia Today. The Council also extended the operations of restrictive measures introduced last year.
In addition, Ukraine introduced measures against individuals allegedly involved in information and cyber aggression against Ukraine and in illegal actions against Ukrainian citizens who are being held in Russia illegally,
2929 aperio-intelligence.com FINANCIAL CRIME DIGEST | MAY 2018
PRESS & MEDIA | SANCTIONS
EU extends sanctions against Syria
In line with the EU strategy on Syria, certain investments, a freeze of the assets of the European Council has extended its the Syrian Central Bank held in the EU, export sanctions against the Syrian regime and restrictions on equipment and technology its supporters until 1 June 2019, due to that might be used for internal repression the ongoing repression of the civilian as well as on equipment and technology for population. the monitoring or interception of internet or telephone communications. The Council has also updated the list of sanctioned persons, which now includes According to the official website of the 259 individuals and 67 entities targeted by European Council, the EU believes that there travel, bank and asset freezes. The newly- can be no military solution to the conflict sanctioned individuals were added to the list and strongly supports the work of the UN for their involvement in the use of chemical Special Envoy and the intra-Syrian talks in weapons against civilians. Geneva. This position was stated in the EU strategy on Syria adopted in April 2017, and The current EU sanctions against Syria reaffirmed in the Council’s conclusion of include an oil embargo, restrictions on 16 April 2018.
US proposes sanctions against South Sudan’s top officials
The US has proposed UN Security Council (UNSC) sanctions on a number of South Sudanese ministers and officials amidst accusations of obstructing peace efforts and blocking humanitarian assistance to civilians.
The proposed measures would target six officials, including Defense Minister Kuol Manyang Juuk, former army chief Paul Malong, Minister of Information Michael Minister Kuol Manyang Juuk Lueth, and deputy chief of defense for logistics in the South Sudan Army Malek Reuben Riak Rengu. Koang Rambang, UN Under-Secretary General for (IGAD),a regional trading bloc, to facilitate governor of Bieh State, who has been peacekeeping operations, Jean-Pierre an agreement on a permanent ceasefire, the accused of leading military attacks and Lacroix, reportedly told the Security parties “remain far apart on the issues”. obstructing aid to civilians, would also likely Council that despite the work done by the be affected. Intergovernmental Authority on Development
30 aperio-intelligence.com FINANCIAL CRIME DIGEST | MAY 2018
PRESS & MEDIA | SANCTIONS
Federal Reserve Seven Dutch companies under terminates enforcement action investigation for evading US sanctions against Barclays over sanctions violations A criminal investigation into seven Dutch companies and their directors was launched for allegedly breaching European Union sanctions against The US Federal Reserve has terminated Moscow, by being involved in the an enforcement action against Barclays construction of a bridge linking the which was established eight years ago annexed Ukrainian territory of Crimea when the bank agreed to pay almost USD to Russia. 300 million to settle charges relating to sanctions. The companies allegedly supplied machines, machine parts and other services As part of the settlement agreement signed for the construction of the 11.8-mile-long in August 2010, Barclays agreed to pay bridge spanning the Strait of Kerch, by almost USD 298 million, to submit to a which they violated sanctions imposed by compliance programme including an annual the European Union after the annexation of assessment by the Office of Foreign Assets the Crimean peninsula by Russia in 2014. Control (OFAC) of compliance risks arising from Barclays’ activities and customer According to Reuters, the transactions base, and to undertake training for Barclays under investigation took place between employees in OFAC-related issues November 2015 and the latter part of 2017. According to New Europe, the The termination of the enforcement companies involved are Gelderlander, action suggests that Barclays has met Dematec Equipment and Biljard Hydrauliek. the requirements of the deal. The original The companies reportedly denied any criminal charges against the bank stemmed knowledge of where their equipment was from transactions it allegedly facilitated being used. for banks in Cuba, Iran and other countries targeted by US sanctions.
Photo: IBTimes UK
31 aperio-intelligence.com FINANCIAL CRIME DIGEST | APRIL 2018
COUNTRY UPDATES
Canada that the political party under which Morales ran for Saudi Arabia president, the National Convergence Front (FCN), received more than USD 1 million from a select group A federal budget bill has been put forward by the of anonymous business leaders. In addition to Morales’ Saudi Arabia’s King Salman has ordered whistle- Canadian government, setting out to ease penalties for accusations of impropriety, representatives close to blower protections for employees who report corporate crime. Referred to as a “deferred prosecution the president submitted a motion in April that called for financial and administrative corruption, as part of agreement’’, the optional tool would allow prosecutors an investigation of CICIG. Similarly, in September 2017, a continuous effort to combat corruption and to to suspend criminal charges against companies in when the CICIG requested a preliminary hearing against transform the oil-dependent economy long plagued certain cases of corporate wrongdoing. The agreement Morales related to accusations of illicit campaign by graft. The measure follows the detention of is designed to encourage more companies to come financing, the president declared CICIG head Ivan dozens of royals and top businessmen in the past forward to self-report corporate crimes and to identify Velásquez persona non-grata and attempted to have two years as well as the establishment of specialized individuals for prosecution, however critics have voiced him expelled from Guatemala. departments in the public prosecutor’s office in order concern that the measure would arm prosecutors with to accelerate the investigation and prosecution of discretionary power to seek an arrangement with a corruption cases. company accused of economic crimes, in cases when a prosecution would benefit the public interest. Iraq Sri Lanka Iraq’s parliamentary transparency commission Cayman Islands reported that USD 320 billion has gone missing in the past 15 years due to government corruption. Rahim The Sri Lankan parliament has passed a bill to set al Daraji, a member of the commission, declared that up special courts which would hear corruption and Cayman Islands Prime Minister Alden McLaughlin the money disappeared through corrupt contracts and bribery cases. The decision to establish a permanent publicly announced that the country would resist the is untraceable. Moreover, Iraq lacks any investigative three-judge court is the result of public protests over British Order-in-Council if it seeks to impose a public body that could hold the government accountable. delays in trying former government officials and beneficial ownership register before such a model In 2017 alone over 2000 arrest warrants were issued is expected to expedite legal proceedings in trials of transparency is adopted worldwide. Moreover, for corruption, with 290 suspects currently being brought against those allegedly responsible for the he added that the jurisdiction would resist an open prosecuted in the courts. Iraq ranked 169 out of 180 large-scale corruption, bribery and misappropriation of register not because the change would bring down countries in the latest Transparency International public properties during the previous regime. the local offshore sector, but because it was ‘’wrong, Corruption Perceptions Index scoring 18 out of 100. discriminatory and inappropriate’’. Denying any possibility of cooperation with the United Kingdom over the public register, the government would challenge the Switzerland Order-in-Council in local courts. Japan An unprecedented banking system reform has found The Japanese Financial Services Agency (FSA) is set its way on to the public agenda in Switzerland, as the Sovereign Money Initiative is set to be subject to a Djibouti to enact tougher rules for cryptocurrency exchanges seeking to register in the country. The measures are binding referendum which will take place on 10 June. meant to provide a framework for regulatory oversight, The initiative would fundamentally transform the As part of a series of measures aimed at combating compliance with data protection standards as well as way in which lenders operate, stopping commercial money laundering and financial crime, the Common a set of criteria cryptocurrency exchanges must meet banks from in effect creating money every time they Market for Eastern and Southern Africa (COMESA) in order to operate legally. The decision for stricter make a loan and making the Swiss National Bank equipped Djibouti’s Financial Intelligence Unit (FIU) standards comes in response to the recent cyberattacks the only authority permitted to produce new money with ICT equipment and analytical software, procured and accusations of money-laundering brought against in Switzerland. Support for the plan currently polls at through the COMESA Regional Maritime Security the Tokyo-based Mt. Gox and Coincheck exchanges. The 35%. (MASE) programme funded by the European Union. new rules are likely to come into force this summer. The tools are expected to strengthen the fight against United States money laundering in the region and to disrupt financial networks of pirates and their financiers. Several related A new bill to support the rolling back of post-financial- measures are expected to follow, aimed at improving Russia crisis rules for banks has been passed by the US the legal environment and strengthening the capacity of Congress and is now set to be signed into law by the law enforcement agencies to investigate and prosecute president in the upcoming days. The bill will relax The lower house of the Russian parliament passed a financial crimes. the Dodd-Frank banking regulations passed in 2010 law defining and setting up a framework for regulating which required large financial institutions to oversee cryptocurrency-related activity. Described by the the implementation of strict regulations on banking State Duma as a “digital rights” bill, the legislation activity within the US. While the move to relax banking requires that transactions be conducted exclusively Guatemala rules and reduce the oversight requirements will on compliant exchanges rather than over the counter, provide relief for community and local banks, critics and would only allow one type of transaction: the use suggest that such deregulation at a time when Wall Guatemalan president Jimmy Morales has launched of cryptocurrency to purchase fiat currency. Further Street banks have registered record profits may a new attack to discredit and antagonize the legislation is to follow as a response to a directive given recreate the scenario that led to the 2008 crisis. Commission Against Impunity in Guatemala (CICIG), in 2017 by president Vladimir Putin, in which he called just days after the United Nations-backed anti-graft on officials to prepare and pass legislation regulating body announced the onset of a second phase of the the blockchain space. investigation into illicit campaign financing alleging
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