Money Laundering Bulletin

The proceeds of corruption in property:
time to unmask the offshore companies that own so much of the UK, says TI

UK property has long been a safe haven for overseas investors seeking a stable political and business climate, financial security or an attractive place to live. However, there is growing evidence, says Nick Maxwell, that it has also become a safe haven for corrupt capital stolen from around the world, facilitated by the laws which allow UK property to be owned by secret offshore companies.

Bribery and Corruption, Lawyers, Estate Agents, Assets Recovery, Practice Findings, Europe

He’s watching for a sign: working effectively with a Corporate Compliance Monitor

The firm’s in trouble but can avoid criminal sanction by mending its ways under the watchful eye of a ‘corporate probation officer’. Nigel Coles of Exiger, which was formed to monitor HSBC’s compliance with its deferred prosecution agreement, looks at how to manage a highly nuanced relationship.

Training, Legislation & Guidance, Practice Findings, Supervisors

Bank of Beirut & approved persons pay for remediation falsehoods

Bank of Beirut (UK) Ltd has been fined £2,100,000 by the Financial Conduct Authority (FCA) for failing to correct deficiencies in its financial crime controls within set deadlines and repeatedly lying to the regulator about progress on remediation.

Customer Due Diligence, PEPs, Banks, Cases, Supervisors, Europe

Black gold’s black market

The fuel that powers the industrial global economy, oil is a natural revenue target for both organized crime and terrorists. David Carlisle explores leaks and diversions in the international supply chain, drawing on the experience of three jurisdictions, and suggests how compliance practitioners might assist in capping the illicit flows.

Terrorist Financing, Typologies, Predicate Crimes, Africa, Asia-Pacific, Latin America and Caribbean

FATF analyses ISIL finance

The Financial Action Task Force (FATF) released its report on the ‘Financing of the Terrorist Organisation Islamic State in Iraq and the Levant (ISIL)’ on Friday.

Terrorist Financing, Government and International Bodies, Practice Findings

New UK AML task force to link law enforcement and business

Government, banks and law enforcement agencies in the UK yesterday [25 February 2015] announced they would work together in forming a major new taskforce to combat money laundering.

Law Enforcement, Banks, Government and International Bodies
Risks and Controls

Isthmus and nexus – the misfortune of Central America

Pincered between supply and demand sides of the drugs trade, Central American states cannot escape involvement at some level and this extends to laundering the proceeds, finds Pacifica Goddard.

Predicate Crimes, Practice Findings, Latin America and Caribbean

Insolvency practitioners must not act in haste, lest they repent at leisure

Companies fail for all sorts of reasons, often due to commercial mischance but sometimes after deliberate mismanagement by directors seeking to profit at the expense of creditors. Insolvency practitioners should proceed carefully, therefore, says Jonathan Fisher QC, bearing in mind their own liability under the money laundering legislation.

Industries, Training, Typologies, Predicate Crimes, Assets Recovery, Practice Findings, Europe
Money Laundering

What’s wrong with AML?

Consensus exists on the threat that money laundering poses to society but breaks down over the best way to address it. Alan Osborn talks to constructive critics of the current AML model.

Law Enforcement, Practice Findings, Supervisors

Closer to the owner

The legislative instruments are drafted and it is only a matter of time before company beneficial ownership registers are opened on both sides of the Atlantic: perhaps, but Alan Osborn discovers that political timetables and partisan interests may yet delay the day and qualify their usefulness.

Customer Due Diligence, Government and International Bodies, Legislation & Guidance, Europe, North America, Corporate Vehicles

HSBC private bank helped clients evade tax, others faced serious criminal allegations, leaked files show

HSBC assisted customers of its private bank in Switzerland to evade millions of dollars in taxes due in their home jurisdictions according to leaked documents covering the period 2005-2007. The records reveal how individuals accused of drug trafficking, corruption and money laundering were also clients of the bank.

Customer Due Diligence, PEPs, Tax Evasion, Banks, Europe

The Spanish inquisition

Spain was the first Financial Action Task Force member to undergo mutual evaluation of its AML/CFT regime for effectiveness. Sue Grossey looks at how the pioneer scored.

Reporting, Insurance, Lawyers, Money Service Businesses, Financial Intelligence Units, Government and International Bodies, Legislation & Guidance, Practice Findings, Europe
Terrorist Financing

Islamic State – a model of modern terrorist financing

The most sophisticated terrorist force yet seen, Islamic State has built a varied funding infrastructure that is set to take easily as long to disable as its military assets. Paul Cochrane, based in Beirut, goes in search of the IS backers.

Terrorist Financing, Middle East

Legacy issues - Afghanistan

British forces have already left Afghanistan and the US plans withdrawal of all combat troops by the end of 2016. President Ashraf Ghani must now divide his time between working to preserve security against the threat of Taliban resurgence and delivering on promised structural reform: the heroin trade and endemic corruption will be fixtures on his agenda but he might not have expected that AML compliance in the shape of local banks’ response to a massive fraud dating back to 2010 would also be a priority. Paul Cochrane reports.

Terrorist Financing, Bribery and Corruption, Predicate Crimes, Government and International Bodies, Legislation & Guidance, Practice Findings, South Asia
Legal / Regulatory

Does Norway need a new master builder?

Despite its wealth and reputation for probity – with a rank of 5/175 in the 2014 Transparency International Corruption Perceptions Index – Norway suffers from structural cracks in its AML regime, according to the latest Financial Action Task Force mutual evaluation. Sue Grossey carries out a survey of the findings.

Government and International Bodies, Practice Findings, Europe

EU sanctions update - Russia

On 16 February the European Union expanded the list of parties subject to sanctions over the conflict in Ukraine. Susannah Cogman of Herbert Smith Freehills reviews the additions and the recent High Court decision on Rosneft’s judicial review application challenging aspects of the UK’s implementation of the sanctions.

Sanctions, Legislation & Guidance, Europe

US law sets framework for future Russian sanctions

On 13 December 2014, the US Congress passed the Ukraine Freedom Support Act of 2014 (H.R. 5859) seeking to impose new sanctions against Russia and in support of Ukraine. On 18 December, President Obama signed the Act into law, while stating that at present the Administration does not intend to impose new sanctions pursuant to the Act. Scott Balber of Herbert Smith Freehills considers the scope of the new statute.

Sanctions, Legislation & Guidance, Europe, North America

EU extends Crimea and Sevastopol sanctions, issues guidance on Russian restrictions

On 18 December, the Council of the European Union announced that it would be imposing “substantial” additional sanctions on investment, services and trade with Crimea and Sevastopol to reinforce the EU’s policy of not recognising those territories. Susannah Cogman of Herbert Smith Freehills examines the new measures.

Sanctions, Government and International Bodies, Legislation & Guidance, Europe