Money Laundering Bulletin

North Korea, arms and Africa: three case studies

The Democratic People’s Republic of Korea (DPRK) works actively to promote trading links in Africa but its commercial agenda hides darker objectives that include the supply of dual-use goods in breach of international sanctions. Melissa Hanham, Leslie Wukstich and Stephanie Lieggi examine the risk that Pyongyang’s subterfuge presents to institutions with connections to the continent through a set of clear, documented cases.

Sanctions, Africa, Asia-Pacific

Domestic PEPs – lessons from Russia

Debate over how to identify domestic Politically Exposed Persons (PEPs) seems never-ending, writes Oleg Zadalia of Accuity. Bankers, lawyers and assorted consultants all have an opinion, sharpened against the timetable for the Fourth EU Money Laundering Directive - the final text still looked for later this year. One question is whether anything might be learnt from elsewhere, outside the EU, from Russia perhaps.

PEPs, Europe

Bangladesh – law and practice

Extensive legislative remediation by Bangladesh may have strengthened its AML/CFT regime sufficiently for technical approval by the Financial Action Task Force but corruption and capital flight leave the real impact in doubt. A Z M Anas reports from Dhaka.

Financial Intelligence Units, Legislation & Guidance, Practice Findings, South Asia

Warm hearts and cold crimes

Charities or non-profit organisations are often at work in conflict zones close to terrorist operations and open to direct attack. The threat of financial compromise by the same extremists, arising from NPOs’ extended communication lines, heavy reliance on volunteers, who may not always be properly vetted, high cash turnover, and perhaps weak financial controls due to a strong ethos of trust, applies, equally, away from trouble spots. In a recent typology report, the Financial Action Task Force considers these risks and how AML/CFT professionals can respond. Sue Grossey reviews the text.

Terrorist Financing, Government and International Bodies, Practice Findings

National risk assessment on a small island

Aruba in the Caribbean began work on its money laundering and terrorist financing risk assessment even as the Financial Action Task Force’s revised Recommendations, which require it, were launched in early 2012. Bas Jennen, who managed the project, sets out the approach that was followed together with the findings and lessons for the conduct of future NRAs.

Government and International Bodies, Practice Findings, Supervisors, Latin America and Caribbean
Risks and Controls

All in the price – the hidden cost of trade-based money laundering

The chance that a discrepancy between contract price and value of goods delivered in any single open account transaction will be picked up from the massive volume of daily business of financial institutions, whether by the authorities or AML industry professionals, is remote: Alan Osborn asks if trade-based money laundering is just too difficult to control.

Trade Finance, Government and International Bodies, Legislation & Guidance

Systems switch – a technology tour

The pace of regulatory change may be rapid and continuous but AML technology providers are working hard to keep pace, both with it and each other. Kitty So reports.

Money Laundering, Customer Due Diligence, Monitoring, Technology
Money Laundering

Power-broking: Iranian sanctions and conflict in the Middle East

Negotiations at the end of November on whether limited relaxation of sanctions on Iran should be extended into 2015 will be coloured not only by evidence of the country’s non-military nuclear intentions but also its role as a potential ally in the fight against Islamic State. Paul Cochrane reports from Beirut on compliance and politics.

Money Laundering, Sanctions, Practice Findings, Middle East

Getting their hands dirty – the illegal charcoal trade

The demand for charcoal in Africa has never been higher, while weak or absent controls over production and export make it an irresistible and lucrative source of funds for terrorists, armed political factions and criminals alike. David Carlisle investigates the scale of illegal deforestation, who is responsible and countermeasures that might prove effective.

Terrorist Financing, Typologies, Predicate Crimes, Government and International Bodies, Africa, Middle East

Call my bluff – Crimea

Sanctions, on the hard edge of international diplomacy, are presently ratcheting up over Crimea, with US and EU asset freezes and visa bans prompting retaliation in kind by Moscow, but there are good reasons to think they won't go much further, says Timon Molloy.

Sanctions, PEPs, Legislation & Guidance, Europe, North America
Industries

Penalty points

Fines for AML breaches may be rising on both sides of the Atlantic but real interest lies in the variations. Timon Molloy reads between the numbers.

Banks, Money Service Businesses, Cases, Financial Intelligence Units, Supervisors, Europe, North America

Alert service to focus banks on real-time financial crime

A new Financial Crime Alerts Service (FCAS), warning banks about the latest financial crime and cyber threats, is to be launched by the British Bankers Association.

Money Laundering, Terrorist Financing, Predicate Crimes, Banks, Government and International Bodies, Europe
Terrorist Financing

Arab Bank found liable for terrorist financing

Arab Bank was liable for knowingly supporting terrorism in and around Israel which led to the deaths of US citizens, a federal jury in New York found on 22 September.

Terrorist Financing, Banks, Cases, North America

Holiday plans – after the FATF plenary

June’s Financial Action Task Force plenary yielded assorted updates, admonishments and typologies sure to spice the summer reading list of any AML/CFT professional.

Terrorist Financing, Government and International Bodies, Practice Findings
Legal / Regulatory

Making a Korea in AML

South Korea has worked hard to address the long list of deficiencies identified by the Financial Action Task Force in its 2009 mutual evaluation. Sue Grossey examines the changes that earned it removal from the follow-up process in June this year.

Government and International Bodies, Practice Findings, Asia-Pacific

Rocky relations – Gibraltar and Spain

Spain’s historic claim to Gibraltar may make it quick to criticise the British overseas territory but allegations that ‘The Rock’ is a centre for handling illicit funds are hotly disputed, Pacifica Goddard finds.

Financial Intelligence Units, Practice Findings, Europe
Sanctions

EU & US tighten sectoral sanctions on Russia

On 12 September the European Union and United States issued new sanctions against Russia over hostilities in Ukraine. The sectoral measures target named Russian banks as well as defence and energy companies and bar provision of dual-use goods and some oil project services. Susannah Cogman and Scott Balber of Herbert Smith Freehills work through the detail.

Sanctions, Europe, North America

EU & US sanctions hit Russia’s finance, energy and defence sectors

New rounds of sanctions have been announced by the European Union (EU) and United States, which reduce Russian access to their capital markets and restrict EU and US persons' dealings with Russian banks, arms manufacturers and oil companies.

Sanctions, Europe, North America