Jayesh Shah and his wife’s epic struggle to win $300m damages from HSBC Private Bank (UK) Ltd for blocking transactions in late 2006 and early 2007, without, he claimed, justified suspicion of money laundering, ended in failure on 16 May. Following a 27-day trial that concluded four and a half years of litigation, Mr Justice Supperstone found for the bank on all counts.
Habib Bank AG Zurich has been fined £525,000 by the UK Financial Services Authority (FSA) for operating defective anti-money laundering (AML) controls around high risk customers between 15 December 2007 and 15 November 2010. The bank’s MLRO, Sayed Itrat Hussain, since retired, has also been fined, £17,500 for failing to institute and maintain adequate an AML framework.
Turmoil and anarchy in Somalia have affected countries all over the world but its immediate neighbours have been hit hardest by the lawlessness across their borders with Kenya, east Africa’s commercial hub, especially exposed to money laundering. One major concern is the earnings of Somalia’s rapacious pirates. Millions of dollars are collected in ransoms and from the sale of seized cargoes but these criminal enterprises are not known for their contribution to social and economic development – so where does the money go? Mohammed Yusuf looked for answers in Nairobi.
Ongoing instability, both physical and political – may have blighted attempts to give effect to money laundering and terrorist financing regulations in Iraq but the central bank is determined to push ahead. In a rare interview, Khalid Shiltagh, director general of the country’s financial intelligence unit, discussed the proceeds of crime challenges in one of the world’s most dangerous jurisdictions; he spoke to Paul Cochrane in Beirut.
Planned or coincidence, two international weather-making institutions for AML have signalled climate change so far this year: the Financial Action Task Force issued its revised 40 Recommendations in March and in April the European Commission published its review of the Third EU Money Laundering Directive, which also provides a medium-term forecast up to autumn and the Fourth Directive.
Suspicious activity monitoring systems do not come cheap but, after a lean period, the return of comparative financial stability is seeing a pick-up in investment in the latest technologies. M J Deschamps reports.
Reuters journalists knew immediately they had struck gold: access to one confidential US Attorney’s office report, highly critical of the state of AML compliance in a financial institution’s domestic operations, would be news enough but two, and HSBC the bank – which in a February 2012 US regulatory filing had already declared that it faced possible civil or criminal charges – was like finding the mine.
Gulf states have responded to the global economic downturn, increasing international regulation and the ‘Arab Spring’ by establishing new public authorities or extending existing mandates to curb financial crime. There is some notable progress, reports Paul Cochrane, but enforcement continues to lag.
The poorest country in the Middle East, with annual GNP per head of just over US$1,000, Yemen is beset by chronic economic problems, corruption, smuggling, links to East African piracy, separatist movements and is host to militant groups. The country has a Financial Information Unit but, reports Paul Cochrane, from Beirut, AML enforcement is effectively non-existent.
29 March 2012 saw what is likely to be the last thematic review published by the UK Financial Services Authority (FSA) as we know it, writes Mark Dunn. The report, entitled “Anti-bribery and corruption systems and controls in investment banks” [1], looks at the procedures financial institutions have put in place to mitigate the key financial crime risks of bribery and corruption. The findings make unpleasant reading, prompt a consultation on regulatory guidance and hint at enforcement action to follow.
Large Western governments may be launching unprecedented attacks on banking secrecy but it remains guarded, if not quite as jealously in practice as hitherto, in many jurisdictions like Switzerland and Liechtenstein. If initiatives against tax evasion have prompted outflows to the Middle East and Asia, there is still plenty of reason to check the provenance of funds in the Western hemisphere, says Paul Cochrane.
A rising gold price is alluring to criminals, especially those close to the source, for whom it represents a precious laundering opportunity. Nadja Drost in Bogotá reports on a South American carousel.
The surging gold price has unleashed a gold rush in Colombia, and international criminal networks are using the burgeoning trade in the precious metal to clean the proceeds of crime. In a country with as intimate a connection with the illicit drugs trade and terrorism as Colombia, the risks posed to anti-money laundering (AML) authorities are significant. “Through gold, money launderers are bringing in illicit dollars via licit means,” said a former bank official responsible for money laundering prevention, who spoke on condition of anonymity. The government estimates US$8bn are laundered annually in Colombia.
The death of Osama bin Laden may have provided a sense of closure, even satisfaction for some, especially in the US, almost 10 years after 9/11, but his legacy is a fragmentation and diffusion of Al Qaeda-inspired terrorist groups that are learning to fund themselves. Paul Cochrane reports from Beirut.
Edward Jones leaned back in his chair, his hands clasped behind his head, and resolved to savour the moment. It was a good day to be an MLRO – and you can’t often say that, he reflected, smiling at Sue Grossey.
In previous articles Derrick Paterson has pondered secondees (Sally’s secondment [1]) and outsourcing (Sing’s sorrows [2]). Now he meditates on branches and finds them even more confusing.
Following up on the article in February 2012’s edition of Money Laundering Bulletin [1], Andrew Katzen and Nicholas Querée of Hickman & Rose analyse the judgment of the European Court of Justice in Pye Phyo Tay Za v Council of the European Union. Has it struck the proper balance between ensuring financial sanctions are effective whilst providing sufficient rights to challenge for those wrongfully affected?
“Are we increasing the pressure on the government of Iran and isolating key-decision makers? Absolutely,” Adam Szubin, Director, US Office of Foreign Assets Control (OFAC) told a 1300-strong audience at the ACAMS moneylaundering.com 17th Annual International AML Conference in Miami. The multilateral isolation of the Islamic republic over its nuclear programme was “unprecedented”, he said, “Two or three years ago the bulk of the pressure came from the US and its allies. Today not a country in the world would say, ‘we will be Iran’s bankers.’” He conceded there could be rogue financial institutions, which would still seek to do business with Tehran, and avoided any mention of the C-word – China.
20 May 2012, 04:48:46
20 May 2012, 04:37:28
20 May 2012, 03:52:41
Wed May 09 10:18:55 BST 2012
Mon May 07 12:00:12 BST 2012
Fri May 04 10:44:33 BST 2012
