April 21, 2008

  HSBC bragged last week that it is launching a new private bank in Ireland. "Ranked the third largest private bank in the world by Euromoney, HSBC Private Bank offers wealth management, banking and trust services in over 93 locations around the world" -- including some breakaway republics, with the presumptive offer of creative money washing...

March 31, 2008

 From last week's LA Times: " Overall, it is nearly impossible to distinguish funds meant for potential terrorism from legitimate transactions, said a senior State Department official, who, like some of the those interviewed, spoke on condition of anonymity because of prohibitions against commenting on the record on counter-terrorism." What prohibitions?

March 17, 2008

  So how did Eliot Spitzer get caught? North Fork Bank, recently re-branded Capital One, filed a Suspicious Activity Report last July. Like most SARs, it went nowhere. Until HSBC filed its own, about transactions with shell companies QAT International and QAT Consulting Group, connected to Emperor's Club VIP. Now investigators took an interest, tracing back to Spitzer. Why was he banking with North Fork, of all places?

March 10, 2008

Barclays has been contacted by the Department of Justice and the New York district attorney with questions about payments made in dollars through its New York branch. The payments may have been made by people or companies from states which are on the U.S. blacklist of nations it believes sponsor terrorism. The probe referred to in Barclays' notes to its annual 2007 results on February 19, where it warned "the potential financial effect of any resolution could be substantial''.

ABN Amro was fined $80 million in civil penalties in 2005 for transactions through its New York offices which the U.S. government said failed to meet the necessary controls on money laundering. RBS said in its annual results published last week that ABN is the subject of an ongoing criminal probe by the DoJ over the same issue. Negotiations over a possible $500 million settlement are ongoing, RBS said.

            HSBC yesterday noted in its results that it has a "small representative office in Tehran''. HSBC said it recognized that should it break the U.S. rules on sanctions, there would be "serious legal and reputational consequences''.

March 3, 2008

A Singaporean citizen and 10 companies she owns have been targeted under new US sanctions aimed at the Myanmar regime. Cecilia Ng is married to the incongruously-named Steven Law, whose father Lo Hsing Han is "known as the 'Godfather of Heroin'," according to the US Treasury Department. The department's Office of Foreign Assets Control (OFAC) said in a Feb. 25 notice that Ng, born in 1958, is a Singaporean citizen who owns 10 companies including Golden Aaron Pte Ltd. State media in Myanmar reported in December 2004 that Singapore's Golden Aaron Pte Ltd was part of a consortium that signed an oil and gas exploration contract with military-ruled Myanmar. OFAC listed Ng's other companies as including: G A Ardmore Pte Ltd, G A Capital Pte Ltd, G A Foodstuffs Pte Ltd, G A Land Pte Ltd, G A Resort Pte Ltd, G A Sentosa Pte Ltd, G A Treasure Pte Ltd, G A Whitehouse Pte Ltd, and S H Ng Trading Pte Ltd. Ng could not be immediately contacted for comment on the allegations. A woman who opened the locked door at Ng's offices in Singapore's business district to AFP said she was not there. A plaque visible through the door listed Golden Aaron, S H Ng Trading and another firm, Kokang Singapore Pte Ltd. The Monetary Authority of Singapore (MAS) said, "our rules are vigorously enforced. Should there be links with illicit activity, MAS will not hesitate to take necessary action." No mas!

February 25, 2008

  The story of the week was Germany's payment for a CD-ROM of its citizens with money in Lichtenstein. Enabling tax evasions as an act of war? And what of Lichtenstein's posture at the UN of being in favor of international law? And what of the multi-million dollar penthouse owned by Lichtenstein, on 40th Street and 2nd Avenue, and the diplomats regaled there?

February 18, 2008

    U.S. proposed rules requiring government contractors to report any fraud of $5 million or over that they find have a gaping loophole: they specifically exempt "contracts to be performed outside the United States," according to a notice published last month in the Federal Register. Can you say, for example, Lockheed Martin?

February 11, 2008

 Now the Credit Union National Association says the emperor has no clothes:  Section 326 of the USA Patriot Act requires institutions to check "a list of known or suspected terrorists or terrorist organizations issued by any Federal government agency and designated as such by Treasury in consultation with the Federal functional regulators." But did the federal government ever issue a Section 326 List? "To date, no such list has been issued," says Valerie Moss CUNA's director of compliance information....

February 4, 2008

More Russian action -- The Central Bank of Russia (CBR) has revoked the banking license of Moscow-based Industrial Development Bank (IDB), the CBR said last week. The CBR said that the bank had repeatedly violated the federal law on the prevention of money laundering and financing of terrorism. IDB also did not report to the Federal Service for Financial Monitoring on transactions subject to obligatory reporting and made other violations, the CBR said. The CBR has appointed a provisional administration to run the bank until an arbitration court rules to declare it bankrupt or to appoint a liquidator of the bank.

January 28, 2008

While the UN Development Program operated in North Korea, government officials monitored UNDP's communications and searched its employees' houses, according to a Senate report release Wednesday night on the eve of testimony by UNDP and other United Nations officials. The report, co-issued by Democrat Carl Levin of Michigan and Republican Norm Coleman of Minnesota, largely confirms the charges leveled over the past year at UNDP for its North Korea programs: that UNDP paid workers' salaries directly to the government in hard currency, had only limited access to sites of projects it funded and no access to its own bank accounts, and paid a vendor asserted by the U.S. State Department to be involved in Kim Jong-Il's weapons programs. The specifics about wiretapping and unannounced searches are new, as are some of the details about the flow of UNDP's funds through Banco Delta Asia, a Macao institution later frozen as a money laundering concern.

January 21, 2008

  From U.S. Congressman to stealth diplomat for Ban Ki-moon to Khartoum, to indictment for money laundering -- the story of Mark D. Siljander needs to be further probed. "UN Adviser on Sudan Charged with Terror Money Laundering" -- it's a headline the first part of which the UN would be sure to object to. But from LA Times: "He offered voluntary, informal advice," said the senior U.N. official responsible for coordinating the meetings, who spoke on condition of anonymity. Developing...

January 14, 2008

            BB&T Corp. recently paid the U.S. government $10,000 to settle allegations that it allowed funds to be withdrawn from an account held by a known terrorist. The Treasury Department's Office of Foreign Asset Controls says BB&T permitted an automatic debit "against an account held for a specifically designated global terrorist," and did not voluntarily disclose the matter. Question: so BB&T got fined only $10,000? Some deterrent...

    On another front,  currently the U.S. Foreign Sovereign Immunities Act permit such suits only against countries that the State Department has named state sponsors of terrorism. One theory likely to get attention now is whether Saudi Arabia's alleged money laundering for Al Qaeda counts as commercial activity, which falls under an exemption to the Foreign Sovereign Immunities Act...

January 7, 2008

  Regulators to bankers, at the FRBNY: "Since the FBI considers SARs to be like informants, and we normally pay informants, I’m here to pay you," deadpanned FBI special agent Eugene Casey. "Not with money, unfortunately, Congress hasn’t given us a budget yet for this fiscal year, but to pay you compliments and my respect. So thank you. Thank you for filing SARS." Casey and his colleagues took the stage at the NY Federal Reserve conference center in mid-December at the invite of the NY Metro InfraGard Alliance, an FBI-sponsored public-private alliance that urges security and technology chiefs from all sectors to build relationships with law enforcement. The quartet told some tales from the street: Bangladeshi mortgage fraud rings in Queens, $280 million in cash seized in Mexico City earlier this year, and even an ID thief who, when he heard the FBI pounding on his door, escaped out the window naked, pausing only to grab a Ziploc bag containing 400 credit reports. The common thread in most money laundering arrests, the agents attested, was the value of SARs in helping them pursue their cases. Informers, eh?

December 24, 2007

  The Central Bank of Russia (CBR) has revoked the license of Moscow-based Bank Kitezh, the CBR said Thursday. The CBR said that Bank Kitezh had repeatedly violated over one year requirements of the federal law on the prevention of money laundering and financing of terrorism. Bank Kitezh did not report to the Federal Service for Financial Monitoring on transactions subject to obligatory reporting, the CBR said. The CBR has appointed a provisional administration to run the bank until an arbitration court rules to declare it bankrupt or to appoint a liquidator of the bank. The CBR could revoke 50-80 banking licenses this year, the CBR's First Deputy Chairman Gennady Melikyan said in November, adding that the bank revokes a similar number of licenses every year. The CBR had revoked 40 licenses as of early November since the beginning of the year, Melikyan added.

December 17, 2007

  Othman Ahmed Othman al Haidar, who is wanted by the Bosnian authorities, continued to visit Kosovo but changed his mode of transport - he travelled by air instead of land. Express newspaper sources from Prishtina International Airport have advised that even though that person officially was expelled from Kosova in 2004, he returned through this airport in 2005. The Revival of Islamic Heritage Society (RHIS/P) which has branches/offices in 54 countries, including Kosovo, is on the black list of the US State Department as an NGO that may have ties to Al-Qaeda. The organization has been under investigation by a court in Bosnia-Hercegovina on money laundering charges since 1994. A police official has advised that Othman Ahmed Othman al Haidar was in Kosovo even this year - more specifically, around four weeks ago, and was seen on at least one occasion in the company of a former UNMIK police officer from Pakistan...

December 10, 2007

  The president of human rights group Freedom Now, raised the prospect of Washington imposing sanctions, such as those used against a Macau bank accused of money laundering for nuclear-armed North Korea, on a Southeast Asian state-owned bank suspected of links to Myanmar's military rulers. "Anecdotally in conversations with diplomats in ASEAN countries, I know there is a deep concern about the prospects of the United States doing to a state-owned bank what happened to Banco Delta Asia in Macau because of its laundering of North Korean funds," a DC hearing was told...

December 3, 2007

The Central Bank of Russia has revoked banking licenses from three Russian banks for money laundering:  Samolyotbank and BIKBANK... Meanwhile, UAE-based banks are reluctant to deal with companies that are likely to import goods into Iran, says Nasser Hashempour, vice-president of the Dubai-based Iranian Business Council....

November 26, 2007

 Singapore has no plans to change banking secrecy laws, an official at the Monetary Authority of Singapore (MAS) said last week. "They allow for the necessary transparency in combating criminal activity, while safeguarding investors' interest for safety and security," the official said. The EU is pressing for more transparency in Singapore's banking regime and participation in the EU savings tax directive, so the MAS position could undermine talks for a trade agreement between Singapore and the EU. Singapore insists that it won't become a shelter for money laundering, particularly with the opening of two multi- billion dollar casinos in 2009 and its proximity to countries that are battling terrorist groups. Singapore is resisting pressure to join in the EU withholding tax arrangements, introduced in 2005, which impose a tax on the investments of EU nationals residing in another EU country. They are seen as the main stumbling block to a trade agreement. Switzerland caved in to the pressure and now collects withholding tax for remittance to the member states of the EU. In its statement, the MAS noted: "The Singapore constitution does not allow us to collect taxes on behalf of a foreign country."

November 18, 2007

            North Korean officials are to meet US diplomats, Treasury officers and Secret Service agents in talks in New York this week to discuss steps Pyongyang could take to abandon counterfeiting and money laundering activities for it to be integrated into the global financial system. The two-day talks from Monday, convened at Pyongyang's request, will be "related to money laundering and other forms of illicit finance," a US State Department official said. The US team will be led by the Treasury's deputy assistant secretary Daniel Glaser North Korea will be represented at the talks by a six-member delegation led by Ki Kwang-ho, a director at Pyongyang's finance ministry, South Korea's Yonhap news agency reported -- hopefully, it might be added.

November 12, 2007

            In Athens, US embassy spokesperson Carol Kalin said Greek authorities have been asked to "investigate" the bank as US allies have been urged to take "similar or comparable measures" to those adopted by Washington. The US last month blacklisted Bank Melli and Bank Mellat, accused of providing banking services for Iran's nuclear agencies, and Bank Saderat, which allegedly funnels funds to Hezbollah, Hamas, PFLP-GC, and Palestinian Islamic Jihad. The bank from 2001 to 2006 transferred 50 million dollars from the Central Bank of Iran to its branch in Beirut via London for the benefit of Hezbollah fronts in Lebanon, and has also transferred several million dollars to Hamas, the State Department says. "As we announced on October 25, we had a new round of US sanctions on certain Iranian entities, including Bank Saderat. This is part of our effort to advance diplomacy on Iran," Kalin said. "We have asked our allies to take similar or comparable measures to those we've taken."

November 5, 2007

  From a Q&A with Chris Hill in Beijing last week:

Q You mentioned discussion of the financial issues. The last time that issue came up with BDA the Six-Party Talks stalled for over a year. Are you concerned that some of those things might scuttle talks again this time?

MR. HILL: No, I think from their point of view they're interested in improved access to the international financial system. From our point of view, we're interested in assurances and actions on their part to deal with the problems of counterfeiting and other money laundering concerns, which I think have been prime issues in impeding them from access to the international financial system.

October 29, 2007

"We call on responsible banks and companies around the world to terminate any business with Bank Melli, Bank Mellat, Bank Saderat, and all companies and entities of the IRGC," U.S. Treasury Secretary Henry Paulson said in a statement. And in Toyko they wondered, how would they pay for and settle on the 10% of their energy that comes from Iran?

  Bank Melli has several subsidiaries: Bank Kargoshaee, in Tehran; Bank Melli Iran Zao, in Moscow; Melli Bank, in London; and Arian Bank, a joint venture with Bank Saderat in Kabul. Bank Mellat has branches in Armenia, Britain, South Korea and Turkey. Bank Saderat specializes in the financing of Iranian's foreign trade balance. Its international businesses are mainly concentrated in the Gulf countries and Lebanon, but it is also active in France, Germany and Greece....

October 22, 2007

  On the new U.S. list of Myanmar sanctions, Pavo Trading Pte Ltd, Air Bagan Holdings Pte Ltd and Htoo Wood Products Pte Ltd serve as "wake-up call" for Singapore. Also named is Air Bagan Ltd of Myanmar, which last month made Singapore its second international destination. The airline's chairman, Tay Za, arrived on the first flight. According to AFP, Tay Za has very, very strong links to the junta... The directory at a building in Singapore's central business district lists Air Bagan Holdings and the two other blacklisted Singapore-linked firms as operating from a suite on the 24th floor. But the suite carries no sign and workers in neighboring offices said they knew nothing about what type of company operates from there, although they have seen people coming and going on weekdays. An opaque blue sticker covered the door and obscured the interior. Phone and email messages to Pavo Trading were not immediately returned...

October 15, 2007

   Revolting revolving door: on the American Bankers Association's committee to weaken anti-money laundering laws are a slew of former regulators: Richard Small, the Federal Reserve AML "guru" who sold out to Citigroup then GE Money; William Fox, former Financial Crimes Enforcement Network (Fincen) director, now at Bank of America;  Werner, another former Fincen director and now at Merrill Lynch; and William Langford, a former director of regulatory affairs at Fincen and now a senior vice president of global AML at JPMorgan Chase. The three top banks, the biggest brokerage and GE Money all hired directly from the agencies, and now use them to lobby for de-regulation...

October 8, 2007

   A (hype?) search of UK-registered companies turned up 4,000 exact matches for terrorists, financial criminals and disqualified directors. Worldcheck's Rob Mitchell presented findings of the project his firm conducted into UK registered companies to an audience at Mount Murray Hotel. 'Some results were eye opening,' he said. Worldcheck compared the Companies House register with its own database of 589,000 organizations and individuals that have come to their attention through due diligence research, sanctions lists and the likes. Mitchell said: 'There were significant matches across all categories that go well beyond disqualified directors - although we did find 1,504 of these who were current directors of UK firms despite their disqualification.' In fact, the research turned up 4,000 exact matches including 13 for known or suspected terrorists and 154 for people involved in financial crime...

  Meanwhile, U.S. President Bush signed off on the first U.S. shipment of heavy fuel oil to North Korea in five years after the country agreed to complete an inventory of its nuclear programs and disable its existing nuclear facilities by the end of the year. The United States will send 50,000 metric tons of fuel worth about $25 million, according to the president's order...

October 1, 2007

  In a one-paragraph statement, the government in Macau, a former Portuguese colony that is a burgeoning gambling haven, said last week Banco Delta Asia had shown ''remarkable improvement'' during two years of government oversight. It said that Stanley Au, a former gold dealer who ceded control of the bank in September 2005, would be put in charge of the bank again on September 29...

September 24, 2007

            The UN's Ban Ki-moon has appointed Carlos Castresana Fernandez of Spain to head the International Commission against Impunity in Guatemala (CICIG), established under an agreement between the United Nations and the Government of Guatemala that entered into force on 4 September. Castresana was previously assigned to the Special Prosecutor's Office against Drug Trafficking, where he handled cases of criminal organizations charged with international drug smuggling and money laundering...

September 17, 2007

  In the same week that Bank of America set a record, jacking up its surcharge for the use of ATMs to three dollars, the Federal Reserve hauled off and delivered an approval, of BofA's takeover of LaSalle. The Fed seems to have ignored most of the issues raised. For example, the Fed states that ICP and Fair Finance Watch

"expressed concern about Bank of America’s connection to investigations and lawsuits related to the bankruptcy of Parmalat SpA, Parma, Italy. The commenter also expressed unsubstantiated concerns about Bank of America’s student loan policies [and] the handling of certain money transfers through the New York branch of Bank of America, National Association."

September 10, 2007

   Last week U.S. District Court Judge Victor Marrero ruled that the amended National Security Letters provisions of the Patriot Act that gagged those receiving the letters from disclosing the fact violated the First Amendment and the separation of powers. Since the gag-order provisions could not be meaningfully separated from authority to issue the letters, he struck down the whole law, while staying the implementation of his ruling pending any appeal or for 90 days if there is no appeal. Department of Justice Spokesman Dean Boyd said government lawyers were "reviewing the ruling and considering our options."

September 3, 2007

  In 2006, Paraguay imported $4.5 billion worth of goods and exported $1.7 billion. Most economists expect that would have sent the 6.7 million-person country's currency into free fall. That didn't happen, leading many to surmise that the bulk of those imports were re-exported without documents, for example through Cuidad del Este. The wholesalers there, according to McClatchy, include not only the hyped-up Lebanese, but also Koreans...

August 27, 2007

  On August 20, Royal Bank of Scotland told the Federal Reserve that its anti-money laundering policy should be withheld from ICP Fair Finance Watch. Quickly this counter-argument was filed:

RBS argues that its Anti-Money Laundering policy should be withheld, "since disclosure might provide information which might assist persons seek to circumvent those policies and procedures and to engage in money laundering."

  But Fortis and Santander provide their anti-money laundering policies. Therefore the record on this application contains a contradiction -- if RBS' argument is accepted, then Fortis and Santander are assisting and enabling money laundering. If, on the other hand, this is not what Fortis and Santander are engaged in, RBS' policy must be released.

 We note pervious RBS AML issues, including regarding sanctioned entities in Afghanistan. The policy should be released, including so that timely commenters, who timely requested the application, including but not only under FOIA, can review and comment on it.

            And lo and behold, by the end of the week RBS released its AML policy, which is now being analyzed...

August 20, 2007

  From Interfax -- "The Bank of Russia has revoked the licenses of the International Bank of Cooperation (MBS) and the Ermitazh Innovative Commercial Bank (both of which are Moscow-based) to carry out banking transactions... two of Ermitazh's clients transferred R1.2bn in a dubious goods deal to a British company." Is it the UK connection that led to the license revocation?

August 13, 2007

  This week, something different: bank regulators in Washington, pulled one way by injunctions to open up banking to the underserved, and pulled another way by anti-money laundering and FinCen, have come up with a plea. What to do with FinCEN's insistence that it is a crime for a person to have a Social Security number and non-SSI identification at the same time? The Office of Thrift Supervision says it is struggling with this, and asks for guidance...

August 6, 2007

  Hector Orlansky was sentenced in Miami on August 3 by U.S. District Court by Judge Adalberto Jordan for fraudulently inflating the value of collateral used to obtain loans through Espirito Santo Bank of Florida....

July 30, 2007

  In the same week in which Deutsche Bank announced it is leaving Iran, ostensibly due to "spiraling costs," Banco Santander was reported to have continued to do business with sanctioned Bank Sepah until at least March 2007.  How this might impact the Santander - RBS - Fortis bid for ABN Amro, including their pending applications before the U.S. Federal Reserve, remains to be seen...

July 23, 2007

  Many Kims and money laundering (and counterfeiting) apparently forgotten -- on July 14, Kim Myong-gil, deputy chief of the North Korean mission to the United Nations in New York, stated that North Korea had notified the U.S. of shutting down its nuclear facilities at Yongbyon (they still want a light water reactor). "The shutdown came at a time when the first shipment of 6,200 tons of heavy fuel oil arrived in the North," he said. The second stage of the deal calls for North Korea to disable the aging Soviet-era reactor and four other nuclear facilities and provide a full account of its nuclear programs in exchange for an additional 950,000 tons of fuel oil or equivalent aid. North's Foreign Ministry spokesman in the KCNA report stressed on July 15 that the oil is not aid and but "compensation for the DPRK's suspension of its nuclear facilities." In other compensation news, in Beijing, the chief nuclear envoy of South Korea, Amb. Chun Yung-woo, and his North Korean counterpart Kim Kye-gwan began a bilateral meeting.

   Again, In 2005, the U.S. blacklisted the Banco Delta Asia, a small bank in the Chinese-controlled territory, as a money-laundering concern. That caused about US$25 million in North Korean funds to be frozen in the bank. No commercial banks -- not even Wachovia -- came forward to help transfer the money. The money was sent to the Russian central bank from the U.S. Federal Reserve in New York, then transferred in late June to a bank in Russia's Far East, where North Korea has an account. So, the Federal Reserve can "work around" Section 311 of the PATRIOT Act...

  Next step? Kim Myong Gil at North Korea's United Nations mission in New York said his government would only disclose the full extent of the country's nuclear program and disable the reactor if Washington takes actions "in parallel. We will discuss about the economic sanctions lifting and removing of the terrorism list. All those things should be discussed and resolved," he said...

July 16, 2007

  Time reports that Kim Jong-il's "criminal businesses not only stretch across Asia but also have managed to gain footholds in Russia, Europe and the U.S. Among the regime's illicit activities are the production and trafficking of opium and heroin to dealers around the world, the manufacture and sale of billions of counterfeit cigarettes and the production of tens of millions of dollars in forged U.S. currency sophisticated enough to evade detection by U.S. banks. In many cases, the transactions are conducted not by rogue gangsters but by North Korean government officials, including members of the country's diplomatic corps stationed overseas... North Korea requires that its missions abroad be self-financing, meaning they need to earn enough money to stay afloat without help from Pyongyang... FOR MOST OF THE YEAR, KIM IN-HO, 42, A defector from North Korea who now lives in Seoul, was an ordinary worker in a state-owned textile factory in Haesan City in Yangang province, not far from the border with China. Yet each summer, Kim and his colleagues left the looms and were sent to nearby farms to collect the year's harvest. It wasn't food they were gathering, he says, although North Korea has chronic food shortages, but "white bellflowers," or poppies, the vital feedstock for opium and heroin processing. North Korean poppies are the starting point of an elaborate chain of production whose result ends up on the streets of Russia, China and beyond... Government trucks transport the opium harvested in North Hamgyong province to a factory outside Pyongyang run by Raemong Pharmaceuticals, a government-owned firm. A North Korean defector who claims he was a key middleman in the narcotics business alleges that Raemong is mainly a normal drug company. But, he says, it also converts opium into heroin headed abroad."

   And not long ago, UN officials claimed they had visited and upheld N. Korea's production of "a small amount" of opium, for medicinal purposes...

July 9, 2007

   This week, two quotes from ex-regulators monetized their expertise and access. "If it's now 2007 and the control failure occurred in 2005, 2004 ... is there going to be any value to law enforcement, any value to the government in finding things that happened two or three years ago and reporting it now?" The speaker of these words was identified by the American Banker newspaper as "Richard Small, the global anti-money-laundering leader at GE Money, the consumer and small-business financial services division of General Electric Co., and a former top anti-laundering official at Citigroup Inc. and the Federal Reserve Board, where he was a deputy associate director in the division of banking supervision."

    A related quote: "Was it really worth it? If you make one or two cases out of 5,000 reviews," said Robert Serino, identified by the American Banker only as "a counsel at Buckley Kolar LLP." He was also a lawyer at the OCC...

 July 2, 2007

  Treasury's Paulson defense last week of using the Federal Reserve System to get around the Patriot Act was that "in April, the Macanese made the decision to release the funds. The Treasury supported that as a way to move the six-party talks forward." Now the Government Accountability Office is going to evaluate whether the U.S. government ran afoul of its own anti-money-laundering rules. Paul Anderson, a spokesman for the GAO, said Congress's investigative arm will decide whether to proceed with an investigation within the next week to 10 days. Molly Millerwise, Treasury spokeswoman, said, "we appreciate Congress's interest in safeguarding the U.S. financial system from abuse. The transaction the U.S. government helped to facilitate is fully consistent with all applicable laws and regulations." We'll see...

June 25, 2007

  We take a brief detour for this, from the Straits Times of Singapore:

"ON JUNE 8, my father went to HSBC Jurong East branch to help me deposit money in my bank account, which I had just opened recently. A bank teller first asked about the origins of the money and then remarked that she was afraid my dad was a terrorist. My dad had a rude shock. Although I understand banks are required to carry out Customer Due Diligence (CDD) measures under MAS Act Cap 186 Prevention of Money Laundering and Countering the Financing of Terrorism, the bank teller could have handled the matter more appropriately. After I gave my feedback to HSBC, its reply was less than satisfactory. Instead of accepting responsibility for poor customer service, the customer service manager of Jurong East branch explained in a phone conversation that the teller was temporary and even suggested my dad go to the branch to receive an apology. In a subsequent letter, she advised me of the bank's requirement to seek details of the source and use of funds to comply with strict international regulations regarding money laundering and terrorism. A check on MAS Act Cap 186 reveals that banks undertake CDD measures only if the transaction exceeds $20,000. However, my dad's transaction was less than this amount... With all the government initiatives to make Singapore the regional banking centre and service centre, it is worrying that a temporary employee, I would think not properly trained by HSBC, is allowed to handle sensitive banking transactions. Even more disturbing is how HSBC management handles customer feedback."

June 18, 2007

  A new low for the Federal Reserve, it prosecutes money laundering while allegedly engaging in it, since unlike banks it is not subject the USA Patriot Act: " The decision to use the Federal Reserve Bank to return the [North Korean] money to the original account holders came after government lawyers concluded that the Federal Reserve was not subject to the same legal provisions as the commercial banks." LAT....

June 11, 2007

   The UN Counterterrorism Committee has warned Bangladesh of the danger of terror-financing through remittances sent by expatriates. The committee also warned of the possibility of militants being financed through donor agencies. Elizabeth Joyce, a senior UN legal official led the three-member team of the UN Counterterrorism Committee. In the meeting Joyce said, "Bangladesh is among the leading countries when it comes to cash transactions. 80 to 90 per cent of all transactions are in cash. They include bank and non-bank transactions. Bangladesh receives around 600 crore [1 crore equals 10m] dollars in expatriates' remittances. This can easily be used for financing terror."

  The UN's interesting in money laundering in Bangladesh happens as UN special rapporteur Hina Jilani is not allowed to leave the country...

June 4, 2007

  Quotes of the week -- U.S. Ambassador to South Korea Alexander Vershbow said on May 30 "We're ready to begin the process of removing North Korea from the list of state sponsors of terrorism and from the application of the Trading with the Enemy Act."

            In email to US Banker, from US Treasury spokeswoman Molly Millerwise, noting that the agency has worked with Macanese authorities for 18 months, during which they turned over 300,000 related bank documents: "We said at that time we'd be willing to review and possibly lift the rule if our concerns were addressed."

   And the concerns, beyond BDA in Macao, were centered on Yongbyon...

  It is FT-reported that "since 2001, the State department has had a method of electronically transferring cash from its credit union to the Foreign Trade Bank in Pyongyang"....

May 28, 2007

 The U.S. negotiator in North Korean disarmament Christopher Hill talks and a delegation from Pyongyang attended Asia's security forum in Manila on Friday, but the American diplomat ruled out separate bilateral meetings. Hill told reporters when he arrived late Thursday that he had no plans to meet the North Koreans on the sidelines of the forum. "Those are different North Koreans from the ones who deal with at the six-party talks," he said earlier this week in Vietnam. Hill bragged that the U.S. will not let a dispute over $25 million in North Korean funds, allegedly tied to money laundering and counterfeiting, stand in the way of achieving progress in the North's nuclear disarmament. The money has since been freed, but the transfer has been delayed because other banks are apparently hesitant to touch the tainted funds.

  But maybe not Wachovia...

May 21, 2007

  Bank of New York, now sued for $22 billion by the Russian customs service, still argues that its merger application to acquire Mellon should go forward, without even a re-opening of the Fed's comment period. We'll see.

Strange days: on May 17, Wachovia's spokeswoman Christy Phillips-Brown announced that Wachovia was asked "by the U.S. State Department to help them process an interbank transfer of funds held at other banks, which are the subject of negotiations with North Korea. We have agreed to consider this request and our discussions with various government officials are continuing." Since dealing with Banco Delta Asia is still illegal, one wonders both how the U.S. could cynically waive the law for one transaction, and what it would owe Wachovia for this "service." It creates conflicts, which will be explored...

May 14, 2007

 Kyodo News says the US is considering letting an unnamed American bank handle the money at Macau's Banco Delta Asia, waiving its own Patriot Act. If the deal is approved, the Macau bank would transfer the cash to a US bank which would in turn send it to a third country, Kyodo News said.

Asked whether the United States would make an exception to let a US bank handle the money, State Department spokesman Sean McCormack said it was up to the Treasury Department. "It's a heck of a lot more complicated than anybody would have ever thought," McCormack said of unfreezing the money. Yep...

May 7, 2007

  According to Nikkei, leading Japanese banks are stepping up monitoring to prevent money laundering following the recent punishment by U.S. authorities of blue-chip financial institutions Mitsubishi UFJ Financial Group Inc. and Sumitomo Mitsui Banking Corp. Bank of Tokyo-Mitsubishi UFJ this month created an anti-money-laundering office of about 20 employees, while SMBC is considering upgrading the monitoring system it introduced in 2004. Last December, Mizuho Bank installed a computer system capable of comparing sender and recipient names against a blacklist that includes terrorism-linked individuals and missile-related North Korean organizations. We'll see...

April 30, 2007

   Quote of the week : Japanese Prime Minister Shinzo Abe describing his impression of Kim John Il based on a meeting with him in 2002 -- "I regard Mr. Kim Jong Il as a person who is capable of rational thinking. I think there are people there who can make logical decisions, so I believe a policy of dialogue and pressure vis-a-vis the North will be effective."

 North Korea will likely be discussed when Abe meets Bush on Thursday. In February, North Korea pledged to begin abandoning its nuclear program in return for energy aid and political concessions, but it missed an April 14 deadline to shut down its nuclear reactor. The North has refused to act until it receives US$25 million in cash frozen after a Macau bank was blacklisted by the United States for allegedly helping the North with money laundering and counterfeiting. The funds have been freed for withdrawal, but for unknown reasons the North has not yet acted to recover the money. Developing...

April 23, 2007

The Egmont Group is getting legislation and regulations from the Canadian government granting immunities to the group and its officials, meaning the group's yet-to-be-named executive secretary and his or her family will have the same privileges and immunities as diplomats. In addition, the Egmont Group's officials will have legal immunity for anything they say or do in their official capacity and non-Canadians who are not permanent residents of Canada will be exempt from taxes on their salaries. All property and assets of the organization will be immune from any legal process. More than 24 organizations have been granted similar immunity ranging from the Caribbean Development Bank to the International Civil Aviation Organization.

  Question: how can Canada grant Egmont Group's officials "legal immunity for anything they say or do in their official capacity"?

April 16, 2007

  The WSJ reports the "the Macau Monetary Authority set up a team to investigate BDA, and two days later, took over its management and froze more than 50 North Korean accounts with about $25 million in deposits. Among them were 20 accounts held by North Korean state-owned banks, 11 held by trading companies and nine held by individuals. State-run Zokwang Trading Co., accused by the U.S. in 1994 of passing hundreds of thousands of dollars in counterfeit U.S. currency into Hong Kong, held a number of accounts. Treasury has alleged that another account holder, state-owned Tanchon Bank, has financed North Korea's weapons programs... Foreign aid organizations tied to the United Nations faced difficulties bringing foreign currency in and out of the country. Some innocent businesses got caught up in the dragnet. Daedong Credit Bank, a joint venture between North Korea's state-owned Daesong Bank and a Hong Kong-based investment company, says about $7 million of its funds were frozen in BDA. Of that figure, $2.6 million were funds owed to its client, British American Tobacco PLC. BAT runs a small manufacturing facility in Pyongyang in a joint-venture with a North Korean trading firm... In February 2006, Mongolian intelligence officials detained Daedong couriers seeking to deposit $1 million and 20 million yen ($168,000) at Ulan Bator's Golomt Bank. The Mongolian officials charged the couriers with moving counterfeit currency, and froze the funds. Daedong says its couriers were carrying cash to Mongolia because North Korea doesn't have any computerized systems to make money transfers." Who knew?

April 9, 2007

  Regarding North Korea's April 15 deadline, Susan Stevenson, a U.S. Embassy spokeswoman in Beijing, said on April 6: "Our discussions and common efforts with all parties continue. We believe that it is possible to meet the 60-day deadline and are working with the other parties to accomplish that goal." Also Friday, a news report in Seoul that said the money will be returned to Pyongyang via a bank in Hong Kong. South Korea's JoongAng Ilbo newspaper reported, citing an unidentified high-level government official, said the United States, China and Banco Delta Asia came to the agreement during the Beijing talks.

            The South Korean Foreign Ministry, as usual, refused to comment, to the AP much less anyone else...

April 2, 2007

  At deadline, US officials remain tight-lipped about the talks between a delegation led by Daniel Glaser, the deputy assistant secretary for terrorist financing and financial crimes, and Chinese officials. Glaser was still in Beijing 6 days after arriving and holding  talks with officials from China's foreign ministry, the central bank and the country's banking industry regulator. The 25 million dollars was supposed to be transferred quickly to a North Korean account with the Bank of China but the state-owned lender has, AFP reports, refused to accept the money...

March 26, 2007 -- At the UN, Questions of Iran Sanctions' Secondary Effect, On Bank Sepah's Depositors

UNITED NATIONS, March 24 -- As the UN Security Council unanimously imposed further sanctions concerning Iran's nuclear programs, a question arose about the impact of including a financial institution, Bank Sepah, in the annex to the resolution. Following Saturday's 15-0 vote, Iran's foreign minister Manoucheher Mottaki delivered a lengthy speech, which along other things said "what can harming of hundreds of thousands of depositors in Bank Sepah, with 80 year history in Iran, mean other than confronting ordinary Iranians?"

            At the Security Council stakeout, Inner City Press asked this month's Security Council president, South African Ambassador Dumisani Kumalo, whether these sanctions would impact Iranian civilians. Amb. Kumalo responded that South Africa's "understanding of these sanctions is that they were aimed at trade... not at somebody who has ten dollars in the bank." He noted, "Remember, we as South Africa had asked for this to be removed." Video here, from Minute 7:33. As with most of South Africa's requests, this was not accepted by the resolution's proponents and initial negotiators, the five Permanent Five members, any one of which could have vetoed the resolution, and Germany.

            Inner City Press asked the Ambassador of P-5 member Russia, Vitaly Churkin, whether the financial sanction were, as he'd said, "carefully crafted," and whether civilian depositors would be impacted. Amb. Churkin responded that, "Unfortunately, there is this sanctions list, and when you get into sanctions, there can be secondary effects. Life without sanctions is much more comfortable. The way to get out of these nuisance is to have a negotiated solution to the problems posed by the Iranian nuclear program at this point." Video here, from Minute 11:35.

            A question remains, whether impacting depositors of Bank Sepah is reasonably calculated to bring about a negotiated solution. A chapter on the financial sanctions imposed by the UN's Counter-Terrorism Committee in "International Sanctions" (London: 2005, Frank Cass) speaks of the difficulties with such financial provisions. The U.S. recent on-again, off-again approach in connection with the Six Party Talks with North Korea to Banco Delta Asia shows the arbitrary nature of such sanctions. Their impact in this case on regular deposits remains to be seen -- and to be tracked.

            Bank Sepah has branches in London, Paris, Frankfurt and Rome.  When earlier this year the U.S. first applied its own sanctions, Bank Sepah objected to "fabricated statements based on purely hypothetical pretext, made out of political inducements" and said that the bank will "continue with its efficient performance with due observance of internal and international regulations as before." We'll see.

March 19, 2007

  From the Hong Kong Standard of March 17: "A Japanese delegate said the IAEA had urged countries attending the six- party talks to lift their sanctions on Banco Delta Asia."

 Question: is that the IAEA's role?

"We deeply regret the United States' insistence on using American domestic law to apply a ruling on Banco Delta Asia," China's Foreign Ministry spokesman Qin Gang said in a regular press briefing last week.

March 12, 2007

   After last week's U.S.-North Korea working-group meeting with North Korean Vice Foreign Minister Kim Kye Gwan, U.S. assistant secretary of state for East Asian and Pacific affairs Christopher Hill quipped, This process that we're on, you know, not unlike a video game, gets more and more difficult as you go into more and more levels," Hill said. The State Department's declassification of North Korea as a sponsor of terrorism would award the impoverished country access to assistance from the International Monetary Fund and the World Bank. North Korea is also pushing to have U.S. financial sanctions on its accounts at Macao's Banco Delta Asia SARL lifted as soon as possible. The curbs were imposed in September 2005 for alleged money laundering and distributing counterfeit U.S. currency. Immediately after the six-party accord, Hill said the United States would resolve the financial curbs it imposed on the bank in September 2005 within 30 days. We'll see.

March 5, 2007

  This week's U.S.-North Korea working group session will serve as the venue for the direct bilateral talks Pyongyang has long sought. It is to be led by Christopher Hill, U.S. assistant secretary of state for East Asian and Pacific affairs, and North Korean Vice Foreign Minister Kim Kye Gwan.

 Inner City Press: a portion of the UN press corps has been in a frenzy tracking the foreign minister of the Kim Jong Il government of North Korea, from San Francisco to New York, where he's slated to meet with Christopher Hill at the U.S. Mission. In San Francisco, Japan's NHK television is said to have rented five motorcycles to try to find Minister Kim.  In New York, reporters flocked out to the airport, awaiting a certain (or uncertain) United Airlines flight, and then camped out in front of the Millennium Plaza hotel, in the same structure at UNDP, and awaited him. They got a wave, and not much more.

            Achieving full diplomatic relations is no easy task in view of the complexity of resolving pending bilateral issues, such as removing North Korea from a U.S. list of "state sponsors of terrorism." The State Department's declassifying North Korea as a sponsor of terrorism is North Korea's main area of interest. In addition to trade with the United States, the declassification would give the impoverished country access to assistance from the International Monetary Fund and the World Bank. North Korea is also eager to have U.S. financial sanctions on its accounts at Macao's Banco Delta Asia SARL lifted as soon as possible. The curbs were imposed in September 2005 for alleged money laundering and distributing counterfeit U.S. currency. Immediately after the six-party accord, Hill said the United States would resolve the financial curbs it imposed on the bank in September 2005 within 30 days. But he cautioned Wednesday that any continued money laundering or counterfeiting will be met with additional financial sanctions.

February 26, 2007

            Colombian Foreign Minister Maria Consuelo Araujo Castro resigned Monday, just days after authorities arrested her brother for alleged ties to illegal right-wing paramilitary forces and announced they also would investigate her father and cousin for similar activities. "I believe that the judicial process needs to be free of interference," Araujo said in her resignation letter to President Alvaro Uribe. "The certainty of the innocence of my father and brother forces me to leave, so I can be free to be by their side and help them as a daughter and a sister." In addition to the arrest of her brother, the attorney general announced last week the investigation of former minister Araujo Castro's cousin, Hernando Molina Araujo, governor of Cesar province, on suspicion of murder and money laundering. Witnesses have told authorities that before Molina became the governor he was a paramilitary leader under the nom de guerre "Commander 35."

February 19, 2007

  From a February 8 letter from Bank of America to the Federal Reserve: "ICP notes accounts of anti-money laundering investigations related to South American money service businesses. Bank of America provided to the Board information about its anti-money laundering policies and practices [and] has routinely demonstrated its strong commitment to anti-money laundering compliance." Oh, really?

February 12, 2007

  Jiji says that the United States has started showing a flexible stance on lifting its financial sanctions against North Korea, imposed for suspected money laundering involving a Macau-based bank, so discussions on the matter could become complicated... The stance of Japan, a key U.S. ally, at the upcoming G-7 meeting appears different from that of the United States as Tokyo is determined to maintain a tough stance on North Korea, insisting that Pyongyang resolve issues related to its abductions of Japanese nationals. Meanwhile, Japan may be urged by other G-7 nations to strengthen its measures against money laundering, after major Japanese banks such as Bank of Tokyo-Mitsubishi UFJ and Sumitomo Mitsui Banking Corp. received business improvement orders from U.S. financial regulators for failing to take appropriate steps on the issue...

February 5, 2007

            Bank of America's offshore tax shelter scheme has led to a too-small $3 million fine for money-laundering. The National Association of Securities Dealers found that Banc of America Investment Services failed to obtain customer information about 34 accounts involving trust and private investment corporations based in the Isle of Man. BofA "fundamentally failed to meet its obligations with these high risk accounts by failing to adequately investigate and pursue red flags," James Shorris, the NASD's head of enforcement, said-in-a-statement. The Senate's Permanent Subcommittee on Investigations said it thought the accounts were controlled by two billionaire Texas brothers, Sam and Charles Wyly. As part of a 375-page report on offshore tax havens, the committee said the brothers, who helped build craft retailer Michael Stores Inc., used the accounts to shield stock option gains from taxes. Sen. Carl Levin, D-Mich, the chairman of the subcommittee, said that the fine "sends a strong message to U.S. securities firms that when they open accounts for offshore entities and transfer offshore dollars across U.S. lines, they have a legal obligation to know who is behind those accounts or risk millions of dollars in fines and other enforcement action." And now BofA wants to buy another secretive private bank, US Trust? See, "Protest filed against BofA's deal for U.S. Trust," by Rick Rothacker, Charlotte Observer, Jan. 27, 2007

January 29, 2007

  On the DPRK, "South Korean's foreign minister, Song Min-soon, said the second round of arms talks may be held before Feb. 10, according to a news report on Friday from the Yonhap news agency. The financial action that the United States took in 2005 that so angered North Korea was against a bank -- Banco Delta Asia SARL -- in Macau, a special administrative district of China. The United States alleged that the bank helped North Korea distribute counterfeit currency and engage in other illicit activities. The bank had provided financial services for more than 20 years to North Korean government agencies. As a result of the U.S. clampdown, some $24 million in North Korean accounts has been frozen at the bank."  Click here for Inner City Press' coverage of the North Korea funding scandals involving the UN Development Program...

January 22, 2007

  Royal Bank of Canada has been refusing to open U.S. dollar accounts for some Canadians who are also citizens of countries facing American sanctions: Iran, Iraq, Cuba, Sudan, North Korea and Myanmar. RBC spokesman David Moorcroft claimed that U.S. authorities expect RBC to live up to a higher standard than others because the bank is the largest provider of U.S. dollar accounts in Canada. Moorcroft also said RBC aims to be a leader in the efforts to crack down on money laundering and terrorist financing. Yeah, right...

January 14, 2007

   A company dropped at the last minute from the UN Security Council's Iran resolution showed up in comments by a top U.S. Treasury official last week. Stuart Levey, treasury undersecretary for terrorism and financial intelligence, told a news conference that Iran's state-owned Bank Sepah had facilitated business between Iran's Aerospace Industries Organization and North Korea's alleged missile-related exporter, the Korean Mining and Industrial Development Corp. "There's a real concern there...one would have to be concerned about these sorts of links between North Korean proliferators and Iranian proliferators and the financial intermediaries who might be handling that business," Levey said. Click here for Inner City Press' story reported from the UN about the dropping of Aerospace Industries Organization from the Iran resolution...

January 8, 2007

  From a Lud(dwig)ite op-ed about the revolving door at FINCEN: " When Mr. Werner was at the OFAC, he collaborated with Mr. Fox, Fincen's director at the time... Treasury should work with Congress to determine whether effective synergies could be developed through a merger. An additional benefit of a merger that created a more effective agency would be elevating the importance of the director's role -- and making it more likely that the director would stay in place longer." So that's why they leave? Not enough prestige? Or a lack of any post-employment restriction a/k/a anti-revolving door safeguards?

January 1, 2007

  Just as UNDP said no to meeting in New York (click here for Inner City Press' story of UNDP junket to Goa), the North Koreans don't want New York as venue for financial sanctions talks. "We have no intention of going to New York. The two sides should find another place," the Dong-A Ilbo quoted Kim Kye Gwan as saying Saturday before leaving China after attending the six-party nuclear talks, which failed to produce tangible progress. The North Korean vice foreign minister made the remarks in an interview with the newspaper at the airport in Beijing. Asked if North Korea wants the next session with the United States to be held in the Chinese capital, Kim nodded in approval...

December 25, 2006

            So now BNP Paribas is subject to a $220 million class action lawsuit for its role in the UN - Iraq Oil for Food scandal...

            From the Economist, on politics: " On December 14th the Serious Fraud Office reluctantly ditched its investigation into allegations, denied by the company, that BAE paid bribes to Saudi Arabian officials in exchange for an agreement to supply, organize and train the Saudi air force, a deal that has produced up to £43 billion ($84 billion) over almost two decades for BAE. The decision came after weeks of intense lobbying by BAE and the Saudi government, which reportedly threatened to cancel a follow-on purchase of 72 Eurofighter Typhoon jet fighters.  Tony Blair said the investigation had been halted because it threatened to harm relations with Saudi Arabia, a key ally in the fight on terrorism and a partner in the Middle East peace process. But suspicions linger that an equal motive was protecting thousands of British jobs."

December 18, 2006

  From Yomuiri, The United States and North Korea will set up a separate working-level mechanism in Beijing to discuss U.S. financial sanctions against the North in parallel with the planned restart of the six-way talks on Pyongyang's nuclear program, Christopher Hill, assistant secretary of state for East Asian and Pacific affairs, said Wednesday.  Washington, which is determined that the six-nation talks that are likely to resume Monday will yield results, has made concessions to the North in the hope of winning concessions from Pyongyang to suspend the operations at its nuclear facilities. The United States, however, has refused bilateral talks with North Korea and has opposed addressing the issue through talks on the ground that financial sanctions are a legal punishment for the North's illegal activities, including money-laundering.

 At the news conference in Washington, Hill said that when the six-way talks resume in Beijing, a two-nation mechanism apart from the six-way talks will be established for preliminary talks on the financial sanctions. He said Washington wanted to solve the problem. Instead of Hill, Daniel Glazer, an assistant to the deputy secretary of the Treasury specializing in terrorist funding and financial crime, will represent the United States in the bilateral talks, according to officials of the U.S. Treasury....

December 4, 2006

  From the official Chinese news agency Xinhua: A senior central bank official said recently that China's membership of the world money policing agency, the Financial Action Task Force on Anti-Money Laundering (FATF), would benefit the FATF as well as China. China attaches great importance to combating money laundering and the financing of terrorism, claimed Xiang Junbo, vice-governor of the People's Bank of China (PBOC), at a symposium held in Shanghai. Voting will take place next June...

November 27, 2006

  The revolving door is making a mockery of anti-money laundering enforcement. Robert Werner, after a mere nine months as director of the U.S. Treasury Department's Financial Crimes Enforcement Network, announced last week that he will leave the agency in January to cash out at Merrill Lynch. Werner is the second agency head to leave in less than a year. A former Fincen official has since been quoted that "It would be nice to have some continuity. I do hope that the next director will be there for the long haul." Without anti-revolving door safeguards, that's unlikely...

November 20, 2006

 In the Czech Republic, the planned cancellation of the financial police is criticized not only by its heads, but the Financial Ministry expressed its dissatisfaction, too, the daily Pravo has reported. Karel Korynta, head of the ministry's financial and analytical department, said that this step may affect the fight against money laundering and financing of terrorist activities. "The Interior Ministry should now clearly say who will be our new partner. It is high time to do it," Korynta told the paper. "We will demand a continuity. We need to know in advance who will be our partners in curbing money laundering and financing of terrorism," Korynta's deputy Josef Bazant told Pravo. Interior Minister Ivan Langer argues that the cancellation of the financial police and transfer of its employees to other police units will speed up investigation of financial crimes and make it more efficient. Langer and Police President Vladislav Husak say that the financial police work well, but not quickly enough. Reservations against the step were voiced by the Social Democrats (CSSD). As from 2007, part of the financial police is to merge with the anti-corruption police, while other employees are to join the organized crime police or the anti-drug unit.

Last week Inner City Press sat down for an interview with the president of the Nagorno-Karabakh Republic, Arkady Ghoukasyan, and asked him about the fires, about the United Nations and other breakaway republic matters. Click here for the footage, on Google Video.

November 13, 2006

  Europe's EcoFin Council has adopted by a qualified majority (Germany and France abstained) a regulation establishing the information requirements to accompany the transferring of funds in order to prevent money laundering and the financing of terrorism (EP-Council 3630/06, 14023/06 ADD). The new regulation will complete Directive 2005/60/EC on money laundering and will be applicable from 1 January 2007 in compliance with the recommendation by the G7 Financial Action Task Force adopted in 2001, the day after the 11 September airplane attacks...

November 6, 2006

  In the summer of 2007, the UK will assume presidency of the Financial Action Task Force (FATF), the inter-governmental policy-making body founded by the G-7 Summit in 1989. In this role, the UK will promote its new anti-terror measures  and urge FATF to hold accountable the countries that have insufficient terror financing controls.

  Inner City Press continues to await the U.S. State Department's promised comment on the FATF last month removing Myanmar from the money laundering blacklist...

October 30, 2006

    Gold worth over $1 million extracted by Chilean dictator Augusto Pinochet has reportedly been found in HSBC, whose spokesman Gareth Hewett said, "Al insistírsele sobre el particular, aseguró: "No puedo confirmar ni desmentir. Sin comentario" (no comment). Later HSBC claimed the Chilean documents are forgeries, but another maintained their authenticity. We'll see.

  In Kenya, a senior U.S. embassy official, who requested not to be named, said: "The United States enjoys a robust working relationship with Kenyan law enforcement officials. We have not been formally requested to assist in the Charterhouse affair. If we are formally requested to assist in the future, we will do so to the best of our abilities." But the government said it would not engage the services of US agencies. Foreign Affairs Assistant Minister Moses Wetang'ula said the government would instead turn to Interpol to which it is a member. "As a sovereign state, it would be laughable to invite a foreign country to come and assist on such minor issues as bank fraud while we have sufficient investigative agencies to do the job," he said.

Already, three bank officials who blew the whistle on the 18bn-shilling [250m-dollar] Charterhouse Bank affair, have fled the country citing fears over their lives. Before fleeing Kenya, officials believed to be from the US Drug Enforcement Administration, interviewed the trio in their Nairobi hideouts. It was then that a decision was reached to fly them to South Africa where travel documents for the asylum-seekers were processed to enable them fly to the US.

October 23, 2006

  On October 13, the FATF dropped Myanmar from its money laundering blacklist. On October 17 at the UN, Inner City Press asked U.S. Ambassador John Bolton for his reaction to the FATF's decision. Amb. Bolton had cited Myanmar's money laundering as one of the reasons that Myanmar should be put on the agenda of the UN Security Council, as a threat to international peace and security. Amb. Bolton on Oct. 17 said he hadn't heard of the FAFT decision. His staff gestured to call or email him. Inner City Press emailed the staffer press accounts of the FATF decision and was told that a comment will be forthcoming.

October 16, 2006

  Georgia's foreign minister Gela Bezhuashvili said last week, "Branches of Russian banks are continuing to operate in Abkhazia, unlawfully. Money-laundering is still happening there. Counterfeit money is still being printed in South Ossetia." Meanwhile at the UN, a Georgian representative promised Inner City Press to provide information on this alleged money laundering. Inner City Press asked six questions of Georgia's UN ambassador, click here to view. Until next report, for or with more information, contact us

October 9, 2006

   In Federal court in Brooklyn, NY, Judge Charles P. Sifton in Brooklyn has in the past two week denied motions to dismiss terror-related charges by RBS' NatWest and Credit Agricole. The latter e suit, filed in February under the Anti-Terrorism Act, portrays Credit Agricole of improperly doing business with a French-based charity that has been designated a terrorist organization.

In court papers, the bank claimed it suspected the charity, CBSP, might be involved in money laundering, but not terrorism. The judge said in his ruling that 'it is reasonable to believe that when the bank noticed 'unusual activity' on CBSP's accounts, the bank would have investigated the organizations receiving the large transfers, "including designations of terrorist organizations made by the government whose country was experiencing the terrorism." Ah, RBS and Credit Agricole...

October 2, 2006

  Bank of America admitted last week that its lax operations allowed South American money launderers to illegally move $3 billion through a single Midtown Manhattan branch. BofA said that it ''takes seriously its anti-money laundering obligations'' and that it ''never knowingly does business with persons, organizations or businesses engaged in illegal activities and did not in this case.'' Most of the funds came from Brazil via a licensed money transmitter in Uruguay and then to the Bank of America branch, which allowed funds to reach unlicensed money transfer firms in the area...

September 25, 2006

 HSBC was tied with Citigoup and Bank of New York for first place in the highest number of fines for violations from the U.S. Office of Foreign Assets Control -- six each, from 2003 through August 2006.  And the Office of the Comptroller of the Currency, in approving a massive JPM Chase - Bank of New York application on September 15, on which Fair Finance Watch raised money laundering issues, does not even mention the issue. The OCC is a unit of the U.S. Treasury Department...

September 18, 2006

    New era? First deputy chairman of the Central Bank of Russia Andrei Kozlov was shot in Moscow on September 13 in the evening--

"This is the first attempt on the life of a high-ranking bank official in the Russian history. Observers and Kozlov's colleagues stated without a moment's hesitation that the attempt was bound up with his official activities. According to preliminary information, the attempt on Andrei Kozlov was made nearby a sports center Spartak on Oleniy Val Street at about 9.30 pm. His colleagues say that he took part in a corporate football match organized there by officers of the CBR and commercial banks every Wednesday. According to the data of the Chief Internal Affairs Department, when the match was over, two men walked into the sports center. When the official appeared on a parking place, they opened fire. The criminals managed to disappear. The Perekhvat plan was of no effect. In the capacity of the first deputy chairman of the CBR, Andrei Kozlov was in charge of bank supervision. As a matter of fact, the CBR's decisions about enforcement of such measures as a revocation of bank licenses depended on him."

  Developing...

September 11, 2006

   The U.S. Treasury Department announced on September 8 it has cut off Iran's Bank Saderat from access to the U.S. financial system to block terrorist funding, and is sending its officials worldwide to seek similar actions. Treasury Undersecretary for Terrorist and Financial Intelligence Stuart Levey said they will "consult with government and private-sector leaders on measures we should all be taking to protect ourselves from Iran's use of the international financial system to advance its dangerous policies. The United Nations is one avenue for imposing pressure on the Iranian regime -- an avenue we continue to aggressively pursue -- but like-minded states and even the global private sector may well decide to take additional measures outside of that context," Levey said. "We have some important success with North Korea," he added, referring to financial sanctions against North Korean companies for proliferating WMDs and a Macao-based bank for allegedly distributing counterfeit U.S dollars and laundering money for the North.

  That cut off preceded the test firing of missiles... In an approval order the Fed recited in footnote 13 that ICP Fair Finance Watch

"cited various news and congressional reports from 2003 through 2005 regarding allegations that ES Bank concealed assets and money laundering in connection with accounts held for the benefit of certain international individuals, including former Chilean President Augusto Pinochet."

   What a generous description, "international individuals."  

September 4, 2006

  In the shadows and interstices of UN Security Council resolutions, the U.S. is at work. 'There is sort of a voluntary coalition of financial institutions saying that they don't want to handle this business anymore and that is causing financial isolation for the government of North Korea,' Stuart Levey, the Treasury Department's undersecretary for terrorism and financial intelligence, told AP last week. 'They don't want to be the banker for someone who's engaged in crime, as the North Korean government is,' he said.  Banks in Singapore, Vietnam, China, Hong Kong and Mongolia are opting not to do business with North Korea, Levey said. We'll see.

August 28, 2006

    Who's in bed with whom? LAT: Wells Fargo's supposed safeguards for detecting illicit banking activities by terrorists, drug smugglers and other criminals were so weak that federal regulators should have publicly reprimanded the San Francisco-based bank, according to a Treasury Department report released last week. Instead, senior banking regulators met with Wells Fargo CEO Dick Kovacevich, then overruled their own staff by letting Wells off with an informal enforcement action -- sparing Wells the scrutiny and embarrassment suffered by other banks that have been forced to disclose that regulators faulted their oversight systems. 

"We believe that [the Office of the Comptroller of the Currency] should have acted more quickly and forcefully to require Wells to strengthen its compliance and that OCC's failure to take formal enforcement action against Wells sent the wrong message to the banking industry about OCC's resolve to ensure that banks comply" with the Bank Secrecy Act, the inspector general's report said. The OCC staff recommended Feb. 4, 2005, that a formal cease-and-desist order be issued to Wells Fargo. Dick Kovacevich met five days later with top OCC officials, including Acting Comptroller of the Currency Julie Williams, who was then running the agency. After that meeting, the OCC pulled the recommended action from consideration by its top supervisory review committee, according to the report. On April 12, 2005, a new memo was issued recommending that the agency take informal action. Who's put at risk by these cozy relationships?

August 14, 2006

The Bank of England on August 11 froze the assets of 19 suspects allegedly involved in the failed plot to blow up U.S.-bound planes. MW: "The Bank of England said financial institutions should check whether they operate bank accounts for the men or hold assets on their behalf in other ways. If so, those accounts and assets should be frozen and all information reported to the bank." The suspects' lawyers say they've barely gotten to see them, and they can be held for up to 25 more days without being charged. Developing.