World Money Laundering Report: Digest 20061212

World Money Laundering Report: Digest.

Citation: WMLR: D 2006 12 12

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*The Society of Anti Money Laundering Professionals.*

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In World Money Laundering Report Online : Daily News recently -

Myanmar: MoU expected with Indonesia

12. December 2006

Reports coming out of Myanmar suggest that the country is about to enter into its second information exchange agreement with Indonesia to follow Thailand in signing an MoU.

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Drugs and Crime: disturbing link

11. December 2006

A disturbing link between crime and drugs is disclosed in a BBC programme.

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AUS: Financial Services Reps banned

11. December 2006

Two representatives of financial services businesses have been barred from the industry for up to three years.

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GIB: web fraudsters move to insurance.

11. December 2006

Regulators in Gibraltar have issued a warning about a website claiming to be for a Gibraltar Insurance company - but the company is not registered there.

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USA: FDIC proposes Basel II half-way house

8. December 2006

On 6th December, the Board of Directors of the Federal Deposit Insurance Corporation (FDIC) approved an interagency proposed rule that would provide a new option for how most banks and thrifts in the U.S. calculate their minimum risk-based capital requirements.

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Aus: ASIC liquidates Sydney Investment House Group companies

8. December 2006

The Australian Securities and Investments Commission (ASIC) has succeeded in its application to appoint a liquidator to seven companies within the Sydney Investment House Group.

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US: FinCEN at last recognises laundering in property industry

7. December 2006

From the "I told you so" department: demonstrating that the USA has had a truly blinkered approach to where money laundering risk applies, preferring to focus on cash entering the banking system, FinCEN has at last recognised the wider problem with a report that highlights money laundering in the property industry. They say "FinCEN sees growth...." We say "that's because you've started looking.

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US: OFAC update re Hezbollah supporters

7. December 2006

The "Tri-Border" area has been of deep concern for organised crime, drugs and people trafficking and other problems but recent evidence of fund raising by terrorist groups has led to the designation by the US Treasury of those they say are proven supporters of Hezbollah (Hizbollah)

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Drugs: United Nations says drugs threatens Afghan stability

7. December 2006

A report released by the UN Office on Drugs and Crime and the Bank says that efforts to combat opium production in Afghanistan have been marred by corruption and have failed to prevent the consolidation of the drugs trade in the hands of a few powerful players with strong political connections.

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World Money Laundering Report: Digest News

** Sri Lanka: Former Deputy Finance Minister Bandula Gunawardene has put the cat amongst the pigeons by saying that Sri Lanka is risking developing a bad reputation as a money laundering centre because of lack of up to date law, poor regulation and weak enforcement. He said that the scale of the problem was raised when a speaker at an investment forum in Singapore last month questioned how safe it is to take in money from Sri Lanka. Rumours have been circulating about suspicious transactions on the stock market and there is also criticism of the Financial Intelligence Unit which operates from within the Central Bank and is said to lack independence, so making it impossible for effective investigation of any allegations relating to politicians and their contacts.

** Dominican Republic: certificates of deposit are in the news again as authorities confiscate CDs worth more than 45m pesos held in the names of sisters of suspected drugs dealer Felix Antonio Zapata who has recently been extradited to face charges in New York.

North Korea: one of the objectives of the US sanctions on North Korea, demanding that no US financial institution directly or indirectly deal with it or face sanctions as being of primary money laundering concern is in part aimed at curtailing the PDRK's trade in gold, for whilst the US and Australia make much of alleged drugs trafficking and counterfeiting of currency, the fact is that a significant amount of the NoKo's external revenues are generated from the sale of gold. Unfortunately, one of the products used to extract gold from ore is a dual-use substance and can also play a part in the development of fissionable material. The PDRK has been sourcing its supplies from all over south east Asia and beyond, paying in USD and / or even in gold, but also trying to barter. With pressure from Japan, which has blocked the export of all luxury goods to the PDRK, the focus has returned to Banco Delta Asia which remains named as being “of primary money laundering concern” under s311 of the USA PATRIOT Act. BDA says that it was a major trader in PDRK gold.

** Russia: Finance Minister Alexei Kudrin has announced that Russia has closed 50 banks in 2006, and a further 70 in the two years before that, largely as a result of suspicions of money laundering or due to inadequate controls.

** Netherlands: drugs fail to help airline stay high. When Air Holland fell into financial difficulty in the late 1990s, it nevertheless managed to stay afloat, so to speak, until 2004. But now its former CFO Paul Gruythuysen has been sentenced to three years for money laundering – a part of which went to try to keep the airline going. In court it was said that he delivered some USD8 million in cash to a diplomat from the Dominican Republic – the diplomat has claimed immunity and returned home. He didn't keep the money: British Customs grabbed it and have refused to give it back. The company's former CEO, Cees van Dormael, was also sentenced. It was accepted that he did not take an active part in the scheme but that he knew about it and did nothing to prevent it continuing.

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