Ministers from the 27 European Union member states have backed plans to continue to allow US authorities to inspect the details of Europeans' bank transfers. They want the US to have access even to transfers that do not reach the US.

The Brussels-based Society for Worldwide Interbank Financial Telecommunication (SWIFT) manages international payments between banks. It hit the headlines in 2006 when it was discovered that transfer details were being monitored by US authorities.

The organisation owned a 'mirror' server in the US which duplicated all the activity logged on its European machine. That server was being monitored by US authorities in a way which EU data protection commissioners said was unlawful.

SWIFT's customers are the major banks, and it has told OUT-LAW.COM that it allowed the authorities in the US to access its data because it felt bound by a subpoena in a country in which it operated.

Independent EU privacy advisory body the Article 29 Working Party said that the actions broke EU privacy law.

"As far as the communication of personal data to the US Treasury is concerned, the Working Party is of the opinion that the hidden, systematic, massive and long-term transfer of personal data by SWIFT to the US Treasury in a confidential, non-transparent and systematic manner for years without effective legal grounds and without the possibility of independent control by public data protection supervisory authorities constitutes a violation of the fundamental European principles as regards data protection and is not in accordance with Belgian and European law," it said in 2007.

The Belgian and Swiss data protection authorities said that the activity also broke their laws.

At a meeting of the EU's Council of Ministers, ministers from all 27 member states agreed that the US should continue to have access to banking data.

"The Council approved guidelines for negotiations with the United States for an international agreement to make financial payment messaging data available to the US Treasury Department in order to prevent terrorism and terrorist financing," said a statement from the Council.

Under an interim deal the US has access to the information that passes through the US server but The European Commission's Justice and Home Affairs Commissioner Jacques Barrot told a press conference this week that he wants to extend those rights to databases held in the EU.

"It would be extremely dangerous at this stage to stop the surveillance and the monitoring of information flows," Barrot said, according to news service Associated Press (AP). He said that any deal that gave access to EU-only transactions would also increase privacy protections.

SWIFT plans to open a new data centre later this year in Switzerland that would only deal with EU transactions, and negotiations will centre on what access US authorities can have to this database.

Source: Out-Law

TOUGHER and wider ranging measures to tackle money laundering and terrorist financing have been approved by the Government.

New legislation to be announced by Justice Minister Dermot Ahern today will beef up existing controls and extend their scope to include dealers selling high-end goods.

And the measures will also apply to drug barons and organised crime bosses who attempt to conceal their cash hoards outside the State, the Irish Independent learned last night.

A special monitoring unit will be set up by the Department of Justice to keep watch on sales involving cash receipts of at least €15,000 and the legislation will apply to jewellers, art and antique dealers and car and boat salesmen, among others.

Already covered by money-laundering laws are officials of financial institutions, such as banks, building societies and credit unions, lawyers, accountants, estate agents and tax advisers.

Under the new criminal justice bill there will now be an additional onus on them to identify customers at the start of their transactions, as well as report suspicious dealings to the gardai and the Revenue Commissioners.

Private members' gaming clubs, such as casinos, will be included in money-laundering law. These will also be monitored by the department.

Mr Ahern said last night that the Government had given approval for priority consideration of the bill by the Dail and the Seanad in the autumn session.

- Tom Brady Security Editor

Source: Independent

A group of politicians — mostly from Hudson County — were among 44 arrested by FBI agents last week as part of a federal investigation of public corruption and a “high-volume, international money-laundering” conspiracy, according to Acting U.S. Attorney Ralph J. Marra Jr.

The scheme moved “at least tens of millions of dollars through charitable, nonprofit entities controlled by rabbis in New York and New Jersey,” Marra said.

Among the politicians charged with accepting bribes were newly elected Hoboken Mayor Peter Cammarano III; Assemblyman L. Harvey Smith (D-Jersey City) and his aide, Richard Greene; Assemblyman Daniel Van Pelt (R-Forked River); Secaucus Mayor Dennis Elwell; and Anthony Suarez, Ridgefield attorney.

Several rabbis also face charges of money laundering, Marra said. In most cases, the rabbis used charitable, nonprofit entities connected to their synagogues to “wash” money they knew came from criminal activity, according to the criminal complaints.

The investigation expanded into the public corruption track in July 2007, when a cooperating witness, not named, posed as a developer and owner of a tile business who wanted to build high-rises and other projects, and get public contracts in Hudson County schools. That witness was introduced to a Jersey City inspector, who promised to smooth the way for construction approvals in exchange for a $40,000 bribe, Marra said.

New Jersey’s business community reacted to the news with dismay.

Jim Leonard, senior vice president of government relations at the New Jersey Chamber of Commerce, said the probe is “another black eye for New Jersey.” “At a time when we’re all doing our best to improve the image of the state, to read about the actions of selfish elected officials is extremely disappointing.”

Philip Kirschner, president of the New Jersey Business & Industry Association, said, “If businesses believe that New Jersey officials are corrupt, they will look to do business in another mid-Atlantic state.”

E-mail to mdaks@njbiz.com

Source: NJBIZ

The Israel Police will likely receive a request from the FBI to assist in the investigation of an enormous money-laundering ring that allegedly involved Orthodox charities operating in the US and Israel, a law enforcement source told The Jerusalem Post on Sunday.

The source stressed, however, that no such request had been received yet by Israeli authorities.

According to the FBI, five US rabbis ran a money-laundering network that utilized charities based in Israel, New Jersey and New York.

Earlier Sunday, former police Investigations Branch head Cmdr. (ret.) Moshe Mizrahi said that if Israeli charities were involved, it was a certainty that Israeli police would eventually need to investigate.

"If the signatures lead to here, and the money passed through here, that would demand an investigation here," he said.

"This would be a very local case of money-laundering as well, not just an American case," Mizrahi added.

Mizrahi noted that there were two types of money-laundering, but that only one type of offense was recognized as money-laundering by Israeli law.

In the first type of activity, money "from shady sources is laundered so that it can be used legitimately," he said.

"The money is circulated through several people in the form of false donations and transferred through organizations to hide its origins," he explained. "Everyone takes a little on the way as the money makes the rounds. If you wish to launder $1 million, for example, you can get back $700,000, which can be used legally."

The second form of offense is tax evasion, which is a "different kind of operation. The money is hidden as false donations, thereby evading scrutiny and tax in both countries," Mizrahi said.

"Tax evasion is not recognized as money-laundering in Israel, although it is recognized as such in other countries," he added.

Source: JPost

They talked in code. Cash was "gemoras." Money-laundering contacts were "washing machines." They met in cars, on a Brooklyn street corner, inside a bakery, and in a synagogue.

Tens of thousands of dollars in cash was transported in plastic bags, in boxes of Apple Jacks and Cinnabon Crunch cereal, and even a box decorated with Power Rangers stickers.

The men the FBI arrested July 23 and charged with being part of a massive international money-laundering scheme were, for all intent and purpose, "crime bosses," acting U.S. Attorney Ralph J. Marra Jr. said.

But at least several of them were, in fact, religious leaders in the tight-knit Syrian Jewish communities of Deal and Brooklyn, N.Y. They stand accused of using Jewish charities they controlled to launder millions of dollars in cash.

Court papers indicate that five rabbis and several other men were laundering money for an FBI cooperating witness who told them he needed to hide profits of his counterfeit handbag company, which produced knock-off versions of Prada, Gucci and Canali bags, which the witness said were sold for hundreds of dollars.

Sources have identified the witness as Solomon Dwek, 36, of Ocean Township, a disgraced real estate mogul who was arrested in May 2006 and charged with bank fraud. Dwek is accused of cashing a bad check for $25.2 million at a drive-in lane at PNC Bank branch in Eatontown. The bank spotted him the money, most of which he moved to other accounts. The bank was left with a $21 million loss when the check bounced, according to the FBI.

Brad Simon, a former federal prosecutor and assistant U.S. Attorney for the Eastern District of New York, said he is surprised the government's case appears to rely so heavily on the testimony of one key witness with a checkered past.

"This guy, at least from a defense attorney's point of view, seems like a treasure trove for defense purposes," said Simon, who is now a criminal defense attorney who represents clients accused of white collar crimes. "I would love to have the opportunity to cross-examine this guy."

Speaking to Brooklyn Rabbis Lavel Schwartz and Mordchai Fish in his car parked on a borough street in September 2008, the FBI's witness told them that a $50,000 check he was giving them to launder was "from the profits from the bags and the PNC," according to criminal complaints.

Fish, 56, and Schwartz, 57, both have been charged with money laundering.

The witness first infiltrated the money-laundering network, and then, in July 2007, began representing himself as a developer and the owner of a tile business to public officials in Hudson County, according to U.S. Attorney Marra.

The witness was eventually introduced to a web of public officials, council and mayoral candidates, and their associates, who took bribes in return for pledging their assistance in getting the witness's projects approved, or in steering contracts to him, Marra said.

When speaking to the targets of the money-laundering operation, Dwek openly discussed his bankruptcy problems, as well as the fact that he was involved in illegal businesses and bank frauds, according to sources and court records.

Dwek told the targets that his ongoing bankruptcy proceedings meant he had to conceal cash and assets, and that some of the money he needed to launder came from his "bank schnookie deals," a reference to bank fraud.

Prosecutors said they have hundreds of hours of video and audio recordings documenting much of the money laundering and bribes.

Marra called the money-laundering case "unprecedented" in the "number and prominence of the individuals involved."

The rabbis and their associates continued working with the witness even though they sometimes expressed concern about the possibility of getting caught.

In March, the witness was driving Fish to a Brooklyn meeting with Levi Deutsch, an Israeli who supplied cash for Fish's money-laundering operations. When the witness mentioned cross streets to which they were headed, Fish became nervous, according to court records.

"Don't even say the street. . . . in this car," Fish said, according to the complaints. The witness reassured Fish that "there's nothing. I had (the car) swept. Don't worry about it," to which Fish replied, "swept, shmept."

Latest corruption probe

The arrests marked the third phase of the "Operation Bid Rig," investigation by the FBI, the IRS Criminal Investigation Division and the U.S. Attorney's Office that began in Monmouth and Ocean counties 10 years ago.

The initial investigation became public in 2002 with the guilty plea of Ocean Township Mayor Terrence Weldon, who admitted extorting cash from several developers to influence approval of projects.

Forty-eight public officials have been convicted since the Operation Bid Rig investigation started in 1999.

On Thursday, another 44 people, including three mayors, two assemblymen, a Lakewood housing inspector and five rabbis were charged as part of a two-pronged investigation into political corruption and money laundering. Local Assemblyman Daniel M. Van Pelt, R-Ocean, was arrested on a charge of accepting $10,000 in a bribe.
Israeli cash

To start the money laundering, Dwek handed over checks — often made out to charities run by the religious leaders — and said they were proceeds of his illegal activities, sources and court papers indicate.

Three of the rabbis had connections to cash sources in Israel, and for a fee, those men in Israel made money available through "cash houses" run out of Brooklyn homes, offices and a bakery, according to court documents.

The men who ran those cash houses obtained the money at the direction of the co-conspirators in Israel, then gave the funds to the rabbis in Deal and Brooklyn, according to court papers.

The religious leaders took their cut, generally 10 percent, then turned over the remainder to the FBI witness, according to court papers.

During one meeting in Brooklyn, Eliahu Ben Haim, 58, of Long Branch, the principal rabbi of Congregation Ohel Yaacob in Deal who is accused of laundering $1.5 million, spoke with the witness about his cash source in Israel.

Ben Haim said he talked to the man every day or every other day, and said in the past four years, the Israeli man had the rabbi send out wires, under different names, all over the world, from Australia to New Zealand to Uganda, according to the FBI's complaint.

"It's unbelievable. I never saw anything like it," Ben Haim said, according to court documents. "I mean every country imaginable. Turkey, you can't believe it. . . . All different names. It's never the same name. . . . Switzerland, everywhere, France, everywhere, Spain . . . China, Japan."

In another method, the witness would bring a check to two other rabbis, Saul Kassin, 87, and Edmond Nahum, 56, principal rabbi at the Synagogue of Deal, according to prosecutors. Kassin is the spiritual leader of 75,000 Syrian Jews in Brooklyn.

Prosecutors said the rabbis would write the witness checks from a charity bank account for a slightly smaller amount, payable to the entity of his choice.

The witness then cashed the Kassin checks through Ben Haim, authorities said.

Criminal complaints say Kassin laundered more than $200,000 and Nahum laundered about $185,000.

Lawyers for the two men said they are innocent.

Nahum's attorney, Justin P. Walder, said the rabbi looks forward to clearing his name at trial. The rabbi has headed the Deal synagogue for many years, is well-established in the community and is married with four children, he said.

Walder did not mention Dwek by name, but said his client had been taken advantage of by a man who had known the rabbi for a long time.

"We intend to establish that his goodness was utilized by a person who was seeking to be absolved for his immense wrongful conduct by implicating another," Walder said. "Obviously, this man, under the system that exists in the federal court, the way he can get the best deal for himself is to implicate another, and obviously he took advantage of the rabbi."

Source: APP.COM

The European Union should negotiate a deal with the United States on sharing information on bank transfers to fight terrorism, EU foreign ministers agreed Monday as they tasked the bloc's executive with opening talks.

The agreement is likely to be welcomed by law-enforcement officials on both sides of the Atlantic, but to outrage data-protection advocates who argue that it is a breach of privacy.

The international system for bank transfers known as SWIFT, which is currently run by computers housed in the US, is set to move most of its servers to Europe in a bid to protect users' privacy.

But US anti-terror agencies, who have hitherto been able to use some of the SWIFT data to track terrorist financing because the computers holding those data were on their territory, want to keep that access - a request the EU's executive supports.

The data-sharing system has led to information of "significant value" in the fight against terrorism, the European Commission said in a recent statement.

To keep that system going after the SWIFT servers move home, the EU and US will have to agree a new information-sharing contract. If, as it hopes, the EU brings the Lisbon Treaty into force in 2010, the European Parliament will have to approve the deal.

But the treaty is not set to come into force until the end of the year at the earliest, leaving a gap of several months while the SWIFT servers are already in Europe but the US cannot access them.

Any such wait could cause a "security gap," the commission said.

Monday's decision therefore mandates the commission to begin talks on an interim data-sharing agreement with the US, to last until the treaty is in force and the two sides have drawn up a new deal with the parliament's backing.

Source: TopNews

A new report from the European Commission notes progress but still finds too much organized crime and corruption in the two new member states

When Bulgaria and Romania joined the European Union in 2007, other member states expressed serious concern about the high level of corruption in both of the former communist states, and, in Bulgaria, about the political power wielded by violent criminal gangs operating there. Now, some 30 months after joining the union, widespread fraud, corruption, and organized crime remain problematic according to new European Union reports that openly question the will of political leaders to implement reforms to tackle these problems.

The latest progress reports on the justice system and fight against corruption, released on 22 July, come as a serious if not unexpected blow to Bulgaria and Romania – which suffer from the public perception they were accepted into the EU club too early – but also to EU candidate countries where accession talks have stalled, such as Croatia and perennial hopeful Turkey.

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While noting Bulgaria's and Romania's progress in key areas, the European Commission, as in previous reports since 2007, listed an array of ills, among them inadequate measures to fight money-laundering and killings linked to organized crime. In total, the reports named 21 areas in which Bulgaria needs to improve its performance, and 16 for Romania, including the implementation of anti-corruption laws and boosting the judicial independence.

"The reform momentum that has been established now needs to be backed up by a national political consensus involving all political parties and institutions, and more convincing delivery of results," European Commission President Jose Manuel Barroso said in a statement. "Citizens in both countries and across the rest of Europe must feel that no one is above the law. I hope that the two governments will move quickly to implement the concrete recommendations for reform that the Commission has put forward."

The commission last year froze around 500 million euros in subsidies earmarked to help the Bulgarian economy and threatened to sanction Romania as well over exactly the same kinds of failings outlined in this week's reports.

This time the commission decided not to advise other member states to stop cooperation with Bulgaria and Romania on judicial issues, an option known as the "safeguard clause" in the two countries' accession agreements. Brussels also stopped short of saying that the shortcomings could imperil the countries' attempts to join the border-free Schengen area in 2011.

But the commission will extend into 2010 the monitoring system, known as the Cooperation and Verification Mechanism, with the next progress report due in a year's time. That extension is a political embarrassment for Sofia and Bucharest – and a wake-up call for Croatia to also get its house in order. EU Enlargement Commissioner Olli Rehn noted that Zagreb is also lagging in "key areas such as judicial and administrative reform, the fight against corruption, and organized crime."

BIG JOB FOR NEW BULGARIAN LEADER

Whether this will instill a need to fast-track reforms remains to be seen. Indeed, the commission – which has already barred two Bulgarian government agencies from handling EU funds – said in its latest report that while Sofia no longer is denying that organized crime and corruption are widespread, the political will to do something about it is not yet evident.

"In the public perception in Bulgaria justice is too slow" and is "subject to influence and interference," Johannes Leitenberger, chief spokesperson for the commission, told reporters in Brussels, as cited by EUobserver.com. "There are still shortcomings which need to be urgently addressed by the newly elected Bulgarian government."

The commission released the latest judicial and crime monitoring reports days before the scheduled swearing-in of Bulgaria's incoming prime minister, Boyko Borisov, the Sofia mayor and a former Interior Ministry official who won elections this month on an anti-corruption platform. His party GERB (Citizens for the European Development of Bulgaria) also pledged to go after former government officials suspected of graft and has promised to implement the commission's demands.

If Borisov talks tough, he may well have the background and political muscle to back up his words. The private security company he founded helped protect Bulgaria's deposed last communist leader, Todor Zhivkov, and on the other side of the political spectrum, Simeon Saxecoburggotski, the deposed monarch who returned from exile and served as premier from 2001 until 2005.

MILD PRAISE FOR BUCHAREST

Romania – criticized for its fragmented and politicized approach to reform – did earn praise for the work of its anti-corruption directorate. Organized crime is also seen as far less of a problem than in Bulgaria. According to the commission, the country's criminal and civil codes, while updated, have not been fully or systematically revised, leading to a "patchwork" of ad hoc legislation that risks compromising anti-corruption efforts.

In Romania, "reform efforts remain fragmented, they have not yet taken firmly root and must still produce practical results," the commission stated. "Overall, a broad based political consensus behind reform and an unequivocal commitment across political parties to real progress has still to be demonstrated." And while prosecutors in Romania have accused almost 20 cabinet ministers and former ministers of corruption since the country's accession to the bloc in 2007, not one has been convicted.

Opinion polls show EU citizens have grown more wary of bringing new countries into the bloc since the "early admission" of Bulgaria and Romania – and the perception of lawlessness in the region is a factor. But without the "carrot" of that qualified (i.e. monitored) membership and the "stick" of sanctions, the wheels of judicial reform in these countries would have turned far slower. The message to EU candidates Croatia, Turkey, and Macedonia and those waiting in the wings (Serbia, Montenegro, Bosnia, and Albania) is to raise the bar – accelerate reforms – ahead of entry or formal accession talks.

Likewise, if Brussels should renege on the promise of future membership to the Balkans it could destabilize an already volatile region, right on the EU border. In that regard, Enlargement Commissioner Rehn was right this month to propose offering visa-free travel for citizens of Macedonia, Serbia, and Montenegro from 1 January 2010, in an effort to bring these countries closer to the bloc even as Brussels pushes for faster political, judicial, and economic progress.

Source: BusinessWeek

The Financial Intelligence Unit (FIU) of Sri Lanka recently signed Memoranda of Understanding (MOU) with FIUs of Philippines and Nepal to share financial information to facilitate the investigation and prosecution of persons suspected of money laundering and terrorist financing.

The signing ceremony was held in Brisbane, Australia during the Annual Meeting of the Asia Pacific Group on Money Laundering, said the Central Bank of Sri Lanka in a press release.

FIUs have been established in more than 130 countries as dedicated institutions to facilitate fight against money laundering, terrorist financing and other unlawful activities.

In Sri Lanka the FIU was established in 2006 under the Financial Transactions Reporting Act (FTRA) No.6 of 2006 and now operates in the Central Bank of Sri Lanka.

It also said money launderers and terrorist financiers are most often internationally connected and operate across borders. Financial intelligence and authorities also need to be internationally organized to fight these activities. Therefore, there is a need for FIUs to co-operate with each other and to exchange information.

MOUs will facilitate greater co-operation and co-ordination among FIUs in the exchange of financial intelligence.

The FIU-Sri Lanka has already entered into MOUs with Malaysia, Afghanistan, South Korea and Indonesia. Arrangements are currently being made to sign similar MOUs with other FIUs in the region including India, Bangladesh and Japan.

Source: Isria

By his decree from 16 July of the year President Ilham Aliyev has endorsed the Regulation on the Financial Monitoring Service under the Central Bank that is the main point in realization of the Law on counteraction to legalization of money and property received by criminal way and terrorism financing.

The Presidential Administration’s press service informs that the Central Bank was charged with approving Agency’s structure and staff for 15 days and solving issues following the decree. The Cabinet was given a month to make the proposals for bringing the appropriate legislative acts in compliance with the decree, make together with other bodies of executive power the relevant amendments to the standard and legal acts and solve the matter of material and technical maintenance of the Service.

Earlier Rufat Aslanli, the chairperson of the State Securities Committee and the head of the law-maker group, said that after adoption and commencement of the Draft Law, Moneyval (the Council of Europe Committee of Experts on the Evaluation of Anti-Money Laundering Measures) published a statement which covered positive results and achievements of Azerbaijan.

A Moneyval’s plenary session also made a decision to empower its office with the right to halt monitoring of Azerbaijan in case of the latter implements all decisions covered by presidential decree on law application. Among these decisions are approval of the Charter of Financial Monitoring Body under the Central Bank of Azerbaijan, adoption of relevant amendments to the Administrative and Criminal Codes.

The plenary session also decided to transfer to its Bureau the right to stop the monitoring of Azerbaijan in case the latter implements all decisions covered by the presidential decree on law application, in particular if Azerbaijan approves the Charter of the Financial Monitoring Body and passes draft amendments and additions to the Administrative and Criminal Codes.

Earlier this year Financial Action Task Force (FATF) called the member states and other countries to be extremely careful in deals with persons and financial organizations residing or located in Azerbaijan.

Moneyval’s next session will be held at the end of 2009 and Azerbaijan will have a chance for full removal of monitoring on simplified system.

On 24 February 2009, President of Azerbaijan Ilham Aliyev signed the Draft Law on counteraction to legalization of the money and property received by criminal way and terrorism financing adopted by the Parliament on February 10. The decree says of establishment of Financial Monitoring Service under the National Bank and gives a month to the NB to develop and submit the Regulation on the Service.

In its public statement passed on 12 December 2008 the FATF appealed financial institutions of other countries to be extremely careful in deals with Azerbaijan and carry out due check of clients to remove risk of money laundering/terrorism financing. To the Expert Group appeal it was indicated to re-consider the Bill on Counteraction to ML/TF passed in the second reading in Azerbaijan as it fails to conform to key international standards to the large extent and adopt immediately complex legislation complying with the requirements.

Rosfinmonitoring’s notification can aggravate realization of financial operations between Russia and Azerbaijan.

In its evaluation Moneval also pointed out that the country fails to fulfill structural, legislative and institutional requirements when certain type of institute is lacking in the country.

Out of the 40 FATF standards there were recognized Azerbaijan’s non-conformity in fight against breaches on money laundering, audit of clients, politically persecuted persons, new technologies and face-to-face business, non-standard deals, reporting on suspicious deals, internal control, audit, sanctions, foreign branches and subsidiaries, management and relations with clients, lack of a body on FIU, on statistics, freezing and confiscation of terrorist funds, non-profit organizations.

Source: ABC.AZ

By Helena Bachmann / Geneva

Switzerland — the land of chocolate, watches and neutrality — isn't known for flexing its muscles in a heated standoff with another country. But now it finds itself pitted against the U.S. in a David and Goliath–style imbroglio that could damage diplomatic and economic relations between the two for years to come. On one side, the U.S. Department of Justice is accusing Swiss banking giant UBS of helping wealthy Americans hide billions of dollars from the tax man and insisting that the bank reveal their identities. On the other, the Swiss government is threatening to step in to protect the country's famous secrecy laws. The two have until Aug. 3 to come up with an agreement — or continue the fight in court.

UBS has been under investigation by the Department of Justice since last summer for allegedly helping wealthy Americans hide $200 billion in undisclosed offshore accounts to evade taxes. To absolve itself of criminal charges, the bank, one of the world's largest wealth managers, agreed to pay a $780 million penalty and release the names of 250 clients whom the Internal Revenue Service suspected of evading taxes.

But that wasn't enough to end the bank's troubles. In February, the Department of Justice filed a civil lawsuit against UBS seeking the identities of 52,000 more Americans suspected of stashing a total of $15 billion at the bank. This time, the Swiss were having none of it. Citing bank-client confidentiality guaranteed in the Swiss constitution, Switzerland's government has forbidden UBS from complying. It has also threatened to "take control of the data at UBS" to prevent the bank from handing the accounts over to the Americans.

The Swiss claim that the U.S. proceeding against UBS breaks the terms of the treaty between the two countries that permits an exchange of information on tax matters only in individual cases where a specific and justified request is made. "The blocking order that the Swiss government is prepared to issue would be a first, but it's a reasonable step to take in light of the IRS's threatened disregard for international treaties and provisions of Swiss law," says James Nason, spokesman for the Swiss Banking Association (SBA), a trade group for Switzerland's financial institutions.

The case was due to reconvene in Miami on July 13, but an eleventh-hour temporary reprieve was granted over the weekend, with a U.S. federal court postponing the ruling until Aug. 3 to allow both countries to negotiate a settlement.

In the meantime, the U.S. government's insistence on enforcing its laws on foreign soil doesn't sit well with the Swiss. "The U.S. seems to prefer the role of an increasingly obnoxious tyrant," says Andy Sundberg, a retired businessman and founder of the Geneva-based American Citizens Abroad, an advocacy group for expatriate U.S. citizens. "It is obsessed with humiliating this small country, forcing it to betray the principles of its own constitution."

Sundberg says that with the IRS intensifying its hunt for alleged tax evaders, Swiss banks, fearful of potential legal problems, are closing the accounts of resident Americans and refusing to open new ones. Both UBS and Switzerland's second largest bank, Credit Suisse, have told Americans to move their money into specially created units registered in the U.S., or lose their accounts. Many smaller Swiss banks are simply turning away Americans.

While the long-term damage to UBS may be difficult to gauge, experts say its reputation as a reliable institution has taken a beating. "Clients worldwide have lost trust in UBS's ability to protect their privacy," says Teodoro Cocca, former professor of asset and wealth management at the Swiss Banking Institute in Zurich. "This will affect UBS's attraction for wealthy clients — the main franchise of the bank."

But others are confident that the damage will be limited to UBS. "We don't foresee any negative impact on the Swiss banking industry as a whole," says Martin Naville, CEO of the Zurich-based Swiss-American Chamber of Commerce, an organization that helps Swiss companies in the U.S. and U.S. companies in Switzerland expand their businesses. "It's the cleanest system in the world, with strict laws on money laundering, terrorist finances, corruption and other illicit activities."

The future of Swiss banking secrecy, long a bone of contention among Switzerland, the U.S. and the European Union, also looks to come through this scandal unscathed. In a recent SBA poll, 91% of respondents favored the protection of their privacy in financial matters. "It's an expression of mutual trust between the Swiss state and its citizens," SBA's Nason says. "The government is able to secure its tax revenues without having to trample on privacy by demanding an automatic right of forced entry into bank accounts. The Swiss take great pride in this arrangement and reward it with a very high level of taxpayer honesty."

The U.S., however, has warned Switzerland that if a deal is not reached in the UBS case, it will "vigorously pursue" the matter and may even seize the bank's American assets. But such an aggressive response "might destabilize UBS and have a major impact on the American economy, so the U.S. government should proceed at its own risk and peril," says the Swiss-American Chamber of Commerce's Naville, who points out that both countries have "a lot at stake" in each other's economies. Switzerland is the U.S.'s 15th largest export market and, with almost $149 billion spent in 2008, its fourth largest recipient in terms of direct investment. Switzerland, for its part, invested nearly $195 billion in the U.S. last year.

As the clock ticks toward the Aug. 3 deadline, the Swiss are hoping that the future of their secrecy laws is something they can still bank on.

Source: TIME

There are Joint Working Groups (JWGs) on Counter-Terrorism between India and 27 countries and regional organisations including the US, Germany, Pakistan and the European Union, Lok Sabha was told today.

As part of its global cooperation to counter terror, JWGs have been established with 27 countries and regional organisations to provide a forum to share information and assessments, technologies and strengthening of multi-lateral efforts to combat terrorism, Minister of State for External Affairs Preneet Kaur said while replying to a question.

Noting that JWG has served as a useful platform, she said it addresses common concerns such as drug-trafficking, financing of terrorism, bio-terrorism, aviation security, cyber security and extradition.

Other countries with which India have JWGs include France, Australia, Italy, Singapore, China, the UK, Egypt, Poland and Russia.

Nepal: Strip maps pertaining to 96 per cent of the Nepal-India boundary have been jointly finalised and initialled, Kaur said.

Both the countries have also agreed to establish local level mechanisms to address any boundary concerns, she said.

Myanmar: India and Myanmar are in discussions to undertake road projects including one from Zawkhather (Mizoram)/Rhi into Myanmar, Kaur said.

Besides providing a valuable cross-border link between India and Myanmar, these roads also enhance bilateral trade and tourism, she added.

Source: Business Standard

The Financial Crimes Enforcement Network (FinCEN) today issued an advance notice of proposed rulemaking (ANPRM) to solicit public comment on a wide range of questions pertaining to the possible application of anti-money laundering (AML) program and suspicious activity report (SAR) regulations to non-bank residential mortgage lenders and originators.

“As primary providers of mortgage finance who generally deal directly with consumers, these lenders and originators are in a unique position to assess and identify money laundering risks and possible mortgage fraud while directly assisting consumers with their financial needs and protecting them from the abuses of financial crime,” said FinCEN Director James H. Freis, Jr.

In April, the Department of the Treasury and FinCEN coordinated an inter-agency effort with the U.S. Department of Justice (DOJ), the Department of Housing and Urban Development (HUD), the Federal Trade Commission (FTC), and state officials to announce new initiatives to target foreclosure rescue scams and loan modification fraud. These initiatives are helping to coordinate information and resources across agencies to maximize targeting and efficiency in fraud investigations, alert financial institutions to emerging schemes, step up enforcement actions and educate consumers to help those in financial trouble avoid becoming the victims of a loan modification or foreclosure rescue scam. FinCEN is seeing the results of these efforts with banks already filing SARs under the guidance issued in April. Utilizing the initiative’s advanced targeting methods, FinCEN has so far made 10 case referrals, involving over 80 suspects, to law enforcement investigators. FinCEN, at the request of civil and criminal law enforcement, is also contributing to 35 ongoing investigations, involving multiple suspects and hundreds of Bank Secrecy Act reports.

This coordinated effort combined with today’s announcement that FinCEN is considering applying AML program and SAR regulations to non-bank residential mortgage lenders and originators comes when millions of vulnerable homeowners are seeking assistance under the Administration’s Making Home Affordable program. These initiatives will help prevent criminal actors from perpetrating predatory schemes.

In FinCEN’s recently issued mortgage fraud reports, SAR analysis showed non-bank mortgage lenders and originators initiated many of the mortgages that were associated with SAR filings. In addition, although its focus is limited to gathering information relevant to the possible AML responsibilities of this industry sector, this ANPRM is complementary to ongoing regulatory reform and consumer protection initiatives, as regulators and consumer protection agencies also benefit from the data provided by SARs.

SARs filed with FinCEN by financial institutions are a critical source of information for law enforcement in investigating and prosecuting mortgage fraud related crimes. FinCEN believes that new regulations requiring non-bank residential mortgage lenders and originators to adopt AML programs and report suspicious transactions could augment FinCEN’s initiatives in this area. In addition, in 2008, the Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) became law. Among other things, the SAFE Act requires the development of a nationwide licensing system and registry for certain mortgage professionals that may serve to complement any related FinCEN efforts in the future.

“Broad public input through this ANPRM will aid policymakers seeking to ensure the appropriate regulatory regime for this industry sector,” noted Freis. “These financial professionals are ideally positioned to contribute to the promotion of safety and integrity in the U.S. mortgage marketplace.”

Under the Bank Secrecy Act, FinCEN can issue regulations requiring financial institutions to keep records and file reports determined to have a high degree of usefulness in criminal, tax, or regulatory investigations or proceedings, or in the conduct of intelligence or counterintelligence activities, including analysis, to protect against international terrorism. Federally regulated depository institutions are already required to have AML programs. This ANPRM considers adding companies that perform certain services with respect to residential mortgages, analogous requirements to those that currently apply to depository institutions performing those same services.

The ANPRM, as submitted to the Federal Register, is available on www.FinCEN.gov. Comments are due to FinCEN 30 days after publication in the Federal Register.

Source: RealEstateRama

All estate agents in the UK must register with a new anti-money laundering register that is being launched at the end of this month.

The Office of Fair Trading is reminding agents that it will be compulsory to belong to the register by the end of January 2010. Any agent who is not registered by then will be operating illegally.

The Money Laundering Regulations, which came into force on December 15, 2007 also apply to buyers' agents and relocation agents. Failure to register whilst carrying on business as an estate agent could result in prosecution and jail.

As the actual registration process will take around 45 days, the OFT is asking agents to apply to join the register as soon as it is open on July 31 and at least by the end of November as it expects a mad rush at the end of the year.

Agents will have to pay £115 per office, capped at £2,300 for a firm with 20 or more branches. There will be an annual fee payable after that, although the actual amount has yet to be decided.

While anti-money laundering laws do not include letting agents, the OFT is also warning that they do apply to letting agents under certain circumstances. If a letting agent deals in premium leases where companies 'purchase' leases for, usually, one or two years on behalf of their employees then they will need to register. This particular method of renting is popular with corporates such as American banks relocating personnel on assignments to the UK.

Money laundering regulations will also apply to letting agents who accept double instructions where the landlord/seller instructs them to market the property for sale or for rent.

Letting agents are also bound by the Proceeds of Crime Act 2002 which means that if they have suspicions about a landlord or tenant who might be money laundering, they have a legal duty to report those suspicions.

Source: Property Wire

Two Australian entrepreneurs who laundered millions of dollars through New Zealand banks are to pay the Australian Tax Office over $NZ40 million in tax and penalties.

A former director of Murchison Metals and backer of the Sydney Swans, Phillip Grimaldi, will pay more than $A36m in tax and penalties, and Sydney property developer Garry Bonaccorso has agreed to pay $A3.5 million after the pair funnelled millions of dollars through a series of New Zealand bank accounts.

The money was disguised as consultancy and management fees when it left Australia, and was then sent back disguised as a loan, the Sydney Morning Herald reported today.

Eight ANZ accounts and two at Bank of New Zealand were used as part of the scheme.

Mr Grimaldi had $A14.3 million in these New Zealand accounts, while Mr Bonaccorso had $A220,000 in them.

More than $A1.25 million in an ANZ account in Auckland in the name of International Finance Trust Company was from the sale of 300,000 shares in Murchison Metals in June 2007.

Mr Grimaldi used the proceeds of the scheme to buy a $A300,000 Bentley, a $A645,000 boat and to fund a shopping spree at British retailer Harrods.

A separate court action has been brought by the New South Wales Crime Commission in the NSW Supreme Court, alleging that the funds are the proceeds of crime.

If they are found to have committed fraud the two men face up to five years in jail.

Both invested in the alleged money-laundering scheme, which was promoted by the Australian accountant Robert Agius, 59, based in Vanuatu.

The tax avoidance and money-laundering scheme was exposed by a joint taskforce of the federal police and the Tax Office, which has been tapping phones and raiding offices.

The pair are the largest clients of Mr Agius so far to face court orders to pay unpaid taxes.

According to a statement filed by a federal police investigator, Arthur Moerman, in the criminal case against Mr Agius, the scheme was a "round robin scheme".

An "initial analysis of all foreign company bank accounts operated by Mr Agius" indicated that more than $A100 million had been moved through them on behalf of hundreds of clients since November 2000.

Mr Grimaldi is alleged to have used Vanuatu companies, including RLB Investments, Iron Investments, Iron International and International Finance Trust Company to evade tax. RLB Investments was a big shareholder in Murchison Metals.

International Finance Trust Company made more than $10 million in payments to Mr Grimaldi in the two years to 2008.

A fortnight ago Justice Minister Simon Power told Parliament that New Zealand had been used to launder millions of dollars of criminal proceeds, as the Anti-Money Laundering and Countering Financing of Terrorism Bill passed its first reading on a unanimous vote.

"Last year, I am advised, New Zealand was used by an offender to launder almost $120 million from Australia through New Zealand and into Vanuatu," he said.

Source: guide2.co.nz

The United States has warned banks and other financial institutions in the country against shortcomings in measures against money laundering and terror financing in five nations, including Pakistan and Iran.

An advisory informed banks and other financial institutions operating in the US of "risks associated with deficiencies in the anti-money laundering and counter- terrorist financing regimes of ... Iran, Uzbekistan, Turkmenistan, Pakistan and Sao Tome and Principe".

The advisory, issued the Financial Crimes Enforcement Network, a part of the US Treasury Department, has referred to the recent statement issued by the Financial Action Task Force (FATF) -- a 34-member intergovernmental body established to combat money laundering and terrorist financing.

Going by FATF's website, India and Republic of Korea have observer status in the body. The 34 members include the US, the UK, Japan, Italy, China, Russia and Germany.

The FATF has said that it remains concerned about the money-laundering/terrorist-financing risks posed by Pakistan.

The intergovernmental body, however, welcomed the process under way to improve the anti-money laundering/ counter-terrorist financing regime in Pakistan

Regarding Iran, the FATF had raised concerns about the country's failure to meaningfully address the ongoing and substantial deficiencies in its anti-money laundering and combating financing of terrorism regime.

Source: The Hindu

The Hong Kong Special Administrative Region (HKSAR) government on Thursday launched a three-month public consultation on a proposed framework legislation on anti-money laundering in respect of the financial sectors.

The Financial Services and the Treasury Bureau (FSTB) said the initiative was a direct response to a call from the Financial Action Task Force (FATF) for Hong Kong to provide statutory backing and appropriate sanctions for customer due diligence and record-keeping requirements for financial institutions, and to put in place an anti-money laundering framework for remittance agents and money changers.

The FATF was an inter-government body created in 1989 with the mission of pushing for and setting the international standards on anti-money laundering regime.

"The proposal is intended to address the deficiencies identified by the FATF in Hong Kong's anti-money laundering regime in its evaluation completed in 2008 and will help maintain Hong Kong's status as an international financial center," said the FSTB.

The proposed Hong Kong framework prescribes the customer due diligence and record keeping requirements for financial institutions, including banks and deposit-taking institutions, among others. It also provided for appropriate regulatory powers.

It provided for criminal and supervisory sanctions, with the establishment of an independent statutory appeals tribunal.

A licensing system will also be introduced for remittance agents and money changers for anti-money laundering regulation and administered by customs authorities.

The FSTB said it was aiming at another round of consultation on the detailed proposals towards the end of the year, adding that it was expecting the introduction of the bill into the Legislative Council in the second quarter of 2010.

Source: Xinhua

A top U.S. Treasury official met with Hong Kong regulators and bankers Thursday as part of an effort to keep North Korea from using the international financial system to fund its nuclear program and other illicit activities.

Stuart Levey, a U.S. Treasury undersecretary who oversees the department's terrorism and financial intelligence section, met with officials from Hong Kong's de facto central bank, the Hong Kong Monetary Authority, the bank said in a brief statement to The Associated Press.

The authority refused to release details of the talks.

Levey was also meeting with executives from HSBC, the giant London-based lender with major operations in Hong Kong and elsewhere in Asia, according to a person familiar with the matter. The person spoke on condition of anonymity because of the sensitivity of the situation.

The meeting was "to remind people that there are regulations," the person said.


Levey traveled to China and Hong Kong this week to gain support for U.S. initiatives to curb North Korea's access to banks and businesses to buy and sell missile and nuclear technology. He arrived Monday in China and was meeting with government officials and private sector executives Wednesday through Friday.

However, at least one Hong Kong-based bank, the Bank of East Asia, declined to meet with Stuart.

"He requested a meeting with us, but unfortunately we were not able to meet with him," said the bank's chief executive, David Li. "We have nothing to do with North Korea."

A Treasury spokesperson did not immediately return a message seeking comment.

The international community has been struggling to rein in North Korea since the reclusive totalitarian state conducted a nuclear test in May.

The U.N. Security Council last month adopted tougher new sanctions, which North Korea defied last week with missile launches.

U.S. officials have gone after North Korea's funding before.

In 2005, the U.S. imposed financial restrictions on Banco Delta Asia, a bank near Hong Kong in the Chinese territory of Macau, over allegations it helped North Korea with money laundering and other illicit activities.

The move effectively cut Pyongyang off from the global financial system, analysts say, because banks in other countries, including North Korean ally China, did not want to jeopardize access to the U.S. financial system.

The restrictions were lifted in 2007 to nudge North Korea back to stalled nuclear talks.

Source: Los Angeles Times

The G8 declaration on counter terrorism Thursday called for increased coordination among countries to check the abuse of internet by terrorist organisations for propaganda.

“Special attention must be paid to the abuses by terrorist organisations of both modern and more traditional means of public communication for propaganda. In particular the internet is widely exploited by terrorists to disseminate their radical messages and to plan and facilitate their violent acts,” the declaration said.

“We remain convinced that terrorism can be effectively defeated only through multi-faceted collective and coordinated efforts - particularly in the fields of information sharing and capacity building,” it said.

The declaration emphasised that special attention must be paid to victims of terrorism.

“Our countries are committed to further developing initiatives that assist survival and families of the victims.

“Visible progress has been achieved in our joint fight to prevent terrorist travel, terrorist financing, terrorist abuse of non-profit organisations and other forms of material support, including weapons, mainly through the establishment of a comprehensive sanctioned regime by UN Security Council resolutions,” the declaration said.

Source: Thaindian.com

By William Fisher

While President Barack Obama conceded in his speech in Cairo last month that U.S. rules on charitable giving “have made it harder for Muslims to fulfill their religious obligation,” civil rights advocates are pressing the president to turn his words into action.

The Muslim Public Affairs Council has joined other nonprofit organizations in urging Obama to follow up on his commitment to work with Muslim Americans to revise charitable giving rules.

In a letter to the president, the organizations said, “We are seeking a meeting with you and the appropriate representatives of your administration to provide background information on how current national security rules create problems for all U.S. charities and to provide recommendations for change.”

It outlined a set of principles for new rules governing charitable giving and operations, and said government policy “must address systemic problems.”

The government, it said, should “provide clear standards for permissible charitable and development activity that are consistent with long-standing norms for humanitarian operations,” such as the Code of Conduct for the International Red Cross and Red Crescent Movement and Non-Governmental Organizations (NGOs) in Disaster Relief.

It must provide a fair opportunity for charities accused of supporting terrorism to defend themselves; protect charitable assets from indefinite freezing and allow these resources to further the charitable mission donors intended to support; and withdraw the Treasury Department's Anti-Terrorist Financing Guidelines: Voluntary Best Practices for U.S.-based Charities.”

For Muslims, charitable giving is a religiously-mandated obligation known as “zakat.”

The “war on terror” has dealt a harsh blow to Muslim charities and interfered with their donors’ religious freedom, according to a report by the American Civil Liberties Union (ACLU).

The report says statutes that it describes as overly broad and enforced in a discriminatory manner, coupled with a lack of due process, have starved Islamic charities of money and impeded Muslims’ ability to fulfill their religious requirement to make charitable donations.

Entitled “Blocking Faith, Freezing Charity,” the report is based on interviews with more than 100 Muslim community leaders as well as experts on antiterrorism laws and regulations. Though it gives no estimate of the decline in donations to Muslim groups, it says a total of nine Islamic charities have closed as a result of government action against them since the terrorist attacks of Sept. 11, 2001.

That action ranges, it says, from declaring a group to be under investigation to designating it a terrorist organization and freezing its assets.

Georgetown Law Center’s David Cole, a widely respected Constitutional scholar, sees a correlation between the McCarthy witch-hunts of the 1950s and the government’s current policies. He told us, “With our return to a ‘preventive paradigm’ of preemptively weeding out threats to national security, guilt by association has been resurrected from the McCarthy era. While it was illegal in the 1950s to be a member of the Communist Party, it is now a crime to support an individual or organization on a terror watch list, although the government can designate and freeze assets without a showing of actual ties to terrorism or illegal acts.”

“While the House Un-American Activities Committee once relied on the private sector to mete out punishment through the destruction of reputations and careers, today measures such as the Anti-Terrorist Financing Guidelines have turned funders into the new enforcers. In this light, he said the nonprofit sector has an obligation to resist such a partnership with government.”

Last November, five members of the now-defunct Holy Land Foundation for Relief and Development were convicted in federal court in Dallas of funneling money to the Palestinian militant group Hamas and sentenced to prison. The defendants said they only gave much-needed aid to a volatile region.

Two other high-profile terrorism-financing trials, in Chicago and Florida, ended without convictions on the major counts.

Two current court cases may test the limits of the Obama administration's executive authority as well as its commitment to transparency. Human rights lawyers are challenging the government's right to use information obtained through warrantless wiretapping as evidence and to shut down charitable organizations without allowing them to defend themselves.

In one case, the government shut down the Al Haramain Islamic Foundation, a Saudi charity, in 2004, allegedly using information obtained though illegal wiretaps. In the other, also involving a Muslim-oriented charity, the American Civil Liberties Union (ACLU) is challenging the constitutionality of government programs that designate organizations as "terrorists" and close them down without providing these groups a way to contest the decision in court.

In the Al Haramain case, the George W. Bush administration's Treasury Department charged that the group was funneling money to terrorists in Chechnya and shut it down. But the government inadvertently released a classified document to the group's lawyers. Now the lawyers contend that this document revealed that the government had been wiretapping both the organization and its lawyers without a warrant.

The organization sued the Bush administration. But when the case came to court, in 2006, the government invoked the so-called "state secrets privilege," claiming that the case could not go forward because it would reveal information that would compromise national security.

The judge in that case, Vaughn Walker of the federal district court in San Francisco, rejected the government's claims. In a first-of-its-kind ruling, the judge said the government had to comply with the Foreign Intelligence Surveillance Act (FISA), which forbids it from obtaining evidence without first obtaining a warrant from the FISA court.

The president, the judge said, could not invoke the state secrets privilege to conceal the evidence and dismiss the case.

And when the Obama administration filed an emergency appeal before the Ninth Circuit Court of Appeals in San Francisco, it hoped for a reversal of the lower court's ruling. But the appeals court surprised government lawyers - and legal scholars - by rejecting their appeal, thus allowing the lower court decision to stand.

The decision was a significant victory for Al-Haramain's lawyers, who said they needed the classified documents to represent their clients.

"I did not expect this from the Obama justice department," Jon Eisenberg, an Oakland, California, lawyer representing Al Haramain, told us. "I anticipated that the Obama Department of Justice would take a more reasonable approach to moving forward with litigating this case in a manner that doesn't jeopardize national security, which I think can be easily done," he said.

In the second case, the Treasury Department threatened to name KindHearts, a Muslim charity, as a "specially designated global terrorist" (SDGT) based on classified evidence, without providing it with a reason or meaningful opportunity to defend itself.

The ACLU is asking a federal court to block the government from blacklisting KindHearts without providing it due process, and to lift the freeze on the organization's assets.

"OFAC's unlimited authority to seize KindHearts' property and shut it down without giving the charity notice or an opportunity to defend itself is unconstitutional," Hina Shamsi, lead ACLU attorney on the case, told us.

"KindHearts has been in limbo for more than two and a half years and is asking for independent judicial scrutiny of what has been, until now, unilateral government action," she said.

In October 2008, a federal judge granted the ACLU's request for an emergency order blocking the government from designating KindHearts as an SDGT without further judicial review.

Source: The Public Record

The UAE and Montenegro signed today a memorandum of understanding (MoU) for joint cooperation in combating money laundering and terrorist financing.

The memo was signed following a meeting held by HE Sultan Nasser Al Suweidi, Governor of the UAE Central Bank and Chairman of the National Anti-money Laundering Committee, with a visiting delegation from Montenegro led by Predrag Mitrovic, Director of the Administration for the Prevention of Money Laundering.

Abdulrahim Mohamed Al Awadi, Assistant Executive Director and Head of Anti-Money Laundering and Suspicious Cases Unit (AMLSCU), UAE Central Bank, and Predrag Mitrovic, Director of the Administration for the Prevention of Money Laundering, Montenegro, inked the memo.

Under the memo, the two countries will exchange financial information regarding money laundering and financing of terrorism and consolidate their policies in that respect.
The UAE apex bank said the conclusion of the memo underlines the UAE's sincere desire to pursue cooperation with the international community in the fight against these two crimes.

Source: WAM

Ahead of his departure for Moscow last night, President Barack Obama questioned the politically charged prosecution of a prominent Russian businessman.

Obama raised concerns about the treatment of Mikhail Khodorkovsky, who along with his partner has been put back on trial six years after they were first arrested. Critics say the new trial seems aimed at keeping Khodorkovsky, a rival to the government who was once Russia's richest man, in prison.

Obama called on President Dmitry Medvedev to follow through on his promise "to strengthen the rule of law in Russia," which he said includes ensuring "courts are not used for political purposes.''

Khodorkovsky, who led Yukos, a giant oil company, was arrested in 2003 when he challenged former president Vladimir Putin. He was sentenced to eight years in prison for fraud and tax evasion and his company was effectively taken over by the state. He is back on trial on new charges of embezzlement and money-laundering.

Source: NEW YORK TIMES

Victoria Pennington

Barclays and Mega International censured for breeches of rules governing anti-money laundering in Australia

SYDNEY - Barclays and Chinese lender Mega International have been censured by Australia's anti-money laundering body, the Australian Transaction Reports and Analysis Centre (Austrac), for "significant breaches" of its rules on reporting suspicious transactions and account activity.

Austrac stated the banks' actions had left their services and the wider financial system vulnerable to potential abuse by criminals looking to launder the proceeds of crime or finance terrorism.

Barclays has undertaken to review all account transactions carried out since July 1, 2002 and will report any suspicious activity to Austrac. It will also have to submit information about any large fund transfers into or out of Australia.

Mega International has provided a similar guarantee to review transactions since January 2002, although the Australian Daily noted Austrac remains concerned the bank could still in breach of Australian law.

Source: OpRisk & Compliance

In the past two decades, football has changed from a popular pastime into a global industry. With the growing economic importance of football along with other sports, the investment of money into the sector has increased exponentially, and some of this has criminal connections.

The FATF has just completed a study to determine what makes the football sector attractive to criminals. Why look at football? It is by far the largest sport in the world – more than 250 million people play – and the FIFA World Cup final in 2006, for example, attracted over 1 billion viewers. Despite the rapid growth and high visibility of the football sector, however, football’s regulatory structure has not yet caught up with some of the risks that come with these changes.

Download the report

The FATF report examines the sector in economic and social terms and provides case examples identifying areas that could be exploited by those who want to invest illegal money into football. In preparing this analysis, the authors engaged with some of the major sports organisations, such as FIFA, UEFA and the International Olympic Committee, in addition to relevant experts from FATF and non-FATF member countries.

The goal of this FATF report is to draw attention to some of the risks facing the football sector in particular – and the sports industry in general – to misuse by criminals so that government policy makers, law enforcement, the financial sector and sports regulatory authorities can better understand and begin dealing with this problem.

Source: FATF

New Zealand has been used to launder millions of dollars of criminal proceeds, Justice Minister Simon Power has told parliament.

He has introduced a bill that tightens the laws around money laundering and told MPs the international Financial Action Taskforce had set standards and was demanding compliance from all countries.

"New Zealand stands in real danger of being publicly criticised for its lack of progress to date," he said during the first reading debate on the bill.

"This bill will demonstrate New Zealand's dedication to global anti-money laundering and counter-terrorism financing efforts."

Power said some might argue it was not a problem in New Zealand.

"Unfortunately, this is not the case," he said.

"Last year, I am advised, New Zealand was used by an offender to launder almost $120 million from Australia through New Zealand and into Vanuatu."

Power said the bill's new powers would enable law enforcement agencies to tackle trans-national organised crime head on and worked alongside the recently passed Criminal Proceeds Recovery Act.

"Conservative estimates put the proceeds of domestic crime at between $500 million and $1 billion every year," he said.

"Organised criminal groups in New Zealand use sophisticated commercial and financial tools as part of their criminal offending."

Power said the bill's provisions would help the fight against illegal drugs, particularly methamphetamine.

The bill works by requiring businesses that deal with the public to put in place systems which prevent or detect transactions made by criminals trying to launder money.

It sets out "know your customer" requirements and puts record keeping obligations on financial institutions and casinos.

It also obliges the financial sector to report all suspicious activity to the Financial Intelligence Unit.

"The government recognises that the bill will place additional costs on New Zealand businesses at a time when many are coming under strain," Power said.

"However, without this bill we could face increased cost for crown borrowing, higher thresholds for New Zealand businesses trying to access international capital as well as the higher interest rates that may follow such increased scrutiny."

The Anti-Money Laundering and Countering Financing of Terrorism Bill passed its first reading on a unanimous vote on Tuesday night.

It has been sent to the foreign affairs and defence select committee for scrutiny and public submissions.

Source: TVNZ