Author Archives: Kathrin Katanoba

Pandora Papers

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Offshore havens and hidden riches of world leaders and billionaires exposed in unprecedented leak

The Pandora Papers reveal the inner workings of a shadow economy that benefits the wealthy and well-connected at the expense of everyone else.

Millions of leaked documents and the biggest journalism partnership in history have uncovered financial secrets of 35 current and former world leaders, more than 330 politicians and public officials in 91 countries and territories, and a global lineup of fugitives, con artists and murderers.

The secret documents expose offshore dealings of the King of Jordan, the presidents of Ukraine, Kenya and Ecuador, the prime minister of the Czech Republic and former British Prime Minister Tony Blair. The files also detail  financial activities of Russian President Vladimir Putin’s “unofficial minister of propaganda” and more than 130 billionaires from Russia, the United States, Turkey and other nations.

The leaked records reveal that many of the power players who could help  bring an end to the offshore system instead benefit from it – stashing assets in covert companies and trusts while their governments do little to slow a global stream of illicit money that enriches criminals and impoverishes nations.

Among the hidden treasures revealed in the documents:….  icij.org/investigations/

Acres of Money Laundering

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Acres of Money Laundering: Why U.S. Real Estate is a Kleptocrat’s Dream 

What do the Iranian government, a fugitive international jeweler, and a disgraced Harvard University fencing coach have in common?

They have all used U.S. real estate to launder their ill-gotten gains. In Acres of Money Laundering: Why U.S. Real Estate is a Kleptocrat’s Dream, Global Financial Integrity GFI dives into the murky world of global money laundering and demonstrates the ease with which kleptocrats, criminals, sanctions evaders, and corrupt government officials choose the U.S. real estate market as their preferred destination to hide and launder proceeds from illicit activities.

To tell the story of why U.S. real estate continues to remain a favored destination for illicit activity, GFI built a database of more than 100 real estate money laundering cases from the U.S., UK, and Canada, reported between 2015 – 2020. The database and accompanying regulatory analysis in this report provide conclusive evidence that the current U.S. regulatory approach, using temporary and location- specific Geographic Targeting Orders (GTOs), has critical shortcomings that will require comprehensive reform before it can adequately address the threats to the U.S. financial system and national security. To provide context to the analysis and recommendations in this report, GFI compares the regulatory developments in the U.S. with ongoing practices, challenges, and developments in the rest of the G7. Analyzing the problem in the U.S. through this prism helps the U.S. see the merits and demerits of possible regulatory approaches in other similarly placed economies and lends weight to GFI’s final recommendations. At the same time, this approach underscores the continued relevance of real estate money laundering as a systemic risk across the G7 and the need therefore for solutions that are more cooperative.

GFI’s key findings on the U.S. include:

  • At a minimum, from cases reported in the last five years, more than US$2.3 billion has been laundered through U.S real estate, including millions more through other alternate assets like art, jewelry, and yachts;
  • Gatekeepers including attorneys, real estate agents, investment advisers, and employees of financial institutions have repeatedly facilitated REML by high net-worth individuals through willful blindness or direct complicity, yet the U.S. remains the only G7 country that does not require real estate professionals to comply with anti-money laundering (AML) laws and regulations;
  • 60.71 percent of U.S. cases involved properties in one or more non-GTO counties, demonstrating the limitations of this location-specific regulatory tool;
  • Well over 50 percent of the reported cases in the U.S. involved politically exposed persons, which is particularly problematic considering the lack of guidance from FinCEN on PEP identification;
  • While commercial real estate featured in more than 30 percent of the cases and generally had significantly higher values than the residential real estate involved, the U.S. is yet to create any reporting obligations for risks in the sector;
  • The use of anonymous shell companies and complex corporate structures continues to be the number one money laundering typology. Eighty-two percent of U.S. cases involved the use of a legal entity to mask ownership, highlighting the importance of implementing a robust beneficial ownership registry under the Corporate Transparency Act.

KEY RECOMMENDATIONS

GFI proposes the following key recommendations for the U.S. real estate sector in line with international best practices and regulatory developments seen elsewhere in the G7:

  • The GTOs, through a new rule-making, should be made permanent, expanded nationwide, and without any dollar threshold;
  • Real estate agents should be required to identify the beneficial owner of a residential real estate purchase, when title agents are not involved in the transaction;
  • FinCEN should issue guidance, red flag indicators, and create reporting requirements for real estate money laundering typologies related to commercial real estate transactions;
  • Legal professionals should be made the lead reporting entity for identifying money laundering risks in commercial real estate transactions;
  • The U.S. should create robust AML/CFT processes targeted at the real estate sector, including but not limited to a risk-based approach identifying and verifying the source of funds and beneficial owner of the client;
  • FinCEN should issue guidance on the definition of PEPs and an advisory highlighting the risk of foreign PEPs to real estate money laundering schemes. Reporting entities should be required to report when a foreign PEP purchases property;
  • Investment advisors should be required to carry out client due diligence, including enhanced client due diligence where required, on all prospective investors in private (real estate) funds;
  • The U.S. should undertake comprehensive gatekeeper reform for the real estate sector, by lifting the exemption given to real estate professionals under the BSA and include real estate agents and legal professionals who are involved in real estate transactions under the definition of ‘financial institutions’;
  • The EB-5 visa investor program needs critical reform on the methods used to identify the source of funds and verify investor identity, including processes to record investors that are PEPs.

EU Efforts To Combat Money Laundering Show Weakness

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Money laundering is the practice of “legitimising” the proceeds of crime by filtering them into the regular economy to disguise their illegal origin. Given the importance of EU anti-money laundering policy and the role of the banking sector, we assessed whether the EU’s actions in this area are well implemented.

We found institutional fragmentation and poor co-ordination at EU level when it came to actions to prevent money laundering and take action where risk was identified. EU bodies have limited tools to ensure sufficient application of AML/CFT frameworks at national level. There is no single EU supervisor, the EU’s powers are split between several bodies and co-ordination with Member States is carried out separately.

A European Court of Auditors report says the EU requires legislation to be implemented coherently at member state level if it is to adequately tackle money laundering and terrorist financing.

A special report from the European Court of Auditors published on Monday has concluded that the EU’s efforts to combat money laundering and terrorist financing is fragmented, poorly coordinated and shows weaknesses. It fails to ensure a coherent approach and a level playing field.

“EU-level weaknesses with regard to money laundering and terrorist financing need to be addressed, and the EU’s supervisory role significantly strengthened”, said Mihails Kozlovs, the member of the European Court of Auditors responsible for the report. “Much more needs to be done to ensure that the EU law is implemented promptly and coherently. For a start, the EU should use regulations in preference to directives wherever possible, given the need for legislation to be implemented coherently at Member State level”…..
Special Report: EU efforts to fight money laundering in the banking sector are fragmented and implementation is insufficient.
Money Laundering Illustrations, Royalty-Free Vector ...

800 Criminals Arrested

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In biggest ever law enforcement operation against encrypted communication

The US Federal Bureau of Investigation (FBI), the Dutch National Police (Politie), and the Swedish Police Authority (Polisen), in cooperation with the US Drug Enforcement Administration (DEA) and 16 other countries have carried out with the support of Europol one of the largest and most sophisticated law enforcement operations to date in the fight against encrypted criminal activities.

Since 2019, the US Federal Bureau of Investigation, in close coordination with the Australian Federal Police, strategically developed and covertly operated an encrypted device company, called ANOM, which grew to service more than 12 000 encrypted devices to over 300 criminal syndicates operating in more than 100 countries, including Italian organised crime, outlaw motorcycle gangs, and international drug trafficking organisations. Europol.europa.eu/Newsroom

Press conference – Operation Trojan Shield

Trojan Vector

Spartan Trojan Vector free vector | Download it now!

Five Ways Biden Could Crack Down On Dirty Money And Financial Secrecy

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Riding a wave of anti-money laundering momentum, will the U.S. president from Delaware deliver on his pledges to tackle tax havens and make the wealthy pay more?

Early rhetoric from the Biden administration has encouraged anti-corruption advocates that the new president’s tenure in the White House may mark a turning point in the fight against dirty money and tax haven abuse — two overlapping problems made worse by a veil of secrecy that shields vast sums of money from tax collectors and law enforcement authorities.

“We will crack down on tax havens and illicit financing that contribute to income inequality, fund terrorism, and generate pernicious foreign influence,” the administration’s Interim National Security Strategic Guidance, released last month, says, identifying the fight against global corruption as a top security priority. The strategy mirrors promises Joe Biden made during his candidacy.

The pledges come at a time when the U.S., like many other countries, is seeing political momentum around proposals to ensure that wealthy individuals and high-earning corporations pay their fair share of taxes to aid pandemic relief and economic recovery.

It’s time to “change the paradigm,” Biden said in his first press conference, to “reward work, not just wealth” — a line that reinforced his pledges to raise marginal tax rates for the rich and for corporations. This week, Biden unveiled a proposed tax hike on companies and foreign profits to pay for his infrastructure plan.

The International Consortium of Investigative Journalists has documented across many investigations how millionaires, including corrupt politicians, drug dealers, human rights abusers and tax evaders use the offshore system to hide their wealth. Most recently, in 2020, the FinCEN Files investigation revealed how banks allow billions of dollars in suspect money to flow through their accounts.

So far, the Biden administration hasn’t provided specifics about how the promised fight against tax havens and dirty money might shake out. Taxation and money laundering experts say there are at least five reforms that the new president should put at the top of the list.

1. Crack down on tax havens at home and abroad…,
icij.org/investigations/


The role of tax haven in money laundering activities ⋆ MyGh Online
Hajo de Reijger

Financial Integrity For Sustainable Development

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The report notes that tax abuse and money laundering trap billions of people
in poverty.

The world must curb financial flows associated with tax evasion and avoidance, as well as those obtained through corrupt activities and money laundering. The magnitude of the funds involved is immense; trillions of dollars in bank accounts and other assets, and not just in tax havens.

The concealed money drains resources from the hands of governments, generates increasing inequality –because the beneficiaries are generally rich people— and causes significant deterioration in public sector governance worldwide. Increased transparency and accountability to curb these flows would improve governance and enhance fairness at the national and international levels….
FINANCIAL INTEGRITY FOR SUSTAINABLE DEVELOPMENT

Oecd-Development

Follow the Money

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Task Force Eligo generates more than $580 million in cash, drugs and assets

ACC

Australian Crime Commission, Australian Federal Police, Australian Transaction Reports and Analysis Centre

The Australian Crime Commission has today unveiled a year-long covert money laundering investigation codenamed Eligo following a record $5.7 million cash seizure in Sydney at the weekend (Saturday, 18 January 2014).

The Eligo National Task Force, established in 2012 as an Australian Crime Commission-led special investigation into the use of alternative remittance and informal value transfer systems by serious and organised crime, has seized more than $580 million worth of drugs and assets, including $26 million in cash.

Follow the Money

Follow the Money

 

WEF- World Economic Forum 2021

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Live Sessions

 

 

The Davos Agenda is a pioneering mobilization of global leaders to shape the principles, policies and partnerships needed in this challenging new context. It is essential for leaders from all walks of life to work together virtually for a more inclusive, cohesive and sustainable future as soon as possible in 2021. To this end, the World Economic Forum has served for more than 50 years as a trusted platform where leaders from business, government, international organizations, civil society and academia convene to address critical issues at the start of each year.

An entire week of global programming will be dedicated to helping leaders choose innovative and bold solutions to stem the pandemic and drive a robust recovery over the next year.

The Davos Agenda will also mark the launch of the World Economic Forum’s Great Reset Initiative and begin the preparation of the Special Annual Meeting in the spring. Each day will focus on one of the five domains of the Great Reset Initiative:

Monday 25 January: Special Addresses, Leadership Panels and Impact Sessions on Designing cohesive, sustainable and resilient economic systems.

Tuesday 26 January: Special Addresses, Leadership Panels and Impact Sessions on Driving responsible industry transformation and growth.

Wednesday 27 January: Special Addresses, Leadership Panels and Impact Sessions on Enhancing stewardship of our global commons.

Thursday 28 January: Special Addresses, Leadership Panels and Impact Sessions on Harnessing the technologies of the Fourth Industrial Revolution.

Friday 29 January: Special Addresses, Leadership Panels and Impact Sessions on Advancing global and regional cooperation.
The Global Risks Report 2021

WEF- Programme 2021

Live Sessions

Twitter: WEF- Programme 2021

Silavan Wegmann
www.w-t-w.org/en/silvan-wegmann

A New Money Laundering Machine In A Familiar Guise

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The Azerbaijani laundromat: a new money laundering machine in a familiar guise

D. Crijns, AMLC senior advisor

Most of you are familiar to the so-called Russian laundromat, a $20 billion money laundering scheme during the period 2010 – 2014. A few weeks ago, the journalist collective OCCRP published a new, similar scheme: the Azerbaijani laundromat.

In this article I will discuss four items. First the new scheme in short. Then I will deal with a special legal entity that is often used in this type of money laundering scheme, and give some examples and more detailed information. In the third paragraph I will focus on the role of the banks in the scheme and how the money actually got into the hands of the criminals. Finally, I will give examples of how the money is spent.
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the-azerbaijani-laundromat-a-new-money-laundering-machine-in-a-familiar-guise