Jersey lawyer criticises inconsistency of EU money laundering 'white list'

A Jersey lawyer specialising in the field of money laundering and financial services regulation has questioned the validity of the European Union's 'white list' of countries whose money-laundering controls are considered to be equal to those of EU member states, and which notably excludes leading offshore fund jurisdictions in Europe and the Caribbean.

Stephen Platt, an English barrister and chairman of BakerPlatt Group, queries the inclusion on the list of countries such as Russia, Argentina and Mexico, as well Australia and Canada, which have been adjudged to be less than 25 per cent compliant with the international standards established by the Financial Action Task Force.

Platt describes as "bewildering" the suggestion that the white list countries have higher standards of anti-money laundering controls than leading offshore financial services jurisdictions including the UK's Crown Dependencies.

"Having researched the background to some of the countries included, we question why countries that fall behind recognised international standards are on the list, while finance centres such as Jersey, the Bahamas and the Cayman Islands are not," says Platt, who advises governments and regulators on the implementation of regulatory and anti-money laundering rules.

An analysis by BakerPlatt and its alliance partner in London, Seven Bedford Row, notes that the first mutual evaluation report on Russia in 2001 by the European Committee on Crime Problems noted as a "critical deficiency" the country's lack of comprehensive laws and regulations implementing international standards on money laundering.

Although a second evaluation in 2004 noted significant improvements, it also found that numbers of investigations, prosecutions and convictions for money laundering were falling and know your customer procedures remained deficient.

A report on Argentina by Gafisud, a regional FATF offshoot for South America, noted inherent weaknesses in legislation that had the effect of impeding successful prosecution of money laundering, while no offence of terrorist financing existed. The country was criticised for its failure to provide statistics in anti-money laundering areas, preventing an assessment of the implementation of core requirements from being carried out.

The FATF's September 2004 report described the application of anti money laundering measures in Mexico as somewhat haphazard, and said the lack of mutual legal assistance legislation not only inhibited the country's ability to co-operate internationally, it also undermined national prosecutions. Bank and trust secrecy was also criticised as impeding investigations.

In addition, the lawyers say, while the FATF praised South Africa for developing a legislative structure to combat money laundering, the absence of a framework to combat the financing of terrorism was noted, whilst the framework in place was so new it needed time to be assessed for its effectiveness.

BakerPlatt notes that Jersey, which was not included on the white list, was assessed as 76 per cent compliant at the time of the island's last assessment by the International Monetary Fund in 2003. The most recent FATF assessments, issued in November last year, rated the Bahamas as 45 per cent compliant and Cayman as 78 per cent compliant.

However, five of the 13 countries on the list were far below this level, according to their most recent IMF assessments: Australia (24 per cent), Canada (14 per cent), Singapore (23 per cent), Switzerland (22 per cent) and the US (31 per cent).

"Australia's and Canada's staggering level of non-compliance with FATF recommendations makes it difficult for the EU to justify their inclusion on the white list on the grounds of 'equivalence'," Platt says.

"Given that the EU recently announced that it is to pursue infringement measures against 15 of its member states for failing to implement the Third Money Laundering Directive into national law, it would perhaps be better placed to give a jurisdiction such as Jersey the recognition it deserves, and the role model some of its member states appear to need, as the leader in the field of anti-money laundering."

Source: HedgeWeek

Taiwan seeks help of foreign banks in money-laundering probe

Taiwan has sought the help of international banks as part of its probe into an alleged money-laundering case implicating former president Chen Shui-bian and his family, a prosecutor said Tuesday.

Merrill Lynch & Co., Credit Suisse Group and ABN Amro Holding NV are among the banks that have pledged to assist the investigation, said a prosecutor who declined to be named.

"We are seeking assistance from the banks as witnesses," the prosecutor said, without elaborating.

When contacted by phone, Merrill Lynch spokeswoman Vicki Kwong said: "As in normal practice, Merrill Lynch is cooperating with authorities."

Taiwan launched a probe this month into alleged money laundering implicating the former first family, following similar moves by Swiss authorities.

Copies of Swiss documents obtained by a Taiwanese lawmaker showed Chen's son Chen Chih-chung and daughter-in-law Huang Jui-ching transferred 31 million US dollars to her Swiss bank accounts in 2007.

They were also suspected of laundering money by setting up companies in the Cayman Islands.

Prosecutors have named the couple and Chen Shui-bian, his wife and brother-in-law, as defendants in the case.

The ex-president has admitted that his wife wired 20 million US dollars abroad from his past campaign funds, but said she did so without his knowledge. He has denied any illegal activity.

His son and daughter-in-law have said they merely did their mother's bidding and were unclear about "the source or the background" of any transferred funds.

Chen, who left office in May, is already being investigated for allegedly embezzling 14.8 million Taiwan dollars (480,500 US) in special expenses while president, and his wife is on trial for corruption and document forgery in the same case.

Source: AFP

Son of Taiwan ex-leader returns to face money laundering charges

The son and daughter-in-law of Taiwan's ex-president Chen Shui-bian Monday returned to the island to face a probe into alleged money laundering implicating the former leader. The couple, listed as defendants along with the ex-leader and his wife Wu Shu-chen over their alleged roles in the scandal, insisted they knew nothing about a 20 million US dollar fund kept at their bank accounts set up by a Swiss bank in Cayman Islands.

"I have no idea about the funds because my mother has long been the one handling the family's money," said the son Chen Chih-chung at the airport.

He stressed he did not know about the source and how the fund was wired abroad.

His wife, Huang Jui-ching, also said her mother-in-law, Wu Shu-chen, asked her to sign some documents, which she did as she was told without asking why.

They insisted that their return to Taiwan is a solid proof that they want to cooperate with the judicial authorities in clearing themselves and their family. Taiwan prosecutors have issued summons for the couple, who left Taiwan on August 9, just days before the scandal came to light earlier in August.

Taiwan's prosecution authorities have listed the former president Chen and four of his family members as defendants over their alleged roles in a high-profile money laundering scandal.

The scandal came to light on August 11 after Swiss judicial authorities notified Taiwan after finding unusual fund transfers through the son and daughter-in-law accounts set up by a Swiss bank.

The Supreme Prosecutor's Office launched the probe after Chen admitted at a news conference on August 14 that his wife had remitted 20 million US dollars worth of previous campaign donations abroad without telling him. He said his wife told him this was done in preparation for their retirement after he stepped down as president in May.

On August 16, prosecutors barred the ex-leader and his wife from going abroad, after searching Chen's home and office and Wu's home earlier in the day.

Investigators claimed to have found details of four secret bank accounts opened in 2000, the year Chen won the presidential election.

Chen said the money was from campaign funds that he had failed to declare. But prosecutors are trying to determine if the couple was attempting to launder illegally-obtained money through their son and daughter-in-law as well as other relatives.

The money laundering scandal has dealt a crushing blow to Chen's Democratic Progressive Party (DPP), which lost its eight-year grip on power to the pro-China Kuomintang (KMT) party in the March 22 election.

Chen, who served two four-year terms as president between 2000 and 2008, resigned from the DPP on August 15 as the party was preparing to expel him.

Source: The Earth Times

EU’s money laundering white list questioned

A lawyer spcialising in money laundering has put the validity of EU’s ‘white list’ in doubt

A lawyer specialising in money laundering and financial service regulation this week questioned the validity of the EU’s ‘white list’ of countries where money laundering controls are considered the same as EU member states.

Stephen Platt, BakerPlatt Group barrister and chairman, questioned why countries such as Russia, Argentina and Mexico could justifiably make the list and noted Australia and Canada, also on the list, were less than 25% compliant by the standards set by the Financial Action TaskForce (FATF) into money laundering controls, according to Tax-News.com.

Platt described as ‘bewildering’ that white list countries were regared as having a higher level of control of money laundering compared with leading offshore finance centres, including the British Crown Dependencies.

‘Having researched the background to some of the countries included, we question why countries that fall behind recognised international standards are on the list, whilst finance centres such as Jersey, the Bahamas and the Cayman are not,’ said Platt, who advises gand regulators on the implementation of effective regulatory and anti-money laundering rules.

Source: AccountancyAge