JP Morgan pays $88.5m to settle sanction violations

JP Morgan Chase has agreed with the US Treasury Department to pay $88.3m (£54.2m) to avoid liability for "apparent violations" of sanctions against Cuba, Sudan, Liberia and Iran.

The Treasury said such violations, which took place between March 2005 and March 2011, were "egregious".

These included processing 1,711 transfers totalling $178.5m to Cubans in contravention of US regulations.

JP Morgan said there had been no intention to violate regulations.

"The firm screens hundreds of millions of transaction and customer records per day, and annual error rates are a tiny fraction of 1%," said Jennifer Zuccarelli, a spokeswoman for the bank.

"We are pleased to have resolved these matters and to move forward with enhancements to our [foreign assets] compliance programme."

JP Morgan reported net profits of $5.4bn for the three months to 30 June, up from $4.8bn a year earlier.

Source: BBC

US maintains Cuba, Iran, Sudan, Syria on terror sponsors' list

The US has retained Cuba, Iran, Sudan and Syria on the list nations which allegedly sponsor of terrorism.

The State Department retained these four countries in this list after Secretary of State Hillary Clinton determined that the government of these nations has repeatedly provided support for acts of international terrorism.

As a result, these countries would face a wide range of sanctions including a ban on arms-related exports and sales; controls over exports of dual-use items, requiring 30-day Congressional notification for goods or services that could significantly enhance the terrorist-list country's military capability or ability to support terrorism; prohibitions on economic assistance and imposition of miscellaneous financial and other restrictions.

Designated as a State Sponsor of Terrorism in 1982, the Government of Cuba maintained a public stance against terrorism and terrorist financing in 2010, but there was no evidence that it had severed ties with elements from the Revolutionary Armed Forces of Colombia and recent media reports indicate some current and former members of the Basque Fatherland and Liberty continue to reside in Cuba, the State Department said.

Iran, designated as a State Sponsor of Terrorism in 1984, remained the most active state sponsor of terrorism in 2010.

Tehran's financial, material, and logistic support for terrorist and militant groups throughout the Middle East and Central Asia had a direct impact on international efforts to promote peace, threatened economic stability in the Gulf, and undermined the growth of democracy, it said.

In 2010, Iran remained the principal supporter of groups implacably opposed to the Middle East Peace Process, it added. Sudan, which was designated as a State Sponsor of Terrorism in 1993, the State Department said remained a cooperative partner in global counter-terrorism efforts against al-Qaida in 2010.

During the past year, the Government of Sudan worked actively to counter AQ operations that posed a potential threat to US interests and personnel in Sudan.

Sudanese officials have indicated that they viewed continued cooperation to the US as important and recognized the potential benefits of American training and information-sharing.

Syria was designated as the State Sponsor of Terrorism in 1979. In 2010, it continued its political support to a variety of terrorist groups affecting the stability of the region and beyond, the report said.

The State Department said Syria provided political and weapons support to Hizballah in Lebanon and allowed Iran to resupply the terrorist organization with weapons.

The external leadership of Hamas, the Palestine Islamic Jihad, the Popular Front for the Liberation of Palestine, and the Popular Front for the Liberation of Palestine-General Command, among others, were based in Damascus and operated within Syria's borders.

Statements supporting terrorist groups like Hamas and Hizballah consistently permeated government speeches and press statements, it said.

Source: Deccan Herald

KENYA: AML Bill Passes, But Does Govt Mean Business?

Kenya's Parliament finally passed the Proceeds of Crime and Anti-Money Laundering Bill in December. But while the passing of the bill is viewed as a highlight of the Tenth Parliament, many fear it may just be a gimmick by the government to appease international partners.

George Kegoro, the executive director of International Commission of Jurists - Kenya Chapter, says while the legislation is good, he doubts there is political will to completely stamp out money laundering in Kenya.

"The existence of the legislation is not sufficient to deter the vice neither are the stiff penalties that are recommended in the bill," he says. "There is need for genuine support from the government to enact this law. We need a good set of people to be put in place to interpret the legislation."

Kegoro, whose organisation undertakes advocacy and policy work aimed at strengthening the role of lawyers and judges in protecting human rights and the rule of law, argues that while the bill was government-sponsored, Kenya’s track-record on corruption is poor and he doubts the genuineness of the political class.

It is the fourth attempt since 2004 to pass a bill to prevent the concealment of large profits from drug trafficking and other organised crime, and even this time around it faced resistance from members of parliament who believed the bill was a sly back-door re-introduction of an Anti-Terrorism Bill which had been quashed.

When the bill was tabled in November, an assistant minister in defiance of his own government, strongly opposed the tenets of the Bill. The assistant minister for public service, Aden Sugow, opposed the Bill saying it was an attack on the Muslim community. He argued implementing the Bill would be bowing to the interests of external interests and said that Kenya currently has adequate laws in place to deter money laundering.

While supporting the bill, defence minister Yusuf Hajji warned of a general feeling among the Muslim community that the legislation was targeting them. The Bill went forward after assurances from Prime Minister Raila Odinga that the government had no such intentions.

Once signed by the president, the law will establish a Financial Reporting Centre to assist in the identification of the proceeds of crime. An Asset Recovery Agency will be charged with tracing and recovering ill-gotten assets.

According to Job Ogonda executive director of international corruption watchdogs Transparency International, this would mean millions of dollars stashed in off-shore accounts swindled from Kenya could be recovered.

But Ogonda doubts the passage of new legislation will improve Kenya’s standing as a corrupt state internationally.

"At the moment it is embarrassing to be a Kenyan. Nigeria is improving with regards to corruption because they have shown tangible commitment of doing something about graft. However, the same cannot be said for Kenya," he says.

"We have previously had good pieces of legislation which would have helped fight graft, however, nothing has been done. How many ministers or former ministers have ever gone to prison because of corruption?" Ogonda wonders.

Ogonda is referring to anti-corruption legislation such as the Public Procurement and the Public Officers Ethics Act which require all public office holders to declare their wealth and origin of the same: this older legislation has had no noticeable effect.

Kenya’s record internationally as a corrupt state has for many years been bad and in the bribery and corruption index released by Transparency International, the country has kept the company of states such as Nigeria, Russia and Zimbabwe. Currently, Kenya is position 147 out of 180 on the global index of corruption.

Indeed the passing of the anti-money laundering bill comes in the wake of the release of a U.S. State Department report saying 93 million dollars of earnings from drug trafficking are laundered in the country’s financial system annually.

Another equally damning report by a UK firm, Kroll Associates, hired by the Kenyan government to track wealth acquired corruptly, revealed an estimated $1.7 billion is currently stashed in off-shore accounts. While the results of this 2004 report have remained confidential, the document was leaked: no action has been taken against any of the prominent figures named in its 110 pages.

But all the right noises were made when the bill was moved in Parliament by deputy Prime Minister Uhuru Kenyatta, who said that in view of the magnitude of the problem to the economy, the debate should focus on the quality of the legislation to ensure it was stringent enough.

Seconding the bill, Raila said, "The country risks becoming a pariah state unless the legislation is passed. We have suffered from the effects of money laundering especially in the property sector whose value has been skyrocketing due to the money being brought from the acts of piracy off the coast of Somalia".

A boom in property prices in Nairobi is preventing a majority of Kenyans from buying real estate, and in some cases even pricing locals out of the rental market. Media reports are linking the boom with profits from Somali pirates who seized numerous vessels during 2009, extracting handsome fees from their owners before releasing ships and crew members. In certain Nairobi neighbourhoods, Somalis are willing and able to pay rent up front for periods of even up to two years.

Ogonda states that for many years, Kenya has been a hub of money laundering with illegally acquired cash from Europe, South Africa, South America, Democratic Republic of Congo, Sudan, Rwanda, Burundi, Uganda and Tanzania finding its way into local financial markets.

"Due to our porous borders and poor implementation of legislation, people have simply walked in with huge amounts of cash, hired a lawyer to front for them who in turn invest the cash, especially in property," Ogonda says.

He says despite moves to assure the independence of the new watchdog agencies' leadership, and fresh monitoring requirements for the banking system, the version of the bill which is now awaiting presidential assent does not demand greater accountability from lawyers whose lawyer-client privileges remain intact.

Kegoro notes that the prescribed penalties are fairly high - jail terms of two to five years, with fines of up to $65,000 for individuals, and corporate penalties set as high as $330,000 or the value of the property. But, he argues, it is not the severity of the penalty that will make people fear it. It is the certainty of being caught, hence the need for genuine political will to implement the law.

Ogonda is in agreement. "Application of the bill is what will be the determining factor. The structure of governance has to support the law and if it remains the same the legislation can exist and nothing will change."

By Susan Anyangu-Amu

Source: IPS

Saudi Arabia: Cabinet looks at money laundering

Monday’s Cabinet meeting, chaired by King Abdullah, Custodian of the Two Holy Mosques, resulted in approval for measures to address issues concerning money laundering and terrorism funding as well as housing.


The King briefed the session, held at Al-Yamama Palace in the capital, on the most significant communications of the past week, including the visits to the Kingdom of the President of Egypt, Hosni Mubarak, Palestinian President Mahmoud Abbas and the President of Sudan, Omar Hassan Al-Bashir.
King Abdullah also briefed the Cabinet on communications he received from the President of Yemen, Ali Abdullah Saleh, and his reception of Turkish Foreign Minister Ahmed Dawoud Awghlou and the Second Vice President of Afghanistan, Abdul Karim Khalili.

Minister of Culture and Information Abdul Aziz Khoja released a statement to the Saudi Press Agency (SPA) saying that the meeting looked at reports on developments in the Arab and Islamic world as well as wider international affairs and discussed the Kingdom’s economy following the recent announcement of the national budget.

Cabinet approval was given to authorize Prince Naif, Second Deputy Prime Minister and Minister of Interior, to sign with foreign authorities a memorandum of understanding on collaboration in investigation into money laundering and the financing of terrorism.

Measures were also approved following a study on providing land grants to Saudi nationals to facilitate the acquisition of homes. The measures included joining the Ministry of Municipal and Rural Affairs program to the Iskan housing program to guarantee citizens housing, the provision of land to the Housing Commission to build homes for nationals in conformity with regulations and government-planned zones, provide all services stipulated for by the budget, and help beneficiaries of housing projects integrate with the rest of society by ensuring that projects are evenly distributed across cities. Cabinet approval was further given for the proposed Board of Directors at the Balad Al-Ameen Construction Development Company for the period of three years and its members from government, private and other sectors.

Similar approval was given for the restructuring of the Board of Directors of the Jeddah Development and Construction Company.

Source: The Saudi Gazette

Libya's Membership Application To MENAFATF Approved

Members of the anti-money laundering and anti-terrorist financing organization, the Middle East and North Africa Financial Action Task Force, or MENAFATF, approved Libya's membership application Tuesday, MENAFATF President Abdulrahim Al Awadi said.

"The plenary of 17 members approved the application of Libya to be a member and the application of the World Customs Organization to be an observer member," Al Awadi told reporters in Fujeirah, United Arab Emirates.

Libya will become the 18th member state of the organization, which was set up in November 2004 and includes Saudi Arabia, Bahrain, Oman, Sudan, Iraq and Egypt. The U.S., U.K., France and Spain are observer members, as well as the International Monetary Fund and the World Bank. The U.A.E. currently holds the presidency.

The U.A.E., which is keen to expand membership, also proposed that Djbouti, Comoros Islands, Seychelles and Maldives become members. The proposal is still being studied by member states.

Al Awadi added that the taskforce will meet next in Bahrain, which takes over the presidency of the organization in May 2009.

He also said that the global credit crisis won't draw attention away from fighting money laundering and terrorist financing.

"Members reiterate the financial crisis should not affect progress and, on the contrary, will add resolve to progress," Al Awadi said.

Source: Zawya

Islamic Charity Charged with Terrorist Financing; Former U.S. Congressman Indicted

KANSAS CITY -- A federal grand jury in the Western District of Missouri has returned a superseding indictment that charges the Islamic American Relief Agency (IARA) and several of its former officers with eight new counts of engaging in prohibited financial transactions for the benefit of U.S.-designated terrorist Gulbuddin Hekmatyar. The indictment also charges former U.S. Congressman Mark Deli Siljander with money laundering, conspiracy and obstruction of justice in the case.

The 42-count superseding indictment returned today was announced by Kenneth L. Wainstein, Assistant Attorney General for National Security; John F. Wood, U.S. Attorney for the Western District of Missouri; Joseph Billy, Assistant Director of the FBI’s Counterterrorism Division; and Monte C. Strait, Special Agent in Charge of the FBI’s Kansas City Field Office.

“This superseding indictment paints a troubling picture of an American charity organization that engaged in transactions for the benefit of terrorists and conspired with a former United States Congressman to convert stolen federal funds into payment for his advocacy on behalf of the charity,” said Assistant Attorney General Wainstein.

“An organization right here in the American heartland allegedly sent funds to Pakistan for the benefit of a specially designated global terrorist with ties to al-Qaeda and the Taliban,” said U.S. Attorney Wood. “By bringing this case in the middle of America, we seek to make it harder for terrorists to do business halfway around the globe. The indictment also alleges that a former congressman engaged in money laundering and obstruction of a federal investigation in an effort to disguise IARA’s misuse of taxpayer money that the government had provided for humanitarian purposes.”

IARA, the Islamic charitable organization named in today’s indictment, was headquartered in Columbia, Mo., and was formerly known as the Islamic African Relief Agency-USA. IARA was officially formed in 1985 and closed in October 2004, when it was identified by the U.S. Treasury Department as a specially designated global terrorist organization. Mubarak Hamed, 51, of Columbia, Mo., a naturalized U.S. citizen from Sudan, served as IARA’s former executive director and is named as a defendant in the indictment.

Also charged in today’s superseding indictment is Mark Deli Siljander, 57, a former U.S. Congressman from Michigan (1981-87) who serves as the owner/director of Global Strategies, Inc., a planning, marketing and public relations company located in the Washington, D.C. area.

Other defendants named in the indictment are Ali Mohamed Bagegni, 53, formerly of Columbia, Mo, a naturalized U.S. citizen born in Libya and a former member of IARA’s board of directors; Ahmad Mustafa, 55, of Columbia, a citizen of Iraq, and a former fund-raiser for IARA; Khalid Al-Sudanee, 56, a citizen and resident of Jordan, and the regional director of the Middle East office of the Islamic African Relief Agency (also known as the Islamic Relief Agency, or ISRA); and Abdel Azim El-Siddig, 51, of Palos Heights, Ill., a naturalized U.S. citizen born in Sudan, and formerly vice president for international operations for IARA.

On March 6, 2007, IARA, along with five officers, employees and associates were charged in a 33-count indictment for illegally transferring funds to Iraq in violation of federal sanctions. They were also charged with stealing government funds, with misusing IARA’s charitable status to raise funds for an unlawful purpose, and with attempting to avoid government detection of their illegal activities by, among other things, falsely denying in a nationally-televised interview that a procurement agent of Osama bin Laden had been an employee of IARA. These charges are included in the superseding indictment returned today.

New Terrorism-Related Charges Against IARA

Today’s superseding indictment adds to the original charges by alleging that IARA and its former executive director, Mubarak Hamed, engaged in prohibited financial transactions for the benefit of Specially Designated Global Terrorist, Gulbuddin Hekmatyar, an Afghan mujahideen leader and founder of the Hezb-e-Islami-Gulbuddin (HIG), who has participated in and supported terrorist acts by al-Qaeda and the Taliban. Hekmatyar has vowed to engage in a holy war against the United States and international troops in Afghanistan. The U.S. government designated Hekmatyar as a Specially Designated Global Terrorist on Feb. 19, 2003, thereby blocking all property and interests in property of Hekmatyar.

According to Counts Thirty-Four through Forty-One of the new indictment, IARA and Hamed knowingly and willfully engaged in financial transactions for the benefit of Hekmatyar’s organization by sending approximately $130,000 in 2003 and 2004 in numerous transactions to Islamic Relief Agency (ISRA) bank accounts in Peshawar, Pakistan, purportedly for an orphanage housed in buildings owned and controlled by Hekmatyar.

“Sending money to benefit designated terrorists jeopardizes both U.S. national security and the security of nations around the world,” said Assistant Director Joseph Billy, Jr., FBI Counterterrorism Division. “The FBI will continue to work diligently with our partners in the law enforcement and intelligence community to pursue suspected terrorists and their supporters, whether in the United States or overseas.”

It is important to note that the indictment does not charge any of the defendants with material support of terrorism, nor does it allege that they knowingly financed acts of terror. Instead, the indictment alleges that some of the defendants engaged in financial transactions that benefited property controlled by a designated terrorist, in violation of the International Emergency Economic Powers Act.

New Charges Against Former Congressman

Today’s superseding indictment also names Mark Deli Siljander as a defendant on counts of money laundering, conspiracy, and obstruction of justice. According to the indictment, Siljander was hired in March 2004 by defendants IARA, Hamed, and Bagegni to advocate for the removal of IARA from a U.S. Senate Finance Committee list of non-profit organizations suspected of being involved in supporting international terrorism.

The Senate Finance Committee placed IARA on this list of charities and published the list on Jan. 14, 2004. Siljander was to advocate for IARA’s removal from the list and reinstatement as an approved government contractor by gathering information and meeting with individuals and agencies of the U.S. government.

As compensation for the services that Siljander agreed to perform, IARA transferred roughly $50,000 in stolen federal funds to accounts that were controlled by Siljander at the National Heritage Foundation and the International Foundation. According to the indictment, the funds used to compensate Siljander for his services had previously been stolen from the U.S. Agency for International Development (USAID) by IARA, Hamed and Bagegni. The International Foundation and the National Heritage Foundation, which is not related to the Heritage Foundation, are not charged with any wrongdoing in this case.

IARA, Hamed and Bagegni had previously entered into a series of agreements with USAID for relief projects in Mali, Africa. When USAID terminated those agreements in December 1999, the amount of money involved totaled approximately $2 million. IARA had allegedly failed to fully fund the matching contributions required to receive USAID funds. After the termination of these agreements, the indictment alleges, IARA, Hamed and Bagegni, without authorization, retained approximately $84,922 of USAID money and failed to return the funds to USAID as called for by the agreements.

According to Count Twenty-Eight of the indictment, Siljander and defendants IARA, Hamed, Bagegni and El-Siddig conspired to engage in money laundering by transferring stolen USAID funds, knowing that the transfers were designed to conceal the nature, source and ownership of the proceeds. Counts Twenty-Nine through Thirty-One of the indictment charge Siljander along with IARA, Hamed, Bagegni and El-Siddig with engaging in money laundering by transferring stolen USAID funds, knowing that the transfers were designed to conceal the nature, source and ownership of the proceeds.

Obstruction of Justice

Count Thirty-Two of the indictment alleges that Siljander obstructed the due administration of justice in the grand jury investigation in the Western District of Missouri by making false statements to FBI agents in December 2005 and to FBI agents and federal prosecutors in April 2007.

According to the indictment, Siljander told federal officials that he had not been hired to do any lobbying or advocacy work for IARA and that the money or checks he received from IARA were charitable “donations” intended to assist him in writing a book about bridging the gap between Islam and Christianity. When he made these statements, he then well knew and believed that each statement was false, the indictment alleges.

The public is cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence. The defendants are presumed innocent unless and until proven guilty.

This case was investigated by the Federal Bureau of Investigation, IRS-Criminal Investigation, the Department of Homeland Security’s U.S. Immigration and Customs Enforcement, and U.S. AID-Office of Inspector General.

The case is being prosecuted by Assistant U.S. Attorney Anthony P. Gonzalez from the U.S. Attorney’s Office for the Western District of Missouri, in conjunction with Trial Attorneys Corey J. Smith, National Security Division of the U.S. Department of Justice, and Steven M. Mohlhenrich, Tax Division of the U.S. Department of Justice.

http://www.thesop.org/article.php?id=9137