Terror Groups Hijack Charity Cash

Exclusive unsuspecting members of the public are being duped into donating cash to charities that are fronts for terror groups. Europol, an arm of the European Union that gathers information from national police forces, says “substantial” amounts of money innocently donated to apparently good causes is ending up in the pockets of terrorists.

Even raffles are being used to con people, Europol believes.

It is also highlighting an increasing trend by terrorists to use women. A spokesman for Europol told the Sunday Express: “Women are involved in propaganda, support and financial activities. Men are more likely to be involved in actually perpetrating violence.

“Women are also used as cash couriers and they sometimes smuggle documents and take care of administrative matters.”

In a report detailing trends in terrorism and extremism in the EU, Europol says Britain is the number one target for terrorists.

It identifies Islamic extremism as the biggest threat, with the growing power of radical youth groups of particular concern.

In trying to combat the threat, EU police forces want to cut the lifeline of illegal funds, which also come from organised crime. The EU Terrorism report for 2010 says: “Illegal sources for the financing of terrorism cover a wide range of criminal activities including fraud, counterfeit products, drug smuggling, kidnapping, human trafficking and extortion.

“Alongside criminal activities, funds can also be derived from legitimate sources. Charitable organisations continue to be misused by individuals who misappropriate voluntary contributions destined for genuine purposes to fund terrorist activities.”

Financing terrorism was one of the most common reasons for arrest in the EU-wide battle against extremism last year, according to the report.

Rob Wainwright, the British director of Europol, which the Sunday Express last week revealed could become an FBI-style force with the power of arrest, said: “In some cases it is difficult to differentiate between criminality and acts of terrorism. Terrorism is not an ideology but a set of criminal tactics which deny fundamental principles of democratic societies.”

Although Britain’s Charity Commission works with the Serious Organised Crime Agency if there is a suspicion of illegal activity, it admits being unable to monitor how individual charities’ funds are spent.

The problem is more acute if the cash is sent abroad. Last year, a trustee of a northern-based charity was arrested in Bangladesh after the country’s police found an arms cache in an Islamic school for which he had been raising funds.

A Charity Commission spokeswoman said yesterday: “We carry out risk-based monitoring where appropriate as part of our case work. Where allegations of criminality arise, these will be for the police and law enforcement agencies to assess.”

Meanwhile, Europol is also concerned about the rise of far-right extremism against Islam after it emerged last week that football hooligans have formed a group called the European Defence League.

Police fear it could hijack Champions League matches to stage its protests.

By Ted Jeory

Source: Express

Guernsey must do more to stop money laundering

A report on Guernsey's financial sector has called into question the effectiveness of the island's anti-money laundering provisions.

In what was otherwise positive feedback from a 2010 International Monetary Fund inspection, the report cited a "disconnect" between the number of money laundering cases investigated and the number of prosecutions and resulting convictions.

The report said: "The law enforcement authorities are adequately resourced and trained and have a sufficient legal arsenal at their disposal to effectively conduct a money laundering investigation, but still the results are modest.”

The IMF warned that that this approach could lead to Guernsey becoming over reliant on foreign enforcement bodies to investigate cases within its own borders.

The IMF also believed Guernsey could do more to identify what it called “high risk customers”, who should be subject to greater due diligence checks. Reliance on introducers such as UK lawyers and accountants to vet such customers was not enough, the report said.

According to the IMF, financial institutions should also be subject to potentially greater fines from the local regulator, the GFSC. The current top level cap of £200,000 was not “dissuasive or proportionate” in terms of financial companies breaking local rules.

Source: The Telegraph

Global money laundering gang jailed

A gang who used an online money transfer business to launder almost £50 million of criminal profits has been jailed following an international investigation by HM Revenue & Customs (HMRC).

Tanveer Hussain Jaffery, 61, and Naveed Ahmad, 45, both of Stoke-on-Trent, were the ringleaders of a group of criminals who ran a business called R2PK.com as a front to launder millions of pounds.

As part of the operation, coded serial number-based text messages were sent by criminals based all over the UK to tell couriers where and when to collect the ‘dirty’ money and deposit it into different branches of UK banks in amounts of £25,000 or less.

This process, known to law enforcement officials as smurfing, allowed the gang to stay below the radar prior to the investigation. The offences took place between 1 May 2007 and 30 September 2008 and resulted in the laundering of £48.6 million.

It is understood that the online money transfer business was used to clean up huge amounts of criminal cash that was sent to Dubai and then to Pakistan.

Peter Millroy, Assistant Director of Criminal Investigation for HMRC, said: "Money launderers such as these are as much a part of the criminal underworld as the fraudsters whose cash they clean.

“HMRC's dedicated teams of investigators will pursue and bring to justice those who attempt to disguise and hide the illegal profits of other criminals.”

Source: GT

FSA Report: Banks’ Management of High Money-Laundering Risk Situations

Banks’ management of high money-laundering risk situations

How banks deal with high-risk customers (including politically exposed persons), correspondent banking relationships and wire transfers

This report describes how banks operating in the UK are managing money-laundering risk in higher risk situations. It focuses in particular on correspondent banking relationships, wire transfer payments and high-risk customers including politically exposed persons (PEPs).

Click here to download

UK watchdog probes two banks over money laundering

By Kirstin Ridley

Two banks in Britain are being investigated for lax money-laundering controls and others are likely to be handling the proceeds of corruption and other financial crime, the financial regulator said on Wednesday.

The Financial Services Authority (FSA) said it had referred two banks to its enforcement division for "serious weaknesses" in how they managed "high-risk" customers, including those whose public status made them vulnerable to corruption.

"We are considering whether further regulatory action is required in relation to other banks, and further cases may be referred for enforcement," the FSA added as it published a review of how banks manage money-laundering risks.

In a damning report, the FSA said some banks appeared unwilling to turn away or exit very profitable business relationships, even when there appeared to be an unacceptable risk of handling the proceeds of crime.

"Around a third of banks, including the private banking arms of some major banking groups, appeared willing to accept very high levels of money-laundering risk if the immediate reputational and regulatory risk was acceptable," it stated.

Many of the failings identified by the regulator are the same as those it spotted 10 years ago when deposed Nigerian strongman Sani Abacha, his family members and associates used 42 UK bank accounts to turn over $1.3 billion in four years.

More than half of banks visited by the FSA this time around failed to have meaningful due diligence measures in higher-risk situations, and failed to identify or record negative information about customers.

Around one-third also dismissed serious allegations about their customers without adequate review, and more than one-third failed to identify customers as "politically exposed persons", or PEPs, who are considered the most vulnerable to corruption because of their public prominence.

The FSA said three-quarters of banks in its sample, which included the majority of large banks, did not always manage high-risk customers and PEP relationships effectively, and needed to do more to protect themselves from money laundering.

"We will, where appropriate, use our enforcement powers to reinforce key messages in this report to encourage banks and other firms to strengthen AML (anti-money laundering) systems and controls, and deter them from making decisions which do not take adequate account of money-laundering risk," the FSA said.

Lawyers noted the FSA was not mincing its words.

"The warning is clear: do your checks properly and be prepared to turn down high-risk business, or the FSA will come knocking," noted Alison McHaffie of law firm CMS Cameron McKenna

Global Witness, a non-government organisation that runs campaigns against conflict and corruption, said the review provided long overdue recognition of the need for ongoing monitoring and punishment to force banks to comply with rules.

"For too long, Britain's banks have been happy to accept money stolen from developing countries by corrupt rulers and their families," said Anthea Lawson, head of the banks campaign at Global Witness.

"Neither dictatorship nor corruption can occur without banks willing to help."

(Editing by David Hulmes)

Source: Reuters

Chinese Gang Laundering Money at Laundries

Spanish police say they arrested 34 Chinese citizens as they smashed a family-run crime gang suspected of importing fake goods and laundering the profits, with the help of a chain of laundries.

The raids in Madrid, Barcelona, Valencia, Cadiz, Seville and Huelva overnight broke up the largest Chinese-linked criminal gang based in Spain, operating since the 1990s, said the Civil Guard overnight.

Police detained 34 Chinese nationals and seized assets worth 11 million euros ($15 million), it said.

The gang may have earned more than 40 million euros ($54.64 million) a year, importing four-to-six containers a month through Valencia packed with fake tobacco, clothes and other goods bound for sale in Spain, Britain, France, Italy and Portugal, they said.

The Chinese family-run gang laundered the proceeds by moving the money around with couriers, making bank transfers of less than 20,000 ($27,318) and by extending high-interest loans to compatriots based in Spain, police said.

The gang recruited Chinese people it had helped to enter Spain, often taking away their passports after they arrived or opening bank accounts in their names to launder illicit gains, they said.

According to police, the organisation had a branch in China, which controlled more than 30 companies including a chain of nearly 1,000 laundries and was used to conceal the source of the profits.

Source: Herald Sun

UK opens YUKOS-related money laundering case

The UK has filed a criminal case on money laundering by a British citizen who was directly involved with the YUKOS Company and its management.


This comes in a statement by the ITAR-TASS news agency with reference to the deputy chief of Interpol Russia at the Russian Interior Ministry Alexei Abramov.

According to British law enforcement agencies, the man became involved in laundering money made in a criminal way by the former YUKOS CEO Mikhail Khodorkovsky and former MENATEP Bank president Platon Lebedev.

The case of Khodorkovsky and Lebedev, sentenced to long prison terms in Russia for stealing billions, had been the subject of much discussion in the West.

Source: The Voice of Russia

Terror arrests in Ireland are third highest in Europe

by Michael Freeman

There were more arrests over terrorism offences in Ireland than almost anywhere else in the EU last year, according to a new report.

Some 62 terror suspects were taken into custody in the Republic – more than ten per cent of the European total. They included 57 people suspected of republican paramilitary activity and five in relation to Islamic militancy, Europol’s EU Terrorism and Trend Report reveals. The five Islamic terrorism arrests came after an alleged plot to murder Swedish cartoonist Lars Vilks, who drew a controversial image of the prophet Muhammad, was uncovered in Ireland in March 2010.

Only Spain and France made more arrests in 2010, though the numbers there were far greater. France arrested 219 people and Spain 118, while in fourth place the UK figure was 45. Ireland’s figures were almost double the previous year, when only 33 suspects were taken into custody.

The main other findings of the report were:

• There were a total of 249 terrorist attacks carried out across the EU, with 40 perpetrated by terrorist groups based in Northern Ireland and the Republic.
• The Real IRA and Continuity IRA “continue to pose a threat” in the UK, and have grown in size and capability in recent years.
• Ireland has a mostly successful record for prosecuting terrorism offences, with 83 per cent of cases resulting in conviction. However, the average jail penalty of five years is below the EU average.
• The report noted that Ireland had successfully implement an EU directive on money laundering, designed to restrict financing of terrorism. 
• A total of 179 people were arrested in Europe on suspicion of Islamic terrorism. This was a 50 per cent increase on the previous year, and almost half the arrests were made over planned attacks on EU countries.
• The report warned that continued political unrest in North Africa could shake up al-Qaeda affiliates and lead to them establishing a greater presence in Europe. It also stated that most of the suspects arrested over alleged Islamic terrorism were acting alone or autonomously – meaning there is no single network or organisation which can be targeted.

Europol is the EU’s criminal intelligence agency, which works with law enforcement organisations across all member states.

Source: The Journal

Drugs money 'saved the banks from collapse' during global crisis

Drugs money saved some banks from collapse at the height of the global crisis the United Nations' drugs and crime chief claimed today.

Antonio Maria Costa, head of the UN Office on Drugs and Crime, told the Observer that there were signs that some banks were rescued by billions of dollars that 'originated from the drugs trade and other illegal activities.'

Speaking from his office in Vienna, Costa explained that in the second half of 2008, lending was the banking system's main problem.

'The system was basically paralysed because of the unwillingness of banks to lend money to one another,' he told the newspaper.

He said he had seen evidence that the proceeds of organised crime were the 'only liquid investment capital' available to some banks on the verge of collapse last year.

Costa said that as a result, a majority of the $352bn (£216bn) of drugs profits was absorbed into the economics system, effectively laundering it.

The UNs' drugs and crime chief said that he was first made aware of evidence that illegal money was being absorbed into the financial system around 18 months ago, although he would not name countries or banks that may have received drugs money.

A British Bankers' Association spokesman told the newspaper: 'We have not been party to any regulatory dialogue that would support a theory of this kind.

'There was a clear lack of liquidity in the system and to a large degree this was filled by the intervention of central banks.'

Costa's claim comes as police launch a new anti-drugs campaign that aims to appeal environmentally-minded cocaine users with the message that snorting cocaine destroys the rainforest.

The campaign warns that for every gram of cocaine made, four square metres of rainforest are destroyed.

The campaign, headed by the police and Greenpeace, comes amid evidence that cocaine use is on the increase among young people in the UK.

It has been suggested that lower prices have contributed to the prevalence of the drug

Source: Daily Mail

Turkey property 'scam' man faces court hearing

An NI man alleged to be involved in a multi-million pound property scam in Turkey is to appear in court later this month charged with 171 fraud offences.

Kevin O'Kane, 51, who is originally from Bellaghy and now lives in Portglenone, is accused of obtaining money and property by deception.

About 80 people from NI are believed to have paid £75,000 each for three bedroom properties near Bodrum.

Mr O'Kane has consistently claimed he is himself the victim of a scam.

His solicitor has said he will be denying the charges.

He faces one court of money laundering, three of forgery and 167 of obtaining money or property by deception.

The charges date from between 2005 and 2007.

It is alleged that he falsely represented himself as the landowner, builder and developer of the Golden Beach Villas and claimed that he had the authority to sell them.

His solicitor, Hugh Leslie of John J Rice and Company, said his client had fully co-operated with investigating police.

"He has given full explanations as to his business activities in Turkey.

"He makes the point that he has lost financially as a result of his involvement in those activities and that the people who are responsible for the loss of money involving so many investors in Northern Ireland are still in Turkey.

"He says he acted in good faith."

He added that Mr O'Kane believed there was a risk to his personal safety in Turkey.

"He is anxious to clear his name and he will be pleading not guilty at his eventual trial."

It is believed that at the court hearing on 27 August, the Public Prosecution Service will apply to have Mr O'Kane returned for trial by a jury.

Source: BBC

UK Government publishes consultation on changes to Money Laundering Regulations 2007

The Government is publishing today its response to its review of the Money Laundering Regulations and proposals for improvement.

The proposals follow a Government review of the regulations, with engagement from more than 250 stakeholders, which found that the regulations and their implementation are broadly effective and proportionate, but that improvements could be made.

The Government’s proposals are intended to give businesses greater confidence to focus compliance on their highest risk areas and to discourage the tick-box approach taken by some businesses. They support the plan to reduce the burden of regulation on British businesses, as set out in the Plan for Growth. The Government welcomes views on the following proposals:

• The removal of over two dozen criminal penalties for businesses which fail to have the appropriate systems and controls in place to combat money laundering. This would allow businesses to implement a fully risk-based approach, where businesses make their own assessment of the risks they face and implement appropriate systems and controls. Civil penalties will remain and the Government will be consulting on whether regulators should have the power to impose additional penalties.
• A general exclusion for very small businesses (for example those with below £13,000 VAT-exclusive turnover per annum), or a reduction in the requirements placed on such businesses.

The Money Laundering Regulations 2007 require regulated businesses to have appropriate systems and controls in place to identify and verify the identity of their customers and carry out ongoing monitoring as appropriate.

This consultation will not affect the criminal penalties for money laundering under the Proceeds of Crime Act 2002 or the obligations of firms to report suspicious activity to SOCA.

A full list of consultation questions is available in the review. The consultation closes on 30 August 2011.

The Commercial Secretary, Lord Sassoon, said:

“It is essential that the UK’s money laundering regulations make the UK a hostile environment for money laundering and terrorist finance. But improvements can be made and we must consider the impact of these regulations on British business.

We believe that we can make the regulations more effective and proportionate by removing a range of criminal penalties on all businesses and by lifting the burdens on the smallest businesses. This will modestly reduce the burden on business, without damaging the fight against money laundering.”

Notes for Editors

1. The consultation document and the response to consultation can be found on this website: Government response to its review of the Money Laundering Regulations

2. The Money Laundering Regulations 2007, require regulated businesses to have appropriate systems and controls in place to identify and verify the identity of their customers and carry out ongoing monitoring as appropriate, based on their own assessment of the risk from money laundering and terrorist finance.

The Regulations currently contain criminal penalties that mean, in theory, responsible individuals within firms could face prosecution if they fail to have adequate systems in place.

While these criminal penalties have rarely, if ever, been used, there is evidence that their existence may deter firms from taking a risk-based approach, for fear of getting it wrong and facing prosecution.

This consultation will not affect the criminal penalties for money laundering under the Proceeds of Crime Act 2002 or the obligations of firms to report suspicious activity to SOCA.

3. The Government’s approach to money laundering regulation is designed to make the UK financial system a hostile environment for money laundering and terrorist finance, while minimising the regulatory burden imposed on UK businesses.

The objective of the review was to assess the extent to which the implementation of the Money Laundering Regulations 2007 reflects the principles of effectiveness, proportionality and engagement. The Government’s proposals aim to strengthen the risk-based approach, which is designed to give businesses the confidence to adopt policies and procedures that reflect their own assessment of risk.

4. An impact assessment of the changes proposed is also being published. Businesses, supervisors, law enforcement and others are asked to review and provide information on the costs and benefits of these changes, to inform robust analysis and to help determine whether the proposed changes will make the regulations more effective and proportionate.

5. The general de minimis limit for those businesses with less than €15,000 VAT-exclusive turnover per annum (The press notice refers to the approximate equivalent amount in Sterling), is suggested in the consultation in order to prompt discussion of this and other ideas about whether and how to define those operating at such a low level that they could be judged not to be in business for the purposes of the Money Laundering Regulations.

It is based on existing limits in the Regulations for specific activity and comes from the EU 3rd Money Laundering Directive.

6. The consultation closes on 30 August 2011.Responses should be sent to mlr.review@hmtreasury.gsi.gov.uk or to Review of the Money Laundering Regulations, 3/15, HM Treasury, 1 Horse Guards Road, London, SW1A 2HQ.

Non-media enquiries should be addressed to the Treasury Correspondence and Enquiry Unit on 020 7270 4558 or by e-mail to public.enquiries@hm-treasury.gov.uk

This Press Release and other Treasury publications are available on the HM Treasury website hm-treasury.gov.uk For the latest information from HM Treasury you can subscribe to our RSS feeds or email service.

Media enquiries should be addressed to the Treasury Press Office on 020 7270 5238.

Source: HM TREASURY

Why the Iran Sanctions Matter

It's easy to criticize the U.N. Security Council's new resolution targeting Iran. But it might prove a surprisingly effective tool in tightening the noose on the regime in Tehran.

Wednesday's U.N. Security Council resolution sanctioning Iran marks a critical turning point in the U.S.-led efforts to target Iran's illicit activities. The resolution focuses on Iran's nuclear-weapons and ballistic-missile programs; the Islamic Revolutionary Guard Corps (IRGC), which is responsible for these programs as well as the regime's support for terrorism; and the Islamic Republic of Iran Shipping Lines (IRISL), which has been directly involved in proliferation shipments. The sanctions included in this resolution are, as U.S. Ambassador to the U.N. Susan Rice put it, "as tough as they are smart and precise." If anything, this new resolution is both too precise and purposefully vague. And therein lies its strength.

The list of 40 entities and one individual listed in the resolution's three annexes is extremely targeted. Employing such "smart sanctions" -- pinpointing the specific entities and persons involved in Iran's illicit conduct and holding them accountable while shielding the general Iranian public from old-fashioned, shotgun, regime-wide sanctions -- has been very effective. This tactic denies Iran's revolutionary regime the chance to deflect blame for the country's economic woes, while disrupting its ability to finance and transport material necessary for its nuclear-weapons and ballistic-missile programs. But the number of entities excluded from the resolution is even more telling than the list of those that made the final cut. Most entities designated this week, for example, had already been designated by the U.S. Treasury Department and/or the European Union. They have therefore already been subject to most of the impacts a U.N. resolution would hope to achieve, such as economic isolation by major financial institutions.

Consider Iran's shipping line, IRISL. The U.S. government first designated IRISL in September 2008 for facilitating the transport of cargo for U.N.-designated proliferators and falsifying documents and using deceptive schemes to shroud its involvement in illicit commerce. And, as the State Department noted at the time of the designation, IRISL had already been "called out by the U.N. Security Council as a company that has engaged in proliferation shipments."

But following up on U.S. and EU designations of entities like IRISL or the IRGC-controlled Khatam al-Anbiya construction company (also called Ghorb) by designating them at the United Nations as well is vitally important to the global sanctions regime. With critical countries such as China, Malaysia, Singapore, and others willing to do only the minimum to comply with Security Council resolutions, getting critical entities like IRISL and IRGC companies designated at the U.N. means wider implementation of sanctions.

Unfortunately, multilateral action is not only difficult to achieve, but can often lead to lowest-common-denominator decision-making. So while international consensus was being built for robust action at the U.N., Britain, the European Union, the United States, and others wisely pursued both unilateral and bilateral financial measures focused on IRISL, IRGC-affiliated entities, and other individuals and institutions facilitating Iran's illicit conduct. With the increased militarization of the Iranian regime and the blatant abuses of the IRGC-affiliated Basij militia, targeting entities affiliated with the Revolutionary Guard unilaterally while international consensus was being built to do so at the U.N. level was an effective strategy. That does mean, however, that this week's list of sanctioned entities is more of a reinforcement of prior actions than completely new ones.

And that's OK. Because though the lists of sanctioned entities are very precise, U.S. and other negotiators made sure that general "hooks" upon which additional actions could be "hung" were peppered throughout the body of the resolution. These will provide the United States and other states and multilateral bodies with the international imprimatur for further action. Put another way, the new resolution is most important not for the specific entities listed in its annexes, but for providing a foundation upon which further efforts to disrupt Iran's illicit activities can be built.

Note, for example, the multiple times the resolution "calls upon all States" to do things above and beyond checking the list of specifically sanctioned entities and persons, such as the call to "exercise vigilance" over transactions involving the IRGC that could contribute to "proliferation-sensitive nuclear activities or the development of nuclear weapon delivery systems." In plain English, this language effectively empowers states and other international bodies to take still more stringent action against the IRGC.

Broadening its sanctions against Iran's shipping company, the resolution "calls upon all States" to inspect "all cargo to and from Iran, in their territory, including seaports and airports, if the State concerned has information that provides reasonable grounds to believe the cargo contains items the supply, sale, transfer, or export of which is prohibited" by this or prior Security Council resolutions. The contrast between the specificity of the list of sanctioned entities and the fairly low standard of "reasonable grounds to believe" is a telling example of purposeful vagueness that could prove powerful in the hands of states inclined to get tough on Tehran.

Similarly, the resolution "requests" that all member states report to the U.N. "any information available" on "transfers or activity by Iran Air's cargo division or vessels owned or operated by [IRISL] to other companies" that might be related to sanctions evasion. The resolution "calls upon" states to "take appropriate measures" -- which, again, by virtue of being appropriately vague is appropriately empowering -- both to prohibit Iranian banks from opening branches, subsidiaries, representative offices, joint ventures, or correspondent relationships with banks in their jurisdiction and to prohibit financial institutions in their territories or under their jurisdiction from opening offices or accounts in Iran.

Indeed, the resolution specifically "welcom[es]" the guidance issued by the Financial Action Task Force (FATF) -- the multilateral technocratic body that sets international standards to combat money laundering and terrorism finance -- to assist states in implementing their financial obligations under two previous resolutions, 1737 (2006) and 1803 (2008). In particular, it highlights the FATF's warning to "exercise vigilance over transactions involving Iranian banks, including the Central Bank of Iran, so as to prevent such transactions contributing to proliferation-sensitive nuclear activities, or to the development of nuclear weapon delivery systems." So though the Central Bank of Iran is not specifically sanctioned, it is, broadly speaking, open game.

In February, the FATF named Iran to its new blacklist, recognizing that in support of its weapons programs, its crackdown on democracy, and its terrorist proxies, Tehran has continued to engage in deceptive financial conduct aimed at raising, moving, hiding, and accessing funds internationally. In line with the G-20's call to protect the international financial system from abuse, the blacklist identified countries with deficient "anti-money laundering and combating the financing of terrorism" (AML/CFT) measures. Iran received special designation on the blacklist; it was the only country whose illicit financial conduct merited a call for international countermeasures.

Contrary to conventional wisdom, Iran is highly sensitive to such actions. After one of the FATF's warnings, for example, Iran sent a delegation to lobby the agency despite not being a member. The FATF, however, dismissed Iran's claims that legislative changes had fixed its financial shortcomings, calling the new measures "skimpy" and noting their "big deficiencies." Indeed, the FATF blacklisted Iran even as it recognized the regime's "recent steps" to engage with the agency. The message seemed to be that the FATF would not mistake public engagement for substantive progress. Similarly, though Iran requested technical help from the U.N. Office on Drugs and Crime to set up a computer-based training center for its nascent financial intelligence unit, the FATF still highlighted the regime's "failure to meaningfully address the ongoing and substantial deficiencies" in its AML/CFT efforts.

The result is a sharp increase in the cost of doing business for the Iranian regime. European multinational companies are terminating business relationships with Iran, following the lead of major international banks in tightening the noose on Iran's financial system. Chinese and Malaysian companies may lap up available contracts, but many key technologies Iran needs for its oil and gas industries and for its nuclear and missile programs are only available in the West.

And now, for a change, existing sanctions might finally be seriously enforced. Just as important as the specific list of sanctioned entities and the broad invitations to take further action against Iran is the resolution's creation of a monitoring committee, including a panel of experts, to better enforce existing sanctions. Indeed, expert panels proved effective in strengthening sanctions on Sudan and Ethiopia. The "naming and shaming" power of the panel's findings could further influence firms and individuals considering whether to run the risk of doing business with Iran. Furthermore, an expert panel could also help the Sanctions Committee and U.N. member states by recommending ways to make the sanctions more effective. Such a monitoring committee would be particularly effective if it included among its experts individuals knowledgeable about export control and dual-use goods.

But implementation and follow-up is everything in the sanctions business. For the new resolution to make a difference, three things must happen.

First, states like Britain and the United States, regional bodies like the EU, and multilateral bodies like the FATF and G-20 must all act on the resolution's various "calls" to expand the resolution beyond the list of specifically sanctioned entities.

Secondly, the monitoring committee must demand substantive reports from member states upon which it can submit public reports with substantive recommendations for enhancing enforcement of existing sanctions.

Finally, unless the report finds that Iran has become fully compliant with its obligations, the Security Council must quickly follow up on the report with another round of sanctions. The resolution requests that the director general of the International Atomic Energy Agency submit a report to the Security Council within 90 days on whether Iran has established "full and sustained suspension" of its illicit nuclear activities. If the international community does not respond in a timely fashion, the entire premise of targeted and graduated sanctions -- the credibility of which are premised on consequences for ongoing illicit conduct -- will be irreparably damaged. One reason Iran has not been deterred by the sanctions put in place to date is that the deadlines of prior resolutions came and went with no timely follow-up. This delay undermined the whole sanctions enterprise, leaving Iran with the general sense it could survive sanctions, get by, and outlast the resolve of the international community. June 9's resolution offers an opportunity to reverse that trend and re-empower sanctions as an effective tool of foreign policy, one that doesn't require the use of force.

On their own, these sanctions will not solve the crisis over Iran's nuclear program. But wisely implemented and enforced, they could prove critical in preventing Iran from getting the bomb. And that's a very good thing.

Source: Foreign Policy

The New UN Sanctions Resolution Against Iran

The UN Security Council approved a resolution on June 9th imposing a fourth round of sanctions on Iran in response to its continued nuclear enrichment program in violation of prior Security Council resolutions. The vote was 12 in favor, 2 against (Brazil and Turkey) and 1 abstention (Lebanon).

The new resolution imposes new financial restrictions on Iran, expands an existing arms embargo, and authorizes greater stop and search of Iranian cargo ships. Targeted sanctions on specific individuals and entities were expanded. The resolution also includes measures directed against Iran’s Revolutionary Guard.

While the United States, Great Britain and France were its strongest sponsors, China and Russia also expressed their verbal support along with their votes, although the Russian ambassador added a major caveat in his response to a reporter’s question about Russia’s prospective sale of a sophisticated anti-aircraft system to Iran.

Lebanon’s decision to abstain was a pleasant surprise, considering the influence of Iran-backed Hezbollah in the Lebanese government. However, Brazil and Turkey as expected opposed the new resolution on the grounds that it could undermine the proposed nuclear fuel swap agreed by the two countries with Iran last month. They seemed to forget that the European Union has been trying to negotiate with Iran since 2005 and the Obama administration waited 18 months while trying to engage Iran before seeking passage of this resolution. Only when new sanctions became a real possibility did Iran come around to the fuel swap concept that it had first agreed upon and then promptly reneged on last fall.

Rice’s Positive Spin

U.S. Ambassador Susan Rice told reporters after the vote that the “resolution is strong, it’s tough and it’s comprehensive. And it is something that Iran fought very hard to prevent passage today. The effort, the time, the money, and the poise that they employed, to try to prevent this resolution’s passage only underscores their understanding, that this is a major blow.”

Despite the ineffectiveness of the three prior resolutions, Ambassador Rice expressed confidence that the cumulative effect on Iran of all the resolutions is “harmful and hurtful.”

Iran’s Rebuke

Iran remains unbowed. Its representative told the Security Council after the vote that it had no intention of changing its present course. He accused the United States and Great Britain in particular of continuing a long pattern of interference in Iran’s affairs and displaying a double standard vis a vis Israel. Ambassador Rice told reporters that these comments were “reprehensible, offensive, and inaccurate.”

Stronger Resolution on Paper

On paper at least, the new resolution does appear to represent a significant move forward from the prior three. More specifically, the resolution prohibits Iran from investing in sensitive nuclear activities abroad, like uranium enrichment and reprocessing activities, as well as activities involving ballistic missiles capable of delivering nuclear weapons. The ban also applies to investment in uranium mining.

States are prohibited from selling or in any way transferring to Iran various categories of heavy weapons (battle tanks, armored combat vehicles, large caliber artillery systems, combat aircraft, attack helicopters, warships, and certain missiles or missile systems). States are similarly prohibited from providing technical or financial assistance for such systems, or spare parts.

The resolution also sets up a new cargo inspection framework. States are expected to inspect any vessel on their territory suspected of carrying prohibited cargo, including banned conventional arms or sensitive nuclear or missile items. States are also expected to cooperate in such inspections on the high seas.

States are called upon to prevent any financial service and freeze any asset that could contribute to Iran’s proliferation.

Resolution targets the Islamic Revolutionary Guard Corps

Most significantly, the resolution targets the Islamic Revolutionary Guard Corps (IRGC) for its role in proliferation and requires states to mandate that businesses exercise vigilance over all transactions involving the IRGC. Fifteen IRGC-related companies linked to proliferation will have their assets frozen. The IRGC is the major power center in Iran’s economic and military spheres as well as one of the government’s primary instruments for suppressing political dissent. Impairing the IRGC’s freedom of operations will be a significant accomplishment, if successful.

The Proof Will be in Enforcement

UN Security Council sanctions resolutions against Iraq, North Korea and Iran have had a bad track record in actual practice. The resolutions have been easy for the sanctioned countries to evade, through the use of multiple front entities, money laundering and trading partners unwilling to give up short term advantage for longer term peace and security.

Also, enforcement of the cargo inspection at sea will be a challenge if Iran, as expected, refuses to cooperate. When the French UN ambassador, for example, was asked what measures France would be willing to take in such a scenario, he refused to answer what he called a “hypothetical question.”

Most ominously, the Russian UN ambassador told reporters that Russia did not consider the sale of its sophisticated S-300 anti-aircraft system to Iran to be within the resolution’s scope. The S-300 missile defense system would no doubt be used by Iran to shield its nuclear sites against a potential air strike, should military force become necessary to stop Iran from producing nuclear bombs. The Russian ambassador is technically correct because the resolution’s ban on the transfer to Iran of certain missile systems is written in such a way that it creates a big loophole for Russia to walk through in delivering to Iran its ground-to-air missiles, including its S-300 anti-aircraft missiles and anti-missile interceptors.

The Obama administration will spin the latest sanctions resolution against Iran as a major diplomatic triumph and a significant obstacle in the way of Iran’s progress towards achieving a nuclear arms capability. I hope they are right. However, until the S-300 loophole is closed; until the U.S. and its allies figure out a way to effectively stop evasions of the sanctions; and until enough countries show that they are willing to enforce the cargo inspections, the Obama administration might want to wait before it celebrates.

Source: Canada Free Press

India arrests hawala money laundering suspect Naresh Jain

British police suspect Naresh Kumar Jain, also wanted in Dubai, US and Europe, laundered millions for organised crime gangs

A multimillionaire suspected of being one of the world's leading underworld bankers is under arrest in India after a global manhunt involving British police.

The Serious and Organised Crime Agency (Soca) believes that Naresh Kumar Jain is responsible for laundering millions of pounds of profits from organised crime gangs in the UK over several years. His organisation has been under investigation in Britain since 2006, after inquiries into the cash flows of drug gangs and other criminal networks repeatedly identified his alleged network at the end of money transactions.

Jain, 50, was seized in New Delhi on Sunday, a year after he jumped bail on money laundering charges in Dubai, from where he allegedly ran his operations. Soca is now liaising with both Indian and Dubai police.

Labelled a criminal mastermind by alleged victims, Jain is suspected of laundering money for Albanian and Italian heroin dealers, and narcotics cartels in America, the United Arab Emirates, Pakistan and Britain, according to inquiries in Italy and the US. German and US police say Jain's operation has tentacles in all of the major drug and terrorism hotspots across the globe. He was also wanted by police in Spain and the Netherlands.

According to Soca and other international agencies, Jain is suspected of controlling a laundering system capable of moving $2.2bn (£1.35bn) a year. From Dubai he allegedly provided customers with funds in a country of their choice. It is claimed his network was so extensive and lucrative that he often did not have to physically move money, a fact that made his detection all the more difficult, according to an investigative source.

Ian Cruxton, deputy director of Soca, said: "This operation is part of Soca's long-term strategy targeting specialist money launderers based overseas. These networks pay no attention to cultural or geographical barriers and launder money for organised crime groups from any ethnic background or criminal businesses, particularly UK, Pakistani and Turkish nationals based in the UK and mainland Europe involved in drugs trafficking."

Jain, also known as Naresh Patel, was arrested in April 2007 by Dubai police after a year-long international investigation. Much of the money he allegedly moved was by hawala, an informal honour-based money transfer system primarily based in the Middle East, east Africa and southern Asia.

According to the US department of justice's drug enforcement agency, police in Dubai made a number of searches of his property after his arrest and recovered banking and wire transfer records demonstrating that he was directing money transfers through banks and exchange houses in Dubai, into bank accounts at a finance company in Manhattan. The accounts of the company showed he was involved in "layering," a money laundering technique designed to disguise the origin of sham commodities trades.

The US government obtained a seizure warrant for the funds in the accounts as property involved in money laundering and this year a district judge ordered the forfeiture to the US of more than $4.3m. A further £1.5m in cash from Naresh's business dealings has been held around the world.

A two-year investigation in Italy revealed an alleged trail that suggested Naresh was laundering $4m a day, with heroin and terrorism cash coming in through a beauty parlour in Italy. The Italians and Americans say he was at the centre of a sprawling terror network that was taking in money for the Taliban as well as other criminal cartels.

While inquiries were being made into his activities, Naresh was bailed in Dubai – where he faces trial for breaking foreign exchange laws – and fled his business headquarters. He resurfaced in his native India, where authorities raided several properties owned by him and issued an all ports alert.

Two months ago he denied any involvement in money laundering and claimed he was a businessman who was being trapped. Speaking in New Delhi, Naresh said: "I have a factory in South Africa. I supply ready-made garments in Afghanistan and Nepal. I talked to people in Pakistan in relation with purchasing rice."

British authorities have secured an exclusion order preventing Naresh from entering the UK.

Source: The Guardian

UK regulator fines Royal Bank of Scotland over money laundering breaches

Britain's financial services regulator has fined the Royal Bank of Scotland 5.6 million pounds (US$8.9 million) for failing to follow rules designed to prevent banks lending to people who are on government ban lists.

The Financial Services Authority said Tuesday that RBS failed to properly screen its customers and their transactions during 2008.

The regulator says that resulted in an "unacceptable risk that RBS could have facilitated transactions involving sanctions targets, including terrorist financing."

It adds that the failings were particularly serious because of the risk they posed to the integrity of the U.K. financial services sector.

It is the first fine imposed by the FSA under the 2007 Money Laundering Regulations.

Source: The Canadian Press

Indian Govt signs MoUs with three countries to fight terror financing

The MoUs will enable the country’s Financial Intelligence Unit to share information with foreign FIUs and to obtain information from them on money-laundering activities

The government has signed memoranda of understanding with Russia, Malaysia and Brazil this year for combating money laundering and terror financing.

Negotiations with more than 30 other countries is under process for enhancing international cooperation in fighting illegal routing of money for terror and Hawala like operations, a senior finance ministry official has said.

India has also signed MoUs in this regard with Mauritius and the Philippines in 2008.

The MoUs will enable the country’s Financial Intelligence Unit (FIU) — a government agency to investigate and disseminate information between financial and law enforcement agencies for identification of suspicious money laundering — to share information with foreign FIUs wherever considered necessary and reciprocally to obtain information from them on money-laundering activities, the official said.

The government, in the same context this year, received 69 requests of information from foreign financial intelligence units while it sent 17 such requests to other countries.

The Union government has also established Joint Working Groups (JWG) — comprising senior officials from enforcement agencies — with a number of countries like the US, Germany, the UK and Russia on various operational issues relating to terrorism and other crimes including money laundering and drug trafficking.

A joint meet was held with Russia this year, the finance ministry official added.

The FIU-IND in relation to foreign FIUs screens and processes requests from foreign FIUs, disseminates information to foreign FIUs, establishes and maintains relationship with foreign FIUs, and facilitates, administers and negotiates Memoranda of Understanding (MoUs) with foreign FIUs.

According to established government guidelines, the MoU envisages that the information or documents obtained from the respective authorities will not be disseminated to any third party, nor be used for administrative, prosecutorial or judicial purposes without prior consent of the disclosing Authority.

The information acquired will be treated as confidential and will be subject to official secrecy. The MoU also provides that authorities will jointly arrange, consistent with the legislation of their respective countries, for acceptable procedures of communication and will consult each other with the purpose of implementing the Memorandum, the guidelines state.

The guidelines further add that the authorities would not be under any obligation to give assistance if judicial proceedings have already been initiated concerning the same facts to which the request is related. Further, the MoU may be amended or revoked at any time.

Source: Live Mint

Ghana fingered in Australia massive identity fraud

Ghana has been named as one of the countries whose citizens are stealing the identities of Australians.

News out in the Australian media say the theft which is in a large scale involves spies, drug dealers, illegal immigrants and people engaged in money laundering.

The report say passport details of five people emailed to a travel agent for travel for people from Ghana has been found.

One report by the Herald Sun citing documents from the country’s Department of Foreign Affairs and trade says the illegal practice of forging passports of living Australians is widespread.

According to the report, a fake or doctored Australian passport has been found, on average, once a week in the past three years.

Fake passports were detected at ports in countries including Britain, Dubai, Ghana, Thailand, Hong Kong, Indonesia, Malaysia, Egypt, Turkey, and Peru, the report indicated.

According to the report, some of the passports were in the hands of spies, smugglers and thieves.

Australian passports were used in 525 frauds in the last financial year, and many people were caught lying to get a passport, it said.

Source: Citifmonline

Swiss money laundering docs mysteriously shifted

As the news comes that the Supreme Court will start hearing petitions against NRO cases from 7th Dec, Geo News has reported that in a secret operation headed by Pakistan envoy to UK, Mr. Wajid Shamsul Hasan, documents and evidences related to the Swiss Money Laundering Case have been taken over in Geneva and shifted to unknown location(s).


It is not clear where these documents are presently kept at, whether they have been brought up to the Pakistan Embassy in UK by Mr Hasan, and who has its official custody now.

The Swiss money-laundering charges against President Asif Zardari were taken seriously by the international banking circles and the governments in 1999 when US Congress launched an intensive investigation into the allegations of money-laundering by Citibank through private banking.

A permanent sub-committee on investigation by the US Congress found two cases intriguing enough to kick off a thorough probe. Nigeria s military dictator Sani Abacha and President Zardari’s bank accounts qualified for this investigation and US Congress found that both had been involved in money-laundering through Citibanks negligence, said a report.

Pakistan’s High Commissioner to Britain Mr. Wajid Shamsul Hasan, is a close confidant of President Asif Zardai and the Bhutto family. He reportedly personally received at least 12 cartons of original documents and evidences against Mr Zarari against whom the money laundering case was filed by the Pakistan government in Geneva, Geo News reported Tuesday.

Geo News team is said to have secretly filmed the whole episode from an undisclosed location after receiving tip-off from reliable sources.

According to its correspondent, the Prosecutor General of Pakistan deposited these cartons to Geneva legal authorities during the former President Gen (R) Pervez Musharraf’s government.

The secret operation on Monday was carried out at the bidding of a "top personality" of Pakistan, says Geo, as these evidences could be used if the said case was reopened after the National Reconciliation Ordinance (NRO) term came to an end, on November 28, 2009.

The Supreme Court of Pakistan has announced that it will look into the National Reconciliation Ordinance (NRO) that has benefited President Zardari among others. The hearings are said to start on December 7th.
The judge in Geneva, Daniel Devaud, who originally investigated the charges against President Zardari late wife Mohtarma Benazir Bhutto is on record having said that the withdrawal of the case does not prove Zardari’s innocence. The withdrawal of the case had come as a shock to me and it should not be interpreted as a sign of Zardari’s innocence, the Daily Times quoted Devaud as saying.

Source: PK on WEB

Accountant jailed for laundering drugs money

A Manchester accountant has been jailed for laundering more than £1.2m for an international drug dealer, partly through property deals and living a luxury lifestyle in Wilmslow in Cheshire.

Malcolm Carle, (pictured left) 57, helped his boss Walter Callinan (pictured right) process money from importing and selling cannabis and bought a £1.2m hotel with the cash, according to the Manchester Evening News.

Police reportedly found evidence of a cash receipt of £973,000 in cash and details on the purchase of the Hadley Green Bowling Inn near Worcester.

Carle used the money to follow Chelsea FC around the world, drive a Jaguar and even took out a secret loan against the hotel to finance his own property purchase.

He was jailed for six years at Winchester Crown Court after admitting three offences of money laundering on 15 November.

His accomplice, Walter Callinan, 59, who lived in a mansion in Malaga, was sentenced to 11 years for two drug-dealing offences, five counts of money laundering and two passport offences.

When police raided Carle's home they found more than £10,000 in cash and uncovered a complex network of trusts and overseas companies, so well concealed the Serious Organised Crime Agency had failed to find them, according to evidence.

The clerk of Winchester Court confirmed the proceeds of crime investigation is still ongoing.

Five co-defendants were also jailed for their part in the drug scam.

Source: Mortgage Solutions by Vicky Hartley

UK jury: Nigerian leader's sister laundered money

A U.K. jury has convicted the sister of a former Nigerian governor on charges of money laundering and mortgage fraud.

Christine Ibori-Ibie, sister of politician James Ibori, was found guilty Tuesday of 12 charges stemming from allegations she helped her brother embezzle an estimated $101.5 million from Nigeria's Delta state into U.K. bank accounts.

The jury acquitted one of Ibori's former assistants, while a third accused aide's trial continues Wednesday.

Nigeria's anti-graft agency says Ibori stole as much as $292 million while governor in the oil-rich state in the Niger Delta.

A Nigerian judge in December dismissed a 170-count fraud case against Ibori. Ibori was arrested May 12 in Dubai on a U.K. warrant and remains there, but is free on bail.

Source: The Associated Press