The contentious issue of sanctioning Russian oil came to the fore this week, but despite objections from some member states the EU is pressing ahead with plans to ban all imports within six months. Meanwhile, existing sanctions are being felt across the widest possible spectrum, from the hallowed turf of Chelsea FC right up to the dizzying heights of the International Space Station.
This week we shine the spotlight on crypto, a topic that is rarely out of the news these days. Whether it be the latest hack, its role in sanctions evasion, or the ongoing debate between nations and financial authorities who want greater control and the libertarians who want exactly the opposite.
The NatWest money laundering scandal hit the headlines again, with a belated apology to shareholders set against the backdrop of the trial of eight individuals charged with facilitating the operation.
To complete this week’s AML Roundup, we have a special podcast featuring Robert Mazur, the former US Customs special agent and author of The Betrayal, who is internationally recognised as one of the world’s leading authorities on money laundering techniques.
In a speech to the European parliament, Ursula von der Leyen wants Russian supply of crude oil to be prohibited within six months and refined products banned by the end of the year, although she acknowledged Slovakia and Hungary’s demands for flexibility.
In a bid to prevent Hungary and Slovakia from vetoing the EU’s proposed ban on oil imports, Brussels is said to be proposing a longer period to implement the embargo. The exception is centred around existing contracts for Russian crude oil that have been signed by both Hungary and Slovakia.
Slovakia is almost completely dependent on the Russian oil it receives through the Druzhba pipeline, while Hungary is heavily reliant with 85% of its gas and over 60% of its oil coming from Russia. As a result, the neighbouring countries threatened to veto the move unless given more time to make other arrangements.
In the wake of the Russia sanctions, it has been reported that in late April China’s economic regulators held emergency meetings with bank officials. This has led to fears that China is looking at ways to defend itself from similar sanctions and protect $3.2 trillion in foreign currency reserves should it carry out its threat to invade Taiwan.
Recent sanctions have demanded that banks must stop all transactions with Sovcomflot after May 15, resulting in the shipping giant having to repay all its loans to the relevant banks and financiers before the cut-off date. According to Lloyd’s list, this has led to Sovcomflot putting up to a third of its vessels on the market.
In the face of mounting sanctions, Russia is set to stop work on the International Space Station (ISS). According to the Tass and RIA Novosti media agencies, the Russian Space Agency Roscosmos is set to inform its partners about its intention to end work on the ISS with a year’s notice as stipulated by its international obligations.
A leading U.S. think tank has said that even if sanctions on persons or businesses are lifted as events unfold, the financial, banking, technology and market prohibitions placed on Russia may not be completely unravelled for decades.
Australia has imposed targeted monetary sanctions and travel bans on 76 members of Russia’s State Duma and 34 senior members of Ukraine’s breakaway regions of Donetsk People’s Republic (DPR) and Luhansk People’s Republic (LPR).
Chelsea FC has been warned its future is on the line amid fears Roman Abramovich is reneging on his promise to write off a £1.6 billion debt. With the licence deadline of May 31 looming, UK ministers are refusing negotiations that would enable the Russian billionaire to be repaid, however the club is raising the prospect of a restructure on sale terms which may solve the issue.
A new property data leak has revealed how just how many foreigners have poured their money into Dubai in recent times. The list includes more than 100 members of Russia’s political elite, public officials, or businesspeople close to the Kremlin, as well as dozens of Europeans implicated in money laundering and corruption.
For years Israel has been one of the most common destinations for Russian billionaires, as the ‘Law of Return’ grants automatic entry and passports to anyone who can prove they have at least one Jewish grandparent. Now with the recent crackdown on European ‘golden passport’ programmes, its popularity as a destination for oligarchs looking for a safe haven is set to increase.
At least eight yachts owned by Russian oligarchs and worth a collective $1.1 billion, are now moored in Turkish ports. Despite being a NATO member, Turkey is a popular destination as it has rejected Western sanctions and maintained close ties with Russia.
The ICIJ and its media partners have once again delved into the Pandora Papers, FinCEN Files and Paradise and Panama Papers to reveal numerous secret networks of Russian oligarchs and businesspeople and released them across the world.
The Council of Europe’s MONEYVAL committee has urged European countries to crack down on crypto-enabled money laundering, warning of the challenges presented by decentralised finance, privacy coins, and market manipulation of crypto assets.
The US Securities and Exchange Commission has allocated 20 additional positions to the unit responsible for protecting investors in crypto markets and from cyber-related threats. The renamed Crypto Assets and Cyber Unit (the Cyber Unit) in the enforcement division will grow to 50 dedicated positions.
The idea that crypto helps money laundering is often proposed by those with a stake in the traditional financial system. Yet the vast majority of crypto transactions are recorded on a public ledger, which acts as a permanent trail.
In response to the sanctions imposed on Russia, Binance, one of the world’s largest cryptocurrency exchange platforms has blocked the accounts of multiple individuals related to senior Kremlin officials.
The EU’s own banking authority has claimed that recent proposals to monitor crypto transactions with unhosted wallets could run counter to the risk-based approach set out by international money laundering regulators.
According to a report by the Kenyan publication the Nation, three Nigerian nationals may have transferred more than $215 million from Nigeria to Kenya between October and November 2020. Allegedly aided by a powerful Kenyan politician, the trio then used the proceeds to buy bitcoins worth over $43 million.
The decentralised finance (DeFi) platform Deus Finance has confirmed that hackers have used an illegal trading method and stolen $13 million. The Deus platform was hit with a ‘flash loan attack’ whereby hackers borrow funds that don’t require collateral, buy crypto to artificially raise the price before offloading it, then paying back the loan and keeping any profits.
Yuga Labs, the collective responsible for the Bored Ape Yacht Club non-fungible tokens, has been targeted by hackers, resulting in the theft of $ millions of one of the best-known collections of NFTs.
The chair of NatWest bank has apologised to shareholders for failures that led to the money laundering that occurred at the group between 2012 – 2016. NatWest pled guilty and was subsequently fined £264 million for breaching anti-money laundering regulations.
Jurors heard how the gold dealer, Fowler Oldfield, deposited some £266 million through NatWest between 2014 – 2016. Prosecutors say the laundered money was used to purchase gold for export to Dubai, while £46 million was transferred into an account of socialite James Stunt’s company, Stunt & Co Ltd. The eight defendants deny the charges, claiming the authorities cannot prove the cash came from criminal sources.
This important report details the full catalogue of AML failures. It covers NatWest’s failure to conduct ongoing monitoring of a business relationship, an erroneous risk rating, weaknesses in the bank’s automatic transaction monitoring system, and failures to respond to alerts and reports. You can read the full report here.
The country’s controversial banking secrecy law is being debated by the Swiss parliament this week. This follows pressure from UN officials to scrap rules under which whistleblowers and journalists can be prosecuted for reporting potential wrongdoings. Known as article 47, it currently makes it a criminal offence to disclose information about a bank’s clients, even if it’s in the public interest.
The Swiss Federal Police Money Laundering Reporting Office (MROS) has recorded an increase in the number of suspicious activity reports (SARs) received for the last eight years in a row. The 5,964 new SARs, involving over 10,000 business relationships, represent an increase of 12% compared to the previous year.
10 locations in Romania have been searched at the request of the European Public Prosecutor’s Office (EPPO). The searches were part of an investigation into alleged fraud of European funds totalling more than €3 million, linked to companies in Cyprus, Portugal, and Spain.
A recent study conducted by the Anti-Human Trafficking Intelligence Initiative (ATII) and the University of New Haven’s Center for Forensic Investigations of Trafficking in Persons (CFITP) indicates that sex crimes involving children and adults are being hosted on the social media site OnlyFans.com.
As part of a multi-billion-euro tax fraud investigation, German authorities searched the Frankfurt branch of the US bank in connection with ‘cum-ex transactions’, which involves quickly buying and selling shares around the dividend payment date, so tax authorities are unable to identify the true owner.
An OCCRP investigation has uncovered evidence that Indian tycoon Yogesh Mehta’s Dubai-based petrochemical conglomerate circumvented Iran sanctions by using false paperwork to hide its operations.
In the latest episode, Stephen Platt was joined by Robert Mazur, the former US Customs special agent and author of The Betrayal, who is internationally recognised as one of the world’s leading authorities on money laundering techniques.
Published by: riskscreen.com
