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

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

Paraguay called financial hub for terror and crime

Ralph Nieves, a wiry ex-NYPD narcotics detective, lived through the aftermath of Sept. 11, 2001, in Manhattan. That is why what he discovered about a particular part of Paraguay during a recent assignment there has so disturbed him.

Working under a U.S. government contract to carry out polygraph examinations of public officials in the country, Nieves said he discovered evidence of pervasive corruption among some police and military units.

It is a situation other law enforcement officials believe has contributed to parts of Paraguay being a terrorist haven where al-Qaida, Hezbollah and allied groups have been for years.

As a result, Paraguay's borders with Brazil and Argentina -- an area called the "tri-border" -- are being increasingly viewed by investigators, as well as American diplomats, as the vulnerable underbelly of the U.S. Ciudad del Este, Paraguay's second largest city,which is suspected of being a financial hub for terror and organized crime groups.

Some American investigators also believe the area's porous borders make it an ideal springboard for terrorists to make their way to the U.S. circuitously through Mexico and the Caribbean by using a variety of smuggling venues.

"Every major criminal organization in the world has a criminal representation in Ciudad del Este," Nieves, 63, said in a recent interview.

The lawlessness of the region makes it a threat for future terrorist financing and action in New York, Nieves said. He isn't alone in his concerns.

"It is being watched," Rep. Peter King, the ranking Republican on the House's Homeland Security Committee, told Newsday recently when asked about the tri-border zone.

Hezbollah, an umbrella organization for Shia Muslims, which started in Lebanon, is believed to have laundered $10 million annually through the area, King said.

Martin Ficke, former head of Immigration and Customs Enforcement in New York and now director of operations for the Jericho-based investigative firm SES Resources Ltd., said the tri-border is a continuing concern for money laundering. Ficke, who worked with the El Dorado money laundering task force, said agents were looking to see how readily terrorists could rely on narcotics networks in Paraguay to move cash to support terror operations. He wouldn't comment further.

Officially, the U.S. Department of State says southern Paraguay has yet to sustain an "operational" presence for al-Qaida, Hezbollah and Hamas. King also doesn't believe al-Qaida is present in the area. But there are documented cases where members and sympathizers of Hamas, a militant Palestinian organization, and Hezbollah have engaged in money laundering, extortion, bombings and other crimes inside Ciudad del Este and surrounding areas. Back in the 1990s, suspects in the bombings of South America's Jewish communities were traced to the area.

Some U.S. officials also believe an al-Qaida ally, a shadowy terrorist group known as Lashkar-e-Taiba, which became active in Kashmir in the 1990s, is now operating in the region. Earlier this year, a Manhattan federal judge sentenced a Baltimore man to 15 years in prison for traveling to Pakistan for terrorism training at one of the group's camps.

A report prepared by the U.S. Embassy in Paraguay in April said the country doesn't have effective ways to deal with money laundering and terrorist financing but does try to cooperate in counterterrorism efforts. Judicial and police corruption were concerns, said the report.

In May, MSNBC ran a brief interview by correspondent Pablo Gato with a young Arab Muslim sympathizer of Hezbollah in Ciudad del Este who threatened to attack the U.S. if Iran was targeted.

"In two minutes, Bush is dead," the man told MSNBC of the threatened consequences of a U.S attack.

While those remarks seem like braggadocio, some U.S. officials have been wary of Hezbollah members infiltrating the United States through Mexico to carry out acts of terror. Washington has been pouring millions into Paraguay to try to strengthen its legal institutions, which is why Nieves, who is a private investigator in the Bronx, was working there.

Nieves took polygraph exams of nearly 80 cops, customs officials and military officers. They were applicants for positions in a special customs task force aimed at improving border controls in Paraguay that was to be funded by American aid dollars.

According to Nieves, one of a few U.S.-based Spanish-language polygraphers active in the business, the officials easily opened up to him. After Nieves assured them that admissions of participating in routine graft -- known locally as "la coima" -- wouldn't get them in trouble, the applicants said they believed criminals were tipped off to investigations by law enforcement officials. In some cases, local prosecutors warned smugglers of raids so they could dispose of contraband, Nieves said.

One customs officer said that some higher-ranked customs officials knew all of the organized crime leaders and provided them with information. Some national police also took part in executions on the border with Brazil near the town of Pedro Juan Caballero, said the official, adding that the killings involved disputes over smuggled goods.

The applicants painted a picture of a wild-west atmosphere where legitimate law enforcement was intimidated by criminals and corrupt higher officials.

"They mentioned terrorists, every organized crime group, al-Qaida, the Chinese," recalled Nieves of his debriefings.

One American law enforcement consultant who didn't want to be identified because he does a lot of business in Paraguay said the country's customs service is prone to corruption because of the low wages officials are paid. But even higher pay won't bring speedy reform, he said.

"They don't look at it as corruption. It is part of the culture," he said. "Everybody takes a piece of the government income."

"Most of those people who were coming forward were decent people. Unfortunately, the circumstances are overwhelming for them," Nieves said about the corruption.

Nieves thinks the United States could benefit by developing its own network of paid informants within Paraguay's customs and border police as an early warning system against terrorism.

"Everyone I met were people we could flip," he said.

http://www.newsday.com/news/nationworld/ny-nypara0101,0,7656260.story

Brazil President's Publicist Under Investigation

Publicist Joao Santana, who headed the publicity campaign for Brazilian President Luiz Inacio Lula da Silva during his 2006 re-election run, is being investigated for alleged irregularities in business contracts with political parties, O Estado de Sao Paulo newspaper reported Sunday.

Santana is the target for a stealthy investigation being carried out since 2006 by the Public Ministry and the Federal Police, according to government officials consulted by the daily.

The investigation, the paper added, concerns contracts that Santana's firm signed with the governing Workers Party, or PT, in 2004 to undertake the ad campaigns of three mayoral candidates being backed by the party.

According to the paper's version, prosecutors suspect that part of the income Santana received from the PT in 2004 was not reported to the authorities by the party, which would be a sign of money laundering and tax evasion.

The PT was founded by Lula in 1980 and came to power for the first time in 2003 when he won the presidency after several tries.

Santana took over Lula's publicity campaign during his re-election bid after the 2005 eruption of the corruption scandal within the PT wound up tainting publicist Duda Mendonca, who up to then had been in charge of crafting the president's image.

The corruption scandal, the worst faced by Lula so far and which politically wiped out the entire PT leadership, forced the party to admit that it illegally used certain resources to finance its various election campaigns.

Santana's defense attorney, Dora Cavalcanti Cordani, admitted to O Estado de Sao Paulo that her client is the target of an investigation, but she added that he is not suspected of money laundering or alleged tax evasion.

She said that the accusations are unfounded and that all the money Santana received from the PT in 2004 was legally declared.

Source: Herald Tribune

Satyam Wins Pegasystems Partner Innovation Award for AML Solution

October 30, 2007: 12:33 PM EST

HYDERABAD, India, Oct. 30 /PRNewswire/ -- Satyam Computer Services Ltd. , a leading global consulting and IT services provider, announced today that it won the 2007 Pegasystems Partner Innovation Award in financial services. The announcement was made at PegaWORLD 2007, Pegasystems' annual conference, and one of the business process management (BPM) industry's flagship events.

Satyam won the esteemed award for its advanced Anti-Money Laundering (AML) solution, which enables financial institutions to intelligently track, manage and quickly resolve potentially fraudulent and criminal activity with greater speed and accuracy and to comply with stricter AML regulations. Satyam used Pegasystems' SmartBPM(R) Suite to create the new solution, which addresses a critical and underserved need in the market.

"Financial institutions now have an innovative way to fight fraud and financial crime, as well as stay in compliance with BSA/AML/KYCC statutes," said Anil Kumar, the Global Head of Satyam's Financial Services Business.

Integration among Satyam experts accelerated the solution's development and deployment.

"Satyam's business process management and banking experts leveraged Pegasystems' SmartBPM platform to rapidly deliver an advanced solution without additional and costly software development," said Joseph Lagioia, head of Satyam's Consulting and Enterprise Solutions Practice. "We are very proud and pleased to win this prestigious honor."

Satyam's AML solution optimizes a financial institution's existing transaction-monitoring systems-detecting suspicious activity such as the deposit of very large sums, multiple accounts for the same person, and suspicious names-while at the same time minimizing the number of false positives, which has been a nagging problem in the past. The solution also allows financial institutions to recognize suspicious transactions quickly, rather than waiting until the end of the day, which is the norm for institutions using case management systems.

"Satyam combines superior subject matter expertise in financial services with deep understanding of Pegasystems technology to deliver truly innovative business solutions in an accelerated fashion," said Douglas Kim, managing director of Global Alliances and Business Development for Pegasystems. "We're proud of our long-standing relationship with Satyam and are delighted to recognize them with this award."

About Satyam

Satyam , a leading global business and information technology services company, delivers consulting, systems integration, and outsourcing solutions to clients in 20 industries and 57 countries.

Satyam leverages deep industry and functional expertise, leading technology practices, and an advanced, global delivery model to help clients transform their highest-value business processes and improve their business performance. The company's 45,700* professionals excel in engineering and product development, supply chain management, client relationship management, business process quality, business intelligence, enterprise integration, and infrastructure management, among other key capabilities.

Satyam development and delivery centers in the US, Canada, Brazil, the UK, Hungary, Egypt, UAE, India, China, Malaysia, Singapore, and Australia serve 599* clients, 173 of which are Fortune Global 500 and Fortune US 500 corporations. For more information, see http://www.satyam.com.

*As of Sept. 30, 2007

Safe Harbor

This press release contains forward-looking statements within the meaning of section 27A of Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended. The forward-looking statements contained herein are subject to certain risks and uncertainties that could cause actual results to differ materially from those reflected in the forward- looking statements. Satyam undertakes no duty to update any forward-looking statements. For a discussion of the risks associated with our business, please see the discussions under the heading "Risk Factors" in our report on Form 6-K concerning the quarter ended June 30, 2006, furnished to the United States Securities Exchange Commission on July 28, 2006 and the other reports filed with the Securities Exchange Commission from time to time. These filings are available at http://www.sec.gov.

http://money.cnn.com/news/newsfeeds/articles/prnewswire/DCTU00430102007-1.htm

Brazilian police arrest Credit Suisse employee in money-laundering probe

Police in Rio on Wednesday arrested a Credit Suisse employee for allegedly helping wealthy Brazilian clients launder money and send it abroad without paying taxes, officials said.

The suspect was seized after a search of his hotel room turned up incriminating documents, a spokesman for the state prosecutor's office in Sao Paulo told Agence France-Presse.

He is to be added to a list of suspects compiled as part of a long-running investigation into alleged tax evasion by rich Brazilians, the spokesman, Marcelo Oliveira, said.

Weiss was suspected of arranging for Brazilian clients to use money-changers to send money abroad, evading Brazilian taxes.

Credit Suisse's public relations agency in Brazil declined to confirm the information.

It said the bank's representative office in Sao Paulo and the Swiss-based Credit Suisse investment bank 'are independent and have no relationship with each other.'

The bank's Brazilian operations, it said 'always act under the most rigorous legal and ethical principles,' it added.

Money Laundering Cases In Brazil Rise By 2,875 Percent

November 21, 2007 10:03 p.m. EST

Vittorio Hernandez - AHN News Writer

Sao Paolo, Brazil (AHN) - Following the launch of an intensified campaign against money laundering, Brazilian insurance regulator Susep said suspected money laundering cases among insurance companies have risen by 2,875 percent. From only 3,101 cases for the first 10 months in 2006, the number has ballooned to 92,258 cases as of October.

Susep passed regulations in February 2006 that imposed a reportorial system among insurance companies. The new requirement is responsible for the dramatic rise in suspected money laundering incidents uncovered.

Aside from insurance companies, banks are the target of anti-money laundering operations in Brazil. On November 6, Brazilian police arrested 19 people for connivance in a scheme that helped large Brazilian companies evade taxes by using Swiss banks UBS AG and Credit Suisse Group and the U.S.-based American International Group.

Raids on 44 locations in four Brazilian states led to the arrest of 19 people. On October the local office of American network provider Cisco Systems was raided by Brazilian police operatives.

The raids yielded two Swiss nationals, one of them was an employee of UBS AG. Over $4 million dollars were seized in the raids.

The scheme involved depositing by Brazilian companies of money in overseas accounts using blackmarket money changers with accounts in Brazil and other countries. The money is used to purchase items from the U.S. and China that were shipped to Brazil.

The tax evasion done through money laundering is estimated at $588 million (1 billion reais) in foregone taxes the past 18 months.

Football money-laundering fears

By Michael Peel

Published: June 18 2008 23:30 Last updated: June 18 2008 23:30

Claims that football clubs and other sports team are being used as a conduit for money-laundering are to be investigated by the global watchdog on criminal fund flows.

The inter-governmental Financial Action Task Force last night agreed to investigate whether sporting clubs in Europe, the US and South America are used to process illicit money through investments and player transfers.

The project – which arrives neatly as the European football championship builds to a climax – is aimed at helping countries combat possible abuses in a sector that has come under increasing scrutiny as it has grown more lucrative and international.

Sir James Sassoon, taskforce president, said the project showed how the body was trying to “pick out things from across the waterfront that could present material vulnerabilities to the financial system”.

A London meeting of the taskforce – set up by the Group of Eight industrialised nations – gave final approval to a project that has attracted growing interest from its 34 members.

The push would see FATF produce toolkits on how to detect money laundered through sporting clubs for investigators, regulators and people in the private sector, Mr Sassoon said.

Officials at the meeting said the proposed focus on European football clubs had widened to cover teams and player transfers in South America and the finances of leading US sports.

One official said that while the report was not intended to name and shame clubs or individuals, it could be used to highlight problem countries and practices for national investigators to probe. “Any time you have organised sports – and big money is there – there may be a vulnerability. That’s what we are trying to find out,” he said.

The emergence of football on the agenda of the taskforce – whose other remits include the proliferation of weapons of mass destruction – is a sign of concerns raised by the influx of money to the game.

One high-profile case emerged in Brazil last year, over suspected money-laundering involving Russian and British nationals in connection with payments of $32.5m made to the Corinthians football club of São Paulo.

Concerns in Europe have included suspected illicit payments linked to the transfer market, investments from the former Soviet Union, and possible match-fixing by Asian betting syndicates.

Source: The Financial Times

Latino countries new destination of laundered money

Banks are increasingly notifying about money laundering suspicion operations, an official source told El Khabar, adding that during this year’s first half, banks have issued 192 money laundering suspicion notifications, i.e. a 100% increase comparing to the three last years.

The same source said Europe stand on the top position in terms of favorite destinations of laundered money, including France, Italy and Belgium, followed by Gulf countries, like Arab Emirates, while some Latin America’s countries, like Brazil, have joined the list.

The number of money laundering suspicion notifications moved from 36 in 2006, to 66 last year, while jumping up to 192 during 2008 first half.

On another side, the same source said export activities have become safe heaven of money laundering operations, while pointing out that no notification has been issued about local products exports.

Meanwhile, Algeria will be subject to evaluation in terms of money laundering and countering financial crimes, scheduled by international organizations early next year.

Worth mentioning that Algerian Justice is procrastinating in terms of treating money laundering cases, while managing settling only two cases off the hundred suspicion notifications being issued by banks.

Source: ElKhabar

Brazil issues arrest warrant for Berezovsky on money-laundering charges

A court in Brazil issued an arrest warrant for Kremlin foe Boris Berezovsky on charges of money laundering, ITAR-Tass reported Friday.

The warrant was issued Thursday by the federal court in Sao Paolo in a case involving the Media Sports Investment group, or MSI, a sponsor of the Corinthians soccer club, the Russian state-owned news agency reported.

A trial in absentia against Berezovsky opened Thursday in Moscow in a separate case. Berezovsky, a fierce critic of President Vladimir Putin who has asylum in Britain, is accused of embezzling millions of dollars from Aeroflot.

Berezovsky said neither he nor his lawyers have had any contact with Brazilian authorities about the reported warrant, which he said was part of a politically motivated Kremlin push against him. He denied any involvement in money-laundering.

"Given the extensive comment in the Russian media and the farce of a 'trial in absentia' in the Russian courts, I have no doubt that the Brazilian story is an extension of the Kremlin's politicized campaign against me," Berezovsky said in a statement.

The case in Brazil dates back to 2004, when MSI spent millions of dollars acquiring new players, which raised the interest of Sao Paulo state prosecutors. They wanted to know more about the investment group, its Iranian-born president Kia Joorabchian and the origin of the money he and his unidentified partners injected into the club.

"Who would invest this much money in a soccer team that has been in the red for years?" state prosecutor Jose Reinaldo Guimaraes Carneiro said when he started his investigation in February 2005. "And why?"

Later that year, he said the answers pointed to the Russian tycoon and money laundering.

"There is enough circumstantial evidence indicating that the MSI-Corinthians partnership is being used for the laundering of money, most of which was received from Boris Berezovsky, who is wanted (by Russian authorities) for crimes committed against the Russian financial system," Carneiro said in the summary of a 15-page report released after the investigation.

Warrants for Berezovsky's arrest could soon be issued by other countries as well, the Russian news agency Interfax reported Friday, citing an unidentified source. The source said the countries are "two or three European states."

The Brazilian warrant was the result of close cooperation between the law enforcement agencies of a number of countries, the source said.

The trial against Berezovsky in Moscow was postponed for two weeks so the court-appointed defense attorney could read the voluminous case materials. Berezovsky has ordered his own lawyers not to take part in the trial, which he said was part of a Kremlin effort to draw attention away from the poisoning death of his associate Alexander Litvinenko.

http://www.iht.com/articles/ap/2007/07/13/europe/EU-GEN-Russia-Berezovsky.php

U.S. says Iran increasing activity in Latin America

Iran is increasing its activity in Latin America and the Caribbean, including actions aimed at supporting the Lebanese militant group Hezbollah, a top U.S. military commander said on Tuesday.

Navy Admiral James Stavridis, who oversees U.S. military interests in the region as head of U.S. Southern Command, also said Hezbollah was linked to drug-trafficking in Colombia.

"We have seen... an increase in a wide level of activity by the Iranian government in this region," Stavridis told the Senate Armed Services Committee.

"That is a concern principally because of the connections between the government of Iran, which is a state sponsor of terrorism, and Hezbollah," he said.

The U.S. State Department lists the Lebanese-based political and military movement as a terrorist organization.

Stavridis said Hezbollah activities in South America have been concentrated particularly in the border region between Brazil, Paraguay and Argentina, but also in Colombia.

"We have been seeing in Colombia a direct connection between Hezbollah activity and narco-trafficking activity," the commander added, without providing specifics.

Colombia said last October that it had smashed a drug and money-laundering ring suspected of shipping funds to Hezbollah.

Hezbollah has denied links to drugs and money-laundering and described allegations as part of a propaganda campaign aimed at harming its image.

President Barack Obama's administration has sought to move toward dialogue with Tehran, despite sharp differences on several topics including Iran's nuclear program. Iran says it only wants to generate power while the Washington and its allies accuse Tehran of trying to build a nuclear bomb.

Stavridis is the latest U.S. defense official to express concerns about Iranian influence in Latin America, where the left-wing governments in Venezuela, Cuba, Ecuador, Nicaragua and Bolivia have all become allies of Iran in recent years.

In January, Defense Secretary Robert Gates told the same Senate panel he was more worried about Iranian "meddling" than he was about Russia's activities in Latin America.

(Reporting by David Morgan, editing by Alan Elsner)

Source: Reuters

Organized Crime Embraces Film Piracy; Terrorists May Follow, Report Says

By Matthew Harwood

Film piracy by organized crime is flourishing worldwide, with some of the proceeds possibly financing terrorism, according to a new report from the RAND Corp. financed by the Motion Picture Association.

“If you buy pirated DVDs, there is a good chance that at least part of the money will go to organized crime and those proceeds fund more dangerous criminal activities, possibly terrorism,” said RAND’s Greg Treverton, the study’s lead author.

The criminal organizations that traffic pirated DVDs span the globe and often have multinational criminal connections. The report tells of one Italian crime boss turned government witness who explained the his organization's connection to Chinese and Taiwanese criminal gangs involved in film piracy and other acts of counterfeiting.

“Given the enormous profit margins, it’s no surprise that organized crime has moved into film piracy,” said Treverton.

The profits associated with film piracy are astounding, outperforming revenue generated from both Iranian heroin and Colombian cocaine. In Malaysia, a pirated DVD costs 70 cents to make and sells on a corner in London for $9, more than 1,000 percent markup.

The report also discusses three groups that have used film piracy to finance terrorism. The best-documented case involves the Irish Republican Army, which used film piracy among other criminal activities, to fund its terrorist campaign against the British government. Another case involves the D-Company, an Indian criminal group heavily involved in film piracy. In 1993, the group carried out a string of bombings on what became known as “Black Friday” in Mumbai, killing 257 people and wounding hundreds more.

The third example has the most relevance today.

In 2004, the U.S. government labeled DVD pirate and counterfeiter extraordinaire Assad Ahmad Barakat “a specially designated global terrorist” for transferring $3.5 million to Hezbollah. His criminal network operates within the heavily Lebanese tri-border area of Argentina, Brazil, Paraguay, in what RAND calls “most important center for financing Islamic terrorism outside the Middle East.” (For more on the connection between Islamic extremism, terrorist financing, and the tri-border region, see John Barham's "Hezbollah's Latin American Home," from the Feb. 2008 issue.)

RAND notes the boom in film piracy is directly linked to weak penalties when someone is caught and convicted, which is rare.

An individual convicted of selling counterfeit products in France can expect a maximum of two years in prison and a $190,000 fine compared to ten years in prison and a fine of $9.5 million if caught selling drugs. In the United States, 134 people were sentenced to federal prison for intellectual property crimes in 2002, while 1.5 million people were arrested for drug offenses nationwide in 2003.

If governments worldwide want to decrease the volume of counterfeited goods and cut off a possible avenue of terrorist financing, RAND recommends spending more money and manpower to address the problem while passing tougher penalties for those convicted of counterfeiting and other intellectual property crimes.

Source: Security Management

UAE to join hands with 82 nations to fight dirty funds

The UAE said yesterday it will sign new anti-money laundering agreements with 82 countries as part of an intensified strategy to combat dirty funds.

The National Anti-Money Laundering Committee (NAMLC) discussed the plans at a meeting that also covered recent cases of currency fraud and other issues.

The Central Bank, which organised the meeting in Dubai, said the committee heard that a memorandum of understanding (MoU) had so far been signed between the anti-money laundering unit and 21 countries.

They were told that the unit planned to sign MoUs with 82 other nations that were members of the Egmont Group, an international gathering of financial intelligence units.

Some of the countries covered by the agreements have large communities in the UAE and financial sources say the agreements will strengthen the drive to crack down on dirty money and ensure the banking system here remains clean.

"These agreements demonstrate the commitment of the UAE to share financial information with its global partners to co-ordinate the efforts against money laundering, terrorist financing and related crimes," a Central Bank spokesman said after some of the deals were signed earlier this year.

"These agreements were aimed at further supporting the UAE's continued co-operation with the international community on subjects of mutual concern and on ways to strengthen co-operation on combating money laundering."

MoUs were signed with the financial intelligence units of Lebanon, Belgium, Brazil, Croatia, Estonia, Isle of Man, Macedonia, Malawi, Monaco, Nigeria, Portugal, the Philippines, Serbia, South Africa and other countries.

The agreements followed a pledge by the UAE last year to push ahead with an extensive campaign against money laundering and terrorist funding through intensified regional and international co-operation.

Source: Emirates Business 24/7

Tri-border transfers 'funding terror'

The tri-border area, where Paraguay, Brazil and Argentina meet, is a lawless region where drugs trafficking, gun running and counterfeit goods are rife.

The BBC has now found documents showing the suspicious transfer of large sums of money to the Middle East, which investigators believe goes to fund terrorism. The BBC's Andrew Bomford reports from Ciudad del Este in Paraguay.

It didn't look like the global centre of a business sending billions of dollars overseas, but on the first floor of the dingy-looking shopping arcade, if you could get past the two guards blocking the stairs, there it was - a shop, looking like a pawnbrokers, called Telefax.

According to Paraguayan and American investigators, Telefax, owned by a Lebanese businessman called Kassem Hijazi, is responsible for transferring huge sums of laundered money overseas and hiding the identities of the people responsible.

The money is believed to be the proceeds of crime - anything from drug smuggling, to gun running, to counterfeit goods to tax evasion.

"From the evidence and documentation we saw, it was clear that this man was moving large sums, hundreds of millions of dollars, through its doors, in its own name, hiding the identities of who was truly the owners of the money," said Carlos Maza, of the US Department of Homeland Security.

"Kassem Hijazi is a serious player who more than anything else has found the vulnerability in the Paraguayan system, the ability to control how money is moved through its banking system."

'Frustrating situation'

But US investigators are particularly worried that some of this money goes to fund terrorism as well as militant organisations like Hezbollah and Hamas.

Robert Morgenthau, the New York District Attorney, has prosecuted a number of American banks for moving millions of dollars from the tri-border area to what he suspects are terrorist bank accounts in the Middle East.
"We've found money going to the Arab Bank in Ramallah," he told the BBC.

"The Arab Bank is well known as one of the banks used by terrorist organisations. But that's part of the frustration. You don't know who's sending the money and you don't know who's receiving it."

The BBC saw company accounts for Telefax showing a business with an annual turnover of just $50,000.

But a large number of money transfer documents, obtained in a series of raids by Paraguayan prosecutors, show Telefax making international transfers worth ten times that amount almost on a daily basis.

Claims denied

The owner of Telefax, Kassem Hijazi, agreed to do an interview with the BBC.

He produced a large amount of the prosecution paperwork allegedly showing thousands of money transfers, but claimed that every single one of the documents had been forged.

"The proof is here," Mr Hijazi said, indicating the transfer documents.

"They have to prove that I've done it. Even the prosecutor says the documents are false, not us, the prosecutor. I wasn't transferring money abroad. It's the money exchange houses that send the money, and they've forged the documents. We don't do transfers abroad."

Mr Hijazi did admit to using numbers instead of names for his clients, effectively hiding their identities, but he said that was merely to make his paperwork easier.

The BBC examined a number of the transfer documents and saw large amounts of money, around $10m, moving to Lebanon in the space of a year.

Three transfers, for $100,000, $70,000, and $42,200, went in the space of two days to companies in Beirut which did not appear to exist.

Adolfo Marin, the original prosecutor in the case, said it was very difficult to investigate the money transfers because the banks in Beirut were dominated by Hezbollah.

"I have no idea what they can export to us from Lebanon, so necessarily the money that goes to Lebanon is not for imports," he said. "So it is possible to formulate a hypothesis about the probability of money laundering and links with terrorism."

Kassem Hijazi strongly denied any involvement in terrorist financing. "It's absurd," he said.

"It doesn't happen here. The people I work with are friends, not terrorists. They've been investigated and if there was some evidence they would have been charged."

'Helping our brothers'

This view was supported by Sheik Taleb Jomha, the Muslim leader of the 30,000-strong Lebanese community in the tri-border area.

"I am not telling you a secret when I say that Iran and Syria are supporting Hezbollah," he said.

"Iran has the ability to send weapons and rockets, not us. They say money is moving from here to the Middle East. That's right. But not to help political or military groups, but to help our brothers and sisters who need help."

Kassem Hijazi is not facing charges of money laundering or even terrorist financing.

In Paraguay, funding terrorism is not a crime, and the law on money laundering is out of date, making it difficult to achieve a prosecution.

A new law has been languishing, unapproved, in the country's Congress for more than two years.

In the meantime, Mr Hijazi has been accused of tax evasion, which he also denies, and is expected to face trial in 2007.

http://news.bbc.co.uk/2/hi/americas/6179085.stm

Brazilian Ex-Banker and Son Are Arrested

Dec. 12, 2006, 1:28PM
© 2006 The Associated Press

SAO PAULO, Brazil — Brazilian police arrested the former owner of Banco Santos and his son Tuesday on charges of money laundering, criminal association, bank fraud and conspiracy.

Edemar Cid Ferreira and his son Edemar Rodrigo Rodrigues Cid Ferreira had both been convicted earlier of the crimes but had been freed pending appeal in August after spending 88 days in jail.

On Tuesday, a judge ordered them back to prison to begin serving their sentences of 21 and 16 years respectively.

Ferreira's lawyer Arnaldo Malheiros said they planned to appeal the decision.

Banco Santos went bankrupt in September 2005, leaving behind debts of over $1 billion.

The elder Ferreira is considered one of Brazil's largest art collectors and was instrumental in organizing the Guggenheim Museum's "Brazil: Body and Soul" exhibition in 2001. He was also involved in failed efforts to open a branch of the Guggenheim in Rio de Janeiro.

http://www.chron.com/disp/story.mpl/ap/fn/4396725.html

U.S. targets Hezbollah finance network

By Jeannine Aversa
The Associated Press
Article Last Updated:12/07/2006 12:11:53 AM MST


Washington - The Bush administration took action Wednesday aimed at choking off a major fundraising channel for Hezbollah operating in the tri-border area of Argentina, Brazil and Paraguay.

The Treasury Department's action covers nine people and two entities - a shopping center in Paraguay and an electronics company, Casa Hamze, located in the shopping center.

As a result, Americans are forbidden from doing business with them, and any bank accounts or other financial assets belonging to the designated people and entities found in the United States must be frozen.

In a joint statement, Argentina, Brazil and Paraguay said that "the information presented by the United States does not provide any new elements that would permit it to affirm the existence of terrorist activities in the region, including the financing of terrorism."

The statement added that "no operative terrorist activities were detected in the Triple Border region."

The department alleges that those designated have provided financial and logistical support to the Islamic militant group Hezbollah, which the United States considers a terrorist organization. The Lebanon-based Hezbollah is suspected of involvement in terrorist attacks worldwide.

The U.S. also blames Hezbollah for triggering bloodshed in the Middle East involving Lebanon, Israel and the terrorist group during the summer and more recently stirring political unrest in Lebanon.

Specifically, the department alleges that the designated people gave financial and other assistance to Assad Ahmad Barakat, whom the government several years ago added to its asset-blocking list for his support of Hezbollah.

"Assad Ahmad Barakat's network in the tri-border area is a major financial artery to Hezbollah in Lebanon," said Adam Szubin, director of the Treasury Department's Office of Foreign Assets Control.

The Treasury Department alleged that Muhammad Yusif Abdallah is a senior Hezbollah leader in the tri-border area and an important financial backer of the terror group.

It says Abdallah is an owner and manager of the Galeria Page shopping center located in Paraguay, which the department also designated on Wednesday.

The department alleged that Abdallah pays a percentage of his income to Hezbollah based on the profits he receives from the shopping center. It alleges that Abdallah has been involved in importing contraband electronics, falsifying passports, credit-card fraud and trafficking counterfeit U.S. dollars.

Hamzi Ahmad Barakat also was designated, with the government alleging that he is a Hezbollah member in the tri-border area and has served as a source of funding for the terror group through his electronics store, Casa Hamze. He also is suspected of trafficking in narcotics, counterfeit U.S. dollars, arms and explosives, the government said.

Hatim Ahmad Barakat, who has traveled to Chile to collect money for Hezbollah and is the brother of Assad Ahmad Barakat, also was named.

The tri-border region is considered a haven for arms traffickers, smugglers and counterfeiters and is home is thousands of Lebanese Muslims. It was once described by the U.S. State Department as a "focal point for Islamic extremism in Latin America."

http://www.denverpost.com/headlines/ci_4792568

Brazil rejects U.S. action against alleged terrorist links in tri-border area

The Associated Press
Friday, December 8, 2006
RIO DE JANEIRO, Brazil

Brazil has rejected U.S. sanctions against alleged terrorist fundraisers in the tri-border area with Argentina and Paraguay, saying American officials failed to present sufficient evidence.

The Foreign Ministry announcement late Thursday indicated that the three South American governments are unwilling to place complete trust in U.S. assertions about the war on terror.

The administration of U.S. President George W. Bush on Wednesday imposed sanctions on what it termed a major fundraising channel for the Islamic militant group Hezbollah in the tri-border area, focusing on nine people plus a shopping center in Paraguay and an electronics company located there.

The U.S. Treasury Department barred Americans from doing business with them and said any bank accounts or other financial assets belonging to the nine people and the businesses found in the United States must be frozen.

But Brazil said the three countries met in Buenos Aires this week and decided there was not "any new data or evidence that corroborates the accusation by the United States."

It also said the United States had failed to prove oft-repeated suggestions that the region itself is a hotbed of terrorist financing.

"In light of the information available, there is no sign of the occurrence in that region of activities linked to terrorism or their financing," the Foreign Ministry statement said. "That position is shared by Argentina and Paraguay."

The ministry said that "unilateral statements that arbitrarily single out the tri-border region cause undue harm to the region," but it reiterated Brazil's "international commitment ... for the prevention and combat of terrorism."

The tri-border region is considered a haven for arms traffickers, smugglers and counterfeiters and is home is thousands of Lebanese Muslims. The United States considers the Lebanon-based Hezbollah a terrorist organization and the group is suspected of involvement in terrorist attacks worldwide.

At least some local analysts praised Brazil's action.

"It's a question of national sovereignty," said Alexandre Barros, a political analyst with the Early Warning consulting firm in Brasilia. "The United States says it's all rotten here, but Brazil has no international obligations unless they are proven and discussed. They say, 'We're going to clamp down,' but that's unacceptable. Brazil doesn't have to accept"

Barros said Brazil had been cooperative in opposing international terrorism, "but the problem has to be concrete."

The U.S. alleges that it had identified people who had given financial and other assistance to Assad Ahmad Barakat, whose "network in the tri-border area is a major financial artery to Hezbollah in Lebanon," said Adam Szubin, director of the Treasury Department's Office of Foreign Assets Control.

The Treasury Department alleged that Muhammad Yusif Abdallah, allegedly an owner of the Galeria Page shopping center in Paraguay, is a senior Hezbollah leader who pays a percentage of his income to the group.

It also said that Hamzi Ahmad Barakat funded Hezbollah through his electronics store, Casa Hamze, located in the shopping center.

The U.S. government said regional law enforcement authorities have been concerned about their activities and the U.S. move should come as no surprise.

"The U.S. government stands firmly behind our designation of these nine individuals as terrorist financiers for Hezbollah," Molly Millerwise, the department's public affairs director, said in an e-mail on Friday to The Associated Press.

"It is important for countries around the world to recognize that their obligation to fight terrorism extends beyond simply preventing attacks within their own borders and includes halting the export of funds that facilitate terrorism elsewhere," she said.

http://www.iht.com/articles/ap/2006/12/08/america/LA_GEN_Brazil_U.S._Terror.php

Argentina, Brazil, Paraguay deny terrorism at shared border

The governments of Argentina, Brazil and Paraguay on Thursday rejected accusation made by a U.S. report that the so-called "triple frontier" where the three nations meet is a haven for terrorists.

The joint statement said that the U.S. document had presented no new evidence for their repeated claim that terrorism and terrorist financing operated in the region.

The statement was issued at the end of the three-day fifth Plenary Meeting of the 3+1 Mechanism on Triple Frontier Security held in Buenos Aires.

The final statement was a reply to the United States, which was an observer at the meeting and has recently published a report saying that the "triple frontier" is home to a network charged with collecting funds and staff for Lebanon's Hezbollah guerilla.

The U.S. authorities on Wednesday froze the U.S. assets of nine people and two businesses in the border area, accusing them of transferring millions of dollars to Hezbollah, which engaged in a fierce fighting with Israel this summer. Washington labeled the organization as a terrorist group.

Source: Xinhua

http://english.people.com.cn/200612/08/eng20061208_330089.html

US freezes funds to Hizbollah

Friday December 8, 2006


WASHINGTON - The United States froze the US assets of nine people and two businesses in the border area of Brazil, Argentina and Paraguay who Washington said helped funnel millions of dollars to Hizbollah.

The US Government considers the Shiite Muslim militia a terrorist organisation.

The Treasury said the people and businesses raised and transferred cash for Hizbollah through the triple border area between the South American countries, which is home to a large Arab community.

An executive order froze their US assets and banned transactions with US citizens and banks.

"Millions of dollars have been raised and moved by this network," Treasury assistant secretary for terrorist financing Pat O'Brien said. "One of the key ways money has moved is through personal couriers."

- REUTERS

http://www.nzherald.co.nz/category/story.cfm?c_id=340&objectid=10414395