Audit unveils no money laundering by Czech govt VV

A recent forensic audit has proved that there was no money laundering on the part of the Czech junior ruling Public Affairs (VV), VV chairman Radek John said today, presenting the audit, to reporters.

A separate audit of VV deputy Michal Babak´s finance has proved no irregularities either, John said.

The VV had its finance audited earlier this summer.

The audit has unveiled major shortcomings in the VV´s party accounting but the auditor found no signs of an expedient distortion of the accounting data, says the BDO auditor´s report that the VV has released on its website.

The unveiled shortcomings are of a procedural nature and the VV will remedy them soon, John said.

Babak had his own finance audited separately in reaction to critics´ suspicions of money laundering on his part.

In a press release today, Babak rejected any further challenging of his personal and professional integrity.

"I provided any possible cooperation, including thorough information on my family´s financial situation, to the auditor and the police investigators. No Czech politician has done anything similar so far. I did not have and I don´t have anything to hide," said Babak, whose VV membership has been suspended over the above mentioned suspicions.

He admitted having taken some rather non-standard steps in good faith and in an effort to help the VV during its turbulent start [in his politics], but the audit has shown that all the steps were taken to the VV´s benefit and none was at variance with law.

He said he is ready to do his utmost as a member of the VV leadership to supervise the correction of the unveiled shortcomings and prevent similar situations from repeating.

The VV entered the Czech lower house for the first time in history in the mid-2010 elections. It is the smallest in parliament and in the centre-right government.

Suspicions about its allegedly problematic financial management emerged this spring when not only the whole government but also the VV itself experienced internal turbulences.

Source: ČTK

Sri Lanka: International Conference on Countering Terrorism

Sri Lanka: International Conference on Countering Terrorism draws international terrorism experts to Colombo

20th October 2007

The three-day International Conference on Countering Terrorism is now on in Colombo on the theme 'Terrorism: A Challenge to Democratically Elected Governments.' The Conference, brought together renowned terrorism experts, including from the academia and the media, from 23 countries including Australia, China, Czech Republic, France, Germany, India, Indonesia, Russia, Singapore, South Africa, the United States and Vietnam. It was also widely attended by the Diplomatic Community .

Delivering the Inaugural Address, Foreign Minister Rohitha Bogollagama, highlighted that "Sri Lanka had been a foot soldier in the battle against terrorism over a long period of time and notwithstanding some impediments and setbacks, can in several aspects count itself as having been a success story in the battle against terrorism." Sri Lanka's refusal to compromise or condone terrorism while constantly seeking to resolve the conflict through political means, to persuade other states to proscribe the LTTE, prevent money flows and apprehend those conniving with terrorists, has been significant. Successive governments and the people of Sri Lanka have also shown considerable resilience in the face of terror, whilst also ensuring that economic growth was not compromised. The Minister hoped that the deliberations of this Conference would, among other matters focus on the need for states to go beyond merely adopting conventions, to convert these into tangible action by developing enabling legislation and taking concrete action against those including terrorist front organizations operating from their soil. Noting that a bulk of maritime traffic passes through the Indian Ocean region and that in recent times many acts of terrorism had taken place in these waters, the Minister emphasized the urgent necessity to develop robust modalities to arrest the growing threat that faces Indian Ocean states from terrorists.

The former Director of the European Center for the Study of Conflicts in France, and one of the earliest writers in the field of terrorism, Dr. Gerard Chaliand traced the evolution of terrorism over the years. Referring to the LTTE, he said "the independence they ask cannot be granted and should not be granted, not only because no State is willing to accept such a blow to its sovereignity but also because, like the Shining Path or the Khmer Rouges, the LTTE under the leadership of V. Prabhakaran is a totalitarian movement, which has transformed its groups into a killing machine." He said "the most important thing about the LTTE is that it is a totalitarian movement fighting in a country which is democratic." He said the "LTTE has brutally eliminated all other parties or groups willing to represent the Tamils". "An absolutely intolerant sect, no peace seems possible with V. Prabhakaran as we have seen from the peace process of 2002-2005, which was but a tactical truce", Dr. Chaliand added.

Secretary of Foreign Affairs, Dr. Palitha Kohona delivering the vote-of-thanks repeated the unprecedented challenge Sri Lanka faces in combating terrorism and Sri Lanka. He said the world had focused on international terrorism only after 9/11 but terrorism had affected countries long before then. He emphasized that "the international rule of law against terrorism is being strong themed each year," adding that "there are 13 UN Conventions addressing different dimensions of the global terrorist threat and a comprehensive convention is being negotiated." The Foreign Secretary pointed out that "terrorism will never be eradicated solely by cooperation among law enforcement officials. It requires a concerted political effort and policy coordination among countries. Further it also requires an ability to understand and minimize the motivation and impetus that inspire terrorist acts."

Renowned Chairman of the French Anti-Terrorist Judges, Judge Jean Louis Bruguiere, who was the Guest of Honour of the Conference, and addressing the first panel of the day focused on the international responses to terrorism, traced the manner in which international efforts at responding to terrorism have evolved over the years, stating that if the fight against terrorism is an inescapable requirement, "we owe it to ourselves to reinforce our international cooperation at every level, notably by adopting multilateral or bilateral conventions in the field of judicial cooperation as well as extradition." He said the French Government considers "that an organization like the LTTE is a terrorist organization like any other and that its activities even in the area of logistics, have to be repressed with the same vigour as for terrorist networks operating on our [French] soil and threatening us directly" and that on this basis "that in April this year the French Government had dismantled a vast network of Tamil militants who actively supported the LTTE, notably at the financial level."

This session, which was chaired by the Dean of the Faculty of Arts of the University of Colombo, Prof. Amal Jayawardena,while the discussants were the Executive Director of the Regional Centre for Strategic Studies, Dr. Rifaat Hussain and the Senior Terrorism Prevention Officer of the United Nations Office on Drugs and Crime, Vienna, Dr. Ms. Irka Kuleshnyk.

Addressing the panel on regional responses to terrorism, former Commander of the Indian Army, Gen. V. P. Malik emphasized the need to combat and defeat terrorism in all its manifestations. He said "terrorist activities anywhere will stop only when their fuel runs out." Gen. Malik who traced the important steps taken to counter terrorism in South Asia, emphasized the need for a regional strategy and cooperation, but essentially local operatives and doctrines.

Former Secretary General of SAARC, Ambassador Nihal Rodrigo, chaired this session, while the discussants comprised the Associate Research Fellow of the China Institute of International Studies, Prof. Zhang Lijun, the Deputy Director of the Russian Foreign Ministry, Mr. Vladimir Titokerni as well as the Pro-Chancellor and Director of the School of Science and Forensic Science, National Law University Rajastan, India, Prof. P. Chandra Sekharan.

The third thematic session focused on the domestic dimensions of terrorism where the head of the International Centre for Political Violence and Terrorism Research in Singapore, Dr. Rohan Gunaratna, who was the principal speaker, who joining the deliberations on a video link, highlighted the recent successes of the security forces in combating LTTE terrorism. He noted that within the year the Sri Lanka Navy destroyed eight merchant vessels. In order to defeat the LTTE, Dr. Gunaratna articulated the need for strengthening and building capacity in the intelligence field, with a high degree of professionalism, and also stressed the necessity for special forces and elite units that could target the leadership of the LTTE.

Former Inspector General of Police, Mr. Chandra Fernando chaired the discussion at which intervention were made by Deputy Solicitor General, Mr. Dappula de Livera and Prof. Karunaratne Hangawatte of the University of Nevada.

The final panel discussion of the day focused of the critical area of combating terrorist financing, where the Founder and CEO of World-Check, Mr. David Leppan spoke extensively on the manner in which terror groups collect funds and their illegal activities.

Researcher of the Centre for Policing, Intelligence and Counter Terrorism of the Macquarie University of Australia, Mr. Shanaka Jayasekera the co-speaker at this session noted that the LTTE's supply chain capability has been significantly disrupted, estimated at between 65% to 70%. This would result in the need for the LTTE to aggressively campaign for fund raising activities in the 12 top level resource mobilization countries. In order to maintain the advantage the Government has achieved, it is imperative that the fund-raising be curbed with international cooperation in the next few months. Therefore it is suggested that a contact group be established as a prelude to the commencement of a political process."

The Deputy Governor of the Central Bank, Dr. Ms. Ranee Jayamaha chaired the sessions, at which the discussants were Mrs. Joan De Zilva Moonesinghe formerly of the Financial Investigation Unit and the Advisor of the Financial Investigation Unit of the Central Bank, Mr. Eric Stonecipher.

Ministry of Foreign Affairs
Colombo

20 October 2007

Swiss government pursues BAE over laundering claims

The Swiss government is investigating money laundering charges against British defence company BAE Systems.

Switzerland’s public ministry of the confederation has opened three criminal investigations as a result of alerts by Switzerland's Money Laundering Reporting Office.

BAE Systems has also been investigated by Britain's Serious Fraud Office for its operations in the Czech Republic, Romania, Chile, Qatar, South Africa and Tanzania.

In 2006, the British office dropped a probe into the company that could have implicated Saudi officials over bribes allegedly taken over an arms contract of 53.5 billion euros.

Source: Beijing News

Czech parliament approves EU rules to fight money laundering

Prague, May 7 (CTK) - The lower house of Czech parliament Wednesday passed a bill against money laundering that is to prevent legalising revenues from criminal activities and help the state fight against organised crime and terrorism financing.

The bill that is yet to be discussed by the upper house and signed by the president incorporates the EU directive against money laundering in Czech legislation.

Under the bill, parties to a trade deal should be identified in all transactions over 1,000 euros. The current directives bind banks to require identification documents only for sums about four times higher.

The bill also markedly extends banks and other financial institutions' duty to monitor and check deals of their clients, who are obliged to prove the aim and purpose of transactions exceeding 15,000 euros, along with the origin of the money involved.

Not only banks, but also lawyers, notaries, bailiffs, auditors and tax advisers are to register suspicious deals.

The bill toughens checks of suspicious deals struck by a selected category of people who live abroad or hold a public post there. This applies to ministers, MPs, judges, high-ranking diplomats and soldiers, and also their family members and business partners.

http://www.praguemonitor.com/en/331/czech_national_news/22454/

EU targets 15 states over money laundering rules

BRUSSELS, June 5 (Reuters) - Fifteen European Union states including financial centres Germany and France have been given a final warning for failing to update their rules aimed at choking off finance for terrorist activities, the bloc's executive said.

"If there is no satisfactory reply within two months, the Commission may refer the matter to the European Court of Justice," the European Commission said in a statement on Thursday.

EU countries were obliged to introduce an updated version of the bloc's anti-moneylaundering rules by December last year.

The warnings were sent to Belgium, the Czech Republic, Germany, Greece, Spain, Finland, France, Ireland, Luxembourg, Malta, the Netherlands, Poland, Portugal, Sweden and Slovakia.

The rules apply to the financial sector, lawyers, notaries, accountants, real estate agents, casinos, trusts and company service providers.

The scope also extends to all providers of goods when payments are made in cash over 15,000 euros ($23,140).

Under the rules, a company would have to identify and verify who they are dealing with, report suspicions of moneylaundering or terrorist financing to the public authorities, and ensure personnel are properly trained.



http://www.finance.cz/zpravy/finance/171673-update-1-eu-targets-15-states-over-moneylaundering-rules/

Czech Republic: Government readies money-laundering bill

By Markéta Hulpachová
Staff Writer, The Prague Post
August 1st, 2007

A new law against money laundering may soon limit the privacy rights of Czech bank clients. So says the global financial analyst Ernst & Young in a July 23 study exploring the readiness of Czech banks to comply with a European Commission (EC) directive that seeks to tighten bank security.

Requiring all member states to implement corresponding legislation by the end of the year, the EC directive, which aims to prevent banks from being used for money laundering and terrorist financing, is prompting European financial institutions to implement systematic and technological reforms.

The Czech Republic has not yet passed the bill that will bring it into compliance with the directive. Such a bill is now under consideration at the Legislative Council and is expected to pass into law by Dec. 15.
An anti-money laundering law has been in effect in the Czech Republic since 1996, but a series of amendments — 11 in all — has made its interpretation confusing.

Instead of making further amendments to the current legislation, the Finance Ministry drafted a new bill to replace the 1996 law.

“Because of systematic and organizational concerns, the ministry agreed to draft a new bill instead of amending the current law,” said Finance Ministry spokesman Jakub Haas.

Primarily, the bill’s new features take a stricter stance on client accountability by requiring banks to closely monitor the identity of their clients.

“The main goal is to stymie the shielding of client identity by preventing the ‘crumbling up’ of financial transactions,” Haas said.

The bill also redrafts several client protection protocols by allowing banks to exchange information regarding questionable transactions and curtailing the ongoing investigation of clients not directly linked to suspicious accounts.

Additionally, the bill prohibits any correspondence with financial institutions without a physical presence in any country, or so-called “shell banks.”

According to the Finance Ministry, major Czech banks are comfortable with the bill, which was drafted in close cooperation with the Czech National Bank and the Czech Banking Association, representing the interests of local banks.

“We expect the responsible financial institutions to adopt these new measures without any significant problems,” Haas said.

Unanswered questions
Polling financial institutions in the Czech Republic, Hungary, Slovakia and Slovenia, the Ernst & Young study found that, while most Czech banks are not concerned about the new directive’s effects on profits or expenditures, “the direct impact on the market and the clientele is still an unanswered question.”

Based on past experiences of banks in Western Europe, where similar requirements have already been met, the study expects the directive to have a profound impact on all branches of banking.

“The implementation of these mechanisms will cost hundreds of thousands of euros in direct expenditures,” said Markus Lohmeier, Ernst & Young’s director for investigative services and conflict resolution. “The changes will not only affect internal processes and information technology, but also the clientele.”

Czech banks say the directive’s stricter regulations will limit client privacy. But it is unlikely that it will increase fees, said spokeswoman Kristýna Havligerová of Česká spořitelna, the largest bank by number of customers.
“In the near future, it will be necessary to react to certain regulatory changes, especially those regarding client identification, client screening and the monitoring of politically active individuals,” she said. “Legislative compliance will be achieved through updates in software and methodology, which do not require significant expenditures.”

Since the EC first passed the anti-money laundering directive in 2005, Czech banks have started to play a stronger role in screening suspicious client accounts. For the past two years, local financial institutions have made significant investments into new organizational and technological systems to enable closer monitoring of financial transactions.

“Banks are investing substantial sums into systematic programs for the prevention of money laundering, and their efforts are producing results,” wrote KPMG analyst Vladimír Dvořáček in a 2005 report.

http://www.praguepost.com/articles/2007/08/01/government-readies-money-laundering-bill.php

Austrian officials arrest BAE lobbyist on money-laundering charges

by David Leigh

Count Alfons Mensdorff-Pouilly questioned over €13m payment from British arms company

An Austrian count and lobbyist for the British arms company BAE has been arrested, making him the first of the company's global network of confidential agents to be held in custody in five years of bribery investigations by international authorities.

Count Alfons Mensdorff-Pouilly is being detained in Austria after being arrested on Friday, a spokesman for the Vienna regional court for criminal matters, Christian Gneist, said. He faces a court hearing on 16 March.

Under Austrian law, pre-trial custody can last up to six months if an investigating judge deems it necessary.

Mensdorff-Pouilly owns a castle in Scotland and is married to the former Austrian health minister Maria Rauch-Kallat. He was arrested at his house in Luising, Austria, according to his lawyer, Harald Schuster, who claimed the accusations, which include money laundering, were groundless.

BAE, Europe's biggest arms manufacturer, declined to comment on the arrest.


The Austrian investigation, which follows one by British authorities, relates to lease agreements from 2003 and 2004. Hungary renewed a lease for 14 Gripen planes and the Czech government agreed to lease 14 planes over 10 years. BAE marketed the planes, which are produced by the Swedish company Saab, in which BAE has a 21% stake.

Mensdorff-Pouilly is being questioned in connection with a €13m (£11.6m) payment allegedly made to him by BAE, for whom he had been a consultant for 16 years. Documents which have emerged in the case link BAE to secret payments made to an intermediary company called Valurex, in Switzerland.

Following exposure by the Guardian of the original bribery allegations against BAE, a report last year by the retired British judge Lord Woolf said the arms giant had paid "insufficient attention" to ethical standards when doing arms deals. After strenuous lobbying by BAE, a British investigation by the Serious Fraud Office (SFO) into bribery allegations in Saudi Arabia was halted by the then prime minister, Tony Blair, on the grounds it would compromise national security.

But the SFO continued to work with international prosecutors on allegations against BAE in eastern Europe, Tanzania, Chile and South Africa. They obtained production orders from BAE and its bankers, Lloyds TSB, which unearthed links with Mensdorff-Pouilly's companies.

Last year, the count was stopped for questioning by the SFO on the way home from Dalnaglar Castle in Perthshire, a property he bought after the conclusion of the Czech deals.

The US justice department has been negotiating with BAE about the possibility of a settlement in a parallel investigation into possible breaches of the US Foreign Corrupt Practices Act.

Source: The Guardian