U.S. Expands N.Korea Sanctions

The Obama administration has stepped up sanctions against North Korea by freezing the assets of individuals, companies and organizations allegedly linked to support for Pyongyang's nuclear program.

According to an executive order posted on the U.S. Treasury Department's website on Monday, the U.S. will freeze the assets of four North Koreans, three of the country's companies and five government agencies suspected of "illicit and deceptive activities."

The move includes a new executive order issued by President Barack Obama as well as sanctions against a North Korean intelligence agency and an office of the North Korean Workers' Party which the Treasury says is involved in the trade of methamphetamine and heroin.

The Treasury added that those on the blacklist have bought luxury goods on behalf of the regime and are suspected of drug trafficking, money laundering and currency counterfeiting.

Source: The Chosun Ilbo

NZ firms linked to money laundering

by MICHAEL FIELD

Criminals are using shell companies set up under New Zealand's lax company laws to launder money.

Companies created by an Auckland firm operating out of Queen St have been linked to Russian crime, a Mexican drug cartel and Romanian extortion.

A 16-month Fairfax Media investigation has also tied companies created by Geoffrey Taylor and his sons Ian and Michael, who work out of 363 Queen St, to a company that smuggled arms out of North Korea.

The government admits there is a problem but says it has had other priorities.

The Taylor operation is not illegal, but the companies they create are connected to serious crimes in a number of countries.

They set up a shell company, Bristoll Export Ltd, that helped move part of the proceeds of a $245 million Russian tax fraud out of Moscow and into Swiss bank accounts. London-based Hermitage Capital Management hired a lawyer to find out what happened, but he died in a Moscow jail.

Hermitage chief executive Bill Browder told the Sunday Star-Times he was "highly motivated to make sure all aspects of this story see the light of day", and that he had a "treasure trove of information" about New Zealand companies' ties to the scandal.

The Taylors set up complex webs of companies, and one of them, linked to Russians in Cyprus, is administered out of a home in Albany near Auckland.

A United States Justice Department investigation into the banking giant Wachovia, also tied Taylor-linked companies to the movement of drug money. Wachovia was fined more than $202m for helping disguise the illegal origins of up to $479 billion for Mexican drug lords, predominantly the murderous Sinaloa cartel. Four Taylor companies "filtered" $50m in drug money through banks in Latvia and on to Wachovia. Each of the companies had just one director – Stella Port-Louis, 32, of the Seychelles, until recently a director of around 300 New Zealand companies.

Canada's Financial Transactions and Reports Analysis Centre, which assessed Wachovia, identified the "exploitation of New Zealand's weak company registration laws" as a problem.

International expert Martin Woods said shell companies were "ideal vehicles for money launderers, tax evaders and arms traffickers".

In 2009, a Georgia-registered cargo plane flew from North Korea to Bangkok and was found to have 35 tonnes of arms on it. The plane was chartered by SP Trading Ltd, a company set up by the Taylors.

The company's director was a Burger King cook named Lu Zhang, 29, who was later convicted of 75 breaches of the Companies Act for giving false addresses on registration forms, something she described in court as "one little mistake".

She is also a director of companies linked to Romanian Lorenzo Kiss, who is under arrest over an alleged $14.5m embezzlement.

Ian Taylor told the Sunday Star-Times media reports connected dots that weren't there.

PricewaterhouseCoopers Auckland's forensic services director Alex Tan said using company service providers had become common here.

"The money-laundering and even terrorist financing risks associated with them are high, particularly considering they can be set up over the internet."

Source: Sunday Star Times

FATF Public Statement

The Financial Action Task Force (FATF) is the global standard setting body for anti-money laundering and combating the financing of terrorism (AML/CFT). In order to protect the international financial system from ML/FT risks and to encourage greater compliance with the AML/CFT standards, the FATF identified jurisdictions that have strategic deficiencies and works with them to address those deficiencies that pose a risk to the international financial system.

Jurisdictions subject to a FATF call on its members and other jurisdictions to apply counter-measures to protect the international financial system from the on-going and substantial money laundering and terrorist financing (ML/TF) risks emanating from the jurisdictions*.

Iran

Democratic People's Republic of Korea (DPRK)

Jurisdictions with strategic AML/CFT deficiencies that have not made sufficient progress in addressing the deficiencies or have not committed to an action plan developed with the FATF to address the deficiencies** The FATF calls on its members to consider the risks arising from the deficiencies associated with each jurisdiction, as described below.

Bolivia
Cuba**
Ethiopia
Kenya
Myanmar
Sri Lanka
Syria
Turkey


* The FATF has previously issued public statements calling for counter-measures on Iran and DPRK. Those statements are updated below.
**Cuba has not engaged with the FATF in the process.


Iran

The FATF remains concerned by Iran’s failure to meaningfully address the on-going and substantial deficiencies in its anti-money laundering and combating the financing of terrorism (AML/CFT) regime. The FATF remains particularly concerned about Iran’s failure to address the risk of terrorist financing and the serious threat this poses to the integrity of the international financial system. The FATF urges Iran to immediately and meaningfully address its AML/CFT deficiencies, in particular by criminalising terrorist financing and effectively implementing suspicious transaction reporting (STR) requirements.

The FATF reaffirms its call on members and urges all jurisdictions to advise their financial institutions to give special attention to business relationships and transactions with Iran, including Iranian companies and financial institutions. In addition to enhanced scrutiny, the FATF reaffirms its 25 February 2009 call on its members and urges all jurisdictions to apply effective counter-measures to protect their financial sectors from money laundering and financing of terrorism (ML/FT) risks emanating from Iran. FATF continues to urge jurisdictions to protect against correspondent relationships being used to bypass or evade counter-measures and risk mitigation practices and to take into account ML/FT risks when considering requests by Iranian financial institutions to open branches and subsidiaries in their jurisdiction. If Iran fails to take concrete steps to improve its AML/CFT regime, the FATF will consider calling on its members and urging all jurisdictions to strengthen counter-measures in October 2011.

Cuba

Cuba has not committed to the AML/CFT international standards, nor has it constructively engaged with the FATF. The FATF has identified Cuba as having strategic AML/CFT deficiencies that pose a risk to the international financial system. The FATF urges Cuba to develop an AML/CFT regime in line with international standards, and is ready to work with the Cuban authorities to this end.

Bolivia

Despite Bolivia’s high-level political commitment to work with the FATF and GAFISUD to address its strategic AML/CFT deficiencies, Bolivia has not made sufficient progress in implementing its action plan, and certain strategic AML/CFT deficiencies remain. Bolivia should work on addressing these deficiencies including by: (1) ensuring adequate criminalisation of money laundering (Recommendation 1); (2) adequately criminalising terrorist financing (Special Recommendation II); (3) establishing and implementing an adequate legal framework for identifying and freezing terrorist assets (Special Recommendation III); and (4) establishing a fully operational and effective Financial Intelligence Unit (Recommendation 26). The FATF encourages Bolivia to address its remaining deficiencies and continue the process of implementing its action plan, including by continuing to work on its AML/CFT legislation.

Ethiopia

Despite Ethiopia’s high-level political commitment to work with the FATF to address its strategic AML/CFT deficiencies, Ethiopia has not made sufficient progress in implementing its action plan, and certain strategic AML/CFT deficiencies remain. Ethiopia should work on addressing these deficiencies, including by: (1) adequately criminalising money laundering and terrorist financing (Recommendation 1 and Special Recommendation II); (2) establishing and implementing an adequate legal framework and procedures to identify and freeze terrorist assets (Special Recommendation III); (3) ensuring a fully operational and effectively functioning Financial Intelligence Unit (Recommendation 26); (4) raising awareness of AML/CFT issues within the law enforcement community (Recommendation 27); and (5) implementing effective, proportionate and dissuasive sanctions in order to deal with natural or legal persons that do not comply with the national AML/CFT requirements (Recommendation 17). The FATF encourages Ethiopia to address its remaining deficiencies and continue the process of implementing its action plan.

Kenya

Despite Kenya’s high-level political commitment to work with the FATF and ESAAMLG to address its strategic AML/CFT deficiencies, Kenya has not made sufficient progress in implementing its action plan, and certain strategic AML/CFT deficiencies remain. Kenya should work on addressing these deficiencies, including by: (1) adequately criminalising terrorist financing (Special Recommendation II); (2) ensuring a fully operational and effectively functioning Financial Intelligence Unit (Recommendation 26); (3) establishing and implementing an adequate legal framework for identifying and freezing terrorist assets (Special Recommendation III); (4) raising awareness of AML/CFT issues within the law enforcement community (Recommendation 27); and (5) implementing effective, proportionate and dissuasive sanctions in order to deal with natural or legal persons that do not comply with the national AML/CFT requirements (Recommendation 17). The FATF encourages Kenya to address its remaining deficiencies and continue the process of implementing its action plan, including by implementing the AML legislation and operationalising the new AML Advisory Board.

Myanmar

Myanmar has taken steps towards improving its AML/CFT regime, including by clarifying the scope of the ML offence. Despite Myanmar’s high-level political commitment to work with the FATF and APG to address its strategic AML/CFT deficiencies, Myanmar has not made sufficient progress in implementing its action plan, and certain strategic AML/CFT deficiencies remain. Myanmar should work on addressing these deficiencies, including by: (1) adequately criminalising terrorist financing (Special Recommendation II); (2) establishing and implementing adequate procedures to identify and freeze terrorist assets (Special Recommendation III); (3) further strengthening the extradition framework in relation to terrorist financing (Recommendation 35 and Special Recommendation I); (4) ensuring a fully operational and effectively functioning Financial Intelligence Unit (Recommendation 26); (5) enhancing financial transparency (Recommendation 4); and (6) strengthening customer due diligence measures (Recommendation 5). The FATF encourages Myanmar to address its remaining deficiencies and continue the process of implementing its action plan.

Sri Lanka

Despite Sri Lanka’s high-level political commitment to work with the FATF and APG to address its strategic AML/CFT deficiencies, Sri Lanka has not made sufficient progress in implementing its action plan, and certain strategic AML/CFT deficiencies remain. Sri Lanka should work on addressing these deficiencies, including by: (1) adequately criminalising money laundering and terrorist financing (Recommendation 1 and Special Recommendation II); and (2) establishing and implementing adequate procedures to identify and freeze terrorist assets (Special Recommendation III). The FATF encourages Sri Lanka to address its remaining deficiencies and continue the process of implementing its action plan, including by continuing to work on its AML/CFT legislation.

Syria

Syria has taken steps towards improving its AML/CFT regime, including by improving the ML and TF offences. Despite Syria’s high-level political commitment to work with the FATF and MENAFATF to address its strategic AML/CFT deficiencies, Syria has not made sufficient progress in implementing its action plan, and certain strategic AML/CFT deficiencies remain Syria should work on addressing its deficiencies, including by: (1) adopting adequate measures to implement and enforce the 1999 International Convention for the Suppression of Financing of Terrorism (Special Recommendation I); (2) implementing adequate procedures for identifying and freezing terrorist assets (Special Recommendation III); (3) ensuring financial institutions are aware of and comply with their obligations to file suspicious transaction reports in relation to ML and FT (Recommendation 13 and Special Recommendation IV); and (4) ensuring appropriate laws and procedures are in place to provide mutual legal assistance (Recommendations 36-38, Special Recommendation V). The FATF encourages Syria to address its remaining deficiencies and continue the process of implementing its action plan.

Turkey

Turkey has taken steps towards improving its AML/CFT regime, including by working on CFT legislation. Despite Turkey’s high-level political commitment to work with the FATF to address its strategic AML/CFT deficiencies, Turkey has not made sufficient progress in implementing its action plan, and certain strategic AML/CFT deficiencies remain. Turkey should work on addressing these deficiencies, including by: (1) adequately criminalising terrorist financing (Special Recommendation II); and (2) implementing an adequate legal framework for identifying and freezing terrorist assets (Special Recommendation III). The FATF encourages Turkey to address its remaining deficiencies and continue the process of implementing its action plan.

Source: FATF

US diplomats to hold talks in Seoul on Iran sanctions

A delegation of senior U.S. diplomats is scheduled to arrive in Seoul on Monday for consultations on anti-Iran sanctions expected to focus on how much Korea should cut its crude oil imports from the Middle Eastern nation.

The three-day visit by the U.S. delegation, led by Robert Einhorn, the State Department's special adviser for nonproliferation and arms control, comes amid mounting global tensions over Iran's nuclear ambitions. 

Late last month, U.S. President Barack Obama signed into law a bill that imposes tough sanctions against financial institutions dealing with the central bank of Iran accused of seeking a nuclear weapons program.

The new U.S. sanctions, however, have placed South Korea in a difficult position, as Seoul imports some 10 percent of its crude oil needs from Tehran. 

Einhorn, who last visited South Korea early last month, will be accompanied by Daniel Glaser, the U.S. Treasury's deputy assistant secretary for terrorist financing and financial crimes, Seoul's foreign ministry said. 

South Korean officials said that Seoul has not yet made a decision on how much to cut its crude oil imports from Iran. 

In a statement, the foreign ministry said South Korea will "actively request that the U.S. help minimize potential adverse effects that the new U.S. sanctions could exert on South Korean companies in the course of their implementation." 

During his visit to Seoul last month, Einhorn denied that he specifically asked Korea to stop purchases of crude oil from Iran, but said the U.S. would welcome such a decision by Seoul.

Iranian crude oil accounted for 8.3 percent of total imports by South Korea in 2010, but the ratio rose to 9.6 percent in the first 11 months of last year. 

Currently, Korea is dealing with Iran's central bank to make payments for its crude oil imports. 

In an apparent move to minimize fallout from the U.S. sanctions against Iran, Korean Prime Minister Kim Hwang-sik is currently on a tour of two Middle East nations, Oman and the United Arab Emirates. (Yonhap)

Source: The Korea Times

Apple Global Supply Manager Accused of Accepting $1 Million in Kickbacks

A mid-level Apple manager faces twenty-three counts of a federal grand jury indictment alleging that the 37-year-old Paul Shin Devine, a global supply manager, is guilty of wire fraud, money laundering, and kickbacks related to his position at the company. Andrew Ang, of Singapore, faces the same charges as well.

And if that's not bad enough, Apple itself has filed a separate civil suit against Devine, alleging that the Sunnyvale, CA-based (former) employee accepted more than $1 million in bribes and kickbacks from countries including China, South Korea, Taiwan, and Singapore.

According to the indictment, Devine allegedly used his position at Apple to acquire various bits of confidential information about the company. He would turn around and sell this information to more than a half-dozen Apple suppliers—including the aforementioned Ang—and both would receive payments for their efforts. Using the confidential knowledge, said suppliers would be able to better position themselves to bid for and receive Apple contracts.

The San Jose Mercury News reports that the companies in the indictment remained unnamed, but they're said to be involved in supplying materials for Apple's iPods and iPhones.

"Apple is committed to the highest ethical standards in the way we do business," said Apple spokesman Steve Dowling in a statement. "We have zero tolerance for dishonest behavior inside or outside the company."

The somewhat-complicated scheme, reads the indictment, involved a number of U.S. and foreign bank accounts, as well as the falsified company "CPK Engineering," to process the payments. Devine allegedly attempted to conceal the money transfers using code words as to not clue his employer into what was actually transpiring, and would even go so far as to open the foreign bank accounts in his wife's name.

The Internal Revenue Service reports that Devine is currently in the custody of U.S. Marshals, awaiting a 1:30 p.m. court appearance this coming Monday in the U.S. Northern District Court in San Jose.

Source: PC Mag

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

Korea: ACC sits on $7.5m money laundering evidence

A Korean citizen claims that an Anti-Corruption Commission (ACC) official has stopped proceedings of filing a case regarding laundering of about $7.5 million although National Coordination Committee (NCC) to combat serious crime and corruption has evidence.

Ok-Kyung Oh in a press conference at Jatiya Press Club yesterday said a taskforce team this year found evidence of laundering the amount to South Korea by her former husband Bo- Sun Park, chairman of TaeHung Packaging (BD) Ltd, and forwarded the matter to ACC for further action.

She alleged ACC did not make any probe into the matter for mysterious reasons except changing the enquiry officer three times.

Ok-Kyung Oh, who claims to have been removed from the post of managing director of the same company illegally in 2004, alleges that ACC Commissioner Abul Hasan Manzur Mannan is holding back the file regarding filing of the case.

"If an ACC commissioner is holding back a file like this, then who's going to fight against corruption?" Ok-Kyung Oh asks.

"If ACC cannot file this case even after having such documents, the commission cannot file any case regarding corruption," she adds.

Contacted, Mannan told The Daily Star, "The allegation is not true. May be she has misunderstood me. She might have said that Customs Bond Commissionerate did not scrutinise her allegations earlier."

On delay in ACC action regarding the matter, he said, "The officer entrusted with enquiry earlier collected all the information but did not take those into cognisance, especially those technically important for this case."

"I don't know why the officer did that," he said, adding, "As we have understood all aspects of the matter by now, it would be disposed of soon."

Mentioning the recent taskforce report regarding the matter, Ok-Kyung Oh told journalists $7.5 million amounts to Tk 52.35 crore was laundered from 2000 till 2007 through over invoice.

She also complains that two former committees formed by the Bangladesh Bank and Customs Bond Commissionerate could not conduct impartial investigation and were influenced by former communications minister Nazmul Huda and his wife Sigma Huda during tenure of the four-party alliance government.

Source: The Daily Star

Romanian soccer investigated for tax evasion, embezzlement, money laundering

BUCHAREST, Romania (AP) - Anti-corruption prosecutors began an investigation Thursday into top soccer officials involving money laundering and tax evasion in the transfer of Romanian players to foreign clubs.

The prosecutors say the state should have received ¤1.7 million (US$2.5 million) in revenue and tax if the actual amounts of money received in the transfers
had been registered in the accounts of the clubs.

Romanian prosecutors pieced together information about finances related to soccer deals from countries such as the Netherlands, Spain, Italy, China and South Korea. They say 12 players were transferred to foreign clubs for bigger amounts of money than stated in the accounts.

Ten people are under investigation, including Rapid Bucharest chairman Gheorghe Copos and Dinamo chairman Cristi Borcea. The 10 are accused of diverting more than ¤10 million (US$14.6 million) to bank accounts of offshore companies from the Virgin Islands and the Netherlands to avoid paying the full tax.

Soccer is one of the most popular sports in Romania, but it has recently been marred by claims of corruption and match-fixing.

http://www.pr-inside.com/romanian-soccer-investigated-for-tax-r391755.htm

Macau Bank Denies Laundering North Korean Cash

By Heda Bayron
Hong Kong
20 September 2005

In a statement published Tuesday in major newspapers in Hong Kong and Macau, Banco Delta Asia said it had been engaged in business with North Korean banks and trading companies since the 1970's. But it called the U.S. Treasury Department's accusation that the bank is a money laundering conduit for North Korea "unfounded".

On Thursday, the Treasury Department designated Banco Delta Asia as a "primary money laundering concern" under the USA Patriot Act, which was passed in the aftermath of the September 11, 2001, terrorist attacks on New York and Washington.

The department said Banco Delta has been a "willing pawn" for North Korean agencies and companies to engage in "corrupt financial activities through Macau." It said the bank has met North Korea's needs and demands "with little oversight or control."

Stanley Au, the bank's chairman, told Hong Kong television the allegations are not true.

The bank says it will appeal the designation, and has announced that it has suspended all transactions with North Korean clients.

On Friday and Saturday, thousands of panicked depositors in Macau lined up to withdraw money from the bank.

In a bid to maintain public confidence, the Macau government appointed two independent bankers to help run Banco Delta Asia while it is under investigation. The Hong Kong Monetary Authority Friday also appointed a representative to manage a bank subsidiary in Hong Kong.

Joseph Yam, the head of the Hong Kong Monetary Authority, said Tuesday the investigation into the bank should proceed carefully in order to protect depositors.

The Treasury Department's Financial Crimes Enforcement Network has proposed a new rule that would prohibit U.S. financial institutions from dealing with Banco Delta Asia.

The department characterized Macau as a region in need of "significant improvement" in money laundering controls. The former Portuguese enclave reverted to Chinese sovereignty in 1999, and is best known for its booming gambling industry.

Source: VOA

U.S. retains N.K. on terrorism list but reaffirms possible removal

YONHAP - The United States on Wednesday retained North Korea on its list of terrorism-sponsoring states, but reaffirmed in stronger language its commitment to remove the communist regime once Pyongyang fulfills its denuclearization obligations.

On South Korea, the annually announced report expressed satisfaction with Seoul's law enforcement and intelligence capabilities, and said it remains a valuable partner in the fight against terror financing and money laundering.

The report, which assesses developments in 2007, does not mention the U.S. announcement last week that North Korea helped Syria, another country designated for abetting terrorism, build a covert nuclear reactor.

But a State Department official said the U.S. was looking into the recent revelation, including whether that is "valid" information.

"We are looking very carefully at those situations with our intelligence analysts, ensure we got the right information as to whether those are valid or not," said Dell Dailey, coordinator of the Office for Counterterrorism, at a press briefing on the report.

"We are not certain yet that is valid information. Some of it is unfolding as we speak."

The report, titled "Country Reports on Terrorism," has been closely watched in recent years after the U.S. offered to take the North off the list as one of the incentives for Pyongyang to give up its nuclear weapons and programs under six-nation agreements.

South and North Korea, the U.S., China, Russia and Japan are members of the six-party talks aimed at denuclearizing the Korean Peninsula.

North Korea was put on the list, joining Cuba, Iran, Sudan and Syria, in January 1988 after its agents bombed a South Korean airliner in November the preceding year. All 115 people aboard the plane were killed.

The report said North Korea is not known to have sponsored any terrorist acts since then.

Getting off the list is one of Pyongyang's most coveted benefits, since it would lift wide-ranging prohibitions that effectively restrict economic assistance and diplomatic interchanges.

After striking a deal in September 2005, under which Pyongyang agreed to eventually abandon its nuclear programs, the U.S. toned down the segment on North Korea by striking out detailed accounts of the country's past abductions of Japanese citizens.

This year, the report gave more emphasis to the U.S. commitment to delist Pyongyang once conditions are met.

"As part of the six-party talks process, the United States reaffirmed its intent to fulfill its commitments regarding the removal of the designation of DPRK as a state sponsor of terrorism in parallel with the DPRK's actions on denuclearization and in accordance with criteria set forth in U.S. law," said the report.

DPRK stands for Democratic People's Republic of Korea, North Korea's official name.

Last year's report said the U.S. agreed to "begin the process" of removing North Korea from the list.

But the U.S. intelligence assessment, made public last week, of the North Korea-Syria nuclear connection has complicated the circumstances. Critics, including those in Congress, argue that Pyongyang cannot be trusted and insist that the U.S. exert more pressure on the regime, which allegedly had nuclear experts in Syria as recently as last fall, to help clean up what the U.S. believes was a reactor that was destroyed by an Israeli air raid in September.

This year's report does not mention the issue.

On South Korea, the report said the country has broadened its attention to terrorism beyond the Korean Peninsula "and continued its active participation in regional training and capacity-building programs." "South Korean immigration and law enforcement agencies had an excellent record of tracking suspicious individuals entering their territory and reacting quickly to thwart potential terrorist acts," it said.

"The government is on schedule to begin issuing e-passports that will further protect the identity of lawful travelers and prevent terrorists from using counterfeit passports."

The report also noted that the South Korean parliament passed anti-terrorist financing legislation to further curb money laundering by terrorist groups in and through the country.

http://www.amlosphere.com/asia/cft/u.s.-retains-n.k.-on-terrorism-list-but-reaffirms-possible-removal.html

FATF to Decide on Korean Membership

The Financial Action Task Force on Money Laundering will begin a review of Korea's financial situation, as the country seeks membership into the organization.

The Financial Services Commission in Seoul says the two-week inspection will take place from Monday to next Friday, November 14th.

The FATF, an affiliate of the Organization for Economic Co-operation and Development, was founded in 1989 by the advanced Group of Seven member countries to fight against money laundering. There are currently 32 members.

A seven-member inspection group of U.S., Japanese and Spanish officials will evaluate Korea based on a 49-item FATF checklist.

A commission official says Korea could become a member some time next year if the inspection is successful, which he says will positively affect the credit ratings of domestic financial firms.

Source: KBS

India: Cabinet okays amendments to Prevention of Money Laundering Act

The government on Wednesday approved amendments to the Prevention of Money Laundering Act, which would expedite the process of India's entry into Financial Action Task Force (FATF) -- an inter-governmental body combating money laundering and terrorist financing.

A Bill seeking to change the Act will be introduced in Parliament, Home Minister P Chidambaram told reporters after a meeting of the Cabinet.

"Some amendments have been made. The Bill will be introduced in the current session of Parliament and we will plan to get it passed if possible," he said.

He said the changes in the Act were necessary for India to become a member of the FATF.

"This is important in order to get India's membership in the Financial Action Task Force, which is an international body," he said, however, not elaborating what amendments have been proposed in the Bill.

India, along with South Korea, has been trying to become a full member of FATF. It was given the observer status in February 2007.

In another decision, the Cabinet gave post-facto approval for Agricultural and Processed Food Private Export Development Authority Amendment Bill 2008, which is already in Parliament as an amendment Bill.

Source: ZeeNews

Sri Lanka FIU signed MOUs with FIUs of Philippines and Nepal

The Financial Intelligence Unit (FIU) of Sri Lanka recently signed Memoranda of Understanding (MOU) with FIUs of Philippines and Nepal to share financial information to facilitate the investigation and prosecution of persons suspected of money laundering and terrorist financing.

The signing ceremony was held in Brisbane, Australia during the Annual Meeting of the Asia Pacific Group on Money Laundering, said the Central Bank of Sri Lanka in a press release.

FIUs have been established in more than 130 countries as dedicated institutions to facilitate fight against money laundering, terrorist financing and other unlawful activities.

In Sri Lanka the FIU was established in 2006 under the Financial Transactions Reporting Act (FTRA) No.6 of 2006 and now operates in the Central Bank of Sri Lanka.

It also said money launderers and terrorist financiers are most often internationally connected and operate across borders. Financial intelligence and authorities also need to be internationally organized to fight these activities. Therefore, there is a need for FIUs to co-operate with each other and to exchange information.

MOUs will facilitate greater co-operation and co-ordination among FIUs in the exchange of financial intelligence.

The FIU-Sri Lanka has already entered into MOUs with Malaysia, Afghanistan, South Korea and Indonesia. Arrangements are currently being made to sign similar MOUs with other FIUs in the region including India, Bangladesh and Japan.

Source: Isria

US Treasury official presses Hong Kong bankers to help curb NKorean bank access

A top U.S. Treasury official met with Hong Kong regulators and bankers Thursday as part of an effort to keep North Korea from using the international financial system to fund its nuclear program and other illicit activities.

Stuart Levey, a U.S. Treasury undersecretary who oversees the department's terrorism and financial intelligence section, met with officials from Hong Kong's de facto central bank, the Hong Kong Monetary Authority, the bank said in a brief statement to The Associated Press.

The authority refused to release details of the talks.

Levey was also meeting with executives from HSBC, the giant London-based lender with major operations in Hong Kong and elsewhere in Asia, according to a person familiar with the matter. The person spoke on condition of anonymity because of the sensitivity of the situation.

The meeting was "to remind people that there are regulations," the person said.


Levey traveled to China and Hong Kong this week to gain support for U.S. initiatives to curb North Korea's access to banks and businesses to buy and sell missile and nuclear technology. He arrived Monday in China and was meeting with government officials and private sector executives Wednesday through Friday.

However, at least one Hong Kong-based bank, the Bank of East Asia, declined to meet with Stuart.

"He requested a meeting with us, but unfortunately we were not able to meet with him," said the bank's chief executive, David Li. "We have nothing to do with North Korea."

A Treasury spokesperson did not immediately return a message seeking comment.

The international community has been struggling to rein in North Korea since the reclusive totalitarian state conducted a nuclear test in May.

The U.N. Security Council last month adopted tougher new sanctions, which North Korea defied last week with missile launches.

U.S. officials have gone after North Korea's funding before.

In 2005, the U.S. imposed financial restrictions on Banco Delta Asia, a bank near Hong Kong in the Chinese territory of Macau, over allegations it helped North Korea with money laundering and other illicit activities.

The move effectively cut Pyongyang off from the global financial system, analysts say, because banks in other countries, including North Korean ally China, did not want to jeopardize access to the U.S. financial system.

The restrictions were lifted in 2007 to nudge North Korea back to stalled nuclear talks.

Source: Los Angeles Times

Korea Becomes 35th FATF Member

South Korea has garnered full membership of the Financial Action Task Force on Money Laundering (FATF) after almost a decade of efforts to join the international organization.

During its plenary meeting on Wednesday, which takes place three times a year in February, June and October, the Paris-based agency admitted Asia's fourth-largest economy as its 35th member.

The Korea Information Intelligence Unit (KOFIU) expects the membership will help improve the integrity and confidence in the nation's financial markets, and have a positive impact on the offshore business operations of local financial institutions.

``Thus far, Korean financial entities, especially small-sized ones, have languished in their overseas business operations as the country was not a member of the FATF,'' KOFIU Director Lee Young-jick said.

``For example, they have been required to submit additional documents to foreign authorities in order to gain approval or a license. Such inconvenience will not happen in the future,'' he said.

Established in 1989, the FATF has concentrated on the development and promotion of policies to grapple with money laundering and terrorist financing both locally and globally.

Most developed countries have joined the initiative ― a majority of the member countries of the Organization for Economic Cooperation and Development (OECD), composed of advanced economies, participates in the FATF.

Only five OECD nations ― Poland, Hungary, Slovakia, the Czech Republic and Korea ― had not been part of the task force.

After setting up the KOFIU back in 2001, timed with the introduction of the anti-money laundering systems, Korea has tried to join the FATF and gained observer status midway through 2006.

``We will take the FATF membership as an opportunity to make a greater contribution to cross-border efforts fighting against money laundering and terrorist financing,'' Lee said.

Currently, those who attempt money laundering here face severe punishment. Even financial outfits or casino operators who fail to abide by reporting obligations on suspicious transactions regarding money laundering can face criminal charges.

Financial firms or casino owners are subject to a maximum of 30 million won in fines or up to five years in jail if they violate regulations on the mandatory reports.

KOFIU is looking to expand reporting to non-financial professionals such as lawyers or accountants as soon as possible, which is recommended by FATF.

Led by Commissioner Kim Young-kwa, KOFIU is affiliated with the Financial Services Commission, the nation's top financial policymaker headed by Chairman Chin Dong-soo.

Source: Korea Times

Korea: Lawyers, Accountants Will Be Obliged to Report Money Laundering

The Korean government plans to introduce a rule under which lawyers and accountants will be obliged to report when their customers are suspected of having committed money laundering.

The Financial Services Commission (FSC) made public its plan to expand the reporting obligations to non-financial professionals during the parliamentary inspection of the commission, Monday.

But the rule may trigger a conflict of interest if lawyers and accountants must inform on the wrongdoings of their clients, analysts said.

Currently, only casinos and financial companies such as banks and brokerage houses have had to report transactions of more than 20 million won suspected of involvement in money laundering to the Korea Financial Intelligence Unit (KFIU).

The failure to do so or any false reports constitute criminal offences. Violators of the regulations may be subject to a maximum of 30 million won in fines or five years in jail.

"In order to meet the requirement, we will expand the rule to include attorneys and accountants," an FSC official said.

"The plan will be introduced in phases. At first, we will advise the non-financial professionals to voluntarily report the suspicious deals. Later on, it will be legislated," he said.

In addition, the FSC is looking to reduce the lower limit of 20 million won for the reporting obligations to 5 million won in the near future.

This year, up to 100,000 cases of suspicious money laundering were reported to the KFIU, compared with 85,624 last year. The number is expected to reach 130,000 this year.

The number stood at 13,459 in 2005 but surged to 24,149 in 2006 and 52,474 in 2007 before surpassing the 100,000 mark this year.

The reports came mostly from banks, out of approximately 5,800 financial companies and 17 casinos. Since last December, just two casino operators reported 11 suspicious cases.

In the meantime, Korea hopes to become the 35th member nation of the Financial Action Task Force on Money Laundering (FATF), at the general meeting of the Paris-based organization Wednesday, which will take place in the French capital.

The FATF is an international organization, whose purpose is the development and promotion of policies to grapple with money laundering and terrorist financing locally and globally.

Up until now, the country's financial outfits, particularly small-sized ones, have faced some difficulties because it was not a member of the FATF.

Source: Korea Times

Korea: Tighter Money-Laundering Rules Go Into Force

Starting Monday, all financial institutions will be required to classify their customers as high or low risk and the Financial Intelligence Unit under the Financial Services Commission must be notified of daily transactions exceeding W20 million or over $10,000 by high-risk clients (US$1=W1,292).

The FIU must also be notified of the source of funds, purpose of transaction, employment information and wealth status. The measure is part of strengthened checks on customers in line with government efforts to stem the amassing of slush funds and to prevent money laundering.

Under a set of new standards prepared by the Korea Federation of Banks and other organizations, high-risk customers are those with at least W3 billion in financial assets in a single financial institution, persons either under 18 years of age or over 80 and foreigners from territories that are either deemed high-risk countries or tax havens.

Source: Chosun

Delta Asia denies involvement in money laundering

BEIJING, March 27 (Itar-Tass) - Banco Delta Asia in Macao (Aomen) where North Korea's money worth 25 million US dollars are deposited has denied involvement in money laundering, according to a press release of the bank owner Stanley Au circulated here on Tuesday.

Thorough examinations conducted by auditors and investigators have not yielded any proof that not a single holder of accounts in Delta Asia had in that or other way participated in or had been involved in illegal transactions, it is stressed in the document. It also points out that Delta Asia and its daughter companies have resolutely denied such accusations.

The press release has become the first official reaction of the bank to a ban of the US Treasury Department on American banks’ deals with Delta Asia.

In 2005, Washington labelled Delta Asia as the main money laundering instrument accusing it of spreading counterfeited dollars allegedly made in North Korea, legalisation of money from drug sale and other crimes. The American Treasury Department then demanded that the Macao authorities should freeze accounts of North Korean firms, however, later made concessions in order to attain progress at the six-party talks on the Korean Peninsula denuclearisation and unblocked the accounts.

However, Pyongyang has encountered a problem with getting the money, because other banks have been refusing to receive on their accounts the supposedly “dirty” money, unwilling to tarnish their reputation and fearing to be put on the “blacklist” of the US Treasury Department.

http://www.itar-tass.com/eng/level2.html?NewsID=11375286&PageNum=0

Macau bank says HSBC helped it authenticate $US deposits by N.Korea

HONG KONG (AP) - Banco Delta Asia - a Macau bank accused by the U.S. of helping North Korea distribute counterfeit money - relied on global banking group HSBC to check large deposits of U.S. dollars for North Korean customers, lawyers for the Macau lender have said.

The Macau lender's attorneys said in an Oct. 18 letter to U.S. investigators that the bank was a "relatively small, family-owned institution'' that was unable to check big batches of currency for fake bills.

"Since the bank did not have the sophisticated technology to analyze large deposits of U.S. currency, such deposits were sent to HSBC New York for analysis before being finally credited to the depositor's account,'' according to the letter, posted on the U.S. Treasury Department's Web site.

Most of the North Korean transactions were big "wholesale cash deposits,'' which were sent to HSBC, the letter said.

The Macau bank said it used its own older equipment to check smaller, retail deposits.

The equipment "did not function as well as the equipment used at HSBC New York,'' it said.

The letter to the U.S. department's Financial Crimes Enforcement Network was written by New York-based attorney Joseph McLaughlin with the law firm of Heller Ehrman, which is representing Banco Delta Asia.

Heller Ehrman's Hong Kong office did not immediately return calls from The Associated Press on Friday.

HSBC spokesman Gareth Hewett in Hong Kong told the AP the bank does not comment on individual companies.

He added, "We take money laundering control very seriously. We comply stringently with anti-money-laundering regulations issued by our various regulators, including in the U.S.''

In 2005, the U.S. Treasury Department accused the Macau bank of willingly helping North Korea launder money and handle counterfeit U.S. currency.

Washington launched an informal financial embargo that enraged the North Koreans, who walked out of discussions about the nation's nuclear program.

The talks have recently restarted.

This week, a U.S. Treasury envoy Daniel Glaser said his agency's suspicions of illegal financial activity were confirmed by two days of talks with Pyongyang officials that ended Wednesday.

But North Korea has not commented publicly on the meetings with Glaser.

It has insisted that it is innocent and has repeatedly demanded that Washington lift financial restrictions.

http://thestar.com.my/news/story.asp?file=/2007/2/2/apworld/20070202122428&sec=apworld

U.S. suspects N. Korea laundering money

A U.S. Treasury envoy who on Wednesday wrapped up two days of talks with North Korean officials said his agency's suspicions of illegal financial activity involving bank accounts linked to the communist nation were accurate.

Deputy Assistant Treasury Secretary Daniel Glaser said that he went over bank information of 50 account holders from the Macao-based Banco Delta Asia with his North Korean counterparts in Beijing, adding that U.S. concerns that the bank was being used for money-laundering purposes had "been vindicated" by the discussions.

"I think we are now in a position after a very lengthy investigation ... to start moving forward and trying to bring some resolution to this matter," Glaser said. He did not elaborate.

The financial talks are linked to continuing talks between North Korea and five other nations aimed at getting Pyongyang to dismantle its nuclear programs. China said Tuesday that those talks - the latest round of which ended in December with no breakthrough - will resume next week.

Glaser said the two sides planned to meet again to talk further about U.S. financial restrictions imposed due to Pyongyang's alleged smuggling and counterfeiting, but no date had been set.

Washington took action against the Banco Delta Asia in 2005, accusing the bank of complicity in North Korea's alleged illegal financial activity such as counterfeiting and money-laundering.

The move has caused other banks to steer clear of North Korean business for fear of losing access to the U.S. market, hampering the North's access to the international financial system.

The North says the restrictions are evidence of U.S. hostility.

U.S. officials have indicated that North Korea is demanding the financial issues be dealt with before progress can be made on the nuclear talks, involving the two Koreas, the United States, China, Japan and Russia.

Pyongyang wants Washington to first end the financial isolation campaign, and to lift a freeze on $24 million in accounts at Banco Delta Asia.

http://www.myrtlebeachonline.com/mld/myrtlebeachonline/news/world/16588681.htm