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FINANCIAL CRIME DIGEST

December 2016

A copy of the Bribery and Corruption Assessment template can be found HERE.

FINANCIAL CRIME DIGEST DECEMBER 2016

IN THIS ISSUE:

US Congress votes to extend Iran sanctions by 10 years

EU leaders agree to extend sanctions against RussiaLeaders of the European Union have agreed to extend existing sanction against Russia, relating to its activities in Crimea and Eastern Ukraine, by a further six months.

The current EU sanctions against Russia are due to expire on 31 January 2017. The “phase 3” sanctions were first introduced on 31 July 2014 and target access by Russian banks to capital markets in the EU, as well as Russian defence, finance and energy sectors.

Members of the US Senate have supported by the US House of Representatives by voting to extend the President’s authority to impose sanctions against Iran by 10 years.

The Administration has said the extension of the law does not affect the Joint Comprehensive Plan of Action, agreed in January 2016. The President declined to sign the extension although did not use his power of veto to prevent it being passed. Iran has said the extension is a violation of the nuclear agreement.

Welcome to the December edition of the Financial Crime Digest, Aperio Intelligence’s monthly newsletter, an informative summary of the most recent developments relating to the world of money laundering, fraud and terrorist financing, bribery and corruption, and sanctions.

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TECHNICAL UPDATES

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PRESS AND MEDIA 04 MONEY LAUNDERING | FRAUD | TERRORIST FINANCING

PRESS AND MEDIA 09 BRIBERY | CORRUPTION

PRESS AND MEDIA 15 SANCTIONS

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UK issues bribery and corruption assessment template

The UK Government has issued a Bribery and Corruption Assessment template that is intended for use by all Central Government Departments.

Based on input from experts and stakeholders across Government, use of the template is intended to be integrated into existing counter fraud activity and the work across the Government, led by the Cabinet Office, to create standards for counter fraud work and, from these standards, a Government Counter Fraud Profession.

https://mail.google.com/_/scs/mail-static/_/js/k=gmail.main.en.Az9C4K3BfFw.O/m=m_i,pdt,t,it/am=yOLiAPL_vj-IkwFAWelUhdn3zzefSgf73Pv_-wcECvoZ-L_Z_wP8GwAAAAB2UYMC/rt=h/d=1/rs=AHGWq9ArYc4a4SWDouFeU0nVxdczmRmKvg

FINANCIAL CRIME DIGEST | DECEMBER 2016

FATF issues mutual evaluation reports of United States of America and Switzerland

a good understanding of the risks of complex structures of legal persons and arrangements being used to hide ownership and launder money, the report noted that there are serious gaps in the legal framework to prevent access to accurate beneficial ownership information on a timely basis.

The report found that fundamental improvements are needed in these areas.

Sanctions programmes freezing terrorist assets have also had a significant impact on the proliferation of terrorist financing. The US has taken effective measures in regard to asset confiscation, having confiscated over USD 4.4 billion in 2014. In addition, the report found that the US has highly effective measures for international cooperation and provides good quality and constructive mutual legal assistance and extradition.

Whilst the report noted that AML/CFT supervision of the banking and securities sectors appeared to be robust as a whole, there is a significant supervisory gap as relates to AML/CFT supervision of other designated non-financial businesses and professions. In addition, notwithstanding that Federal authorities appear to have

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TECHNICAL UPDATES

The Executive Summary of the FATF/APG report on the US can be found HERE.

The second presidency compromise text (14 November 2016) (ST 14433 2016 INIT) can be found HERE.

The Executive Summary of the FATF report on Switzerland can be found HERE.

The full report can be found HERE.

United States of America

The Financial Action Task Force (FATF) has issued its fourth mutual evaluation report of the Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) measures of the US, undertaken in conjunction with the Asia/Pacific Group on Money Laundering (APG). The report found that the US has made CFT its priority and its measures in this respect are highly effective. The report notes that the US proactively and aggressively investigates, prosecutes and convicts individuals for terrorist financing and can capture any form of material support. Effective implementation of targeted financial sanctions has largely kept terrorist financing out of the US financial system.

Switzerland

FATF has issued its report on Switzerland’s AML and CFT system, based on the 2012 FATF Recommendations. The report comments on both the level of effectiveness of Switzerland’s AML/CFT regime as well as its level of technical compliance with the FATF Recommendations. The report found that since the last mutual evaluation of 2005, Switzerland has strengthened its AML/CFT regime and commented that there was a clear political will to promote the integrity of its financial centre. Switzerland has undertaken legal reforms to address the money laundering risks its faces.

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The report also noted that law enforcement authorities have demonstrated effectiveness in their investigative methods and of the mutual legal assistance they provide relating to cases of grand corruption. Switzerland has repatriated considerable sums of money to affected countries. In relation to supervisory measures, FATF encouraged the Swiss authorities to strengthen their controls with regard to the obligation to report suspicious transactions, particularly in relation to financial institutions.

The report also recommends that sanctions be applied for failure to comply with AML/CFT requirements, both to natural and legal

persons and should be commensurate to the seriousness of misconduct identified.

FATF noted that Switzerland has recently adopted measures to address some of its concerns and encouraged Swiss authorities to ensure effective implementation of these new legal provisions.

http://www.fatf-gafi.org/media/fatf/documents/reports/mer4/MER-United-States-2016-Executive-Summary.pdf

http://www.fatf-gafi.org/media/fatf/documents/reports/mer4/MER-United-States-2016.pdf

http://www.fatf-gafi.org/media/fatf/content/images/mer-switzerland-2016-executive-summary.pdf

http://www.fatf-gafi.org/media/fatf/content/images/mer-switzerland-2016.pdf

aperio-intelligence.comFINANCIAL CRIME DIGEST | DECEMBER 2016

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MONEY LAUNDERING | FRAUD | TERRORIST FINANCINGPRESS AND MEDIA

Italy’s Intesa Sanpaolo fined for anti-money laundering and bank secrecy violations

New York’s Department of Financial Services has fined Italy’s largest bank by market capitalisation, Intesa Sanpaolo, USD 235 million for violating anti-money laundering and bank secrecy laws, noting that it had uncovered “sweeping” abuses requiring fundamental changes to the way the company undertakes business.

The Department also reported that compliance staff at Intesa had “utterly” mismanaged transaction monitoring and repeatedly failed to stop suspicious transactions over a period of over a decade.

According to a consent order signed by Intesa, the bank trained employees to deal with transactions involving Iran so as to conceal information linking them with blacklisted clients. The Department reported that between 2002 and 2006 Intesa conducted over 2,700 clearing transactions involving US dollars (amounting to over USD 11 billion) on behalf of Iranian clients and other entities possibly the subject of US sanctions. Meanwhile financial regulatory authorities in Italy are reported to be reviewing whether Intesa’s financing of a EUR 10.2 billion investment in Rosneft complies with trade sanctions on Russia.

aperio-intelligence.com FINANCIAL CRIME DIGEST | DECEMBER 2016aperio-intelligence.com FINANCIAL CRIME DIGEST | DECEMBER 2016


New Zealand government to regulate new anti-money laundering rules New Zealand’s government has rejected a proposal for industries to police new money laundering rules themselves, revealing that the Department of Internal Affairs will instead scrutinize the new professions covered by the rules, which includes lawyers, real estate agents, accountants and car dealers.

Since the April 2016 release of the Panama Papers, which shows how companies and individuals used trusts incorporated in New Zealand to avoid paying tax, the nation’s government has come under increased pressure to tackle money laundering. New Zealand’s Ministry of Justice has stated that self-regulating bodies had no experience in tackling money laundering and the financing of terrorism, and that having multiple agency supervision by such bodies is not considered appropriate. Industry groups for the legal and real estate sectors had been asking to be

allowed to enforce the new rules, set to become effective next year, however experts have said that this could lead to weaker compliance. Following the release of the Panama Papers, former Prime Minister John Key pledged to speed-up the extension of anti-money laundering rules, which at present only cover financial institutions and casinos.

After a bill updating anti-money laundering rules is passed, lawyers will have six months to comply while accountants and real estate agents will have 12 and 18 months respectively.

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Following the release of the Panama Papers, former Prime Minister John Key pledged to speed-up the extension of anti-money laundering rules


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The US Financial Industry Regulatory Authority (FINRA) has reported having fined Credit Suisse’s US securities business USD 16.5 million for ineffective anti-money laundering programs having found that the company relied on its brokers to identify and report suspicious trading, which did not consistently occur.

FINRA also found that the effectiveness of Credit Suisse Securities’ automated system used to monitor suspicious transactions was impeded owing to many of its data feeds missing information.

The bank neither admitted nor denied the charges, with a spokesperson commenting that the company had cooperated with FINRA’s inquiry and had been taking appropriate internal remedial efforts.

US regulator fines Credit Suisse for ineffective anti-money laundering programs


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Former budget minister convicted of money laundering and tax fraud

Jérôme Cahuzac, President François Hollande’s budget minister for less than a year, has been sentenced to three years in prison after having been found guilty of money laundering and tax fraud.

Mr Cahuzac, who ironically led efforts to crack down on tax cheats while he was in office, stepped down from his appointment in 2013 after it was reported that he had a bank account in Switzerland and was connected to several accounts in tax havens containing millions of dollars. Following his resignation, Mr Cahuzac admitted having lied to France’s parliament about the existence of the accounts in Switzerland. Judges have barred him from holding any political office for five years and also sentenced his former wife to two years in prison. During their trial, the prosecution proved that approximately EUR 2.7 million of the couple’s EUR 3.5 million

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fortune had moved through a bank account held by Ms Cahuzac in the Isle of Man that had not been reported to French authorities. François Reyl, the head of the Geneva bank that bears his surname, and the intermediary Philippe Houman were convicted of assisting Mr Cahuzac in transferring funds from an account in Switzerland to one in Singapore. The two were each handed a suspected sentence of a year in prison and fined EUR 375,000, while the Swiss bank was fined EUR 1,875,000 for money laundering. Mr Cahuzac sheltered some of the funds he and his wife made from their successful hair transplant business in a UBS account in Switzerland in the 1990s. Those funds were later moved to Singapore.

Mr Cahuzac admitted having lied to France’s parliament about the existence of the accounts in Switzerland

The Monetary Authority of Singapore (MAS) has imposed penalties of USD 3.65 million and USD 2.4 million respectively on the local branches of Standard Chartered and Coutts for money laundering breaches relating to the 1MDB scandal following its closure of the local branches of the Swiss banks BSI and Falcon.

MAS reported having identified significant lapses in Standard Chartered’s customer due diligence measures and controls for ongoing monitoring without finding any wilful misconduct. Standard Chartered noted in a statement that it was taking action to strengthen controls and surveillance systems at the bank. Standard Chartered further noted that it had reported the suspicious 1MDB-related transactions and had been cooperating with authorities investigating the matter. MAS’s investigation into Coutts identified 24 breaches of anti-money laundering requirements in relation to customer due diligence measures for politically exposed persons. MAS has reported nearing the end of its 1MDB-related investigations and has said it will provide a final update in early 2017

Singapore’s central bank fines Standard Chartered and Coutts for money laundering breaches

aperio-intelligence.com FINANCIAL CRIME DIGEST | DECEMBER 2016

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FirstRand closed Gupta accounts because of money laundering concerns South Africa’s largest bank by market value, FirstRand, has disclosed that suspicions of money laundering was behind the company’s decision to sever banking ties with the wealthy and influential Gupta family, which has been linked to allegations of influence-peddling in President Jacob Zuma’s administration.

FirstRand is reported to be the first lender to have publicly disclosed reasons for severing links with Oakbay Investments, which is controlled by the Gupta brothers, whose lawyer has described the suspicions

as groundless. In an affidavit reported to have been seen by Reuters, FirstRand’s chief executive is noted as having said that the company had closed Oakbay accounts to comply with international regulations. The Gupta family’s lawyer is reported to have informed Reuters that the accusations of money laundering were being taken seriously

and that they would be addressed in a court application to be filed at the end of this year. Between December 2015 and April this year, Standard Bank, Nedbank, Barclays Africa and others terminated the accounts of companies controlled by the Gupta family without making the reasons behind these decisions public. President Zuma recently sent back to parliament an anti-money laundering bill that would have increased scrutiny of prominent individuals’ bank accounts, contending that it might be unconstitutional.

A damaging report compiled by South Africa’s Public Prosecutor published in November focuses on allegations that the Guptas had tried to influence the appointment of ministers in South Africa, and calls for a judicial inquiry to be established by the President.

FirstRand is reported to be the first lender to have publicly disclosed reasons for severing links with Oakbay Investments, which is controlled by the Gupta brothers


US congressman sentenced to prison for racketeering, bribery, money laundering and fraud

SP Tyagi, the former chief of India’s air force, has been arrested by police over allegations of corruption in a transaction with the Anglo-Italian company AgustaWestland involving 12 luxury helicopters intended to carry dignitaries.

According to India’s Central Bureau of Investigation (CBI), Mr Tyagi (who has denied the charges) gave the company “undue favours” and channelled funds to bribe others. The CBI also disclosed that two of Mr Tyagi’s cousins had been arrested on charges of taking bribes. Indian authorities filed a criminal case against AgustaWestland and firm’s parent company, Finmeccanica, in 2013. In 2014 the country’s defence ministry cancelled the GBP 597 million deal after announcing that it would undertake an investigation into the matter.

Former Indian air force chief arrested for alleged corruption

PRESS AND MEDIA BRIBERY | CORRUPTION

Photo: indianexpress.com

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Congressman Chaka Fatah, who represented Pennsylvania for 22 years, has been given the second-longest prison sentence ever given to a US congressman for corruption, 10 years, having been convicted in June 2016 of taking bribes he used to enrich himself and preserve his political career.

He has vowed to appeal the conviction. Mr Fatah was found guilty of having taken an illegal USD 1,000,000 loan to launch a failed bid in 2007 to become the mayor of Philadelphia and, when this failed, used federal funding to pay-off his campaign debts. He was also accused of having used charity funds to pay down his son’s college loans and having taken a bribe from a personal friend and former campaign aide in order to lobby President Barack Obama to appoint him as an ambassador.


Switzerland’s Attorney General Michael Lauber has disclosed in an interview that his office is reviewing how banks in the country were used to channel bribes to officials at the Brazilian state-owned oil major Petrobras and at whether those banks were criminally negligent.

Mr Lauber declined to name any of the banks under investigation or provide a timeframe for any action against them. The Swiss attorney general’s office is working in concert with its counterparts in Brazil and the US, which are looking into the sprawling Operation Carwash scandal, which has implicated Petrobras executives and the company’s contractors in bribery and the illicit transfer of funds. It has been reported that over 60 executives from the Brazilian construction firm Odebrecht

SA and an affiliate were recently preparing to sign plea agreements with authorities in the US and Brazil regarding US Foreign Corrupt Practices Act charges. While Mr Lauber did not comment further on his office’s investigation, in 2015 Brazilian prosecutors disclosed that the Swiss branches of the large, multinational investment banks HSBC, RBC and Deutsche Bank had been used to conduct a money laundering scheme orchestrated by the Brazilian-Swiss duel citizen Bernardo Freiburghaus, while the Swiss private bank Lombard Odier has been described as a conduit for bribes in a testimony given by a former Petrobras executive who was convicted of accepting bribes. According to a spokesperson for the attorney general,

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Swiss authorities continue to pursue the Swiss banking side of Operation Carwash


BRIBERY | CORRUPTIONPRESS AND MEDIA

Photo: indianexpress.com

approximately 60 criminal proceedings linked to bribery, money laundering and Petrobras are underway, 56 of which are against unnamed individuals and four of which involve companies including Odebrecht. Last year the attorney general froze USD 400 million in assets from over 30 unnamed banks in Switzerland for their suspected ties to the Petrobras scandal. The Swiss Financial Market Supervisory Authority has opened enforcement proceedings against four unnamed banks in Switzerland, one of which is believed to by PKB Privatbank SA. Meanwhile authorities in Switzerland continue to review suspected misconduct relating to the Malaysian sovereign wealth fund 1MDB.

60 executives from Brazilian construction firm Odebrecht SA were reportedly preparing to sign plea bargain agreements in the US and Brazil


Mahmoud Thiam, Guinea’s minister of mines and geology from 2009 to 2010, has been arrested in New York and charged with taking USD 8.5 million in bribes in exchange for assigning lucrative investment rights to an unnamed Chinese-owned conglomerate.

US authorities claim that Mr Thiam travelled to Hong Kong and China in 2009 to meet the head of the Chinese conglomerate and strike a memorandum of understanding to establish a joint venture with Guinea. While on this trip, he allegedly opened a bank account into which an executive with the conglomerate deposited USD 3 million the following day. US authorities also allege another two payments of USD 3 million and USD 2 million were made into the account in 2010, and that Mr Thiam used bank accounts he opened in Hong Kong to launder funds back to the US to buy a USD 3.75 million property in New York, pay for his children’s private education, and pay-off other African officials. He is also reported to have allegedly provided misleading information to US banks and the Internal Revenue Service to conceal the bribes.

Former Guinea minister of mines charged with taking bribes

Samuel Mebiame, the son of the late former Prime Minister of Gabon, Leon Mebiame, has pleaded guilty in a US federal court to paying bribes to government officials in Africa in exchange for mining rights while working as a “fixer”/ consultant for a mining company owned by a joint venture between the US hedge fund management firm Och-Ziff Capital Management and a company incorporated in Turks and Caicos.

Prosecutors disclosed in a statement that Mr Mebiame conspired with others to pay bribes to government officials in Chad, Niger and Guinea through intermediaries and lawyers to gain or retain business in though countries in violation of the US Foreign Corrupt Practices Act. In Niger, for instance, Mr Mebiame is believed to have paid over USD 3 million in bribes to a government official, who he also gave luxury cars. In return, Niger’s government awarded Mr Mebiame’s employer licenses for Uranium concessions. Earlier this year, Och-Ziff agreed to pay USD 412 million in criminal and civil penalties as part of a settlement reached the US authorities regarding the company’s activities in Africa.

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Son of former Gabonese prime minister pleads guilty to overseas bribery


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Steinmetz arrested over bribery allegations

The billionaire businessman Beny Steinmetz has been arrested in Israel in connection to claims he arranged large bribes to be paid so that his company BSG Resources could secure half of the rights to a significant iron ore deposit in Guinea.

It has been reported that Steinmetz appeared in court in Israel after police raided his home and offices there. The court subsequently released Mr Steinmetz for two weeks under house arrest, while his passports have been confiscated and he has been informed he cannot leave Israel for 180 days.

This follows news that BSGR has written to the British-Australian major Rio Tinto stated that itwill file a legal action against the company if its demands for compensation relating losses it allegedly sustained from activities relating to the Simandou iron ore deposit in Guinea are not met by 3 January 2017.

This latest development follows recent news that Rio Tinto made a questionable payment of USD 10.5 million as part of its battle with BSGR for a significant stake of what is believed to be the largest iron ore deposit on the planet. This dispute dates back to 2008, when the then leader of Guinea Lansana Conté stripped Rio Tinto of the company’s rights to the northern half of the deposit, giving them to BSGR. However, Rio regained favour with officials in Guinea after opposition leader Alpha Condé assumed the office of the presidency in 2010.

The following year Rio paid USD 700 million to resolve its dispute with Guinea, securing the company’s claim to the southern half of the deposit. Condé’s administration cancelled BSGR’s rights to the northern


BRIBERY | CORRUPTIONPRESS AND MEDIA

half of the deposit after an investigation concluded that the company had paid bribes to win them, which the firm has strongly denied.

BSGR subsequently filed legal action against Rio in New York, claiming that Steinmetz’s company had conspired to steal Simandou. The case was dismissed in 2015 on a technicality. In a letter addressed to Rio’s chief executive and chairman seen by the Financial Times, BSGR’s lawyers cite leaked correspondence that purportedly show how Rio paid the former French presidential adviser and classmate of Condé, François de Combret, USD 10.5 million in 2011 to ‘help smooth over’ relations with Guinea, paving the way for the USD 700 million

settlement and for the company to recover the rights for half of the Simandou deposit. BSGR is reported to allege in the letter that Rio improperly helped to bring about the cancellation of its rights over the Sumandou deposit and that the British-Australian company’s New York lawsuit had a significant effect on its commercial interests, estimating losses running into ‘billions of dollars’.

In response to the letter, Rio is reported to have stated, ‘Rio Tinto acknowledges the receipt of a letter from lawyers from BSGR making a number of accusations and claims. Rio Tinto’s lawyers will respond in due course. If BSGR ultimately brings a claim, Rio Tinto expects to defend itself robustly.’

Condé’s administration cancelled BSGR’s rights to the northern half of the deposit after an investigation concluded that the company had paid bribes to win them

aperio-intelligence.comFINANCIAL CRIME DIGEST | NOVEMBER 2016

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Paul Simpkins, a retired US Department of Defence contracting supervisor, has been sentenced to six-years in prison for accepting USD 300,000 in payments from the discredited Malaysian businessman Leonard Glenn Francis, “Fat Leonard”, and ordered to pay a USD 50,000 fine, forfeit USD 450,000 in criminal proceeds, and pay USD 450,000 in restitution to the US Navy.

Mr Simpkins pleaded guilty to steering lucrative contracts to Fat Leonard in exchange for the payments, services of prostitutes and other bribes. Mr Francis has previously pleaded guilty to fraud that helped his ship supply company Glenn Defense Marine Asia, cheat the US Navy out of nearly USD 35 million by overcharging the service and inflating fees for supply ships in the Pacific. A total of 16 individuals, including nearly a dozen serving and former Navy officers, have been charged so far. Mr Simpkins worked in a number of managerial contracting roles in the US federal government, including as a supervisory contract specialist for the Navy

Former US Department of Defence contractor sentenced to prison for accepting bribes

in Singapore from April 2005 to June 2007 and as an assistant director in the Department of Defense’s office of small business programs from December 2007 to August 2012. He has admitted to accepting bribes from Mr Francis from May 2006 to September 2012, and having provided him with sensitive information. Prosecutors also contended that Mr Simpkins worked to suspend at least one of Mr Francis’ competitors, prevented staff from reviewing his company’s invoices, and overruled an officer who recommended against extending a contract because of its high prices.

He has admitted to accepting bribes from Mr Francis from May 2006 to September 2012, and having provided him with sensitive information


President Obama refuses to sign Iran sanctions renewal into law

PRESS AND MEDIA SANCTIONS

President Barack Obama has declined to sign into law a 10-year renewal of the Iran Sanctions Act (which passed through the Senate unanimously and in the House by an overwhelming margin), but will let it become legislation anyway in an apparent effort to alleviate Tehran’s concerns that the US is reneging on its side on the Joint Comprehensive Plan of Action (JCPOA), more commonly known as the nuclear deal, and expressed disapproval of lawmakers’ actions.

Under the Constitution, the US president has 10 days after Congress passes a bill to sign it, veto it or do nothing. As Congress is still technically in session, the bill will become law with no presidential signature.

President Obama’s administration has contended that the sanctions renewal is unnecessary as the US retains other authorities to penalise Iran if necessary and that it may undermine the nuclear deal.

Iran has complained to the United Nations about the sanctions renewal while the country’s president has ordered plans to be drawn up to construct nuclear-powered

President Obama’s administration has contended that the sanctions renewal is unnecessary

ships, and formally accused the US of violating the terms of the JCPOA. US lawmakers have argued that renewing the sanctions is critical to maintaining pressure on Iran to abide by the deal and curtail the country’s ballistic missile programme and alleged sponsoring of terrorism, while President Obama’s administration has contended that Iran will be unaffected by the renewal so long as it continues to abide by the deal. President-elect Donald Trump has been critical of the nuclear deal and threatened to renegotiate it, while Israel’s prime minister has revealed that he plans to lobby to undo the deal.

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SANCTIONS PRESS AND MEDIA

UN regional envoy: Gambian president will be sanctioned if he continues to cling to powerThe United Nation’s regional envoy to West Africa Mohammed Ibn Chambas has said that Gambian President Yahya Jammeh will be “strongly sanctioned” if he tries to stay in power.

Germany and France want to extend sanctions on RussiaFrench President Francois Hollande and German Chancellor Angela Merkel have stated that they want to extend sanctions on Russia owing to a lack of progress in implementing a ceasefire deal between Ukraine and Russian-backed separatists.

European Union leaders are scheduled to meet before the end of the year to discuss extending sanctions in relation to the conflict in Ukraine, which includes restricting access to international financing and curbs on defence and energy cooperation with Russia.

Speaking with President Hollande who was visiting a Franco-German conference in Berlin, Chancellor Merkel noted that

President Jammeh initially conceded defeat to Adama Barrow following Gambia’s presidential election before seemingly changing his mind. Gambian security forces have since occupied the offices of the country’s electoral commission and are being urged to leave by the US and UN. A visit by the leaders of Nigeria, Ghana, Liberia and Sierra Leone has also failed to convince Mr Jammeh to hand over power to Mr Barrow.

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the implementation of the Minsk ceasefire deal was “very sluggish” and that it will be necessary to extend sanctions on Russia again. President Hollande commented, “we must continue to apply the terms of the Minsk agreement and when they are not carried out, we must continue with sanctions”. At the end of November, four-way talks on ending the separatist conflict concluded without a breakthrough.


China informs Japan it opposes unilateral sanctions on North Korea


While China has expressed willingness to work with the international community to implement United Nations resolutions in regards to North Korea, a senior Chinese diplomat has told Japan that the country opposes any unilateral sanctions outside of this framework.

Japan and South Korea have both vowed to impose new unilateral sanctions on North Korea over is nuclear and ballistic missile programmes following a new UN Security Council resolution imposed on the pariah state aimed at cutting its annual export revenue by a quarter. This comes in response to North Korea’s fifth and largest nuclear test in September. Both South Korea and Japan already have comprehensive unilateral sanctions in place on North Korea.

China’s foreign ministry has cited the country’s special envoy for the Korean peninsula Wu Dawei as having commented that, “China is willing, along with the international community, to fully and completely enforce Security Council resolutions, and opposes unilateral sanctions imposed outside the framework of Security Council resolutions”.

He also expressed China’s hopes that all parties can create conditions for the early resumption of a six-party talks process, referring to a stalled dialogue mechanism involving both Koreas, China, Japan, the US and Russia. While China has supported several sets of UN sanctions on North Korea, it has stressed that civilians and normal trade contracts in the country should not be affected. China is North Korea’s sole major ally, though relations between the countries have

been seriously strained by the latter’s repeated ballistic and nuclear missile tests. China fears that cutting-off North Korea completely could lead to the country’s collapse, causing large numbers of refugees to move across the border into China’s poorer regions.

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China is willing, along with the international community, to fully and completely enforce Security Council resolutions, and opposes unilateral sanctions imposed outside the framework of Security Council resolutions”



US imposes sanctions on figures close to Congolese president Kabila

The US has imposed sanctions on members of Congolese President Joseph Kabila’s inner circle a week before his mandate expires in an apparent attempt to force the government to agree to a compromise with opposition leaders.

Prior to this, the European Union imposed travel bans and asset freezes on seven security officials it claims violated human rights and helped disrupt elections. The international community fears that President Kabila’s refusal to leave office on 19 December, as required by the Congolese constitution, could lead to renewed violence

following anti-government protests in September in which 50 people were killed during clashes between protestors and security forces.

Kabila’s administration has contended that the election to select his successor, which was originally scheduled for November, cannot be organised until April 2018 as millions of new voters need to be registered.

President Kabila has vowed to stay on until the presidential vote, despite being banned from seeking another term after being in power since 2001. Opposition figures accuse him of clinging to power and have scheduled protests for 19 December. The US has placed interior minister Evariste Boshab and Kalev Mutondo, the head of the country’s intelligence service, on its list of specially designated nationals, with

the Department of the Treasury’s Acting Under Secretary for Terrorism and Financial Intelligence commenting that, “The Congolese government continues to undermine democratic processes in the DRC and repress the political rights and freedoms of the Congolese people”. The US has already placed three Congolese generals on its sanctions list.

Any financial assets they have in the US are blocked and American citizens are barred from engaging in any financial transactions with them. The EU has placed sanctions on Commander of the Republican Guard Ilunga Kampete and six others, including Kinshasa’s police commissioner as well as intelligence officials. In a statement, the EU noted that, “Additional restrictive measures may be considered in the event of further violence or the political process being impeded”.

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US Treasury reviewing Rosneft stake sale deal for sanctions violations


The US government has said that it is checking whether sanctions were violated when Russia recently reached a USD 11.3 billion deal to sell a stake in the oil producer Rosneft to a consortium of Qatar’s sovereign fund and the commodities trading and mining company Glencore.

White House press secretary Josh Earnest commented that the, “experts at the Department of Treasury that are responsible for constructing and enforcing the sanctions regime will carefully look at a transaction like this”. He told a briefing in Washington that, “they’ll look at the terms of the deal and evaluate what impact sanctions would have on it”. The state-owned Rosneft is one of

the entities covered by US sanctions on Russia which were imposed following the country’s annexation of the Crimea region in 2014 and support of separatists in eastern Ukraine.

Russian officials have said that the deal is not directly affected by sanctions as the income from the transaction will go to the Russian state and not Rosneft itself.

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US can now apply sanctions on foreign officials found to engage in gross human rights abuses or corruption

The Global Magnitsky Human Rights Accountability Act, named after a tax lawyer for Hermitage Capital Management who died while in the custody of Russian authorities after exposing a tax refund fraud scheme, has been passed by Congress as part of an annual defence-authorisation bill.

The global Magnitsky provision authorises visa bans and a block on the assets in the US of government officials anywhere in the world found violating human rights or committing or assisting in significant corruption, making graft committed by a foreign official punishable by sanctions. Senator Bill Cardin, who proposed the sanctions bill in 2015, said in a statement, “the US has added a critical tool to our diplomatic toolbox, making clear that gross violators of human rights and those who engage in serious acts of corruption cannot escape the consequences of their actions even when their home country fails to act”.

US sanctions two Yemeni men and a Yemen-based charity The US Department of the Treasury has reported imposing sanctions of two Yemeni men and a Yemen-based charity as part of efforts to disrupt the financial support networks of al Qaeda’s branch in Yemen.

The Treasury has added Al-Hasan Ali Ali Abkar, Abdallah Faysal Sadiq al-Ahdal and the

Rahmah Charitable Organization to its list of specially designated nationals and entities that support or engage in terrorism. It noted that the Rahmah Charitable Organisation had acted as a front organisation for Al Qaeda in the Arabian Peninsula (AQAP). The Treasury’s action prohibits US citizens from engaging in any transactions with the two men and charity and blocks any property they may have in the US. John Smith, the acting director of the Treasury’s Office of Foreign Assets Control, said in a statement that, “the facilitators and front company designated today are responsible for supporting AQAP’s violent terrorist activities”. 19


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UK Treasury lifts sanctions on Bank Saderat

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A copy of the UK Treasury notice can be found HERE

Ten individuals added to EU sanctions list

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The European Union Council has added 10 individuals to its sanctions on Syria in relation to their involvement in repression against the civilian population and support for the Syrian regime.

The individuals include high-ranking military officials and senior figures linked to the Syrian regime. The decision brings to 217 persons the total number of

persons targeted by a travel ban and an asset freeze for violent repression against the civilian population in Syria.

The designation follows an announcement by the EU Council that it would seek to impose further sanctions against supporters of the Syrian regime.

The European Union has de-listed Bank Saderat and its UK subsidiary Bank Saderat PLC from its sanctions on Iran following a decision that the bank’s listing should apply only until 22 October 2016.

Previously under the JCPOA, Bank Saderat was not due to be de-listed until transition day, which is 20 October 2023. The UK Treasury has published a notice confirming these entities have been removed from the consolidated list of sanctioned entities and are no longer subject to an asset freeze.

The EU Council press release can be found HERE

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https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/562184/Notice_Bank_Saderat_Delisting.pdf

http://www.consilium.europa.eu/en/press/press-releases/2016/10/27-syria-persons-added-to-sanctions-list/?utm_source=dsms-auto&utm_medium=email&utm_campaign=Syria%3a+EU+adds+10+persons+to+list+of+those+under+sanctions+against+the+regime

financial crime digest - aperio intelligence · pdf filefinancial crime digest december 2016...

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