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Money Laundering

If someone describes themselves as an "expert" or a "thought leader" in relation to, let's say, financial crime or FinTech or even on-line banking, ask them this - and don't give them time to look up the answer: "what's Q-Coin?*" And, is Second Life about to get a second chance as a potential money laundering vehicle?

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In Mumbai, a special money laundering court is the venue for the laying of charges against Vijay Mallya and 8 co-defendants. Mallya is described in Indian media as a "fugitive" because he left India for the UK where he lives in considerable luxury although he had divested himself of many assets including, reports suggest, at least some of his interest in the Force India Formula One team. The Court seems to agree..

The appeal in Abdul Ghani bin Tahir -v- the Public Prosecutor of Singapore resulted in the upholding of the conviction but a reduction of 50% in the sentence. The case draws together principles that have been developed in a number of jurisdictions and should be regarded as a leading case across all jurisdictions. Even more interesting, it involves a chartered accountant and glaring failures in any form of financial crime risk management system.

There are two principles in the soft conversion of societies to various forms of centralised control, be that control from the left or right of politics, from vested interests or religion.

The first is the manipulation of language: using terms in ways that are inaccurate and, even, the direct opposite of what they truly mean.

The second is to give individual members of society the illusion that they have status, even a degree of control when in fact what they have is responsibility without authority.

Welcome to the worrying world of today's Financial Crime Risk and Compliance Officers.

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It's pathetic: according to a report in The Law Society's Gazette, the official publication of the Law Society of England and Wales, "The Legal Sector Affinity Group, whose members include the Law Society and Solicitors Regulation Authority, has told the Treasury that a ‘sensible supervisory approach’ to the new regulations would give firms and individuals time to adjust to their new obligations." Apparently the membership body and the regulator haven't had time to prepare their Guidance. Too busy with finding new crazy obligations to impose on an already over-stretched profession, one might conclude.

Below, free content, is my interview, given in May 2017 at the Thompson Reuters Regulatory Summit in Singapore, published today.

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Continuing our analysis of AFP v Ganesh Kalimuthu & Anor

For part one see here

The case is said to be on its own facts but the Court was not invited to consider all the relevant facts. It is therefore a narrow judgment. It is a precedent but it is not a comprehensive precedent and creates an open door for international transfers of large amounts of money with impunity.

Chaudhry NISAR Ali Khan, Pakistan's interior minister, gets a bad press and, like all politicians, some of it is justified. But he's got a horrible job: balancing religious interests, north and south, political interests in various regions, the continued problems resulting from partition first after separation from India and then after Bangladesh voted for independence and huge border problems on almost all sides. His country is a major source and transit country for heroin and other drugs. And there are millions of "Pakistanis" living and working overseas who own political allegiance to the country, but economic and familial allegiance to Bangladesh, or religious allegiance to tribal groups with their own interpretation of Islam. If that's not bad enough, he doesn't even know who's in the country, as he explained this weekend. But he's determined to correct that. And he has a lesson for the EU about migrants.

It's bizarre. A press release received today headed "Attorney General Xavier Becerra Announces Settlement With Western Union For Wire Fraud Scams, Encourages Victims to Come Forward" refers to a case that the US Department of Justice announced settled on 19th January this year under the headline "Western Union Admits Anti-Money Laundering and Consumer Fraud Violations, Forfeits USD586 Million in Settlement with Justice Department and Federal Trade Commission." In the DoJ announcement it says that the California settlement is part of the overall deal. However, there is some interesting stuff...

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In the past 25 years or so, the level of professionalism in the solicitors branch has fallen dramatically as thieves, vagabonds, chancers and businessmen, "right-on" campaigners and the barely literate have taken over the once proud profession. But there have, generally, been beacons that remind us what the Profession shoulda, coulda, woulda become if the correct decisions had been made by government and the self-regulatory bodies that control it. One of those has always been Clyde & Co. How, then, has this (in City terms) small, highly professional outfit, ended up before the Solicitors Disciplinary Tribunal and the firm, and three partners, being fined? And what lessons are there for other law firms? (updated)

Yes, yes, yes, we all know: HSBC is officially a UK bank except we all know it isn't. Not really. Yes, it has a big office in London and because of Stock Market rules its big bosses all have desks there but in truth, HSBC is still what it says on the tin. Even the Shanghai bit is coming back into use. So when HSBC in Hong Kong announced that it is starting to collect more detailed Know Your Customer information, it's good to take notice. And one reason it's good to take notice is that almost every other bank in the world is going to have to follow the HSBC lead as Compliance/Risk Management decisions inform business direction. And if they don't, they face appearing on a new OECD blacklist, an OFAC list and many more.

It's good when some novel conduct comes up: it helps FCROs and others avoid terminal boredom. One that's appeared in Australia might not be new but it's uncommon enough to be interesting - and it's carefully designed to be difficult to spot as it takes place within the ordinary course of business. For those in "all-crimes" jurisdictions, it's something new to try to watch out for.

In 2015, the UK's Financial Conduct Authority fined Barclays Bank its then largest penalty for failings in its financial crime management obligations. Barclays had been one of the first major banks to install company-wide money laundering management software. But it doesn't help when those within the bank don't feed it the information it needs.

PART One of this article appears at http://www.pleasebeinformed.co...

In its Conclusion the Joint Opinion implies a monumental failure of the European machine. And it has little to say beyond that already known and widely not acted upon.

Around the turn of this decade, Nigel Morris-Cotterill had surprisingly open access to the Embassy of North Korea in Kuala Lumpur. His experiences are instructive and fascinating.

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