PEP

Real estate and the promise of ready money – who cares if the cash is dirty?

The UK welcomes wealthy foreign investors, but does it really care where their money comes from? Estate agents in London’s super expensive neighbourhoods are apparently agreeing to house purchases with ‘corrupt’ Russian politicians.FCA London Property

If you are in the UK, tune in to Channel 4 this evening to watch a revealing documentary about what really goes on between agents and super rich buyers. In ‘From Russia with Cash‘,  undercover reporters pose as an ‘unscrupulous’ Russian government official “Boris’ who wants to buy a house in London for his mistress, ‘Nastya’. Despite ‘Boris’ making is clear to the agents that his funds are not from a legitimate source, the estate agents he deals with are apparently happy to go ahead with the sale and even recommend ways for ‘Boris’ to keep a low profile, according to the Guardian report.

Channel 4’s reporters used hidden cameras to film meetings with estate agents, who talked openly about previous dealings with foreign clients, government ministers – politically exposed persons, and the amount of deals which are made with some degree of anonymity. Politically exposed persons (PEPS) are individuals with access to national coffers, funds which belong to the electorate. They are government officials, their families, their associates and beyond.

Property, or real estate, is widely recognised as the best way to invest. So it should be no surprise that the proceeds of crime have found a natural home in bricks and mortar. Rules on investing and moving dirty cash are well publicised. In the UK and many other countries, Financial institutions, lawyers, accountants, dealers in high value goods and real estate agents are required to report transactions of dubious origin – those which could be hiding the proceeds of crime – to law enforcement. The penalties for not reporting suspicious transactions are severe for the institution and the individual.

Corruption and billionaires  

FCA - TITransparency International’s ‘Unmask the Corrupt‘ campaign looks closely at how UK property launders funds for corrupt individuals, many of whom are politically exposed persons. Funds designated for schools and hospitals – ‘Boris’ claims his money comes from a government health budget – is sent to offshore havens, shrouded in secrecy and then passed on to ‘enablers’ or gatekeepers in the UK who advise and facilitate investment. The thing is, the practice is nothing new. This is how the big money has always moved – the only difference is that now it is under scrutiny.

Forbes, the register of all things super-rich, lists London as third in the world of ‘Billionaire Cities‘.  Five of the remaining nine are Asian cities – Hong Kong, Tokyo, Shanghai, Singapore and Mumbai sit alongside Paris, Moscow, New York and Sydney. If the corrupt are managing to get money into the UK property market, they are certainly managing it in the other countries on this list.

Will the estate agencies and law firms mentioned in this programme be investigated and will this give rise to increased scrutiny of the real estate sector in the UK? Financial Crime Asia is keen to find out.

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Singapore: MAS proposes new CDD rules for cross border tx

The Monetary Authority of Singapore has proposed a series of new measures designed to re-enforce the national anti-money laundering and counter-terrorist financing framework (AML/CTF).FCA - Singapore

Proposed amendments include:

a) requiring financial institutions to perform an ML/TF risk assessment at the wider institutional level,  in addition to assessing the ML/TF risk of individual customers;

b) elaborating on steps to be taken by FIs to identify and verify beneficial ownership of non-individual customers, such as companies and trusts;

c) formalising the need for FIs to screen customers and their connected parties;

d) catering for a risk-based approach for certain categories of Politically Exposed Persons; and

e) putting in place additional requirements for cross-border wire transfers exceeding SGD1,500 (USD1200) such as customer due diligence on occasional transactions and minimum information fields in the message or payment instructions.

Institutions have until August 14 to submit comments on the consultation paper.

Source: MAS

PEP Alert Romania: President’s brother arrested in bribery case

BUCHAREST, Romania (AP) — Police have arrested the brother of the Romanian president on suspicion of taking a bribe and using the president’s name to promise he could get a prison sentence reduced.

The Bucharest Court late Friday approved an application from anti-corruption prosecutors to arrest Mircea Basescu for 30 days on suspicion of taking a bribe of 250,000 euros ($340,000) from the family of a well-known convict. Basescu had been detained on Thursday, but only for 24 hours.

His arrest came after a video was broadcast in which he appeared to acknowledge receiving a bribe to help reduce the sentence of Sandu Anghel, who is imprisoned for attempted murder. Mircea Basescu has denied wrongdoing.

President Traian Basescu has denied intervening in the case and has distanced himself from his brother.

Source: AP

Sanctions: US lists 7 PEPs, 17 entities.

The US Office of Foreign Assets Control has added 24 new names to its sanctions lists. A group of seven politically exposed persons (PEPs), and 17 entities are now on the Specially Designated Nationals (SDN) list.

The PEPs include Putin’s envoy to the Crimea, the CEO of Rostec –  the state defence and arms company – and the CEO of Rosneft, the state oil company.

Three banks are also on the SDN list; Investcapital Bank, JSB Sobin Bank and SMP Bank.

The following individuals have been added to OFAC’s SDN List:
  1. BELAVENCEV, Oleg Evgenyevich (a.k.a. BELAVENTSEV, Oleg); DOB 15 Sep 1949; Russian Presidential Envoy to the Crimean District; Member of the Russian Security Council (individual) [UKRAINE2].
  2. CHEMEZOV, Sergei (a.k.a. CHEMEZOV, Sergey Viktorovich); DOB 20 Aug 1952; POB Cheremkhovo, Irkutsk, Russia (individual) [UKRAINE2].
  3. KOZAK, Dmitry; DOB 07 Nov 1958; POB Kirovograd, Ukraine; Deputy Prime Minister of the Russian Federation (individual) [UKRAINE2].
  4. MUROV, Evgeniy Alekseyevich (a.k.a. MUROV, Evgeny; a.k.a. MUROV, Yevgeniy; a.k.a. MUROV, Yevgeny); DOB 18 Nov 1945; POB Zvenigorod, Moscow, Russia; Director of the Federal Protective Service of the Russian Federation; Army General (individual) [UKRAINE2].
  5. PUSHKOV, Aleksei Konstantinovich (a.k.a. PUSHKOV, Alexei); DOB 10 Aug 1954; Chairman of State Duma Committee on International Affairs (individual) [UKRAINE2].
  6. SECHIN, Igor; DOB 07 Sep 1960; POB St. Petersburg, Russia (individual) [UKRAINE2].
  7. VOLODIN, Vyacheslav; DOB 04 Feb 1964; POB Alexeyevka, Khvalynsk district, Saratov, Russia; First Deputy Chief of Staff of the Presidential Executive Office (individual) [UKRAINE2].
The following entities have been added to OFAC’s SDN List:
  1. AQUANIKA (a.k.a. AQUANIKA LLC; a.k.a. LLC RUSSKOYE VREMYA; a.k.a. OBSHCHESTVO S OGRANICHENNOI OTVETSTVENNOSTYU RUSSKOE VREMYA; a.k.a. RUSSKOE VREMYA OOO; a.k.a. RUSSKOYE VREMYA LLC), 47A, Sevastopolskiy Ave., of. 304, Moscow 117186, Russia; 1/2 Rodnikovaya ul., Savasleika s., Kulebakski raion, Nizhegorodskaya oblast 607007, Russia; Website http://www.aquanika.com; alt. Website http://aquanikacompany.ru; Email Address office@aquanika.com; Registration ID 1075247000036 [UKRAINE2].
  2. AVIA GROUP LLC (a.k.a. AVIA GROUP LTD), Terminal Aeroport Sheremetyevo Khimki, 141400 Moskovskaya obl., Russia; Website http://www.avia-group.su/ [UKRAINE2].
  3. AVIA GROUP NORD LLC, 17 A, Stratoyava St., Saint Petersburg, Russia; Website http://www.ag-nord.ru [UKRAINE2].
  4. CJSC ZEST (a.k.a. ZEST LEASING), pr. Medikov 5, of. 301, St. Petersburg, Russia; 2 Liter a Pl. Rastrelli, St. Petersburg 191124, Russia; Website http://www.zest-leasing.ru; Registration ID 1027809190507; Government Gazette Number 44323193 [UKRAINE2].
  5. INVESTCAPITALBANK (a.k.a. INVESTKAPITALBANK; a.k.a. OJSC INVESTCAPITALBANK; a.k.a. OPEN JOINT STOCK COMPANY INVESTCAPITALBANK), 100/1, Dostoevskogo Street, Ufa, Bashkortostan Republic 450077, Russia; SWIFT/BIC INAKRU41; Website http://www.investcapitalbank.ru; License 2377 [UKRAINE2].
  6. JSB SOBINBANK (a.k.a. SOBINBANK), 15 Korp. 56 D. 4 Etazh ul. Rochdelskaya, Moscow 123022, Russia; 15/56 Rochdelskaya Street, Moscow 123022, Russia; SWIFT/BIC SBBARUMM; Website http://www.sobinbank.ru; Registration ID 1027739051009; Government Gazette Number 09610355 [UKRAINE2]
  7. SAKHATRANS LLC (a.k.a. OBSHCHESTVO S OGRANICHENNOI OTVETSTVENNOSTYU SAKHA (YAKUTSKAYA) TRANSPORTNAYA KOMPANIYA; a.k.a. SAKHATRANS OOO), 14 ul. Molodezhnaya Rabochi Pos. Vanino, 682860 Vaninski, Raion Khabarovski Krai, Russia [UKRAINE2].
  8. SMP BANK (a.k.a. BANK SEVERNY MORSKOY PUT; a.k.a. SMP BANK OPEN JOINT-STOCK COMPANY), 71/11 Sadovnicheskaya Street, Moscow 115035, Russia; SWIFT/BIC SMBKRUMM; Website http://www.smpbank.ru; Email Address smpbank@smpbank.ru [UKRAINE2].
  9. STROYGAZMONTAZH (a.k.a. LIMITED LIABILITY COMPANY STROYGAZMONTAZH; a.k.a. STROYGAZMONTAZH CORPORATION; a.k.a. “SGM”), 53 prospekt Vernadskogo, Moscow 119415, Russia; Website http://www.ooosgm.com; alt. Website http://www.ooosgm.ru; Email Address info@ooosgm.ru [UKRAINE2].
  10. STROYTRANSGAZ GROUP (a.k.a. STROYTRANSGAZ; a.k.a. “STG GROUP”), 3 Begovaya Street, Building #1, Moscow 125284, Russia; Website http://www.stroytransgaz.ru [UKRAINE2].
  11. STROYTRANSGAZ HOLDING (a.k.a. STG HOLDING LIMITED; a.k.a. STG HOLDINGS LIMITED; a.k.a. STROYTRANSGAZ HOLDING LIMITED; a.k.a. “STGH”), 33 Stasinou Street, Office 2 2003, Nicosia Strovolos, Cyprus [UKRAINE2].
  12. STROYTRANSGAZ LLC (a.k.a. OOO STROYTRANSGAZ), House 65, Novocheremushkinskaya, Moscow 117418, Russia [UKRAINE2].
  13. STROYTRANSGAZ OJSC (a.k.a. OAO STROYTRANSGAZ), House 58, Novocheremushkinskaya St., Moscow 117418, Russia [UKRAINE2].
  14. STROYTRANSGAZ-M LLC, 26th Meeting of the Communist Party Street, House 2V, Novy Urengoy, Tyumenskaya Oblast, Yamalo-Nenetsky Autonomous Region 629305, Russia [UKRAINE2].
  15. THE LIMITED LIABILITY COMPANY INVESTMENT COMPANY ABROS (a.k.a. LLC IC ABROS), 2 Liter a Pl. Rastrelli, St. Petersburg 191124, Russia; Government Gazette Number 72426791; Telephone: 7812 3358979 [UKRAINE2]
  16. TRANSOIL (a.k.a. LIMITED LIABILITY COMPANY TRANSOIL; f.k.a. OBSHCHESTVO S ORGANICHERNNOI OTVETSTVENNOSTYU TRANSOIL; a.k.a. TRANSOIL LLC; a.k.a. TRANSOYL SNG LTD.), 18A Petrogradskaya nab., St. Petersburg 197046, Russia; Website http://www.transoil-spb.ru; alt. Website http://transoil.com; Email Address info@toil.spb.ru; Registration ID 1037835069986 [UKRAINE2].
  17. VOLGA GROUP (a.k.a. VOLGA GROUP INVESTMENTS; f.k.a. VOLGA RESOURCES; f.k.a. VOLGA RESOURCES GROUP), 3, rue de la Reine L-2418, Luxembourg; Russia [UKRAINE2].
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China: Hainan vice governor in corruption investigation

BEIJING — China’s ruling Communist Party said Tuesday a vice governor of the southern island province of Hainan is underFCA - JI Wenlininvestigation for serious violations, an apparent reference to corruption.

Ji Wenlin is the latest high-ranking official to be investigated since party leader and President Xi Jinping launched an anti-corruption campaign after taking over as head of the ruling Communist Party last spring.

As with several others who have fallen in the campaign, Ji has personal and professional connections to the powerful former Chinese security czar Zhou Yongkang, currently the subject of a rumored investigation.

The party’s disciplinary body said in a one-line statement that Ji is suspected of serious violations of regulations and the law. That’s almost always a reference to accepting bribes and kickbacks, providing unauthorized favors, and other forms of personal malfeasance.

The statement gave no details.

Xi has made fighting widespread graft a key campaign of his leadership so far, with promises to target both junior and high-level officials.

Investigations have so far targeted businesspeople, senior executives in the state oil sector — Zhou’s former power base — and most recently, a vice minister of public security. Ji was a key aide to Zhou in a last three of his central government positions, before taking up a series of positions in Hainan’s local government.

Although rumors are rife, no official word has been released about any investigation into Zhou, until 2012 a member of the party’s all-powerful Politburo Standing Committee.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Source: AP/The Washington Post

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PEP names revealed in leaked records of China elite’s hidden offshore holdings

Close relatives of China’s top leaders have held secretive offshore companies in tax havens that helped shroud the Communist elite’s wealth, a leaked cache of documents reveals.

The confidential files include details of a real estate company co-owned by current President Xi Jinping’s brother-in-law and British Virgin Islands companies set up by former Premier Wen Jiabao’s son and also by his son-in-law. Nearly 22,000 offshore clients with addresses in mainland China and Hong Kong appear in the files obtained by the International Consortium of Investigative Journalists.

Among them are some of China’s most powerful men and women — including at least 15 of China’s richest, members of the National People’s Congress and executives from state-owned companies entangled in corruption scandals.

For the full story, go to the ICIJ website