AML Roundup: Russia Sanctions Update – Human Trafficking & Modern Slavery – Money Laundering, Corruption, & Bribery
13 May 2022

Sanctions against Russia continue to be ramped up by Western governments, with the US and UK targeting banks, Russian media companies, and trade. Meanwhile the EU has encountered pushback from member states with Hungary causing it to backtrack on plans to ban the shipping of Russian oil and Austria asking for more time before imposing an embargo on Russian gas. 

This week we shine the spotlight on human trafficking in the wake of the Ukrainian refugee crisis. An estimated 25 million people were trafficked across the globe in 2021 and this evil practice shows little sign of abating. While humanitarian crises such as war provide traffickers with the opportunity to prey on vulnerable women and children, poverty remains an underlying cause and is also one of the key drivers behind the pernicious practice of modern slavery. 

To complete this week’s AML Roundup, we report on the latest global news covering money laundering, corruption, and fraud. 

Russia Sanctions Update 

US imposes new sanctions on Gazprombank executives and Russian TV stations

Avoiding taking steps that might lead to the disruption of gas supplies to Europe, the new sanctions target senior executives of Gazprombank to signal that it isn’t a safe haven. Further sanctions have been levelled at the state-controlled television stations, Joint Stock Company Channel One Russia, Television Station Russia-1, and Joint Stock Company NTV Broadcasting Company. 

The UK announces fresh sanctions on Russia and Belarus targeting £1.7bn of trade

The Department for International Trade said the new import tariffs will apply to goods including platinum and palladium, which are used in mobile phones and computers. Export bans will target chemicals, plastics, rubber and machinery. It takes the value of products subject to UK sanctions to more than £4bn.

G7 Meet: UK Foreign Secretary calls for strict sanctions until Russia withdraws from Ukraine

At the G7 meeting this week, UK Foreign Secretary Liz Truss called upon international allies to impose stringent sanctions on Russia until it withdraws its forces completely from the Ukraine.

Pushback from member states forces EU to ditch plans to ban shipping of Russian oil imports

The EU’s sixth package of sanctions aimed at weakening the Russian economy will go ahead without the ban on the shipping of Russian crude oil. It is reported that member states were unable to reach a deal with Hungary at the forefront of the those rejecting the policy. 

Austria rejects sanctions on Russian gas and membership of NATO 

Austria has said that it requires more time before imposing an embargo on Russian gas citing its dependency. It also denied it had any interest in joining NATO and wishes to remain militarily neutral.

Switzerland sanctions two more prominent businessmen 

Switzerland has sanctioned Ukrainian businessman Serhiy Vitaliyovich Kurchenko and Russian businessman Yevgeniy Viktorovich Prigozhin. Mr Kurchenko is also listed under US and UK’s Russia sanctions regimes, and the EU’s Ukraine sanctions regime. While Mr Prigozhin is also listed under the EU and UK’s Libya sanctions regimes and the US Russia, cyber and election interference sanctions regimes. 

Sanctioned oligarchs using the Hawala payment system 

Russian oligarchs have circumvented financial sanctions through the payment system known as Hawala, an informal method of transferring money without any physical money actually moving. It’s an historical form of underground banking that has been used by money launderers and terrorists to transfer funds across the world. 

How a Russian operator urged Catalonian leaders to break with Madrid 

It is claimed that on a trip to Barcelona in 2017 a long-time diplomat, Nikolai Sadovnikov offered to give the Catalonians $500 billion to aid their attempts to make the region an independent state. In return, he asked them to turn Catalonia into a haven for cryptocurrencies. 

Human Trafficking & Modern Slavery 

The Human trafficking of Ukrainian refugees is heaping crisis upon crisis 

According to the U.N., almost 6 million people have fled Ukraine since the start of Russia’s invasion, with around 90% being women and children. Often arriving with little more than the clothes they are wearing, identification documents, a phone, and a pet, they can all too easily fall victim to the evils of human trafficking. 

“That anyone would seek to take advantage of these people who have already suffered so much is inhumane, but we know it will happen. We have witnessed it before.” 

Human trafficking risks grow for women and children fleeing Ukraine 

With Ukrainian men banned from leaving the country and called up to fight, UN data has shown that 90% of the refugees are women and children. As a result, they face a heightened risk of falling victim to human traffickers warns a new report, compiled by NGO La Strada International. 

Malawi struggles to control human trafficking in the wake of the pandemic and Ukraine war 

Malawi has long been a trafficking hot spot in southern Africa, driven by endemic poverty and rural unemployment. Despite government efforts to curb human trafficking, the pandemic and fallout from Russia’s war on Ukraine has exacerbated the situation.  

Former Facebook moderator accuses Meta of human trafficking 

A former Facebook moderator based in Kenya has accused the social media platform of human trafficking, forced labor, and union busting and is suing its parent company Meta. 

New York state to pass legislation to fight human trafficking 

According to the National Human Trafficking Hotline 414 people were trafficked in New York state in 2020, with 300 reported to be victims of sex trafficking. As a result, two bills have been proposed in the Senate that will mandate cards and signs with information for victims of human trafficking be posted in the restrooms of airports and bus terminals.

“Understand the human trafficking risks that may impact your organisation because of your client base and the markets in which you do business. Make sure these risks are incorporated into your organisation’s AML risk assessment.”

Minor abducted from Dallas Mavericks game and trafficked for child pornography 

A couple has been charged with human trafficking and child pornography, in a case involving a minor. According to police, the victim disappeared at a Dallas Mavericks game in April and ended up in Oklahoma City where they were physically abused and exploited. 

Video: The US’ first anti-slavery newspaper returns to cast a fresh eye on lingering challenges 

In 1820, the nation’s very first abolitionist newspaper ‘The Emancipator’ was launched. 200 years later, it is returning to cast a fresh eye on some of the country’s lingering challenges. 

Video: Analysing Harvard’s ties to slavery 

This week, Harvard University issued a report revealing its historic ties to slavery and recommending steps to address the legacy which include a $100 million fund for reparations. 

After decades of claims of child labour in its supply chain Nestlé says the root cause is poverty 

In 2001, the world’s best-known confectionery companies jointly committed to eliminating the worst forms of underage working, yet the issue still persists. Nestlé claims that the root cause is widespread rural poverty and unless this underlying problem is addressed the practice will continue.

Money Laundering, Corruption, & Bribery

Queen’s speech 2022: measures to bolster UK’s dirty money defences but significant gaps remain 

While the Economic Crime and Corporate Transparency Bill was included in the Government’s legislative agenda, major questions remain about how to end secrecy in Britain’s offshore financial centres. Observers say there is a need to overhaul the private sector’s dirty money defences, while significantly increasing funding for law enforcement to pursue money launderers. 

Turkey has made progress, but remains on FATF’s ‘grey list’ 

In a follow-up report, FATF has set out the progress that Turkey has made to tackle money laundering and terrorist financing. While Ankara has strengthened measures, Turkey is still not fully compliant on six recommended areas and will remain on FATF’s ‘grey list.’ 

The banking sectors biggest money laundering scandals 

Money laundering is a major concern for financial institutions with even the biggest companies struggling to prevent it. Huge fines and damage to organisational reputation are the unfortunate outcomes for those banks that have been caught, which covers a long list of recognisable names. 

Former US Federal Agent guilty of participating in bribery scheme 

A former US special agent with Homeland Security has been found guilty of dozens of criminal charges by a Federal Court for accepting cash payments from an individual linked to organised crime. 

National Crime Agency recovers millions stolen by former Nigerian Head of State 

The NCA has recovered over $23 million siphoned from the Nigerian state in the 1990s by associates and family of the former Nigerian Head of State, General Sani Abacha. The money has been transferred to the Home Office with the ultimate intention for it to be repatriated for the benefit of the Nigerian people. 

India state mining secretary arrested in alleged money laundering case 

The Enforcement Directorate (ED) arrested Jharkhand mining secretary Pooja Singhal in a money-laundering probe linked to the alleged embezzlement of MGNREGA funds in Khunti. 

INTERPOL’s Financial Crime and Anti-Corruption Centre (IFCACC)

Anti-corruption is one of the three areas of action that comprise INTERPOL’s newly created Financial Crime & Anti-Corruption Centre (IFCACC). Its efforts span different crime types including sports integrity, the corruption of public officials and grand corruption. 

Forthcoming Event

Ethical Behaviours in Times of Change: Meeting the ESG Agenda 2022

We are pleased to announce that RiskScreen is sponsoring and joining panel discussions at Gibraltar’s very first industry-wide gaming and gambling conference. 

The conference entitled, Ethical Behaviours in Times of Change: Meeting the Environment, Social & Governance Agenda 2022, will be held on Wednesday 18th and Thursday 19th of May 2022 at the Sunborn Yacht hotel, Gibralter

Rob Mitchell, Senior Vice President, RiskScreen will be joining other key speakers at the following two panel discussions: 

Social: Real values, real vision, real standards or just ticking a box?  

Safer gambling, human rights, labour standards, and green agendas – Wednesday 18th May at 15:45 

Good Governance Comes First.  

Risk management, corporate governance and anti-corruption   – Thursday 19th May at 09:45 

RiskScreen would also like to invite you to visit its exhibition stand, where Rob Mitchell and key representatives of RiskScreen will be happy to discuss the topics in more detail. 

You can discover more about this ground-breaking event and register your attendance here.

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