Articles
AML Roundup: Russia Sanctions Update – Spotlight on Money Laundering – Corruption, Fraud, Bribery, & Narcotrafficking
20 May 2022

As sanctions continue to squeeze the Russian economy, Western powers are now exploring new ways of ensuring that sanctioned individuals and entities are unable to circumvent the measures. In addition to ending European reliance on Russian fossil fuels, there have been moves among member states to introduce new laws that will enable the authorities to confiscate assets from sanctioned individuals. Meanwhile, questions have been raised about Putin’s health and whether he is losing his grip on power.

This week we shine the spotlight on money laundering, the scourge that seems to pervade virtually every area of society and every country in the world. While continuing pressure from the likes of FATF has forced many countries to re-evaluate and improve their anti-money laundering legislation, there is still a great deal of work to be done.  

To complete this week’s AML Roundup, we gather news from around the world to report on the latest corruption, bribery, fraud, and narcotrafficking stories. 

Russia Sanctions Update 

EU unveils plans to end reliance on Russian gas

The European Commission has detailed how it will end Europe’s dependence on Russian energy.  The REPowerEU strategy was first announced in March and aims to reduce Russian gas imports by two thirds in 2022 by speeding up its shift to green energy but says it must also invest in pipelines in other countries. Russia currently supplying 40% of the EU’s natural gas and 27% of its imported oil receiving €400 billion a year in return. 

UK introduces new sanctions targetting Russian airlines 

The new sanctions will hit Russian state-owned Aeroflot, Ural Airlines, and Rossiya Airlines and prevent the airlines from earning on landing slots at UK airports estimated to be worth £50 million  

Video: How the West Is fuelling Russia’s war on Ukraine 

With a staggering paid to Russia $44 billion by EU countries for oil and gas since the invasion of Ukraine began. this video explores just how fossil fuels are financing Putin’s war machine. 

Putin claims EU sanctions on Russian gas and oil are for political reasons 

Russian President Vladimir Putin has said that EU has been sanctioning Russian oil and gas for “absolutely political reasons” and doing so “under pressure from their American overlords,” He added that the EU has failed to consider their effect on Europe’s collective economic competitiveness. 

EU to help member countries confiscate assets frozen by sanctions 

The European Commission is to present a legal proposal designed to enable EU countries to confiscate assets frozen as a result of the Russia sanctions campaign. By making sanctions evasion an EU crime it would provide countries with the legal basis to confiscate frozen assets. 

Russia facing a full block on dollar bond payments as May 25 deadline looms 

When the US imposed sanctions on Russia, the Treasury’s Office of Foreign Asset Control included an exemption for bond payments that allowed investors to continue receiving payments from Moscow via US banks. This gave Russia’s central bank room some breathing space and allowing it to avoid a default, but the exemption expires on May 25 putting Moscow closer to a historic default. 

Australia and New Zealand target Russian journalists, civil servants, and oligarchs with new sanctions  

Australia has introduced new sanctions aimed at the Russian media, with the list including Rossiya Segodnya International Information Agency Director General Dmitry Kiselev, FSB First Deputy Director Sergey Korolyov, RT Managing Director Alexey Nikolov, and acting Emergencies Minister Alexander Chupriyan. Meanwhile, New Zealand is mulling sanctions against Russian billionaire Alexander Abramov, who has been linked to Putin yet has avoided any action through fear of its impact to the economy. 

Russian authorities seize 113 planes in retaliation for Western sanctions 

AerCap Holdings, the aircraft leasing giant and the world’s largest owner of jets with 1,624 aircraft on its books, lost 113 planes when Russia seized them in retaliation for sanctions imposed by the West. 

U.S. launches first criminal prosecution for sanctions evasion involving cryptocurrency 

An American citizen is accused of transmitting more than $10 million worth of bitcoin to a virtual currency exchange in direct violation of U.S. government sanctions. 

Video: Is a coup against Putin underway? 

With the war in Ukraine going badly, there have been rumours of discontent among members of Russia’s security services. The Director of International Security Studies at RUSI discusses whether a possible coup against Vladimir Putin is underway. 

Russia sanctions compared to 1940 U.S. asset freezes on Nazis 

U.S. Treasury Secretary Janet Yellen has drawn parallels between the sanctions being imposed on Russia and 1940s efforts to deny financial resources to Nazi Germany. 

Money Laundering

Video: Why oligarchs choose London for their dirty money 

Already considered as one of the best locations in the world to launder dirty money, The Economist explains why and asks if this is likely to change.

Dirty money contaminates the UK’s public sphere 

The UK has been a ‘laundromat’ for corrupt money for far too long and latest estimates suggest that economic crime costs our economy £290bn every year. But it’s not just Russian oligarchs, Kleptocrats, drug traffickers, people smugglers, arms dealers and other criminals use the UK to clean illicit wealth. 

Crowdcast: Thurs, 26 May at 5pm BST: Battling corruption from the inside with Dame Margaret Hodge 

As Russia’s invasion of Ukraine focuses attention on oligarch’s billions stashed in London and UK overseas territories, Dame Margaret Hodge is joined by the Bureau of Investigative Journalism reporter Ed Siddons to deliver the inside story of the legislative fight to crack down on dirty money on  

Video: Fowler Oldfield jury watch CCTV footage of cash arriving in boxes and bags 

Video footage put before the jury in a money-laundering trial involving a Bradford jeweller includes footage of large wads of cash arriving in toy gun boxes and takeaway bags. Eight individuals are accused of washing just over £266 million of criminal cash through Fowler Oldfield between 2014 and 2016. 

Shilpa Shetty’s husband faces money laundering charges relating to pornography racket 

The Enforcement Directorate (ED) has registered a money laundering case against businessman Raj Kundra, the husband of Bollywood actress Shilpa Shetty. The charges relate to a pornography racket which preyed on young aspiring girls for which he was jailed last year, it is now alleged that the proceeds were routed out of India through hawala channels 

Mexico’s progress in strengthening measures to tackle money laundering and terrorist financing 

Mexico has been in an enhanced follow-up process following its mutual evaluation in 2018 . In line with the procedures, the country has reported back on the action it has taken since their mutual evaluation and subsequent follow-up report. The FATF has now re-rated the country and Mexico is now compliant on 10 of the 40 Recommendations and largely compliant on 22 of them. It remains partially compliant on 7 Recommendations, and non-compliant on 1 recommendation. 

Cyprus to combat money laundering through online beneficial ownership register  

The Cyprus Securities and Exchange Commission (CySEC) has launched a new online platform for the Cyprus Beneficial Ownership Register of Express Trusts and Similar Legal Arrangements (CyTBOR). The platform will be accessible to trustees from 17 May and all involved parties from 17 June, providing up-to-date information about the beneficial owners of Express Trusts and Similar Legal Arrangements. 

Once off the FATF greylist Malta can prove it is cleaner than other jurisdictions 

The gaming industry has urged Malta to use its FATF greylisting to make positive change. Once it has been removed from the list it should use the opportunity to show the island is cleaner than other jurisdictions. 

Corruption, Fraud, Bribery, & Narcotrafficking

U.S. ranked most secretive financial jurisdiction in the world  

According to the Tax Justice Network, The U.S. is the top supplier of financial secrecy in the world – even surpassing Switzerland. The 2022 Financial Secrecy Index shows a significant deterioration of the U.S. score since 2020. 

US lifts some Cuba restrictions and eases Venezuela sanctions 

The United States is reported to be easing some of its tough sanctions on Venezuela in order to promote dialogue between President Nicolas Maduro’s regime and its opponents. The easing of sanctions came just one day after Joe Biden lifted some restrictions imposed on Cuba by the Trump administration.

FTX chief says Bitcoin has no future as a payments network 

Sam Bankman-Fried, the head of FTX, the US licensed cryptocurrency exchange, believes that Bitcoin has no future as a payments network, citing its inefficiency and high environmental cost. 

The FCN Financial Crime country dashboard for Japan has been released 

Japan enjoys very low crime rates and is regularly placed in the top 10 safest countries. With crime rates falling for the last 20 years and corruption at exceptionally low levels, Japan is rated overall, as “Moderate” risk, scoring 50/100 for financial crime by FCN.  

Paraguayan anti-mafia prosecutor murdered by mafia hitman while on honeymoon 

A tragic reminder of the evils meted out by organised crime. Paraguayan anti-mafia prosecutor was murdered in cold blood while on his honeymoon in Columbia just hours after learning that his wife was pregnant.  

Nigeria’s accountant general to face corruption charges 

Nigeria’s accountant general has been arrested on charges of diverting public funds and money laundering amounting to 80 billion naira ($193 million). Africa’s biggest economy and energy producer has long struggled with corruption among senior public servants and the political elite, who many feel are to blame for widespread poverty in the country. 

Former Airbus executive indicted for alleged foreign bribery 

Édouard Ullmo, a former Airbus executive has been indicted by the French authorities, for bribery of a foreign public official in the investigation into the financing of former French President Nicolas Sarkozy’s election campaign allegedly by Libya in 2007. The case relates to the sale of 12 Airbus airplanes to Muammar Gaddafi’s regime in 2006. 

U.S authorities discover major cross-border drug smuggling tunnel 

The secret passage was discovered near San Diego’s Otay Mesa border crossing and stretched one third of a mile (532 m) from Tijuana, Mexico to a warehouse in an industrial area in the U.S. Featuring rail and ventilation systems, electricity, and reinforced walls, it was discovered in an area where numerous sophisticated tunnels have been found over the last two decades. 

Former Australian sports star charged with drug trafficking 

A high-profile former AFL player Sam Fisher has been charged with trafficking large amounts of drugs across Australia  

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