Tuesday, September 01, 2015

Beware of thieves making beguiling promises!



One of the many things the City of London does brilliantly is the way in which it consistently lobbies Government to mitigate the effects of regulatory requirements which it finds inconvenient. The lobbying industry is kept busy throughout the year and they have no shame. No matter how appalling or dishonest the conduct of their client constituency; regardless of how many crimes they commit; despite all their mafia-like conduct, the lobbyists will continue to buttonhole civil servants, MP’s and ministers to minimise some rule or requirement which is getting in the way of profit. The thieves they represent can always be depended upon to come up with some beguiling promise to the future (which of course they have no intention of keeping)!

The latest scam which the bankers are hoping to perpetrate is to get George Osborne to amend the money laundering rules which are designed to prevent large quantities of mainstream criminal money from finding a safe-haven in the UK.

What they are hoping to achieve is to water-down, to a state of complete ineffectiveness, regulations which are designed to prevent corrupt foreign Heads of State, their immediate families, their political supporters and their dishonest facilitators from finding a safe home for the vast amounts of money they have sequestered from their home state coffers. These rules also apply to foreign corruptors, drug profiteers, arms-dealers, people-traffickers and foreign warlords who rape third world countries to steal their natural resources, and then stash the money in safe banking environments, like the City of London, Zurich and New York.

How does the City intend to achieve this desirable state of affairs?

By encouraging the usual bunch of lick-spittle toadies, poltroons and other Tory Members of Parliament, coupled with the usual suspects and apologists for banking criminality like the British Bankers’ Association, to support calls for the ‘cutting of red tape’ as a means of helping British business.

They will make it sound so benign that you could be forgiven for thinking that there was a shelf-full of law books out there, all crammed full of texts and designed to deliberately obstruct British business from achieving its full potential! No-one will ever bother to explain to you that these laws are specifically designed to put the greatest pressure on major foreign criminals to make hiding their ill-gotten loot as difficult as possible.

If you were to listen to the bankers and their prostitute advisers and enablers, you could be given cause for thinking that the banks were being unreasonably denied access to this money. No-one would even bother to stop and suggest that the whole pint of these rules was to prevent major criminals from profiting from the proceeds of their crimes.

This is where politicians become so two-faced!

Those of you who may have read previous blogs in this series will know that I have often commented on the reasons why the Government appears to refuse to enforce the laws dealing with financial crime, money laundering and many other forms of economic skulduggery!

Why, for example, when HSBC was outed as being a serial money launderer for the Mexican mafia drug cartels, did David Cameron not step in and demand that the laws on money laundering be enforced? 

David Cameron and George Osborne must know perfectly well why we have such laws. 

Even if they find it difficult to understand, they have any number of Government lawyers and advisers who can explain to them the purpose of these laws and how they work. Yet, they insist on pandering to these deliberately ill-spun misinterpretations that such laws are just an encumbrance to British business and enterprise!

The laws which British banks are now moaning and bleating about deal with what are called ‘politically exposed persons’ and are sensible, well-intended, and not difficult to obey or apply. They require banks to submit any applicant for business who comes from or appears to come from a range of State-oriented functions to special identification procedures, in order to be able to ensure that he/she is properly identified, and any untoward concerns about him/her or their source of funding is recognised or identified.

Quoting from the handbook published by the global supervisory agency the Financial Action Task Force, the following reasons are relevant;

“...A politically exposed person (PEP) is defined by the Financial Action Task Force (FATF) as an individual who is or has been entrusted with a prominent public function. Due to their position and influence, it is recognised that many PEPs are in positions that potentially can be abused for the purpose of committing money laundering (ML) offences and related predicate offences, includingcorruption and bribery, as well as conducting activity related to terrorist financing (TF).

This has been confirmed by analysis and case studies. The potential risks associated with PEPs justify the application of additional anti-money laundering / counter-terrorist financing (AML/CFT) preventive measures with respect to business relationships with PEPs.

To address these risks, FATF Recommendations 12 and 22 require countries to ensure that financial institutions and designated non-financial businesses and professions (DNFBPs) implement measures to prevent the misuse of the financial system and non-financial businesses and professions by PEPs, and to detect suchpotential abuse if and when it occurs...”

So, it can be immediately seen that such requirements are put in place to avoid the likelihood that a client might be engaged in a wide range of crimes, including facilitating the proceeds of terrorism.

The banks must simply submit such applicants to another layer of due diligence before dealing with them, and the main board has to approve their being taken on as a client. These rules really are not onerous, but they can take time to complete and this is where the banks are unwilling to engage.

They know that some former dictator of some tin-pot republic may want to hide his ill-gotten loot in a hurry, and if they have to wait for weeks while the requisite regulatory requirements are completed, he may get anxious and seek other support from another bank. That is why our banks hate having to comply with these particular regulations, because they can mean serious criticism and even regulatory sanctions from a regulator if they are not complied with, but at the same time, the client is getting twitchy, particularly if there is a likelihood that he may be facing a UN or US investigation about his conduct!

And this is why these banks must not be allowed to influence Government in order to get them to amend these laws. This is why we have to expose the double-standards and the deliberate untruths which the apologists for the criminal banking industry are deliberately adopting.

Right now, as it is reported, ministers are looking to cut red tape in the government’s anti-money laundering regime, only a matter of a few weeks after David Cameron promised Britain would not be a haven for dirty money! 

This is what I mean about two-faced political standards. He makes these statements fully knowing that City of London is awash with foreign criminal loot!

Cameron knows he will be severely criticised if his government fails to get the balance of these demands right, not least because of his recent vow: “London is not a place to stash your dodgy cash.”

Mr Cameron said on a visit to Singapore last month that properties in London were “being bought by people overseas through anonymous shell companies, some with plundered or laundered cash”.

Cameron knows only too well that thousands of dubious foreign criminals, tax evaders, corruptors, and bribe merchants look upon the UK as a safe home for their looted money, and he knows that this makes London complicit in the handling of the proceeds of these foreign crimes, despite the fact that we have serious laws designed to prevent such activities. 

But what is he to do when his ministers come whining to him that their friends in the banks are getting antsy because they are being required to comply with some inconvenient regulatory demands.

Sajid Javid, business secretary, recently announced a review to reduce complexity in the system to ensure the rules were not “unintentionally holding back” British business.
What an exercise in ‘doublespeak’ – what a masterpiece of civil service weasel words! It’s all there: ‘Complexity holding back British business’!

Companies and banks have complained to ministers that rules intended to stop black money flowing into Britain have also imposed extra costs and time burdens on innocent companies and individuals. Critics also say that the crackdown carries an unintended humanitarian cost by adding charities and non-governmental organisations to the ranks of the “de-banked”.

But, the minister insists the review — part of the government’s plan to save businesses £10bn by cutting red tape — would not weaken the UK’s fight against money laundering.
Mr Javid said the review would look at the implementation of existing legislation by national regulators such as the Financial Conduct Authority and HM Revenue & Customs: it was not about scrapping rules.

Well, he has got to say that hasn’t he? The fact is, that once he starts making these sensible rules easier, it will mean that even more dirty money will flood into the City, but with far less chance of interdiction this time.

It will also make life a whole lot easier for the other ranks of criminal money facilitators, on the lawyers, estate agents, accountants, and company formation agents. Once the important rules on politoically exposed persons are watered down, they will be free to continue facilitating the movement of foreign criminal proceeds without let or hindrance.

Ministers also say they are concerned about the complexity of the system and the differing interpretations among regulators. This is yet another piece of ministerial wabble-babble, trying to give the impression of wanting to maintain the best standards while making it easier to do business at the same time. The problem is that when it comes to dealing in foreign ‘funny money’ you can’t have it both ways. 

But never say a British politician won’t try and engage in a triumph of hope over experience.

“This new review is about making sure the rules we have to protect our strong financial services industry from abuse are not unintentionally holding back new and existing British business,” Mr Javid said.

What is this stuffed suit talking about?

As a former career banker with time spent working in both South America and in the Far East, he will be well versed in the schemes and machinations of the money movers who spend their time rolling the ball of hot black money around the world. He will know all too well what will help to prevent that dubious mazuma from finding a safe home, and he will talk the same language as the dodgy bankers and their oily PR people when they seek interviews with him.

Others of course know only too well that removing these important protections will lead to increased criminality..

“The problem with anti-money laundering regulations in the UK is not the content of the regulations but the fact they aren’t properly enforced,” said Stuart McWilliam, senior campaigner at Global Witness.

Mr Javid said the review of financial regulation was one of six chosen in the first wave of a government programme to save £10bn from red tape costs for business.

Harriett Baldwin, City minister, another career banker whom you might assume would know about the money laundering regulations, came out with the usual series of ministerial bromides, written no doubt by some teenage special adviser, when she claimed Britain was “leading from the front” in the protection of the “integrity” of its financial centre, but then admitted the regime needed to be made more effective.

You see, it’s all the same message being orchestrated by Whitehall.

‘Oh look how good we are at dealing with foreign criminal money, but how can we loosen the impact of regulations so we can let even more dirty money into the system?

The British Bankers’ Association inevitably welcomed the initiative,( well they would wouldn’t they), saying it looked forward to seeing the details. “We want to make sure the system is targeted against criminals while not impacting disproportionately on genuine customers.”

The CBI also welcomed the review. Matthew Fell, CBI director for competitive markets, said there was evidence to suggest that the anti-money laundering rules were acting as a big barrier to companies getting the trade finance they needed to export to new markets.

It’s all very well making these unsustainable statements to populate a press release, butI call upon Matthew Fell here and now to produce even a scintilla of evidence to prove how the AML rules act as a big barrier to obtaining trade finance. 

“We need to boost the number of UK firms exporting their products and services around the world to sustain our long-term growth and access to finance is critical to that effort,” Mr Fell said.

It is well known that many terrorist groups help to finance themselves through dodgy trade finance arrangements, but then it is the responsibility of the bank putting up the finance to demonstrate that it knows its customer, and knows what kind of business the customer is engaged in. Again, this isn’t difficult, it just needs honest application, and an intention to act honestly.

If you know how to read ministerial statements, you will know that this new regime is already virtually a done deal already.

The main message is about making Britain’s regulatory systems fit for purpose, while not getting in the way of business.

Once and for all, the AML rules are there to stop countries from taking a free ride on the back of other international rules, and profiting from a wilful ignoring of the laws designed to prevent and forestall money laundering.

Once these provisions have been repealed, the City of London will have nothing standing in its way to prevent all the dirty money in circulation from ending up here, which is of course, what the bankers want. They don’t care about reputation because they have none, well alright, they have one which is of the worst kind.

If this reform does happen, and I have every expectation that it will, we should be thoroughly ashamed of ourselves.!

Friday, August 21, 2015

British Embassy to re-open in Tehran – Now is the time to reopen liaison between Iran and the Financial Action Task Force.



It is wonderful news that the British Embassy is to reopen in Tehran. In saying this, I must declare an interest to state that I have been very fortunate to have travelled to Tehran on 2 occasions, and to have enjoyed the hospitality of my Iranian hosts within the banking sector.

I was invited to Tehran to teach anti-money laundering best practice to Bank Saderat staff, and the visit proved to be so positive and open-handed that I was invited to return to teach a large number of Iranian bank staff from all over the country.

The success of these visits, and the initiatives that flowed therefrom were subsequently deliberately undermined by American agents with close ties to Israel who did not want Iran to be perceived to be trying to provide full compliance with international anti-money laundering initiatives.

The reopening of Britain's embassy in Tehran will now consolidate the normalisation of relations after a very bumpy period. 

While relations were not formally broken off, they were reduced to the lowest level possible. 

Ties have slowly been warming but it is clearly the successful conclusion of the nuclear accord with Iran that has paved the way for the embassy reopening. 

A number of other European countries have already sent ministers and trade delegations hotfoot to Tehran in the wake of the nuclear deal. The hope now is that better diplomatic ties and stronger economic links might help to bolster more reform-minded elements in the Iranian leadership and open up Iranian society to new pressures for change. 

One of the earliest changes I hope will take place will be a re-opening and re-negotiation of Iran’s relationship with the Financial Action task Force, the international body designated to oversee global anti-money laundering best practice standards.

In late 2007, the FATF had made a series of public pronouncements dealing with its relations with Iran, and its concern with a perceived lack of good compliance by Iran with accepted global standards of best practice, and threatening further interventionist action.

Early In 2008 I was contracted by the Iranian Bank Saderat to teach anti-money laundering best practice to Iranian bankers, my first visit covering a 5 day period during which I lectured to about 100 practitioners. 

The banking response to this visit was to invite me back to lecture again to about 800 bankers from all over the country. I was inundated by a very large number of decent men and women, all of whom wanted to be educated in global aml systems and controls in a 'best practice' model, and who wished to be 100% globally compliant with FATF requirements.

 At the end of my visits, I became the willing intermediary between the Central Bank of Iran and the FATF in Paris, during which I encouraged and later facilitated the first visit of an Iranian delegation to the FATF.  

I was asked to interpret an FATF letter to the Iranian Government dealing with AML compliance and I was happy to be able to draft a response to be sent by Iran to Paris, responding positively to an invitation to engage with the FATF.

Subsequently, I was invited to attend the meeting in Paris as a consultant to the Iranian delegation, although I was not allowed to attend the Plenary meeting, the only attendees being Government and FATF officials and invitees. 

I was able to be present at the post meeting discussion with the Iranian delegates and to advise on the outcomes. I was therefore a witness to the entire process with the exception of the plenary meeting itself, the entire contents of which were subsequently reported to me by the Iranians and FATF staffers.

During this visit, the Iranians were able to demonstrate their working model of aml interdiction, and they left this very cordial and helpful meeting with the knowledge of how their requirements would need to be increased and further developed.

So successful was this meeting that it resulted in an invitation to return to Paris for working meetings with FATF professionals and staffers, at which I would have been permitted to be present, to further develop their methodologies along the correct lines. 

As a direct result of this thawing of relations between Iran and the FATF, the agency made a public announcement on 28th February 2008, that it did not intend to take any further AML/CTF interventionist action against Iran, following the publication of its earlier notice in October 2007.

The FATF notice stated;

“…Since its October 2007 Plenary meeting, the FATF has engaged with Iran and welcomes the commitment made by Iran to improve its AML/CFT regime. Consistent with its Statement on Iran, dated 11 October 2007, the FATF confirms its call to its members and urges all jurisdictions to advise their financial institutions to take the risk arising from the deficiencies in Iran’s AML/CFT regime into account for enhanced due diligence. Iran is encouraged to continue its engagement with the FATF and the international community to address, on an urgent basis, its AML/CFT deficiencies...”

The FATF specifically recognized therefore the commitment made by Iran to improve its AML regime and encouraged it to continue the same. The FATF had the power to impose other sanctions against Iran, but because of its open and transparent cooperation with the FATF, it has chosen not to alter the existing situation, and would continue to work with Iran to remedy all deficiencies.

However, this state of affairs had not satisfied those officials in the US Government who had close ties to the State of Israel and whose ambitions were to harm Iran at every possible opportunity. 

No sooner had the likelihood of Iran’s improving relations become apparent, then the Americans commenced a whole programme of deliberate untruths, downright lies and cynical disinformation which was planted in the US press, which completely spun a whole new interpretation on the facts of and the reasons for the Paris visit. 

On Saturday 16th February 2008, the International Press Agencies all began carrying reports of a ‘secret’ meeting held between US and Iranian officals in Paris earlier in January.

Depending upon which agency you read determined what story you received, but suffice it to say that the majority of the articles carried by the US agencies all placed a major US ‘spin’ on the piece.

Take this as a typical example from the Kansas City Star;

“US secretly met Iran banking officials”

‘…A US official met secretly with Iranian banking officials and senior government aides who oppose punishing the Islamic nation for not doing enough to stop money laundering and terrorism funding…

The United States was represented by Daniel Glaser, the Treasury Department’s deputy assistant secretary for terrorist financing and financial crimes…The meeting was part of the Bush administration’s attempts to ramp up international pressure on Iran to halt atomic activities that could lead to the development of nuclear weapons…’

No mention was made of the real reason for the Paris meeting, or the Iranian initiatives in seeking to become more compliant with global initiatives.

The way this story was reported placed a wholly inaccurate interpretation on the events, and attempted to portray the US’s part in these events in a fictitious light. It was yet another example of the way that the US Treasury continued to disseminate a stream of disinformation about Iranian affairs, particularly Iranian banking and financial affairs, as part of a deliberate US policy to destabilise the Iranian state and its internal economic policies. 

As the Kansas City Star stated quite openly;

‘…Washington has boasted that the US and existing UN sanctions, have taken a significant toll on Iran’s economy, particularly on its unemployment and inflation rates and raised pressure on the Government…’

The real FATF meeting in Paris was co-chaired by the Italian representative and the US representative, Daniel Glaser. Quite why the US representative was chosen to chair this delicate meeting is not clear, his political leanings should have made it obvious that he should not have played a leading role.. 

The meeting was reported to be cordial, focused and covered a wide range of issues. The Americans it was reported, played no particularly significant part over any other participant, nor was the meeting anything to do with any policy initiatives on their part, either in Paris or elsewhere. They were merely present at the meeting in the same way as the other FATF representatives, all of whom would have expected the meetings to be kept confidential.

At this time, agents of the US Treasury were in Europe, seeking to bring significant economic pressure on the Iranian banking community by threatening other banks and international businesses who had business with Iran that the US would seek to impose draconian penalties on those entities if they continued to do business with Iran. 

The pressure for these unfair activities had been directed from and by agents of the office of Stuart Levey, the then US Under Secretary for Terrorism and Financial Intelligence. By focusing on the tactics of pressurizing foreign companies who traded or dealt with Iran to drop their business activities, Levey and his team engaged in a wide range of activities designed to bring financial and commercial pressure on Iran. Their aim was to bring about a revolution from within Iran by so destabilizing the economy of the country that regime change would be effected through a popular revolution.

In view of the proximity of Mr Glaser to Mr Levey, it might have been thought obvious that the Iranians might not unreasonably feel that their own transparent deliberations with the FATF were being wholly undermined by Mr Glaser’s position as co-chair of the meetings, as he was a direct satrap of the very official who was doing everything he could to unfairly undermine the Iranian economy.

It is surely no accident that having observed the willing acceptance by Iran of the FATF invitation to enter multilateral discussions, followed by an even more recent announcement of the passing of the Iranian law outlawing money laundering, that the Americans could easily see that their widely trumpeted allegations of Iranian regulatory non-compliance would now begin to ring a bit hollow. 

Hence, the sudden outburst of articles all claiming US initiatives for engaging in the meetings, and playing up their involvement.

All this intervention so outraged the Iranians that they immediately withdrew from all further FATF negotiations, because they no longer trusted the process. 

This of course, was always the intended result from the US point of view, because they could not bear to contemplate the possibility that Iran might become a respected and compliant member of FATF, because this would immediately give the lie to US terrorist-funding allegations, a major plank of their demands for international sanctions against Iran.

Now that the opportunities exist for a greater degree of cooperation with Tehran, it is to be hoped that the Iranians can be re-invited to come back to the discussion table and to re-enter their meetings with FATF officials, to ensure that their international compliance can finally be recognised as a reality.