Kenneth Rijock

Kenneth Rijock

Friday, January 18, 2019

MALAYSIA CAN'T FIND A BUYER FOR 1MDB FRAUDSTER'S $130m YACHT



It seems that Malaysia is having a lot of trouble finding a buyer willing to pay a fair price for 1MDB fugitive fraudster Jho Low's $130m mega-yacht. The vessel, which is reportedly docket at a Malaysian Navy facility near Kuala Lumpur, has only drawn substandard bids. Malaysia is said to be paying the equivalent of over $750,00 per month to maintain the the luxury yacht.

Jho, who was last seen in Hong Kong and Macao, and is a fugitive from justice, regarding the billion dollar 1MDB scandal, is believed to have transited China, and may be seeking refuge in St Kitts & Nevis, where he hold CBI citizenship, and where he would be immune from extradition; St Kitts has become a safe haven for some financial criminals who have secured SKN passports through the country's Citizenship by Investment program. Jho is regarded by some as the poster boy for all that is wrong with East Caribbean CBI programs, where known criminals purchase passports for cash, and the compliance process is a total sham, even though the programs allege that they conduct due diligence upon applicants.

Notwithstanding Jho's celebrity history, which we have extensively reported on this blog, the latest news is that he has disappeared from public view, after being seen in Hong Kong. Whether he ever makes it to St. Kitts, in his flight to avoid prosecution, remains a question. 

Thursday, January 17, 2019

USE OF BVI COMPANIES PLUS LAUNDERED CASH DROPPED INTO FOREIGN DIRECT INVESTMENT MEANS THAT YOU SHOULD NOW REDLINE ALL BVI CORPORATIONS


One technique of money launderers is to take laundered criminal proceeds, hide them within a British Virgin Islands company, so that Beneficial Ownership is totally unreachable, and then, through Foreign Direct Investment, seamlessly placing the funds into the same countries where the dirty money was originally earned.

These tactics are employed in jurisdictions where you'd least expect them to be active. One report showed that the largest foreign investment being made in the Federal Democratic Republic of Nepal is through BVI companies. If you've ever worked in compliance, you know how difficult it is to verify client information about beneficial ownership of a BVI corporation. Personally, I know that there is no foolproof method to accomplish that task.

Therefore, since you do not know whether the BVI corporation you are looking at is being used to place laundered dirty money into an investment, and British Virgin Islands corporation ownership information remains opaque, as an intentional act of BVI government, the prudent, risk-based conclusion is redline ALL BVI corporations, with no exceptions. If a new bank client chooses to shield beneficial ownership through BVI entities, decline their business, without exception.

Remember, when journalists arrive at the BVI, looking for information on Beneficial ownership, the local authorities bar them, and put them on the next plane. BVI corporations have no place in legitimate commerce; they are basically attractive only to money launderers, tax evaders and terrorist financiers. 

IN AFTERMATH OF CLOSURE OF RUSSIAN DISINFORMATION, DO NOT ACCEPT NEWS ARTICLES POSTED ON SOCIAL MEDIA AS FACT


If you are paying attention to developments on social media, you know that social media sites, including Facebook, have been shutting down clients that turn out to be Russian disinformation organizations. Not only are these bogus sites spewing false "news" about the United States, but about European countries as well, especially those who have upcoming elections that Russia is seeking to manipulate.

As a practical matter, when conducting enhanced due diligence on new customers, it is wise to disregard the facts contained in ALL articles that appear on social media, whether the entire article, or just a hyperlink. The disinformation campaigns are just too well made for you to differentiate between verified fact, and misinformation. A wise move would be to ignore all references to news articles posted on social media, lest you use misleading information to make a decision about onboarding a new client, and later find out it was a costly mistake.

Wednesday, January 16, 2019

SENATE VOTES TO ALLOW REMOVAL OF SANCTIONS AGAINST DERIPASKA COMPANIES



The Republicans in the US Senate who support the Treasury Department's move to remove OFAC sanctions from Russian corporations controlled by OFAC-sanctioned Russian tycoon Oleg Deripaska succeeded today in voting against a motion to lift those sanctions. The motion required 60 votes in the Senate, and the movants fell short in reaching that number.

Democrats in the Senate, as well as eleven Republicans, dissatisfied with Treasury Secretary Mnuchin's assurances that reducing Deripaska's holdings to 45% would cause him to lose control, voted to lift the sanctions, but the affirmative vote on the motion were insufficient to move the motion to a floor vote. 


TURKEY SEEKS INTERPOL RED CARD FOR AMERICAN BASKETBALL STAR, CALLS HIM 'TERRORIST"



If you were looking for a reason to raise Country Risk on Turkey, which is lurching towards complete abandonment of the Rule of Law, here it is. The Government of the Republic of Turkey has charged that NBA professional basketball star Enes Kanter, who plays for the New York Knicks,  is a "terrorist." Kanter who is a vocal opponent of the Erdogan government, declined to travel with his team to play in London, stating that Turkish agents might kill or kidnap him.

Kanter's father Mehmet, a former university professor, has been arrested, and expelled from public service, and faces an upcoming trial, for his critical comments regarding Erdogan. Turkey is requesting that INTERPOL. the international association of chiefs of police, issue a Red Card, or arrest notice, for Enes Kanter. More than 50,000 Turks were arrested by the regime after the 2016 unsuccessful coup d'etat attempt, many without any evidence of their involvement.

We trust that the National Basketball Association will insure the safety of its player, especially given that a conspiracy to kidnap a major Opposition figure living in Pennsylvania, Fethullah Gulen, became known during the investigation conducted by the Office of Special Counsel.

Tuesday, January 15, 2019

US SENATE VOTES TO TAKE UP RESOLUTION TO BLOCK LIFTING OF SANCTIONS ON DERIPASKA COMPANIES


The United States Senate today voted to advance a resolution which would block the US Treasury Department from lifting sanctions on three Russian corporations connected to sanctioned Russian businessman Oleg Deripaska. By a 57 to 42 vote, the Senators have moved the matter forward; a 3/5 majority, or 60 votes, will be required to move the resolution to a final floor vote. Eleven Republicans, who generally vote lockstep with President Trump, voted in favor of advancing the resolution.

Reducing Deripaska's ownership to less than 45% will certainly not change his influence upon Russhal, notwithstanding Secretary Mnuchin's claims that a minority share will magically and immediately change control of the company. Many believe this is just one more concession made to Russia on the orders of President Trump, and that Treasury's claims are totally without any basis in fact, and bogus.

Given Deripaska's known connection with Russian efforts to influence the 2016 Presidential Election, Treasury's proposed lifting of sanctions, which reportedly comes as the result of Deripaska's efforts, is seen as pandering to special interests, and not in the best interests of the United States.




REVIEW WHITE PAPER ON CHINA FOR COUNTRY RISK ASSESSMENT




Readers who are charged with conducting Country Risk assessments in the Asian region should review the Defense Intelligence Agency (DIA) White Paper, entitled China Military Power. It contains a detailed analysis of China's military history, current capabilities, and long-range goals. Compliance officers may access the complete text of the 140-page document here.