Saturday, December 3, 2011


A number of forecasters are claiming that the decline in both housing sales and manufacturing in China indicates that the country may be headed for the same place as the West; an economic downturn. If this is indeed occurring, or is about to occur, be advised that money launderers for certain elements will be on the move:

(1) Corrupt PEPs who have, through bribes, kickbacks, or sweetheart deals on government contracts handled by relatives and associates, moved their illicitly-acquired wealth offshore, may need to now repatriate some of it, to support their lifestyles, or prop up struggling businesses that they own through fronts. If business is bad, bribes become more infrequent. They may actually need to bring some cash onshore.

(2) Criminal organisations, regularly laundering and banking their profits offshore, may now need some of their funds for "operating capital."

(3) legitimate business owners, who have been diverting a small portion of their profits to offshore financial centres, in tax evasion schemes, may have fallen upon hard times, and need to access some of their external assets, to maintain profitability.

Individuals in the above groups will depend upon the money launderers who moved their dirty money out, to safely and quietly repatriate a portion of it, as needed.

Look for:

(A) Payments made to Chinese companies, whether in Hong Kong or Mainland China, that have no history of international sales.

(B) Loans to individuals or entities from known tax haven jurisdictions.

(C) Large payments purporting to be for claims submitted to foreign insurance companies for alleged losses covered by existing policies.

(D) Payments that recite that they are investments by foreign lenders or entities.

There may be well-documented, but unusual, transactions, covering the return of illicit wealth. If it looks suspicious, apply Enhanced Due Diligence.

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