Kenneth Rijock

Kenneth Rijock

Thursday, May 31, 2018

WHY IS A POST-APOCALYPTIC DOMINICA ASKING RUSSIANS TO VISIT FOR TOURISM ?



Internet visitors have noticed lately that the Commonwealth of Dominica has placed a number of tourism ads in Russian language websites, social media sites, and even search engines, in what appears to be a concerted effort to bring Russians to Dominica as tourists. What's wrong with this picture ?

First of all, Dominica is still reeling from having absorbed a direct hit from Hurricane Maria; widespread electric power outages, and other critical infrastructure issues, still exist, and extensive damage to what some call the Nature Island frankly renders eco-tourism, or tourisn of any kind, impossible. Of course, if there are Russian tourists want to come and help with reconstruction, they are more than welcome, but sun & fun is a little hard to find in Dominica in 2018, as that is assuming that our Russian "tourists" will even find travel user-friendly, because Dominica has no international airport,, and getting there will not be "half the fun."

Perhaps there is a hidden agenda here; after all, Dominica has a new, hard-working resident Ambassador in Moscow, who primary business is his CBI consultancy. What if the ads are really a call for Russians to consider CBI investments, so that they can pick up that nice little Dominica passport, which affords them visa-free travel into the UK and the EU, something their Russian passport cannot do. Maybe the most affluent ones will even spring for a diplomatic passport.

Are Russians merely passing through, picking up their prized CBI passports, en route to a coveted European, or Commonwealth, destination ? We cannot say, but Dominicans will most certainly be looking for any new arrivals, with pale skin that has not seen the sun, who may happen to have only minimal English skills, but a lot of greenbacks, headed for the nearest local lawyer's office, provided that the lawyer is also a CBI consultant.

UNRESOLVED CORRUPTION ISSUES CONTINUE TO PLAGUE ANTIGUA & BARBUDA


The constant buzz of the Asot Michael corruption scandal, together with a number of other pending and still unresolved financial crime scandals.continue to roil Antigua, and are thought responsible for the major resuction in new CBI applications, and lack of legitimate investors seeking opportunities in the two-island nation.

Some of the issues that simply will not go away, and are hurting Antigua's image, and therefore its ability to attrct capital:

(1) The Leroy King case, where the country's former chief financial services regulator's extradition, to face charges in the Stanford International Bank case, has been artfully delayed for several years, some say through government influence.

(2) The missing two hundred passports scandal, which involves Asot Michael, the former head of the Antigua Policem and a number of others who are attempting to stay out of the public eye.

(3) Asot's British scandal, where he is accused of soliciting a $2m bribe to facilitate an investment, and where one of the partners in the investment group is a known white collar criminal.

(4) The never-ending story about the failure of the country's CIP program to elevate its vetting to enhanced Due Diligence, resulting in the acceptnce of unsuitable applicants, whose subsequent criminal acts bring the program into disrepute.

(5) Lingering rumors that the most senior individuals in government have accepted large bribes and kickbacks, while the Integrity Commission magically gives all the suspects a clean bill of health..

Without true reform, Antigua will remain in both the economic, as well as political, doldrums, with no relief in sight, and with negative news dominating stories from the island.

Tuesday, May 29, 2018

DOMINICA'S LARGE NUMBER OF NEW CBI PASSPORTS ISSUED ARE A CLEAR AND PRESENT DANGER



It appears that the Commonwealth of Dominica has recently sold far more Citizenship by Investment (CBI) passports than any of the other four East Caribbean States; some insiders are saying that it may be as much as several hundred during the last few months. Here's why this is extremely disturbing, not only to bank compliance officers, who fear money launderers and terrorists with CBI passports, but to law enforcement agencies, who are tasked with crime suppression and counter-terrorist financing inside North America, the European Union, and the countries of the Commonwealth of Nations.

If you take a close look at the names of the companies that are CBI consultancies approved by the Government of Dominica, you find that there are firms targeting only Chinese nationals, and who also have offices inside China, or inside offshore tax havens frequented by Chinese. Other firms are specifically marketing to Russians, and/or are located in Russia.

Both countries use non-Latin alphabets, in their official languages; making accurate transliteration into English problematic, and making the intentional disguise of true identities, by unregulated CBI consultants intent upon earning those sky-high commissions, by seeing that all their applicants pass due diligence, the rule, rather than the exception.

Add to this the abysmal (some experts say dysfunctional) level of due diligence performed on applicants for Dominica CBI passports, and you have a perfect storm, whereby career criminals, terrorist financiers, sanctions evaders, and other dodgy types claim that valuable passport, only to use them for the purposes the drafters of Dominica's CBI laws never intended.

Inasmuch as Dominica will not elevate its vetting process to true Enhanced Due Diligence, it has become time to treat ALL Dominica passports, where the holder was not born in the country, as suspect, high-risk, and a potential danger, wherever they are produced abroad, for any purpose.

VENEZUELA'S REDENOMINATED CURRENCY RELEASED JUNE 4



If you were wondering what the new Venezuelan Bolivars will look like, here are the images from the Banco Central de Venezuela website. At 14000% per cent inflation per year, obviously you do not want to hold any of this currency, but it important to be aware of it. The Bolivar s being redenominated because its unofficial rate is fast approaching one thousand Bolivars to one US Dollar. (1000BV=USD$1.00)

RAIN OF STONES - DOMINICA MAY 29, 1979



For those of you who are not students of Caribbean history, on this day in 1979, the people of Dominica, fed up with an autocratic regime that intended to pass legislation limiting freedom of speech, and the rights of unions, rose up and took down the government of Patrick John. There were casualties among the people, who were unarmed, when the police and military opended fire upon them.

I was in Dominica immediately after that, and present at the Inquest into the carnage. What was I doing there ? Even back then, long before St Kitts created the CBI ib 1984, Dominica's corrupt leaders were selling diplomatic passports.

Those who forget the lessons of history are doomed to repeat them. If you want to read the complete story, access it here.

Monday, May 28, 2018

A DAY TO REFLECT ON THE SACRIFICES MADE BY OUR SOLDIERS






For all my brothers in arms who served with me in the First Infantry Division in the Republic of Vietnam in 1969 and 1970, and in the Twenty-Fifth Infantry Division, in Vietnam and Cambodia in 1970, and who fell on the battlefield, rest in peace.


ANTIGUA'S FUGITIVE FORMER BANKING REGULATOR, NOW "AMERICA'S MOST WANTED" FINANCIAL CRIMINAL, FEARS THE LONG ARM OF US JUSTICE



Leroy King, the former head of Antigua's Financial Services Regulatory Commision, remains the sole fugitive from justice in the billion dollar Stanford International Bank Ponzi scheme, and a principal target of the US Department of Justice. His extradition has been delayed several years, and most legal observers say that political pressure has been applied to delay his case indefinitely, by repeatedly changing the judge asigned to hear the case, who then requires many months to study it, before transferring it to yet another member of the judiciary.

King apparently fears being removed from Antigua by means other than extradition; he has been seen with no less than three full-time bodyguards* to prevent such action by private bounty hunters, who have been rumored to have been engaged to bring him to Texas where he faces a potential life sentence. King is the only defendant to have escaped American justice for his prominent role in concealing from US regulators the fact that Stanford bank was a massive Ponzi scheme. He allegedly has first-hand knowledge of millions of dollars in bribes and kickbacks, paid by Stanford to the most senior officials then in the Government of Antigua, some of whom are now still in office.


Former FSRC head Leroy King

In 2018, efforts were made to arrange a plea deal for him, and a generous sentence of only two years was reportedly offered, which he declined, in a maneuver said to be only another delaying tactic on his part. (Stanford himself received 110 years in Federal Prison) The failure of Antigua to extradite King, against whom extremely damaging testimony was given at the Allen Stanford trial, continues to negatively affect its relationship with the United States, as well as affecting Country Risk assessments on Antigua by the North American banking community.  


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* Considering that King is known to be without income, employment or assets, and living a meager existence in Antigua, the question arises regarding who is paying for his bodyguards, and supporting him. He was seen, during the last National Election, disbursing bribes to voters, as part of an organized campaign of election fraud, in which he was an active participant. 

Saturday, May 26, 2018

PANAMA: PLAYGROUND FOR SPECIALLY DESIGNATED GLOBAL TERRORISTS



Longtime readers of this blog may recall our article, dated September 8, 2013, entitled Al-Qaeda has a Business Office in the Republic of Panama, which detailed how the most dangerous terrorist organizations, including Hezbollah, all openly maintain offices in Panama City. They employ Panama's capable banking structure to move criminal proceeds back to the Middle East; this is known as terrorist financing, or providing material support to sanctioned terrorist organizations.
President Varela and President Abbas

If you know a Panama insider, you can still find your way the Hamas and Hezbollah offfices in Panama (but do not attempt to enter). The administration of President Juan Carlos Varela not only allows them to freely operate, and to remit the proceds of their cocaine trafficking operations in Latin America back to Beirut, Istanbul and Amman, using Panama's "don't ask, don't tell" banks, but he is busy developing a relationship with Mahmoud Abbas, and the Palestinian Authority, an entity that rewards terrorist bombers and murderers by sending salary payments to their families and next of kin, for all the years that they are imprisoned.

Panama gets an "F" in the global war on terrorism; so why are its locally-owned banks still allowed to maintain correspondent banking relationships with multiple financial institutions in the United States & Canada ? 


 

RICARDO MARTINELLI'S LETTER: HIS UNCONFIRMED VERSION OF THE FACTS

Readers who are following unfolding developments in Ricardo Martinelli's extradition case may be interested in reviewing the complete text of the letter sent by the former president of Panama, to US government officials. We stress that his version of the facts are uncorroborated and unverified.

Friday, May 25, 2018

RICARDO MARTINELLI DIRECTS THAT HIS APPEAL OF EXTRADITION ORDER BE DISMISSED



Ricardo Martinelli, Panama's fugitive former president, has directed his Miami attorneys to move to dismiss his appeal of a Federal court order authorizing his extradition to Panama, to face serious criminal charges. he has been in custody since June, awaiting a final resolution of the extradition process.

His Panama City Attorney, Sidney Sitton, released to the press this handwritten note to the Eleventh Circuit Court of Appeal, whereby Martinelli has terminated his attorney, former United States Attorney, Marcos Jimenez, and "rescinded" his appeal of the adverse decision.

The motion, as filed in Federal Court by his attorneys, is curiously sealed to the public, as was 95% of the court file, leading us to assume it contains sensitive information about Martinelli, and his relationship with one or more US law enforcement or intelligence agencies. Martinelli was allowed to enter the United States after his term as president ended, notwithstanding that he was under criminal investigation in Panama, for multiple offenses.

It is still up the Secretary of State, who makes the final decision on extradition requests, to decide whether Martinelli must face justice in a Panamanian courtroom, or wehtehr he may remain in the United States.

US IGNORES SUPERNOTE THREAT, SAYS COUNTERFEITS COME FROM CHINA

 




Our efforts to raise an alarm on the threats posed by the latest version of the North Korean-manufactured USD$100 bill seem to have fallen upon dear ears, at least where it comes to two of the US government agencies charged with enforcing American laws against counterfeiting. Neither showed any interest in opening an investigation into the Series 2006 $100 note, when contacted. Mainstrean US media is likewise silent.

One agency was presented with an exemplar of the counterfeit notes and, after examination, stated that it believed that they were made in China, not North Korea, and discounted the threat altogether. The other agency advised that it was also not interested in information, and that it had rebuffed three prior civilian inquiries about the newest iteration of the so-called Supernote.

What really concerns me is that there are, if the photographs are to be believed, pallets of these counterfeits sitting in cold storage, both in South Korea as well as in China, and nobody appears to care about the fact that the dominent Korean organized crime syndicate, which controls the warehouses where they are stored, could flood Asia with them, seriously affecting the confidence that individuals who choose to place their wealth in cash and in dollars, presently have in our currency.

Given that the organized crime group has ties to North Korea, it is not a stretch to consider that if the DPRK is sufficiently angy at the US Government's latest bellicose statements, it might order that the counterfeits be released into circulation, in a mass event that could cause the valiue of our currency to temporarily plummet abroad. Traders who had advance knowledge of this act could earn huge sums for North Korea, by betting on the fall of the dollar.

Could such an action even permanently damage the value of the US Dollar ? I hope that we don't have to find out the hard way.

Series 1914 US $100 note

Thursday, May 24, 2018

DISGRACED ANTIGUA EX-MINISTER THREATENS VIOLENCE IF HE IS INDICTED FOR CORRUPTION


Cashiered from his four ministerial posts, for rampant corruption which has been previously described in painful detail, on this blog, the disgraced politician, Asot Anthony Michael, has crossed a red line, and uttered threats against his own constituents, the people of Antigua & Barbuda at large. His fall from grace has been swift, but this latest incident renders him unfit, not only for public office, but even to continue to reside in Antigua for any purpose.

MP Michael, who initially stated that he would resign his seat in Parliament, but later reneged upon his promise, repeatedly stated in a public forum,where he was was heard by witnesses to threaten, that "if any Antigua and Barbuda Labour Party (ABLP) member is arrested by the Opposition, that there will be blood flowing in the streets." This is a direct threat to the public safety, and since the statement was made outside of Parliament, he cannot hide behind immunity in any form or manner. His arrest, as a public enemy who has made obvious death threats, should have occurred already. The Royal Police Force of Antigua & Barbuda must take him into custody, before anyone gets hurt by the "Bagman of Antigua" who early political career he wants the public to forget.



First of all, it is not the Opposition that will arrest Michael, it will be law enforcement, and only after an indictment is filed against him. Second of all, he is the guilty one, not any of the other ABLP ministers, so he may not hide behind his political party; they should expel him forthwith.

Antigua, the world is laughing at you; reform your elected official leadership now, or be relegated to the dustbin of history, while the other East Caribbean States move forward, using their expanding CBI program income to create modern economies, while investors avoid Antigua, due to the taint of continuing scandals that permanently stain the country's image.


MOVE OVER CHINA AND WATCH OUT DOMINICA, HERE COME THE RUSSIANS !

Ambassador Katz

 If you read the Caribbean media closely, you know that the Government of Dominica has appointed a Resident Ambassador to Russia, to be located in the capital, Moscow. The Ambassador, Nuri Katz, is the owner and CEO of a CBI consultancy, based in Montreal, Apex Capital Partners Corp., which, among other services, offers Citizenship by Investment through Dominica, where it also maintain an office.

For those readers who are wondering why Mr. Katz is moving to Moscow at this time, you only need look at recent developements in the United Kingdom, regarding the issue of visas awarded to Russian nationals. For reasons that are relevant to UK moves towards corporate transparency, including the fact that most high-end property in London is now being purchased through opaque shell companies, and the UK poisoning attack, affluent Russians are reporting extreme difficulty in securing a UK visa. Individuals who have substantial real estate holdings in the UK, including commercial properties, and seek to visit there, are being turned down.

The is a potential problem; With a Dominica CBI passport, the holder, whose listed name is a transliteration from the Cyrillic alphabet to to our Latin characters, may possibly have had his true identity slightly altered, to defeat computer inquiries by law enforcement agencies. The holder, with a clean new name on his new passport, can now enter the UK visa-free, because Dominica is a member of the Commonwealth of Nations.

Athough arriving directly from Russia might be a problem, Russians who acquire Dominica CBI passports would most likely choose to transit additional countries, and to produce the CBI document, when arriving at Heathrow, for the first time, so no interesting passport stamps would appear to give them away. Would they be coming from the Western Hemisphere ? We cannot say, but this appears to be a solution to their dilemma. Maybe he picks up his CBI passport in  Roseau, the capital, enroute the UK; he can take BA across the Pond.

Will Russians visit Dominica, after they become Dominicans ? The Russian Federation and the Commonwealth of Dominica do have a close, albeit classified, relationship, the details of which have never been made public. Here are two incidents that prove one exists:

Russian Foreign Minister Sergei Lavrov


(1) Russian Foreign Minister Sergei Lavrov, in a one-on-one meeting with his Dominican counterpart, Francine Baron, in Sochi, Russia, on November 14, 2016, during the CELAC meerting,  signed a bilateral agreement of cooperation between their two countries. Details of that agreement have never been disclosed, nor has the Government of Dominica ever referred to it in official communications. What is in that agreement ?

Dominica Minister of Foreign Affairs Francine Baron


(2) A private meeting, between Dominica Prime Minister Roosevelt Skerrit, and Russian FM Lavrov took place on June 2, 2017, during the Twenty-First St. Petersburg International Economic Forum, where Lavrov made reference to the bi-lateral cooperation agreement as the focal point between the two signatories.

Will we now see wealthy Russians flying in to their "adopted" country, in expensive business jets, where the airport authority sends everyone home early, to protect their privacy, as was done recently ? We cannot say, but we will be watching, cameras ready.


ANTIGUA MINISTER OF INVESTMENTS ASOT MICHAEL KNEW VIRDEE'S PARTNER WAS CONVICTED FRAUDSTER, BUT HID HIM FROM CABINET

Asot Michael

Asot Michael, while Minister of Investment in Antigua, deliberately and intentionally hid from the Cabinet the fact that Peter Virdee's partner in PV Energy Ltd., Hans Dieter Trutschler, had a major  criminal conviction on his record. Questions have been raised in Antigua as to whether this constitues a criminal act, and whether Michael should be charged, to demonstrate to prospective investors that Antigua will not brook this type of conduct fronm its elected officials.

Trutschler was "convicted of fraud related offenses for illegally diverting $4.3m in legitimate payments from one company, from accounts he controlled," according to a United Nations report  quoted in media. This occurred in Kosovo in 2002; He was working for the UN at the time, in a senior position.

All this information is publicly available, and Michael, as Investment Minister, and a longtime friend of Virdee, certainly would have known about it, but he failed to give any of this information to his colleagues on the Antigua cabinet, especially due to the fact that Trutschler was sentenced to a prison term of three and one half years imprisonment, under the alias Johanns Dieter Trutschler.

Inasmuch as Michael's fellow ministers in the Cabinet were deceived about the true nature of the individuals behind PV Energy, and have to account to the people of Antigua, who elected them, they should consider their own civil action against Michael, for Malfeasance in Office, or another active Tort, if they are not reelected due to Michael's misconduct.



Wednesday, May 23, 2018

PROSECUTORS NAME MOSSACK & FONSECA LAWYERS THAT ARE UNDER INVESTIGATION FOR MONEY LAUNDERING


Panama's Anti-corruption prosecutor has advised that it is continuing to investigate the Mossack & Fonseca scandal, and that it has charged ten of the firm's staff with money laundering. The case, which arose out of the Brazilian "Java Leto," or car wash, scandal is being handled with the cooperation of Brazilian authorities.

The names that have been released thus far are:

(1) SARA MONTENEGRO.
(2) RAMSES OWENS.
(3) RUBEN HERNANDEZ.
(4) KATIA SOLANO.
(5) MARIBEL ROBLES.
(6) SANDRA CORNEJO.

Additionally, Edison Teano, a prominent member of the now defunct Mossack firm, was also named.

We have previously identified many of the law firm's members, in a number of articles, as a public service, to warn the public that they are probably now sitting in Panama City law firms, perrforming the same money laundering, tax evasion, and cleaning of the proceeds of crime and corruption, that they did at Mossack Fonseca.  We verified that information through social media sites.

Have those lawyers sanitized their resumes by deleting any period during which worked at Mossack ? We cannot say, but you are urged to insure that you do not engage the services of any former MF employee, staff member, associate or partner, for they may be eventually convicted of any of the above crimes, and if they are imprisoned, they cannot complete any legal tasks for you.

ANTIGUA'S BOI BANK REFUSING TO GIVE CUSTOMERS THEIR MONEY



Customers of BOI Bank are reporting that they have been unable to retrieve finds from their accounts, and that the situation is dire. Some customers allege that they have has problems withdrawing money for the last eighteen months. The bank asserts that it cannot secure the necessary intermediary bank and correspondent bank, to transfer funds to clients, but we are unable to determine whether there is a factual basis for this statement.

BOI Bank Corporation, trading as BOI Bank, is an Antiguan bank, reportedly managed and operated  completely from Caracas. Its record owner is Venezuela's BOD Financial Group, which also owns Banco Occidental de Descuento. Victor Vargas is the president and chairman.

Tuesday, May 22, 2018

KEEP CBI HONEST ON TWITTER


Oversight of CBI contractors & developers, as well as clearly excessive charges of consultancies are the subject of a new Twitter account,  #keepcbihonest  . If you are interested in an exchange of views between Citizenship by Investment (CBI) consultants, East Caribbeans who favor one program over another, and those who are complaining about the conduct of developers, you should visit.  Sam Bayat, an attorney known for advising clients about CBI programs, is the moderator.

LOOK WHO ALSO USED THE OFFICE OF OFFSHORE ZUMA BANK IN DOMINICA



Due to the large amount of interest in yesterday's article on Dominica's Zuma Bank, we are making additional information available, in our efforts to determine the bank's lines of business, customer base, and goals.
Vladimir Antonov

 The bank's office, 42 (Unit 2) Kennedy Avenue, in Roseau, the capital of Dominica, was formerly the office of Banco Transatlantico, the failed Dominica offshore bank owned and operated by Vladimir Antonov, the London-based Russian banker. Antonov later fled to avoid extradition to Lithuania, where he faced charges of fraud and money laundering for asset-stripping ($1.4bn) at Snoras Bank, which was nationalized. together with its Latvian subsidiary, to save both from total collapse due to his criminal acts. Antonov's Dominica attorney was Alick C Lawrence.


 Antonov is currently known to be living in St. Petersburg, Russia. Banco Transatlantico Ltd., which also maintained offices in the Republic of Panama, collapsed shortly after Antonov was arrested in the United Kingdom. It was the subject of compulsory liquidation in Dominica's High Court of Justice.  In April, 2018, Antonov was arrested in Moscow, and charged with embezzlement at Sovetsky Bank, which was placed under government financial supervision.



The other former tenants at that office were two offshore banks, ASA Bank and Trust.and FGC Bank and Trust, both of whose licenses were revoked in 2016. Both banks were owned by Alex Nain Saab MorĂ¡n, a Colombian national with close ties to the Maduro government in Venezuela, and whose name shows up as a holder of a diplomatic passport from Antigua & Barbuda.


The Zuma Bank Mastercard we pictured in our last article about Zuma comes back to a Venezuelan bank, most likely one that has branches in Panama. The credit card firm that is processing the cards is believed to be located in Panama, and the website has the earmarks of Panamanian webmasters. Our  investigation into Zuma continues.




Monday, May 21, 2018

MYSTERIOUS ARRIVAL OF PRIVATE BANKER IN DOMINICA IS NOTICED



Last night, Gabriel Sanz Gonzalez, the CEO of the low-profile offshore private financial institution, Zuma Bank, incorporated in the Commonwealth of Dominica, arrived in-country, on board the Venezuelan business jet YV-2961, which is a Learjet Type 55. The aircraft reportedly came in directly from the British Virgin Islands, the corporate formation jurisdiction of choice for anyone who wants to obtain a corporation with beneficial ownership information that is be totally and permanently opaque.


Sanz' biz jet at Douglas-Charles (ex-Melville Hall) Airport
Sr. Sanz came to Roseau to see Claudius Lestrade, the director of Dominica's Financial Services Unit, which is part of the Ministry of Finance. We are not aware of the subject of his visit. Since its Dominica incorporation in 2012 according to Zuma (though the FSU states it was in 2015), there has been no significant information in the media, detailing Zuma Bank's operations or clientele.

 Zuma Bank has no footprint in the global financial industry, though it holds itself out to be a private bank. Many of the Internet websites are in the Russian language, and it is therefore assumed that the bank's marketing is directed towards wealthy Russian nationals. What is in Zuma Bank's book of business and who are its clients ?




The arrival of Sanz is not the only recent arrrival of private aircraft that has puzzled Dominicans; on another recent evening, Melville Hall Airport staff were dismissed at the end of the day's aviation operations, notwithstanding information about a late arrival. One member of the airport staff, having seen all the runway and airport lighting extinguished for the night, was driving by the field later that evening when he saw, to his amazement, that all the lights were back on, meaning that a significant arrival was in progress.

What's with all this frenzied activity involving Venezuela of late ?  We note that the so-called Bolivarian Republic is now funding hurricane reconstruction, specifically single-family home construction, but given Venezuela's failing economy, is there another reason for this totally  unexpected financing ?  Remember also that the US has recently sanctioned Venezuelan officials, which might expose local contractors and vendors in Dominica to OFAC violations.



Finally, is Zuma Bank owned by Venezuelan or Russian interests, and who are its clients ? We cannot say, but our inquiry into the bank's operations shall continue.


FFIEC UPDATES ITS MANUAL ON CUSTOMER DUE DILIGENCE AND BENEFICIAL OWNERSHIP



The Federal Financial Institutions Examination Council (FFIEC) has updated its manual on Customer Due Diligence and Beneficial Ownership Requirementss for Legal Entity Customers.  Readers who wish to review the complete text of these sections may access them at the bottom of this Press Release here.

Sunday, May 20, 2018

SHOULD THE UNITED NATIONS EXPEL DOMINICA FOR THE DIPLOMATIC PASSPORTS IT SELLS TO CRIMINALS ?




If you live in the Caribbean, you know that the Commonwealth of Dominica has been stripped of its voting rights in the United Nations General Assembly, for failure to pay dues for a period of two years. Considering that the country's government is taking in millions each year, from its Citizenship by Investment, or economic passport, program, it makes you wonder into whose pockets all that money is going.

More importantly, the United Nations should eject Dominica from its membership, not for that reason, but for one much more serious; its outlaw diplomatic passport program, which freely sells passports that do not comply with international law, to career criminals, international sanctions evaders, corrupt government officials, organized crime members, and just about any other type of lowlife who would benefit from a tool that facilitates crime or terrorism. Do you have two or three million dolars in criminal proceeds on hand ? Then you can become an instant diplomat.

The officials in power in Dominica have sold, for US Dollars, passports that violate the Vienna Convention on Diplomatic Relations, to which all UN members, as signatories, are bound. They really do not give a damn about international law, believing that national sovereignty protects their criminal enterprise. In the meanwhile, over five hundred Dominica diplomatic passports have been issued by a government that is engaged in racketeering for profit.

The most effective remedy available to solve this problem is for the UN to remove Dominica from membership and to declare all diplomatic passports issued by it null and void. The United States, Canada and the UK are considering how to impose sanctions, but it is also up to the United Nations to act; Throw the bums out.

WHEN CARIBBEAN BANKS REJECT KYCC, THEY REAP THE CONSEQUENCES OF DE-RISKING


The complaints about what is called "de-risking" continue to roll in, especially from the financial institutions in the Caribbean. Those banks bitterly relate tales of abrupt cancellation of long-term correspondent relationships with American financial institutions, and their often desperate quest to find alternatives, only to learn that the increased costs will probably have to be passed along to the class of client who can least afford it, expats sending remittances, and the recipients of those payments, which they do not want.

It is not a conundrum; the affected banks all have access to programs that create the Know Your Customers' Customers, or KYCC, that American banks now demand. if I am a compliance officer in a New York bank, I want to have immediate acccess to the Caribbean bank's customers, his transactions, personal information, account history, and lines of business. Basically  it isall those things that are part of his client story, so that I may reduce my risk of being involved in his US transactions.

Compliance officers know, or should know, that KYCC programs can be installed that give the USA bank a window into the Caribbean banks' customers, their recoreds, and their transactions, on a real-time basis. Unfortunately, due to cost concerns, fears about losing clients to local competitors, and pressure from clients to maintain confidentiality, most Caribbean banks fail to engage in KYCC programs, and their eventual loss of correspondent relationships, due to increasingly intrusive regulatory actions against US banks and bankers, is only a matter of time.

My advice to compliance officers at Caribbean financial institutions, adopt a program that affords onshore US banks KYCC access to your clients' information, before you get the final notice of impending closure of your prized correspondent accounts in New York. Loss of access to the US banking structure, even temporarily, can result in massive client flight, and eventual insolvency. Pay attention, and solve this problem, before your bank becomes a fatality of de-risking.

RAISE COUNTRY RISK ON LEBANON




The perfect storm for armed conflict in Lebanon, due to Hezbollah's new monopoly on political power, in the wake of recent elections there, and other factors, could result in a total disruption of the Beirut banking industry, the country's remaining significant asset.

The additional reasons for concern:

(1) The Trump Administration has just sanctioned the senior Hezbollah leadership, and America's total support of Israel has angered that specially designated global terrorist organization. Bellicose statements from the newly-sanctioned Nasrallah, against the US Embassy opening in Jerusalem, as well as Isreal, has increased.

(2) With the winding down of the anti-ISIS war in Syria, Hezbollah has combat-experienced fighters available to it, and they hold strategic positions close to the northern Israeli border.

(3) Israel's military has increased its readiness in its north, especially in the Golan Heights region. Hezbollah feels its is invincible, due to its Iranian missile inventory.

(4) A leading Israeli politician has bluntly warned that, should Hezbollah initiate hostilities, has country will formally declare war on Lebanon, and not limit its response to the area under Hezbollah control, south of the Litani River. If the missiles fall on Israeli population centers, count on a massive aerial response, and since Israel can maintain air superiority, Beirut could end up looking like Berlin in 1945.
If the Beirut banking center is attacked, even if alternate security arrangement have been carriec out in advance, Middle East money will think twice before continuing to patronize the city's banks, and massive capital flight is a distinct possibility.




This is probably a good time to reduce your risks regarding Lebanon, whether it be financial exposure, outstanding receivables, or pending matters. for war is not just possible, it is fast becoming probable.

Saturday, May 19, 2018

THE FOLLY OF THE EAST CARIBBEAN CBI STATES: ALLOWING APPLICANTS TO MAKE PAYMENT IN US DOLLARS


Use of US Dollars can confer extraterritorial jurisdiction of US Courts
The issues that compliance officers at North American banks, and US & Canadian immigration officers, have with holders of Citizenship by Investment (CBI) passports have been reported in the financial press of late, but there is a more serious problem that the five East Cabibbesn CBI states are facing: the threat of criminal prosecution, by the US Department of Justice, for violations of money laundering laws by government leaders, notwithstanding that they operate these probems outside the Unted States.

The problems the EC states have is that US money laundering laws confer what is known as extraterritorial jurisdiction upon foreign nationals, and this is occurring because the Caribbean attorneys who created CBI legislation committed what some legal experts regard as a fatal error: they adopted provisions in their CBI laws that allowed CBI program managers to accept US Dollars (USD$) as payment for their economic citizenships. That has has been judged to be a major error.

Why is this now actually considered legal malpractice ? Any attorney drafting legislation in his country should be aware of the possbility that the laws he is creating might increase specific risks in other jurisdictions, and carefully weigh the potential consequences with his client before recommending that they be enacted into law.

In this case, most attorneys in the Caribbean are aware of the Money Laundering Control Act of 1986 (18 USC §§1956-1957), which imposes a maximum penalty of twenty years for violations, plus a mega-fine. The lawyers drafting CBI legislation ibn the East Caribbean failed to research that statute in depth, for if they had they would have learned that it has extraterritorial jurisdiction.

This means that a foreign national could be charged if the US Dollars they accept, for any purpose, are the proceeds of what are referred to Specified Unlawful Activities, and any portion of the transaction has a connection (nexus) with the United States, such as being deposited in a US bank, or transiting the American financial system. The MLCA, which was strengthened by the USA PATRIOT Act of 2001, will reach out and touch foreign nationals (e.g Reza Zarrab), for acts that they committed totally outside the USA.

Therefore, any dodgy applicant, using criminal proceeds for his cash to purchase that CBI passport, which is later deposited in a dollar account, and ends up passing into, or through, a US financial institution, has implicated not only himself, but the CBI program, and the country's leadership, as well, under US law.

We doubt that the Caribbean attorneys tasked with drafting their local CBI laws even bothered to look at the possible negative consequences of accepting US currency. They probably used the pioneering St Kitts & Nevis CBI program as a template. Unfortunately, that program became law back in 1984, two years before money laundering became a federal crime. Why didn't someone realize that using US Dollars might have consequences ?

Should the CBI program directors, and their attorneys, have chosen the Pound Sterling, instead of the US Dollar ?  Probably so, given the extraterritoriality issue, as well as the fact that the USA has very broad conspiracy laws, unlike the UK, which adds to the undesireability of accepting US Dollars, unless you are completely sure of the Source of Funds, and of your applicant's bona fides.

We understand that the leaders of a number of the East Caribbean CBI states are feeling anxious of late; are they feeling a cold chill, perhaps coming from the possibility that the US Department of Justice might be investigating them ?  




Friday, May 18, 2018

FAILING TO REFORM YOUR CBI PROGRAM CAN BE HAZARDOUS TO YOUR PRECIOUS US VISA


There has been much talk, in the five East Caribbean states operating a Citiznenship by Investment (CBI) program, about reform, especially regarding the need to perform Enhanced Due Diligence upon all applicants, and lookbacks upon all existing CBI passport holders. For those prime ministers in those countries, you only need look back to see what could happen to your own coveted US visa, shouls you fail to implement  those reforms forthwith.

When the elected leaders of St Kitts & Nevis failed to clean up the many flaws in their CBI program, after a number of official complaints were lodged by the American Secretary of State, John Kerry, the US cancelled the US visa of the then St Kitts Prime Minister, Denzil Douglas. Additionally, FinCEN issued its now notorious Advisory, warning the financial world about US concerns regarding all St Kitts CBI passports. The lesson; there are consequences if you ignore your international compliance responsibilities, after you are duly warned by Uncle Sam. Your prime minister might lose the right to shop in Miami or New York, and your voters will quickly tire of their long trips to the US Embassy in Barbados, while applying for visas, and of you as their elected leader.

Even after Mr. Douglas left office, in 2015, the United States has declined to reisue or reinstate his visa to enter the country, though we know that Douglas has requested his visa, as a private citizen. Also, Canada imposed visa entry requirements for all St Kitts passport holders.

For those CBI jurisdictions who keep repeating that the United States does not impose any sanctions for their continued failure to implement significant reforms, ask Denzil Douglas, who has not been in America for seveal years, and ask those Kittitian businessmen who must buy goods and equipment in repeated buying trips to the US, and now need submit to the tedious visa application process. We trust this has been instructive to the five sitting prime ministers in the EC CBI states.

WANT TO HEAR AUDIO FILE OF MY ONE HOUR INTERVIEW ON DOMINICA ISSUES ?



My one hour interview on current Dominica and Antigua issues, which was heard this week on TDN Radio Caribbean, is now available as an audio file free to any reader who wishes to hear it. Kindly email me at : miamicompliance@gmail.com  and I will be happy to send it off to your email address.

Please note that it is 22Mb, and your email program must be able to accept a file of that size.

Thursday, May 17, 2018

REPORT SAYS NORTH KOREAN COLONEL DEFECTED WITH SUPERNOTE PRINTING PLATES

                                                                             



Citing South Korean newspaper articles, a story in a security publication noted that a senior North Korean colonel, assigned to a special unit, has defected while in China, and that he allegedly took with him the printing plates for the "Supernote," the most recent version of the North Korean counterfeit USD $100 note. One example of the Supernote, the US Series 2006, was found late last year by a teller at KEB Bank in Seoul, and it took a team of experts to deduce that it was indeed a counterfeit.

This version of the Supernote has not, to date, been seen in global circulation, though massive amounts of the bills are known to exist in cold storage, and have been so stored since they were manufactured by the DPRK, more than a decade ago. There is a report from Singapore, where quantities of the Supernote was offered for sale by criminal elements, at the astounding price of 50 cents on a dollar of face value. This asking price is far in excess of the typical market price counterfeits realize, which is probably a testament to the quality of  these latest Supernotes. The current holders of the stored notes are said to be Korea's largest organized crime syndicate, which operates in South Korea, but has ties to the DPRK, as is alleged to have created the printing plates, and transferred them to North Korea.

Are the printing plates in the hands of the Peoples' Republic of China, which reportedly already has a large quantity of the notes on hand ? We cannot say, but the mystery surrounding the elusive 2006 Supernote continues to grow.

Wednesday, May 16, 2018

TURKISH BANKER WHO FACILITATED IRAN OIL-FOR-GOLD BILLION DOLLAR SANCTIONS RECEIVES SHORT SENTENCE


Mehmet Atilla, the number two at Turkey's state-run Halkbank, who aided Reza Zarrab's organization in moving $4bn in illegal iranian oil profits,was sentenced today to only thirty-two (32) months of incarceration by a US District Judge in New York. Federal prosecutors had recommended 15 ro 20 years, as Atilla was a major player in the massive oil-for-gold sanctions evasion scheme.

Atilla was convicted of:
(1) Conspiracy to Defraud the United States.
(2) Conspiracy to vuolate the IEEPA.
(3) Bank Fraud.
(4) Conspiracy to Commit Bank Fraud.
(5) Conspiracy to commit Money Laundering.

Whether the sentence is insufficient as a means of punishment, and not an effective deterrent to others is not an easy question to answer. There may have been, or will be, Substantial Assistance, rendered by the defendant, that will materially aid the investigation, and subsequent indictment of other conspirators in the reportedly $13bn sanctions evasion scheme. As it stands now, with his pretrial detention time, he will complete his short sentence in 2019. Why the preferential treatment ?

Will Atilla implicate Babak Zanjani, Alireza Monfared, and the other leaders of the global Iran sanctions evasion cartel ? Does Atilla also have a diplomatic passport issued by the Commonwealth of Dominica ? We hope that there is a second phase to this case, so that we may be able to get some answers.