JAMES COMEY'S ARGUMENT FOR AN OPEN HEARING IN THE TRUMP RUSSIA PROBE

We are firm believers that, when it comes to important legal issues, only the primary source materials should be consulted, and not articles by journalists who may not have a legal education, and are probably not trained in issue perception. Here is the Argument section from former FBI Director James Comey's attorneys' Motion and Memorandum in Support  by James B. Comey to Quash the Congressional Subpoena. Comey is the subject of an eleventh-hour last ditch effort by the Republican members of the House to take his testimony, in closed session, before January results in the Democrats' accession to majority rule. The articles we have seen on the subject frankly do not do it justice.

If there are any readers who require the entire 17 page Motion, kindly email me and I will send it off to you. miamicompliance@gmail.com

MONEY LAUNDERER WANTED FOR MOVING MONEY TO NORTH KOREA

BVI GETS A €300m BLACK EYE FROM DEUTSCHE BANK SCANDAL

Buried in the news about German police conducting a major raid and search of Deutsche Bank's Frankfurt headquarters, in connection with a massive money laundering investigation, is the little detail concerning the bank's British Virgin Islands (BVI) subsidiary alleged to service more than nine hundred Deutsche Bank customers, whose transactions totaled  €311m. That figure was a quote from the Frankfurt prosecutor's office.

BVI's reputation for opacity, in the aftermath of its vocal battle with the UK Parliament over the creation of a Public Register of the Beneficial Owners, could be further damaged by the Deutsche Bank scandal. BVI companies are favorite purchases of Cayman Islands corporate services officers, who list the BVI company as the owner of a Cayman corporation, thus insuring total
secrecy for their clients.

It has gotten to the point where many compliance officers at American financial institutions now regard all BVI entities as high-risk, and readers are advised to decline to open new accounts for such entities, nor to accept client assurances that they are the shareholders, as part of a risk-based compliance program.  
  

RUSSIAN BILLIONAIRE MEETS DOMINICA'S PRIME MINISTER AND AMBASSADOR TO CHINA ON YACHT IN GRENADA

 This is Martin Charles, who was appointed Dominica's Resident Ambassador to the Peoples' Republic of China in March of 2018. Ambassador Charles, who is an insurance agency manager, does not appear to have any educational or vocational training for a diplomatic posting, and the Opposition has questioned his lack of qualifications for such an important assignment. The controversy swirling around Charles' reputed inability to discharge a senior position at the Dominica Embassy has resulted in a statement by Vince Henderson, the Ambassador to the UN, to ask Dominicans to give him an opportunity to see if he can handle the job. None of his biographies list his educational background, and it is doubtful that he holds any degrees.

One month before his appointment, Charles, together with Dominica Prime Minister, Roosevelt Skerrit, had a mysterious meeting, on board a luxury yacht berthed off the coast of Grenada, with a Russian billionaire. Given Dominica's extensive participation in seminars in the Peoples' Republic, where Dominica's Citizenship by Investment (CBI) program is avidly marketed, questions regarding sales of CBI passports in China, to foreign nationals, by Charles, are being asked.

The Russian national, who is known to hold a Grenada CBI passport, allegedly was seeking to relocate, which explains his meeting with Skerrit, but why was the Ambassador-Designate part of the meeting ?  Was he acting on behalf of Russians who were to receive CBI passports through the Dominica Embassy in China ? Was he purchasing passports in bulk, for later delivery ? We hope our readers can shed some light on this mystery. Our email address is posted on the right-hand side of this page.

DE-RISKING CAUSES LEADING CANADIAN BANK TO EXIT NINE EAST CARIBBEAN STATES

This week's announcement, from Canada's Scotiabank, that it is selling off its interests in nine East Caribbean states to a Trinidad-based regional bank, was met with dismay by local governmental officials, who angrily explained in local media that all such transfers were subject to local regulatory approval, and that they had not received advance notice of the sale. One official, PM Gaston Browne from Antigua, arrogantly stated that "local investors" should have been afforded a Right of First Refusal on the branch located there. (He has forgotten how a number of Antiguans who are wealthy cannot afford to disclose their Source of Funds.)

Everyone appears to be missing the point; Scotiabank publicly asserted that the sale had to do with its increased focusing upon its expanding Latin America, and that it will remain in other parts of the Caribbean, but facts tell a different story:

(1) De-Risking: increased regulatory pressure, especially from agencies located in the United States, but also from Canada, is believed to have been the principal factor. Scotiabank rightly fears the long arm of regulatory civil fines and penalties, being issued in a very public way. Given the low profit-low volume of financial business in the East Caribbean, why risk a major run-in with US regulators, when you are not taking substantial profits out of the region ?

(2) The CBI madness; Citizenship by Investment (CBI/CIP) programs, in five of the nine jurisdictions being exited by Scotiabank, have attracted dirty money from dodgy applicants. Local government officials have accepted bribes and kickbacks, and that money must also go into the local financial system. No bank wants to unwittingly take the proceeds of crime, and later have to face regulators, when their career criminal CBI client is arrested by law enforcement abroad.

(3) Bearer share corporations, offshore banking licenses and a lack of transparency regarding Beneficial Ownership of companies: These problems remain major roadblocks to international acceptance of the East Caribbean as a low-risk region for compliance. Unless there is true reform, there's no reason for Scotiabank to remain in jurisdictions where money laundering-friendly laws exist, because they attract illicit capital.

Some politicians have said they will no approve the sale in their countries. These local threats to decline regulatory approval for the sale could result in Scotiabank simply closing those offices in the nine countries, leaving local residents with one less financial institution to assist them in their business, as well as personal, banking activities. This macho posturing will only result in hurting the people these politicians have sworn to represent wisely.

finally, will the countries in the region actually learn from the experience, and enact the extensive reforms necessary to lift them up into low-risk status ? We cannot say, but if they do not act, look for still more deadly De-Risking in the Caribbean's future.

DOMINICA'S CBI UNIT BERATES SALES AGENTS FOR MISEPRESENTATIONS OF MATERIAL FACT

Emmanuel Nanthan, the Coordinator of Dominica's Citizenship by Investment Unit, has notified all the licensed sales agents of the CBI products that many of their sales and marketing ploys are deceptive, dishonest and misleading. Nanthan has ordered them to cease and desist from their dodgy sales tactics.

Some sales agents have "discounted" the government fees and costs, while misrepresenting total costs to prospects. Nanthan has firmly stated that there will be no reductions in official fees and costs, and he has appended a detailed fee schedule to his letter, which appears below.

  

OPERATION SKYNET POSTS PHOTOGRAPHS OF CHINA'S 100 FUGITIVES WANTED FOR CORRUPTION

Operation Skynet is China's global effort to capture, and return, its one hundred most wanted fugitives charged with corruption crimes. If you are banking any wealthy Chinese expats, you may want to check those clients' passport photographs against these 100 photographs, using your facial recognition software platform. We regret that the document does not have their names as they are expressed in English, in the Latin alphabet, but a picture speaks a thousand words,

The webpage with legible photos is available here.

FORMER TREASURER OF VENEZUELA SENTENCED TO TEN YEARS FOR MONEY LAUNDERING IN MIAMI FEDERAL COURT

Alejandro Andrade Cadeño the former President of the National Office of the Treasury in Venezuela, and former president of BANDES, Venezuela's national development bank, was  sentenced today by a US District Judge in West Palm Beach to ten years in Federal Prison on money laundering charges. He admitted to accepting $1bn in bribes, much of which has been laundered through South Florida real estate.

His Plea Agreement can be accessed  here.

PARLIAMENTARY COMMITTEE IN UK LOOKING INTO UNDERMINING OF CARIBBEAN DEMOCRACIES BY CBI CONSULTANCIES

A Grand Committee in the House of Commons, hearing evidence of Disinformation in the East Caribbean, has indicated that it intends to investigate threats to democracy in the region, caused by foreign firms allegedly involved in fixing national elections. Among the firms named are a major CBI consultancy.

Questions have been repeatedly raised about the fact that CBI consultancies have created Citizenship by Investment (CBI/CIP) programs, and subsequently appear to have substantial influence over local government in those jurisdictions, in addition to acquiring lucrative contacts as registered sales agents for the CBI product. Close ties between the CBI consultancy and firms allegedly performing statistical work for political parties, in countries where the outcome of national elections seem to have been affected, have been reported, and will be the subject of committee inquiries.

The role of powerful CBI consultancies in the East Caribbean states has been a matter of controversy, particularly in those jurisdictions where handsome commissions to agents may have resulted in seriously decreased payouts to governments participating in such programs, meaning that benefits to local residents are minimal.

BRITISH COLUMBIA STUDY UNCOVERS $1bn MONEY LAUNDERING SCHEME

Readers who have been following our articles on Canadian money laundering through real estate will want to read the latest BC study on how Asian organized crime syndicates have been cleaning the proceeds of crime through real estate transactions. The article, which was reportedly taken from a law enforcement study, details how the British Columbia real estate market is the target. The link is below.

https://globalnews.ca/news/4658157/fentanyl-vancouver-real-estate-billion-money-laundering-police-study/

FRENCH BANKER FLEES MONEY LAUNDERING & CORRUPTION TRIAL IN GREECE

 
Jean-Claude Oswald, a French banker who was on trial in Athens for money laundering and corruption, has disabled his electronic personal monitoring device, and absconded, following his court appearance. He reportedly fled his residence shortly after being escorted there by local police. Oswald was originally held in custody, but later was released to home confinement (house arrest).

Oswald allegedly bribed Greek officials who were seeking to obtain lucrative arms and telecom contracts.

He is charged with facilitating payments that exceeded €60m, and funneling them through Swiss banks. He was quoted as having no interest in knowing the Source of Funds of money he was charged with depositing, and claiming that this was an unofficial Swiss banking policy, to facilitate now business.

Oswald was extradited to Greece from Abu Dhabi in 2015. A former officer at BNP Paribas, he reportedly holds Swiss citizenship.

RICARDO MARTINELLI'S SONS, IN CUSTODY IN MIAMI, FACE A DEPORTATION HEARING ON DECEMBER 4

Ricardo Alberto and Luis Enrique Martinelli Linares, the sons of the indicted former President of Panama, Ricardo Martinelli, will have a hearing before an Federal Immigration Judge on December 4th. The brothers, whose US visas were revoked in 2017, are in the country illegally, and face immediate deportation to their native Panama. An INTERPOL Red Notice was issued by the Republic of Panama last year.

There are reports that the brothers have previously applied for asylum in the United States, but that information has not been publicly released. 

HEZBOLLAH AND IRGC GIVEN SYRIAN ID CARDS BY DAMASCUS

In order to perpetrate the myth that Hezbollah and Iranian Revolutionary Guard Corps (IRGC) troops operating in Syria are members of the Syrian Armed Forces, Damascus has reportedly now issued Syrian national ID cards to the troops in those organizations, under Syrian command and control. 

How many of those soldiers will end up acquiring Syrian passports is impossible to predict, but armed with them, they could easily apply to any one of the many European or Caribbean Citizenship by Investment (CBI) passports, and gain visa-free entry to the countries of the European Union, Commonwealth of Nations jurisdictions, and many others. Publicly-available statistics show that a large number of Syrian nationals have qualified for, and received CBI passports.

The issuance of Syrian ID cards to members of designated terrorist organizations raises the level of risk that these individuals will obtain CBI passports. We trust that CBI unit chiefs will now reject, out of hand, and without exception, all Syrian applicants, notwithstanding the ongoing refugee problem.

Advice to compliance officers at international banks that are approached by CBI passport holders to open accounts: find out where the applicants were born, and do NOT rely upon the passport or national ID card for that information. The last thing you want to do is to allow a terrorist financier with a CBI passport issued by a European or East Caribbean jurisdiction to open an account in your shop.

A PRIMER ON INTERNATIONAL PRODUCT DIVERSION

In order to give readers greater insight into the subject, below you will find the introduction to the case where I was first introduced to International Product Diversion. An Assistant US Attorney described the criminal conduct of what must be one of the most obscure crimes in the US Code, to acquaint the Court with the facts. The Information that the case was taken from is not available on PACER.

UNMASK HIDDEN PEPS SEEKING TO BECOME BANK CLIENTS THROUGH FACIAL RECOGNITION SOFTWARE SYSTEMS

Is your new wealthy prospective client, who claims to be a corporation president abroad, really a Politically Exposed Person, or PEP ? He has all the traditional customer identification documents, plus references, so why should you make further inquiries ?

 Because he might be a general officer from a corrupt dictatorship, in mufti, the executive director of a major charity located in a country where there is little or no regulatory control, or a purchasing agent for weapons procurement in a banana republic, or the son-in-law of the vice president of an African country, posing as a private businessman.

Banking best practices today mean that you must rule out each and every new client for PEP status. Why is this important ? A clever PEP, once you on-board him as a low-risk private citizen from a small company, knows that he will probably not be monitored, allowing him to later move the proceeds of corruption, or of crime, through his accounts long before your front line compliance staff tumbles to the fact that his recent activity does not correspond to the information he supplied you at account opening. No bank wants to be exposed to regulatory civil fines and penalties issued under a Consent Order; if you fail to catch a number of PEPs, you might be facing one.

Some compliance officers use software that searches social media sites to expose hidden PEPs, but that method has a major disadvantage: it assumes that the name on your target's presented passport, his drivers' license and other purportedly government-issued photo identification is his true name. What if it is a cleverly crafted alias, or an intentional modification of his full name ? That method can fail, especially if the target's IT people have already populated social media with entries containing his alias.

The only accurate method of identifying, and unmasking, your target as a PEP is to employ a facial recognition software system that accesses not only social media and social networking sites, but other cloud-based, web-based and proprietary database image resources. Because, even if the target has had "reputation management professionals" remove his original (and incriminating) social media sites, and plant new ones with the alias, facial recognition software will locate and return images that the target is not aware exist, and older sites that either the target has forgotten, or which cannot be altered or removed. Also, his IT help cannot remove entries that they do not find.

The goal is to first identify your target, and then to learn whether the evidence establishes him as a Politically Exposed Person; you can do both by using a facial recognition software platform, which  alone is the solution to PEP issues.  

AML AUTHORITIES IN GREECE CREATING NATIONAL REGISTER OF NGOs

While have been busy discussing the reluctance of the Government of the Cayman Islands to build a Public Register of beneficial owners of corporations, saying that it is waiting for other jurisdictions to follow, the recent actions of Greece show is that governments can, and do, take information public without being ordered to do so.

Greek anti-money laundering agencies have announced that they are creating a public register of non-governmental organizations (NGOs), many of whom are "charities." It will contain all NGOs active in Greece, not just those domiciled there; the program is being directed by the Deputy Prosecutor Assigned to the country's Supreme Court. Apparently, the current situation assigns NGO enforcement to the government ministry involved in the activity the NGO is engaged in, and that arrangement is not suppressing NGO participation in money laundering, human trafficking, violation of immigration laws, forgery, and aiding smugglers, and even espionage charges.

 We hope and trust that the register contains the names and addresses of all NGO officers, advisors, board of directors, the executive director, division managers, and supervisors. With that list, compliance officers can access personal identification data, including photographs, to conduct EDD of NGO officials.

SHOULD THE EU ADOPT CANADA'S TURN-IN-A-MONEY-LAUNDERER PROGRAM ?

 It can be argued that the European Union is losing its war on money laundering. Between the laundrymen obtaining CBI passports from Malta, Cyprus and the East Caribbean, to the Swiss banks operating their efficient laundromats from a safe haven outside EU jurisdiction, to dirty money from Africa, Asia and the Middle East flowing into the UK, Germany, Austria, and several other EU member countries, things are not improving; Things are actually getting worse.

Perhaps it is time to be proactive. Legitimate businessmen know that successful money laundering raises the prices of real estate, limited supply luxury goods, damages a country's reputation as a known money laundering center, which discourages foreign investment, and taints government officials scorched with the twins of corruption, bribes & kickbacks. Narcotics manufactured in China and smuggled into British Colombia are resulting into Canada's own opioid overdose crisis.

The Canadian Province of British Columbia has directly engaged with its citizens, many of whom are sick and tired of reading about Asian organized crime members (Triads) purchasing large amounts of real estate in their neighborhoods, elevating home prices to where many residents cannot find a reasonably-priced home for purchase. They are laundering the money through casinos, which are not reporting any of the illicit transactions to regulators or law enforcement, and they are also using horse racing  and luxury automobile purchases to clean their drug cash.Known as the "Vancouver Model,"
money laundering in BC is out of control, and has not been suppressed thus far by local law enforcement action.

Enter the "Turn-in-a-Money Launderer" program. It allows Canadians to anonymously report suspected money laundering operations, without disclosing their identities if they wish. Using the "Money Laundering Tip Portal, " they can directly pass information along to the Government of British Columbia. It is part of a BC program known as "Get Involved," which encourages local input on several issues, but is handled separately, to protect the informants and their information.

Should the European Union adopt this aggressive program ? Note that the BC program asks only for the methods and modes of operation; it allows the informant to identify the operation without naming the money launderer, though his or her identity can be easily ascertained, given the information supplied. Thus, any EU privacy issues, regarding the names of suspects, are artfully avoided.

Law enforcement agencies, armed with the information, then identify the subject laundryman, quickly obtain his photograph, and then confirm his identity, or expose his true name, using social media resources accessed through facial recognition software systems. They conduct surveillance on the money laundering pipeline, and suppress it through subsequent arrests and seizures of assets.

I am sure the good people of Malta and elsewhere in the European Union, would welcome such a chance to take a bite out of crime. We hope the European Commission will consider taking such action.

AMERICANS SPECULATING IN IRAQI DINARS DUE TO VAGUE PROMISE MADE BY TRUMP

A number of American investors have purchased millions, at face value, of the nearly-worthless Iraqi Dinar (IQD), reportedly based upon a vague statement made by President Donald Trump regarding upgrading foreign currencies. There does not appear to be any basis in fact for this wave of foolish speculation, but it continues. Today one US Dollar = 1190 Iraqi Dinars.

IRAN AND RUSSIA FUNDING HAMAS AND HEZBOLLAH THROUGH OIL SHIPPED TO SYRIA

OFAC has imposed sanctions upon Iranian and Russian entities that are providing financial support to Hamas, Hezbollah and IRGC, through shipments of Iranian oil to Syria, the sales of which generate funds. The central players are Syrian national Mohammad Amer Alchwiki, the Russian-based corporation Global Vision group, the state-owned Russian company Promsyrioimport, Mir Business Bank and the Iranian Tadbor Kish medical and Pharmaceutical Company. Kindly refer to the OFAC website for details.

Treasury has issued an Advisory, regarding vessels that have delivered Iranian oil to Syria by this syndicate, and we are publishing it here for the benefit of compliance officers with maritime clients.

RICARDO MARTINELLI'S SONS ARRESTED IN MIAMI, SLATED FOR DEPORTATION

Ricardo, Ricardo Alberto and Luis Martinelli

Immigration and Customs Enforcement (ICE) arrested the two sons of former Panamanian President Ricardo Martinelli, Luis Enrique Martinelli Linares and Ricardo Alberto Martinelli Linares, in Coral Gables, Florida, where they have been living since not long after their their father left office. The brothers' US visas were cancelled in 2017, and they are subject to deportation proceedings, which local media has stated will commence at a hearing to take place next Monday.

The Republic of Panama has caused INTERPOL Red Notices to be issued against the Martinelli sons, in connection with their alleged receipt of $49m in bribes and kickbacks from the Brazilian construction giant, Odebrecht. Rather than endure the extended nature of extradition proceedings, including any possible civil appeal solely for the purposes of delay, as their father unsuccessfully attempted himself earlier this year, justice could be more quickly served by deportation, as they are currently in the United States illegally.

Panamanian INTERPOL Red Notice requesting their arrest

Local newsreel footage showed that the brothers had berthed a luxury yacht at their disposal behind their home,  with ocean access. It was reportedly stocked with food and supplies, as if they were intending to flee the United States. There has been no information released regarding whether any cash or financial instruments was seized, whether in their residence, or on the yacht. The brothers have been accused in Panama of conducting a money laundering operation with bribe money.

CONVICTED TURKISH BANKER IN IRAN OIL-FOR-GOLD CASE FILES HIS APPELLATE BRIEF

Mehmet Atilla

 Attorneys for Mehmet Hakan Atilla, the Halkbank Deputy General Manager who was convicted the Reza Zarrab oil sanctions evasion case in US District Court in New York, have filed their Brief of Appellant in the Second Circuit. His counsel has asserted that the trial court committed a number of reversible errors.

The Points on Appeal, in summary form:

(1) The Jury Instruction that stated the jury could convict Atilla of Conspiring to violate the IEPPA if it found that he conspired to evade or avoid the imposition of secoRdary sanctions.
(2) The IEEPA does not criminalize conspiracies to evade or avoid secondary sanctions.
(3) The appellant is entitled to a new trial on the jury instructions about the IEEPA.
(4) The Government presented no evidence the appellant would involve US banks.
(5) It was error for the Court to refuse to admit Zarrab's statements to Atilla, and his jailhouse conversations, which proved bias.

Atilla's Federal Prison Presumptive Release Date is July 25, 2019, and the appeal will probably still be pending on that date. If his conviction is reversed, he most likely will have already served his entire sentence.
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* IEEPA:    International Emergency Economic Powers Act authorizes the President of the United States to regulate commerce, after declaring a national emergency, in response to any unusual or extraordinary threat to the US from a foreign source.

HOW MANY HOLDERS OF MALTA'S CBI PASSPORTS ARE LINKED TO THE MALAYSIAN 1MDB SCANDAL ?

Since the world's media continues to pay rapt attention to Malaysia's massive 1MDB scandal, the question has come up regarding just how many individuals allegedly involved in the theft of the $4bn from the fund hold Citizenship by investment (CBI) passports issued by Malta.

We note that a Jordanian national, Shaher Awartani a/k/a Ahmad Shaher Moh'd Awartani has been reported holding a Malta CBI passport, and that sources have verified this through a review of the Malta Register of new citizens. Awartani is a principal in a Middle Eastern construction company alleged to have received $66m in stolen 1MDB funds. he is reportedly under investigation by a number of countries. 1 MDB is a state-owned fund intended to perform good works in Malaysia.

Awartani is reportedly a partner of the UAE Ambassador to the United States, who has also been linked to the 1MDB scandal. When the news that Awartani held a Malta CBI passport, and was involved in the 1MDB theft, appeared in Malta's press, many Maltese nationals openly questioned how he had ever passed the due diligence investigation necessary to qualify for a passport, as his passport was issued years after the scandal broke. There are ongoing criminal investigations in the United States, Singapore and Switzerland. Awartani's relationship with the principal plotter, Joh Low, was exposed when an unknown party stole a large number of emails between the two of them, as well as the Ambassador, and other individuals suspected of having received a portion of the stolen funds.

We wonder how many other players in the 1MDB theft hold Malta CBI passports ?

WANT TO KNOW WHICH OF YOUR MALTESE BANKING CLIENTS ARE RUSSIANS WITH CBI PASSPORTS ?

Malta, unlike the other Citizenship by Investment (CBI) jurisdictions, actually publishes the names of its new citizens. If you review the list*, which came out at the very end of 2017, you will notice that the vast majority of CBI passport holders have Russian, or Middle Eastern Arab, surnames. It makes you want to run all the names, more than 2000, against your client list, doesn't it ? The pages in the 100-page document that lists the CBI names run from 16 to 50.

Note: there are also a small number of names of individuals who were naturalized, not CBI citizens.
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*The Malta Government Gazette, 22 December, 2017

CAYMAN ISLANDS CONTINUE TO DRAG ITS HEELS ON BENEFICIAL OWNERSHIP AND SHARING INFORMATION

The two senior leaders of the Cayman Islands are still offering excuses as to why they will not agree to abide by the UK order to make available to the public a register of the Beneficial Owners of the island's corporations by 2020. They assert that it will harm their local corporate services industry, if they become transparent before the rest of the world's opaque tax havens, but in truth and in fact, unless Cayman willingly become transparent, it will be imposed upon them through an Order in Council from the United Kingdom, which after all is its sovereign. (They also want to retain an intermediary local agency's permission, before sharing any information with foreign agencies, which detractors allege is an attempt to delay an investigation, and which could give criminals time to move their dirty money).

The other argument, that such an act is not legal under the existing Constitution, because Cayman has local, domestic autonomy, candidly does not wash either, for the external consequences of its corporate secrecy affect foreign affairs, in which the UK has sole jurisdiction. Read the Sanctions and Anti-Money Laundering Act, gentlemen.

Finally, these threats to seek independence from Britain are obviously nothing more than a bluff. The biggest selling point Cayman financial services professionals pitch to foreign investor clients is the legitimacy and permanence of the Crown, which passes down to its Overseas Territories. If the Cayman Islands became independent, the corporate flight, especially the 600+ hedge funds domiciled there, would be massive. 

Given that the last twelve financial scandals in the Caymans have not resulted in a single local criminal charge, nor the recovery of foreign investments lost through fraud, the UK is correct in insisting on total and complete transparency, to identify, name & shame, and charge the fraudsters and other financial criminals who use the jurisdiction to perpetrate their dark craft. Compliance officers need to know precisely who owns and controls Cayman companies, so that they can properly advise their clients, be they banks or private investors, of the risks involved in any financial or corporate transaction contemplated there.

The Cayman Islands needs to come out of the shadows, and rendering their prized corporation industry transparent is the best way to insure that it happens. Otherwise, foreign businesses seeking tax advantages, and their capital, would be safer elsewhere.

AMERICA'S RETURN TO IRAN SANCTIONS AGAIN RAISES THE BAR FOR COMPLIANCE OFFICERS

All the financial news stories about the recently reimposed comprehensive US sanctions against Iran seem to have neglected the fact that compliance officers at American financial institutions, and foreign institutions connected to the US financial structure, are again bound by the greatly increased enhanced due diligence responsibilities on the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010*, more commonly know by its acronym, CISADA.

CISADA imposes an increased responsibility upon Compliance officers regarding their obligation to access public information on their assigned individuals and entities, above and beyond what has been regarded as best practices, to the "knowable" level. If significant or relevant information is freely available in the public domain, there is an expectation that such information is knowable, and therefore it must be obtained. This raises the bar significantly for front line compliance staff, as they are now responsible for information that "should have been known**."

To pass the knowingly test, compliance officers must now increase their level of due diligence to enhanced due diligence, in order to retrieve all possible publicly-available information on their subject. This means going beyond sanctions lists, building a robust and wide-ranging program, which includes cloud-based resources, resources that lie behind paywalls, and other compliance assets that did not exist when CISADA was enacted or amended.

CISADA also means that a close examination of social media/social network sites, and other image resources, using effective facial resolution software systems, has become mandatory for any query in which Iran, its nationals, or any company which may have, directly or indirectly, been linked to Iran or Iranians. Given that social media, and other relevant image resources, are freely and publicly available, the failure to deploy a facial recognition software system, as an integral part of an effective enhanced due diligence program, may not only constitute compliance malpractice, it may expose compliance staff, and their bank as well, to potential civil, or even criminal, liability, under CISADA.

Therefore, to summarize:

(1) "Check the box," meaning sole reliance upon sanctions lists, and lists of high-risk individuals and entities is grossly insufficient for any inquiry even remotely involving Iran. Enhanced due diligence, using all the resources that this term entails, is the order of the day.

(2) An examination of the complete spectrum of public-available social media, and related images resources, employing facial recognition software technology to access and locate all possible relevant information, including image capture, satisfies CISADA, making social media searches now one of the central components of your inquiries, as to neglect them appears to violate both the plain meaning, as well as the intent, of the statute.

 Finally, inasmuch as these expanded inquiries are now mandatory for any searches might possibly involve Iran or Iranians, it would be prudent to apply them to all your compliance tasks, to insure that you do not unwittingly fail to employ CISADA-level enhanced due diligence to a subject later found to have indirect links to Iran.   
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* https://www.treasury.gov/resource-center/sanctions/documents/hr2194.pdf
** One major provider of commercial off-the-shelf data provider to compliance officers actually expanded their clients' access to publicly-available information, based upon its understanding of the impact and thrust of CISADA.