Posts Tagged ‘Cyprus’

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Smuggling cash with foreign prepaid cards

April 15, 2013

ACAMS MoneyLaundering.com is reporting that while know-your-customer requirements and other safeguards are in place to prevent abuse of prepaid, reloadable cards obtained from American financial institutions, the freedom of foreign banks to issue such cards remains a potential area of terror finance vulnerability.

Here is an excerpt from MoneyLaundering.com’s featured article by Colby Adams on Apr. 9:

…Final rules issued by the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) in July 2011 imposed anti-money laundering (AML) program duties on American providers and sellers of certain prepaid products, including customer identification, suspicious activity reporting and transactional recordkeeping requirements.

But reloadable cards that can be acquired in person or over the Internet from foreign financial institutions remain an immediate threat to the United States, according to a senior compliance officer at a major U.S. financial institution linked to the prepaid industry.

“The rules are way too focused on what’s leaving the United States—on bulk cash smuggling on a card,” said the person, who spoke on condition of anonymity. “The giant elephant in the room is that the regulators aren’t checking what’s coming here, and that could mean trouble sooner rather than later.”

In such a scenario, a member of a terrorist organization living in a high-risk jurisdiction could purchase a network branded prepaid card from a non-U.S. bank with little trouble. Should the person travel to the United States, he or she could use the card to withdrawal money from any one of thousands of ATMs, or receive additional funds from another foreign-issued prepaid card holder

Why would Muhammad Atta need a SunTrust account if he could have just brought a preloaded payment card with him from Hamburg?  Especially when that card is branded with the familiar logo of Visa or Mastercard, such as this product being offered on the website of Cyprus-based Hellenic Bank:

https://www.hellenicbank.com/easyconsole.cfm/id/576#contentDisplay

Screenshot of foreign p-card promising anonymity and a Visa logo

So much for know-your-customer provisions when a bank in the EU is encouraging customer anonymity.  Moreover, Mr. Adams notes that “the Visa logo means that it can be used anywhere Visa is accepted – including ATMs.”

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Turkish Bank fined £294,000 for violation

October 24, 2012

Turkish Bank has settled with Britain’s financial regulator for breaking rules written to prevent money laundering.  What’s surprising about this story is that the U.K. had already warned Turkish Bank about its practices, but the bank continued the same behavior anyway.  One wonders who exactly, such as corrupt politicians in the Middle East, may have been depositing funds into Turkish accounts without adequate screening procedures.

From this month’s edition of Anti-Money Laundering Magazine:

Turkish Bank loses its sweetness

The Financial Services Authority (FSA) has fined Turkish Bank (UK) Ltd (TBUK) £294,000 for breaching the Money Laundering Regulations 2007 (MLR).

These breaches – which related to TBUK’s correspondent banking arrangements – were widespread and took place over two-and-a-half years. They led to an unacceptable risk that TBUK could have been used to launder money. This is the first occasion in which the FSA has taken enforcement action against a firm in relation to money laundering weaknesses in its correspondent banking arrangements.

TBUK is a wholly owned subsidiary of Turkish Bank Limited which is incorporated in Northern Cyprus. TBUK’s customer base is mainly retail. TBUK offers a range of financial services, including correspondent banking. Correspondent banking involves a bank (correspondent) providing banking services to an overseas bank (respondent) to enable the respondent to provide its own customers with cross-border products and services, such as payment and clearing that it cannot provide them with itself. TBUK acted as a correspondent bank for nine respondent banks in Turkey and six respondent banks in Northern Cyprus between 15 December 2007 and 3 July 2010.

Under the MLR, providing correspondent banking services to banks based in non-European Economic Areas states is recognised as creating a high risk of money laundering that requires enhanced due diligence and ongoing monitoring of the relationship. During this period, Turkey and Northern Cyprus did not have anti-money laundering (AML) requirements that were equivalent to those in the UK.

The FSA visited TBUK in July 2010 as part of a thematic review of how banks operating in the UK were managing money laundering risks. This thematic review resulted in the eye-popping report released in July 2011. It contained alarming findings. The FSA’s visit to TBUK gave serious cause for concern in relation to TBUK’s AML controls over correspondent banking leading to this enforcement action.

TBUK’s breaches of the MLR included failing to:

  • establish and maintain appropriate and risk-sensitive AML policies and procedures for its correspondent banking relationships
  • carry out adequate due diligence on, and ongoing monitoring of, the respondent banks it dealt with and failing to reconsider these relationships when this was not possible
  • maintain adequate records relating to the above.

While not deliberate or reckless, these failings were more serious because the FSA had previously warned TBUK of deficiencies in its approach to AML controls over correspondent banking.

Tracey McDermott, Acting Director of the Enforcement and Financial Crime Division, said: “Turkish Bank fell far short of the standards we expect of firms in managing their money laundering risks. This was despite clear warnings from the FSA that it needed to improve”…

In other news, Turkey faces expulsion from the Organization for Economic Cooperation and Development for its insufficient efforts in “blocking the financing of terrorist groups” if it doesn’t tighten its laws within four months.

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Finding manna from heaven under the sea

September 10, 2012

The Financial Times has an excellent article on recent natural gas discoveries off the coast of Israel.  For many decades, the commonly held perception of Israel was that it is the only country in the Middle East without oil.  The recent discoveries, which involved hard work and long odds, turn the old perception on its head.

Energy independence is extremely important for the U.S. and the West at large.  But it may be a matter of existential survival for Israel.  Israel has had to depend exclusively on imported energy in the past, leaving it vulnerable to price shocks and supply interruptions.  Natural gas deposits at Tamar and Leviathan will go a long way in helping Israel to write its own future.

Here’s a long excerpt, but you should take a look at the full piece:

Field of dreams: Israel’s natural gas

Aug. 31

By Tobias Buck

After decades of importing every drop of fuel, Israel has struck it rich, uncovering vast reserves of natural gas in the Mediterranean

The black and yellow helicopter heads north from Tel Aviv, passing over empty beaches, a yacht harbour and a string of sprawling seafront residences that house some of Israel’s wealthiest families. After a few minutes the pilot makes a sharp turn to the left and steers his ageing Bell 412 towards the open sea.

For more than half an hour, all there is to see is the blue waters of the Mediterranean. Then suddenly a hulking mass of brightly painted steel rises from the midday haze. Towering more than 100m above the water, this is the Sedco Express, a drilling rig that has been operating in this stretch of ocean for almost three years. As the helicopter touches down on the landing pad, we see a small blue and white Star of David flag fluttering in the wind. It is the only sign that the Sedco Express sits atop one of the greatest treasures that Israel has ever found. Far below, connected to the rig by a slender steel pipe that runs through 1,700m of ocean and another 4,500m of rock and sand, lies a vast reservoir of natural gas known as the Tamar field.

The men on board the Sedco Express are busy testing the field’s multiple wells in preparation for the long-awaited day next April, when a US-Israeli consortium will start pumping the gas onshore. With reserves of almost 10 trillion cubic feet of natural gas, the Tamar field is a hugely valuable asset for the Israeli economy. Discovered in January 2009, it was the biggest gas find in the world that year, and by far the biggest ever made in Israeli waters. But the record held for barely two years. In December 2010, Tamar was dwarfed by the discovery of the Leviathan gasfield some 20 miles farther east – the largest deepwater gas reservoir found anywhere in the world over the past decade. The two fields, together with a string of smaller discoveries, will cover Israel’s domestic demand for gas for at least the next 25 years, and still leave hundreds of billions of cubic feet for sale abroad. The government take from the gasfields alone is forecast to reach at least $140bn over the next three decades – a staggering sum for a relatively small economy such as Israel’s.

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Turkish jizya levied on Greeks in Cyprus

March 7, 2011

Turkish occupiers have imposed a modern jizya against the Greek Orthodox Christians living in northern Cyprus.  Islamic tax law mandates that jizya revenues fund the armies of Islam.  Accordingly, the jizya against Greek Cypriots is being used to fund the Turkish army.  Now we must sadly add one more country to the list of nations imposing jizya in an darkening world today.  Does this portend the revival of Ottoman jizya taxation?

Big kudos to John Akritis for translating the article from Kathimerini and posting it on his blog Hellenic Antidote on Feb. 8:

I’ve translated below a report from today’s Cyprus Kathimerini regarding the imposition of the Islamic Jizya tax by the Turkish occupation authorities on the few hundred Greeks who since the Turkish invasion have been enclaved in the villages of Ayia Triada/Yialousa and Rizokarpaso in the Karpasia peninsula. The funds are being used for the upkeep of Turkish army camps and the building of new mosques. The report also makes clear that provisions provided to the enclaved by the Cyprus government via the UN are being systematically looted by Turkish settlers.

Jizya tax on the enclaved in Karpasia
The Karpasia Co-ordination Committee has revealed that an Ottoman-style Jizya tax is being imposed on the enclaved Greeks of Karpasia by the occupation army and the [ultra-nationalist] Grey Wolves to pay for the upkeep of Turkish army camps in the region and the building of new mosques.

‘The Ottoman jizya tax [amounting to 10% of the value of goods or 10% of that produced] has been imposed on the enclaved by the Turkish occupation army and the Grey Wolves, who together exercise authority in the peninsular,’ a statement by the Karpasia Co-ordination Committee said.

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