16 Feb 2018
Published in News

Millions stolen from Russian bank via SWIFT: central bank

Unknown hackers stole 339.5 million roubles ($6 million) from a Russian bank last year in an attack using the SWIFT international payments messaging system, the Russian central bank said on Friday.

The disclosure, buried at the bottom of a central bank report on digital thefts in the Russian banking sector, is the latest in a string of attempted and successful cyber heists using fraudulent wire-transfer requests.

The central bank said it had been sent information about “one successful attack on the work place of a SWIFT system operator.”

“The volume of unsanctioned operations as a result of this attack amounted to 339.5 million roubles,” the bank said.

After the report’s publication, a central bank spokesman said hackers had taken control of a computer at a Russian bank and used the SWIFT system to transfer the money to their own accounts.

The spokesman declined to name the bank or provide further details. He quoted Artem Sychev, deputy head of the central bank’s security department, as saying this was “a common scheme”.

A spokeswoman for SWIFT, whose messaging system is used to transfer trillions of dollars each day, said the company does not comment on specific entities.

– By Jack Stubbs, Reuters, 16 February 2018

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15 Feb 2018
Published in News

Singapore: Regulator to launch review into banking culture and conduct

The Monetary Authority of Singapore (MAS) is to launch a review into the behaviour of financial intuitions and fund managers, as part of efforts ‘to try to better understand how workers embed culture into their everyday lives.’

From this year onwards, the financial watchdog will begin looking at larger managers first and engage financial institutions and asset managers in the operation.

It intends to share best practices, where possible, from its initial rounds of the study, which could serves as a point of reference, said MAS executive director Mr Lim Cheng Khai.

“ We will look beyond compliance frameworks to assess if the manager has embedded a sound “risk and ethics DNA” – one in which employees are aware of the risk boundaries; are being held accountable for their actions; and are empowered to speak up when they suspect or encounter malpractices,” he explained.

Poor banking culture has been blamed for global financial crisis, and it is still linked to a number of scandals that have ensued since, including the misselling of insurance in the UK and the fraudulent creation of millions of accounts at Wells Fargo, he said, closer to home, the 1MDB investigation uncovered some gross misconduct of two financial institutions.

“Such ethical failures are rarely the result of one action or one person. Often, it is the culmination of a series of ill-disciplined, unchecked actions, over a period of time,” he explained.

“A slip here, a compromise there. Without strong principles undergirding business decisions or the right tone from the top, it can be easy to veer into a chase after profits, at the expense of conscience and ethics.”

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15 Feb 2018
Published in News

US seeks to sanction Latvian bank ABLV over money laundering

The United States has issued a notice seeking to blacklist ABLV, which it says is a bank of ‘prime money laundering concern’ that facilitates illicit cash transactions for sanctioned individuals and North Korea’s procurement or export of ballistic missiles.

According to the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN), ABLV has ‘institutionalized money laundering as a pillar of the bank’s business practices.’

Management also allow the bank and staff to ‘orchestrate money laundering schemes’ as well as to ‘solicit high-risk shell company activity’ that enables the bank and its customers to launder funds.

Fincen also accused ABLV of maintaining ‘inadequate controls over high-risk shell company accounts,’ and of seeking to prevent enforcement of Latvian anti-money laundering and counter terrorism funding (AML/CFT) rules in order to ‘protect these business practices.’

“Illicit financial activity at the bank includes transactions for parties connected to UN-designated entities, some of which are involved in North Korea’s procurement or export of ballistic missiles.”

“In addition, ABLV has facilitated transactions for corrupt politically exposed persons and has funneled billions of dollars in public corruption and asset stripping proceeds through shell company accounts,” said Fincen.

ABVL has denied the allegations, which it said are based on assumptions and information that is currently unavailable to the bank.

Regarding North Korea, the bank said the regulator had initiated an administrative matter and in November 2017 a Settlement Agreement was concluded.

“After a six-month inspection, the following conclusion was provided: ‘There were no violations of international, including European Union, sanctions, national sanctions of the Republic of Latvia, as well as sanctions imposed by the USA, detected in the operation of the Bank”.

In addition, its “internal control system in the field of the prevention of money laundering, terrorism financing and circumvention of sanctions, as well as the implemented control solutions have been audited and inspected both by the regulator and by international auditors,” it said.

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15 Feb 2018
Published in News

EU regulators warn cryptocurrency investors could lose all their money

Three main authorities overseeing financial regulation in the European Union have warned consumers from purchasing virtual currencies (VCs), saying they are ‘highly risky.’

The European Supervisory Authorities (ESAs) for securities (ESMA), banking (EBA) and insurance and pensions (EIOPA) said cryptocurrencies are ‘unregulated products’ which are also ‘unsuitable as investment, savings or retirement planning products.’

“The ESAs are concerned that an increasing number of consumers are buying VCs unaware of the risks involved,” said an ESA statement, “VCs such as Bitcoin, are subject to extreme price volatility and have shown clear signs of a pricing bubble and consumers buying VCs should be aware that there is a high risk that they will lose a large amount, or even all, of the money invested.”

An issue of concern to the tri-partite panel is that consumers buying VCs are not covered by the protection given to other financial services as they are not regulated under EU law.

This means if a VC exchange goes out of business, for example, or consumers have their money stolen because of a cyberattack, there is no EU law to cover their loss, ESA stated.

“Some VC exchanges have been subject to severe operational problems in the past. During these disruptions, consumers have been unable to buy and sell VCs when they wanted to and have suffered losses due to price fluctuations during the period of disruption.”

The cautions from the European supervisors adds to the growing number of warnings and criticisms that regulators and senior industry figures have put forward about cryptocurrency trading.

Last month, hackers targeted one of Japan’s largest digital currency exchanges Coincheck, causing it to lose some $530 million. In 2014, another Tokyo exchange MtGox collapsed after admitting that $400 million had been stolen from its network.

Japan, the US and Australia are the few major countries that regulate this field.

Image: jaydeep_

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15 Feb 2018
Published in News

U.S. hiring probe casts shadow on Credit Suisse

A U.S. investigation into whether Credit Suisse hired referrals from government agencies in Asia in exchange for business poses another reputational hurdle for CEO Tidjane Thiam as the Swiss bank enters the final stretch of a three-year turnaround plan.

Credit Suisse said on Wednesday that it was in contact with the U.S. Department of Justice and the U.S. Securities and Exchange Commission (SEC) about its hiring in Asia because of potential violation of U.S. foreign corruption law.

The revelation comes just a week after Credit Suisse terminated a publicly traded product betting on future stock index swings after its value plunged during a market rout.

On Wednesday, as the bank announced its third consecutive annual loss, its chief executive played down the fallout from that product’s collapse.

“It worked well for a long time until it didn‘t. Which is generally what happens in markets,” Thiam said, noting the prospectus made clear the product was not for amateurs and warned about the risk of substantial losses.

He conceded, however, that he could not predict whether law suits would result.

“It is not in my gift to predict whether there’ll be a litigation against us or not … the prospectus is extremely clear, I have had to read it myself,” he told analysts on a conference call.

“We believe that the disclosures made and the kind of role we played, which is really to be manufacturers, we mostly interacted with market makers and were not involved in the distribution (of the product), leaves us in a reasonable position,” he said.

The events of the past week, combined with activist investor pressure, have put the bank’s image in focus.

“This is the year when they have to prove that it is working,” said Andreas Venditti, an analyst at Vontonbel, commenting on Thiam’s efforts to make the bank profitable.

– By John O’Donnell, Jennifer Hughes, Reuters, 14 February 2018

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15 Feb 2018
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World chess body Swiss bank accounts closed

The World Chess Federation (Fide) says its Swiss bank accounts have been closed after its president was accused of facilitating transactions on behalf of the Syrian government.

Russian millionaire Kirsan Ilyumzhinov was added to a US Treasury Department sanctions list in 2015 for his alleged dealings with the Assad government.

He denies wrongdoing, and stepped back from Fide to try to resolve the issue.

But Fide says Swiss bank UBS closed its accounts as he is still sanctioned.

Lausanne-based Fide’s treasurer, Adrian Siegel, acknowledged the issue was “a serious problem” that had “severely damaged” the organisation’s business dealings.

“After more than two years of Kirsan Ilyumzhinow’s [sic] presence on the sanction list… UBS has announced that they will immediately close our accounts,” he said in a statement.

“It was only a question of time until we face this serious problem,” Mr Siegel said, adding that the anticipated
“some problems” while they looked for a “new bank connection”.

In a separate statement, Mr Ilymuzhinov’s defence team said he denied the “outrageous and false allegations made against him” and said he was “not aware that Fide’s bank accounts have been frozen by UBS”.

Mr Ilyumzhinov, who is still listed as Fide’s president on its website, said the allegations were part of a “smear campaign related to a power struggle” at the organisation ahead of the elections later this year.

In March 2017, Mr Ilyumzhinov was quoted by Russia’s Tass news agency as saying that FIDE, the governing body of international chess competitions, was trying to “oust” him after a statement on it’s website said he had resigned.

“I think there is an American hand in this, and I think it’s called a set-up.”

Eccentric character

Mr Ilyumzhinov, a former businessman and politician, has long been viewed as an eccentric character.
He once claimed on television to have met aliens on board a spaceship.

He was president of the Republic of Kalmykia, a small Buddhist region of Russia which lies on the shores of the Caspian Sea, for 17 years.

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15 Feb 2018
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India: Punjab National Bank detects $1.77 billion fraud

India’s Punjab National Bank has detected fraudulent transactions worth $1.77 billion at a single Mumbai branch in a case that could affect more banks and raise fresh questions about lending procedures at Indian banks mired in soured debt.

PNB, India’s second-largest state-run lender with assets of $120 billion, said in a regulatory filing that the fraud benefited “a few select account holders” and that it has reported the matter to law enforcement agencies.

Indian federal agents last week said they were investigating a billionaire jeweler, Nirav Modi, and others over accusations that they defrauded PNB of $44 million.

An official with the Central Bureau of Investigation (CBI) told Reuters on condition of anonymity that the cases were related.

Modi, who has not commented on the federal case so far, could not be reached for comment on Wednesday. His flagship Firestar Diamond has said it had no involvement in the case.

PNB said that other banks appeared to have lent money to customers abroad based on the fraudulent transactions. It did not name the banks or the customers.

Indian banks, including PNB, have been stung by a surge in bad loans in the past four years, choking lending growth vital to accelerate the pace of expansion in Asia’s third-largest economy. The government recently announced a $14 billion bailout for state banks that account for most of the $147 billion of soured loans.

Shares in PNB, the fourth-biggest among all Indian banks by assets, closed almost 10 percent down on Wednesday.


PNB first notified the CBI of its discovery late last month and subsequently issued a “caution notice” to warn other lenders about the alleged fraud. PNB has said that two junior officials at the Mumbai branch had issued illegal “letters of undertaking”.

Letters of undertaking (LoUs) are typically issued by a bank giving some sort of a guarantee on behalf of a company.

– By Devidutta Tripathy, Rajendra Jadhav, Reuters,14 February 2018

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14 Feb 2018
Published in News

UK Valentine’s Day warning: Victims lose £41m to romance fraud

Thousands of people continue to fall victim to romance fraud in the United Kingdom, where victims were conned out of £41 million in 2017 alone.

The figure was released by City of London police ahead of Valentine’s Day, said Action Fraud, a UK-based organisation which received 3,557 romance frauds reports last year, averaging 10 reports a day.

Romance fraud occurs when “someone creates a fake identity to enter into a relationship with a victim with the intent to steal either funds or personal information.”

“Those who fall victim to these frauds are almost twice as likely to be women, [63% compared with 37% of men],” the organisation stated.

“Evidence suggests [the] numbers do not accurately represent the true scale of the problem due to the embarrassment felt by some victims of fraud, which can discourage people from coming forward to report their experience,” it added.

Meanwhile, a working group #DateSafe , which includes City of London Police, Victim Support and Age UK, has been formed with the aim of raising awareness of the risks of romance fraud in the UK.

The new group was also tasked with publishing some tips online as a part of a campaign to help inform and protect users of dating sites and apps ahead of Valentine’s Day.

The tips include not rushing into an online relationship, evading scammers by never sending money or sharing bank details with an online acquaintance.

City of London Police’s Commander Dave Clark, the National Co-ordinator for Economic Crime, said: “Callous criminals will target vulnerable victims for their own monetary gain and our latest intelligence tells us that women in their forties are the most likely to be tricked in this way.

“We are therefore urging people to spot the signs of dating fraud in order to protect themselves and to follow the ‘Date Safe’ advice this Valentine’s Day and in the future.”

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14 Feb 2018
Published in News

Banking: Swiss regulator identifies video on-boarding abuse risk

The Swiss Financial Market Supervisory Authority (Finma) has launched a consultation towards updating the due diligence requirements for client on-boarding through digital platforms.

The move comes two years after its video and online identification procedures were enacted.

Although the digital identification experience has been ‘positive’ and financial intermediaries have adapted their processes, new risks of misuse have also emerged, Finma explained, with suggestions that such risks could be linked to money laundering.

The watchdog said it has therefore amended its circular which takes ‘such developments’ into account and “ensures that innovative capacity, technology neutrality and effective money-laundering prevention are maintained.”

The consultation on the changes, which will run until 28 March 2018, states that: “The video identification process may still be carried out despite evidence of a higher risk level. However, the business relationship may be established only after the consent of the line manager, a superior instance or senior management.”

It also says that the video identification process no longer contains the provision regarding the single-use password (TAN).

“Instead, at least three randomly selected visual security features of identification documents must be checked,” Finma said.

For online identification, Finma said it no longer requires a transfer from a bank in Switzerland to ensure compliance with due diligence requirements: under certain conditions, a transfer from a bank in an FATF member state is now also permitted.

In addition, liveness detection is required as a further security measure when checking photographs.

Last week the Monetary Authority of Singapore published guidance on the use of technology during the on-boarding process, an update to its digital procedures which are already in place.

As part of the measures it said financial institutions can conduct non-face-to-face verification of a client’s identity, for example, provided there are ‘adequate’ measures in place to prevent impersonation.

Other aspects mentioned include biometric identification and real-time video conferencing.

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14 Feb 2018
Published in News

South Africa corruption: Elite police swoop on ‘Gupta home’

The Hawks, South Africa’s special police unit, landed at a home reported to belong to the Gupta family on Wednesday morning in what is considered to be part of a probe into corruption allegations linked to President Jacob Zuma.

The Guptas have featured prominently in a number of scandals, and are alleged to have wielded strong influence over the public and private sectors because of their association with Zuma.

Zuma and the Guptas have denied the allegations against them. Attempts to reach the Gupta family were unsuccessful.

A South African Police statement said: “The Hawks’ Serious Corruption Crime Unit is currently conducting on-going operations at various addresses in Gauteng, including a residential premises in Saxonwold near Johannesburg.

“The operation is in respect of the Vrede Farm investigations. So far three people have been arrested and two other suspects are expected to hand themselves over to the Hawks. Operations are still ongoing and further details will be made available at a later stage.”

The Vrede Farm investigations relates to a project which was originally meant to help poor black farmers but the Gupta family allegedly pocked millions from it, according to the BBC, which also said local people expressed satisfaction about the police arrests.

The police development comes a day after the ruling African National Congress (ANC) issued a statement recalling Zuma from his position as President.

The document was issued after ‘intense meetings’ with Zuma in which the party is understood to have asked him to step down from power.

Zuma agreed in principle to resign, but proposed time frames extending from three to six months.

However, the party’s national executive council (NEC) felt that the matter was “urgent” and indicated he should leave immediately.

“The National Executive Committee firmly believes that this situation requires us to act with urgency in order to steer our country towards greater levels of unity, renewal and hope,” the statement said.

It added that “all necessary parliamentary processes that arise from this decision will now ensue.”

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14 Feb 2018
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U.S. pushes to add Pakistan onto FATF terrorist-financing watchlist

The United States has put forward a motion to place Pakistan on a global terrorist-financing watchlist with an anti-money-laundering monitoring group, according to a senior Pakistani official.

Pakistan has been scrambling in recent months to avert being added to a list of countries deemed non-compliant with terrorist financing regulations by the Financial Action Task Force (FATF), a measure that officials fear could hurt its economy.

The United States has been threatening to get tough with Islamabad over its alleged ties with Islamist militants, and last month President Donald Trump’s administration suspended aid worth about $2 billion.

Islamabad, which denies assisting militants in Afghanistan and India, has reacted angrily to U.S. threats of further punitive measures.

A meeting of FATF member states is due to take place next week in Paris, where the organisation could adopt the motion on Pakistan. The FATF, an intergovernmental body based in Paris, sets global standards for fighting illicit finance.

Pakistan’s de facto finance minister, Miftah Ismail, told Reuters that the United States and Britain put forward the motion several weeks ago, and later persuaded France and Germany to co-sponsor it.

“We are now working with the U.S., UK, Germany and France for the nomination to be withdrawn,” Ismail said, speaking by telephone from Europe. “We are also quite hopeful that even if the U.S. did not withdraw the nomination that we will prevail and not be put on the watchlist.”

Pakistan had been on the FATF watchlist from 2012 to 2015.

A senior U.S. official who follows U.S. policy in the region said Pakistan has “always been selective” in cracking down on militants who use its territory as a base.

“It is time for that to stop, and so we are working with our allies, who also are affected, to see effective action against groups such as the Haqqanis and elements of the Taliban,” said the official, referring to militants operating along the border with Afghanistan.


The FATF had previously warned Islamabad it could be put back on the watchlist without further efforts to crack down on the flow of funds to militants.

Pakistani officials and Western diplomats say that being put on the FATF watchlist could deal a blow to Pakistan’s economy as it would make it harder for foreign investors and companies to do business in the nuclear-armed South Asian nation.

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14 Feb 2018
Published in News

Equifax under pressure after data breach update

Equifax is facing a fresh demand to disclose the full extent of last year’s data breach, following a report that it was bigger than previously disclosed.

The Wall Street Journal (WSJ) reported on Friday that cyber-thieves had accessed US citizens’ email addresses, tax ID numbers and more driver licence information than acknowledged earlier.

US Senator Elizabeth Warren is now demanding details of any other data the firm believes may have been stolen.

She wants a reply by the week’s end.

your company continues to issue incomplete, confusing, and contradictory statements and hide information from

Congress and the public, it is clear that five months after the breach was publicly announced, Equifax has yet to answer this simple question in full: what was the precise extent of the breach?” the Democratic senator from Massachusetts wrote in a letter to the credit rating agency.

The WSJ said it was unclear how many of the 145.5 million Americans that the firm had previously said were affected by the breach, had had the additional information about them exposed.

The Atlanta, Georgia-based company, one of the biggest companies of its kind, had previously confirmed that social security numbers, birth dates and addresses had been compromised.

“We have complied with applicable notification requirements in the disclosure process,” the firm told the WSJ.

It added that it believed that the additional driver licence data exposed – which is reported to have involved issue dates and the states that granted them – was “extremely minimal”.

UK update

Last month, Equifax revealed that it was writing to a further 167,431 consumers in the country on top of the 693,665 it had already promised to notify.

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14 Feb 2018
Published in News

Newly free Saudi Prince Alwaleed gives to soccer club

Saudi Arabian billionaire Prince Alwaleed bin Talal, freed two weeks ago from detention in a luxury hotel during a corruption sweep, said on Tuesday he was answering a government call to support local soccer clubs by donating half a million dollars.

Prince Alwaleed, one of the country’s top international investors, says he spent his nearly three months of detention in the Riyadh Ritz-Carlton hotel, along with dozens of senior officials and businessmen, part of a crackdown on the orders of Crown Prince Mohammed bin Salman.

In an interview conducted hours before his release, he told Reuters he maintained his innocence and expected to keep full control of his firm. But when asked, he did not rule out making a donation to the government in return for his freedom.

A senior Saudi official later told Reuters he was freed after reaching a financial settlement with the attorney general, but neither party provided details.

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13 Feb 2018
Published in News

UK watchdog publishes key points on algorithmic trading supervision

The Financial Conduct Authority has published a report summarising the key areas of algorithmic trading oversight, including areas of good and bad practice it has observed.

Automated technology has “significant benefits” to investors, such as increased execution and reduced costs, however it can also amplify some risks,” the FCA said.

“It is therefore essential that key oversight functions, including compliance and risk management, keep pace with technological advancements.”

Key areas of focus within algorithmic trading compliance in wholesale markets include the development and testing process, risk controls, governance oversight and market conduct, the FCA explained.

Highlighted in the report are examples of good practice. This includes having ‘checkpoints’ throughout the development and testing process, such as after due-diligence was completed and during testing too.

It is also useful to have an independent committee to check all the relevant documentation, and active representatives on the committee from risk, compliance, legal and business operations.

Poor practice, however, includes firms that use a simplistic sigh-off process, involving a few individuals and no independent representation. “As such, the process does not give the decision maker sufficient documented evidence and independent verification to confirm that the required checks have been completed,” the report explained.

Regarding risk control, the regulator outlined a number of expectations, including the need for firms to maintain post-trade controls to monitor their trading activity, and it also discussed the ‘kill functionality,’ stating that firms should “maintain kill functionality to disable trading activity to protect the integrity of the market.

“Compliance staff must also maintain contact with the individual at the firm who is able to cancel immediately any or all of the firm’s unexecuted orders.”

Megan Butler, Director of Supervision – Investment, Wholesale and Specialist at the FCA, said: “This report is relevant for all firms developing and using algorithmic trading strategies in wholesale markets. Firms should consider and act on its content in the context of good practice for their business.”

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13 Feb 2018
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US: Deutsche Bank fined for misleading customers

The United States’ Securities and Exchange Commission (SEC) has penalised Deutsche Bank and a trading desk executive after if found that traders and sales people made false and misleading statements while negotiating bond prices.

The bank also did not have compliance procedures in place designed to detect the misconduct that increased the firm’s profits on commercial mortgage-backed securities (CMBS) transactions, an investigation found.

Misled customers ended up overpaying for the securities, the SEC explained.

A senior official at the trading desk also did “did not take appropriate action after becoming aware of false statements made to customers by traders under his supervision.”

To settle the charges, Deutsche agreed to pay a $750,000 penalty and reimburse customers, distributing over $3.7 million to this effect. The trading executive also agreed to pay a $165,000 fine and to be suspended from the securities industry for 12 months.

Deutsche Bank said it “cooperated extensively with the SEC’s investigation and took appropriate disciplinary action, including termination in some instances.”

Daniel Michael, chief of the SEC Enforcement Division’s Complex Financial Instruments Unit, said: “We’re committed to ensuring that firms communicate accurate pricing information when transacting with customers in opaque markets.

“Deutsche Bank and [its senior trading official] failed to keep watch as traders generated profits for the firm at the expense of CMBS customers by misrepresenting purchase prices and other important details.”

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Gibraltar creating ‘world’s first rules’ for initial coin offerings

Gibraltar has started working on what it says are the world’s first rules for initial coin offerings, following feedback on a consultation on digital assets.

A bill is expected to be considered by Parliament in the second quarter of this year.

The British overseas territory has already introduced a new law requiring firms that use distributed ledger technology (DLT), or blockchain, to apply for licences from the regulator.

In the United Kingdom and elsewhere, ICOs and the trading of cryptocurrencies have come under strong attack from financial regulators and senior figures for their price volatility and associated risks.

A the Gibraltar Financial Services Commission (GFSC) spokesman said Gibraltar is “the first in the world” to come up with rules for an ICO.

“It’s mainly about size. We still share the same principles as the bigger states [in terms of security and risk], however as a smaller jurisdiction we are more flexible [with drafting laws] and firms have greater access to the regulator.”

The government and its regulator GFSC, are working on legislation relating to promoting and selling tokens by people connected with Gibraltar, as well as rules for secondary market activities relating to tokens, a GFSC statement explained.

Legislation is also expected to include the provision of investment advice, in or from Gibraltar relating to tokens.

The development comes after the government sought the views of local stakeholders via Gibraltar’s Finance Centre Council, an umbrella organisation comprising local professional associations.

Siân Jones, senior advisor on DLT at the GFSC said, “Token regulation is the natural progression following the regulation of DLT Providers, being vital to the protection of consumers.

“One of the key aspects of the token regulations is that we will be introducing the concept of regulating authorised sponsors who will be responsible for assuring compliance with disclosure and financial crime rules.”

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Ex-presidential confidante linked to Samsung bribery case jailed 20 years

AP – A confidante accused of collaborating with South Korea’s former president for personal gain was sentenced Tuesday to 20 years in prison for bribery and other crimes in a political scandal that triggered the country’s first presidential impeachment and the conviction of an heir to the Samsung empire.

The Seoul Central District Court also sentenced the chairman of the Lotte Group, South Korea’s fifth-largest conglomerate, to 2 ½ years in prison for bribery in the same case.

Former President Park Geun-hye was impeached last March and removed from office in disgrace. She is standing trial on more than a dozen criminal charges, and the case against her close friend could hint at the penalty Park could face if convicted.

The court convicted Choi Soon-sil of abuse of power, bribery and other crimes and fined her 18 billion won ($17 million). Choi left the courtroom quietly after the sentencing without showing any emotion.

Among her crimes was pressuring major companies to donate large sums to foundations under her control and receiving bribes from Samsung and Lotte.

The court said Choi’s crimes were grave given how they led to the impeachment of a president and disappointed the public.

Choi’s lawyer, Lee Kyung-jae, said she would appeal. At her final court hearing in December, Lee called the accusations a complete fabrication by politicians, civic groups, media and politically motivated prosecutors who wanted to overthrow Park’s government, according to Yonhap News agency.

In the Lotte case, the court said Chairman Shin Dong-bin offered 7 billion won ($6.5 million) in payments to Choi’s foundations to curry favors such as winning a state license to open a duty-free shop and to strengthen his control over the group. Lotte has interests in retail, confectionary and many other businesses.

The sentencing sent a shockwave through the South Korean business community, which had been relieved to see an appeals court release Samsung heir Lee Jae-yong from prison last week on a suspended sentence with some of his convictions overturned.

In a third case Tuesday, the court sentenced one of Park’s former senior aides, Ahn Jong-beom, to six years in prison for abuse of power.

Choi was largely unknown to the South Korean public until a series of revelations in late 2016 disclosed how she allegedly pulled government strings from the shadows, editing presidential speeches and wielding influence over government personnel even though she held no official government position.

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‘Whistleblower’ alleges VIX manipulation, urges regulatory probe

A scheme to manipulate Wall Street’s fear gauge, VIX, poses risk to the entire equity market and costs investors hundreds of millions of dollars a month, a law firm on behalf of an “anonymous whistleblower” told U.S. financial regulators and urged them to investigate before additional losses are suffered.

The Washington-based law firm which represents an anonymous person who claims to have held senior roles in the investment business, told the Securities and Exchange Commission and Commodity Futures Trading Commission on Monday that he discovered a market manipulation scheme that takes advantage of a widespread flaw in the Chicago Board Options Exchange (CBOE) Volatility Index (VIX).

The CBOE Volatility Index measures the cost of buying options and is the most widely followed barometer of expected near-term stock market volatility.

“The flaw allows trading firms with advanced algorithms to move the VIX up or down by simply posting quotes on S&P options and without needing to physically engage in any trading or deploying any capital,” it said in a letter.

Those bets against volatility unraveled last week as the benchmark S&P 500 and the Dow Jones Industrial Average suffered their biggest respective percentage drops since August 2011.

Investors using exchange-traded products linked to the VIX were pummeled and two banks, Credit Suisse Group and Nomura Co Ltd, said they would terminate two exchange traded notes that bet on low volatility in stock prices.

– By Rama Venkat Raman, Reuters, 13 February 2018

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Firms on Caribbean island chain own 23,000 UK properties

A quarter of property in England and Wales owned by overseas firms is held by entities registered in the British Virgin Islands, BBC analysis has found.

The Caribbean archipelago is the official home of companies that own 23,000 properties – more than any other country.

They are owned by 11,700 firms registered in the overseas territory.

The finding emerged from BBC analysis conducted of Land Registry data on overseas property ownership.

The research found there are around 97,000 properties in England and Wales held by overseas firms, as of January 2018.

It adds to concerns that companies registered in British-controlled tax havens have been used to avoid tax.

Close behind the British Virgin Islands (BVI), which has a population of just 30,600, are Jersey, Guernsey and the Isle of Man.

Of the properties owned by overseas companies in England and Wales, two thirds are registered to firms in the British Virgin Islands, Jersey, Guernsey and the Isle of Man.

Many foreign UK property owners are also officially headquartered in Hong Kong, Panama and Ireland.

The analysis provides a new picture of ownership of property by overseas companies in England and Wales following a decision last November to make the database public and free to access.

It found:

 Close to half (44%) of all properties owned by overseas companies in England and Wales are located in London

 More than one in ten (11,500) properties owned by overseas companies in England and Wales are located in the City of Westminster

 More than 6,000 properties owned by foreign companies are in the London borough of Kensington and Chelsea.

Among those entries in the database that disclosed a price, the most expensive was the former headquarters of the Metropolitan Police, New Scotland Yard, at 8-10 Broadway.

The site was purchased by the Abu Dhabi Financial Group in 2014 for £370m from the Mayor of London’s office. But it is officially owned by a Jersey-based company called BL Development.

The 1967 multi-storey block has now been demolished to make way for “a luxury collection of one to five bedroom apartments across six architecturally striking towers”.

These range in price from £1.5m to more than £10m.

The leasehold of Admiralty Arch, the former government building off Trafalgar Square that straddles one end of The Mall, was sold to hotel developer Prime Investments for £141m.

It is registered to a Guernsey-based entity, Admiralty Arch Hotels Ltd.

– By Andy Verity, Economics correspondent, BBC

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12 Feb 2018
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Hackers target UK government websites to mine cryptocurrency

A number of UK government websites have been targeted by hackers looking to use them to secretly mine or generate virtual money.

As part of the operation, anyone who visited a website with the Browsealoud library embedded ran a mining code on their computer inadvertently, helping generate money for the hackers, the National Cyber Security Centre (NCSC) explained.

Browsealoud is a website plug-in used to help blind people access the internet.

“No money was taken from users themselves, but the mining code performed computationally intensive operations that were used to earn the cryptocurrency. These operations may have affected the performance and battery life of the devices visiting the site,” the NCSC said.

NCSC technical experts examined data involving incidents of the malware being used to illegally mine cryptocurrency, a spokesman explained.

“The affected service was taken offline, largely mitigating the issue,” and there was also “nothing to suggest that members of the public are at risk,” the spokesman said.

The attackers are understood to have targeted UK and other websites around the world.

Earlier on Monday, the website for the Information Commissioner’s Office (ICO) was down.

In an emailed statement later, an ICO spokesperson said: “The ICO’s website is up and running again following a problem with the Browsealoud feature on Sunday.

“The website was taken down as a precautionary measure whilst we investigated the incident, which did not involve the access or loss of any personal data,”

The spokesperson said the Browsealoud service has been temporarily removed from the website whilst further work is undertaken.

Browsealoud maker TextHelp said in its online statement: “Phase One of the company’s internal technical investigation is complete and a data security incident action plan is underway. The criminal investigation continues and Texthelp is working with the National Crime Agency and The National Cyber Security Centre to pursue the investigation further.”

In May last year several trusts in England were hit by WannaCry ransomware, which lead to the cancelation of thousands of NHS appointments.

In October, the National Audit Office (NAO) suggested that NHS trusts were left vulnerable because cyber security recommendations were not acted upon soon.

“The Department [of Health] was warned about the risks of cyber attacks on the NHS a year before WannaCry and although it had work underway it did not formally respond with a written report until July 2017,” the NAO report said.

– Irene Madongo

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Australia: Inquiry into misconduct in banking sector begins

A long-awaited public hearing into wrongdoing in Australia’s financial services sector has begun in Melbourne.

On Friday the Royal Commission said the inquiry would begin on Monday and published basic information about the procedures for leave to appear and arrangements for witnesses.

The hearing is a key development for the sector which has been bit by issues such as financial crime, customer exploitation and other allegations of misconduct.

Attention is expected to focus on the country’s ‘Big Four’ main banks, including the Commonwealth Bank of Australia which faces numerous charges of money laundering and terrorism brought against it by regulator Austrac.

In December it admitted to a number of compliance failings, agreeing that it was late in filing around 50,000 threshold transaction reports which it linked to a systems-related error, alongside a few other issues.

“We take our anti-money laundering and counter-terrorism financing (AML/CTF) obligations extremely seriously. We deeply regret any failure to comply with these obligations,” the bank said.

Addressing issues of misconduct could prove useful for the financial services sector, which contributes an estimated nine per cent to the Australian economy, making it the largest income generator.

On Monday, Anna Bligh, CEO, Australian bankers’ association, said in an interview with ABC National Radio: “Banks have said from the outset that they will be transparent and they will cooperate fully with the Commission.

“Last week all of the major banks indicated that they would not rely on any confidentiality agreements that had been previously signed with either customers or staff and all banks have disclosed cases to the Commission in the last four to five weeks through submissions regardless of whether they’re subject to confidentiality and all non major banks are currently giving consideration to waiving those clauses and a number have already decided to do so.”

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UK: Barclays faces new Qatar charge from Serious Fraud Office

The Serious Fraud Office has brought a further charge against Barclays regarding its capital raising arrangements with Qatar during the financial crisis.

On Monday it charged the lender with obtaining financial assistance unlawfully, following-on June last year when it charged it and four individuals with conspiracy to commit fraud and the provision of unlawful financial assistance contrary to the Companies Act 1985.

During the 2008 financial crisis, the British bank turned to Qatar for financial assistance. It took out a multi-billion dollar loan from Qatar Holdings, which is owned by the State of Qatar, to avoid a UK government bailout.

In turn, it issued a loan to Qatar.

An SFO spokesman said Monday’s charge is against Barclays Bank Plc, the operating firm, whereas June’s charges were against Barclays Plc, the holding company, and the individuals.

In a statement, Barclays said on Monday that it intends to defend the respective charges brought against it.

“Barclays does not expect there to be an impact on its ability to serve its customers and clients as a consequence of the Charge having been brought,” it added.

London-based Philip Marshall QC at Serle Court Chambers said: “It’s surprising that the SFO brought another charge against the operating company this time round. The statutory provision pertaining to obtaining financial assistance unlawfully is usually used to protect creditors. For example, liquidators can use it for the benefit of the creditors who might suffer if there are problems. But in this case, if it results in a fine or penalty, then the statutory provision is not being used to benefit creditors but quite the opposite.”

The SFO first announced it was opening its investigation in August 2012.

In June last year it explained: “The charges relate to Barclays Plc’s capital raising arrangements with Qatar Holding LLC and Challenger Universal Ltd, which took place in June and October 2008, and a US$3 billion loan facility made available to the State of Qatar acting through the Ministry of Economy and Finance in November 2008.”

The individuals charged with conspiracy to commit fraud by false representation in relation to the capital raising include former Barclays CEO John Varley; Roger Jenkins, former executive chairman of Investment Banking; Thomas Kalaris, former chief executive of Barclays Wealth and Investment Management, and Richard Boath, former Barclays European Head of Financial Institutions Group.

Varley and Jenkins were also charged with unlawful financial assistance contrary to s151 of the Companies Act 1985.

– Irene Madongo

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Ritz-Carlton corruption purge Saudi hotel reopens

A luxury Saudi hotel that served as a detention centre for dozens of princes and top officials held in a corruption drive since November has reopened.

Reception staff at the five-star Ritz-Carlton in Riyadh told the BBC the hotel was admitting guests.

More than 200 princes, ministers and businessmen had been held there and in other hotels.

At the end of January the Saudi prosecutor general’s office said more than $100bn (£72bn) had been recovered.

It followed financial settlements agreed with those being held.

The prosecutor general’s office said 56 people were still being held at the time, although some reports said the remaining detainees had been moved from the Ritz-Carlton to a prison.

The detentions came following the formation of a new anti-graft body headed by the powerful Crown Prince Mohammed bin Salman.


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North Korea says unable to pay U.N. dues, blames sanctions

North Korea is unable to pay its share of the 2018 U.N. budgets because of international sanctions on its foreign exchange bank and has asked a senior U.N. official for help, the country’s U.N. mission said in a statement.

North Korea’s U.N. Ambassador Ja Song Nam met with U.N. management chief Jan Beagle on Friday to ask the world body to help secure a bank transaction channel so Pyongyang could pay the nearly $184,000 it says it owes for 2018.

U.N. member states are required to pay assessed contributions to the world body’s regular and peacekeeping budgets, as well as a budget for international tribunals.

U.S. and U.N. sanctions on the Foreign Trade Bank, North Korea’s primary foreign exchange bank, were preventing the country ”from honoring its obligation as a U.N. member state by hindering even normal activities such as payment of the U.N. contribution,” the North Korean mission said in a statement late on Friday.

”It also shows how cruel and uncivilized the sanctions are,” it said.

If it is unable to make payment “it is crystal clear” the blame lies with the United States and “its followers,” the statement said.

The United States sanctioned the Foreign Trade Bank in 2013, while the U.N. Security Council blacklisted the bank last August.

– By Michelle Nichols, Reuters, 10 February 2018

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Iceland expected to use more energy on crypto-mining than homes

AP – Iceland is expected to use more energy “mining” bitcoins and other virtual currencies this year than it uses to power its homes.

With massive amounts of electricity needed to run the computers that create bitcoins, large virtual currency companies have established a base in the North Atlantic island nation blessed with an abundance of renewable energy.

The new industry’s relatively sudden growth prompted lawmaker Smari McCarthy of Iceland’s Pirate Party to suggest taxing the profits of bitcoin mines. The initiative is likely to be well received by Icelanders, who are skeptical of speculative financial ventures after the country’s catastrophic 2008 banking crash.

“Under normal circumstances, companies that are creating value in Iceland pay a certain amount of tax to the government,” McCarthy told The Associated Press. “These companies are not doing that, and we might want to ask ourselves whether they should.”

The energy demand has developed because of the soaring cost of producing and collecting virtual currencies. Computers are used to make the complex calculations that verify a running ledger of all the transactions in virtual currencies around the world.

In return, the miners claim a fraction of a coin not yet in circulation. In the case of bitcoin, a total of 21 million can be mined, leaving about 4.2 million left to create.

As more bitcoin enter circulation, more powerful computers are needed to keep up with the calculations — and that means more energy.

The serene coastal town of Keflavik on Iceland’s desolate southern peninsula has over the past months boomed as an international hub for mining bitcoins and other virtual currencies.

Local fishermen, chatting over steaming cups of coffee at the harbor gas station, are puzzled by the phenomenon, which has spawned oversize construction sites on the outskirts of town.

Among the main attractions of setting up bitcoin mines at the edge of the Arctic Circle is the natural cooling for computer servers and the competitive prices for Iceland’s abundance of renewable energy from geothermal and hydroelectric power plants.

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Singapore: Regulator issues guidance on technology, on-boarding at banks

The Monetary Authority of Singapore (MAS) has published guidance on the use of technology when signing up customers at banks and other financial firms.

The regulator, which expects financial institutions (FIs) to implement robust controls when on-boarding customers in order to prevent money laundering and terrorism financing, already allows some technology to be used in this process.

FIs are permitted to conduct non-face-to-face verification of a client’s identity, for example, provided there are ‘adequate’ measures in place to prevent impersonation.

Additional measures will include biometric identification, real-time video conferencing, and secure digital signature using Public Key Infrastructure (PKI)-based credentials, MAS explained.

“MAS will also allow the use of MyInfo for NFTF customer identification and verification,” the regulator said.

“FIs using MyInfo will also not be required to separately obtain a photograph of the customer. The use of MyInfo will streamline customer due-diligence checks across the financial industry. It will improve the quality of risk management while saving time and costs.”

Ho Hern Shin, Assistant Managing Director (Banking & Insurance), MAS, said, the regulator encourages the use of technology that helps to “increase efficiency and improve the customer on-boarding experience, while safeguarding against money laundering and terrorism financing risks.

“FinTech firms can also capitalise on the MyInfo platform, with customer consent, to develop innovative financial solutions for FIs to enhance customer experience.”

MAS has generally sought to strike a balance between encouraging the use of technology and also maintaining sound regulatory standards across the banking sector.

Last year it encouraged more fintech experimentation in its ‘sandbox’ programme, but said it should also include appropriate safeguards.

“The regulatory sandbox will enable FIs as well as FinTech players to experiment with innovative financial products or services in the production environment but within a well-defined space and duration,” MAS said at the time.

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EU committee to investigate Paradise Papers

The European Union Parliament has agreed to launch a new inquiry into financial crime that will investigate the Paradise Papers as part of its mandate.

Called TAXE 3, the special committee will comprise 45 members and run for a year, beginning this month.

Previous committees have looked at the LuxLeaks (TAXE1 and TAXE2) and Panama Paper (PANA) scandals.

The new committee will “assess how EU VAT rules were circumvented in the framework of the Paradise Papers” and evaluate “the impact of VAT fraud and administrative cooperation rules in the EU, while strongly respecting ongoing work in the ECON committee;” said a copy of the text adopted this week (7 February), and linked to the website of former PANA member Sven Giegold MEP.

The German MEP said: “Parliament’s pressure for tax justice in Europe is being stepped up. We must look to the EU Commission and the Member States to see if they are implementing the European Parliament’s previous recommendations.

“The former special committees have successfully contributed to the progress of tax cooperation in Europe in recent years. Unfortunately, the scandal surrounding the Paradise Papers has had no new political consequences either in the EU or in the Member States.”

TAXE 3 will also evaluate tax evasion and tax avoidance related to the digital economy and “assess national schemes providing tax privileges for new residents or foreign income (such as citizenships programs).”

Belgian MEP Philip Lamberts, who is also the co-president of the Greens/EFA group, said: “The Paradise Papers showed that there is a clearly unfinished work to do if we are to secure tax justice in Europe.”

“The European Parliament’s inquiry committee into the Panama Papers has already produced a strong action plan for clamping down on tax dodging, including many ideas from the Greens/EFA group. This new committee can now make sure this progress is not lost and that these much needed measures are implemented by the Commission and by governments across the EU.”

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UK: FCA issues first Serious Crime Prevention Order, bans illegal lender

The Financial Conduct Authority (FCA) has issued its first Serious Crime Prevention Order (SCPO), barring illegal money lender Dharam Prakash Gopee (64) from operating a money lending scheme again.

SCPOs are civil orders to prevent serious crime, the breach of which is punishable by up to five years in jail and an unlimited fine.

Gopee was also sentenced to three and a half years jail for his crimes, and proceedings have now begun at Southwark Crown Court to confiscate his assets.

Mark Steward, Director of Enforcement and Market Oversight at the FCA, said: “Today’s decision also imposes the FCA’s first Serious Crime Prevention Order which will severely inhibit Mr Gopee’s ability to reoffend and should protect consumers in the future.

During a period of four years, Gopee conducted a “a horrid pattern of exploitation,” loaning money to vulnerable consumers at high prices and securing the loans against their property.

He also sought to take possession of their property if they failed to pay up, the FCA explained.

“His own loan books showed that he issued approximately £1 million of new loans and took in at least £2 million in payments from old and new consumers, none of whom were aware that did not have a licence,” the watchdog explained.

Gopee, who was refused a consumer credit licence by the OFT, and was not authorised by the FCA either, still went ahead with his business operations.

He had already been banned from acting as a director in 2016 and he was also the subject of a restraint order obtained by the FCA in June 2015 under the Proceeds of Crime Act 2002.

Judge HHJ Beddoe, who sentenced Gopee, noted that he was aware of the regulator’s serious concerns, but ignored them, deciding instead to “ … deliberately flout the law” ignoring the fact that he had lost his licence.

Gopee also endeavoured to enforce agreements he knew were unenforceable but that debtors did not, the Judge explained, and continued to pressurise debtors with demands for payment, threatening court action that he knew could not be sustained.

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Ex-Credit Suisse ‘star’ jailed for five years over ‘clever fraud’

Former Credit Suisse client adviser Patrice Lescaudron was sentenced to five years imprisonment by a Geneva court on Friday for abusing the trust of clients and putting in place a fraudulent scheme that brought him tens of millions of francs.

Lescaudron, who is French, appeared in court for the verdict wearing a gray fleece sweatshirt emblazoned with Ferrari, the name of the Italian sports car he was said to have purchased with the money he amassed.

Judge Alexandra Banna said the ex-banker was guilty of serious fraud and forgery in his handling of former clients, including former Georgia Prime Minister Bidzina Ivanishvili and Russian oligarch Vitaly Malkin, “over a very long period of eight years”.

Reading the three-judge tribunal’s verdict, she said he had caused losses totaling 143 million Swiss francs ($152 million) and made personal gains of 30 million francs.

The adviser was “considered as a star” on the bank’s Russia desk, but had “fooled the bank and the client” through a “clever fraud” in which he “copy-pasted signatures on documents so as to falsify transfer orders”, Banna said.

Lescaudron, 54, admitted in court to having falsified trades and hidden mounting losses.


Lawyers for billionaire Ivanishvili have said that fraudulent activities by the adviser lost the former Georgian leader hundreds of millions of dollars.

Zurich-based Credit Suisse has said Lescaudron violated internal rules and Swiss law and worked to conceal these actions from the bank.

“The former relationship manager demonstrated a high degree of criminal energy, violating internal controls and rules as well as Swiss law and concealing his criminal activities from Credit Suisse colleagues,” the bank said in January.

“Two years of criminal investigation have not revealed any indication that the former relationship manager was helped with his criminal actions by other Credit Suisse employees.”

But lawyers for Ivanishvili have said Lescaudron was not a lone wolf.

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Zuma drama overshadows South Africa’s Mandela commemorations

AP – The drama over whether South African President Jacob Zuma soon will leave office because of corruption allegations is overshadowing commemorations of the centenary of Nelson Mandela’s birth.

Top leaders of the ruling African National Congress won’t take part in events leading up to a big rally Sunday that will be addressed by Deputy President Cyril Ramaphosa, the party said Friday.

It said the leaders, who have participated in discussions on Zuma’s exit, dropped out because of “various other commitments.”

The timing and circumstances of the early exit of Zuma, who is under intense pressure to resign, pose a challenge for the party that was the main anti-apartheid movement during white minority rule and has led South Africa since the first all-race elections in 1994.

The ANC has lost moral stature because of the president’s scandals but Ramaphosa, Zuma’s expected successor and new party leader, appears intent on managing an exit for the 75-year-old president that minimizes internal divisions.

Ramaphosa this week has held discussions with Zuma on a power transition and said he anticipates a prompt resolution, though critics accused the deputy of making a mockery of South African democracy with confidential talks that have left the country in political limbo.

Speculation is swirling in the absence of any information about the talks; some wonder whether Zuma is pushing for immunity from prosecution in exchange for his resignation.

South Africans are hoping for clarity by the time Ramaphosa speaks in Cape Town on Sunday, the 28th anniversary of Mandela’s release from prison.

Jailed for 27 years, the anti-apartheid leader addressed an ecstatic crowd from the balcony of Cape Town’s City Hall on Feb. 11, 1990 and was elected as South Africa’s first black president four years later.

He died in 2013 at the age of 95.

Ramaphosa, an anti-apartheid activist who held the microphone for Mandela during the City Hall speech, was a key negotiator during the transition to democracy in the early 1990s.

– By Christopher Torchia, AP

Photo – GovernmentZA

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Sanctions: IOC clears Iran, N.Korea for Samsung phone gifts

Iranian and North Korean athletes at the Pyeongchang 2018 Olympic Winter Games will receive Samsung mobile phones, organizers said on Thursday, after Iran summoned South Korea’s ambassador over reports its athletes would not get the gifts.

News reports said 4,000 of the latest $1,100 Samsung smartphones were being given to athletes attending the Winter Games, but athletes from Iran and North Korea would be excluded because of sanctions against the two countries.

Responding to the furor, the International Olympic Committee (IOC) said athletes from both countries would receive the phones but that the North Koreans would be asked not to take the devices home.

“The IOC will provide mobile phones to all athletes of all countries participating at the Olympic Winter Games Pyeongchang 2018.

These phones contain essential logistical and competition information for the athletes,” an IOC spokesperson said.
“Regarding Iran, we can confirm that all participants will be able to keep the phones. Regarding North Korea, all participants are requested not to take the phones back to their home country,” the spokesperson added.

An Olympics organizer told Reuters last week that South Korea was unsure if North Korean athletes would be eligible to receive the phones because of U.N. Security Council sanctions.

The official declined to elaborate, but experts say the phone could violate a U.N. ban on the sale of luxury items and electronics with a potential “dual” commercial and military use.


Iran summoned South Korea’s ambassador to Tehran to the Foreign Ministry, to explain the phone snub.

“If Samsung does not apologize for its unwise action, this will greatly affect Samsung’s trade relations with the Islamic Republic of Iran”, the state news agency IRNA quoted Foreign Ministry spokesman Bahram Qasemi as saying.

A spokesman for Seoul’s foreign ministry spokesman did not respond to requests for comment.

– Reuters (Dubai newsroom), 8 February 2018

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British regulator FCA addresses questions on data rules, GDPR

The Financial Conduct Authority (FCA) and Information Commissioner’s Office (ICO) have published a brief update on the upcoming EU General Data Protection Regulation (GDPR), addressing some issues raised by firms.

GDPR comes into effect in the United Kingdom on 25 May this year, however, firms apparently still need clarity about the new rules.

An Ipsos Mori January 2018 survey on GDPR showed about 38 per cent of businesses, and 44 per cent of charities, say they have heard about it.

Among those aware of GDPR, ‘just over a quarter of businesses and of charities made changes to their operations in response to GDPR’s introduction.’

Addressing questions about whether companies will be able to comply with both the GDPR and FCA rules, the watchdog said GDPR does not impose rules which are incompatible with those of its Handbook, but instead, the two have a number of requirements in common.

“While the ICO will regulate the GDPR, complying with the GDPR requirements is also something the FCA will consider under their rules, for example, the requirements in the Senior Management Arrangements, Systems and Controls (SYSC) module,” the FCA said, “as part of their obligations under SYSC, firms should establish, maintain and improve appropriate technology and cyber resilience systems and controls.”

Firms must also be able to produce evidence to demonstrate the steps that they have taken to comply, the FCA explained.

It also said that it would review a Memorandum of Understanding it has with the ICO, to ensure the agreement is still fit to address future collaboration.

“The FCA and ICO are working closely together in preparation for the GDPR, and recently jointly hosted a GDPR Roundtable with firms and industry bodies to listen to industry concerns. One example of how we are working together is innovation, where the ICO is providing tailored input to the FCA’s Innovation Hub,” said an FCA statement on Thursday.

Both organisations said they will seek to continue to jointly address concerns firms raise and support firms’ preparations for the introduction of GDPR.

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EU lawmakers urge sanctions for President Maduro, Venezuela officials

Members of the European Parliament (MEPs) have called for the bloc to extend restrictive measures against Venezuela to include President Nicolas Maduro, his deputy, army chiefs and other top government officials.

Current EU sanctions include an arms embargo, which was imposed in November 2017, and travel bans and asset freezes against seven Venezuelan individuals, imposed last month in response to ‘non-compliance with democratic principles, the rule of law and democracy.’

The lawmakers highlighted concerns with issues pertaining to human rights and also condemned Venezuela’s decision to expel and declare Spain’s Ambassador to Caracas “persona non grata.”

Measures should be “extended against those mainly responsible for the increased political, social, economic and humanitarian crisis, namely the President, the Vice-President, the Minister of Defence, members of the high military command, and members of their inner circles”, they said in a resolution approved by 480 votes to 51 with 70 abstentions.

MEPs also condemned Venezuela’s National Constituent Assembly’s decision to call early presidential elections by the end of April 2018, pointing out that “the Venezuelan Supreme Court’s recent ruling excludes MUD opposition party representatives from the upcoming elections and that many potential candidates will be unable to run for election because they are exiled, subject to administrative disqualifications, imprisoned or under house arrest.”

“Only elections based on a viable electoral calendar, agreed in the context of the national dialogue with all relevant actors and political parties, and respecting equal, fair and transparent conditions of participation (…) will be recognised by the EU,” the MEPs said.

Parliament also called on Venezuelan authorities “to allow unimpeded humanitarian aid into the country as a matter of urgency.”

The United States has already imposed restrictions, such as asset freezes, on Maduro and US firms are prohibited from doing business with him.

Venezuela has been looking at its options as sanctions bite, meanwhile, and it is also reportedly planning to launch its own oil and gas-backed cryptocurrency called the petro.

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Rabobank to pay $369m over Mexican dirty cash, regulatory breaches

Rabobank has pleaded guilty to planning to defraud the United States and violating banking rules, after it emerged that it processed over $360 million in illicit funds and tried to conceal this from the regulator.

As a result, it will forfeit around $369 million for allowing the transactions to go through its systems without adequate Bank Secrecy Act (BSA) or anti-money laundering (AML) reviews.

Rabobank (Rabobank National Association), which is the California subsidiary of the Netherlands-based Coöperatieve Rabobank U.A, admitted that its weak AML programme had allowed hundreds of millions of dollars in untraceable cash, sourced from Mexico and elsewhere, to be deposited into its rural branches in Imperial County and shifted around from there. It did not notify regulators of the matter.

Further, Rabobank executives, who knew of these failures, sought to hide the issues in order to deceive regulators, hoping to avoid regulatory sanctions that had previously been imposed on Rabobank in 2006 and 2008 for nearly identical failures, the US Department of Justice (DoJ) said.

Acting Assistant Attorney General Cronan said: “When Rabobank learned that substantial numbers of its customers’ transactions were indicative of international narcotics trafficking, organized crime, and money laundering activities, it chose to look the other way and to cover up deficiencies in its anti-money laundering program.”

“Worse still, Rabobank took steps to obstruct an examination by its regulator into those same deficiencies.”

When the Department of the Treasury’s Office of the Comptroller of the Currency (OCC) launched its periodic examination of Rabobank in 2012, Rabobank, acting through three bosses, agreed to knowingly obstruct the OCC’s examination, the DoJ explained.

In a statement issued on Wednesday, Mark Borrecco, chief executive officer of Rabobank, said: “Settling these matters is important for the bank’s mission here in California,” and “reinforced with strong levels of capital and liquidity, and enhanced internal controls and risk management functions, we are committed to growing with our customers for years to come.”

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08 Feb 2018
Published in News

France pushing Iran business ties despite nuclear deal ‘limbo’

France will encourage its firms to do business in Iran despite uncertainty over a landmark 2015 nuclear deal putting the business environment in “limbo”, a senior French finance official said on Thursday.

Along with other European countries, France has been looking to increase trade with Iran since Paris, Washington and other world powers agreed to lift most economic sanctions in 2016 in exchange for limitations on Tehran’s nuclear program.

But U.S. President Donald Trump on Jan. 12 vowed to restore U.S. sanctions unless France, Britain and Germany change what he calls the “worst deal ever” to his liking, effectively putting it on life support until mid-May.

“We are encouraging companies to keep doing business in Iran,” Joffrey Celestin-Urbain, director of bilateral relations at the finance ministry told a Euromoney Iran conference.

“We are in limbo on the international scene. Nobody knows what will happen after May. This is the uncertainty our French companies are facing and this is something you have to take for granted if you want to do business in Iran.”

France, which has had close business ties with Iran since before the fall of the Shah in 1979 and operates large factories there including Renault and PSA plants, has sought to deepen trade ties since sanctions were lifted.

French exports to Iran for the first 11 months of 2017 rose 120 percent to 1.29 billion euros ($1.6 billion) and imports grew 80 percent to 2.16 billion euros, Celestin-Urbain said.

The short-term priority was to keep trade simple and complete a scheme this year to offer euro-denominated credits to Iranian buyers of French goods, he said, a move that would keep bilateral trade outside the reach of U.S. sanctions.

The head of state-owned investment bank Bpifrance, which is putting the plan together, said he was confident the scheme, which had a pipeline of deals worth 1.5 billion euros, could start operating by end-May or early-June.

– By John Irish, Parisa Hafezi, Reuters, 8 February 2018

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