KYC360 Weekly Roundup - 23rd Dec 2022

Published on Dec 23, 2022

Qatargate Corruption Scandal


Without wishing to detract from arguably the greatest football World Cup final of all time, the recent EU corruption allegations are just the latest in a long line of scandals that have dogged the tournament. The most recent outrage, in which MEPs have been accused of participating in illicit lobbying activities on behalf of Qatar, is only the latest in a series of influence scandals. It has sent shockwaves throughout the EU parliament and reveals the uncomfortable truth that money does buy influence in the European Union. 

With legislation and policies in mind, the most recent updates appear to be following the rather worrying trend of reversing, blocking or introducing initiatives that will ultimately benefit the world’s financial criminals. 

We also deliver news from the crypto sector, provide the latest sanctions updates, and delve into the world of money laundering & bribery. And to wrap up this week’s Roundup we offer a selection of newsworthy items from around the world.

Everything you need to know about the Qatar FIFA World Cup controversy 

Ever since Qatar was awarded the tournament in 2010, it has faced mounting criticism. From the bribery and corruption allegations that surrounded the bidding process, to the country’s human rights record, treatment of women, the LGBTQ+ community, and migrant workers. All of which have been roundly criticised by activists, politicians, and football associations.

The EU’s Qatar bribery scandal explained 

The European Union is embroiled in a scandal involving alleged influence peddling through a European Parliament vice president, bags of cash, a nonprofit organisation, and Qatar, host of the 2022 FIFA World Cup. German Foreign Minister Annalena Baerbock has stated that Europe’s credibility is at stake, so here’s what you need to know about ‘Qatargate’. 

Greek MEP one of four suspects charged over Qatar bribery after 1.5m seized 

Eva Kaili, a Greek MEP, has been arrested along with three others on charges of corruption and money-laundering after prosecutors seized €1.5m from various properties. Kaili is accused of accepting money and gifts from Qatar in exchange for influencing European policy in Doha’s favour and has been stripped of her role as European Parliament Vice-President. Prosecutors have long suspected the Gulf state of influencing the economic and political decisions of the parliament and the bribery investigation could represent one of the biggest corruption scandals in the parliament’s history. 

MEP at centre of Qatar corruption scandal defended Qatar’s labour practices 

Just a few weeks ago, the European Parliament adopted a resolution on human rights in Qatar, asking the nation and FIFA to extend compensation for families of workers who suffered while building the World Cup infrastructure. There was a broad majority in favour of the resolution and only a few no votes, most notably Greek MEP and former Parliament Vice President Eva Kaili who argued that Qatar is a “frontrunner in labour rights”.

“Still some here are calling to discriminate [Qatar]… they bully them and accuse everyone who talks to them or engages of corruption.” 
Eva Kaili, Greek MEP and Parliament Vice President currently under investigation for corruption.

Qatar scandal shows EU has a corruption problem 

The recent outrage, in which a current MEP and a former MEP are reportedly accused by the Belgian police of participating in illicit lobbying activities on behalf of Qatar, is just the latest in a series of influence scandals to shake the EU capital. 

Qatargate scandal: how insider corruption, influence-peddling and money-politics can erode trust 

If the allegations against Greek MEP Eva Kaili and others is proved to be true, it constitutes a huge betrayal of public trust and good news for the world’s autocrats. Furthermore, the scandal will undoubtedly damage the EU, which likes to lecture the world on democratic values, including standards in public life.

EU corruption accusations threatens Qatar gas deals 

Qatar has condemned the corruption investigation by Belgium and the suspension of the Gulf state’s access to the EU parliament, stating that the actions could “negatively” impact ties and natural gas supplies. The allegations could derail efforts to bring gas prices under control, as EU countries have turned to Qatar in a bid to diversify energy supplies in order to make up for shortfalls amid Russia’s continuing invasion of Ukraine.

Qatar’s influence campaigns extend beyond the EU 

There’s nothing inherently wrong with deploying capital for economic growth, but Doha is also seeking to gain sway. The allegations that Qatar has tried buy influence in Brussels isn’t the only indication of Qatar’s efforts to extend its influence worldwide. Since 2016 the tiny Gulf emirate has spent $198 million to buy influence inside Washington, ranking it fourth behind the much bigger China, Japan and South Korea.


Financial_ServicesMoney Laundering, Fraud & Corruption

Danske Bank to pay €470m in Denmark over international money laundering scandal 

The Danish financial watchdog has imposed a fine of 3.5 billion kroner (470m) on Danske Bank, just hours after the bank agreed to pay $2bn (€1.9bn) to resolve fraud investigations against US banks. Prosecutor Jens-Christian Bülow said that it was “the largest fine ever imposed” in a Danish money laundering case and in addition to the fine, Denmark has confiscated 1.25bn kroner (€168m) in profits from transactions by Danske’s subsidiaries.

“It is extremely serious that a bank does not have the necessary corporate governance and internal controls in the area of money laundering and that it does not react correctly and quickly to warnings about possible money laundering."
Prosecutor Jens-Christian Bülow.

Telecom giant Ericsson to be monitored for extra year following US corruption settlement breach 

Ericsson will face a further year’s scrutiny by a mandated compliance monitor imposed as part of a 2019 international bribery settlement. The telecom giant promised to report wrongdoing and submit to audits and to the scrutiny of an outside monitor in a $1bn agreement with the US Justice Department, but has twice violated the deal: firstly, in October 2021 for withholding information, and again earlier this year in the aftermath of the Ericsson List investigation. 

Panama’s former President to stand trial on money laundering charges 

Former Panamanian President Ricardo Martinelli is to stand trial for money laundering. Martinelli, who was in office from 2009 to 2014, is accused of laundering public funds through the purchase of a news outlet during his term. 

German anti-money laundering chief resigns over backlog row 

The head of Germany’s anti-money laundering authority has resigned after the government admitted that the Financial Action Task Force (FATF) was kept in the dark about a huge backlog of unprocessed suspicious activity reports (SARS). Christof Schulte is the fourth head of a German supervisory body to leave their post since 2021, after the heads of financial watchdog BaFin, audit regulator Apas and accounting regulator FREP were all ousted over their handling of the Wirecard scandal. 

Former Venezuelan national treasurer and husband convicted of bribery and money laundering 

Claudia Patricia Diaz Guillen, the former National Treasurer of Venezuela, and her spouse, have been convicted for their roles in a billion-dollar currency exchange, bribery, and money laundering scheme. The conspiracy involved cash hidden in cardboard boxes, offshore shell companies, Swiss bank accounts, and international wire transfers to purchase multiple private jets, yachts, and fund a high-end fashion line.  

SEC charges Honeywell with bribery schemes in Algeria and Brazil 

The Securities and Exchange Commission (SEC) has announced charges against Honeywell International Inc. for violations of the Foreign Corrupt Practices Act (FCPA) arising out of bribery schemes that took place in Brazil and Algeria. The SEC’s order finds that Honeywell engaged in a bribery scheme to obtain business from the Brazil state-owned entity Petrobras and the Algerian state-owned entity Sonatrach. The company has agreed to pay more than $81 million to settle the SEC’s charges. 

“For years, Honeywell neglected to implement sufficient internal accounting controls to mitigate against known corruption risks in countries like Brazil and Algeria. This failure created an environment in which Honeywell employees and agents could and did facilitate bribes.” 
Charles Cain, Chief of the SEC Enforcement Division’s FCPA Unit.

Pro-Israel lobby group biggest donor of free overseas trips to UK MPs 

A pro-Israel Tory lobby group has taken UK MPs on 155 free trips over the last decade, in an unprecedented charm offensive to promote the country in Westminster. An investigation by openDemocracy has revealed that the Conservative Friends of Israel (CFI) paid for MPs to go on more overseas trips than any other donor, with the group fully or partially funded trips with an overall value of £367,000 since 2012. 

Germany shuts child sex abuse ‘darknet’ forums

German investigators have closed three Internet forums on the ‘darknet’ with depictions of the sexual abuse of children and arrested four suspects. Police have stated that the sites had hundreds of thousands of registered users, making them among the biggest platforms worldwide for sharing child abuse images. 


RequirementsLegislation, Regulation and Sustainability

Has the EU Court of Justice taken backwards steps in preventing tax abuse and money laundering?

Over the past weeks, the EU Court of Justice has ruled on three significant cases covering the areas of tax rulings, aggressive tax planning, and anti-money laundering (AML). This article explores the implications of these rulings and the effects they may have on the fight against tax abuse and money laundering. 

US Senate blocks the Enablers Act, a major anti-money laundering bill 

The US Senate has blocked a critical bill to curb financial crime and corruption in the United States, a setback for what advocates have called the most significant reform to the country’s anti-money laundering laws in 20 years. The Enablers Act would for the first time require trust companies, lawyers, art dealers and others to investigate clients as well as the source of money and other assets that are moved into the American financial system.

US-style corporate leniency deals for bribery and corruption go global 

Analysis by the International Consortium of Investigative Journalist (ICIJ) has revealed a surge in closed-door non-prosecution agreements, with more governments allowing companies to pay in order to settle cases. But this has resulted in offenders using their deep pockets to repeatedly break the law. 

UKFIU: How SARs contribute to the fight against different types of serious and organised crime 

The latest issue of the UKFIU magazine, SARs In Action, has been published on the NCA website. It covers information and guidance for anyone submitting a SAR relating to individuals who are vulnerable or where welfare concerns are identified, and includes guidance based on potential indicators of sexual exploitation. It also looks at the Estate Agency SAR working group and how the UKFIU Reporter Engagement Team has been engaging with this sector.

Developing countries lead the way in beneficial ownership registration in 2022 

The Tax Justice Network has published the 2022 update of its beneficial ownership registration report. Based on the findings of the Financial Secrecy Index assessments of 2022 that covered 141 jurisdictions. Despite the recent decision by the Court of Justice of the European Union which effectively closed down the registers of EU-based companies held by member states. many countries, especially developing ones, are moving away from the arbitrary and easily circumvented high threshold of “more than 25% of ownership” towards lower thresholds (including no threshold at all.

Why growing tech companies need to consider ESG now more than ever 

Recent research indicates that while many tech CEOs are aware of the importance of ESG, their companies aren’t fully prepared to measure and track related metrics or develop actionable plans to mitigate ESG risks. Yet, beyond minimising risk, a stronger focus on ESG can drive better financial performance and make companies more resilient


Crypto-1Crypto & Virtual Assets

New York regulator tells banks to get prior approval for crypto activities 

In newly published guidance, New York State-regulated banks will need prior approval from regulators ahead of any virtual currency-related activities. The New York Department of Financial Services (DFS) has stated that banks need to inform them about their virtual currency plans at least 90 days before commencing the activity. 

Banque de France, HSBC, and IBM test interoperability of wholesale CBDCs 

Following tests, Banque de France, HSBC and IBM have published a paper demonstrating that Blockchain & Distributed Ledger Technology (DLT) can be used with existing networks to complete Central Bank Digital Currency (CBDCs financial transactions in real-time. Central banks around the world are considering the viability of their own digital currency; the efficiency and security that CBDC affords could bolster payments in developed countries and promote financial inclusion in emerging markets. 

Binance US to buy bankrupt crypto lender Voyager’s assets for $1bn 

Binance US has won the bidding to acquire the assets of bankrupt crypto lender Voyager Digital for about $1.02bn. Voyager filed for bankruptcy protection in July, listing assets of between $1bn and $10bn and liabilities in the same range. 



EU adopts 9th package of economic and individual sanctions against Russia 

In response to the gravity of the current escalation against civilians and civilian infrastructure in Ukraine, the Council has adopted a ninth package of measures intended to step up pressure on Russia and its government. The agreed package includes a wide range of measures intended to hit hard Russian economy and abilities to continue its aggression. 

“After food and hunger, Putin is now weaponising the winter, by deliberately depriving millions of Ukrainians of water, electricity and heating. The European Union is responding to this latest escalation and war crime with our 9th package of hard-hitting sanctions.” 
Josep Borrell, High Representative for Foreign Affairs and Security Policy.

UK Russia sanctions regime now bans trust services

On 16 December 2022, the Russia (Sanctions) (EU Exit) (Amendment) (No. 17) Regulations 2022 came into force. The amendments introduce a ban on providing trust services to those connected to Russia (unless the services were provided immediately prior to the regulations coming into force), or to a designated person.

Central bank gold rush triggered by fears of Western sanctions 

According to the World Gold Council, central banks bought up more gold in the first nine months of 2022 than all the annual totals since 1967. Triggered by fears of Western sanctions after Russia was made a pariah state following its invasion of Ukraine, officials in many countries outside the West are rethinking their foreign currency reserves after the sanctions meant Russia’s central bank lost the use of its war chest, impeding its ability to protect the ruble and its banking system. 

Russian money laundered through San Francisco real estate and Silicon Valley start-ups 

According to a new investigation, sanctioned Russian oligarch Suleyman Kerimov funnelled at least US$28mn of his fortune into San Francisco real estate and Silicon Valley startups with the help of a covert network of U.S.-based professionals. Nate Sibley, a research fellow with the Hudson Institute’s Kleptocracy Initiative told The San Francisco Standard that the sheer scale of their fortunes motivates lawyers, accountants, investment managers, bankers, agents and other experts to turn a blind eye to where that money came from and to start bending the rules.

Tracking the supply chains of Russia’s most successful UAV 

A joint investigation between RUSI, Reuters, and iStories shows that Moscow’s well-known UAV relies on complex supply chains that reach far beyond Russia’s borders. Sources indicate that many of these Western-manufactured imports are likely being procured by a St Petersburg-based company named SMT-iLogic3 on behalf of STC, which was first sanctioned by the US in December 2016. The components are being shipped to Russia by distributors based in the United States, Europe, China, South Korea and Hong Kong.


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