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Money Laundering and Other Illegal Conduct

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Part of the Contributions to Finance and Accounting book series (CFA)

Abstract

The work done in projects by many international contractors also requires, among other things, the coordination and management of international money flows. This is part of what is required for the effective management of the contract(s), to deliver the goods or perform services in another country and make payments in and receive funds from various countries (if they are outside of the EU Eurozone) in a different currency.

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Notes

  1. 1.

    www.en.m.wikipedia.org/wiki/Danske_Bank_money_laundering_scandal; see also www.bloomberg.com, www.ft.com and www.theguardian.com.

  2. 2.

    www.occrp.org/en/troikalaundromat/; see also www.theguardian.com/world/2019/mar/04/qa-what-is-the-troika-laundromat-and-how-did-it-work and www.amlc.eu/investigation-into-the-troika-laundromat.

  3. 3.

    www.reuters.com/article/amp/idUSKCN1S10DK; www.ft.com/content/c10076e2-d920-11e9-8f9b-77216ebe1f17.

  4. 4.

    www.nsbanking.com/news/standard-chartered-bank-fine/amp/ See also: https://home.treasury.gov/news/press-releases/sm647 and https://www.thetimes.co.uk/article/standard-chartered-in-1bn-settlement-l2vs9bhgg.

  5. 5.

    There are other cases, such as Westpac, one of Australia’s biggest banks, which lost two executives after the company was hit with claims that it had systematically allowed money laundering on its watch. The company announced in November 2019 that CEO Brian Hartzer will step down in the wake of allegations that the bank had violated money laundering and terrorism financing regulations many times. Lindsay Maxsted, who serves as chairman of the board, will also move up his retirement to the first half of 2020. AUSTRAC, an Australian regulator that fights financial crime, said that Westpac failed to report more than 19.5 million instructions for transfers in and out of Australia between 2013 and 2018. Commonwealth Bank (Westpac’s competitor) paid a fine of A$700m for similar breaches in 2018. Further info at various media including: www.bbc.com.

  6. 6.

    See also FCPA Blog article: Why does Scandinavia have so many money laundering scandals? by Jesse Van Genugten, December 13, 2019 in which it is stated: ‘... on November 29, the Norwegian government announced that it had begun investigating DNB ASA … for its role in channeling illicit funds to Namibian officials as bribes in exchange for increased fishing quotas in the country’s territorial waters’. It is the third major bank in Norway, Sweden, and Denmark to face serious questions regarding the institutions’ handling of funds … Danske Bank, the largest bank in Denmark, admitted earlier this year that its Estonian subsidiary helped thousands of its customers launder tens of billions of euros as it ignored warnings about the suspicious nature of the transactions. Likewise, authorities allege that Swedbank, which is headquartered in Stockholm, Sweden, helped to launder as much as $23 billion since the start of the decade. News reports indicate that most of those illicit funds came from Russian sources … the rapid exposure of the illegal activities in the Scandinavian financial institutions, both alleged and proven, indicates that substantial steps are being taken to eradicate money laundering in the region.

  7. 7.

    In the same article: Why does Scandinavia have so many money laundering scandals? by Jesse Van Genugten, December 13, 2019 there is also mention of KYC developments: ‘...as a precautionary and reactionary measure, the Nordic region’s six major banks founded a customer checking center in July, a joint Know-Your-Customer (KYC) registry to combat financial crimes and centralize compliance efforts’.. Notably, the Nordic KYC platform is not unique. There were, for example, recent launches of Afreximbank’s Mansa platform to monitor customer data for counterparties in Africa and CordaKYC to serve as a consolidated blockchain platform for nearly 40 institutions in 19 countries … These multilateral efforts of course indicate that Scandinavian banks are not the only entities that seek to face head-on the vexing issue of conducting customer due diligence.

  8. 8.

    For more info, please see FCPA blog entry: When it comes to AML, doing better means seeing better By Elsa Chan, Wednesday, May 29, 2019.

  9. 9.

    www.fatf-gafi.org/about/.

  10. 10.

    https://www.fatf-gafi.org/about/.

  11. 11.

    FCPA blog article: ‘When it comes to AML, doing better means seeing better’ by Elsa Chan, May 29, 2019.

  12. 12.

    FCPA blog article: In Europe, freezing assets can violate human rights By Todd Carney, Monday, July 22, 2019.

  13. 13.

    www.en.wikipedia.org/wiki/Virtual_currency referring to the ECB.

  14. 14.

    www.en.wikipedia.org/wiki/Virtual_currency referring to the EBA.

  15. 15.

    www.en.wikipedia.org/wiki/Virtual_currency where F/N 3 refers to ‘FIN-2013-G001: Application of FINCEN’s Regulations to Persons Administering, Exchanging or Using Virtual Currencies’.

  16. 16.

    www.forbes.com/sites/michaelbobelian/2014/05/09/sec-warns-investors-to-beware-of-bitcoin/#332bcb9116c3.

  17. 17.

    See FCPA Blog article: ‘Bitcoin threat’ spurs central bank digital currencies by Selva Ozelli, July 24, 2019.

  18. 18.

    See FCPA Blog article: ‘China marches toward creation of a global digital currency’ by Selva Ozelli, December 11, 2019.

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Smith, D. (2021). Money Laundering and Other Illegal Conduct. In: Promoting Integrity in the Work of International Organisations . Contributions to Finance and Accounting. Springer, Cham. https://doi.org/10.1007/978-3-030-73916-4_6

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