BIZweek n°290 15 mai 2020
BIZweek n°290 15 mai 2020
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  • Parution : n°290 de 15 mai 2020

  • Périodicité : hebdomadaire

  • Editeur : Capital Publications Ltd

  • Format : (260 x 370) mm

  • Nombre de pages : 7

  • Taille du fichier PDF : 3,1 Mo

  • Dans ce numéro : impact économique du covid-19.

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VENDREDI 15 MAI 2020 BIZWEEK ÉDITION 290 The 20 countries that posed a «high risk» of injecting criminal or terrorist funds into the single market were namedand shamedby the European Commission on 7 May. They included Afghanistan, a leading heroin exporter. The EU also stigmatised Panama, exposed in the 2016 Panama Papers leak as a global clearing house for shady money. The other 18 sinners were : the Bahamas, Barbados, Botswana, Cambodia, Ghana, Iraq, Jamaica, Mauritius, Mongolia, Myanmar/Burma, Nicaragua, Pakistan, Syria, Trinidad and Tobago, Uganda, Vanuatu, Yemen, and Zimbabwe. It meant EU banks ought to do enhanced due diligence on transactions. Purely technical The listing automatically excluded the 27 EU states themselves, plus Iceland, Liechtenstein, and Norway, under the EU law that governed the process. The blacklist was based on a purely technical, 59-page commission methodology, officials said. It was also based on the decisions and methodology of the Financial Action Task Force (FATF), an intergovernmental anti-money laundering body in Paris. But the claim the EU lists, which areupdated each year, are purely forensic was given the lie by last year’s political exclusion of Saudi Arabia. The commission, last January, said the petro-kingdom had met criteria for listing, on the basis of a detailed and confidential document. But EU states, a few weeks later, vetoed the move anyway, to protect the West’s geopolitical ally. They also vetoed the commission’s listing of four protectorates of Europe’s principal ally on the world stage, the US - American Samoa, Guam, Puerto Rico, and the US Virgin Islands. And the story of political interference goes back further. The commission, in 2018, said 54 countries merited a risk assessment. Methodological reasons That long list included China and Chinese protectorates Hong Kong and Macau, Russia, and the US itself, where the state of Delaware is a fiscal paradise. It namedUK protectorates, such as the British Virgin Islands (BVI) and the Cayman Islands, as wellas some of the EU’s closest friends : Andorra, Monaco, San Marino, and Switzerland. It also namedEU oil supplier Azerbaijan and US ally Singapore. None of these were ever listed in the end, the EU commission says, for methodological reasons. But all of them are known as money-laundering hotspots by experts in the field. «Almost all the recent EU money-laundering scandals come from Russia or the former Soviet region,» Panicos Demetriades, the former president of the Central Bank of Cyprus, who now teaches economics at Leicester University in the UK, told EUobserver. The City of London in the UK and Liechtenstein were also hotspots, Michel Koutouzis, a former FATF inspector, who writes books on money laundering, said. «If the objective is to cleanup the financial system, the [EU] list is weak and unhelpful,» Bill Browder, the CEO of UK hedge fund Hermitage Capital, who has investigated Russian money laundering ever since mobsters raided his firmin Moscow in 2008, also said. «It’s more significant who’s not on the [EU] list than who’s on it,» Browder said. Crooked story BIZ ALERT ANALYSIS Why the EU anti-money laundering list is so short The EU, last week, told a black-and-white tale of 20 sinful states who posed a money-laundering threat to Europe’s law-abiding single market. But the real story of the EU and money laundering is more complicated. And the EU’s new dirty-money blacklist revealed more by its omissions than by its inclusions. The fact EU states gave themselves an automatic pass from the blacklist was also telling, the experts said. Austria, Cyprus, Estonia, Germany, Latvia, Lithuania, Luxembourg, the Netherlands, and Malta also had banking sectors known for money laundering. «Cyprus and the Baltic states were the main transit countries in most Russian money laundering,» Browder said, after following a thread of  € 200m of embezzled Russian funds via various jurisdictions, which led to the  € 200bn Danske Bank affair in 2018 - the biggest money-laundering scandal in EU history. One reason why the EU or FATF lists were «weak», was because they lacked ambition, Koutouzis, the former FATF inspector, said. The lists were designed «to put pressure on small countries to turn down the tap a little» on mafia money, not «to cleanup the financial system», he said. «We give fiscal paradises like the BVI a choice : ‘If you make a small effort to control drugs and prostitution money, we will close our eyes to larger fiscal fraud’,» he said. «We give them a choice to launder the money of large companies instead of small traffickers. Some play the game and some don’t,» he added. «Russia could never be on the [EU] list. It’s too big a morsel to swallow and Russian banks are present everywhere in the world,» Koutouzis said. «Why not name Hong Kong ? It’s the same thing, because we don’t want a fight with China,» he added. But the main reasons why the EU and FATF blacklists were so weak were systemic, the French expert said. The really big criminal money was impossible to trace or stop using lists because of bond markets, he noted. And EU countries, just like China, Russia, or the US, needed fiscal paradises to enable the free flow of capital into their economies, he added. The bond market scam operates when a bank in China, for instance, buys corporate or sovereign bonds using a few million dollars of legitimate money mixed with, for instance, its gangster clients’opium income. [Source  : Andrew Rettman, Brussels, 13 May - EU Observer] 3

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