Ding ding ?? – get ready for round two of US sanctions on Iran
- Iranian ports and the country’s wider shipping industry
- Transactions involving the petroleum and petrochemical industry as well as Iran’s largest energy companies
- Transactions between foreign financial institutions and the Central Bank of Iran
- The provision of systems to the Central Bank of Iran for financial messaging
- Iran’s underwriting, insurance, and reinsurance capabilities
The new sanctions are expected to cause significant pain for the country and its controlling regime. The EU had pledged to come up with an alternative system, known as a Special Purpose Vehicle (SPV) to help Iran maintain an import and export business with Europe. As Monday’s deadline draws closer however, this is looking increasingly unlikely. The Union is yet to find a member state who is happy to host the SVP and incur any repercussions, diplomatic or economic, from the Trump administration. For Europe there is also the embarrassing fact that Iran is still failing to comply with FATF standards. Expect a race to the finish line from the EU and other signatories of the JCPOA to put something in place before the US blows the final whistle.
How can you afford to buy a house that costs AUD $1.5 million when you are paid only AUD $1,000 a month? That is the question that should have been asked to Dy Vuchea, the head of the Cambodian Police and husband of the daughter of the country’s leader when he purchased a house in a suburb of Melbourne. Broadcast by ABC News Australia this story shows the continued poor enforcement of PEP rules in the country’s real estate sector. This is the second case this week highlighting problems with PEPs. A report by George Clooney’s organization, The Sentry, revealed the depressing amount of influence that PEPs hold in the South Sudanese banking sector.
Not all PEPs commit financial crimes but when they do, they abuse the trust of the public who they are supposed to serve. When screening for PEPs remember that corrupt PEPs are aware of the controls in place to stop them and that they have loyal networks. If they choose to perform illicit acts and need to move associated funds they will rarely do this themselves. Financial institutions need to ensure that they screen extensively for Relatives and Close Associated (RCAs) to ensure that misbehaving PEPs don’t profit from their greed and lack of public responsibility.
A little less conversation?
If you are living in the EU you may be getting a little bored of two topics, Brexit and strongly worded statements on AML regime reform. On the AML front, although made with the best intentions, the many statements that we have seen this year have not been followed by much practical action. A report by the European Think Tank, Bruegel galvanized opinion last week when it suggested that what Europe needs is a single anti-money laundering agency to solve all of its problems. But is another layer of bureaucracy what Europe needs? Or would proper enforcement of preexisting rules at the nation state and group level be enough to prevent money laundering scandals like the ones that have filled the headlines this year?
So what is the EU doing? A document leaked by Reuters earlier this week states that the EU will carry out an extensive review of the scandals that have taken place in recent years. By mid-late 2019 they will put forward their findings, most likely to create recommendations to ensure these failings don’t happen again. In the meantime, the EU could take a leaf out of the UK’s or US’s book, both of whom yesterday imposed long prison sentences on money launderers.