Jho Low speaks publicly for the first time in four years, Ghosn gives an intriguing speech and 5AMLD guidance is a long way off.

We share our financial regulatory highlights from the week of 6 January 2020

What to do About 5AMLD?

We’ve written a fair bit about 5AMLD so far already. But that’s because the most comprehensive change to money laundering directives in recent years is making a significant impact.

The most notable thing about the directives is how woefully underprepared industries and nations have been. This week it emerged that new guidance on the AML directive could take months to be distributed in the UK for the legal sector and the property industry is being hit by a wave of fear and suppliers who are misrepresenting the requirements of the legislation.

What the directives must not do is let paralysis and indecision take hold of various industries. 5AMLD is there to prevent financial crime, but if guidance is slow to come forth then it doesn’t achieve anything other than cause confusion.

Regulators must move quickly to deliver useable guidance for businesses and make changes to create a regulatory environment that is capable of handling new legislative requirements in the future.

What Is Ghosn On?

Carlos Ghosn had a recent daring escape from Japan that could have read straight from a thriller novel.

It makes for good reading but the escape is estimated to have cost Ghosn at least $15 million. But he is now in a Mediterranean nation where he has citizenship and the country has no extradition agreement with Japan.

Ghosn held a press conference on 8 January 2020, protesting his innocence and claiming to have suffered a great deal of mistreatment by Japanese authorities. He also stated that he was not fleeing justice but injustice after accusing the authorities of conspiring to put him in prison.

During his speech, Ghosn went on to claim that some Nissan executives were also involved in this conspiracy and that the Japanese justice system was rigged. It’s a story that would easily find a home in fiction but by making the issue so newsworthy it appears as though Ghosn is attempting to be found innocent by the public rather than the courts.

It’s unclear as to how the Ghosn case will play out from here but it’s sure to have a real impact on how high net worth individuals are treated regarding financial crimes in the future.

New From Low Talking About 1MDB

The Malaysian businessman Jho Low went on record 6 January 2020 regarding his role in the 1Malaysia Development Berhad (1MDB) scandal. In an email interview with the Straits Times — his first since the scandal broke in 2015 — the man who has been depicted by many as the mastermind behind it all maintained his innocence, insisting that he has been made a scapegoat for other financial institutions and advisors involved in the scheme.

US and Malaysian prosecutors claim that approximately $4.5 billion intended to help drive economic growth for the Malaysian people was instead used to line the pockets of high-level officials and associates, including Jho Low, from 2009 to 2014.

While Jho Low’s position with the fund was not a formal one, he is characterized as the linchpin of the scheme, connecting key players and orchestrating the deals that made it possible to use 1MDB as a multi-billion-dollar slush fund.

Jho Low then allegedly laundered millions through the purchase of luxury goods, including lavish gifts to celebrities like Miranda Kerr and Leonardo DiCaprio, real estate and even the financing of “The Wolf of Wall Street.”

The ongoing investigation has uncovered what is arguably one of the largest financial scandals in history, having also ensnared Malaysia’s former prime minister, Najib Razak, who is currently on trial for his role. In addition, it has resulted in the shuttering of Swiss Falcon Bank and criminal charges against 17 Goldman Sachs employees.

Jho Low remains on the run and in hiding. In the interview, he asserted that the Malaysian government has shown a disregard for “basic human rights and fair judicial processes.” And while he confirmed he was offered asylum last August, he declined to specify the country. With the man allegedly at the center of it all in hiding and this portion of the investigation at a stalemate, it’s clear this longstanding scandal is far from a tidy resolution.


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