FCN: What is the Sentry and what’s its purpose?
JW/MS: The Sentry is an investigative and policy team that tracks the financing of conflict in East and Central Africa. We follow the dirty money connected to African war criminals and transnational war profiteers and seek to shut those benefiting from violence out of the international financial system. We were co-founded by George Clooney and John Prendergast and launched in 2016. We currently focus on East and Central Africa, specifically South Sudan, Sudan, the Democratic Republic of Congo (DRC), and the Central African Republic.
Complying with economic sanctions requires a comprehensive program of controls and oversight capable of addressing the unprecedented pace of change, geopolitical tensions, conflicting governmental policies, and intense interest by a range of stakeholders, all of which means the monitoring, interpreting and controlling of sanctions risks have never been greater. Sanctions changes that have made headlines or yet might are therefore of interest as should be the potential implications for compliance programs.
In November 2018, the US re-imposed sanctions on exports of oil from Iran after President Trump unilaterally pulled out of a 2015 nuclear accord between Iran and six world powers. The US, however, granted waivers to Iran’s eight main buyers – China, India, Japan, South Korea, Taiwan, Turkey, Italy and Greece.
Closing the Gap: Guidance for Countering North Korea’s Cryptocurrency Activity in South East Asia by RUSI
The UK Think tank, the Royal United Services Institute (RUSI) have issued a paper that reveals how North Korea can exploit cryptocurrency, particularly in Southeast Asia, to circumvent international sanctions. It sets out practical guidance for countries in the region to ensure resilience against the risk of North Korean cryptocurrency activity. North Korea has gone to extremes to raise funds and evade international sanctions, recently expanding these efforts to include the exploitation of cryptocurrencies such as Bitcoin. Cryptocurrencies likely play only a peripheral role in North Korea’s overall fundraising and sanctions-evasion activity.
However, the sophistication of North Korea’s broader cybercrime operations and its general demand for ongoing financial resources present the risk that its cryptocurrency activity could become a sustained security challenge, particularly as international sanctions lead North Korea to seek financial lifelines outside the mainstream sector. Continue reading
The Guidance was published in Jan 2019 and highlights:
• whilst sanctions screening is a primary control, it is not foolproof and needs to be deployed as part of an effective wider sanctions compliance programme; and
• where a risk based approach may be appropriate, including documenting a reasonable risk appetite, notwithstanding the strict liability nature of sanctions compliance.
Consideration has been given to topics such as what is meant by sanctions screening, looking at both reference/customer data and transaction screening; the timing of screening; technology and the use of automated systems; the criteria for alert investigation, as well as testing and quality assurance. The guidance covers a number of areas that are most common to sanctions screening, including: the following:
- the programmatic approach to sanctions screening is explored, including how to employ a risk based approach.
As the only thing certain apparently is uncertainly (unless you count death and taxes) only a fool would predict anything. So foolishly here are my top 10 predictions for 2019 – in the fight against financial crime.
- Crime will remain a top 10 global industry and the most profitable of all industries (due to extremely low levels of interdiction) but fall to 2nd in the list of none financial risks of concern to FI Board’s, after Cybersecurity. Depending on your definition of financial crime estimates range from USD2.1 trillion a year, though these likely understate the amount, particularly as they are based on classic financial criminal proceeds, such as drug trafficking and organised crime and date back to 2011. The figures could include corruption (IMF estimate USD1-1.5
With the date for Brexit due on the 29th March, 2019 (at 11 pm U.K. time) and still no deal, getting a clear view of the likely impact of Brexit on the fight against financial crime, is important. An exit, particularly with no deal, looks to put the UK in a much worse position, but even with a deal the prospects at least in the short term don’t look good. What is at stake and what are the risks and opportunities? In this Part 1, the focus is more on the Policy aspects of fighting financial crime with a few practical potential consequences. Part 2 focuses on the effects on Policing and Part 3 the opportunity that the U.K must take.
This book tells the story of the rise and fall of Hermitage Capital, once the largest foreign investor in post soviet Russia, which made vast fortunes alongside oligarchs and criminals, sharing the spoils from the rigged privatisation of Russian Companies and the crooked markets that developed. As Hermitage made huge profits, the Company, its founder and CEO, Bill Browder, his associates and his Russian lawyers became targets, with Browder having his visa revoked and then his Russian Companies taken. According to Browder, he was taken out by powerful forces on instructions from the highest levels of the the Russian government. Browder tells of his losing battle, uncovering serious criminality by the Russian Interior ministry that took over his Companies, restated their reported profits and collected hundreds of millions of dollars in tax rebates.