Former Chilean dictator General Augusto Pinochet Ugarte, already facing tax evasion and fraud charges for allegedly taking millions of dollars in bribes, was arrested this week for ordering human rights abuses during his presidency, including homicide, kidnapping and torture. Pinochet, whose secret worldwide bank accounts were one of the decade's worst PEP scandals, has been placed under house arrest, due to his advanced age and poor state of health. The scrutiny the industry now gives PEPs owes a lot to the Pinochet case, where bribes and illicit gratuities were reportedly paid to the dictator in connection with arms sales to Chile.

Corporate officers know that if they trade the securities of their company based upon inside information, they break the law. So what do they do ? They form an offshore corporation in the tax havens,and trade away, confident that they will never be linked with an entity from a corporation secrecy jurisdiction. Of course, sometimes, investigators or regulators do find out.

The large number of non-governmental organisations that have been found to be engaged in terrorist financing in Europe and North America means that you must periodically review the activities of your NGO customers for the bank's protection. Today we discuss this threat, and the red flags you must look for.

The United States government apparently has little tolerance for those who resort to offshore tax havens to hide ownership of companies, where matters of national security are concerned. Compliance officers at banks with Caribbean offshore companies as clients might want to file this example away for future reference.

Over 100 people died in this weekend's crash of an ADC Airlines Boeing B737-200 in Nigeria, enroute from Lagos to Abuja, via Sokoto. Several prominent Nigerian Politically Exposed Persons, or PEPs, were on board. Compliance officers and MLROs are advised to increase vigilance for individuals claiming to hold powers of attorney or other purported authorisations on behalf of prominent Nigerians who may have perished in this accident.

This week, a reported $2m in cash was brought into the Palestinian Territory of Gaza by one of the Palestinian Authority' senior officials, a member of Hamas. Funds continue to be covertly obtained in the Middle East for the Hamas-led government, notwithstanding that its leaders are members of a designated terrorist organisation. This is, by definition, dangerous for those banks disbursing that cash amidst the possible penalties available to regulators in the US-led Global War on terrorism.

The United Self-defense Forces of Colombia, more properly known as the Autodefensas Unidas de Colombia, or AUC, reportedly own a number of private corporations conducting legitimate business inside Colombia and overseas. Since the AUC is specially designated as a global terrorist organisation by both the US and the European Union, compliance officers whose institutions bank Colombian companies need verify that the owners are not AUC leaders, lest they run afoul of terrorist financing laws.

Law enforcement authorities have seized $47,000 of counterfeit US Postal Money Orders in Jacksonville, Florida which were part of a scheme whereby unsuspecting Americans were tricked into cashing them, and sending some of the proceeds back to the Nigerian fraudsters. Does this mean that US banks should not give immediate credit to even valued clients making large deposits of postal money orders ? This should now become standard operating procedure is for the joint protection of the bank and its depostors.

Australian authorities have arrested 57 people in connection with a crackdown on money laundering groups that were shipping narcotics profits offshore to Hong Kong, Vietnam and Cambodia. These organisations reportedly moved AUD$93m (US$71.4m).

How extensive is the money laundering network Georgian organised crime is reportedly operating outside the country ? Russia says it moves over $500,000 a day. Authorities in Georgia hotly dispute that its nationals are involved in such criminal activities at home and abroad, and claim that Russia is punishing it for moving towards the EU and NATO. However, inside Russia, two banks have lost their licenses allegedly for supporting Georgian money laundering overseas. What should compliance officers do ?