Last week, Cuban Vice President Ramiro Valdes was appointed to a senior position in Venezuelan government. The problem is, Valdes, (believed to rank third in the Government of Cuba, right behind the Castro brothers) is only one of an estimated 80,000 Cuban nationals assisting in the operation of much of Venezuela's key industries, as well as help run their government. What dies this mean for US financial institutions ? Your bank clients may be unwittingly conducting transactions with Cuban PEPs, Cuban nationals seconded to government-controlled industry, or even members of the Cuban military officer corps, who now reportedly command major Venezuelan army units. Will OFAC levy fines & penalties against your clients, and are do your wire transfers to Venezuela violate sanctions when the individual who signed the contract happens to be a Cuban PEP ?

Friday's filing of a FinCEN Final Rule*, which allows EU law enforcement agencies to to submit AML/CFT information requests to US banks, and American law enforcement to do the same in the countries of the European Union, will have a serious effect on international money launderers. These "professionals," who have been relying for decades on the inability of American and EU law enforcement to conduct effective transnational investigations, now have a potentially major problem; they will be at a higher level of risk for exposure, forfeiture and arrest. Like risk managers in the legitimate world, they abhor dangerously high levels of risk. So, what will their responses be? Good question.  

A US contractor formerly involved in Iraq pled guilty this week to smuggling in more than $800,000 from the Middle East. Bulk cash smuggling issues aside, the explosion of cases involving American contractors in Iraq who are charged with criminal conduct is disturbing. Many of these cases involve corruption; therefore, as a banker handling these individuals as customers, should you not protect yourself? 

For all those who have been asking about the outcome of cousin Peter's criminal case, you find the answer in this week's chapter (95) of "Confessions of a Money Launderer." If you have not read the Confessions series*, I will summarise it for you: Peter was the colourful high-flying Miami lawyer who defrauded the Cuban Government out of $8.8m, and also pled guilty to selling 8 kg. of Cocaine to an individual cooperating with law enforcement. Whilst serving a Federal sentence for these crimes, he was sued by the National Bank of Cuba in US District Court in Miami. His efforts to reinvent himself later as a Hollywood agent resulted in a publicly-traded company with the legendary Stan Lee, with 1000 employees, where he reportedly committed securities fraud. His scheme to obtain a pardon from then-President Clinton resulted in his financial support for Hillary's senatorial campaign, and ultimately, the bold filing of civil suits against the Clintons, when he failed to get what he wanted. He later fled to Brazil, ahead of a looming indictment on securities charges, but was ultimately extradited to the US. several years ago. He has been in legal limbo ever since, under house arrest, awaiting sentencing, having entered a plea of guilty. To find out his fate, go to Confessions' latest chapter.  

If you have clients who trade in Belarus, read on. Treasury has issued a new section (Part 548)* to the Belarus regulations that exist pursuant to Executive Order 1343, "Blocking Property of Certain Persons Undermining Democratic Processes or Institutions in Belarus." The regs are attempting to block transactions for individuals or entities that engage in public corruption, undermine democracy, and commit human rights abuses related to the political situation. 

World-Check users in Puerto Rico please note that I will be lecturing at the 7th Puerto Rico Symposium of Anti-Money Laundering on 26 February. The conference, sponsored by the Puerto Rico Bankers Association* (Asociación de Bancos de Puerto Rico), is being held from 25-26 February, at the Puerto Rico Convention Centre** in San Juan. World-Check representatives will be on site to assist you. 

The United States and Hungary have agreed to sign a tax treaty*, which will avoid double taxation, and theoretically prevent tax evasion. For the compliance officers out there, it is important to note that Article 26 of the treaty, "Exchange of Information," could pose a threat to criminal proceeds laundered and/or invested in Hungary. Financial advisers (read:money launderers) for transnational criminal organisations, who have their own version of country risk guidelines, may now move these criminal assets out of Hungary, lest US law enforcement investigators uncover them, using new data sharing ability.

The United States continues to push its "take no prisoners" policy with respect to those who violate its Iranian sanctions. Look carefully at the case of an aviation company slapped with $15m and $2m penalties for selling airliners to the Islamic Republic*. If you are a US bank, do not allow your clients to move money into, or out of, Iran, using third-parties. if the client is caught, the fines and potential indictments could ruin him, and subject you to possible reputation damage. This is serious; read the case details below.  

When lawyers for obviously corrupt Politically Exposed Persons [PEPs] hide behind the fifth-amendment privilege against self-incrimination when testifying before the US Congress, it is a sign that there is something every wrong with our system. The use of professionals to domestically launder bribes and kickbacks obtained overseas by corrupt PEPs has to stop, for the United States can no longer continue to be the repository of dirty PEP money. Unfortunately, much of what they do is technically legal. The remedy advanced by members of Congress deserves our full attention. Will it become law? 

The World-Check Central Europe Tour will be in the Principality of Liechtenstein on 15 March. The seminar agenda will be "Anti-Money Laundering and Combating the Financing of Terrorism,"  and the invited and confirmed speakers will be World-Check Europe Director Gianluigi Bianchi, Ivo Klein, the former Vice President of the Liechtenstein Parliament, and yours truly.