You are here: Home / Archives for Iran

A Line in the Sand: Getting Tough on Money Laundering in Dubai and the UAE | Westlaw Business

May 19, 2010 By Leave a Comment
Administrative map of the United Arab Emirates...
Image via Wikipedia

Whopping $500 million fines are just one reason sanctions and anti-money laundering measures continue to haunt international commerce. With advances in electronic transmittals, hundreds of billions in dirty money swirls all over the world with breathtaking speed and efficiency. Rather than passively watching the problem spiral, however, the United Arab Emirates and one of its prominent regulators have stepped in with aggressive preemptive action.

With last week’s mega fine imposed by the U.S. on ABN Amro (since acquired by Royal Bank of Scotland) for “turning a blind eye” to sanctions against Iran, Cuba and other countries, the focus of international efforts to control criminal cash flows has received renewed attention. The U.S. and the UN have traditionally borne the yoke of international trafficking cops, but when it comes to money laundering, the United Arab Emirates and the Dubai Financial Services Authority (DFSA) have drawn a line in the sand.

The Sanctions Committee of the United Nations, for example, is a subset of the UN Security Council. From Saddam’s Iraq, to Darfur in the Sudan, the UN has long advocated the use of sanctions “as an enforcement tool when peace has been threatened and diplomatic efforts have failed.” As a consequence, companies and individuals doing business with rogue states bring themselves within the legal jurisdiction of a world body.

The U.S., meanwhile, has a number of different mechanisms for combating illicit traffic. On an international scale, the Office of Foreign Assets Control (OFAC), contained within the Department of Treasury, maintains a list of Specially Designated Nationals. Doing business with individuals and companies on this list subjects U.S. citizens and residents to criminal penalties. Because the list is public information, a presumption of intent when doing business with any person or entity on the list. OFAC maintains a list of 20 extant sanctions programs on its website; the site also includes a list of memoranda between OFAC and bank regulators.

Though not as large or influential as the UN or U.S., the UAE, a geographically a tiny Gulf outpost, has in its own right backed up its claim as a world financial center by committing considerable energy and resources to combating not only money laundering but the financing of terror. The DFSA oversees the Dubai International Financial Centre (DIFC), a self-contained financial free zone with its own civil and commercial law framework located in the Emirate of Dubai. As for penal law, however, UAE federal law still applies not only to the DIFC but all free zones. The DFSA thus provides the compliance mechanisms and the UAE the criminal penalties for money laundering.

While not an Islamic issue, money laundering has received attention from both the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and the Islamic Financial Services Board (IFSB). Both organizations, in their respective governance and corporate responsibility provisions, underscore the importance of compliance with relevant AML laws.

via A Line in the Sand: Getting Tough on Money Laundering in Dubai and the UAE.

Related articles by Zemanta
Filed Under: From The News Tagged With: , , , , , , , , , , , , , , , , ,

Two Decades and Counting for Iran Case

February 16, 2010 By Leave a Comment

Lawsuits — particularly the big-dollar, complex corporate variety — often get compared to marathons. In the case of McKesson Corp.’s legal struggle with the government of Iran, however, that comparison doesn’t quite cut it.

On Jan. 22, the dispute, a fight over shares in an Iranian dairy, reached its 28th anniversary. It has wended its way through one international arbitration, two federal trials and five trips to the U.S. Court of Appeals for the D.C. Circuit. Now, it could soon be heading for its sixth.

A decade ago, a federal judge awarded McKesson $20 million for claims that Iran expropriated the company’s interest in the dairy and withheld its dividends. But during the past seven years, the case has hit a series of unexpected bumps, from changes in government policy to new rulings from the U.S. Supreme Court. The longer it’s gone on, the trickier its path has seemingly become.

San Francisco-based McKesson, a medical products distributor that ranked 15th on last year’;s Fortune 500, is represented in the case by a team from Morgan, Lewis & Bockius headed by partner Mark Bravin. The company and Bravin declined to comment. Iran’s lawyers from Washington, D.C.’s Berliner, Corcoran & Rowe, including partner Thomas Corcoran Jr. and associate Laina Lopez, also declined to comment.

via Law.com – Two Decades and Counting for Iran Case.

Filed Under: From The News Tagged With: , , , , , , , , , , , , , , , , , , , ,

Business and the Way of Democracy – NYTimes.com

December 26, 2009 By Leave a Comment

Much like transitions to democracy over the past four decades transformed governments from mostly authoritarian to mostly democratic, we are currently witnessing a transformation of global corporations from a more or less opaque shareholder-centric model to a more transparent multi-stakeholder model.

The 1970s witnessed the beginning of a global trend toward the democratization of authoritarian and totalitarian regimes. This first appeared in Greece with a coup that led to democracy, continued in Portugal and culminated in Spain with a paradigmatic transition from Franco to democratic government. To this day all three countries continue to be thriving democracies.

The trend continued into the next three decades. Starting with the Polish Solidarity movement and epitomized by the fall of the Berlin Wall in 1989, democratization swept through the former Soviet bloc. Likewise, today most of Latin America can claim the democratic mantle. Successful transitions occurred in such diverse places as South Africa, the Philippines, Indonesia, Mongolia and even Iraq.

The yearning for greater political transparency and accountability continues sometimes tragically, as Iran currently exemplifies. The case of China remains a unique experiment in the liberalization of economics but not politics. Despite some business-related legal reforms, China may remain the exception that proves the rule.

As to global companies, increased government pressure and stakeholder demands for accountability (from employees, investors, customers, non-governmental organizations and others) are creating a similarly catalytic turning point that is beginning to yield a more transparent business model.

[continued] Op-Ed Contributor – Business and the Way of Democracy – NYTimes.com.

Filed Under: From The News Tagged With: , , , , , , , , , , , , , , , , , , , , , ,

U.S. says Credit Suisse schemed to evade sanctions | Reuters

December 17, 2009 By Leave a Comment

U.S. and Manhattan prosecutors detailed on Wednesday a “decades-long scheme” by Credit Suisse to hide thousands of transactions on behalf of clients in Iran, Sudan, Libya and other nations, and said the Swiss bank had agreed to pay $538 million in fines.

More than $1.6 billion was moved through the U.S. financial system through the transactions, prosecutors said.

Manhattan District Attorney Robert Morgenthau told a news conference that other banks were being investigated for similar transactions.

“There will be other prosecutions,” he said. “Not only of financial institutions, which carry the money, but also of the suppliers.”

In Zurich, a source who declined to be identified, said nine banks were involved and that four had settled, including Lloyds TSB Group of Britain and Credit Suisse.

While the majority of the transactions involved Iran, other transactions violated U.S. sanctions against Sudan, Libya, Myanmar, Cuba, and the former Liberian regime of Charles Taylor, the U.S. Treasury Department said in a statement.

The department called the settlement the “most significant” in the history of its Office of Foreign Assets Control and said the penalty could have been “substantially higher” had the bank not cooperated with the government over the past two years and agreed to take remedial action.

via U.S. says Credit Suisse schemed to evade sanctions | Reuters.

Filed Under: From The News Tagged With: , , , , , , , , , , , , , , , , , , , ,