Today’s Top Stories from GFI: Stolen Asset Recovery Efforts Gaining Ground but Obstacles Remain

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August 13, 2014

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Asset Tracing: Follow the Money
Financial Times, August 13, 2014

Efforts to track and recover stolen funds are gaining ground but obstacles remain

By Cynthia O’Murchu

In a building in central Kiev, anti-corruption campaigners are piecing together tattered documents in their efforts to trace more than $30bn that prosecutors believe former President Viktor Yanukovich and his network stole from the Ukrainian state.

“They were purchasing expensive furniture and luxury goods but they saved money on their shredders,” says Natalie Sedletska, a journalist who contributes to YanukovychLeaks, a website detailing dozens of transactions identified from sacks of papers hastily cut up and files dumped when the regime collapsed in February.

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Has The Time Come For An International Anti-Corruption Court?
AFKInsider, August 13, 2014

By Andrew Friedman

Last week, as the US-Africa Leaders Summit opened with the “Civil Society Forum”, American Vice President Joe Biden spoke on the “cancer” of corruption to the assembled representatives.

Biden hit familiar chords as he discussed the “direct threat” to stability posed by illicit flows of currency and stated that corruption “prevents the establishment of a genuine democratic system. It stifles economic growth and scares away investment.”

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Tax Havens

Behind the Collapse of Portugal’s Espírito Santo Empire
The Wall Street Journal, August 12, 2014

Regulators Believe Switzerland’s Eurofin Played Key Role in Financing Failed Conglomerate

By Patricia Kowsmann, David Enrich, and Margot Patrick

Over nearly 150 years, Portugal’s Espírito Santo clan built a corporate dynasty whose interests ranged from European banks to Miami condos to a diamond mine in Angola. Its current patriarch was nicknamed “Dono Disto Tudo,” or “Owner of All This.”

Now the empire is in ruins. The family’s prized asset and Portugal’s second-biggest bank, Banco Espírito Santo SA, collapsed this month, and Espírito Santo’s main holding companies have filed for bankruptcy amid allegations of accounting problems and fraud.

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Phantom Firms

The UK Government must intervene to unmask foreign buyers inflating a new property bubble with questionable cash

The Independent (Op-Ed), August 13, 2014

By Chris Blackhurst

No sooner did the block of flats go up where I live than they were pretty much all gone.  A board appeared, saying “85 per cent sold”.

The same is true of another development nearby. A glance on rightmove.co.uk shows that apartments in these schemes simply are not available to buy.

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Paul Singer Gets OK to Chase Argentina Money Trail to Nevada
Bloomberg News, August 13, 2014

By Sophia Pearson

Billionaire Paul Singer, the hedge fund founder seeking to collect on more than $1.5 billion in judgments over Argentina’s defaulted bonds, may search the deserts of Nevada for some of that money, a judge ruled.

Singer asked a Las Vegas court in April to order 123 companies in Nevada to turn over information about assets belonging to Argentine businessman Lazaro Baez, who is accused in that country of embezzling $65 million from government contracts. U.S. Magistrate Judge Cam Ferenbach in Reno granted that request Aug. 11, ruling that Singer’s hedge fund was attempting to execute a valid judgment against Argentina.

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Tax Evasion and Avoidance

Switzerland confirms India’s data sharing request
Swissinfo, August 13, 2014

By Anand Chandrasekhar

Switzerland has confirmed receiving a request from India to join the Early Adopter Group for automatic exchange of financial account information.

This complements the statement made on Tuesday by the Minister of State for Finance Nirmala Sitharaman in the Rajya Sabha (upper house of India’s parliament).

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India cracks down on illegal funds
Stuff (New Zealand), August 12, 2014

By Michael Field

New Zealand financial authorities have given Indian investigators a large amount of tax data about Indians stashing black money in New Zealand, the Press Trust of India (PTI) reports.

India is cracking down on what is claimed to be $590 billion in illegal funds or black money held in tax havens outside India.

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Macedonia launches online monitoring system to reduce tax evasion
Xinhua, August 13, 2014

Macedonia is launching an online system to moniter cash payment nationwide in a bid to reduce tax evasion, officials here said on Tuesday.

Goran Trajkovski, director of Macedonian Public Revenue Office, told a news conference that the system, set to be completed by January 2015, is expected to cut down tax evasion by 20-25 percent, particularly in the service industry.

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Sanctions

Banks Woo Treasury Sanctions Pros to Navigate Complex U.S. Rules
Bloomberg News, August 13, 2014

By Kasia Klimasinska, Dakin Campbell and Ian Katz

The Obama administration unit central to enforcing economic sanctions on the regimes of Vladimir Putin and Bashar al-Assad has to contend with a nuisance closer to home: large banks poaching its staff.

Companies including HSBC Holdings Plc and Deloitte Touche Tohmatsu Ltd. are beefing up compliance expertise to ensure they or their clients don’t violate the set of programs the Treasury Department has more than doubled to 37 over the past decade. At least eight people of a staff of about 200 have left the Treasury’s Office of Foreign Assets Control in the past year, including no fewer than six in 2014.

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Corruption

Philippines Undersecretary of Justice, Aide Face Graft Raps over Alleged Bribery
ABS-CBN News, August 13, 2014

By Ces Drilon

MANILA – Justice Undersecretary Francisco Baraan III and his former administrative administrative assistant are now facing graft charges before the Ombudsman for allegedly taking bribes.

Baraan, meanwhile, said he will file a perjury case against his accuser.

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Former Haitian leader summoned to appear before judge on corruption charges
Haitian Caribbean News Network, August 12, 2014

By Joseph Guyler Delva

Former Haitian president Jean-Bertand Aristide has received a warrant to appear before judge Lamarre Belizaire who is conducting an inquiry into serious acts of corruption blamed on Aristide and dozens of his allies when he was the Caribbean country’s leader between 2001 and 2004, HCNN has learned on Tuesday.

Aristide is summoned to appear before investigating judge Belizaire at 10 AM on Wednesday and is expected to to answer charges and acts of corruption, laundering of drug money, misappropriation of hundreds of millions of dollars in public funds, criminal conspiracy, among other accusations.

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