Saturday, March 30, 2013

Catch Them If You Can

Similar to the Sarawak-Taib sting, investigative website Cobrapost had a camera equipped journalist walking into banks, pretending to be a unnamed politician whose house could no longer contain his stash of cash. According to the Economist article ("Evasive Cash", Mar 23-29, 2013), bank staff were only too willingly to oblige. "Yes, yes, don't worry sir, all people do this," assured one bank official. It quotes a 2010 World Bank study of 151 countries concluding that India's shadow economy, defined as legal activity concealed from the authorities, as equivalent of one fifth of GDP. The money laundering  was usually efficiently effected by tweaking rules for setting up accounts and insurance policies.

The Private Banking Industry Group (PBIG), not the Monetary Authority of Singapore (MAS), has on its own volition, established a set of guidelines to "protect themselves from tax criminals". The PBIG guidelines expect its staff to determine whether there are any reasonable grounds for suspecting that the funds are proceeds from serious tax crimes. To protect themselves, new clients must acknowledge in writing that they are responsible for their own tax affairs, and/or that they have not committed or have been connected of any serious tax crimes.

What the banking staff will consider as a red flag in respect of a client's taxable assets will be difficult to determine. In September 2011, Eduardo Saverin renounced his U.S. citizenship to obtain a Singapore passport. That his citizenship change reduced the capital gains taxes Saverin was liable for after the Facebook IPO is a sore point with some parties. From the U.S. side, the Ex-PATRIOT Act may result in Saverin not being permitted to enter the U.S. in the future. Will such uncharted territory be covered in the new regulatory measures in July 1, which is intended to designate serious tax offences as money laundering predicate offences?

A clearer case is the courier who takes the ferry from Batam on a regular basis, with wads of U.S. dollar bills stuffed into a sports bag, to distribute to political cronies on the take at Singapore hotels or similar. Remember Lee Kuan Yew's story about Indonesians who fly in for weekend shopping? Some of these guys end up richer even after splurging oodles at the boutique retail outlets. If you had run into the nondescript Mohamed (not his real name) you wouldn't have suspected his true mission objective, what more the humble bank clerk.

15 comments:

  1. Can you recall anyone being prosecuted for moneylaundering in this little red dot?

    ReplyDelete
    Replies
    1. India more efficient:
      From the Times of India: Mar 24, 2013, 10.26AM IST
      RANCHI: The enforcement directorate (ED) on Saturday filed a chargesheet against Anil Bastawade, an aide of former chief minister Madhu Koda, in money laundering case.
      Bastawade was responsible for siphoning off the money of Koda and his associates to foreign countries between 2006 and 2008. He was arrested by the ED from Indonesia in the last week of January and brought to India. At present he is in Birsa Munda Central Jail.

      Delete
  2. Money launderer is a protected species in many countries.
    In fact, most regimes in the World would like to attract and gain from them(the money launderers). And it may not be for the benefit of the countries and the people they rule.

    patriot

    ReplyDelete
  3. I wouldn't be surprise if Al Qaeda has a bank account here.

    ReplyDelete
  4. It is no longer a conspiracy theory that dirty money receives protection beyond the small depositors. In exchange for their patronage, the authorities of aspiring "money laundering centres" will underwrite dirty money with the protection of local money. The day will come when small depositors and taxpayers will bail out bankrupted local banks. If you have any doubt, just consider the numerous cases of the FT offenders being protected in various cases or allowed to bypass the alert home teams customs controls, you know the end-game is clear. My money will no longer loiter around. Flee red dotters, flee!

    ReplyDelete
    Replies
    1. The Russian launderers got their money out of Cyprus thru the London branches of the 2 Cypriot banks even after capital controls prevented local cypriots to transfer their money out. They are "investigating", but also shutting the farm dorr after the horse has bolted, ie for show only!

      Delete
    2. Most reliably informed by many private bankers that most of this Russian Cyprus flight funds have now found a home in Singapore

      Delete
    3. Many people say the casinos are the best place to launder money. First they don't ask silly questions where your money is coming from, clean or not.

      So in our case here, is it as simple as "not over my dead body" or "if we don't allow casinos here, others will" ?

      This sort of thing they will never tell us the hard truth, do they ? Think about it.

      Delete
  5. What do billionaires living in Singapore say?

    "Run for the Hills" Now, I'm Doing It:
    Jim Rogers

    "If you're going to listen to government, you're going to go bankrupt very quickly," he added.

    http://www.cnbc.com/id/100600824

    ReplyDelete
  6. Jim Rogers:
    Taking people's bank accounts is going to happen

    http://www.examiner.com/article/jim-rogers-taking-people-s-bank-accounts-is-going-to-happen

    ReplyDelete
    Replies
    1. CPF, my CPF money.
      Where forth art thou my CPF money?

      Delete
    2. They have laundered it with too much bleach and its now totally white.

      Delete
  7. CIA should just hack the tax havens computer systems and punish those big time tax fugitives heavily. I am sure the number of tax fugitives will decrease once a few of them are caught and punish and made bankrupt.

    ReplyDelete
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