Twelve minutes ahead of the deadline set by Congress back in August, the U.S. Treasury Department issued a highly anticipated report listing Russian oligarchs and senior political figures.  That sound you heard at 11:48 last night?  A host of wealthy Russians heaving sighs of relief.

The “Countering America’s Adversaries Through Sanctions Act,” (CAATSA) which was passed with overwhelming bipartisan support last summer, instituted new sanctions against Russia related to its interference with Ukraine and its alleged tampering with the 2016 presidential election.

But it also required the Treasury Department to issue, no later than yesterday, a report identifying Russian oligarchs with close ties to Vladimir Putin. The report was to identify “the most significant senior political figures and oligarchs in the Russian federation . . . as determined by their closeness to the Russian regime and their net worth.”  The report was required to detail the relationship between identified oligarchs and President Vladimir Putin or “other members of the Russian ruling elite,” “any indices of corruption with respect to those individuals, “their net worth and known sources of their (and their families’) income, and the non-Russian business affiliations of those individuals.”

In addition to reporting on individuals, the report was to identify “Russian parastatal entities,” their leadership structures and beneficial ownership, and the scope of their non-Russian business affiliations. Continue Reading Nothing to See Here: Treasury Report Naming Russian Oligarchs Rehashes Old News and Provides No New Sanctions

The Philippines has been identified by the U.S. as a “major money-laundering country” in the 2017 International Narcotics Control Strategy Report (“Report”), published this month. The country now joins 87 others as one “whose financial institutions engage in currency transactions involving significant amounts of proceeds from international narcotics trafficking.” See 22 U.S.C. § 2291(e)(7).

By way of background, the Report is a legislatively mandated, annual assessment of the efforts of foreign governments to reduce illicit narcotics production, trafficking and use, as well as their efforts to combat money laundering and terrorist financing. Each year, U.S. officials from agencies with AML responsibilities assess the pervasiveness of money laundering in these countries, which includes steps taken (or not taken) to address financial crime and money laundering, and measures to strengthen law enforcement and prosecutorial capabilities.

In regard to the Philippines, the Report concludes that “[m]oney laundering is a serious concern due to [the] international narcotics trade, high degree of corruption among government officials, trafficking in persons, and the high volume of remittances from Filipinos living abroad … [c]riminal groups use the Philippine banking system, commercial enterprises, and particularly casinos, to transfer drug and other illicit proceeds from the Philippines to offshore accounts.”

As support for the heightened designation, the Report cites to the Philippines’ “significant gaps” in its efforts to combat money laundering. For one, the country’s bank secrecy provisions “are among the World’s strictest.” In most cases, Filipino investigators must first obtain a court order to access bank records; such an order is dependent upon a sufficient showing of an ongoing “predicate crime” and neither cybercrime nor tax evasion is classified as such. Despite the country’s effort to centralize AML efforts via the Anti-Money Laundering Council (“AMCL”), since its founding in 2001, cooperation among law enforcement agencies remains “insufficient” and to date, only 49 money laundering cases have been filed. Indeed, Reuters reports that the number of prosecutions and convictions stemming from the 49 has been “virtually nil.”

The Report’s conclusions are an unwelcome development for the Philippines. Though any outcome remains to be seen, their label as a major money-laundering hub may serve as a catalyst for offshore firms to “de-risk” by cutting its ties with local banks and intermediaries.

If you would like to remain updated on these issues, please click here to subscribe to Money Laundering Watch.