Tag: money laundering

Head of financial intelligence unit resigns

The head of the financial intelligence unit at the central bank, Ibrahim Athif Shukoor, has resigned from the post.

Shukoor told local media yesterday that he had resigned on June 21 to work in the private sector.

He was appointed to the post in November last year by the governor of the Maldives Monetary Authority (MMA).

The financial intelligence unit was formed under the anti-money laundering and combating the financing of terrorism (AML/CFT) law passed in April 2014.

Likes(0)Dislikes(1)

MDP to protest against “dangerous” SEZ bill

The Maldivian Democratic Party (MDP) has declared its intention to protest against the governments flagship special economic zone (SEZ) legislation, warning that passing the bill would pose serious dangers to the Maldives.

“We note that the bill on special economic zones in its current form would allow the government to conduct transactions broadly with no transparency and no opportunity for oversight, as a result of which the possibility of losing the country’s independence and sovereignty would be high,” read a press release from the main opposition party yesterday.

The government, however, maintains that SEZs with relaxed regulations and tax incentives were necessary both for foreign investors to choose the Maldives over other developing nations and to launch ‘mega projects.’

The MDP noted that its lawmakers along with Jumhooree Party (JP) MPs boycotted the economic affairs committee yesterday – which was in the process of reviewing the draft legislation – in protest of procedural violations by the committee’s chair and “dictatorial” actions of pro-government MPs.

MDP and JP MPs also objected to the economic committee allegedly disregarding recommendations and commentary on the bill sent by various state institutions.

Reflecting its combined 48 seats in the 85-member house, the ruling Progressive Party of Maldives and coalition partner Maldives Development Alliance have voting majorities on key parliamentary oversight committees.

After walking out of a committee meeting yesterday, JP Leader Gasim Ibrahim warned that an SEZ law would facilitate massive corruption, threaten independence, and authorise a board formed by the president “to sell off the entire country in the name of economic zones.”

Incentives

The MDP press release warned that an SEZ law would allow the government to bypass local councils, declare any region an economic zone, and lease land for any period.

The law would undermine the Decentralisation Act and restrict the authority granted by the constitution for local councils to “raise funds,” “own property and incur liabilities,” the party contended.

Geographic areas declared an SEZ would be removed from the jurisdiction of local councils.

However, Tourism Minister Ahmed Adeeb told Minivan News in June that an SEZ law would encourage further development of tourism outside of the central atolls or the ‘sea plane zone’ – referring to the proximity from Malé’s international airport – and assured that councils would be consulted.

“I believe that by doing the SEZ Act, we will bring the investment to these regions and this is the real decentralisation of investments,” he said.

The MDP also expressed concern with the tax breaks offered to investors in SEZs, which it argued would limit opportunities for small and medium-sized enterprises.

Concessions in the current draft include tax exemptions and relaxed regulations for employing foreign labour.

Investors would be exempted from paying either import duties for capital goods or business profit tax, goods and services tax and withholding tax for a period of 10 years.

Regulations on foreign workers would be relaxed while companies with foreign shareholders would be allowed to purchase land without paying privatisation fees or sales tax.

Article 74 meanwhile allows up to 40 percent of any zone to be tourist-related development with tax and duty exemptions.

Moreover, private airports and seaports in the zones would be outside the jurisdiction of the Maldives Customs Service.

The enactment of an SEZ law would pave the way for “dangerous and serious crimes,” the MDP press statement continued, such as drug trafficking, money laundering, and human trafficking.

“Castles in the air”

Former President Mohamed Nasheed had dubbed the legislation the ‘Artur Brothers bill’, referring to an infamous pair of Armenians linked with money laundering and drug trafficking who made headlines last year after they were photographed with cabinet ministers.

Nasheed has also dismissed SEZs and the touted mega projects as “castles in the air.”

Referring to the opposition to his administration’s public-private partnership projects on religious and nationalistic grounds – with opposition parties accusing the government of “selling off state assets” – in a speech at an MDP event on Tuesday night (August 12), Nasheed argued that the current administration’s economic policies were far worse judging by their terms.

“There could be no bigger deception of the Maldivian people,” he said.

Nasheed also contended that Maldivian law would not be enforced in the SEZs, claiming that gambling would be allowed in the zones.

President Abdulla Yameen meanwhile insisted in a speech on Monday night (August 11) that foreign investments in the zones posed no threat to Islam or Maldivian sovereignty, assuring that the businesses would be fully subject to Maldivian law.

The government’s objective was “economic transformation” through diversification – to mitigate the reliance on the tourism industry – and shifting the economy from its “present production frontier” to a higher level, Yameen explained.

Yameen had declared in April that the SEZ bill would become “a landmark law” that would strengthen the country’s foreign investment regime.

Likes(0)Dislikes(0)

Foreign investments pose no threat to Islam or sovereignty, insists President Yameen

Foreign investments pose no threat to either Islam or Maldivian independence and sovereignty, President Abdulla Yameen said last night, assuring that the creation of special economic zones (SEZs) was no cause for concern.

“It does not mean casinos will be operated in the Maldives, and it does not mean the president would have more power than he should,” Yameen said in a speech at a function held by the Maldives Inland Revenue Authority (MIRA) to celebrate its fourth anniversary.

Yameen insisted that foreign investments would be fully subject to Maldivian law while sovereignty would extend to the SEZs.

The government’s flagship SEZ legislation – which envisions free trade zones with relaxed regulations and tax incentives – has come under fire from the opposition with former President Mohamed Nasheed contending that the zones would be used for criminal enterprises, “irreligious” activities such as gambling, and money laundering.

The opposition leader had dubbed the legislation the ‘Artur Brothers bill’, referring to an infamous pair of Armenians linked with money laundering and drug trafficking who made headlines last year after they were photographed with cabinet ministers.

Nasheed had also argued that the government would have less authority in the SEZs than the authority it exercised in Addu Atoll Gan Island during British occupation.

Corruption

Yameen and GasimBriefing MPs on parliament’s economic affairs committee yesterday – which is reviewing the SEZ bill – MP Mohamed ‘Kutti’ Nasheed reportedly sought to allay fears that SEZs would facilitate corruption.

The ruling Progressive Party of Maldives MP – who was involved in drafting the legislation – explained that the bill includes mechanisms to prevent corruption and take legal action in accordance with the UN  International Convention against Corruption.

Provisions were included for terminating agreements with investors if an act of corruption is proved, he added.

Nasheed also suggested that other issues such as a ceiling for investments and extending incentives to developers in addition to investors could be addressed at the committee stage.

Speaking at the committee, Jumhooree Party Leader Gasim Ibrahim expressed concern with the legislation conferring excessive authority to the president, which he warned could be used to favour or “destroy” businesses.

The absence of a ceiling limit for investments was a threat to existing enterprises, Gasim argued, as the president could “take some dollars and create economic zones to enrich three or four people.”

The business tycoon, however, said he supports passing the bill with revisions.

MP Ahmed Siyam Mohamed – owner of the ‘Sun Siyam Resorts’ and leader of the government-aligned Maldives Development Alliance – urged expediting the passage of the bill as an SEZ law would allow “stalled investments” to resume.

Foreign banks were not lending for investments in the country at present, Siyam said, but development banks would be established along with the SEZs.

The economic committee’s chair said last week that he expects the review process to be completed before the end of the month, after which the bill would be sent to the Majlis floor for a vote. 

New frontiers

Yameen meanwhile said last night that the Maldives should emerge from its “small crab hole” into the wider world.

The government’s efforts to generate income to create job opportunities and provide education and healthcare was “not a big ask,” he said.

The country should have the courage and capacity to forge ahead, he added, and “face new things.”

The government’s efforts were geared towards “economic transformation” through diversification and fostering a “business-friendly environment” for both domestic and foreign entrepreneurs.

While increasing tourist arrivals was “natural economic growth,” Yameen explained that the objective was to “transform” the economy from the present “production frontier” to a higher level.

The “main beneficiary” from economic diversification and ‘mega projects’ would be the state, Yameen added, as tax revenue would increase and job opportunities would be created.

The Ibrahim Nasir International Airport currently caters for about 1.5 million passengers, he continued, but the government’s target was developing the airport to serve “five to seven million passengers.”

Implementation of the mega projects – such as the ‘iHavan’ transhipment port – would “transform the economic landscape,” Yameen suggested.

The government was also reviewing framework agreements for “avoidance of double taxation” to ensure that “corporate leaders” from neighbouring countries with investments in the Maldives are not taxed twice, Yameen revealed.

While the government’s focus was on the economy instead of partisan politics, Yameen stressed that political stability and a low crime rate were among the “basic ingredients” for economic transformation.

Reiterating the government’s focus on youth development, Yameen said the Maldives needed to move away from a culture of “criminalisation” of trivial offences to encouraging youth and “giving them conviction” and employment opportunities.

The younger generation was “the energy of the economy,” he added.

In a speech earlier this month, Yameen point to the country’s “motivated”, “highly intelligent” and “easily trainable” youth as a key resource for economic growth.

Likes(0)Dislikes(0)

Chamber of commerce vice president slams economic development minister

Vice President of the Maldives National Chamber of Commerce and Industry (MNCCI) Ismail Asif has severely criticised Economic Development Minister Mohamed Saeed, questioning his “sincerity” and “competence”.

Asif told the press on Thursday (August 7) that Saeed lacked “vision,” discriminated among local businesses, and had not been able to attract foreign investment.

The relationship between the ministry and the chamber of commerce has deteriorated during Saeed’s tenure, Asif reportedly claimed.

Saeed has not provided necessary information regarding a loan scheme for small and medium-sized enterprises (SMEs), Asif added.

He went on to accuse the minister of “corruption” in appointing businessmen of his choosing to business-related committees formed by the ministry.

Declaring the chamber of commerce’s backing for the government’s flagship special economic zone (SEZ) bill, Asif, however, questioned Saeed’s ability to implement the legislation when it is signed into law.

He added that Saeed had not consulted local businessmen before the bill was drafted and submitted to parliament.

However, Asif praised the government for proposing the SEZ bill early in its five-year term and expressed support for its provisions, arguing that it would expand the domestic economy and spur growth.

If income generated from the SEZs was evenly distributed among the populace, Asif said it would benefit the public and raise standards of living.

He also dismissed criticism that SEZs could be used for money laundering and criminal enterprises, suggesting that it was not directly linked to the establishment of such zones and advised control measures.

Parliament’s economic affairs committee is currently reviewing the SEZ legislation and has set itself a deadline of October 10 to complete the assessment and possibly make revisions.

However, MP Abdulla Khaleel – chair of the committee – told newspaper Haveeru today that he expects the review process to be completed this month, after which the bill would be sent to the People’s Majlis floor for a vote.

Parliament breaks for a one-month recess at the end of August.

As the bill was a high priority for the government, the Progressive Party of Maldives MP for Faafu Nilandhoo said the committee has decided to hold two meetings for every day when there is a parliament sitting.

He stressed that stakeholders would be consulted and technical expertise would be sought.

Likes(0)Dislikes(0)

Parliamentary debate begins on special economic zones bill

Preliminary debate on the government’s flagship special economic zones (SEZs) legislation began today with opposition Maldivian Democratic Party (MDP) MPs warning that the envisaged law could turn the Maldives into a haven for “money laundering and washing black money.”

If the bill is passed into law, the government could hand out uninhabited islands or plots of land for periods, prices, and terms of its choosing without either parliamentary oversight or a role for local councils, contended MDP MP Ibrahim Shareef.

“The Maldives could become a machine for money laundering and turning black money white,” he added.

If the country becomes a money laundering destination for international criminal enterprises, Shareef warned that developed nations could impose sanctions on the Maldives.

Shareef also expressed concern with the impact of tax exemptions for investors in the SEZs on the local tourism industry.

Among other MDP MPs who spoke during the debate, MP Ahmed Nashid noted that the bill “supersedes” 14 other laws while MP Abdul Gafoor Moosa insisted that the legislation should be amended with the input of the main opposition party.

Speaking at an MDP gathering last week, former President Mohamed Nasheed had dubbed the SEZ legislation the “Artur Brothers bill,” referring to the infamous Armenians linked with money laundering and drug trafficking who made headlines in Maldivian media last year after they were photographed with cabinet ministers.

Nasheed claimed that the zones are intended for criminal activity, money laundering, gambling, and “other irreligious activities.”

The Maldivian government’s liaison officer in Addu during British occupation of Gan island had more authority and freedom than what the government would have in the SEZs, Nasheed contended.

Debate

Introducing the 70-page draft legislation (Dhivehi), MP Ahmed Nihan – parliamentary group leader of the ruling Progressive Party of Maldives (PPM) – stressed that the bill includes provisions for terminating agreements with investors if an act of corruption specified in the International Convention against Corruption is proved.

The MP for Vilimale’ appealed for “cooperation and assistance” from opposition MPs in reviewing the legislation and addressing shortcomings at the committee stage.

In the ensuing debate, Jumhooree Party (JP) MP Ibrahim Hassan declared support for the legislation but suggested that the power to form a board of investment to oversee the zones should not be vested solely with the president.

JP MP Moosa Nizar Ibrahim suggested that environmental and national security concerns should be addressed, while JP Deputy Leader Ilham Ahmed said the bill contained “serious problems.”

While supporting the “concept” of SEZs, Ilham expressed concern with the bill offering tax exemptions to investors for a 10-year period and allowing uninhabited islands to be leased without advance payments.

The government would not receive any revenue from investors during the 10-year period, he noted, while investors would enjoy subsidised staple foodstuffs.

Incentives

PPM MP Jameel Usman argued that the bill was intended to assure investor confidence and offer incentives to choose the Maldives over other developing economies in the region.

SEZs in the Dominican Republic and Philippines created thousands of jobs, noted PPM MP Abdulla Rifau, suggesting that new jobs for Maldivian youth would make up for lost tax revenue.

Moreover, the bill requires investors to carry out corporate social responsibility (CSR) projects, he added.

Incentives for investors offered in the bill include tax exemptions and relaxed regulations for employing foreign labour.

Investors would be exempted from paying either import duties for capital goods or business profit tax, goods and services tax and withholding tax.

Moreover, regulations on foreign workers would be relaxed while companies with foreign shareholders would be allowed to purchase land without paying privatisation fees or sales tax.

Geographical areas or regions declared an SEZ by the president would also be removed from the jurisdiction of local councils.

The nine SEZs envisioned in the bill includes an industrial estate zone, export processing zone, free trade zone, enterprise zone, free port zone, single factory export processing zone, offshore banking unit zone, offshore financial services centre zone, and a high technology park zone.

President Abdulla Yameen had declared in April that the SEZ bill would become “a landmark law” that would strengthen the country’s foreign investment regime.

Likes(0)Dislikes(0)

MMA denies US suggestion it has knowledge of terrorist funding

The Maldives Monetary Authority (MMA) has rejected claims by the US State Department that it has any knowledge of funds being used to finance terrorist activities abroad (May 11).

The MMA’s statement came in response to a report from the US government that the authority believed funds from the Maldives were being used to sponsor terrorist activities.

“The MMA has neither received nor communicated any information regarding confirmed operation of terrorist financing activities,” said the MMA.

The US Country Reports on Terrorism 2013 claimed that criminal proceeds were coming from hawala systems (informal money transfer networks) to transfer money between islands.

“Maldivian authorities believe that funds are currently being raised in Maldives to support terrorism abroad; however, there is no reliable information regarding the amounts involved,” read the US report.

“While no official studies yet have been conducted, the Maldivian Central Bank believes that criminal proceeds mainly come from domestic sources, as a large percentage of Suspicious Transaction Reports (STRs) are related to Maldivians,” it continued.

The Maldivian Democratic Party (MDP) has today cited the US report as evidence that the government is not doing enough to combat terrorism.

“The Maldivian Democratic Party strongly condemns the government’s failure to bring an end to terrorist and extremist activities as funds are raised in the Maldives to fund terrorism abroad,” read a press release today.

The party suggested that examples of Maldivians engaging in extremism and terrorism was on the rise, suggesting the government was not doing enough to resolve organised criminal activity in the country.

In response to the US report, the MMA has contended they have not received any confirmed suspicious transaction reports related to terrorist financing in the Maldives through formal or informal money transfer networks.

The authority also expressed confidence in the industry’s framework for preventing such operations, adding that any companies that are under their supervision are subject to the Anti-Money Laundering and Combatting the Financing of Terrorism (AML/CFT) obligations.

AML/CFT legislation drafted by the MMA was passed by the People’s Majlis last month and ratified by President Abdulla Yameen on April 13.

The new law introduced rules governing financial transactions and the inflow and outflow of money from the Maldives.

“We are pleased to note that most of these financial institutions have internal policies, procedures and programs to implement those obligations,” the MMA statement added.

The US State Department had further noted growing concern since 2010 “about the activities of a small number of local violent extremists involved with transnational terrorist groups”.

“There has been particular concern that young Maldivians, including those within the penal system, may be at risk of becoming radicalized and joining violent Islamist extremist groups. Links have been made between Maldivians and violent extremists throughout the world,” the report stated.

The department also suggested that the Maldives has few laws which effectively control the movement of people and money into and out of the country, adding that due to its “sprawling island geography and insufficient technological capabilities” the coastguard could not effectively patrol the territory.

Likes(0)Dislikes(0)

Committee to enlist Singapore parliament in US$800 million oil trade probe

Parliament’s Committee on National Security is requesting assistance from the parliament of Singapore to investigate the case related to US$800 million in “illegal” oil trade allegedly conducted by former President Maumoon Abdul Gayoom and his half-brother, the Progressive Party of the Maldives (PPM) presidential prospect, MP AbdullaYameen, Sun Online reports.

During the committee meeting Monday (January 21) MP Reeko Moosa Manik announced the parliament was notified to contact Singapore’s parliament requesting they facilitate meetings with the Singapore police and anti-corruption authority.

The Foreign Ministry refused to fully cooperate and said it would take two weeks to arrange the requested meetings, according to local media.

Travel to Singapore and Malaysia for the investigation was scheduled for January 20, however was delayed due to the “failure to arrange meetings with [the necessary] investigative bodies,” added Sun Online.

The alleged international money laundering racket involved Yameen as “the kingpin” of a scheme to buy subsidised oil through the State Trading Organisation’s branch in Singapore and sell it on through an entity called ‘Mocom Trading’ to the Burmese military junta, at a black market premium.

Likes(0)Dislikes(0)

Maldives a mid-point for illegal immigration to Europe, money laundering: Immigration Controller

Controller of Immigration Mohamed Ali  on Monday expressed concern that the Maldives was being used as a mid-point for money laundering and illegal immigration to Europe.

Speaking at the Fifth Meeting of the SAARC Immigration Authorities, Ali said that while it was a rising concern that illegal immigrants were making their way to Europe via the Maldives, there was also the matter of African nationals attempting to enter the Maldives itself illegally.

Ali pointed out that people from African countries like Nigeria were entering the Maldives, which he said would lead to problems.

“Now for example, if people like those from Nigeria start entering the Maldives, you all know what sort of problems this can give rise to. That is because Nigerians don’t have much of a reputation when it comes to certain things,” the Controller said.

Stating there was a chance that Maldivians were involved in assisting the illegal immigration, Ali said this should therefore be a matter of huge concern for the country.

“We haven’t received any information about Al-Qaeda. Nevertheless, we have been getting other sorts of information,” Ali said.

“There is all sorts of organised crime coming in now from all sides. It isn’t just terrorism,” he said.

Ali went on to say that people on the Interpol watch-list had been intercepted attempting to enter the Maldives a number of times. A few of these persons have been found after entering the country.

He highlighted the importance of working more closely with Interpol and of strengthening the border control system in order to prevent such crimes from continuing.

Speaking to Minivan News today, Mohamed Ali further said that he hoped the Maldives Monetary Authority (MMA) would now consider the implications of money laundering happening in the country.

“What I meant to say is that there are risks of all these activities happening in the Maldives. Our intention is for MMA to plan and start taking action about the issue of money laundering,” Ali said.

The current border control system is operated by Nexbis, and is at present a contentious matter. The Anti-Corruption Commission has recently approached parliament’s Finance Committee about the issue.

The Maldives has meanwhile been on the US State Department’s tier 2 watch list for human trafficking for three years’ running.

Likes(0)Dislikes(0)

“No new significance” in Sri Lankan money laundering busts, say local police

Sri Lankan police are  investigating a large-scale money laundering case based in Colombo, that reportedly extends to the Maldives.

Local police representatives say no significant case has been filed with Maldivian authorities so far.

According to local media, money was being transferred from the Maldives to various illegal money transfer agents in neighboring Sri Lanka. The money is suspected to be used for such criminal activities as purchasing and distributing narcotics and other contraband.

Last week, Rs. 81.76 million (Rf11.4 million) was seized at Sri Lanka Customs, the largest amount of foreign currency to be detected at Bandaranaike International Airport (BIA). Haveeru reports that dollars from Australia, Canada and the US, as well as sterling pounds, Kuwaiti dinars, UAE Dirhams, Saudi Riyals, Swiss Francs and Euros were included in the stash.

Local police reported no case being lodged regarding the money laundering circuit in Colombo, and cautioned that the information that was given to local media regarding the transport of finances from the Maldives might not be reliable.

Officials did say that money laundering has been a problem in the Maldives. Police Sub-Inspector Ahmed Shiyam said that “the issue of money laundering in the Maldives is growing, and credit cards are being abused more.”

An official from the Fraud and Financial Branch said there have been suspicions of money laundering, but charges can not be pressed for that alone. “Individuals have been charged for drug possession, which might be related to money laundering, but we are currently unable to prosecute someone for money laundering alone. We plan to work on that in the future,” he said.

International Monetary Fund (IMF) reports state that money laundering became a bigger concern internationally post-9/11, when it became heavily linked to terrorism. Although many countries have since adopted IMF anti-money laundering (AML) policies, few have developed legislation to enforce these guidelines.

The latest IMF review of Sri Lanka, dated 2008, indicated that AML standards were adopted by signature but that legislation was not in place. A 2011 review of the IMF program found that international organizations were cooperative, but did not indicate that individual governments and banks had adopted AML procedures.

Sri Lankan police have conducted raids on unauthorized money transfer agencies in the past few weeks, reports Haveeru. Earlier this month the Colombo Fraud Bureau, an arm of the Sri Lankan police force, arrested several suspects and seized approximately Rs. 9 million (Rf1.25 million) in foreign currency, Haveeru reports.

Four key Maldivian narcotics peddlers who were busted by Maldivian authorities in June for their involvement in the smuggling of narcotics via Colombo to Male since 2005 had allegedly used a prominent money transfer agency in Colombo, reports Haveeru.

Likes(0)Dislikes(0)