Integrity Risk International

?? ? The 2022 ILO Global Estimates on Modern #Slavery figured that 17.3 million people are victims of forced labor worldwide. Five years from now, that number will hopefully be much lower. ? ?? More than two years since its proposal, an EU #forcedlabor ban has reached the final signature stage after the Council of the #EU approved the regulation on November 19. The ban will take effect approximately three years after its publication by the EU’s official register. ? The regulation, which forbids the sale of goods made with forced labor, will require bolstered investigative efforts to target companies benefitting from the practice. The Europe Commission plans to create a database of areas or products at risk of forced labor to help investigate the sale of forced labor-linked goods made outside the EU.? ? ?? Coupled with recent US efforts to prevent the sale of forced labor-linked goods created in China’s #Xinjiang region, this new regulation highlights #humanrights as an essential consideration in international #business and supply chain management. ? Reach out to?Duncan N. or Svetlana Milbert to find out how our #humanrights and #supplychain #duediligence services can support your business deals!

?? ??♂? #Insurance mogul and fraudster Greg Lindberg is back behind bars! ? Lindberg's story is one riddled with #financialcrime. Earlier this month, he pleaded guilty to #moneylaundering and #fraud charges in a $2 billion scheme in which he used an intricate web of companies based in popular tax havens, such as #Bermuda and #Malta, and elsewhere to hide the financial condition of his businesses while using company funds for personal benefit.??? ? And up until 2022, he had been incarcerated for allegedly attempting to bribe a North Carolina commissioner into giving his insurance company preferential #regulatory treatment.? ? ?? Lindberg's prosecution sends a strong message to other fraudsters, but this conviction might be too little, too late for thousands of loan and #securities policyholders who allegedly suffered substantial financial hardship resulting from the fraud.?#riskmanagement #duediligence

?? Calling all #IT, #HR, #Finance, and #Legal departments — are you communicating with one another? ? Nowadays, everywhere you turn there's a new #AI-driven #cybersecurity solution. What happens when departments fail to coordinate closely with cybersecurity teams? Let’s say the finance department used an AI system to flag transactions as being either fraudulent or suspicious — this sounds great!? ?? ?? But did AI just violate data privacy regulations? Did this put the company at legal risk? ?? ? To avoid unanswered questions, all departments must be on deck in the early stages of AI development to mitigate #noncompliance. A co-designed AI system, including legal and compliance experts, ensures #transparency and traceability. If each department isn’t involved in the AI development process, you can say hello to potential lawsuits and regulatory penalties. ?? We can all take inspiration from the EU’s General Data Protection Regulation (#GDPR), which grants individuals the right to understand the logic behind automated decisions. If the AI used by each department can’t explain why a decision was made, the company risks losing trust and its business #integrity. ? ?? Remember: AI is a strategic tool for growth, not noncompliance. ? #EU #compliance #duedilligence #riskmanagement

??? This week, the #European Public Prosecutor's Office (#EEPO) revealed its "Moby Dick" investigation," a probe into whale-sized VAT fraud involving criminal organizations, such as Italy's notorious Camorra and Cosa Nostra #mafia groups. ? ?? On November 14, 160 searches were carried out in several #EU and non-EU countries. Moby Dick showed no mercy in Italy as #prosecutors froze 129 bank accounts and seized 192 real estate properties, along with 44 luxury cars and boats. The accused criminals had issued invoices worth more than 1.3 billion euros to trade goods through a fraudulent chain in which companies would claim reimbursements from national #tax authorities, committing what is known as “VAT Carousel fraud.” ? ?? Europe loses roughly 50 billion euros per year due to this type of financial crime. However, Moby Dick and the freezing orders could help mitigate damage to the EU and national #budgets. Reach out to our Europe experts to learn how we can assist your due diligence and risk management efforts! Svetlana Milbert, Duncan N. #banks #corruption #security #tax #financialcrime

?? ?? The global #fentanyl crisis and Beijing's stringent capital controls have created an unlikely alliance: underground Chinese banks are laundering money accumulated by Mexican drug cartels, selling the dirty dollars to wealthy Chinese residents for a profit. ? ??♂? A Financial Times investigation published this week revealed that underground banks are hiring Chinese nationals — including taxi drivers, retail workers, and students — to deliver Mexican cartel dollars to wealthy Chinese residents looking to transfer money out of #China. A former #US Drug Enforcement Administration (#DEA) official called this scheme a “game changer” as it minimizes the need to transfer foreign currency across borders. Even more concerning yet, this method of money laundering evades standard forms of surveillance and is encumbering government efforts to pursue drug traffickers. ? ?? While the scale of the new money laundering system has alarmed law enforcement in several countries, the networks involving Chinese groups have been on their radar for a number of years. And as tensions ease between #Beijing and #Washington, Chinese authorities have shown more interest in assisting with international anti-money laundering (#AML) efforts.

?? Mounting conflict concerns in the #MiddleEast and #Europe, coupled with the possibility of new tariffs on US imports, have the European Central Bank (#ECB) asking for unprecedented levels of #geopolitical #risk information from #banks. ? ?? This is not the first time the ECB has looked at geopolitical risk. Following Russia’s invasion of Ukraine, lenders across Europe set aside money for losses on loans to companies that suffered from spiking energy prices. ? ?? ECB Supervision Head Claudia Buch attributed the bank’s new move to markets and managers not accounting for how geopolitical risks impact banks’ loan portfolios and trading business. However, some bank executives and regulators have aired concerns over how geopolitical risks may influence bank decisions and capital ratios. Stay tuned for how this new change in reporting might impact your #investments!

?? As Netflix cracks down on password sharing, the streaming giant may be facing a crackdown of its own after European regulators raided its offices in #France and the #Netherlands earlier this month. French and Dutch officials claim that Netflix misreported revenue generated from the French market by declaring the revenue in its Dutch #tax filings. ? ?? These allegations are just the latest development in an ongoing saga. The joint investigation has been underway since November 2022, following a 2021 report by LA LETTRE revealing that Netflix had understated its annual income by over a billion euros since 2019. ? ?? As tax fraud charges loom and public scrutiny grows, Netflix investors and partners may be left scrambling to minimize their exposure in the aftermath. For stakeholders concerned about future crackdowns, effective #duediligence can protect your firm from previously unknown #risks.

?? Talk about failure to run a tight ship! Earlier this week, the U.S. Department of Justice announced that a Turkish businessman had been arrested for allegedly helping companies circumvent US #sanctions programs against Venezuela. The defendant, Taskin Torlak, is accused of obscuring oil tanker identities and registration information. ? ?? In 2020, Torlak allegedly began working with co-conspirators in Ukraine, China, and Indonesia to deliver Venezuelan oil to Western buyers. Their oil tankers reportedly avoided detection by turning off mandatory tracking systems, obscuring names, and changing registrations and flags. In addition to hiding their tankers, the conspirators reportedly processed illicit payments through US banks by hiding the identities of those sending and receiving the funds. ? As the US continue to plug the holes in its sanctions program, it is critical that companies batten down the hatches with comprehensive #duediligence to avoid involvement in #illicit schemes. ? #worldnews #finance #compliance #regulatory #trade #energy

?? We are thrilled to announce our new presence in #Switzerland! Led by Duncan N., a senior vice president and Integrity Risk International's head of EMEA, this office will help us meet clients' growing need to conduct screening and enhanced due diligence on ultra-high-net-worth (#UHNW) individuals. “Our new presence in Switzerland is essential to allow us to better serve our financial institution clients that carry out extensive private client business in and/or through Switzerland,” said CEO Jim McWeeney. By choosing Integrity Risk International,?you’re gaining a partner with a deep understanding of regulatory frameworks and the ability to conduct comprehensive investigations on a global scale. ?? #duediligence

Real estate with a view — of a military base, that is — has emerged as a hot commodity for foreign countries looking to spy on the US.???♂? ??♀? The US Department of #Treasury last week finalized a rule expanding the Committee on Foreign Investment in the United States’ (#CFIUS) authority to review foreign acquisition of #realestate near US military bases, amid heightened concern regarding Chinese-linked purchases of US property near #government sites. ? Effective December 2024, the rule will add nearly 60 military facilities to CFIUS' review, raising the number of listed facilities to 227. According to Treasury Secretary Janet Yellen, the rule will “significantly increase the ability of CFIUS to thoroughly review real estate transactions near bases and will allow us to deter and stop foreign #adversaries from threatening our #ArmedForces, including through #intelligence gathering.” #China