Friday, September 30, 2016

Tax policy reforms driven by focus on boosting growth

While fiscal consolidation was the key driver of tax reforms in the years following the global economic crisis, the main emphasis of recent tax reforms has shifted back to tax measures OECDaimed at boosting economic growth, according to a new OECD report.

Tax Policy Reforms in the OECD provides an overview of the tax reforms that were implemented, legislated or announced across the OECD in 2015. The report – the first edition of a new annual monitoring exercise - identifies common tax policy trends across the OECD. 

Tax  reforms launched in 2015 were largely focused on boosting growth and were characterised by reductions in labour and corporate income taxes. This represents a significant shift from the post-crisis period, where a stronger focus on fiscal consolidation led governments to implement increases in labour taxes and value-added tax (VAT) rates.

The report also shows a move in some countries towards higher taxes on personal capital income, but only relatively limited moves toward reform of environmental and property taxes. These are all areas where the OECD has previously identified scope for governments to raise additional revenues while supporting inclusive economic growth.

Major international developments in the area of taxation in 2015 are shown to have influenced tax policy reforms across the OECD. Many of the reported corporate income tax (CIT) and VAT reforms reflected the impact of the adoption of the recommendations agreed upon as part of the OECD/G20 Base Erosion and Profit Shifting (BEPS) project and the endorsement of the OECD International VAT/GST Guidelines.

Austria, Belgium, Greece, Japan, the Netherlands, Norway and Spain were the countries that implemented, legislated or announced the most comprehensive tax reforms in 2015, according to the report.

“Tax policies have direct implications on economic growth as well as on how the benefits of growth are shared across the population,” said Pascal Saint-Amans, director of the OECD Centre for Tax Policy and Administration. “Monitoring tax policy reforms over time and understanding the context in which they were undertaken is crucial to informing tax policy discussions and supporting countries in the assessment and design of tax reforms.”

September 30, 2016 in OECD | Permalink | Comments (0)

Thursday, September 29, 2016

Ernst & Young, Former Partners Charged With Violating Auditor Independence Rules

First SEC Enforcement Actions for Auditor Independence Failures Due to Close Personal Relationships

The Securities and Exchange Commission today announced that public accounting firm Ernst & Young has agreed to pay $9.3 million to settle charges that two of the firm’s audit SECpartners got too close to their clients on a personal level and violated rules that ensure firms maintain their objectivity and impartiality during audits.

SEC investigations found that the senior partner on an engagement team for the audit of a New York-based public company maintained an improperly close friendship with its chief financial officer, and a different partner serving on an engagement team for the audit of another public company was romantically involved with its chief accounting officer.  Ernst & Young misrepresented in audit reports issued with the companies’ financial statements that it maintained its independence throughout these audits.

“These are the first SEC enforcement actions for auditor independence failures due to close personal relationships between auditors and client personnel,” said Andrew J. Ceresney, Director of the SEC’s Division of Enforcement.  “Ernst & Young did not do enough to detect or prevent these partners from getting too close to their clients and compromising their roles as independent auditors.”

According to the SEC’s order finding that Gregory S. Bednar caused auditor independence rule violations at Ernst & Young from January 2012 to March 2015, he was specifically tasked by the firm to improve its relationship with the New York-based audit client because it was a “troubled account.”  Bednar and the company’s CFO stayed overnight at each other’s homes on multiple occasions and traveled together with family members on overnight trips with no valid business purpose, and they exchanged hundreds of personal text messages, emails, and voicemails during the auditing periods.  Bednar also became friends with the CFO’s son and often treated them to sporting events and other gifts.  Certain Ernst & Young partners became aware of Bednar’s excessive entertainment spending but took no action to confirm that Bednar was complying with his independence obligations.

Bednar and Ernst & Young consented to the SEC’s order without admitting or denying the findings.  The firm agreed to pay $4.975 million in monetary sanctions for these violations.  Bednar must pay a $45,000 penalty and is suspended from appearing and practicing before the SEC as an accountant, which includes not participating in the financial reporting or audits of public companies.  The SEC’s order permits Bednar to apply for reinstatement after three years.  Bednar no longer works at Ernst & Young.

According to the SEC’s order finding that Pamela Hartford caused auditor independence rule violations at Ernst & Young from March 2012 to June 2014, she maintained a romantic relationship with financial executive Robert Brehl while she served on the engagement team auditing his company.  Meanwhile another Ernst & Young partner named Michael Kamienski, who supervised Hartford on the audit, became aware of facts suggesting the improper relationship yet failed to perform a reasonable inquiry or raise concerns internally to Ernst & Young’s U.S. independence group. 

According to the SEC’s order, Ernst & Young required audit engagement teams to follow certain procedures to assess their independence, and employees were asked whether they had familial, employment, or financial relationships with audit clients that could raise independence concerns.  But these procedures did not specifically inquire about non-familial close personal relationships that could impair the firm’s independence.

Ernst & Young, Hartford, Kamienski, and Brehl consented to the SEC’s order without admitting or denying the findings.  The firm agreed to pay $4.366 million in monetary sanctions for these violations, and Hartford and Brehl agreed to pay penalties of $25,000 each.  Hartford, Kamienski, and Brehl are suspended from appearing and practicing before the SEC as accountants, which includes not participating in the financial reporting or audits of public companies.  The SEC’s order permits Brehl to apply for reinstatement after one year, and Hartford and Kamienski can apply after three years.  Hartford and Kamienski no longer work at Ernst & Young.

The SEC’s investigation involving the audit of the New York-based issuer was conducted by Vanessa De Simone, John O. Enright, Lisa Knoop, and Thomas P. Smith Jr., and was supervised by Sanjay Wadhwa.  The investigation involving the audit of the other issuer was conducted by Deborah R. Maisel and Amanda deRoo, and was supervised by Jennifer S. Leete.  The SEC appreciates the assistance of the Public Company Accounting Oversight Board.

September 29, 2016 in Financial Regulation | Permalink | Comments (0)

Wednesday, September 28, 2016

More Than 100 Auto Parts Executives, Companies, and Employees Indicted for Obstruction of Justice

More Than 100 Charged in Wide-Spread Auto Parts Investigation of Price Fixing

A federal grand jury in the U.S. District Court for the Eastern District of Michigan returned an indictment charging one current automotive parts industry executive and one former automotive parts industry executive with conspiring to obstruct a federal investigation.  The current executive also was charged with attempted obstruction of justice, the Justice Department announced today.

The indictment, filed today in Detroit, charges Futoshi Higashida and Mikio Katsumaru with conspiring to obstruct a federal investigation.  Higashida is also charged with attempted FBISeal (1)obstruction of justice.  During the charged conspiracy, Katsumaru was employed by an automotive parts company in Japan, and Higashida worked there and in Novi, Michigan, as president of that company’s U.S. joint venture with another company.

According to the indictment, the defendants, along with their co-conspirators, conspired from at least as early as June 2008 until at least September 2012 to delete emails and electronic records and to destroy documents referring to communications with competitors.  In addition, according to the indictment, Higashida instructed another individual on or about September 25, 2012, to ensure that no phone numbers or call records remained on his cellular telephone and that no data remained on his computer that would reflect competitor communications.  The charges contained in the indictment are allegations and not evidence of guilt.  The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

“Individuals will not escape prosecution by covering up or destroying evidence of their own or their company’s wrong-doing,” said Deputy Assistant Attorney General Brent Snyder of the Justice Department’s Antitrust Division.  “Obstructing a federal antitrust investigation – criminal or civil – is a serious criminal violation that the Antitrust Division will vigorously pursue.”

“Federal investigations are serious matters, and we will pursue any individuals who are involved in destroying evidence to keep it from the FBI,” said Howard S. Marshall, Special Agent in Charge of the Louisville office of the FBI.  “The FBI is committed to aggressively investigating companies and individuals who engage in criminal conduct that corrupts the global marketplace.  We will continue our work with the Department of Justice’s Antitrust Division to uncover schemes aimed at creating an unfair competitive advantage by way of price fixing, bid rigging or other illegal means."

A total of 65 individuals and 47 companies have been charged in the Antitrust Division’s investigations into the automotive parts industry.  This indictment was brought by the Antitrust Division’s Chicago Office and the FBI’s Louisville Field Office, Covington Resident Agency, with the assistance of the FBI’s International Corruption Unit and the U.S. Attorney’s Offices for the Eastern District of Michigan and the Eastern District of Kentucky.  Anyone with information about anticompetitive conduct in the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at 888-647-3258, visit www.justice.gov/atr/contact/newcase.html or contact the FBI’s Louisville Field Office at 502-263-6000.

Higashida Indictment

September 28, 2016 in Financial Regulation | Permalink | Comments (0)

Tuesday, September 27, 2016

Undeclared Panamanian Bank Account of $1.5 million Leads to $850,000 FBAR Penalty

Defendant to Pay Full Restitution to IRS and Civil Penalty of More Than $850,000

A Weston, Connecticut man, who used a Panamanian bank account to conceal over $1.5 million in income from the sale of duty-free alcohol and tobacco products pleaded guilty today Irs_logoto one count of conspiring to conceal assets and income from the Internal Revenue Service (IRS), announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division and U.S. Attorney Paul J. Fishman for the District of New Jersey.       

Saul Hyatt, 53, pleaded guilty today before U.S. District Judge Freda L. Wolfson of the District of New Jersey to an Information charging him with conspiracy to conceal assets in an undeclared bank account held in Panama for his benefit.  According to documents filed with the court, Hyatt conspired with another individual in the United States and others to conceal his assets and income derived from the sale of duty-free alcohol and tobacco products.  To execute the scheme, Hyatt used a registered Panamanian corporation, Centennial Group, to buy and sell the duty-free products.  The alcohol shipped through a customs-bonded warehouse in the Foreign Trade Zone in Fort Lauderdale, Florida.  The tobacco products, Chinese-brand cigarettes sold under the names “Chung Hwa” and “Double Happiness,” passed through a customs-bonded warehouse in North Bergen, New Jersey.  From 2006 to 2012, Hyatt directed that $1,627,832 in profits from the sale of duty-free alcohol and tobacco products be wired to his undeclared bank account in Panama.  Hyatt repatriated money from the Panamanian bank account to buy a Mercedes Benz SL 550R automobile and to pay for $19,000 in interior design goods and services. 

U.S. persons are required to report to the IRS on Schedule B of a U.S. Individual Income Tax Return any financial interest in, or signature authority over, a financial account in a foreign country by checking “Yes” or “No” in the appropriate box and identifying the country where the account was maintained.  U.S. persons also must report all income earned from foreign financial accounts and, if the accounts have an aggregate value of more than $10,000 at any time during the calendar year, file with the Department of the Treasury a Report of Foreign Bank and Financial Accounts (FBAR).

Hyatt failed to report income earned on his Panamanian account, and failed to file an FBAR for the years at issue.  Hyatt admitted that this scheme resulted in a tax loss of $521,986.

“The Department continues to vigorously pursue and prosecute those who conceal their assets and income in offshore accounts in an effort to evade paying their fair share of taxes,” said Principal Deputy Assistant Attorney General Ciraolo. “Nearly eight years after the IRS announced its first offshore voluntary disclosure program, individuals who fail to disclose their interests in foreign accounts and report income earned on these accounts should be well aware that there are significant consequences for this criminal conduct.” 

“The Panamanian banking system should not be a haven to hide profits made from United States businesses,” said U.S. Attorney Fishman.  “When American taxpayers use foreign bank accounts to hide their assets, we will investigate and prosecute them to the fullest extent of the law.”

“Concealing income and assets offshore is not tax planning,” said Special Agent in Charge Jonathan D. Larsen of IRS-Criminal Investigation, Newark Field Office.  “Plain and simple, this is international tax fraud. The facts in this case are clear.  Mr. Hyatt earned income through the sale of duty-free alcohol and tobacco products and intentionally had over $1.6 million of profits wired into an undeclared offshore bank account in Panama.  Today’s plea shows how determined we are at the IRS and Department of Justice in uncovering this type of international tax fraud and putting a stop to it.”

Judge Wolfson set sentencing for Jan. 6, 2017.  Hyatt faces a statutory maximum sentence of five years in prison, as well as a term of supervised release and monetary penalties. Hyatt has agreed to file true and accurate tax returns and to pay the IRS all taxes and penalties owed, in addition to paying an $854,465.50 penalty for failure to disclose his foreign accounts.

September 27, 2016 in FATCA | Permalink | Comments (0)

Monday, September 26, 2016

Admissions and Career Services Positions Avaliable

Besides new faculty positions, Texas A&M also has new staff positions that have recently been posted.  One is an Admissions Recruitment Coordinator  and the other is a Career Services Assistant Director. 

Please pass along the link to interested parties for the Admissions position "Admissions Recruitment Coordinator" https://jobpath.tamu.edu/postings/101061

September 26, 2016 in Education | Permalink | Comments (0)

Gross Domestic Product by Metropolitan Area, 2015. Professional and Business Services Led Growth.

Real gross domestic product (GDP) increased in 292 metropolitan areas in 2015, led by growth in professional and business services; wholesale and retail trade; and finance, insurance, real estate, rental and leasing, according to statistics on the geographic breakout of GDP released by the Bureau of Economic Analysis. Collectively, real GDP for U. S. metropolitan areas increased 2.5 percent in 2015 after increasing 2.3 percent in 2014.

Percent Change in Real GDP by Metropolitan Area
  • Professional and business services contributed 0.61 percentage point to U.S. metropolitan area real GDP growth in 2015. This industry contributed to growth in 293 of the nation's 382 metropolitan areas. Growth in this industry accounted for more than half of real GDP growth in 32 metropolitan areas, and contributed more than one percentage point to growth in 25 metropolitan areas, most notably in San Jose-Sunnyvale-Santa Clara, CA (2.75 percentage points), the second fastest growing metropolitan area in the nation (8.9 percent).
  • The wholesale and retail trade industry group contributed 0.40 percentage point to U.S. metropolitan area real GDP growth in 2015. This industry contributed to growth in 335 metropolitan areas and was the leading contributor to growth in 67 metropolitan areas. This industry contributed more than one percentage point to growth in 20 metropolitan areas, most notably in Hickory-Lenoir-Morganton, NC (1.44 percentage points).
  • The finance, insurance, real estate, rental, and leasing industry group contributed 0.39 percentage point to U.S. metropolitan area real GDP growth in 2015. This industry contributed to growth in 246 metropolitan areas and was the leading contributor to growth in 86 metropolitan areas. This industry contributed more than one percentage point to growth in 48 metropolitan areas. This industry also had strong contributions to growth in three metropolitan areas in Florida where total growth was greater than four percent: Sebastian-Vero Beach, FL (3.22 percentage points); Naples-Immokalee-Marco Island, FL (2.91 percentage points); and Punta Gorda, FL (2.39 percentage points).
  • Although natural resources and mining and nondurable-goods manufacturing were not major contributors to growth for the nation, these industries contributed to strong growth in several of the fastest growing metropolitan areas. Natural resources and mining led to notable growth in total real GDP for Midland, TX (9.4 percent) and Visalia-Porterville, CA (7.6 percent), the fastest and fourth fastest growing metropolitan areas, respectively. Nondurable-goods manufacturing led to growth in Lake Charles, LA (8.3 percent)–the third fastest growing metropolitan area.
  • Transportation and utilities subtracted 0.14 percentage point from U.S. metropolitan area real GDP growth in 2015. This industry subtracted from growth in 311 metropolitan areas. The largest subtractions occurred in Houma-Thibodeaux, LA (5.50 percentage points) and Homosassa Springs, FL (3.37 percentage points).

Large Metropolitan Area Highlights

  • Of the large metropolitan areas, those with population greater than two million, San Antonio-New Braunfels, TX (5.9 percent) and Austin-Round Rock, TX (5.0 percent) were the fastest growing large metropolitan areas. San Antonio-New Braunfels, TX was led by a strong contribution from natural resources and mining (2.51 percentage points), while growth in Austin-Round Rock, TX was led by professional and business services (1.57 percentage points).
  • The slowest growing large metropolitan areas were Washington-Arlington-Alexandria, DC-VA-MD-WV (1.3 percent) and Cleveland-Elyria, OH (1.1 percent). Growth in Washington-Arlington-Alexandria, DC-VA-MD-WV was restrained by a decline in finance, insurance, real estate, rental and leasing (–0.17 percentage points), while durable-goods manufacturing restrained growth in Cleveland-Elyria, OH (–0.32 percentage points).

Real Gross Domestic Product (GDP) by Metropolitan Area, 2014 v 2015

U.S. metropolitan areas

14,203,294

14,563,088

.......

New York-Newark-Jersey City, NY-NJ-PA

1,388,513

1,412,183

1

Los Angeles-Long Beach-Anaheim, CA

806,832

838,101

2

Chicago-Naperville-Elgin, IL-IN-WI

552,991

570,082

3

Houston-The Woodlands-Sugar Land, TX

450,740

471,290

4

Dallas-Fort Worth-Arlington, TX

433,423

448,873

5

Washington-Arlington-Alexandria, DC-VA-MD-WV

436,894

442,433

6

San Francisco-Oakland-Hayward, CA

363,951

378,763

7

Philadelphia-Camden-Wilmington, PA-NJ-DE-MD

362,930

368,210

8

Boston-Cambridge-Newton, MA-NH

348,266

355,904

9

Atlanta-Sandy Springs-Roswell, GA

295,397

303,903

10

Current-Dollar Gross Domestic Product (GDP) by Metropolitan Area, 2014 v 2015

U.S. metropolitan areas

15,606,598

16,204,029

.......

New York-Newark-Jersey City, NY-NJ-PA

1,537,140

1,602,705

1

Los Angeles-Long Beach-Anaheim, CA

879,960

930,817

2

Chicago-Naperville-Elgin, IL-IN-WI

608,710

640,656

3

Houston-The Woodlands-Sugar Land, TX

522,028

503,311

4

Washington-Arlington-Alexandria, DC-VA-MD-WV

474,375

491,042

5

Dallas-Fort Worth-Arlington, TX

478,572

485,683

6

San Francisco-Oakland-Hayward, CA

408,067

431,704

7

Philadelphia-Camden-Wilmington, PA-NJ-DE-MD

397,137

411,161

8

Boston-Cambridge-Newton, MA-NH

378,983

396,549

9

Atlanta-Sandy Springs-Roswell, GA

322,054

339,203

10

GDP by Metropolitan Area Statistics

The statistics of GDP by metropolitan area for 2015 are based on source data that are subject to further revision and are limited to 22 NAICS-based sectors. Revised statistics for 2014 are released for 22 NAICS-based sectors and, for the first time, more-detailed 61 NAICS-based subsectors. Statistics for 2001–2013 are also revised. More information on these statistics and the sources of the revisions will appear in the October 2016 issue of the Survey of Current Business, BEA's monthly journal.

Other Texas metros in top 100

#32 Austin-Round Rock $119,949 million

#35 San Antonio-New Braunfels $108,879 million

#86 El Paso $28,912 million

September 26, 2016 in Economics | Permalink | Comments (0)

Sunday, September 25, 2016

Canada's measures to combat money laundering and terrorist financing

 

Canada has a strong anti-money laundering and combating the financing of terrorism (AML/CFT) regime which achieves good results in some areas but requires further improvements to be fully effective.

The International Monetary Fund conducted a detailed assessment of Canada’s AML/CFT framework, and the resulting report was adopted by the FATF as Canada’s 4th mutual evaluation report. The assessment found that the Canadian AML/CFT regime is comprehensive and presents several characteristics of an effective system, but improvements in the legal framework and its implementation are nevertheless necessary.

Canada faces important money laundering and, to a lesser extent, terrorist financing risks. The authorities have a good understanding of these risks and have put a number of mitigating measures in place. The AML/CFT regime covers all high-risk areas, except legal counsels, legal firms and Quebec notaries; the Supreme Court declared AML/CFT measures inoperative in their respect. The lack of coverage of these professions is a significant loophole in Canada’s AML/CFT framework and raises serious concerns. Legal persons and arrangements are at high risk of misuse for money laundering or terrorist financing purposes, and that risk is not satisfactorily mitigated.

Constitutional constraints limit the analysis that Canada’s financial intelligence unit, FINTRAC, can conduct. The fact that FINTRAC is not authorized to request information from any reporting entity creates a gap, however, FINTRAC does cooperate effectively with law enforcement agencies.

The Canadian authorities have achieved some success in combating money laundering, notably when conducting law enforcement efforts with the support of FINTRAC’s analysis. However, these efforts are not entirely in line with the money laundering risks that Canada faces, and overall, the recovery of proceeds of crime appears to be relatively low. Counter-terrorist financing efforts are more in line with Canada’s risk profile. There is effective cooperation of government bodies, good supervision of reporting entities and effective measures are in place to prevent terrorists from raising, using and moving funds. Canada accords priority to pursuing terrorism, with terrorist financing being one of the key components of its counter-terrorism strategy.

Financial institutions, including Canada’s six domestic systemically important banks, generally apply adequate measures to mitigate the money laundering and terrorist financing risks that they face. Designated non-financial businesses and professions, however, are not as effective in their implementation of AML/CFT measures. The financial and non-financial sectors are subject to appropriate risk-sensitive AML/CFT supervision, but further supervisory efforts are necessary with respect to the real estate and dealers in precious metals and stones sectors.

The Canadian authorities cooperate effectively and frequently with their foreign counterparts. Canada has a strong framework for mutual legal assistance and extradition which it adequately uses in the fight against terrorist financing and, albeit to a somewhat lesser extent, money laundering.

This report was adopted by the FATF at its Plenary meeting in June 2016.

Download the report: 

Full report

Executive Summary

Earlier reports on Canada's measures to combat money laundering and terrorist financing

More information: 

FATF Recommendations

Methodology for assessing technical compliance with the FATF Recommendations and the Effectiveness of AML/CFT Systems

Key findings, ratings and priority actions:

 

 

September 25, 2016 in AML | Permalink | Comments (0)

Saturday, September 24, 2016

Two Men Plead Guilty for Their Roles in Identity Trafficking Scheme

Two individuals each pleaded guilty to one count of conspiracy to commit identification fraud and one count of conspiracy to commit human smuggling for financial gain in relation to their respective roles in trafficking the identities of Puerto Rican U.S. citizens and corresponding identity documents.

Francisco Matos-Beltre, 42, a U.S. citizen formerly of Philadelphia, and Alejandro Tello-Rojas, aka Joel Ocasio-Cancel, aka William Davila, 36, a Mexican citizen formerly of Justice logoLawrenceville, Georgia, pleaded guilty before U.S. District Judge Juan M. Perez-Gimenez of the District of Puerto Rico.  On Aug. 6, 2015, Matos-Beltre, an identity document supplier, and Tello-Rojas, an identity document broker, were charged in an indictment returned by a federal grand jury in Puerto Rico.  To date, 14 individuals have been charged for their roles in the identity trafficking scheme, eight defendants have pleaded guilty and six individuals remain fugitives.

According to admissions made in connection with today’s pleas, identity document runners located in the Savarona area of Caguas, Puerto Rico, obtained Puerto Rican identities and corresponding identity documents.  Other conspirators, identified as identity document suppliers and brokers, were located in various cities throughout the United States and allegedly solicited customers for the sale of social security cards and corresponding Puerto Rico birth certificates for prices ranging from $700 to $2,500 per set, the defendants admitted.  The defendants acknowledged that the conspirators used text messages, money transfer services and U.S. mail to complete their illicit transactions.

The defendants also admitted that they sold Puerto Rican identity documents to  customers, who generally obtained the identity documents to assume the identity of Puerto Rican U.S. citizens and to obtain additional identification documents, such as legitimate state driver’s licenses.  Some customers obtained the documents to commit financial fraud and attempted to obtain a U.S. passport, according to the plea agreements.  At the time of his arrest, Tello-Rojas had assumed the identity of Ocasio-Cancel, a Puerto Rican U.S. citizen.

The Chicago offices of ICE’s Homeland Security Investigations (HSI), USPIS, DSS and IRS-CI led the investigation, dubbed Operation Island Express II, with assistance from the HSI San Juan Office and the DSS Resident Office in Puerto Rico.  The HSI Assistant Attaché office in the Dominican Republic and International Organized Crime Intelligence and Operations Center provided invaluable support with assistance from ICE, USPIS, DSS and IRS-CI offices around the country.

Trial Attorneys Marianne Shelvey of the Criminal Division’s Organized Crime and Gang Section and Frank Rangoussis of the Criminal Division’s Human Rights and Special Prosecutions Section are prosecuting the case.  The U.S. Attorney’s Office of the District of Puerto Rico is providing assistance in this matter. 

Potential victims and the public may obtain information about the case at:www.justice.gov/criminal/vns/caseup/beltrerj.html.  Anyone who believes their identity may have been compromised in relation to this investigation or who may have information about particular crimes in this case should call the ICE toll-free hotline at 1-866-DHS-2ICE (1-866-347-2423) or use its online tip form at www.ice.gov/tipline.

September 24, 2016 in AML | Permalink | Comments (0)

At least 500 million Yahoo emails hacked and the personal data stolen in largest breach ever.

"A large-scale data breach was first rumored in August when a hacker who goes by the name of "Peace" claimed to be selling data from 200 million Yahoo users online." see CNN

See NY Times: "... The average time it takes organizations to identify such an attack is 191 days, and the average time to contain a breach is 58 days after discovery.

Security experts say the breach could bring about class-action lawsuits, in addition to other costs. An annual report by the Ponemon Institute in July found that the costs to remediate a data breach is $221 per stolen record. Added up, that would top Yahoo’s $4.8 billion sale price."

"It is unclear whether security testing — such as a test to see if security experts could break into the Yahoo network — was performed as part of Verizon’s due diligence process before it agreed to the acquisition.  But such security is often overlooked by investors, even though breaches can result in stolen intellectual property, compromised user accounts and class-action lawsuits." See NY Times

See Wired

September 24, 2016 in AML | Permalink | Comments (0)

Friday, September 23, 2016

Bahamas Leaks: ICIJ Exposes EU Officials, Politicians, for New Leak of Offshore Files

A cache of leaked documents provides names of politicians and others linked to more than 175,000 Bahamian companies registered between 1990 and 2016

For years, Neelie Kroes traveled Europe as one of the continent’s senior officials, warning big corporations that they couldn’t “run away” from the European Union’s rules.  What Kroes Journalists logonever told audiences – and didn’t tell European Commission officials in mandatory disclosures – was that she had been listed as a director of an offshore company in the Bahamas ...

Read the full ICIJ investigation

Alongside detailed reporting, ICIJ, Süddeutsche Zeitung and other media partners are making details from the Bahamas corporate registry available to the public. This creates, for the first time, a free, online and publicly-searchable database of offshore companies set up in the island nation that has sometimes been called “The Switzerland of the West.”

“We see it as a service to the public to make this basic kind of information openly available,” said Gerard Ryle, the director of ICIJ.

September 23, 2016 in FATCA, GATCA, Tax Compliance | Permalink | Comments (0)

Pakistan becomes the 104th jurisdiction to join the most powerful multilateral instrument against offshore tax evasion and avoidance

Today, at the OECD Headquarters in Paris, Senator Mohammad Ishaq Dar, Minister of Finance of Pakistan, signed the Multilateral Convention on Mutual Administrative Assistance in OECDTax Matters in the presence of OECD Secretary-General Angel Gurría, therewith becoming the 104th jurisdiction to join the Convention.

The Convention is the most powerful instrument for international tax cooperation. It provides for all forms of administrative assistance in tax matters: exchange of information on request, spontaneous exchange, automatic exchange, tax examinations abroad, simultaneous tax examinations and assistance in tax collection. It guarantees extensive safeguards for the protection of taxpayers’ rights.

By signing, Pakistan will send a strong signal of its commitment to fight offshore tax evasion and avoidance. Morevover Pakistan is a Member of the BEPS inclusive framework and has such will exchange automatically country by country reporting as required by Action 13 of the BEPS package. The Convention provides the ideal instrument to swiftly implement automatic exchange  so the signing and ratification of the Convention is very timely.

The Convention was developed jointly by the OECD and the Council of Europe in 1988 and amended in 2010 to respond to the call by the G20 to align it to the international standard on exchange of information and to open it to all countries, thus ensuring that developing countries could benefit from the new more transparent environment. 

Since then, the Convention has become a truly global instrument. It is seen as the ideal instrument for swift implementation of the new Standard for Automatic Exchange of Financial Account Information in Tax Matters developed by the OECD and G20 countries as well as automatic exchange of country by country reports under the OECD/G20 Base Erosion and Profit Shifting (BEPS) Project and is a powerful tool in the fight against illicit financial flows.

September 23, 2016 in GATCA | Permalink | Comments (0)

Texas A&M School of Law Seeks To Hire Several New Law Professors

These are exciting times at Texas A&M University School of Law! Since the university acquired a law school in August of 2013, the law school has embarked on a program of investment that increased its entering class credentials and financial aid budgets, while shrinking the class size; hired 20 new faculty members, including thirteen prominent lateral hires; improved its physical facility; and substantially increased its career services, admissions, and student services staff.

And now, we are again hiring additional faculty. Texas A&M University School of Law now seeks to expand its academic program and its strong commitment to scholarship by hiring TAMU-Law-lockup-stack-SQUARE (1)multiple exceptional faculty candidates for contract, tenure-track, or tenured positions, with rank dependent on qualifications and experience.  Candidates must have a J.D. degree or its equivalent.  Preference will be given to those with demonstrated outstanding scholarly achievement and strong classroom teaching skills.  Successful candidates will be expected to teach and engage in research and service.  While the law school welcomes applications in all subject areas, it particularly invites applications from:

1)      Candidates who are interested in expanding and building on our innovative Intellectual Property and Technology Law Clinic (with concentrations in both trademarks and patents), or in one of our other acclaimed clinical areas, including Family Law and Benefits Clinic, Employment Mediation Clinic, Wills & Estates Clinic, Innocence Clinic, and Immigration Law Clinic; and

2)      Candidates with an oil and gas law and/or energy law background, either domestic U.S. or international, who are interested in interdisciplinary research, teaching, and programmatic activities.

3)      Candidates with strong classroom skills and scholarly achievement interested in teaching in our exceptional Legal Analysis, Research, and Writing Program.

While the law school is primarily interested in entry-level candidates for the above positions, more experienced candidates may be considered to the extent that their qualifications respond to the law school’s needs and interests.

In addition, the law school welcomes lateral and highly experienced professionals for the following positions:

1)      Candidates with experience in IP licensing and technology transfers, with relevant academic and/or professional science background, and who are interested in working and building synergies with the Texas A&M University’s College of Agricultural and Life Sciences

2)      Candidates in the field of Alternative Dispute Resolution with a national or international reputation and stellar credentials in scholarship, teaching, and service, and with an interest in building our nationally ranked dispute resolution program;

3)      Candidates in any field with a national or international reputation and stellar credentials in scholarship, teaching, and service;

Texas A&M University is a tier one research institution and American Association of Universities member.  The university consists of 16 colleges and schools that collectively rank among the top 20 higher education institutions nationwide in terms of research and development expenditures.

Texas A&M School of Law is located in the heart of downtown Fort Worth, one of the largest and fastest growing cities in the country.  The Fort Worth/Dallas area, with a total population in excess of six million people, offers a low cost of living, a strong economy, and access to world-class museums, restaurants, entertainment, and outdoor activities.

As an Equal Opportunity Employer, Texas A&M welcomes applications from a broad spectrum of qualified individuals who will enhance the rich diversity of the university’s academic community. Applicants should email a résumé and cover letter indicating research and teaching interests to Professor Gabriel Eckstein, Chair of the Faculty Appointments Committee, at appointments@law.tamu.edu.  Alternatively, résumés can be mailed to Professor Eckstein at Texas A&M University School of Law, 1515 Commerce Street, Fort Worth, Texas 76102-6509.

September 23, 2016 in Education | Permalink | Comments (0)

Thursday, September 22, 2016

U.S. International Transactions, 2nd quarter 2016

Current Account Balance

 Bureau Econ AnalysisThe U.S. current-account deficit decreased to $119.9 billion (preliminary) in the second quarter of 2016 from $131.8 billion (revised) in the first quarter of 2016, according to statistics released by the Bureau of Economic Analysis (BEA). The deficit decreased to 2.6 percent of current-dollar gross domestic product (GDP) from 2.9 percent in the first quarter.

The $12.0 billion decrease in the deficit reflected an $8.9 billion increase in the surplus on primary income to $42.9 billion, a $3.1 billion decrease in the deficit on secondary income to
$37.6 billion, and a $0.4 billion increase in the surplus on services to $61.5 billion.  These changes were partly offset by a $0.5 billion increase in the deficit on goods to $186.7 billion.

                           Current Account Transactions (tables 1-5)

Exports of goods and services and income receipts

Exports of goods and services and income receipts increased $18.0 billion in the second quarter to $777.0 billion.

   * Primary income receipts increased $10.4 billion to $198.9 billion, primarily reflecting an increase in direct investment income.

   * Goods exports increased $6.1 billion to $360.2 billion, reflecting increases in industrial supplies and materials, primarily in petroleum and products, and foods, feeds, and
     beverages.  A decrease in consumer goods except food and automotive partly offset these increases.

Imports of goods and services and income payments

Imports of goods and services and income payments increased $6.1 billion to $896.9 billion.

   * Goods imports increased $6.5 billion to $546.9 billion, reflecting increases in imports of industrial supplies and materials, largely in energy products, and capital goods except
     automotive. These increases were partly offset by a decrease in imports of consumer goods, except food and automotive, particularly other household goods, including cell phones.

   * Primary income payments increased $1.4 billion to $155.9 billion, reflecting an increase in direct investment income.

   * Secondary income payments decreased $2.4 billion to $69.8 billion, reflecting a decrease in U.S. government transfers, both in U.S. government grants and in U.S. government
     pensions and other transfers.

                          Financial Account (tables 1, 6, 7, and 8)

Net U.S. borrowing measured by financial-account transactions was $31.1 billion in the second quarter, a $14.3 billion decrease from net borrowing of $45.4 billion in the first quarter. An
increase in net U.S. acquisition of financial assets excluding financial derivatives was mostly offset by an increase in net U.S. incurrence of liabilities excluding financial derivatives.
Net transactions in financial derivatives other than reserves reflected more net lending in the second quarter than in the first quarter.

Financial assets

Net U.S. acquisition of financial assets excluding financial derivatives increased $233.8 billion to $293.7 billion.

   * Transactions in portfolio investment assets increased $167.3 billion to net U.S. acquisition of $109.9 billion, as a shift to net acquisition of equity and investment fund
     shares more than offset a shift to net sales of debt securities.

   * Net U.S. acquisition of direct investment assets increased $38.7 billion to $106.1 billion, largely reflecting an increase in net acquisition of equity.

   * Net U.S acquisition of other investment assets increased $26.5 billion to $77.5 billion, as a shift to net provision of loans to foreigners exceeded a shift to net withdrawal of
     U.S. residents’ deposits abroad (in currency and deposits).

Liabilities

Net U.S. incurrence of liabilities excluding financial derivatives increased $232.2 billion to $350.4 billion.

   * Net U.S. incurrence of other investment liabilities increased $143.9 billion to $192.0 billion, mostly reflecting a shift to net incurrence of deposit liabilities in currency
     and deposits.

   * Net U.S. incurrence of direct investment liabilities increased $68.3 billion to $159.6 billion, reflecting increases in net incurrence of both equity and debt instrument
     liabilities.

Financial derivatives

Transactions in financial derivatives other than reserves reflected second-quarter net lending of $25.6 billion, a $12.6 billion increase from the first quarter.

                               Statistical Discrepancy (table 1)

The statistical discrepancy increased $2.3 billion in the second quarter to $88.8 billion.

                                    *          *          *

                                           Revisions

        Revisions to First-Quarter 2016 International Transactions Accounts Aggregates
                          [Billions of dollars, seasonally adjusted]

                                                                      Estimate
                                                       Preliminary                Revised
   Current-account balance                                  -124.7                 -131.8
      Goods balance                                         -186.4                 -186.3
      Services balance                                        64.6                   61.1
      Primary-income balance                                  37.5                   34.0
      Secondary-income balance                               -40.3                  -40.6
   Net lending from financial-account transactions           -35.0                  -45.4
   Statistical discrepancy                                    89.6                   86.5

September 22, 2016 in Economics | Permalink | Comments (0)

Wednesday, September 21, 2016

Panama Papers: NML Hedge Fund, Owner of Argentina Defaulted Bonds, Sues Mossack Fonseca For Alleged Obstruction of Justice in Nevada

Confidential emails revealed in the Panama Papers have opened a new front in a bitter court battle in Nevada involving a hedge fund led by an American billionaire, new court filings Journalists logoshow. see court filings

NML Capital, a hedge fund managed by New York investor Paul Singer, is suing the Nevada office of Mossack Fonseca, the law firm at the center of the Panama Papers scandal, for obstruction of justice.

read the ICIJ story here.

September 21, 2016 in AML | Permalink | Comments (0)

Corruption Investigation Databases of the Organized Crime and Corruption Reporting Project

The Organized Crime and Corruption Reporting Project (OCCRP) is a consortium of more than 24 non-profit investigative centers, scores of journalists and several major regional Crime and Corruption Projectnews organizations stretching from Eastern Europe to Central Asia. We teamed up in 2006 to do transnational investigative reporting and promote technology-based approaches to exposing organized crime and corruption worldwide.

OCCRP designed ID as a transnational collaborative effort to help journalists and civil society researchers. ID hosts three core tools: a crowd-sourced database of information and documents on persons of interest and their business connections, a worldwide list of online databases and business registries, and a research desk where journalists can go for help in sourcing hard to find information.  Within ID, the OCCRP Tech Team has developed ID Search, a growing research database of public information documents gathered from sources around the world launched in 2016. The Tech Team is regularly collecting open source public data such as court documents, property records, leaks, government reports, asset declarations by public officials, political financing data, and much more.

Since 2009 our reporting has led to:

  • US$ 2.8 billion in assets frozen or seized with governments seeking to seize an additional US$ 1 billion.
  • 55 criminal investigations launched as a result of its stories.
  • 25 calls for action by civil or international bodies.
  • 115 arrest warrants issued with 7 subjects on the run.
  • 12 major sackings, including a President, Prime Minister and CEOs of major international corporations.
  • Over 1,300 company closures and court decisions.

OCCRP is supported by grants by the United States Agency for International Development (USAID), the International Center for Journalists (ICFJ), the United States Department of State, the Swiss Confederation, the Open Society Foundations (OSF), Google Ideas and the Knight Foundation.

September 21, 2016 in AML | Permalink | Comments (0)

Tuesday, September 20, 2016

CBP Launches Trade Facilitation and Enforcement Webpage

U.S. Customs and Border Protection (CBP) recently launched the Trade Facilitation and Trade Enforcement Act of 2015 webpage as a means to provide the trade community information CBP logoon TFTEA related issues. The webpage showcases news updates on trade enforcement and trade facilitation efforts in areas such as forced labor, anti-dumping countervailing duties, and the Automated Commercial Environment (ACE), as well as the latest on community engagement.

TFTEA, as the Act is commonly referred to, is the first piece of comprehensive legislation for CBP since the Department of Homeland Security was created in 2003, designed to ensure a fair and competitive trade environment.

For more information, please click here: https://www.cbp.gov/trade/trade-enforcement/tftea

September 20, 2016 in AML | Permalink | Comments (0)

Monday, September 19, 2016

FTC Issues Final Rule Amendments Related to the E-Warranty Act

The Federal Trade Commission has announced final amendments to its Disclosure Rule and Pre-Sale Availability Rule to give effect to the E-Warranty Act.  Download Frn_e-warranty_final_rule_9-6-16

Under the Magnuson-Moss Warranty Act (MMWA), in 1975, the FTC promulgated the Disclosure Rule, which provides disclosure requirements for written warranties on products that 1024px-US-FederalTradeCommission-Seal.svg cost more than $15, specifies language for certain disclosures, and requires simple language in a single document, and the Pre-Sale Availability Rule, which describes how warrantors and sellers must provide warranty terms before a sale. The 2015 E-Warranty Act amended the MMWA to allow warrantors to post warranty terms online, as long as they also provide a non-Internet-based method as well, and to allow certain sellers to use an electronic method to display warranty terms pre-sale, which necessitated the rule amendments announced today.

In May 2016, the FTC sought public comment on proposed changes to the Rules. The final amendments to the Disclosure Rule define what it means for certain disclosures to appear “on the face of” a warranty posted online. The Pre-Sale Availability Rule amendments allow warrantors to display warranty terms online and provide information to consumers to obtain those terms via non-Internet means. The amendments also allow sellers to supply pre-sale warranty terms electronically or conventionally if the warrantor has chosen to display its warranty terms online.

The Commission vote to approve the Federal Register Notice announcing the final amendments was 3-0. (FTC File No. P044403; the staff contact is Gary L. Ivens, Bureau of Consumer Protection, 202-326-2330).

September 19, 2016 in Financial Regulation | Permalink | Comments (0)

Sunday, September 18, 2016

Austria's measures to combat money laundering and terrorist financing

Austria has an overall sound legal and institutional anti-money laundering and counter-terrorist financing (AML/CFT) framework, but improvements are still needed in national policy FATF logocoordination, assessment of risk, and targeted financial sanctions. Austria also needs to improve its effectiveness in applying these and a range of other measures, as detailed below.  Download MER-Austria-2016

The FATF conducted an assessment of Austria’s AML/CFT system, based on the 2012 FATF Recommendations, and using the 2013 Methodology. The assessment is a comprehensive review of the effectiveness of Austria’s AML/CFT system and its level of compliance with the FATF Recommendations.

For more information and to download the report, see: http://www.fatf-gafi.org/countries/a-c/austria/documents/mer-austria-2016.html

September 18, 2016 in AML | Permalink | Comments (0)

Saturday, September 17, 2016

Regions Bank Agrees to Pay $52.4 Million to Resolve Alleged False Claims Act Liability Arising from FHA-Insured Mortgage Lending

Regions Bank (Regions) has agreed to pay $52.4 million to the United States to resolve allegations that it violated the False Claims Act by knowingly originating and underwriting HUD Insp Genmortgage loans insured by the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA) that did not meet applicable requirements, the Department of Justice announced today.  Regions is headquartered in Birmingham, Alabama.   

Download Statement of Facts                                                     

“Mortgage lenders that participate in the FHA insurance program must follow the requirements intended to safeguard its integrity and to protect homeowners,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “We will continue to hold responsible lenders that knowingly violate these important requirements.”

“The FHA insurance program plays a critical role in the stability of the housing market,” said U.S. Attorney for the Middle District of Florida A. Lee Bentley III.  “Lender misconduct that puts this program at risk will not be tolerated.”

Since at least January 2006, Regions has participated as a direct endorsement lender (DEL) in the FHA insurance program.  A DEL has the authority to originate, underwrite and endorse mortgages for FHA insurance.  If a DEL approves a mortgage loan for FHA insurance and the loan later defaults, the holder of the loan may submit an insurance claim to HUD, FHA’s parent agency, for the losses resulting from the defaulted loan.  Under the DEL program, the FHA does not review a loan before it is endorsed for FHA insurance but instead relies on the efforts of the DEL to verify compliance.  DELs are therefore required to follow program rules designed to ensure that they are properly underwriting and certifying mortgages for FHA insurance.

As part of the settlement announced today, Regions admitted that between Jan. 1, 2006, and Dec. 31, 2011, it certified for FHA insurance certain mortgage loans that did not meet certain HUD underwriting requirements regarding borrower creditworthiness.  In addition, between Jan. 1, 2006 and Dec. 31, 2011, Regions did not maintain a quality control (QC) program that fully complied with the requirements established by HUD.  Regions’ QC Department did not consistently review an adequate sample of FHA-insured loans.  Moreover, to the extent that Regions’ QC Department identified deficiencies during the course of its loan review, Regions engaged in a pattern of “curing” QC findings by obtaining documentation that was not available to the underwriter at the time the loan was approved.  As a result, the defect rate reported to senior management was understated.  Regions also failed to review Early Payment Default (EPD) loans in accordance with HUD guidelines.  Regions was required to review all loans that became 60 days past due within the first six months.  Nevertheless, at certain times prior to 2011, as part of its EPD review, Regions reviewed only those loans that became 90 days past due.

Additionally, Regions did not fully adhere to HUD’s self-reporting requirements.  During the period between Jan. 1, 2006, and Dec. 31, 2011, the HUD Handbook required lenders to report “findings of fraud” or “other serious violations” or “serious material deficiencies” to HUD.  Although Regions’ monthly QC reviews identified numerous FHA-insured loans for that period that contained material deficiencies, Regions did not begin self-reporting these materially deficient loans to HUD until 2011.

As a result of Regions’ conduct and omissions, HUD insured hundreds of loans approved by Regions that were not eligible for FHA mortgage insurance under the DEL program and that HUD would not otherwise have insured.  HUD subsequently incurred substantial losses when it paid insurance claims on those loans.

“FHA-approved lenders have a responsibility to ensure that FHA-insured loans meet our standards, which are in place for the protection of FHA’s insurance fund,” said Helen Kanovsky, HUD’s General Counsel.  “The agreement we announce today should serve as a reminder that sustainable homeownership starts with compliance with underwriting requirements.”

“This settlement resolves allegations that a financial institution, trusted to comply with FHA loan origination, underwriting and quality control requirements, failed to meet its obligations as a participant in the FHA program,” said Inspector General David A. Montoya for HUD.  “The bank’s actions impact the solvency of the FHA insurance fund.  It is through the combined efforts of the Department of Justice’s Civil Division, the U.S. Attorney’s Office for the Middle District of Florida, HUD and the Office of Inspector General that we continue to ensure the integrity of this important FHA program to American homeowners.”

The settlement was the result of a joint investigation conducted by HUD, the HUD Office of Inspector General, the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the Middle District of Florida.  The claims asserted against Regions are allegations only, and there has been no determination of liability.

September 17, 2016 in Financial Regulation | Permalink | Comments (0)

Friday, September 16, 2016

Combatting Corruption of Higher Education

Absenteeism, Appropriation, Bribery, Cheating, Corruption, Deceit, Embezzlement, Extortion, Favouritism, Fraud, Graft, Harassment, Impersonation ... UNESCO

An ABC of dishonest practices – usually referred to more coyly as misconduct or misrepresentation – is undermining the quality and credibility of higher education around the world. We shall use ‘corruption’ as a general term to designate such malpractice and make the academic operations of higher education institutions (HEIs) our primary focus.

Alarmed by the increasing frequency of press reports on corrupt practices in the higher education sector, the UNESCO International Institute for Educational Planning (IIEP) and the International Quality Group of the US Council for Higher Education Accreditation (CHEA/CIQG) joined forces to convene an expert meeting in Washington, DC, on 30/31 March 2016.  Corruption in higher education is a dynamic phenomenon. The Expert Group is publishing this Advisory Statement as a wake-up call to higher education to fight academic corruption more aggressively. The sector’s quality assurance systems must take a leading role in this battle.

read the Advisory Statement for Effective International Practice Download Advisory-statement-unesco-iiep here

September 16, 2016 in AML, Education | Permalink | Comments (0)