https://www.afr.com/companies/finan...mint-stumbles-into-tax-havens-20200730-p55gxq
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The Perth Mint signed the Bank of Cyprus up as a customer earlier this year despite the US State Department declaring the island a "major money laundering jurisdiction" and warning about its links to Russian organised crime.
As pressure mounts on the WA government-owned refiner over its sourcing of tainted gold from Papua New Guinea, The Australian Financial Review has been alerted to major gaps in its anti-money laundering protections.
The Perth Mint is dealing with a bank based in the British Virgin Islands, a known tax haven.
In addition to bringing the scandal-plagued Bank of Cyprus on as a customer, the Mint has granted "approved dealer" status to Euro Pacific Bank, from the British Virgin Islands, and Swiss private bank, BFI Consulting.
All three institutions provide offshore banking services to clients who may be seeking to avoid tax or disguise the true ownership of their assets.
One former law enforcement official, who asked not to be named as he still works in government, stumbled across the Mint's approved dealer list when investigating tax havens. The Mint was not a target of that investigation and no law enforcement action has been taken in response to its dealings with these institutions.
He described the Mint as a potential "money launderer's paradise" and raised the prospect that West Australian taxpayers could be guaranteeing the precious metal holdings of tax cheats, kleptocrats and foreign criminals.
As the price of gold remains above $US1900 an ounce, it and other precious metals are becoming an increasingly popular hedge against volatile financial markets.
The money-laundering issues follow a series of governance and compliance failures being revealed by the Financial Review, triggering two reviews, a corruption investigation and the Mint being black-banned by two big banks.
Government guarantee
Being a customer of the Mint's depository business allows clients to buy gold and store it at the Mint, where it is backed by a WA government guarantee. The Mint is the only refiner in the world to have such a guarantee.
The former law enforcement official questioned what additional due diligence the Mint carried out on customers of the three tax-haven institutions and if it knew the ultimate beneficial owners of the precious metal it was housing.
"It is possible the Perth Mint is being used to store the ill-gotten gains of criminals and kleptocrats from around the world," he said.
The Bank of Cyprus is the largest financial institution on the Mediterranean Island, which has long been considered a tax haven for Russian oligarchs.
Following the collapse of the Cypriot financial system in 2012, Vladimir Strzhalkovsky, referred to in Russian media as a former KGB official and ally of President Vladimir Putin, became the Bank of Cyprus' largest shareholder.
Despite improvements in recent years, the US State Department rates Cyprus a "major money laundering jurisdiction" and said its financial system was "vulnerable" to "foreign criminals".
The same report, released in March, rated the British Virgin Islands a "major money laundering jurisdiction".
Financial secrecy
The Basel Institution of Governance, a think tank, said in July a high level of financial secrecy undermined Switzerland's anti-money laundering frameworks.
The Mint is already facing an investigation by the London Bullion Market Association (LBMA), the world's largest precious metals exchange, over its dealings with PNG firm Golden Valley, which is owned by a convicted killer.
Golden Valley has acknowledged the existence of child labour and toxic mercury in its supply chain.
The LBMA investigation could result in the Mint losing its ethical sourcing accreditation, which this week prompted HSBC and JP Morgan to stop buying its gold.
The Mint is also facing an investigation by the WA corruption watchdog over nepotism and related party dealings.
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The Perth Mint signed the Bank of Cyprus up as a customer earlier this year despite the US State Department declaring the island a "major money laundering jurisdiction" and warning about its links to Russian organised crime.
As pressure mounts on the WA government-owned refiner over its sourcing of tainted gold from Papua New Guinea, The Australian Financial Review has been alerted to major gaps in its anti-money laundering protections.
The Perth Mint is dealing with a bank based in the British Virgin Islands, a known tax haven.
In addition to bringing the scandal-plagued Bank of Cyprus on as a customer, the Mint has granted "approved dealer" status to Euro Pacific Bank, from the British Virgin Islands, and Swiss private bank, BFI Consulting.
All three institutions provide offshore banking services to clients who may be seeking to avoid tax or disguise the true ownership of their assets.
One former law enforcement official, who asked not to be named as he still works in government, stumbled across the Mint's approved dealer list when investigating tax havens. The Mint was not a target of that investigation and no law enforcement action has been taken in response to its dealings with these institutions.
He described the Mint as a potential "money launderer's paradise" and raised the prospect that West Australian taxpayers could be guaranteeing the precious metal holdings of tax cheats, kleptocrats and foreign criminals.
As the price of gold remains above $US1900 an ounce, it and other precious metals are becoming an increasingly popular hedge against volatile financial markets.
The money-laundering issues follow a series of governance and compliance failures being revealed by the Financial Review, triggering two reviews, a corruption investigation and the Mint being black-banned by two big banks.
Government guarantee
Being a customer of the Mint's depository business allows clients to buy gold and store it at the Mint, where it is backed by a WA government guarantee. The Mint is the only refiner in the world to have such a guarantee.
The former law enforcement official questioned what additional due diligence the Mint carried out on customers of the three tax-haven institutions and if it knew the ultimate beneficial owners of the precious metal it was housing.
"It is possible the Perth Mint is being used to store the ill-gotten gains of criminals and kleptocrats from around the world," he said.
The Bank of Cyprus is the largest financial institution on the Mediterranean Island, which has long been considered a tax haven for Russian oligarchs.
Following the collapse of the Cypriot financial system in 2012, Vladimir Strzhalkovsky, referred to in Russian media as a former KGB official and ally of President Vladimir Putin, became the Bank of Cyprus' largest shareholder.
Despite improvements in recent years, the US State Department rates Cyprus a "major money laundering jurisdiction" and said its financial system was "vulnerable" to "foreign criminals".
The same report, released in March, rated the British Virgin Islands a "major money laundering jurisdiction".
Financial secrecy
The Basel Institution of Governance, a think tank, said in July a high level of financial secrecy undermined Switzerland's anti-money laundering frameworks.
The Mint is already facing an investigation by the London Bullion Market Association (LBMA), the world's largest precious metals exchange, over its dealings with PNG firm Golden Valley, which is owned by a convicted killer.
Golden Valley has acknowledged the existence of child labour and toxic mercury in its supply chain.
The LBMA investigation could result in the Mint losing its ethical sourcing accreditation, which this week prompted HSBC and JP Morgan to stop buying its gold.
The Mint is also facing an investigation by the WA corruption watchdog over nepotism and related party dealings.
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It just means transactions involving these countries require extra attention, not that they are outright banned. Note that for example UK, Belgium, and Netherlands are on this list.
. Looks like they lost Westpac as a correspondence bank....but please correct me if I am wrong...thx.
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