Kenneth Rijock

Kenneth Rijock

Wednesday, April 26, 2017

IS THE CHINESE EMBASSY IN DOMINICA SPYING ON THE UNITED STATES ?


 This is the Embassy of the Peoples' Republic of China in Dominica. According to local sources, the cost of building this structure was approximately $27m, and its construction was strictly limited to a Chinese crew. It is located in an exclusive residential area, Morne Daniel, and it is protected by a special paramilitary unit of the Dominican Police Force, the Special Service Unit, or SSU. Locals, who are unable to see past the solid wall, report that they are intimidated by the sinage, as well as the SSU palace guard outside, discouraging visitors.


Considering that, outside of the rare Dominican university student, attending school in China, the embassy serves no practical function. The amount of international trade between the two countries is negligible, and outside of Dominican Prime Minister's trips to the Peoples' Republic, there's little or no international commerce, tourism or exchange. it is far too large for its official function, as an embassy, and to provide consulate services. So why is it there ?

When Dominica's left-leaning, and often declared anti-American, Prime Minister, Roosevelt Skerrit, unilaterally withdrew his country's recognition of Taiwan, and established diplomatic relations with China, the two countries embarked upon a relationship which appears to be only at the highest level.  Dominica is actively pursuing high net-worth Chinese, for the country's Citizenship by Investment (CBI) economic passport program, as well as "investors, " though national agriculture took a severe hit during a 2015 tropical storm, and there is no other established industry; even tourism is a small factor.

Taken in the embassy courtyard; note the walls

The obvious conclusion is that the Government of China is using the embassy as a protected  listening post, under diplomatic cover, focused upon the East Caribbean region, as well as the United States, to gather intelligence, whether electronically, or through use of human assets. considering that the United States has one embassy in Barbados, serving no less than six East Caribbean nations, China's footprint in Dominica is large, indeed.

The embassy also exists to exercise, and expand Chinese influence, for an emerging China is seeking to acquire a global reach. Whether its power, and opaque goals, will adversely affect the people of the Commonwealth of Dominica, we cannot say, but this curious embassy bears watching. Does anyone out there remember the Grenada invasion ? 

ZARRAB'S ATTORNEY-POLITICANS ATTEMPT TO MINIMIZE HIS CRIMES, BUT INDICTMENT SAYS OTHERWISE


The unsucessful political efforts, on behalf of the indicted Iranian oil sanctions violator, Reza Zarrab, reportedly conducted with senior government officials in Turkey by Rudolph Giuliani, whose co-counsel are said to have minimized their client's role in the $400m international sanctions evasion scheme, by labeling Zarrab's acts as only involving "consumer goods," which flies in the face of the superseding indictment, alleging Zarrab's support for both Hezbollah and the IRGC, specially designated global terrorist organizations. The US Attorney's Office in New York has, according to published reports, disputed this effort to portray Zarrab in a lesser light.

One report says that Rudolph Giuliani's strategy is to enlist Turkey in a cooperative campaign against ISIS, and argue to senior US officials (NOT Department of Justice) that the release of Zarrab to Turkey, as part of an omnibus agreement between it and America, would be in our best national security interests. In essence, he wants to give Zarrab a "Get out of Jail Card," in an arrangement through which US interests are better served in the Middle East, by Turkish military action.

Whether you agree that this maneuver smells of backroom dirty politics, it doesn't appear to have worked, the US Attorney in Manhattan is moving forward with its case, and since we have seen no evidence of plea negotiations, we must assume that the case will, ultimately, go to trial. Of course, inasmuch as Zarrab is looking at 75 years, or more, of imprisonment, he may still decide to cooperate, and in that event, all the other conspirators in his organization, Zanjani, Monfared, and others, may find themselves as co-defendants sooner, rather than later.

INVESTIGATORS FIND MANY COSTA RICANS IN PANAMA PAPERS ARE PEPS


 As each country delves deeply into the Panama Papers, they are finding, by and large, that many individuals investigators discover within the incriminating documents are their nation's Politically Exposed Persons, also known as PEPs, which raises the question about how such government officials came to possess large amount of money that greatly exceed their salaries, and known wealth & other assets.

Over in neighboring Costa Rica,  local media are referring to the scandal as the "Costa Rica Papers," due to the fact that 37, of the 137 Costa Ricans whose names show up in the Panama Papers, are PEPs. This information has spurred local authorities to launch multiple investigations into the possibility that these corporations formed, and accounts opened, by Mossack and Fonseca were created solely for the purposes of illegal tax evasion.

Among those located in the Papers were:
Two Vice Presidents
Four Deputies
Fourteen Ministers
Three directors of public institutions
One former diplomat who was assigned to the United States
Several individuals linked to the country's major political parties

Most of the offshore entities formed by the Mossack firm were incorporated in Panama, the British Virgin Islands, and  the Bahamas. Details of the MF branch in Costa Rica were also made public. Form the tone of the publicity surrounding the release of this information, it must be assumed that criminal tax evasion charges will ultimately be filed in San José.




Tuesday, April 25, 2017

ARE THE MONEY LAUNDERING LAWYERS THE NEXT TARGETS FOR PANAMA'S ANTI-CORRUPTION PROSECUTORS ?


I note that a prominent Panama City attorney, who represented the two sons of former (and fugitive) President Ricardo Martinelli is in hot water with prosecutors. Is this a sign that money launderers, who just happen to be attorneys, are now to be charged in Panama ?

The lawyer formed a corporation, and then purchased a multi-million dollar property in Spain, even flying to the closing, rather than expose her client, who was a Martinelli son. The Spanish Government has now seized the luxury building, in the same way that the Swiss Government froze $22m of Odebrecht bribe money, in Martinelli accounts, where again, a lawyer fronted for her Martinelli clients. Can this be really happening ?

When Panama actually shuts down the money laundering lawyers, for criminal elements, both local, and foreign, the country has a slim chance of true reform. President Varela, please continue the crusade being waged by your anti-corruption divisions ; jail, and prosecute, the offenders. 


Monday, April 24, 2017

A NEW DICTATORSHIP EMERGES IN THE EAST CARIBBEAN



The right of peaceable assembly may be one of the cherished rights of the English-speaking countries, but this week it was abolished in a country that must now be regarded as a former democracy, now rapidly becoming a dictatorship. The population of the Commonwealth of Dominica has now, by decree, lost the right to assemble, and discuss their grievances.

Today, April 24, 2017, the Minister of Justice, Immigration, and National Security enacted a regulation that enables him to ban any public meeting, assembly or demonstration. He then used this new & absolute power to forbid an assembly, to be conducted by Opposition parties. It is all displayed above and below.



Democracy fades out, in Dominica, and dictatorship becomes the order of the day. if you have been reading any of the articles that I have been posting of late, you have seen the deterioration of the rule of law in Dominica, and the rise of autocratic rule. This one act, which has codified the acts of the local government in 2017, is the beginning of the end for democracy in Dominica.

For  foreign investors, eco-tourists, yachtsmen, and other travelers, the risk levels have flown off the chart, given the rampant corruption, vote buying, sales of passports to all comers, and general fear and loathing. For international bankers, Country Risk has risen so high as to make it a jurisdiction to avoid, leaving the population high and dry, while the corrupt national leadership rakes in their lucre.
Dominica; the newest police state.

Welcome to Dominica; for risk management purposes, it is the new Haiti; a kleptocracy.




THIS WEEK'S PANAMANIAN BETTING POOL: WHAT DAY WILL MOSSACK AND FONSECA FLEE THE COUNTRY ?




The hottest bet around Panama city these days involves picking the day when Jurgen Mossack and Ramón Fonseca, the senior partners of the law firm whose stolen files became known as the Panama Papers, flee the country to avoid prosecution for money laundering. Apparently, most Panamanians are busy counting the days when the duo leaves town for good, to collect upon their bets.

Why have two obviously guilty lawyers have been let out of jail, only to permit them to run ? Perhaps they have far too much incriminating evidence against not only the Martinelli cabinet, but also the present, Varela, government. Perhaps justice will be denied, again, to protect "flight capital" of dubious origins, which many Panamanians regard as the lifeblood of their country's opaque economy.

Where will they go, Miami ?  If so, they can pal around with former Panamanian President Ricardo Martinelli, who seems to have cheated justice, thanks to some hidden American sponsor, most likely a law enforcement agency. If I see them with Rama Vyasulu, of Rosemont Financial "Permuta" fame, I will try to take a photo.

Sunday, April 23, 2017

DOMINICA'S TARGETING OF WEALTHY CHINESE FOR ITS ECONOMIC PASSPORT PROGRAM IS HIGH RISK FOR THE WORLD'S BANKS

Dominica PM Skerrit with officials from Chinese investment firm

If you have been following the ongoing controversy involving the Citizenship by Investment, or economic passport, program, of the Commonwealth of Dominica, you may have seen that the country's Prime Minister, Roosevelt Skerrit, recently traveled to China. While there, Skerrit, according to media releases, met with a prominent Shanghai-based firm that specializes in high net-worth Chinese. The joint press releases discussed creating Chinese investment in Dominica.

What is not mentioned is the new focus Dominica has placed on securing Chinese investors for its economic passport program. In fact, Dominica participated in the 2017 International Migration Summit in Shanghai, which just concluded on April 21, 2017.

Here's the problem: Chinese names must be converted into roman letters, for the purposes of passports from English-speaking countries, and the complex issues involved allow criminal elements, governmental officials, and even potential terrorists, to artfully conceal their true identities. there are several important issues, all of which could bar a compliance officer, at an international bank, from learning the applicant's true identity, at account opening, exposing the bank to increased risk of money laundering, or terrorist financing.

China has an embassy in Dominica much larger than it needs

 (1) The romanization of a Chinese name, to a Western name, offers a career criminal, or other undesirable applicant for a Dominican passport, an opportunity to create a totally new identity, whether by altering the spelling, deleting one or more letters, adding a Western name, and moving the given name to middle name status (which is common), effectively rendering any enhanced due diligence ineffective at best, and a total waste of time, at worst.

(2) Unlike in the West, mainland Chinese also may have acquired additional complete names. These are not just nicknames,  though many exist, but are classified as official "school names,'  so-called courtesy name, and even pseudonyms, all of which complicate the due diligence process.

Affluent Chinese are intent upon moving their wealth outside China
 Add the name issue to the fact that Chinese face significant legal obstacles to moving their wealth offshore, to tax evasion schemes, to efforts of Chinese Politically Exposed Persons (PEPs) to send the proceeds of bribes and kickbacks out of the reach of Chinese authorities, and you have a potentially large  class of "investors" who believe that they must obscure their identities to the West.

Of course, the appointment of agents, without any professional qualifications, or oversight by government, who are the only avenue available to applicants, complicates the matter further, Look at this notice, posted by the CBI unit for Dominica. It is practically offering to obtain identity documents for his clients' applications, which guarantees that the names offered will not be the true names of the clients.

If I am a compliance officer. at a North American or European bank, and run the name of a "Chinese Dominican" passport holder, through my due diligence resources,  his or her real identity, whether it be criminal or not, PEP or not, most likely will not be discovered. If you contend that the original Chinese name should also be checked, exactly how many international banks have Mandarin-fluent compliance officers, and where are they to obtain competent information on Chinese nationals, when the Peoples' Republic controls the media?

Chinese and Dominican flags

Operating a risk-based compliance program means that, should you encounter any passport holder, who was not born in his "adopted" Caribbean country, which happens to award economic citizenship, you must institute enhanced due diligence. If the individual is Chinese, you may have no choice but to decline the account, lest you open a relationship with an individual whom you later learn poses a clear and present danger to the bank.