Argentina
In Argentina there are an estimated 60 to 70 billion dollars “outside the financial system” according to the head of the Financial Information Unit, FIU, which is the country’s office in charge of preventing and combating money laundering. Jose Sbatella, head of the FIU, made the comments on Monday on the enforcement of new rules which increase financial control in real estate operations, cooperatives, medical insurance companies, all of then now responsible for forwarding greater information on their dealings and forced to report any financial or commercial operations suspect of money laundering. The top Argentine officer said that the scheme is still lacking the implementation of the Commission for the Defence of Competition (anti monopoly and anti trust) which is to be organized based on information of corporate takeovers and assimilations.
Source: MercoPress
Few opposed Argentina’s military dictatorship as effectively as the Mothers of the Plaza de Mayo, with their lonely, dignified vigils in Buenos Aires’ main square for their children “disappeared” by the junta. But now the group, whose moral authority in the country was previously akin to that of Nelson Mandela or the Dalai Lama, has become embroiled in a huge corruption scandal that threatens to tarnish its reputation and put an end to the Mothers’ political activism for good. More than 60 people are facing charges, including the daughter of the Mothers’ main driving force, Hebe de Bonafini, in connection with alleged fraud and kickbacks over multi-million pound government contracts to build social housing for the country’s poor. The scandal has also laid bare the group’s cozy relationship with the populist left-wing government of Cristina Kirchner. At the centre of the storm is one of Argentina’s most controversial characters, Sergio Schoklender, the group’s former financial administrator.
Source: The Independent
Brazil
The Brazilian minister in charge of transport projects has resigned amid allegations of corruption. Minister of Cities Mario Negromonte is the seventh minister in President Dilma Rousseff’s cabinet to step down amid corruption charges. Mr Negromonte has been accused of awarding public work contracts to companies which financed his party, allegations he denies. He will be replaced by the Progressive Party leader, Aguinaldo Ribeiro. The Cities Ministry co-ordinates urban development. Mr Negromonte’s resignation had been widely expected after Brazilian newspaper Folha de Sao Paulo reported that his executive secretary had met with a businessman who was interested in bidding for a public works programme in Cuiaba, which the Cities Ministry was in charge of awarding.
Source: BBC
Hungary
Prosecutors in Hungary have concluded an investigation into allegations of corruption in the Hungarian oil and gas group MOL, saying neither the company nor its executives committed any crimes but investigation in Croatia continues. “…No crime was committed in the interests of MOL, by its executives, therefore, we ended the investigation due to a lack of criminal actions,” the prosecution said in a statement released Monday. The investigation in Hungary began after former Croatian Prime Minister Ivo Sanader was accused of accepting a bribe from MOL in 2008 in exchange for making the oil and gas company a dominant shareholder in Croatia’s INA oil and gas firm. Croatian prosecutors approached Hungarian officials in June asking to question MOL’s chairman about the role of two Cyprus-based firms that paid Sanader €10 million.
Source: Organized Crime and Corruption Reporting Project
India
India’s government must decide within a set time frame whether a public official can be prosecuted for corruption, the Supreme Court says. If a decision is not made within four months, the sanction for prosecution will be deemed to have been granted. A politician had sought the ruling in relation to prosecution of officials in an ongoing telecoms scandal. The ruling is a setback for the government, which has been dogged by a series of corruption scandals. Janata Party leader Subramanian Swamy had brought the case in relation to the prosecution of former telecoms minister A Raja. Mr Raja is one of 14 people charged over the alleged mis-selling of telecoms licences which auditors say cost the country about $40bn (£24.5bn).
Source: BBC
On Thursday, India’s Supreme Court ordered the government to cancel all 122 mobile 2G cell-phone telecom licenses allotted since January 2008. An Indian advocacy group had petitioned the court to scrap the licenses due to allegations of fraud in their allocation. Several government officials, including former Telecom Minister A. Raja, and telecom industry executives have been arrested in the so-called 2G scandal in the past year. A special Central Bureau of Investigation court is continuing to probe the matter. The court said the government must then put up the licenses for re-bidding. It wasn’t immediately clear how those auctions would be conducted and what would happen to existing subscribers if current license holders decide to pull out of India.
Source: The Wall Street Journal
An Indian cabinet minister who says he has been unfairly implicated in a foreign bribery case in Ottawa has called on his Prime Minister to intervene with Canada to ensure that he and the Indian government aren’t caused more “embarrassment.” Praful Patel, India’s Minister of Heavy Industries and a former aviation minister, also called on Prime Minister Manmohan Singh to open up the books of Air India to clear up any suggestion of his involvement in what the Royal Canadian Mounted Police has called a bribery and bid-rigging scheme at the state-run airline. Nazir Karigar, a 64-year-old Indian-born Canadian citizen is the first individual to be charged under Canada’s foreign-bribery law – the Corruption of Foreign Public Officials Act. As part of their case against Mr. Karigar, authorities allege that he divulged to others that he had channelled a $250,000 bribe to Mr. Patel through a political ally in 2007. Mr. Karigar has also been accused of bribing two Air India managers and conspiring with a friend, former Air India director of security Hasan Gafoor, to ensure that his employer was shortlisted for a $100-million contract. Mr. Karigar’s employer was a multinational hi-tech security company called CryptoMetrics.
Source: The Globe and Mail
The perceived notion about growing corruption and the policy uncertainties have increased the country-specific credit quality risks for the companies in India, global rating agency S&P has warned. As per Standard and Poor’s (S&P), the country-specific risks have increased in India in the past two years, making it harder for the companies to manage their cash flows, make their long-term strategies, and proceed with investment plans.
Source: The Economic Times
Mexico
The Mexican economy is “hemorrhaging” billions of dollars annually because of money laundering, tax evasion and other forms of corruption, a new study has found. Mexico lost $872 billion between 1970 and 2010, the Washington-based advocacy organization Global Financial Integrity said in an 80-page report released Monday. That averages 5.2 percent of gross domestic product, the group said. “This is an enormously damaging reality for emerging markets and developing countries … an enormously damaging drainage of resources,” the group’s director, Raymond Baker, said at a news conference. One of the most common ways for money to flow illegally out of Mexico is trade manipulation or incorrect pricing, Baker said, when companies or individuals falsify invoices and undervalue or overvalue exports or imports. The Los Angeles Times recently reported that “trade-based” money laundering is fast becoming a favored method of powerful drug cartels.
Source: Star-Telegram
Mexico lost $872 billion to corruption, crime and tax evasion over the last 40 years, according to a new study from Global Financial Integrity. The massive sum was leaked out of the country in illicit financial outflows between 1970 and 2010. It represented, on average, 5.2% of the country’s annual GDP. “This is a devastatingly large amount of money for any developing country to lose,” GFI Director Raymond W. Baker said. “$872 billion is gone, which could have been used to develop the Mexican economy, to invest in education, to build roads, or to fight the drug cartels. The negative ramifications are huge for everyday Mexicans.” The study, titled “Illicit Financial Flows from Developing Countries over the Decade Ending 2009,” found that illicit outflows from Mexico exploded from an annual average of $3 billion in the 1970s to $49.6 billion in the 2000s. It also found that the outflows drove Mexico’s underground economy, spurring drug smuggling and arms trafficking, among other things.
Source: The Wall Street Journal
Nigeria
A judge in Nigeria has dropped fraud charges against one of Nigeria’s most powerful politicians, former House of Representatives speaker Dimeji Bankole. Mr Bankole was arrested in June 2011 on allegations he misappropriated tens of millions of dollars of government funds – charges he has denied. He was held after a four-hour stand-off at his home in the capital, Abuja. Analysts say Mr Bankole is a close ally of President Goodluck Jonathan, who has promised to tackle corruption. It is alleged that Mr Bankole secured a 10bn naira ($65m; £40m) loan, which was then shared out among senior figures in parliament as a pay rise. Mr Bankole has acknowledged that the loan exists but says he did not gain personally.
Source: BBC
Pakistan
Pakistan’s Supreme Court said it would begin contempt of court proceedings against Prime Minister Yousuf Raza Gilani on Feb. 13, a move that could lead to the premier’s removal from office. The Supreme Court wants Mr. Gilani’s administration to comply with a two-year-old order to reopen graft investigations into President Asif Ali Zardari, who is also co-chairman of the ruling Pakistan People’s Party. The court’s decision to push ahead with the proceedings shows the nation’s top judiciary is prepared for a fight with Mr. Gilani and the PPP-led government. Mr. Gilani faces up to a six-month jail term if found in contempt.
Source: The Wall Street Journal
Romania
Romania’s highest court on Monday sentenced former Prime Minister Adrian Nastase to two years in prison after convicting him of illegally raising funds for a failed presidential campaign. The ruling is the first time a former Romanian premier has been sentenced to prison since communism ended in the country in 1989. Four others in the case received six-year prison sentences. The sentences can be appealed. Nastase, who was prime minister from 2000 to 2004, insists he is innocent and that the case is politically motivated. He said he would appeal. Prosecutors alleged that companies and state agencies were forced to pay fees to attend a conference in 2004, and the money was then used to pay for Nastase’s unsuccessful run for the presidency in 2004. He lost the runoff to President Traian Basescu.
Source: Newsday
A gulf between the law and its implementation leaves Romania vulnerable to corruption, a study found. The study of Romania’s national integrity system, conducted by Transparency International and released Thursday, cited a lack of resources and independence of Romanian institutions from political interference as reasons for the rating. Moreover, the dominance of the executive branch over the legislature, the “extensive” use of emergency ordinances, a low level of accountability for corruption and a low level of trust of people in the parliament put in jeopardy the entire democratic foundation of the country, the study said.
Source: The Wall Street Journal
Russia
Russia’s president signed into law a ban on bribing foreign officials, marking a major step in the country’s efforts to stamp out corruption. President Dmitry Medvedev announced the signature on Wednesday of the accession of Russia into the Organization for Economic Cooperation and Development’s anti-bribery convention, which enjoins it with 34 member countries that include some of the world’s biggest economies, including the U.S., Japan and others. Russia is seeking to become a member of the OECD. “By joining the convention, Russia will facilitate efforts in international cooperation on combating bribery of foreign public officials, and also fulfill one of the conditions for joining the OECD,” the statement said. The OECD invited Russia in May 2011 to join the anti-bribery pact. Earlier that month, the country criminalized foreign bribery. Yelena Panfilova, head of the Russian branch of Transparency International, told RIA Novosti the group spent 12 years lobbying the Kremlin to sign the convention.
Source: The Wall Street Journal
Serbia
Justice Ministry State Secretary Slobodan Homen said on Thursday the government had adopted proposed amendments to the Criminal Procedure Code. The changes envisage introduction of new criminal acts related to corruption, he said, and added that they were forwarded to parliament. Homen, who is also the Serbian government’s Media Relations Coordinator, stated at a news conference that new criminal acts of corruption have been defined which will replace the criminal act of abuse of office, adding that the amendments were proposed in cooperation with the Council of Europe. According to Homen, the criminal acts of subsidy fraud, business fraud and public procurement fraud are being introduced.
Source: Regional Anti-Corruption Initiative
South Africa
MTN Group Ltd. (MTN), Africa’s largest mobile-phone operator, dropped the most in a month after saying Turkcell Iletisim Hizmetleri AS (TCELL) may file a lawsuit against the company over the acquisition of an operating license in Iran.The shares fell 1.7 percent to 135.99 rand at the close, and the stock was the most traded by value on the Johannesburg Stock Exchange. MTN has slid 3.9 percent over the past six months compared with a 13 percent gain in the FTSE/JSE Africa All Share Index (JALSH), lowering its market value to 256 billion rand ($33.8 billion).Turkcell alleges MTN made “improper payments” to an Iranian and a South African government official in 2004 and 2005 to secure its license, Johannesburg-based MTN said in a statement yesterday. MTN said there are no grounds for a lawsuit. With 33.3 million customers, Iran is MTN’s second- largest market by subscribers after Nigeria, accounting for about 9 percent of first-half sales and 8 percent of earnings before interest, taxes, depreciation and amortization.
Source: Bloomberg