The latest news from our regional teams about financial crime, corruption, sanctions and integrity issues worldwide.
This month’s Red Flag bulletin includes:
- Bahraini regulator discloses financial crimes and terrorism financing at local bank;
- French businessman Vincent Bollore is arrested for corruption in Guinea and Togo; and
- US-Iran sanctions regime enters critical period.
MIDDLE EAST AND NORTH AFRICA
Bahrain: Government makes additional disclosure about Future Bank financial crime
In April, the Bahraini government revealed further details regarding the extent of Future Bank’s illicit activities between 2004 and 2015. In 2015, Bahraini regulators closed Future Bank and froze its assets as part of an investigation into alleged financial crimes. The Bahraini government’s most recent disclosure revealed that the bank assisted Iran in circumventing sanctions, opened accounts for customers convicted of financial crimes, helped to finance terrorism, and provided loans to fronts for the Islamic Revolutionary Guard Corps, a branch of Iran’s armed forces.
Iran/US: US deliberates the JCPOA
On 12 May, the US will decide whether to re-certify or withdraw from the Joint Comprehensive Plan of Action (JCPOA), a 2015 agreement between Iran and six other countries relating to Iran’s nuclear activities. Under the JCPOA, Iran agreed to reduce its uranium stockpile in return for international sanctions relief. Donald Trump, the current US president, has publicly criticised the agreement since his 2016 election campaign. The US Treasury has indicated that if the agreement is not extended, US sanctions against Iran would come back into effect, likely after 180 days.
Iran/US: US, UK, France and Germany consider new sanctions against Iran
The UK, France and Germany are seeking to impose new, independent EU and US sanctions on Iran in return for the US’s re-certification of the JCPOA. In March, Steven Mnuchin, the US Secretary of the Treasury, stated that the US are working on additional primary and secondary sanctions against Iran, but that these measures are independent of the re-certification of the JCPOA.
South Africa: Auditor general cancels Gupta-connected contracts
In April, South Africa’s auditor general cancelled state audit contracts with KPMG, after reports of the firm’s contravention of auditing standards in relation to work done for companies linked to the Gupta family, a controversial business family. Two KPMG partners had further contravened auditing standards by failing to disclose loans held with a South African bank audited by the firm. The auditor general also cancelled contracts with Nkonki Inc., another auditing firm, due to allegations that a Gupta associate had funded a previous management buy-out of the firm.
Guinea/Togo/France: Bollore arrested for alleged corruption in West Africa
On 24 April, French judicial police arrested Vincent Bollore, CEO of the Bollore Group, a French conglomerate, for alleged corruption in West Africa. French investigators allege that, in 2009 and 2010, Havas, a communications firm formerly owned by the Bollore Group, provided discounted services to the election campaigns of the presidents of Guinea and Togo. In exchange, Bollore Group allegedly received lucrative container port contracts in both countries. Bollore Group denies these allegations.