Not so shocking to those 'in the know' but, imo, some revelations about what banks get up to

https://www.businessinsider.co…files-south-africa-2020-9

Suspect bank flows: These SA transactions highlighted in shock FinCEN report

Business Insider SA
Sep 21, 2020, 08:22 PM

(Getty Images)

• A major leak of suspect transactions that were flagged by banks to the US authorities has just been published online.
• The so-called FinCEN files include more than 170 transactions at South African banks.
• At least one transaction may have a Gupta link.
• For more articles, go to www.BusinessInsider.co.za.

Thousands of leaked files that have just been released show how major institutions had engaged for years in handling up to $2 trillion in dirty money.

The documents are part of a collection of files that belongs to the Financial Crimes Enforcement Network (FinCEN), a US government agency operating to detect and prevent financial crimes, and were first published by BuzzFeed News and the International Consortium of Investigative Journalists (ICIJ).

Banks sent these files to the US authorities to raise concern about what their clients were doing.

The ICIJ analysed the leaked documents over the last 16 months, with more than 400 journalists across 88 countries taking part.

The documents, known as the FinCEN files, showed that five banks - JPMorgan, Standard Chartered, Deutsche Bank, Barclays and BNY Mellon - handled the most illicit funds between 1997 and 2017. JPMorgan, HSBC, and Deutsche Bank facilitated the movement of criminal money even after getting caught, the agency reported.

Between 1999 and 2017, $1.3 trillion was flagged to have passed through Deutsche Bank, German broadcaster Deutsche Welle reported.

Here’s what journalists found after analysing the FinCen files:

• Deutsche Bank helped moved money as part of money laundering for organised crime, terrorists, and drug traffickers,Buzzfeed reports.
• Even after HSBC learned about a scam, it allowed fraudsters to transfer millions around the world, the BBC reports.
• Russian billionaire Arkady Rotenberg, one of Vladimir Putin's closest friends, may have used Barclays Bank to launder money and dodge sanctions, the BBC reports.
• JP Morgan allowed a company to move more than $1 billion through a London account without knowing who owned it – and it may turn out to have belonged to a criminal wanted by the FBI, the BBC reports.

The report by the ICIJ highlights 173 bank transactions that went via South Africa – at a total value of almost $61 million (R1 billion) – which were flagged as potentially suspicious.

Standard Bank apparently reported 169 of the 173 transactions that were highlighted in the report.

Standard Bank may have flagged transfers to banks in Nigeria and Lichtenstein, as well as a number of transactions involving Chinese banks. Standard Bank has close commercial ties with the Industrial and Commercial Bank of China, which bought a 20% stake in the bank in 2007. The two companies hold a joint stake in a global trading business.

Standard Bank did not want to comment on the nature of these transactions, but referred Business Insider South Africa to a FinCEN statement that “unauthorised disclosure of SARs [Suspicious Activity Reports] is a crime that can impact the national security of the United States.”

“Standard Bank complies with local and international anti-money laundering legislation and takes this responsibility seriously. As required by such legislation, and as a responsible corporate citizen, the bank files suspicious activity reports (SARs) to assist in maintaining the integrity of the global financial system. The bank diligently monitors customer transactions and complies with its obligations to report any suspicious transactions to the relevant authorities,” the bank said in a statement.

Transactions in South Africa via two other banks were also highlighted in the ICIJ report: Standard Chartered Bank, and Citibank.

Citi flagged a transfer from a Standard Chartered bank account in Hong Kong to one of its local account holders.

“Consistent with our commitment to protect the integrity of the financial system, Citi is diligent in filing Suspicious Activity Reports with the US Department of the Treasury when appropriate. Given the confidential nature of these reports, we do not comment on or confirm any particular report or transaction,” a Citi spokesperson said.

Standard Chartered also flagged a transaction, in 2013, which involved an almost $10.8 million payment to a Deutsche Bank account in Abu Dhabi. Standard Chartered previously confirmed that it closed some bank accounts linked to the Gupta family, which has since settled in Abu Dhabi, in 2014.

In response, a Standard Chartered spokesperson in South Africa said the bank won't comment on the specific transaction.

"We file SARs when circumstances warrant and that means our screening and monitoring systems are working as intended. A SAR filing does not mean there has been criminal activity.

"We report these matters to law enforcement so they can investigate and, if they see fit, take further action. The reality is that there will always be attempts to launder money and evade sanctions; the responsibility of banks is to build effective screening and monitoring programmes to protect the global financial system."

She said that Standard Chartered has nearly 2,000 staff worldwide dedicated to preventing, detecting and reporting suspicious transactions. "In 2019 we monitored more than 1.2 billion transactions for potential suspicious activity and screened more than 157 million for sanctions compliance. Our monitoring and investigations work has contributed to the conviction of criminals and our efforts have been recognised by law enforcement in multiple jurisdictions."

Reporting by Business Insider US and SA.

Related - https://ewn.co.za/2020/09/21/o…nomic-crime-not-yet-clear

OPEN SECRETS: ROLE OF SA BANKS IN ECONOMIC CRIME NOT YET CLEAR

This comes as leaked secret US government documents reveal how major international banks are helping launder money in the illicit economy.

Picture: Pixabay.com

• Money laundering
• Open Secrets
• SA Banking Industry
• FINCEN files

Chanel September | about 5 hours ago

CAPE TOWN - Anti-corruption group Open Secrets said at this stage it's unclear how deeply some South African banks may be implicated in economic crime.

This comes as leaked secret US government documents reveal how major international banks are helping launder money in the illicit economy.

The FINCEN files also show more than two-trillion dollars of transactions between 1999 and 2017.

According to the group's researcher Mamello Mosiana, an investigation like this plays a crucial role.

"It shows the private sector's deep-seated role in global financial crime. And it shows how deep-seated and central they are to the money-laundering schemes. And the fact that they are not actually reporting these crimes as they should be."

Mosiana accused banks of not doing anything to address the problem.

"They are not freezing these accounts. They know that these are suspicious people, but over and over again they are letting it go because they make a profit. Even when they do get caught, the punishment rarely fits the crime. We have seen in South Africa the banks here have claimed themselves to be victims of state capture, while they have facilitated that state capture and have made a lot of money from it," said Mosiana.

So, South Africa finally goes for universal welfare - the Basic Income Grant aka the UBI . This is a step of a government giving up imho...it will kill productivity once and for all while parasitising the ever shrinking pool of already overburdened taxpayers...this cannot be sustainable and will bankrupt the country. Debt is already skyrocketing...plus... a $4.3 billion IMF loan was also taken out this week and, well, nobody escapes the IMF once they got their claws in you. Sorry to say but I think economically we're about to be screwed beyond redemption...and then that acronym ,B.I.G...just begging for a million jokes...

https://www.news24.com/news24/…-says-anc-report-20200730

BIG bucks: Not introducing a Basic Income Grant could be 'disastrous', says ANC report

30 July 2020

James Stent,

GroundUp

Failure to introduce a Basic Income Grant could be “disastrous”, warns an ANC document.

Photo: Masixole Feni, GroundUp

Earlier this month government announced it was considering introducing a basic income grant for the poor and unemployed.

An ANC subcommittee presented its proposals to the party's national executive committee last month.

This is not the first time research has been done on the need and viability of a basic income grant.

Social Development Minister Lindiwe Zulu announced on 13 July that the government was considering a Basic Income Grant (BIG) for everyone between 18 and 59 years old.

Though there is no clarity on how this would be funded, an ANC document warns that the cost of not funding it would be "disastrous", GroundUp reported.

Zulu's announcement came soon after the ANC's 27-28 June national executive committee, at which a subcommittee chaired by Lindiwe Sisulu presented proposals for a BIG in a discussion document.

Members of the sub-committee include Tito Mboweni, Bathabile Dlamini, Blade Nzimande, Sbu Ndebele and Zizi Kodwa.

READ | Govt considering introduction of basic income grant, says Zulu

The proposal was written by Professor Viviene Taylor, who originally championed the BIG 20 years ago.

The proposal in the ANC document is that 33 million people — all those between 18 and 59 — would receive R500 every month.

There would be no means test. R500 is almost enough money to survive on, the document said, quoting a food poverty line of R591 a month in 2019. In 2015, 13.8 million people in South Africa fell below this line, according to the document.

At R500 per adult per month, the annual cost of BIG would be R198 billion. According to the document, employed people would effectively fund their own grants through a revision of the tax rate, made in such a way as not to over-burden those at the lower end of the taxpayer spectrum.

ALSO READ | Children eat 'plants' to survive as hunger explodes in SA

Taylor chaired the Committee of Inquiry into a Comprehensive Social Security for South Africa, which completed its work in 2002 and "formally recommended the introduction of a BIG".

This recommendation was then followed by a push from civil society, religious leaders and trade union federation Cosatu for the implementation of BIG. In 2002, the Treatment Action Campaign organised a march of thousands of people to Parliament to demand BIG.

'Detailed work is required'

In 2004, the Economic Policy Research Institute and three economists - Pieter le Roux, Charles Meth and Ingrid Woolard - offered four alternative financing options for BIG.

Each worked from an initial assumption that the grant would be universal (for all, regardless of age) and set at R100 at 2000 prices (approximately equivalent to R300 today), with additional grants — disability, pension, child support — sitting on top of the basic amount.

The additional tax burdens calculated ranged between R27 billion and R42 billion (in 2000 prices) and measures offered included raised VAT, raised corporate taxation, and increasing the top rate of income tax to 45%.

But the National Treasury did not buy into the findings of the Taylor Committee. Then-finance minister Trevor Manuel said in 2005 that a universal BIG would bankrupt the country and BIG largely vanished from public debate.

OPINION | Basic income grant is a 'good' idea: Now let's cut spending to make it happen

The ANC document suggests that the cost of the grant "would be clawed back from those with high incomes through the revision of the tax rate".

"While all employed persons would also receive the R500 grant they would pay it back in its entirety as part of a tax deduction. Based on a sliding scale, the lowest paid employees would pay additional tax of R6 000 per annum (R500 X 12) to cover the R6 000 received via the grants system whilst higher paid employees would pay a higher amount so that the full gross cost of the grant is paid."

In pre-Covid-19 times, this would have meant the government would have recovered R101.8 billion immediately, leaving R96 billion to be raised in additional tax.

But because millions of jobs have been shed during the Covid-19 crisis, at 50% unemployment, R120.6 billion would be needed from additional taxation, according to the document’s calculations.

The document acknowledges that more "detailed work is required to determine South Africa’s tax space". The document says: "The social, economic and political costs of not introducing a Basic Income Grant in South Africa are more disastrous than the actual monetary costs."

Some headlines

This is like saying a popped balloon is deflating

Zimbabwe economy to shrink by 4.5% this year on COVID-19, drought

16 July 2020, 9:52 PM

Zimbabwe’s economy is expected to shrink by 4.5% this year owing to the fallout from the COVID-19 pandemic and a brutal climate change-related drought, the finance minister

Every economy is shrinking in Africa as well as globally, so Zambia's far from alone.

Zambia’s economy to shrink 4.2% in 2020: Finance Minister

15 July 2020, 6:11 PM

Zambia expects its gross domestic product to shrink by around 4.2% in 2020, more than the 2.6% contraction forecast by the central bank in May, finance minister Bwalya Ng’andu said on Wednesday.

South Africa’s foreign direct investment inflows rise to $1.7 bln in Q1

16 July 2020, 3:28 PM

South Africa’s foreign direct investment (FDI) inflows rose in the first quarter of 2020, to 29.0 billion rand ($1.74 billion) compared to inflows of 10.5 billion rand in the final quarter of last year, the central bank said on Thursday.

Related: South Africa’s failure to lower debt could trigger downgrade: Fitch

The Germans will need to be miracle workers. The economy was already on life support before COVID. Desperate measures.

German team to assist revive South Africa’s economy 

16 July 2020, 2:48 PM

In an effort to revive South Africa’s dwindling economy and restore the country to what it was before the lockdown, local and German leaders have sent a team to help.

https://www.news24.com/fin24/e…100-in-two-years-20200710

Moody's: Covid-19 could push public debt close to 100% in two years

10 July 2020

Lameez Omarjee

Moody's headquarters in New York. Photo: Getty Images

Moody's expects SA's economic activity to pick up in the second half of the year, but it will still remain weak. Furthermore, Covid-19 is expected to push public debt to nearly 100% of GDP by March 2022.

The ratings agency on Friday issued an update on its forecast for the country's economic performance this year. It highlighted that the Covid-19 pandemic would add to the country's economic challenges but stuck to its projection of a 6.5% contraction in GDP this year. It expects the SA economy to contract by 3% in the second half of the year, compared to the 10.1% contraction in the first half of the year. "We expect economic activity to deteriorate further in the second quarter of the year, as strict lockdown measures implemented in late March but gradually eased between early May and mid-June dampen economic activity," the note read.

READ | Moody's: Stabilisation of of SA budget by 2023 'unlikely'

In its emergency budget, Treasury had indicated that the debt-to-GDP ratio would be 81.8% this year or R4 trillion. Similarly, Business For South Africa has pencilled in debt at 82% of GDP this year and only breaching the 100% mark by 2023/24. Moody's pegs debt-to-GDP at 89.9%, mainly due to the Covid-19 stimulus package which sees government increasing spending. Moody's projects the budget deficit would hit 15.7%, compared to Treasury's projection of 14.6%.

Weak growth and low revenue collections would weigh on "already vulnerable" public finances, Moody's said. "A contraction in the tax base disproportionate to the contraction in GDP due to lockdown measures, job losses and lower confidence drive the fall in revenue," the report read. It noted that the R70 billion in tax relief measures in response to Covid-19 only accounted for a "small share" of revenue.

State-owned enterprises will also take a knock due to the pandemic, which will also add to fiscal drains, Moody's warned. "For instance, reduced electricity demand will lower cash flows and increase Eskom's funding needs," it said. [Hano - Electricity demands are high but payment rates are dropping as Eskom keeps raising rates to compensate for lower income. This in turn leads to even less payment, more electricity theft because of unaffordability and more rate hikes. A vicious circle of stupidity by Eskom which is killing it as its generation monopoly is strangling the economy to death.]

https://ewn.co.za/2020/07/07/a…2021-but-damage-done-afdb

AFRICA TO REBOUND FROM PANDEMIC SLUMP IN 2021 BUT DAMAGE DONE: AFDB

Under a scenario in which the pandemic continues into the second half of this year, the AfDB forecasts a 3.4% contraction in gross domestic product in 2020.

A laboratory specialist wearing protective gear walks toward the ward for quarantined people who had close contacts with the first Kenyan patient of the COVID-19 at the Infectious Disease Unit of Kenyatta National Hospital in Nairobi, Kenya, on 15 March 2020, during the COVID-19 outbreak, caused by the novel coronavirus. Picture: AFP

Reuters | 7 July 2020

JOHANNESBURG - Africa is expected to partially rebound next year from a pandemic-induced economic slump, but it could still lose nearly a quarter of a trillion dollars in economic output in 2020 and 2021, the African Development Bank (AfDB) said on Tuesday.

Africa has so far largely been spared the rampant infections and heavy death tolls seen in Europe and the United States. Its hardest-hit nation, South Africa, has recorded around 200,000 cases of COVID-19 and just over 3,100 deaths.

African economies, however, have not been immune to the pandemic’s global shockwaves, with oil exporters such as Algeria, Angola, Libya and Nigeria on track to witness the continent’s sharpest declines in economic output.

Under a scenario in which the pandemic continues into the second half of this year, the AfDB forecasts a 3.4% contraction in gross domestic product in 2020 - compared with a pre-pandemic projection by the Abidjan-based bank of growth of 3.9%. The figures were included in a revision of the AfDB’s African Economic Outlook, which was originally published before the pandemic.

A partial V-shaped recovery should see growth rebound to between 2.4 and 3% next year, the bank said. “But the projected recovery in 2021 would not make up for an estimated cumulative loss to Africa’s GDP of $173.1–$236.7 billion for 2020 and 2021 due to the pandemic,” the report said.

A rebound is threatened by risks including a potentially worsening pandemic, subdued commodity prices, volatile global financial conditions and even natural disasters such as the locust infestations that have ravaged East Africa this year.

International Monetary Fund slashed its 2020 global output forecast last month, projecting the world’s economies will shrink 4.9%, compared to a 3.0% contraction predicted in April.

The European Commission forecast on Tuesday that the euro zone economy will drop deeper into recession this year and rebound less steeply in 2021 than previously thought.

Sweeeeeet

https://ewn.co.za/2020/07/04/c…ducer-hits-the-sweet-spot

CONGO AND THE CHOCOLATE FACTORY - NEW PRODUCER HITS THE SWEET SPOT

For decades, eastern Congo’s underground riches such as gold and coltan have sustained cycles of deadly violence in the area.

Reuters | 5 July 2020

GOMA - Aisha Kalinda melts the chunks of cocoa in a pan and spoons the brown gloop into a mould which will become the latest bar produced at the Lowa chocolate factory, the first locally owned producer in Democratic Republic of Congo.

For decades, eastern Congo’s underground riches such as gold and coltan have sustained cycles of deadly violence in the area.

But before the country fell apart in the 1990s, North Kivu province exported overground riches too, like coffee and cocoa.

“People have that ignorance of looking at chocolate like it’s something from abroad, that can’t be made in Africa,” Kalinda said, stirring the pot. “We decided to break that rule.”

Boosted by increased consumer interest in the provenance of ingredients, cocoa and coffee are experiencing a renaissance in Congo, said Kevin Wilkins, a cocoa specialist from ELAN DRC, a UK Aid-funded private sector development programme.

Thriving in the rich volcanic soils, the beans have attracted interest from brands like coffee-chain Starbucks and specialty chocolatier Theo Chocolate. Exports surged to 11,000 tonnes in 2016, up from 600 tonnes in 2000, government data shows.

But while the big brands provide jobs and valuable export earnings for the country, Congolese chocoholics have for many years been deprived the pleasure of gorging on their own supply.

In 2014 Kalinda’s grandfather, Kalinda Salumu, had a dream of turning plantations abandoned after Congo’s independence into productive cooperatives that could export beans abroad.

In 2018 his first harvest of 200 kg (441 lb) was not enough to reach the legal minimum to export so he sent his son to Kampala, Uganda’s capital, to train as a chocolatier. “We have cocoa, even the best cocoa of all the cocoa in the world,” Salumu boasts happily.

Last year the family established the Lowa factory, named after the river near where the beans are grown, 150 km (93 miles) west of provincial capital Goma. Lacking sophisticated modern equipment, their output is meagre, only 2 kg (4.40 lb) per day, but the bars have found a devoted following in Goma.

At a local supermarket Baritegera Nikuse Gloria grabbed a $5 bar. She likes it because it’s local, and organic. “Since I tasted this chocolate, I haven’t been able to put it down.”