The Sentry: Bribery, Money Laundering Red Flags in Massive Oil Deal in South Sudan

A new investigative report by The Sentry—the result of a three-year investigation into a loan deal between a local company and a regional bank, with the backing of the South Sudan government—has uncovered red flags for illicit business practices, including bribery, tax evasion, and trade-based money laundering. The investigation exposes how laws were broken in South Sudan, sanctions may have been breached, and powerful individuals were enabled to benefit from the manipulation of business worth hundreds of millions of dollars.

The report, “Crude Dealings: How Oil-Backed Loans Raise Red Flags for Illegal Activity in South Sudan” spotlights a 2018 deal in which South Sudan’s Trinity Energy Limited entered into a trade finance facility with Cairo-based African Export-Import Bank (Afreximbank) for a series of $30 million loans to purchase diesel and gasoline to sell to the South Sudan market. As part of the deal, the government of South Sudan committed to award cargoes of crude oil to Trinity Energy. The deal skirted legislation on oversight, transparency, and competition and facilitated off-book government spending.

The loan deal also perpetuated a damaging reliance on future oil production to finance current spending, a pattern that has locked the country in a spiral of debt. Oil is South Sudan’s most valuable resource and the source of the vast majority of its national wealth. This deal contributed to mortgaging the future prosperity of the country and its citizens.

The Sentry’s report reveals that the arrangements between Trinity Energy, Afreximbank, and the government of South Sudan were contrary to South Sudanese law, and their implementation by Trinity Energy raises red flags for bribery, tax evasion, and trade-based money laundering.

The in-depth investigation by The Sentry included interviews with a former Trinity Energy employee and reviews of the trade finance facility, bank statements, emails, internal memos, and ministerial correspondence.

Selected highlights from the report:

The arrangement gave Trinity Energy—a company that had never before traded crude—privileged access to the market for South Sudan’s oil. The company was awarded more than 40% of crude cargoes contracted by the government from June 2018 to May 2019.

The government paid a premium to Trinity Energy for the sale of fuel to the South Sudanese army. Trinity Energy was given a dominant role in the market for petroleum and diesel imports, a position that facilitated its secretive provision of fuel to the South Sudanese army at a time when government forces were involved in ongoing civil conflict. South Sudan’s army has been accused of war crimes and human rights abuses.

The trade finance facility gave Glencore Singapore Pte Ltd, a subsidiary of Geneva-based oil trader Glencore PLC, privileged access to crude contracts. The agreement designated the firm as the “original offtaker,” meaning that it bought and shipped the cargoes of oil awarded by the government to Trinity Energy. Glencore shipped South Sudanese crude worth $376 million in 2019, all of it through deals with Trinity Energy.

Trinity Energy spent millions of dollars on “facilitation” and “business acquisition” costs for the deal, including 18.7 million South Sudanese pounds (SSP) ($125,000) in payments to the government committee responsible for approving the deal. During the implementation of the trade finance deal, Trinity Energy changed millions of US dollars on the black market, paid fake invoices overseas to disguise the black market exchange of hundreds of thousands of dollars, and engaged in behaviors indicative of tax fraud.

At the time of the trade finance deal and during the period of its negotiation, the owners and directors of Trinity Energy had business and family ties with politically exposed persons (PEPs) in senior government positions. These included two former ministers of finance, the head of the state customs agency, and a senior general in the South Sudanese army. According to incorporation documents on file with the Ministry of Justice, the company’s directors also had ties to two colonels in the National Security Service, both of whom were connected to President Salva Kiir.

Trinity Energy supplied fuel to Santino Deng Wol, a general in the South Sudanese army who was under European Union, United States, and United Nations sanctions at the time and who is now Chief of Defense Staff.

The South Sudanese government’s guarantees to award crude cargoes each worth tens of millions of dollars to Trinity Energy may have broken laws on procurement, competition, and transparency.

Key recommendations from the report (complete list of recommendations included in the full report):

The United States, European Union, United Kingdom, Canada, and Australia should investigate and, if appropriate, sanction individuals and entities involved in corrupt oil deals.

Global and regional financial institutions should take measures to identify accounts held or beneficially owned by those with business dealings in South Sudan’s oil sector and senior South Sudanese PEPs, carry out a comprehensive assessment to identify their broader international networks, and determine measures needed to mitigate the risks involved in such accounts and customer relationships.

Afreximbank should initiate an independent investigation into its relationships and transactions with Trinity Energy and the government of South Sudan.

The UN Panel of Experts on South Sudan should investigate Trinity Energy’s support—via monetary payments and fuel supplies—for political and military leaders and entities.

Kenya and Uganda should investigate and prosecute illicit money flows. Authorities in Kenya and Uganda should investigate the transactions identified in this report in which money sent to company accounts in the two countries raised red flags for trade-based money laundering.

South Sudan should ratify and implement the African Union Convention on Preventing and Combating Corruption, which South Sudan signed in 2013. The country should also implement Chapter IV of the Revitalised Agreement on the Resolution of the Conflict in the Republic of South Sudan (R-ARCSS) to address the crippling cycle of debt, economic mismanagement, and corruption undermining economic prosperity and fueling conflict.

Mauritius: FSC issues FAQs on Moneylending Licence

As per the Financial Services Act (the ‘FSA’), a moneylender is a person, other than a bank or a non-bank deposit taking institution, whose business is that of lending money in Mauritius or who provides, advertises or holds himself out in any way as providing that business, whether or not he possesses or owns property or money derived from sources other than the lending of money, and whether or not he carries on the business as a principal or as an agent.

A Global Business Company (‘GBC’) should apply for a Moneylending Licence where it is engaged or intends to engage in the business of moneylending in Mauritius. A GBC would not be required to seek a Moneylending Licence where it is solely engaged in the business of moneylending outside Mauritius. A GBC lending money to another GBC shall be held to be conducting business outside Mauritius with respect to that transaction. 

As per the Financial Services (Consolidated Licensing and Fees) Rules 2008 (as amended), the processing fee for Moneylending Licence is MUR 43,000 (USD 1,000- applicable for GBC) and the fixed annual fee for Moneylending Licence is MUR 82,000 (USD 1,900- applicable for GBC).

Mauritius: Launch of an AI Powered Due Diligence Platform

The Financial Services Commission, Mauritius (FSC), in collaboration with the Mauritius Research and Innovation Council (MRIC), is pleased to announce the launch of an Artificial Intelligence (AI) Powered Due Diligence Platform on Thursday 02 February 2023, at the FSC House. The event was held in the presence of the Honourable Mahen Kumar Seeruttun, Minister of Financial Services and Good Governance, the Honourable Deepak Balgobin, Minister of Information Technology, Communication and Innovation, Dr Kaviraj Sukon, Chairperson of the MRIC, Professor Theesan Bahorun, Executive Director of the MRIC, Mr Mardayah Kona Yerukunondu, Chairperson of the FSC and First Deputy Governor of the Bank of Mauritius, and Mr Dhanesswurnath Thakoor, Chief Executive of the FSC.

The event was also virtually attended by over 250 participants, both local and international.

The Honourable Mahen Kumar Seeruttun, highlighted in his keynote address that “the launch of the AI Platform, is an announcement to the world that we are constantly re-engineering our processes and regulatory environment in order to establish and conduct business in Mauritius”. Moreover, the platform is set to provide our supervisors with data of higher granularity, diversity and velocity than could ever be imagined and that so, in real-time. Mr Seeruttun outlined that the “due diligence process will become more efficient by automating some of the steps and relieving the task of data collection from due diligence teams thus allowing them to focus on other more critical tasks”. He emphasised that, for the regulator, “the platform will enhance the credibility and promote trust in regulatory activity which are essential ingredients for a competitive and successful International Financial Centre.”

The Honourable Deepak Balgobin underlined in his speech that “today’s event, marks a new turn for our public service, especially in the sector of financial services which constitutes a key pillar of our economy.” He mentioned that the Government is endeavouring, through the Ministry of Information Technology, Communication and Innovation and the MRIC, to establish the right ecosystem for Mauritius to embrace innovation. He added that “with this project bringing AI to the forefront of mechanisms designed to enhance the security of processes in this sector, we are demonstrating that innovation is critical to ensure trust, resilience and sustainability in this sector.” He mentioned that “the financial services industry has entered the AI, a journey that started with the advent of the internet and has taken organisations through several stages of digitalisation. The decision for financial institutions to adopt AI will be accelerated by technological advancement.”

The Executive Director of the MRIC, Professor Theesan Bahorun highlighted in his speech that “there is growing pressure on financial institutions to remain competitive, and this is leading them to undertake major transformation efforts – moving from complex traditional environments to more efficient operations and creating more responsive compliance processes that can meet evolving local and international regulations.” He mentioned that the AI platform that has been developed in the project, will help to ensure that established legal regulatory framework and international standards/regulations are being followed and observed for effective mitigation of money laundering risks. He concluded that “Financial innovation is a fascinating journey. Crucial in this regard is adequate regulation, and supervision, of governance, risk management, and transparency. These are quintessential elements of a well-functioning financial system that passes the litmus test of the public’s trust”.

Mr Mardayah Kona Yerukunondu, the Chairperson of the FSC, in his welcoming address mentioned that “the FSC Mauritius has embarked into a digital transformational journey, not because it is fashion, but out of necessity. This project is aligned with the FSC's overarching strategy to improve the financial ecosystem through the digitalisation of its regulatory process”. He observed that as financial services players are becoming more tech-savvy, regulators have no other choice than to implement technology-based solutions to close the regulatory and supervisory gaps. He further underlined that “As we strive to be an International Financial Centre of trust and of good repute we are gearing ourselves with the means to do so. We remain a credible financial services regulator through investment in our people and infrastructure. We have the vision to develop our innovative system or to seek out for customized off-the-shelf software when required, as we are doing through our partnership with the MRIC.”

The AI Powered Due Diligence Platform aims at moving due diligence processes into a real-time surveillance based on a risk scoring system and is aligned with the FSC’s overarching strategy to improve the financial ecosystem through the digitalising of the regulatory process.

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Mauritius: E-application for Certificate of Character

Certificate of Character is governed by the Certificate of Character Act 2012 (No 18/2012) Amended. It is an official document issued by the Office of the Director of Public Prosecutions which states whether or not a person has previous convictions recorded against him/her in the Republic of Mauritius.

The Office of the Director of Public Prosecutions in collaboration with the Mauritius Police Force hereby inform the public that the online facilities for obtaining a Certificate of Character will be available as from 09 February 2023.

The public can henceforth submit their application for a Certificate of Character electronically as from the above mentioned date. The service can be accessed on: https://ecertificateofcharacter.govmu.org. The applicant will be able to download his/her electronic copy of Certificate of Character after the authorities concerned have completed the process of the application.

An online guide and a tutorial video is available to assist applicants in using the system. Applicant will need to log in the system with their credentials of the Maupass platform for authentication to start the application.

Online payment facilities are provided on the E-Certificate of Character system and can be effected for now only via the credit card payment and debit card.

In addition to the online application, the current system of applying for a Certificate of Character will remain operational.

Applicants are requested to consult the Document(s) Required, Guidelines and Disclaimer sections for more information.

For any additional information, the Helpdesk at the Crime Record Office at Line Barracks, Port Louis may be contacted on 2149794 or by visiting the nearest Divisional Police Headquarters or through an email at coc-support@govmu.org.

Office of the Director of Public Prosecutions

31 January 2023

Nespresso and Chiara Ferragni embark on a journey of discovery, inspired by Italy’s love for coffee

Nespresso is kicking off the year in style with Italian fashion icon, Chiara Ferragni, who has embarked on a journey of discovery through her love of coffee in a four-part short film series. Inspired by the delicious flavours and the Italian regional coffee traditions, Chiara co-developed a limited-edition collection with Nespresso, expanding the Ispirazione Italiana range with the launch of the Milano Intenso coffee, accessories and a coffee machine that pay tribute to the urban vibes and contemporary tempo of Milan, Chiara’s city of adoption.

Alongside renowned historian, Filippo Cosmelli, Chiara starts her adventure in the fascinating history of Rome’s coffee culture and the tradition and creativity of the beautiful city. Together, the duo visit iconic locations, including Antico Caffè Greco where they enjoy a Roma espresso and uncover Italian roasting traditions. Chiara’s journey continues through the city of Milan, the true inspiration behind the design, taste and notes of the Milano Intenso coffee, stemming from historic locations such as Villa Necchi, Palazzo Montedoria and Duomo Cathedral. The Duomo gold spires and Villa Necchi’s bespoke geometric deep green design with gold accents, appear throughout the limited-edition collection, uniting coffee enthusiasts globally with timeless elegance and classic vibes.

Commenting on her collaboration with Nespresso, Chiara Ferragni said: “My love of coffee and Italy knows no limits, so I jumped at the chance to collaborate again with dear Nespresso family to co-develop this limited-edition collection. The new range has been inspired by the creativity and rich culture of Milan, and I am so excited to bring to life such great tasting coffee with beautiful accessories and machine for coffee lovers to enjoy wherever they are.”

A TASTE OF ITALY INSPIRED BY MILANO

The limited-edition expansion of Nespresso’s Ispirazione Italiana 2023 range welcomes Milano Intenso, designed to allow coffee enthusiasts to celebrate the vibrant city of Milan. Finding a balance between jammy fruity notes and a shimmer of spice, the coffee will take people to a place of artistic heritage, luxurious lifestyle and superior taste. Milano Intenso encompasses the elegance, history and coffee expertise of Italy for people around the world to enjoy.

Igniting the senses with a classic combination of roasted-cereal and cocoa notes, coffee drinkers can expect to get hints of bread and dark chocolate with every sip they take. For a momentous tasting experience from start to finish, Nespresso recommends the coffee is sipped as a cappuccino, giving off hints of pepper, berry and funky fruity notes. The coffee uses a split roast technique, with the majority being medium roasted, and the minority composed of the Robusta portion and roasted to a very dark degree.

EMBRACE ITALIAN CULTURE WITH A SELECTION OF ELEGANTLY CRAFTED ACCESSORIES

The limited-edition collection is also comprised of Nespresso’s limited-edition Touch Travel Mug in a sleek gold colour, and a set of two matte black and gold espresso cups, allowing consumers to enjoy their coffee in style. Coffee lovers can also get their hands on a limited-edition Nespresso CitiZ coffee machine with an Italian twist - wrapped in a striking artwork reminding Milan’s Villa Necchi Campiglio and ideal for enjoying Nespresso’s Ispirazione Italiana coffee range, including Milano Intenso.

Nespresso, pioneer of premium single-serve coffee, unveils new range of home compostable coffee capsules

For 30 years, Nespresso has been dedicated to bringing its consumers the ultimate coffee experience in a responsible way. Today, it renews that commitment by announcing a new range of paper-based home compostable capsules.

After three years of research and development, Nespresso has created a home compostable paper-based capsule that delivers the high-quality coffee for which the brand is known – with no compromise on the taste experience. Consumer demand for compostable packaging is increasing, and an estimated 45% of French people now home compost one or more types of biowaste.

Guillaume Le Cunff, Nespresso CEO, said: “Pushing the boundaries of fine coffee experiences is part of the Nespresso innovation, and since becoming a B Corp™ earlier this year, we’re more committed than ever to widening the sustainable choices we offer our consumers. We are excited to announce our first ever paper-based home compostable capsule, which will complement our offering of aluminium capsules that are both recyclable and made using 80% recycled aluminium. This is about yet another sustainable choice, without compromising on quality.”

Several aspects of the capsule feature proprietary technology, including the biopolymer lining inside the capsule which protects the coffee against oxidization.

Julia Lauricella, Head of Nestlé System Technology Center, said: “Our 40 years of experience in coffee systems allowed us, together with the Nestlé Institute of Packaging Sciences, to develop a home compostable paper-based capsule, retro-compatible with the Nespresso Original machines, that meets and exceeds the high expectations consumers have of Nespresso in terms of protecting the coffee’s aromas and taste. We combined a high-precision paper pulp forming process with a biodegradable layer for protection against oxidation to preserve our coffee in transport, storage and during the high-pressure extraction in our machines.”

Nespresso’s coffee masters have also created four new blends, including an organic coffee, sourced through the Nespresso AAA Sustainable Quality™ Program, specifically crafted to act in perfect harmony with these new paper-based capsules.

Developed as an alternative for those who prefer and have access to a compost, the innovation will widen the sustainable choices already offered to Nespresso consumers through its aluminium capsules. Aluminium is infinitely recyclable and the capsules are made using 80% recycled aluminium. Today, Nespresso offers over 100,000 aluminum capsule recycling collection points in 70 countries, giving almost 90% of customers convenient access.

The product is certified for composting, both home and industrial, by TÜV Austria, an international certification body. In some countries, including France where Nespresso is piloting this range, these capsules are accepted in the public biowaste bin.

Huhtamaki, a global provider of sustainable packaging solutions, was one of the partners in the development of this new paper-based capsule.

Charles Héaulmé, Huhtamaki CEO, said: “We are delighted to partner with Nespresso on the home compostable paper-based capsule. Part of this breakthrough innovation is the result of combining paper pulp from wood fibre, a natural renewable material, compressing it to a coffee capsule using our high precision technology, creating another sustainable alternative for Nespresso lovers."

Nespresso is committed to raise awareness among consumers on how to compost their capsules, as well as advocating for the acceptability of these coffee capsules in the public biowaste/organic bin. In France, Nespresso initiated Union des Acteurs du Compostable (UAC), an interest group bringing together public bodies, companies, recycling operators, and NGOs to support the implementation of solutions to help producers of biowaste increasing the sorting of biowaste as well as to raising awareness amongst consumers about composting.

The new range will pilot initially in France and Switzerland on the Nespresso Original system. It will be further launched in several other European countries within a year.

The Sentry: Cash Grab | Billion-Dollar Letters of Credit Scam in South Sudan

Between 2012 and 2015, the government of South Sudan received a credit line of nearly one billion dollars from Qatar National Bank (QNB) and CfC Stanbic Bank in Kenya to support efforts to import much-needed food, fuel, and medicine to the war-torn and newly independent country. The credit line—issued in US dollars in the form of letters of credit (LCs)—was intended to help local traders pay for these imports, considering the extreme shortage of hard currency and the weakness of the new local pound.

The government was supposed to allocate the LCs to traders, who could exchange South Sudanese pounds (SSP) at the then-official exchange rate of 3.16 SSP per dollar. Traders would then use the LCs—essentially a guarantee from the bank—to pay the exporter upon confirmation of delivery of the needed goods.

From the beginning, things went terribly wrong. The Sentry’s three-year investigation into the LCs program found that multimillion-dollar contracts were awarded to foreign-run companies, companies that only existed on paper, and inexperienced middlemen. Businesses with connections to the ruling class—including President Salva Kiir’s family, the then-governor of the central bank Kornelio Koriom, and multiple military officials—were among those that received contracts collectively worth tens of millions of dollars under the program, according to official documents reviewed in connection with this investigation. It appears that millions of dollars’ worth of essential pharmaceuticals, fuel, and food were not delivered. The government failed to repay the borrowed money and entered arbitration proceedings initiated by QNB at the International Center for Settlement of Investment Disputes. By July 2020, the matter remained unresolved, and the government reached a debt-restructuring agreement with QNB.

The failure of the LCs program and the subsequent corruption scandal resulted in shortages that would affect the country for years to come. Almost $1 billion effectively walked out of the country, and the human cost remains to be calculated. At the peak of the LCs program, when hundreds of millions of dollars in goods should have arrived in markets, more than two million people went without food, hospitals and clinics had to treat patients without medicine, and fuel shortages resulted in black market price gouging. In October 2015, just months after the last LC-backed contracts were awarded, the United Nations (UN) reported that 3.9 million South Sudanese faced severe hunger and tens of thousands were on the brink of famine. The country was saddled with unmanageable debts that continue to constrain the government’s ability to devote funds to crucial services. Food, medicine, and fuel shortages persist to this day.

A 2015 report by Stephen Wondu, the auditor general (AG) of South Sudan, was presented to parliament but was never made public. This report, as well as interviews with South Sudanese close to the LCs program, shows that the disbursement process developed into a confusing, disjointed system of documents and signatures that corrupt actors circumvented or subverted. The report, reviewed by The Sentry, provided a comprehensive overview of the timeline of events surrounding the LCs program, the parties involved, and the wrongdoing committed. The report did not identify which individuals or companies benefited directly from the lucrative scheme or may have violated the law, but it clearly set forth the facts surrounding the failure of the program. In 2015, the AG’s findings were presented to Kiir and to parliament, but no action was taken and no one was brought to justice or held accountable for the program’s failures—legally or politically. In August 2021, a copy of the AG’s summary report was circulated on social media in South Sudan, and Wondu asked parliament to initiate an action leading to the prosecution of those government officials who siphoned money out of South Sudan via the LCs program. To date, there have been no prosecutions for corruption linked to the LCs program.

The mismanagement evident in the LCs program has had dire and long-lasting consequences for the people of South Sudan, and the program’s failure is indicative of government corruption and ineffective rule of law. South Sudan’s public officials and institutions have undermined the nation’s ability to achieve economic progress, and the abuse of the LCs program is just one example. In 2021, for the second year in a row, South Sudan ranked as the most corrupt country in the world on Transparency International’s Perceived Corruption Index. The UN reported in September 2021 that “more than $73 million USD was diverted since 2018, including transactions worth almost $39 million USD in a period of less than two months.” The government’s failure to properly carry out the LCs program and repay the loans led to a succession of damaging government policies, including the wasteful and opaque practice of borrowing hundreds of millions of dollars from oil companies. The full scope of the fraud might never be uncovered, but there are measures that can be taken to promote transparency and accountability in the allocation of public funds and to help ensure that the people of South Sudan are not cheated on this scale again.

The Architects of Taste and Pleasure Come Together for a Holiday Season Collection of Coffees, Confections and More to Celebrate the Joy of Gathering and the Art of the Everyday

Nespresso and world-renowned pastry chef and chocolatier Pierre Hermé are thrilled to join forces and announce a capsule collection to kick off the festive season. The exclusive coffees and confections are a celebration of refined tastes and indulgence, representing the best of the best across gustatory pleasures.

The limited-edition collaboration builds upon Pierre Hermé’s extensive background as an expert of flavour, putting forth a collection that deepens the indulgence of the palate by relishing in the shared joy that we experience with friends and family. Herein lies an invitation to gather, to discover and delight in unexpected surprises: from the visceral pleasures of tasting a new coffee or pastry to the combined laughter between friends, fuller stories are written with the Nespresso | Pierre Hermé coffees and confections that bring the art of the haute pâtisserie into the everyday, enriching both in equal measure.

From the creator of the Haute Pâtisserie, Pierre Hermé’s pastries are at the apex of avant-garde design, skilled technique and refined flavours. Decades of experience beginning with an apprenticeship at age 14 for Gaston Lenôtre, widely considered the father of modern pastry, led to Pierre Hermé being crowned the prestigious title of World’s Best Pastry Chef in 2016. With namesake boutiques and cafés all over the globe, Pierre Hermé’s creativity and sophistication in gastronomy is unparalleled. His unmistakably modern imagination pairs with technique to craft the ultimate coffee for the most discerning of palates – epicures will delight in the complex flavours while rejoicing in the ease of use, all in the comfort of one’s own home.

The collaboration consists of delightful coffees, confections, and gifting with Nespresso rounding out the festive season’s offerings by adding limited-edition coffee machines and accessories to bring Nespresso quality into all areas of one’s day.

Leading with a black single origin coffee from Colombia, the Infiniment Espresso, is sourced from the new supplying region of Tolima, where farmers mostly use natural methods and prioritize low-impact agriculture, benefiting the land and its inhabitants. The Arabica beans available in both Original and Vertuo as the Infiniment Double Espresso bloom with vibrant red fruit and smooth cereal notes, expressing an impressive depth of flavor and an elegant mouthfeel.

The Original espresso offerings also include two flavoured coffees: the Infiniment Gourmand Saveur Noisette, crafted from delicately sweet South American Arabica beans, begins with the unmistakable aroma of roasted hazelnuts flavour followed by sweet top notes of almond biscotti and delicate vanilla. The refreshingly smooth Infiniment Fruité Saveur Framboise articulates a smooth cereal aroma pairing beautifully with the alluring flavour of raspberries. Both of these inspire a premium pastry experience by declaring the same complex flavours one associates with Pierre Hermé’s elevated pastries.

When it comes to the decadent mug sized Vertuo flavoured coffees, the Latin American and African Arabica beans of Infiniment Gourmand Saveur Noisette reveal graceful roasted hazelnut flavours with top notes of praline and vanilla, while Vertuo Infiniment Fruité Saveur Framboise divulges the bracing tartness of raspberry flavour juxtaposed with the smooth cereal notes from its Latin American and African Arabicas.

No Pierre Hermé collection would be complete without sweets: to complement the coffees, the Infiniment Exquis 70% Dark Chocolate Squares, crafted from single origin dark chocolate sourced from the Dominican Republic, are delicately perfumed with the rare essence of Timur berries, which are harvested by a local community in Nepal, offering an aromatic profile of grapefruit, pepper and floral notes.

The Infiniment Savoureux Raspberry Cinnamon Biscuits are also available in the range, designed under Pierre Herme’s artistic direction. Intended to be paired with Nespresso coffees and bring new dimensions to the flavour profiles within each of them, the shortbread features dried raspberries and the warm spice of Ceylon cinnamon harnessed in a crunchiness that is a lovely foil to the inherent creaminess of Nespresso coffees.

The Café Noble Scented Candle was imagined in collaboration with master French perfumer Olivia Giacobetti and Pierre Hermé for a longer lasting immersion into the festive spirit. The soft, cozy scent is inspired by the Colombian tradition of adding panela, a golden-brown raw sugar that is as sweet as honey to coffee for an indulgent confection. With all of the complexities and nuances of coffee, the candle boasts notes of cinnamon, vanilla, spice and a robust Arabica bean, and is housed in a reusable porcelain vessel.

Rounding out the festive collection are this season’s Original and Vertuo Advent Calendars, containing 24 coffees and a surprise gift for the last day. The giftable advent calendars contain the three co-created Nespresso | Pierre Hermé coffees as well as favorites from the Nespresso permanent range, offering a different coffee behind each door for a delightful surprise on the path to the festive season, all presented in an exquisite box designed to be reused afterwards.

Outside of the co-created collection, Nespresso is also offering limited-edition coffee machines, the Vertuo Next machine in a shiny Silver or Titan finish and its iconic CitiZ machine in Magic Blue, both of which can be used to create the Nespresso | Pierre Hermé signature coffee recipes. Crowning the collection is the Nomad Travel Mug in a Raspberry color, giving the ability to take the flavours from the artistry of haute pastry anywhere, anytime.

Nespresso’s sophistication meets its match in Pierre Hermé, the architect of taste, with coffee as the connector – a multisensory gourmand treat to delight everyone’s palate and weave connections amongst generations.

The enchantment of indulgence, the gift of conviviality: the Nespresso | Pierre Hermé collection arrives in Nespresso boutiques worldwide and online on [November 1st TBC, per market and offering]. As with all shared moments, the collection is available for a limited amount of time and in limited quantities, while supplies last.

The Global Financial Centres Index 32

The thirty-second edition of the Global Financial Centres Index (GFCI 32) was published on 22 September 2022. GFCI 32 provides evaluations of future competitiveness and rankings for 119 financial centres around the world. The GFCI serves as a valuable reference for policy and investment decision-makers.

China Development Institute (CDI) in Shenzhen and Z/Yen Partners in London collaborate in producing the GFCI. The GFCI is updated and published every March and September, and receives considerable attention from the global financial community.

128 financial centres were researched for GFCI 31 of which 119 are in the main index. The GFCI is compiled using 151 instrumental factors. These quantitative measures are provided by third parties including the World Bank, the Economist Intelligence Unit, the OECD and the United Nations.

The instrumental factors are combined with financial centre assessments provided by respondents to the GFCI online questionnaire. GFCI 31 uses 66,121 assessments from 11,038 respondents.

GFCI 32 Results

Leading Centres

• New York leads the index, with London second, ahead of Singapore in third place, which has overtaken Hong Kong in fourth position.
• Paris returned to the top ten in the index, replacing Tokyo which fell to 16th place, perhaps reflecting a comparatively slow consumer recovery following the Covid-19 pandemic.

Western Europe

• London continues to lead in the region, and rose 5 points in the ratings.
• Other leading Western European centres also gained in the ratings. Berlin, Stuttgart, Lugano, Malta, Reykjavik, Guernsey, and Liechtenstein rose more than 10 rank places, while Madrid and Brussels fell more than 10 ranking places.

Asia/Pacific

• Performance in Asia/Pacific centres was balanced, with half of these centres maintaining or improving their rank, and half falling in the rankings. Leading centres in the region tended to perform better than those in the lower ranks.
• Singapore has overtaken Hong Kong by just one rating point to take the lead in the region, and third place in the index overall. Shanghai, Beijing, and Shenzhen also feature in the world top ten.
• Continuing travel restrictions in places like Hong Kong and Tokyo affect their ability to conduct normal levels of business.

North America

• New York, San Francisco and Los Angeles now feature in the world top 10.
• Canadian centres performed less well than US centres in this region.
• Atlanta and San Diego both rose more than 10 places in the rankings.

Eastern Europe & Central Asia

• Prague, Warsaw, and Nur-Sultan overtook Moscow to take the leading positions in Eastern Europe & Central Asia.
• Continuing the trend in GFCI 31, the majority of centres in the region fell in the rankings in GFCI 32.
• Moscow, Istanbul, Almaty, Athens, and St Petersburg fell more than 10 rank places.

Middle East & Africa

• Dubai and Abu Dhabi take first and second places in the region, with Dubai stable in the rankings at 17th place and Abu Dhabi dropping one ranking place.
• Casablanca continues to be the leading African centre, maintaining its 54th position overall, while other African centres fell in the rankings.

Latin America & The Caribbean

• The majority of centres in the region fell in the rankings after a more positive performance in GFCI 31.
• Cayman Islands, Santiago, and Bermuda overtook Mexico City to lead the region.
• Mexico City, Sao Paulo, Rio de Janeiro, Bogota, and Bahamas fell over ten places in the rankings.

FinTech

• We are able to assess 113 centres for their Fintech offering.
• New York retains its leading position in the Fintech ranking, followed by San Francisco, Los Angeles, and London, with Shanghai and Beijing in fifth and sixth place.
• Chinese, US, and German centres performed well in the Fintech ratings, with Atlanta, Chengdu, Berlin, Stuttgart, San Diego, Tianjin, Dalian, Nanjing, Hangzhou, and Wuhan improving more than 10 rank places. Outside of these countries. Helsinki, Oslo, and Lugano also gained more than 10 rank places.

Zimbabwe’s Disappearing Gold: The Case of Mazowe and Penhalonga

Illicit financial flows (IFFs) in the artisanal mining sector in Zimbabwe are responsible for leakages of an estimated 3 tonnes of gold, valued at approximately USD157 million every month. The sector has now spread its tentacles from alluvial gold deposits along rivers and dry riverbeds to large scale disused mines that are now patronized by politicians and ruling party officials.

Offshore Pilot Quarterly (June 2022, Volume 25 Number 2)

A Need for Reflection and Circumspection

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Mauritius: FSC issues Investor Alert against Healy Consultants Group Plc

The Financial Services Commission (the "FSC") reiterates the particulars of its Investor Alert issued in 2018 and urges the public to be cautious while dealing with Healy Consultants Group Plc and with any other individuals and/or entities allegedly claiming to be licensed / authorised / registered by the FSC.

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Offshore Pilot Quarterly (March 2022, Volume 25 Number 1)

25 Years on: Changes and Constants

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The Sentry: Legal Tender? The Role of Sakunda and the Reserve Bank of Zimbabwe in Command Agriculture

Possibly unlawful payments from Zimbabwe’s central bank to presidential advisor Kudakwashe Tagwirei’s companies formed up to one-third of the $280 million his firms received while running the Command Agriculture program, according to new analysis by The Sentry.

From 2016 to 2019, Tagwirei’s firm Sakunda Holdings ran Zimbabwe’s Command Agriculture program, which was intended to boost agricultural production through the provision of inputs such as seed and fertilizer to commercial farmers. Sakunda—an oil trading company—was appointed to run the billion-dollar project without an open tendering process.

The Sentry’s investigation found that, over the course of the three-year program, Sakunda received $1.28 billion total—$230 million in hard currency and over $1 billion in Treasury Bills—while providing inputs worth $1 billion: an apparent surplus of $280 million.

One of the Treasury Bills was improperly redeemed at a favorable exchange rate by the Reserve Bank of Zimbabwe (RBZ) after a new law had reduced the US dollar value of such assets. While others saw the US dollar value of their Treasury Bills fall, the RBZ protected Tagwirei’s asset from this reduction in value when it was cashed in: the central bank sent more Zimbabwean dollars to his firms than it was obliged to by the new law. This decision was worth—in US dollars—at least $50 million, and perhaps up to $100 million, for the oil tycoon’s companies. The International Monetary Fund reportedly blamed the Reserve Bank’s treatment of this Treasury Bill for bloating the money supply and contributing to inflation and the rapid decline in the value of Zimbabwe’s new currency from mid-2019.1

Sakunda, which denies any wrong-doing, testified in Zimbabwe’s Parliament that it received the favorable rate so that it could repay foreign suppliers—particularly of chemicals—in hard currency.2 However, it appears that the Treasury Bill was given a preferential exchange rate partly to allow one of Tagwirei’s firms to pay the government for some gold mines and a Zimbabwean military-controlled company for its share of a platinum mining joint venture with a Russian conglomerate. In effect, the publicly owned RBZ was printing money for private companies to buy publicly owned assets.

Command Agriculture was the product of a behind-closed-doors culture: the procurement process for this billion dollar program, the preferential treatment of the Treasury Bill, and the selection of recipients of inputs were all hidden from public view. The Sentry’s recommendations therefore include procurement transparency measures that could allow Zimbabwean citizens to see how their money is spent.

An Offshore Cold War: Forging a Democratic Alliance to Combat Transnational Kleptocracy

Transnational kleptocracy is a growing threat to democracy with urgent consequences for national security, human rights, and human development. Kleptocracy combines 19th-century autocracy with 21st-century finance, which empowers dictators to enrich themselves and their cronies, hide the proceeds offshore, and use that wealth to corrode both foreign and domestic institutions. While authoritarian leaders divert public resources to their own pockets and park them overseas, democracies have largely focused on their internal problems rather than acting as a united front to address this peril effectively.

Kleptocratic forces exploit this disunity to cement their repressive rule at home and advance their own, anti-democratic agendas overseas. Year after year, Freedom House’s annual “Freedom in the World” rankings show that the countries that are deemed “least” free in their ranking are often those that have heavily entrenched kleptocratic networks that have taken over as the system of governance. Traditional forms of accountability are curtailed, coopted, or eliminated as kleptocratic regimes seek to prevent their theft from being exposed by journalists and their governance from being monitored by civil society organizations.

Democracies may believe that their institutions are strong enough to resist kleptocratic influence, but the evidence warns otherwise. Russia under President Vladimir Putin, for example, has used massive wealth stolen from its people to coopt foreign leaders and businesses, spread large-scale and corrosive disinformation campaigns, and interfere in democratic elections. The focus on the strength of democratic institutions misses a larger point: as more kleptocratic wealth infiltrates democracies, it corrupts individuals and members of government, which will eventually degrade independent institutions.

Many democracies appear to be waking up to the threat posed by transnational kleptocracy and enacting policies designed to combat it. The Biden administration in the U.S. has made tackling corruption a top priority, and the U.K. and EU have signaled intentions to do the same. But because kleptocracy is a transnational, networked, and entrenched form of corruption, individual or atomized responses are insufficient. Democracies must be unified and networked in their fight against it. Transnational kleptocracy will always identify weaknesses in the global network of regulation and squeeze through them, meaning the whole network must be strengthened if it is to resist infiltration. Otherwise, the money would just move to the country that remains open to it, and the problem would continue.

To fight kleptocracy effectively, we must act together. Democracies should focus on their shared fundamental values—political and personal freedom, free markets, free speech, independent judicial systems, and freedom of expression—to develop a unified response to this top order challenge, much as they did during the fight against communism during the Cold War. That sense of democratic solidarity, where all major political parties understood and recognized the threats communism posed to democratic values, should be repurposed and reinvigorated to fight kleptocracy.

As Oliver Bullough warns in this paper, the very future of democracy is at stake.

U.S. Treasury Releases Study on Illicit Finance in the High-Value Art Market

Today, the U.S. Department of the Treasury published a study on the facilitation of money laundering and the financing of terrorism through the trade in works of high-value art. This study examined art market participants and sectors of the high-value art market that may present money laundering and terrorist financing risks to the U.S. financial system, and identified efforts that government agencies, regulators, and market participants could undertake to further mitigate the laundering of illicit proceeds through the high-value art market in the United States. The study was mandated by Congress in the Anti-Money Laundering Act of 2020.

Several qualities inherent to high-value art – the way it is bought and sold and certain market participants – may make the high-value art market attractive for money laundering by criminals. These include the high dollar value of transactions, transportability of goods, a longstanding culture of privacy and use of intermediaries (e.g., shell companies and art advisors), and the increasing use of high-value art as an investment class.

“As we tackle systemic challenges like corporate transparency and other loopholes that allow criminals to abuse the US financial system, we will look at what else might be needed to address money laundering risks specific to other industries, including the art industry,” said Scott Rembrandt, Deputy Assistant Secretary for Strategic Policy in the Office of Terrorist Financing and Financial Crimes.

The study found that while there is some evidence of money laundering risk in the high-value art market, there was limited evidence of terrorist financing risk. The participants most vulnerable to money laundering in the art market are businesses that offer financial services, such as art- collateralized loans, but are not subject to comprehensive anti-money laundering/countering the financing of terrorism (AML/CFT) obligations. Asset-based lending can be used to disguise the original source of funds and provide liquidity to criminals.

Entities which have lower levels of annual sales turnover (such as small galleries), and entities that only occasionally transact high-value art (such as third-party online marketplaces, museums, other non-profits) may present lower risk, while entities which have larger annual sales turnover and regularly transact in high-value art in the ordinary course of business may present a higher risk. Further, the emerging digital art market, such as the use of non-fungible tokens (NFTs), may present new risks, depending on the structure and market incentives.

To address the identified risks, the study recommends consideration of several non-regulatory and regulatory options:

• Encouraging the creation and enhancement of private sector information-sharing programs to foster transparency among art market participants;
• updating guidance and training for law enforcement, customs enforcement, and asset recovery agencies;
• using FinCEN recordkeeping authorities to support information collection and enhanced due diligence; and
• applying AML/CFT requirements (such as suspicious activity reporting and know-your-customer procedures) to certain art market participants and/or obligating them to create and maintain AML/CFT

In considering these steps, Treasury will take into account how these measures could mitigate identified money laundering risk, the potential burden on smaller art market participants, privacy considerations, as well as progress on addressing systemic AML/CFT issues, such as the abuse of shell companies. In developing the study, Treasury conducted dozens of interviews with art market participants, such as auction houses, galleries, financial institutions, art advisors, art subject matter experts across the U.S. government, international partners that regulate or are regulating the art sector, and academic and non-governmental organizations.

Europol Spotlight - Cryptocurrencies: Tracing The Evolution Of Criminal Finances

Cryptocurrencies are a technical and financial innovation that offer major potential for the global economy. At the same time, they are being used for criminal purposes such as money laundering, fraud, and the online trade of illicit goods and services. The ways criminals use cryptocurrencies is evolving, and it is spreading to all forms of serious and organised crime.

Following these developments, Europol has undertaken an analysis of the criminal use of cryptocurrencies to support law enforcement and its response to changing trends in this area. The resultant report contains core definitions, case examples, and details of the challenges authorities face in combating the illicit use of cryptocurrency.

Europol: Shadow Money – The International Networks Of Illicit Finance

The Pandora Papers was a leak of nearly 12 million documents that took place in 2021. The documents detailed financial practices employed by criminal actors, financial elites, and other groups to obscure ownership of assets and monies, and to shift illegally-gotten funds into the legitimate economy. Financial and economic crimes are major priorities for Europol as we work to tackle organised crime and the driving factors behind it. 

Following the leak of the documents, Europol undertook its own analysis to understand the significance of the Pandora Papers for our own work and for the wider law enforcement sector. This has been collated into a report that contextualises the Pandora Papers amongst similar major leaks of financial data, and details policy recommendations that arose from our analysis.

Chatham House: The UK’s kleptocracy problem

The growth of London as a centre for financial and professional services coincided with the collapse of the USSR and the rise of post-Soviet kleptocracies in the 1990s. These states and their elites have since become a major source of clients for UK-based services firms and of investors in UK assets.

In keeping with global standards, the UK has officially adopted a risk-based approach to anti-money laundering. However, failures of enforcement and implementation of the law – plus the exploitation of loopholes by professional enablers – have meant that little has been done in practice to prevent kleptocratic wealth and political agendas from entering Britain.

Based on extensive research on the laundering of money and reputations by elites from the post-Soviet successor states, this paper details how the UK is ill-equipped to assess the risk of corruption from transnational kleptocracy, which has undermined the integrity of important domestic institutions and weakened the rule of law. It concludes by calling for the UK government to adopt a new approach to this problem focused on creating a hostile environment for the world’s kleptocrats.