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Three Comments on the Fight Against Illicit Finance and Economic Activity

Benjamin Krasna, Deputy Ambassador of Israel to the United States, shares insights on engaging the private sector, reducing financial risk, confronting security and safety risk, and the use of information for action. He emphasizes the importance of educating and empowering individuals, avoiding reputational risk, and taking steps to eliminate exposure. The discussion points cover monitoring and implementation, dissemination of information, enforcement, due diligence, and the use of intelligence and sensitive information.

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Three Comments on the Fight Against Illicit Finance and Economic Activity

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  1. Three Comments on the Fight Against Illicit Finance and Economic Activity Benjamin Krasna Deputy Ambassador of Israel to the United States

  2. Reaching out to the end user • Focusing on Risk and Engaging the Private Sector • Use of Information for Action

  3. Engaging the End User • The first layer of defense is in the field: • Customs Officers at Points of Entry • Port Operators • Compliance Officers • Law Enforcement • Imperative to educate and inform • Make them your partners - Empower them • Share “Red Flags” • Share Previous cases

  4. Focusing on Risk • Reducing financial risk: • Danger of facing financial penalties • Losses caused by bad business practice (mortgage exposure on sanctioned vessels) • Inability to receive payments because of international sanctions • Displaying the highest level of fiduciary responsibility • Mitigating Legal Risk • Avoiding violations of International sanctions • Avoiding Terror Finance and Money Laundering violations (FATF, AML) • Avoiding fines and legal action • Meeting compliance and due diligence requirements • KNOW YOUR CUSTOMER (KYC) • Confronting Security and Safety Risk • Abuse of Transport • Illicit arms and persons • Avoiding Reputational Risk • Bad for business to be affiliated with State that supports terror/ serial violator of human rights. • Sensitivity of CSR – Corporate Social Responsibility RESTRICTED

  5. The Risk Portfolio • Money Laundering: FATF, Patriot Act PML • Illicit Actors Access to Financial Assets • Relevant Sanctions: • Terror • Human Rights • Missiles • Weapons Transfers • Nuclear • USA Unilateral Sanctions on Finance • Other programs: Syria, North Korea, Russia • Potential Links to Organized Crime CONFIDENTIAL

  6. Financial Actions Taken • HSBC – $1.9 Billion • Standard Chartered - $667 Million • ING - $619 Million • Credit Suisse - $536 Million • ABN Amro (RBS) - $500 Million • Deutsche Bank - $450 Million (pending) • Lloyd’s - $350 Million • Barclays - $298 Million • JP Morgan - $88 Million • ABN Amro - $80 Million • Citibank - $2 Billion in Frozen Assets • Commerzbank - $1.45 Billion • Mitsubishi - $345 Million • BNP Paribas - $8.9 Billion Total Financial Actions: Greater than $17.9 Billion finesor frozen assets CONFIDENTIAL

  7. Discussion Points • Monitoring and Implementation: • Look at designation lists • Dissemination of Information: • Govt. must act to protect its own businesses from risk of violation • This is not a “business opportunity” • Enforcement: • Working against the violators and those who enable circumvention • Due Diligence: • Making sure you are in compliance • “Know Your Customer. Ignorance is not a defense” • Mitigating Risk: • Taking steps to eliminate exposure CONFIDENTIAL

  8. Use of Information • Intelligence vs. Evidence • Protection of Sensitive Information • Understanding what is needed to make something operational • Discrepancies between different States

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