FiNETIK – Asia and Latin America – Market News Network

Asia and Latin America News Network focusing on Financial Markets, Energy, Environment, Commodity and Risk, Trading and Data Management

Latin America: Investor News Letter 14 December 2012

Mexcio

With a little help from my friends; Mexico´s new Government
The rise of Mexico The US needs to look again at it´s increasingly important neigbour
Mexico’s New President Offers Much to U.S. Investors
Macquarie Mexico IPO Offers REIT Where Murder Reigned
Thor Urbana Capital Launches $500M Investment in Mexico
HSBC became bank to drug cartels, pays big for lapses
Pemex Sues Siemens Claiming Bribery in Refinery Project
How to Invest in Mexico
Peru, Chile and Mexico are Societe Generale’s favourites for LatAm investments Cemex crumbles and Latin America starts to look weak
 
Brazil
Brazil stimulates construction to spur economy
Deutsche Bank Reduces Investment Bank, Research Teams in Brazil
Brazil Subsidizes Uncertain Shipyard Success
Rousseff Seeks Investment From Spain
Alstom handed Sao Paulo infrastructure contract
GE to Build Oil, Gas Facility at LLX’s Brazil Acu Port
New trains for World Cup host cities
Brazil´s Ceará to receive $66.5 million IDB loan to improve urban infrastructure and business environment

Latin America

LatAm Wealth Management Overview
The world has gotten wealthier, but not the whole world. The engine of growth for private wealth is by far the emerging markets such as LatAm and, particularly, East Asia ex-Japan, which is outpacing the rest of the world by a long shot …

South American airports need more investment: ALTA head
Can South America Become the New European Union?
IDB Approves $153 Million in Loans to Set Up IDB-China Eximbank Equity Investment Platform

Argentina

Argentina May Abandon International Court, Treaties Over Debt Ruling
Argentina raising energy tariffs to fund investment
Argentina’s YPF buys majority stake in natgas distributor

Chile

Chile approves Endesa 740 MW coal-powered project

Colombia

Colombia is Fast Becoming a Rising Oil Giant in Latin America
Southern Cross Group Invests in Sociedad Portuaria Regional de Barranquilla (Columbia)
Holcim to double capacity in Colombia by building new US$600mn cement plant
As Panama Canal expands, Latin America rushes to be ready
Embezzlement stalling Colombia’s infrastructure development: Minister
Infrastructure in Colombia

Peru

Peru Is Clear Investment Destination In Latin America: Minister
Peruvian ports in peril?
 
FiNETIK News Summarier, 14.12.2012

Filed under: Argentina, Brazil, Central America, Chile, Colombia, Energy & Environment, Latin America, Mexico, News, Peru, Risk Management, Wealth Management, , , , , , , , , , , , , , , , , , ,

Latin America: Investor News Letter 2 November 2012

MEXICO

Mexico 2013 inflation view steady despite price spike
Credit Suisse Raises $420 Million to Create Mexico Fund
Mexico: Big investment for citrus producers
Indigenous Groups Protest Mexico’s Biggest Wind-Energy Project
FOX BUSINESS – Mexican fishermen and indigenous groups from the southern state of Oaxaca protested Wednesday in front of the Mexico City offices of participants in a wind-energy project that would be one of the largest ever in Latin America, targeting Coca-Cola bottler and convenience-store operator Femsa (FMX), the Inter-American Development Bank and the Danish government, among others.

BRAZIL

The Brazilian Law on Money Laundering
Precautions Investors Must Take when Investing in Brazil. Brazil has recently altered its money laundering law. The new bill has tightened the government’s grip on most of the investment operations and has significantly broadened financial institutions’ and investment brokers’ duties to report suspicious activities …

ThyssenKrupp Brazil mill fined for pollution, could face closure
The long, brutal haul from farm to port in Brazil
Brazil hit by new blackout, infrastructure in spotlight
Brazil Gives Tax Exemption to Foreign Mortgage Investors
Brazil Power Generators Ask to Renew 106 of 123 Concessions

LATIN AMERICA

Private Aviation takes off in Latin America
The growth of private wealth in LatAm has led to a rise in demand for private aircraft and private aviation services. For the region’s mounting numbers of high-net-worth and ultra-high-net-worth individuals, a plane can be purely a luxury item, of course; but for increasingly global and mobile professionals and business owners, it meets a demand unsatisfied by local transportation alternatives, as well .

Colombia Regulators Seize Interbolsa Brokerage on Funding

Colombia’s financial regulators seized Interbolsa SA’s brokerage, the country’s largest, after the company said it faces a “temporary” funding shortage.

 Latin America stocks rise on China, U.S. data
20 Latin American in the World’s 200 Richest People
Argentina bonds close lower after S&P downgrade
Argentina Plans Regulatory Overhaul to Spur Investments
Increase in pension fund investments makes for headwinds in Andean market
Colombia Equity Fund targets European countries for distribution
Protests in Peru Scaring Off Mining Investment, Government Responds With Social Programs
Honduran supreme court rejects idea of building independently governed ‘model cities’
CAF and OFIC ink agreement to promote energy efficiency projects in Latin America
Modern airport terminal to be opened in Bogota
IDB approves $200m financing for Latin America hydro plant

Filed under: Argentina, Asia, Banking, Brazil, Central America, Chile, Colombia, Latin America, Mexico, News, Peru, Risk Management, Wealth Management, , , , , , , , , , , , , , , , , , , , , , ,

Alternative Latin Investor: Wealth Management Issue 18

The Alternative Latin Investor Issue #18 is focusing on Wealth Management in Latin America.

Special Issue: Wealth Management

The World’s First Diamond Fund
Lack of Transparency in Colombia: Root Causes
LatAm Wealth Management Overview
Private Aviation Takes Off in Latin America
High-Tech Financial Technology Hits LatAm

…and much more. Regulations,  Tax & Money Laundering, Structured Finance, Political Risks,  Agri Business, Impact Investment, Wine Investment, Infrastructure, Art

Please view and access Issue 18  in the following formats

Virtual Viewer http://www.alternativelatininvestor.com/Issue18-Preview.htm

For more details and information please view http://www.alternativelatininvestor.com

Source: AlternativeLatinInvestor 18.10.2012

Filed under: Argentina, Banking, BM&FBOVESPA, Brazil, Chile, Colombia, Energy & Environment, Islamic Finance, Mexico, News, Services, Trading Technology, Wealth Management, , , , , , , , , , , , , , , , , ,

Latin America: Investor News Letter 19.October 2012

Mexico

Elektra to offer No-Fee Banking and Long Term loans to US low income population
Billionaire Ricardo Salinas said he wants to offer no-fee banking deposits and longer-term loans to low-income U.S. consumers, aiming to export his Mexico business model, successful in 8 Latin American countries to the world’s biggest economy.

Mexico’s market shines as reforms, confidence take hold
NYSE Technologies, Bolsa Mexicana and ATG build Mexican trading infrastructure
Slim-backed Mexican firm plans IPO, new cement company
Alsea to invest $110 million in Mexico, Argentina Starbucks cafes
Mexico passes law to combat cartel money laundering

Brazil

Itau Sinks as Rousseff Plan Hurts Bank Profits: Corporate Brazil

Brazil’s push to drive down consumer borrowing costs is eroding the value of its biggest banks.

Brazil wants to restrict strikes in public sector
Monsanto suspends collection of royalties in Brazil following state court ruling
Brazil M&A hits five-year low on turmoil, state intervention
Brazil and South Africa Form Partnership On Future Investment Promotion Initiatives
Brazil’s Water Sector Benefits From Investment Ahead of World Cup, Olympics

Latin America

Cencosud of Chile to Acquire Carrefour Colombia Division

Cencosud SA agreed to buy Carrefour SA’s Colombian unit for 2 billion euros ($2.6 billion) as it taps rising consumer spending in Latin America and the world’s second-largest retailer retreats from markets it can’t dominate.

Venezuela/Paraguay rift spoils Brazil’s plans for a ‘normal’ Mercosur summit
Singapore, the fastest growing market for Latin America
CAF Encourages Singapore to Invest in Latin America
Cuba Praises China-Latin America Ties
Latin America can produce double-digit investment returns over next decade
Arab and Latin American leaders agree to investment bank
LatAm’s Largest Solar Power Plant  in Peru receiving 40 MW of Solar PV Modules from China
Arab and LatAm leaders agree to investment bank
Peru central bank could allow more pension funds invested abroad
Latin American Ratings Strong Enough to Weather a Commodity-Cycle Downturn
Latin American gold rush brings riches, conflict
Latin lithium output mired in controversy

Source: Various 19.10.2012

Filed under: Argentina, Banking, Brazil, Chile, China, Colombia, Energy & Environment, Mexico, Peru, Singapore, Venezuela, , , , , , , , , , , , , , , , , , , , , , ,

What’s Wrong With The Global Banking System

Robert Mazur, the U.S. Customs special agent who led one of the most successful undercover operations in U.S. law enforcement history, gave us some insight into international money laundering and said the Federal Reserve needs to do more to help.

In the 1980s Mazur spent five years infiltrating the highest circles of Colombia’s drug cartels as a money launderer, transforming more than $34 million in cocaine cash into traceable, paper-trailed bank transactions under the pseudonym Bob L. Musella.

His book, The Infiltrator: My Secret Life Inside the Dirty Banks Behind Pablo Escobar’s Medellín Cartel, explains how “Operation C-Chase” led to the indictment of 85 individuals – including several officials affiliated with the then-seventh largest privately-held bank in the world, the Bank of Credit and Commerce International (BCCI)—and the conviction of General Manuel Noriega.

Now he is on a mission to “share information with the public about how this money laundering activity has engulfed the will of the financial institutions of the world.”

Mazur says that “the international community is today doing the same thing that BCCI and their officers were doing 20 years ago”—citing the HSBC money-laundering scandal and the tax havens of the super-rich—and told BI that the problem is much larger than the estimated $2.1 trillion that crime generates each year.

“What [the corrupt bankers at BCCI] did was market flight capital, and they identified it as basically money seeking secrecy from governments,” Mazur said. “Yes it does include the items that the $2.1 trillion identifies but it’s bigger than that because there are times that you take legal money and use it for an illegal purpose, and that money is as big if not bigger than the illegal money.”

He calls the practice “a major moneymaker for the banking world” and cites the Standard Chartered scandal, in which bankers “took $250 billion worth of basically legal money and used techniques to hide from governments the fact that the money was being moved in these otherwise-legal transactions on the behalf of sanctioned nations, including Iran.”

He said the HSBC ruling listed six or seven methods “traditionally used by banks in a big way facilitate relationships with people who want to hide money from governments” and explained that bankers provide these services “to entice these people to bank with them” so that the bank is able to increase their deposits.

Mazur said that banking regulators are “not as focused on the issue of criminal conduct as they are on … making sure that the institution itself stays healthy” so investigations take years and result in a lengthy report.

There’s nothing built in the system to engage criminal investigations up front,” Mazur said.” They always come in a very rusty state after they’ve been played with by the regulators. By then everyone’s built in their plausible deniability and it’s a very difficult task to expect the investigators to then come up with the intent evidence,” which is essential for criminal prosecution.

He added that the current regulatory process ignores the fundamental problem, which is that “there are two brains in a bank—there’s this profit brain that’s motivated by earning money … and then we have a compliance department and their whole agenda has nothing to do with profit, it has to do with identifying risk and minimizing it. But when the compliance and the sales brain meet, upper management sides with sales because that’s their gig too—profits. And there has to be a way to try to begin to change that chemistry of the interaction of the two brains.”

One straightforward ways to do that, according to Mazur, would be to crack down on bankers who solicit shady business—like the ones at HSBC—by putting a few “behind bars for a very long period of time” instead of just giving them a fine.

Another simple way is to require the Federal Reserve to share information about member banks who are in the bulk bank note business. If regulators and prosecutors knew which institutions were moving much larger amounts of money through wire transfers (which the Fed tracks), they would know where to focus investigations or covert-type operations.

“You’re honing down all your information to go after, proactively, the institutions most involved in moving this type of money,” Mazur said. “It’s not complicated but the Federal Reserve doesn’t give that information out freely and that’s something that needs to change.”

He noted that concerned individuals in the military, law enforcement and intelligence community have accessed more of that information in the last 2 years than ever before, but emphasized that more has to be done.

“That’s one of the barriers that’s slowly crumbling, and it’s an important barrier to wind up crumbling, but it’s not completely accessed,” Mazur said.

Filed under: Banking, Colombia, Latin America, Mexico, Risk Management, , , , , , , , , , , ,

HSBC blood fingers – Money Laundry Scandel a Mexican Perspective

In the most recent campaign by the United Nations Office on Drugs and Crime (UNODC, for its acronym in English), states that organized crime generates annual revenues of a whopping 870 billion dollars.

Translation of the original article in Spanish by Dossier Politico by Saul Arellano

The most lucrative for organized crime are drug trafficking, which generates about 320 billion dollars annually, and counterfeiting, with revenues of 250 billion dollars a year.

Moreover, through human trafficking offenders get 32 billion dollars over 7 billion for alien smuggling in addition to that traffic in elephant ivory, rhino horn and tiger parts generates about 75 billion dollars.

The human costs of these activities are huge, especially considering that each year, the UNODC estimates that 2.4 million human beings fall victims of human trafficking, perhaps the most infamous crime committed in our time.

Two things are to be noted:

the first and most obvious is that these activities have a global character and can not be explained but for the existence of powerful networks operating at regional and global levels.

 The second part of a question: if this is the amount of money generated by transnational organized crime, how and by whom move? I.e. who has the power, technology and legality to embed into the legal economy  over a 1 trillion USD  from the criminal illegal organizations  world?

The answer is obvious: there is a complex global financial system that can launder money and gives criminals the ability to remain unpunished because through these resources can carry out legal transactions such as buying property vehicles, and in certain contexts, to weapons.

Why did HSBC do this? It turns out that the “angels” of this global bank “made mistakes” in monitoring suspicious accounts or regarded as “high risk”. According to the note of BBC News, signed by my colleague Julio Brito, is stated:

“HSBC said it takes Mexico´s compliance law seriously compliance (…) ‘We apologize, we will recognize these errors, accounting of our actions and commit ourselves completely to repair what was done wrong’, said the bank”.

Is this apology enough? What about Mexico´s Police Investigation ? What about the Financial Intelligence Unit of the Ministry of Finance? Surprisingly, the scandal was discovered and unrevealed by the investigations of the Permanent Subcommittee on Investigations of the Senate of the United States, but in Mexico the results are and reactions are lukewarm..

I quote again Julio Brito’s note: “The subsidiary of banking giant HSBC Mexico sent seven billion dollars in cash to the bank’s unit in the U.S. between 2007 and 2008, a volume that could only reach that size if included illegal drug profits.” (http://www.cronica.com.mx/nota.php?id_nota=676540)

According to an expert I consulted, the money laundering operations in Mexico are very easy to perform because the financial system is full of holes. For example, operations that money exchange offices have with banks are extremely lax, compared with the regulations of other countries.

Add to this the ease with which managers can access customer accounts, which facilitates the actions of triangulation that due to the operation of electronic banking today can be done in minutes.

Anyway, HSBC faces one of the most embarrassing scandals in its history, which opens one more question: Is it the only bank with these weaknesses operating in our country? That is something the authorities should investigate and seriously, if you really want to win the fight against drug trafficking.

The war on organized crime in Mexico has killed more than 50 000 dead. Now HSBC is an accomplice, at least by default in their controls, as was recognized last Tuesday, so not a bad idea and that the customers of this institution to continue providing profits to reconsider a bank that has indirectly contributed significantly to the bloodshed in our country.

If sending 7 billion dollars is considered impossible for a single bank, not to include narco resources, another question arises, how is that in a country with 52 million poor (on or below poverty line),  transnational banks get their biggest gains and transfers? See if the financial reports of Citi Group, Santander, BBVA, Scotiabank and other global banking institutions operating in Mexico.

While it is true that the fees (banking, transaction and credit cards) charge by these banks are draconian and interest rates that are the worst practices of usury, HSBC scandal should lead policy makers to reconsider that the level of looting reached by foreign banks, to feed their unstable global operations.

Source: Dossier Politico 19.07.2012  by Saul Arellano sarellano@ceidas.org

Filed under: Banking, Mexico, Risk Management, , , , , , , ,

HSBC ‘sorry’ for aiding Mexican drugs lords, rogue states and terrorists

Executive quits in front of US Senate as bank faces massive fines for ‘horrific’ lapses that resulted in laundering money for drugs cartels and pariah states.

Executives with Europe‘s biggest bank, HSBC, were subjected to a humiliating onslaught from US senators on Tuesday over revelations that staff at its global subsidiaries laundered billions of dollars for drug cartels, terrorists and pariah states.

Lawmakers hammered the British-based bank over the scandal, demanding to know how and why its affiliates had exposed it to the proceeds of drug trafficking and terrorist financing in a “pervasively polluted” culture that persisted for years.

A report compiled for the committee detailed how HSBC’s subsidiaries transported billions of dollars of cash in armoured vehicles, cleared suspicious travellers’ cheques worth billions, and allowed Mexican drug lords buy to planes with money laundered through Cayman Islands accounts.

HSBC’s Mexico nightmare on money laundering – FT.com
How Much Will Mexico Money Laundering Cost HSBC? – Forbes
HSBC money laundering probe: Bank ‘allowed flow of Mexican drug

Other subsidiaries moved money from Iran, Syria and other countries on US sanctions lists, and helped a Saudi bank linked to al-Qaida to shift money to the US.

David Bagley, HSBC’s head of compliance since 2002, and who had worked with the bank for more than 20 years, resigned before the committee.

“Despite the best efforts and intentions of many dedicated professionals, HSBC has fallen short of our own expectations and the expectations of our regulators,” he said.

The bank has been under investigation for nearly a decade, and faces a massive fine from the US justice department for lapses in its safeguards. Senators Carl Levin and Tom Coburn, who conducted the hearing, said the permanent subcommittee of investigations had examined 1.4m documents as part of its review and thanked the bank for its co-operation.

The bank has apologised for its lapses and said reforms had been put in place. Paul Thurston, chief executive of retail banking and wealth management, who was sent in to try and clear up HSBC’s Mexican banking business in 2007, said he was “horrified” by what he found.

“I should add that the external environment in Mexico was as challenging as any I had ever experienced. Bank employees faced very real risks of being targeted for bribery, extortion, and kidnapping – in fact, multiple kidnappings occurred throughout my tenure,” he said.

The committee had released a damning report on Monday, which detailed a collapse in HSBC’s compliance standards. The report showed executives at the bank has consistently warned of problems. At its Mexican subsidiary, one executive had warned the bank was “rubber-stamping unacceptable risks”, according to one email gathered by the committee.

HSBC’s Mexican operations moved $7bn into the bank’s US operations, and according to its own staff, much of that money was tied to drug traffickers. Before the bank executives testified, the committee heard from Leigh Winchell, assistant director for investigative programs at US immigration & customs enforcement. He said 47,000 people had lost their lives since 2006 as a result of Mexican drug traffickers.

The senators highlighted testimony from Leopoldo Barroso, a former HSBC anti money-laundering director, who told company officials in an exit interview that he was concerned about “allegations of 60% to 70% of laundered proceeds in Mexico” going through HSBC’s affiliate.

“In hindsight,” said Bagley, “I think we all sometimes allowed a focus on what was lawful and compliant rather than what should have been best practices.”

Levin and Coburn directed particular ire at a Cayman Islands subsidiary set up by the Mexico division of HSBC. That bank handled 50,000 client accounts and $2.1bn in holdings, but had no staff or offices. Money from the Cayman Islands was used to buy planes for Mexican drug traffickers, said the senators. Bagley said those accounts were all now in the process of being closed.

“Forget hindsight,” said Levin. “Is there any way that should have been allowed to happen?”

“No, senator,” said Thurston.

Levin repeatedly said that HSBC must have been aware of the problems. “This is something that people knew was going on at the bank,” he said.

Bagley and Thurston said that HSBC’s compliance had been fragmented and that oversight had been poor. They said that had now been changed. The bank has now adopted a global compliance structure and doubled the amount of money it is spending on oversight.

“Criminals operate globally and if we are to combat them and stop them from accessing and abusing the financial system, we must look at issues from a global perspective. Institutions which operate internationally, like HSBC, will be targeted by these criminals, and our experience in Mexico vividly demonstrates that you are no stronger than your weakest link,” said Thurston.

While much of the hearing focused on Mexico, the senators also slammed the bank for dealings in Iran, Syria, Cuba, and other countries on US sanctions lists. HSBC executives continued to so business with Al Rajhi Bank in Saudi Arabia, even after it emerged that its owners had links to organizations financing terrorism and that one of the bank’s founders was an early financial benefactor of al-Qaida.

While Coburn was unsparing of his criticism of HSBC, he thanked the bank for its co-operation and said there were issues at other institutions including Citigroup, Wachovia and Western Union.

But the report comes at a highly sensitive moment for British banks in the US. Following Barclays fine in the Libor-interest rate scandal and the massive losses at JP Morgan Chase’s London offices US politicians have become increasingly critical of the UK’s financial services sector.

At a recent hearing into the JP Morgan losses, Carolyn Maloney, a Democratic representative from New York, said: “It seems to be that every big trading disaster happens in London.”

Source: The Guardian, 18.07.2012

Filed under: Mexico, Risk Management, , , , , ,

Kroll LATAM Risk Report August 2010: Money Laundring, Mobile Banking, Mexican Security, Brazilian Litigations

MONEY LAUNDERING  Banks on High Alert

Throughout much of Latin America and the Caribbean, banks and other financial institutions are getting tougher on money laundering. For the bad guys, the game of cat-and-mouse continues, as they jump from one country to another, looking for the weakest link in the chain. GO TO FULL STORY

BANKING & TELECOM  Mexico The Regulator as Hero

Mexico’s unheralded decision to design rules for mobile banking is a major milestone on the road to including millions of unbanked and underserved Latin Americans in the financial system and the formal economy. GO TO FULL STORY

Mexico Corporate Security

An annual survey conducted by Kroll and the American Chamber reveals a higher sense of insecurity among business executives at multinational and Mexican corporations. The safety of employees and executives remains the top concern for corporate heads of security. GO TO FULL STORY

CORPORATE LAW Challenging Sham Litigation  in Brazil

A Brazilian regulatory agency takes on Germany’s Siemens for alleged anti-competitive practices in a case that is likely to set an important precedent for regulators and the courts in protecting free market competition.  GO TO FULL STORY

Source: KROLL, 06.08.2010

Filed under: Brazil, Central America, Chile, Colombia, Latin America, Mexico, News, Peru, Risk Management, Venezuela, , , , , , , , , , , , , , ,

Japanese regulator slams Citi AML systems – Stop Sales Operations in Japan

Japan’s financial regulator has ordered Citi to stop sales operations at its retail division for a month after the banking giant failed to improve poor anti-money laundering systems.

The Financial Services Agency says there are “fundamental problems” with Citi’s compliance and governance system, which is inadequate for monitoring suspicious transactions.

The FSA has publicly upbraided Citi in the belief that the US bank failed to catch and report money-laundering by a Japanese yakuza criminal syndicate.

FiNETIK recommends

Citibank Japan reprimanded by regulators (The US bank is punished for inadequate internal controls in the third such disciplinary action since 2001), FinanceAsia.com, 29.06.2009

The watchdog says Citi has not sufficiently carried out a business improvement order it was given in 2004, when it was told to shut down its private banking arm for similar failings.

The FSA says “control systems necessary for the detection, monitoring, and follow-up of suspicious transactions have not been developed” and that “despite the fact that it mainly relies on screening based on the database, input data is extremely limited; in addition, the database has not been updated since 2004″.

The regulator also slammed Citi’s management in the country, accusing it of a “lack an understanding of the rules applied in Japan”. Despite establishing an internal audit department, the bank has not accurately identified a series of problems.

The bank has now been told to submit business improvement plans by 31 July which should be executed immediately, with a progress update provided on every three months.

In a statement, the bank says: “Citibank Japan takes this administrative action very seriously and would like to express our sincere apology to our customers and other parties concerned. Citibank Japan is committed to implement all necessary measures to prevent any future occurrence of the problems identified.”

Citibank Japan operates in 35 locations and two Internet-only branches throughout the country.

The FSA rap comes just days after it emerged Citi has suspended loan applications at its correspondent division in the US after a review found some property appraisals and income-verification documents were missing.

Source:Finextra, 26.06.2009

Filed under: Banking, News, Risk Management, Services, , , , , , , ,

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