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See no evil – Australia’s cosy relationship with PNG corruption

Turnbull and O' NeillCASEY MICHEL | The Diplomat | Extract

IF YOU speak with officials in Australia, they’ll tell you that internationalised grand corruption — the nexus of shell corporations, offshore services and kleptocrats immiserating their domestic populations — hasn’t touched their country.

Rather, as the University of Cambridge’s J.C. Sharman finds in his detailed Despot’s Guide to Wealth Management, Australian officials will insist that Canberra’s current raft of anti-corruption laws have prevented the kinds of kleptocratic cases the US or the UK regularly see.

But as Sharman further uncovers, this reasoning is — as private investigators and off-the-record conversations attest — circular. Content to rest upon their supposedly clean record, Australian officials have little incentive to dig any further than they need to and, even then, far less than the law would demand.

In reality, while Australia still lags behind Washington or London in terms of being a target destination for kleptocrats ransacking the developing world, Canberra is far more typical for its hear-no-evil, see-no-evil approach to combating grand corruption.

As Sharman lays out, even the most stringent anti-corruption and anti-kleptocracy laws are barely worth the paper on which they’re written if officials — such as those in Australia — are unwilling to enforce them.

For instance, look at Australia’s relationship with Papua New Guinea.

Port Moresby currently sits alongside kleptocrat-friendly states like Myanmar and Nigeria in Transparency International’s Corruption Perceptions Index.

And yet, even after the head of PNG’s anti-corruption Task Force Sweep referred to Australia as “another Cayman Islands,” Canberra, as Sharman notes, “had never repatriated so much as a single cent of Papua New Guinean corruption funds.”

This comes despite Papua New Guinean individuals (and companies) tied to corrupt activities owning nearly A$90 million (US$68 million) worth of identifiable properties in Queensland alone.

Or look at Canberra’s relationship with China. While the United States may have recently passed Australia as the largest recipient of aggregated Chinese global direct investment, Beijing has skyrocketed to the top source of investment in Australia’s residential property market such that nearly 20% of Sydney’s new homes are now purchased by Chinese nationals.

Meanwhile, Chinese officials have identified Australia — alongside Canada and the U.S. — as one of the three most popular foreign destinations for looted wealth.

And if Australia presents a typical financial haven for foreign kleptocrats, there’s little reason to think the current global anti-kleptocracy program can continue as is. After all, not only has Canberra failed to deliver a single dollar back to Papua New Guinea, but Australia’s financial intelligence Unit, AUSTRAC, “has consistently refused to share financial intelligence with its Papua New Guinean counterpart.”

Australia says this is due to Port Moresby’s lack of legislation to counter financing of terrorism, “even though there is no credible evidence to suggest that financial institutions in [PNG] are being misused in this way.”

As such, as Sharman concludes, “because Papua New Guinea has not legislated against a problem it does not have, Australia refuses to help with the corruption problem it manifestly does have.”


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Arthur Williams

Searching for something else I came across the following which shines light on 'off-shoring Greek style'.

Sheds a light how the filthy rich can keep their wealth safely abroad even as their once exiled king says: "All Greeks who live in exile, they want to go back. It's in the blood."

2016 Feb 10th The New Greek Invasion – By Sophia Money-Coutts at

Kings, shipping titans, heiresses - all sorts of Greeks live in London, but their gilded expat life is being threatened by a Greek government desperate for funds. Sophia Money-Coutts talks corruption, tax and the old country with the Hellenes-about-town

Last year, as Greece lurched through yet another financial crisis, a Greek shipping tycoon based in London decided to open a new bank account in Britain.

The minimum deposit was £15m, but that was no problem because he's worth £200m. As part of the due diligence process, however, he had to demonstrate proof of address at home in Greece. So he simply produced his Greek benefits claim form, with his Athens address on it.

'The guy's worth £200m, but as it's all out of the country, he's claiming £140 or £200 a month back home - and he found it very funny,' says a Greek friend of mine, who also works in shipping, from his beige office in Mayfair.

But since 2010, after the extent of Greece's debt was revealed and the Eurozone started discussing bailout options, Hellenic money has been pouring into this country at an unprecedented rate. Some say €10bn (£7bn) has been taken out of Greece since then; others put the figure at €20bn (£14bn).

Either way, a lot of cash left the country and a lot of it arrived in London, with Greeks fearful that Greece might revert to the drachma, devaluing savings, and/or that the government would seize any cash reserves.

'In some cases, we didn't really know where the money was coming from,' a private banker says of the sudden influx. 'We just had to accept it without checking, and then we worked it out afterwards.'

In 2010 and 2011, Greeks were the biggest property buyers after the Russians and Arabs.

A quiet announcement recently made by the Greek government is another reason for the secrecy. Last October, Tryfon Alexiadis, the Greek deputy finance minister, revealed that HM Revenue and Customs had recently handed over a list of 3,200 Greeks who have bought properties in Britain since 2010, including 372 people who had bought multimillion-pound properties in key London areas.

According to Alexiadis, Greece would now pursue certain key individuals for tax evasion, and it was also aiming to introduce a new property tax of one per cent on any property bought abroad by its nationals

One of the Goulandris family emails me about why some Greeks are so tight-lipped: 'They come from a culture where the government is so corrupt that they cannot bear to pay taxes. Thence comes a lot of paranoia and frankly ethically compromised positions.'

It's all greeky to me

Philip Fitzpatrick

Blockchain is a technology that is used, among other things, to track the way funds are spent. It is a system that can’t be fiddled with from outside i.e. diverting funds to unauthorised uses.

The Blockchain could be used in various ways to fight corruption in developing countries like PNG. Firstly, through the use of smart contracts and, secondly, through the use of the Blockchains open ledger technology to trace every single financial transaction.

The latter could be particularly useful when it comes to the misappropriation of Foreign Direct Investment, loans by development agencies and charitable funds. It could even be used to transparently track government spending.

However, the PNG government would probably refuse to use it. It would have to be piloted by the donor. Secondly, it doesn’t work with bribes, a big source of corruption in PNG.

As Gary Juffa and others have pointed out candidates in the next election will be set up and financed by big vested interests and then controlled by them.

It’s a useful adjunct but not a panacea for fighting corruption.

`Robin Lillicrapp

I picked up a reference, yesterday, to a newly developed method of money transfer likely to become a key factor in global finance:

"look at the corruption that we see being cleaned out in iraq no one seems to want to look at home ,we are rife with it!!!!

remember this new blockchain way of moving money? well let me put this in your thought process - it causes money to move from sender to end user in minutes if not seconds, sooooo ----- there is no way for corrupt politicians to put their hands on it, if you will, they are totally by-passed ====== no more slush funds- payola ,what ever you want to call it!!!!!

thunder sent the to me and i posted it yesterday , these grants were being misused and pilfered by the politicians in iraq,

notice the same resistance in the usa on confirming the cabinet as is in iraq to do the national settlements, they know the moment that is done their piggy bank just got smashed ,they will have to earn money instead of stealing it/diverting it for their own political advantage."

Perhaps there is hope ahead for the swift identification of cheats such as are referenced in PNG's experience.

Caps converted to lc, Robin. CAPS = SHOUTING - KJ

Arthur Williams

It’s a global rip-off by the elites of every nation. One estimate claims US$ 8 trillion is held offshore in places like Bermuda and the Cayman Islands. Imagine if legitimate taxes were paid on that sum how the lives of the millions of poor could be improved.

Did you see how only last month the longtime President of Gambia was allowed to hang onto his throne allowing him time to peddle his filthy ill-gotten gains off-shore.

And remember how Idi Amin eventually fleeing Uganda was able to rent a pent-house in Saudi Arabia but only with his youngest wife…mmm.

Two books I read last year .....

‘Londongrad’ by Mark Hollingsworth exposed how the dark heart of lowly regulated London was a haven for the oily-garchs who raped the Russian people. Sadly it is still attracting other filthy money as alleged when Moldova lost $1 billion bank reserves with help of City financiers.

‘Mr Nice’ is Welshman Howard Marks’ autobiography of how he milked the system of many countries. Amazing how easily he was able to establish bank accounts all over the world to launder his drug wealth.

As previously stated only by collusion of corporate spivs and immoral bankers can such high class theft occur. We have seen how so many of the best known names in the banking world have been found out in several different sectors of their industry.

Money laundering by HSBC where Argentina wants repatriation of US$3.5 billion illegally moved by them off-shore for slimy customers. Only in December they were fined for being in a cartel rigging Eurobor.

In the pigsty with them were pillars of the banking world – Credit Agricole, Barclays, Deutsche Bank, RBS, Societ Generale and JP Morgan.

The latter must rally had a raucous giggle round the board table at their tiny $150 million fine. Their profits for the 2nd quarter were $6.2 billion.

Just like the Punch story last month on Nigeria where the number of private jets has risen from 20 to 150 and a new one costs the slimeballs $50 million.

Interestingly Nigeria’s tax to GDP ratio is 6%, one of the lowest in the world. PNG is 24; Oz 26; UK 34; USA 27 while Australia is 26.

Apparently the OECD is trying to get to grips with the movement of wealth from poor to rich countries with its Multilateral Competent Authority Agreement for Country-by-Country Reporting (CbC MCAA), bringing the total number of signatories to 57.

I cannot find if PNG is a signatory to this and associated initiatives.

I end with a report by the BBC: 'The great Moldovan bank robbery -$1 billion lost – UK involved' by Tim Whewell.

It tells story that reads like fiction alleging one man managed to remove that huge some of money from one of poorest nations in Europe.

“It claims five Moldovan firms, including Caritas Group SRL, that allegedly received the loans are said to have transferred the money immediately to five UK- and Hong-Kong-registered firms.

"But they all bank in Latvia, and most seem to be owned in turn by companies in offshore tax havens. And in a final layer of obfuscation, they now owe all the money not to Banca Sociala, but to another UK-registered entity, Fortuna United LP, that's said to have bought the entire combined loan.”

Worth a read when thinking about the PNG-Oz links.
Is globalisation of capitalism in the digital age the best system for us plebs where the eight richest billionaires have as much wealth as 3.6 billion people or half the world’s population.

I going to have a luxury lunch for many of this world – beans on toast

Please note The Caritas mentioned above has nothing whatsoever to do with the renowned Catholic organisation.

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