Banks should be on alert for Russian oligarchs attempting to circumvent U.S. sanctions by investing in commercial real estate, a U.S. Treasury Department watchdog said.
Wealthy Russians with ties to the Kremlin are likely attempting to evade the economic sanctions placed on them in the U.S. by moving money into the commercial-real-estate sector, where complex financing methods and opaque ownership structures can help bad actors hide funds, the Treasury’s Financial Crimes Enforcement Network, better known as FinCEN, said Wednesday.
FinCEN, which serves dual roles as the U.S.’s financial intelligence unit and anti-money-laundering regulator, is the recipient of the suspicious activity reports that financial institutions are required to file if they suspect a transaction may be illicit in nature. Law-enforcement officials can consult the reports when conducting investigations into financial crimes.
The Biden administration has targeted wealthy Russians as part of its response to President
invasion of Ukraine last year, placing those with close ties to the Russian government on blacklists that are intended to prevent them from accessing the U.S. financial system.
The alert issued by FinCEN on Wednesday is the Treasury’s latest effort to prevent sanctioned Russians from finding ways to evade such financial restrictions. In an 11-page report, FinCEN listed a number of potential red flags and typologies it said banks should be on the lookout for.
“Thanks to international pressure and the economic restrictions that more than 30 countries have imposed on Russia for its brutal war against Ukraine, sanctioned Russian elites are increasingly left with fewer options for moving and hiding their ill-gotten wealth,” FinCEN Acting Director
Himamauli Das
said.
Sanctioned individuals may try to use pooled investment vehicles or offshore funds to avoid due-diligence processes, FinCEN said in its alert. Banks aren’t typically required to verify the identities of individuals who own less than 25% of a fund. Sanctioned individuals could keep lowering their stakes to avoid detection, while still maintaining control of the fund, FinCEN said.
Oligarchs also may use shell companies and multiple layers of legal entities or trusts, or transfer their assets to a family member or business associate to conceal their ownership, the Treasury bureau added.
Sanctioned individuals aren’t just investing in high-end or luxury properties, according to the alert. In some cases, they may seek out more inconspicuous investments that provide stable returns without drawing unwanted attention. Such sanction evasion strategies are just as likely to occur in small to midsize U.S. cities as they are in the largest metropolitan areas, FinCEN said.
FinCEN’s latest alert builds on a similar warning issued last year, in which the watchdog advised banks to pay close attention to transactions involving high-value assets such as artwork, luxury yachts and jewelry.
Federal prosecutors have warned that lawyers, consultants and other service providers who work for sanctioned individuals could run afoul of the law.
An indictment unsealed earlier this week charged a former high-level FBI agent and a former Russian diplomat with sanctions violations in connection with work they did for
Oleg Deripaska,
a raw-materials magnate who was placed on a sanctions blacklist in 2018.
Write to Dylan Tokar at dylan.tokar@wsj.com
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This month, L’Oréal made a minority investment in micro-printing startup Prinker Korea Inc., a company that has won multiple CES Best of Innovation awards.
Established in 2015, Prinker is the inventor manufacturer of the world’s first digital temporary tattoo device. The company has worked with L’Oreal for several years to develop L’Oreal Brow Magic—a handheld, electronic brow make-up applicator that uses AR technology and patented AI-algorithms. Unveiled at CES, the device scans the user’s face and makes recommendations on the best brow shape which is then printed in seconds automatically.
Prinker is also working on micro printing hair color. Here’s a quick look at the company’s device in action, from CES Unveiled.
A “BOLD” Investment
“At L’Oreal, our researchers are partnering with high end technology start-ups to create the future of beauty. Together, by combining our expertises, we develop unmet personalized consumer experiences,” Barbara Lavernos, deputy CEO in charge of research, innovation and technology at L’Oréal, said in a statement when the accord was announced. “Through this strategic investment, we can fulfill our deep commitment to bringing breakthrough beauty technologies that truly empower boundless personalization and self-expression into the hands of every person.”
The investment was made by L’Oréal’s BOLD (Business Opportunities for L’Oreal Development) unit. Financial details were not released.
“We are thrilled to enter this new phase of partnership with L’Oréal, who aligns with our mission of empowering consumers with versatile and customizable tech to express themselves,” Luke Yun, Co-Founder and CEO, Prinker Korea Inc, said in a statement. “Their century-long heritage of beauty, research and development, and sharp focus on beauty technology will allow us to reach more consumers than ever before. Their investment will enable us to create innovations that will have the best solutions for people worldwide, and we are elated to work together to reach this goal”.
By Robb M. Stewart
Canada is paving the way to become a launching pad for commercial space flights, with plans by Ottawa to establish regulations aimed at supporting launches by private entities.
The move promises to better position Canada to tap into increase in money that has poured into the space sector in recent years, as a number of countries have increased their level of space activity to join or take on industry titans like the U.S.
The federal government said Friday that while Canada is well positioned to support space launches, the regulatory framework needs to be modernized and a number of measures are planned to support commercial launch activities.
In the interim, the government said it plans to allow commercial space launches in Canada under existing legislation and regulations, on a case-by-case basis. During this period, which is expected to last three years, Transport Canada intends to work with other federal departments and agencies to develop regulatory requirements, safety standards and licensing conditions needed for commercial space launches in the country.
The government said the transportation department also will establish an interdepartmental review process to ensure any launch is considered and approved in a way consistent with domestic legislation, international treaties, and national security and foreign policy interests.
“A long-term Canadian commercial space launch regulatory framework is key to maintaining Canada’s leading role in outer space exploration and development and represents an important evolution in Canada’s space activities,” said Annie Koutrakis, parliamentary secretary to the minister of transport. “Canadian space launch capability will create lasting economic opportunity for the Canadian space sector, encourage innovation and research, and support national security.”
Since the early 1980s, nine Canadian Space Agency astronauts have flown to space 17 times. The government said that in 2020, the Canadian aerospace industry contributed more than $16 billion and close to 207,000 jobs to the country’s economy.
In a report released Friday, McKinsey & Co. said the space sector has experienced massive growth in investment, with public and private markets globally injecting $10 billion in fresh capital into space companies in 2021, compared with $300 million a decade earlier. And while the U.S. remains in the lead for funding, with a civil space budget that represents more than 40% of the worldwide total, many countries are raising their level of space activity and about 70 have established national space agencies, the consulting firm said.
A first attempt to launch satellites from British soil reached space earlier this month, though fell short of reaching its target orbit. In November, India tested its first privately developed rocket with a suborbital launch that was a step forward in its efforts to develop a commercial space industry.
Maritime Launch Services Inc., which is developing a launch site in the eastern province of Nova Scotia that will provide satellite delivery services to clients, welcomed Canada’s support for commercial launch activities.
“With today’s announcement, the global space industry can be confident that commercial launch in Canada is not only here, but it has this government’s support,” Maritime Launch Chief Executive Stephen Matier said.
Write to Robb M. Stewart at robb.stewart@wsj.com
Federal Package appointed Melissa Niebes to president and chief commercial officer of the company, effective January 1. Since joining Federal Package in April 2021, Niebes has delivered record sales, developed and implemented robust sales and marketing initiatives, built a strong sales team, and expanded the company’s market presence with a strong digital and in-person marketing strategy.
Steve Dakolios has been appointed chief executive officer effective January 1. Since joining Federal Package in September 2012, Dakolios has led the business through impressive growth and expansion. He will focus on developing and implementing strategic initiatives to support the continued growth and expansion of Federal Package.
“Federal Package is very excited to have a talented leader like Melissa take the helm and leverage her years of experience to better serve our customers and expand our product offerings. She will accelerate our entry into the skincare market while continuing to provide our customers with the high-quality service they expect,” said Dakolios.
Niebes joined Federal Package in 2021 with over a decade of marketing and sales experience in the beauty and personal care categories. Previously, she served as vice president of sales at Reckitt Benckiser and vice president of customer marketing at L’Oréal USA.
These appointments will further accelerate Federal Package’s growth and expansion into the premium skincare market.
“Our customers are looking for partners to help them get to market faster. So we’re investing in stock formulas across multiple categories such as lotions, creams and serums that will accelerate their brand portfolio growth,” said Niebes. “I’m eager to take on another level of responsibility for Federal Package to lead our growth initiatives.”
Federal Package is a leading contract manufacturer for beauty and personal care companies. Federal Package has become the go-to source for companies in the health, beauty and personal care industries searching for all aspects of contract manufacturing including research and development; formulation; blending and filling; decorating and labeling; and health and beauty containers.
(Kitco News) – The Metropolitan Bank Holding Corp. has become the latest victim of the crypto winter as the holding company for New York-based Metropolitan Commercial Bank (MCB) has announced that it will be closing down its cryptocurrency unit.
According to a press release distributed by the bank, MCB currently has four active institutions that account for roughly 1.5% of total revenues and 6% of total deposits, so the financial impact from exiting this vertical will be minimal. Services offered to these clients include providing debit cards, payment and account services.
MCB said that this decision “reflects recent developments in the crypto-asset industry,” and was also influenced by changes in the regulatory landscape in regard to banks’ involvement in crypto-asset-related businesses.
The bank has already begun the process of closing out the relationships that it has with crypto-related accounts and expects the processes to be completed during 2023. It currently has no loans outstanding to any of these clients and does not hold crypto-assets on its balance sheet or facilitate the sale of crypto-assets to its customers.
MCB said this development does not affect the current ability of customers to transact with crypto-asset companies they choose to do business with or affect MCB’s service to customers who do not have crypto-asset-related activity as a principal line of business.
“Today’s announcement of our exit from the crypto-currency related asset vertical represents the culmination of a process that began in 2017, when we decided to pivot away from crypto and not grow the business,” said Mark R. DeFazio, President and CEO of MCB. “Crypto-related clients, assets and deposits have never represented a material portion of the Company’s business and have never exposed the Company to material financial risks.”
The move from MCB comes as companies dealing with the crypto industry have come under increasing scrutiny from regulators in the United States following the collapse of FTX. The Securities and Exchange Commission, Financial Accounting Standards Board and Internal Revenue Service have all signaled that they will be focusing on crypto regulations and increasing their oversight in 2023.
Crypto banking has also come under increasing pressure in the wake of FTXs’ collapse and the contagion events it has sparked. Last week, the California-based Silvergate bank, which specializes in serving cryptocurrency companies, announced that it was laying off 40% of its workforce and was forced to conduct a debt sale in order to stay in business.
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
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SOCIAL CIRCLE — Commercial fishermen can take to the water beginning at midnight on Jan. 1 to take advantage of the opening day of shad season, according to the Georgia Department of Natural Resources’ Wildlife Resources Division. Shad season will run through midnight March 31.
“Last year’s shad season was tough, and catches fell short of what most fishermen wanted,” WRD Senior Fisheries Biologist Jim Page said in a news release. “Nonetheless, 2023 is a new season, and we’re hopeful for a good shad run this year. Additionally, we are excited to announce that we have increased the reward values of tagged shad the agency is releasing in the Altamaha River, with rewards ranging from $10-$100. We hope that encourages better participation by fishermen in the critically important shad survey.”
2023 Shad Season River Regulations:
· Altamaha River: The Altamaha River downstream from the Seaboard Coastline Railroad Bridge is open for commercial shad fishing Monday-Friday. Waters of the Altamaha River system upstream of the Seaboard Coastline Railroad Bridge and below the U.S. Highway 1 Bridge are open Tuesday-Saturday, including the Ohoopee River downstream of the U.S. Highway 1 Bridge. All waters of the Altamaha River system above the U.S. Highway 1 Bridge, including the Ocmulgee and Oconee rivers, are closed to commercial fishing.
Savannah River: The Savannah River is open for commercial shad fishing downstream from the I-95 Bridge Tuesday-Friday. Waters upstream of the I-95 Bridge and below the U.S. Highway 301 Bridge are open Wednesday-Saturday. All waters of the Savannah River above the U.S. Highway 301 Bridge are closed to commercial fishing. Only drift nets may be used downstream of a line between the mouth of Knoxboro Creek and McCoys Cut at Deadman’s Point.
· The Ogeechee, Satilla and St. Marys rivers are not open to commercial shad fishing.
Legal Net Guidelines for Commercial Shad Fishing:
· The minimum mesh size for legal set or drift shad nets is 4½ inches stretched.
· Set nets must be placed at least 600 feet apart and should be limited to 100 feet in length.
· Set nets must clearly display the owners name and commercial fishing license number.
· Drift nets shall not be fished closer than 300 feet apart and are limited to a maximum of 1,000 feet in length in saltwater.
· Set nets and drift nets must be situated to allow one-half the stream width to be open and free for the passage of fish.
· All set nets must have one end secured to the stream bank and must be buoyed at the outer (seaward) end so they will be clearly visible to other boaters.
· Sturgeon, game fish other than American shad or hickory shad, and all species of catfish taken in set or drift nets must be released unharmed into the waters where they were captured.
Commercial shad fishermen must have a valid Georgia commercial fishing license and are required to have purchased a commercial fishing endorsement for shad. Applications for commercial licenses and endorsements are available at [GeorgiaWildlife.com/licenses-permits-passes] GeorgiaWildlife.com/licenses-permits-passes or at Coastalgadnr.org/CommercialFishing. Commercial licenses and endorsements may also be obtained at the CRD office in Brunswick.
Vessels must be registered for use on Georgia waters. Vessel registration information is available at GeorgiaWildlife.com/boating/registration. Boats used below the saltwater demarcation line for commercial fishing need additional registration. Visit Coastalgadnr.org/CommercialFishing for information.
Georgia’s commercial fishing regulations require that fishermen must report the harvest of all American shad, regardless of if they are sold or kept for personal consumption, to the CRD via Trip Tickets. Fishermen can obtain Trip Tickets by contacting CRD’s Julie Califf at (912) 264-7218.
For a complete set of commercial fishing regulations, visit Coastalgadnr.org/CommercialFishing or contact any of the following WRD law enforcement offices: Brunswick (912) 264-7237; Thomson (706) 595-4211 or Metter (912) 685-2145.
SOCIAL CIRCLE — Commercial fishermen can take to the water beginning at midnight on Jan. 1 to take advantage of the opening day of shad season, according to the Georgia Department of Natural Resources’ Wildlife Resources Division. Shad season will run through midnight March 31.
“Last year’s shad season was tough, and catches fell short of what most fishermen wanted,” WRD Senior Fisheries Biologist Jim Page said in a news release. “Nonetheless, 2023 is a new season, and we’re hopeful for a good shad run this year. Additionally, we are excited to announce that we have increased the reward values of tagged shad the agency is releasing in the Altamaha River, with rewards ranging from $10-$100. We hope that encourages better participation by fishermen in the critically important shad survey.”
After China’s most economically and politically turbulent year in more than three decades, investors are keen to see how 2023 will unfold for the world’s second largest economy.
The country is experiencing an explosion of COVID infections, after authorities earlier this month suddenly dropped most of the notoriously draconian restrictions that have shackled business activity and daily life through much of the pandemic.
But so far, experts’ predictions of widespread deaths and a nationwide overwhelming of hospitals have yet to materialize. More than 90% of Chinese are fully vaccinated, compared with 68% of Americans, according to the countries’ respective health authorities.
Officials have said publicly that they now deem the virus weak enough to weather a surge of infections as rapidly as possible — with the hope of then reviving the country’s economic doldrums.
The following are the stories to watch over the coming year as we gauge just how successful — or unsuccessful — this approach becomes.
Opening up
Loosening of internal COVID restrictions surprised citizens with its suddenness. Meanwhile, China is moving more slowly — but steadily — toward reopening to foreign travelers and businesspeople. Next month, it will abolish a centralized quarantine for arrivals, and require only three days of isolation at home or in a hotel, Chinese media reported Wednesday.
Hong Kong last week scrapped all quarantine requirements for international arrivals.
But don’t expect the prepandemic wave of outbound Chinese travelers to resume quickly. More than half of respondents to a survey of 4,000 Chinese consumers by consultancy Oliver Wyman said they would not travel abroad for several months, if not more than a year.
Consumption rebound
For much of the pandemic, unlike many developed countries, China refrained from large-scale stimulus measures, mostly rolling out supply-side support such as boosting infrastructure projects. This neglect of stimulating domestic consumption was compounded by citizens’ reluctance to spend amid times of uncertainty.
But that appears to be changing. At China’s annual economic summit last week — chaired by Xi Jinping, given a norm-busting third presidential term this autumn — officials declared that “the recovery and expansion of consumption should be given top priority,” according to an official readout. Measures include boosting incomes as well as providing subsidies and incentives in a range of categories such as alternative-energy vehicles, housing renovations and elder services.
“Consumer demand is now quickly moving up Beijing’s policy agenda,” consultancy Trivium wrote Tuesday in response to the announcements.
Property
China’s beleaguered property sector — which last year was on the verge of collapse — has been receiving steadily rising government support. Xi last month said that a raft of new measures would be forthcoming, including requiring lenders to up their loans to developers as well as support for bond issuances by private real-estate firms.
Banks have also slashed average mortgage rates by more than a percentage point in the last several months, and mortgage requirements have eased, while processing times have shortened.
“This pragmatic course correction should lead to a gradual, steady recovery in new-home sales in the second half of 2023,” Matthews Asia investment strategist Andy Rothman said in an emailed statement.
Trivium analysts concurred. “We expect more policies in the new year to restore demand for new housing and to boost construction,” they wrote.
These revitalization moves, if successful, bode well for the beginning of a Chinese recovery next year, analysts said.
Through COVID relaxations and proactive fiscal measures, consumer mobility and rising sentiment will help reinvigorate China’s growth in the second quarter and foster expansion even further in the year’s second half, said Bruce Pang, chief economist for Greater China at Jones Lang LaSalle.
Pang expects China’s economy to grow more than 5% in 2023, a forecast other analysts are revising their own estimates toward. “And don’t forget, China is likely the only major economy with a serious [monetary] policy easing stance, while much of the world is tightening,” he said.
Cryptocurrencies were born out of the libertarian dream of a financial system free from government regulation. Bitcoin’s promoters peddle its ability to let us make transactions without dealing with regulated banks, which, they say, we are not supposed to trust.
What crypto players since stripped of their “investments” saw were some operators getting amazingly rich sitting in their shorts and running numbers on their laptops. The less savvy may not have quite understood how this thing worked, but they could bask in the flattery of being called “brave,” per the Super Bowl ads.
The crypto markets crashed amid a sobering string of scandals, crimes and the growing evidence that much of this wealth was basically made-up money. Amid so much suffering, calls have been growing in Washington to impose government oversight on the industry.
The idea is insane.
Nonetheless, the chair of the Securities and Exchange Commission, Gary Gensler, wants to work with Congress to increase his agency’s oversight of what he has accurately calls the “Wild West” of crypto. And Sen. Elizabeth Warren is predictably working on a big digital currency bill that, Politico reports, would cover “consumer protections, anti-money laundering rules and climate safeguards for crypto mining.”
The climate part refers to the coal-fired power plants providing the obscene amount of electricity to mine bitcoin. And the money laundering (and assorted scams) is made possible by another of crypto’s libertarian virtues, anonymity.
Most of the problems Warren cites are being fixed right now through the collapse in crypto values. Many financial experts say the crypto era is now over (although the associated blockchain technology may have good future uses).
When the government gets involved with overseeing investments and the entire category goes south, calls for government bailouts follow. Do the taxpayers really want to be on the hook for invented money? Besides, the biggest crypto selling point is that it isn’t regulated by the government.
But aha, some crypto businesses are now saying, OK, as long as we help write the regs. If that happens, again, heaven help the taxpayers.
One such volunteer was Sam Bankman-Fried, whose $32 billion fortune has vanished along, apparently, with the holdings of depositors at his former crypto empire, FTX. Bankman-Fried cleverly broke with others in his industry by actively calling for regulations. That prompted would-be investors to think: A guy who wants his crypto business regulated is probably on the up-and-up, as opposed to other figures in this admittedly dark business.
Some have likened the crypto craze to the Beanie Baby bubble of the 1990s. Beanie Babies were nothing more than cloth dolls stuffed with beans. They originally sold for $5, but their creator, as Vox reports, “used the illusion of scarcity” to make many think they could be incredibly valuable. People lined up outside Hallmark stores to score a new Beanie Baby release. Especially desirable models traded for thousands of dollars. Naturally, a black market for counterfeit Beanie Babies quickly surfaced.
But step aside Beanie Babies, and make room for CryptoKitties. This is a blockchain-based game that works as follows: You turn over one of the cryptocurrencies in return for pictures of cute little cats. They are marketed as unique kitten pictures, and some have sold for over $100,000. But CryptoKitties are nothing more than digital artwork, which means they have no value other than what you think it is.
Agustin Carstens, a former director at the International Monetary Fund, has called crypto “a combination of a bubble, a Ponzi scheme and an environmental disaster.”
Cryptocurrencies were created to avoid government. Government should avoid cryptocurrencies. Let we who trust banks stroll past the smoking crypto ruins. Not our problem — or shouldn’t be.