News about the Cayman Islands in the Foreign Press

Friday, September 3, 2004

Illegal Iraqi oil money laundered through Cayman companies

WASHINGTON, USA - According to a report by the US Treasury Department's Financial Crimes Enforcement Network, Infobank of Belarus has been involved in money laundering using Cayman companies. The most important intermediaries in money-laundering operations involving Infobank were Belmetalenergo and Capital and Business Management, a company registered in Vienna.

Illegally earned money from Capital and Business Management was reportedly transferred to the accounts of offshore companies in the Cayman Islands and subsequently transferred to foreign representations of Belarusian firms.

Infobank subsidiary Belmetalenergo entered into contracts to purchase oil from the Iraqi State Oil Marketing Organization (SOMO) and secretly agreed with SOMO to pay illegal surcharges and deposit them into Infobank accounts for the benefit of the then-Iraqi government.

Belmetalenergo also entered into contracts for the provision of humanitarian aids to Iraq, in which the value of the goods that were actually provided was inflated. The funds derived from the illegal surcharges and the inflated oil-for-food contracts were laundered through several other banks and shell companies.

Finally, proceeds from these illegal operations were either returned to the Iraqi government or used to purchase weapons or finance military training through Infobank and Belmetalenergo,

Shareholders of Infobank include many private Belarusian companies as well as the government, which is a principal shareholder of the bank's capital. In 2001 Infobank sold a 35 percent stake to the Libyan Arab Foreign Bank, which is fully owned by the Central Bank of Libya.

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