draining development.pdf - Khazar University

How Well Do Anti–Money Laundering Controls Work in Developing Countries? 391Figure 12.1. The Case of Montesinos: Laundering Maneuvers if Monies WereCollected in PeruCashBank transformed cashinto certificates issued tothe bearer.Montesinos keptcustody of thecertificates.LocalbanksVladimiroMontesinosMontesinostransferredcertificates toforeign bankthrough alocal bank. aForeignbanksAssets wereacquired formoney launderingpurposes.Monies were remittedto financial havens.FinancialhavenSource: Dumas 2007.a. In Peru, Banco de Comercio handled over US$220 million in transfers for Montesinos.The Philippine literature tends to focus more on the internationalthan on the internal aspects, but Briones (2007, 10) summarizes it wellwhen she observes that “a part of the Marcos ill-wealth stayed in thePhilippines and included corporations which were acquired on hisbehalf by his cronies, land, machinery, etc.” One might add that trustenables beneficial ownership to be disguised more easily, especially if thisis achieved by noncompetitive tendering. The Marcoses might have hadto rely on their network’s informal sanctions and friendships to securebenefits in the event of their fall from power. One anonymous source hasobserved to this author that Imelda Marcos has experienced significantdifficulty in resuming control of assets placed in the hands of somenominees: one of the problems of using clandestine laundering methods.In the event, Briones states, the assets taken domestically from theMarcos network—mainly by sequestering 69 beneficially owned corporations—totaledUS$11.8 billion, though this figure may relate only toassets frozen rather than sequestered. 22An indicator of the size of the assets taken by Marcos is the fact thatthe Agrarian Reform Program of the Philippines is funded in part fromthe illicit gains of the Marcos regime. According to an unpublished 2010report of the Philippine Institute of Development Studies, approximatelyP74.5 billion was recovered over the period 1987–2008 by thePresidential Commission on Good Government, that is, US$1.6 billion