Year: 2020

2020: We cast a cold eye over the 15 major highlights of a financial crime year in review

Bribery, Corruption, Money Laundering
As we near the end of one of the toughest years for people and businesses in decades, we take a look back at some of the biggest happenings in the world of financial crime, corruption and the laws in place to stop it. 1. Cryptocurrency: the way of the future2020 has seen governments across the world tighten their grip on virtual assets. They were once seen as an easy pathway to launder money, but this year, the trend accelerates away from that. This month, France announced sweeping new KYC measures for all crypto companies operating within its borders. Registration will…

Putin’s Ex-Son-in-Law Bought $380M Stake in Petrochemicals Giant for $100 – Investigation

Corruption
President Vladimir Putin’s former son-in-law purchased $380 million worth of shares in Russia’s top petrochemicals company for $100 after marrying the president’s daughter, according to a report by the iStories investigative outlet. Kirill Shamalov acquired 3.8% of petrochemicals producer Sibur through a web of offshore companies months after marrying Katerina Tikhonova in February 2013, iStories reported, citing private emails obtained through a massive data breach. Multiple media reports have identified Tikhonova as the younger of Putin’s two daughters. Shamalov previously estimated Sibur’s value at $10 billion, meaning that the $100 he had paid was 3.8 million times below market value.…

Advocates Celebrate Major US Anti-Money Laundering Victory

Money Laundering
Landmark laws to thwart the use of U.S. shell companies by terrorists, human traffickers, arms dealers and kleptocrats are set to be enacted after more than a decade of lobbying and politicking with rare bipartisan support. The sweeping anti-money laundering reforms hitched a lift in the annual defense spending bill that passed the Senate 84-13 today, and was approved by the House 355-78 earlier this week. The Corporate Transparency Act requires U.S. companies to report their true owners to the Treasury Department’s Financial Crimes Enforcement Network, known as FinCEN — largely ending anonymous shell companies in the country. The International…

The Hague Court of Appeal wants the Public Prosecution Service to prosecute Ralph Hamers, former CEO of ING Bank

Money Laundering
In 2018, due to a failing anti-money laundering policy, ING Bank reached a settlement of 775 million euros with the Public Prosecution Service. Ralph Hamers remained out of harm’s way. Pieter Lakeman, chairman of Stichting Onderzoek Bedrijfs Informatie (SOBI) asked the Court of Appeal to compel the Public Prosecution Service to prosecute Ralph Hamers, who has been CEO of the Swiss bank UBS since September. The Court considers it important “that the standard is confirmed in public criminal proceedings and that bank directors cannot go unpunished if prohibited conduct actually took place during their leadership. Citizens must be able to…

Harrods mega-spender loses Supreme Court challenge

Unexplained Wealth Orders
The Supreme Court has rejected an attempt by a woman who spent £16m in Harrods to overturn the UK’s first Unexplained Wealth Order (UWO). Zamira Hajiyeva, wife of a jailed banker, may now lose her £12m London home – and a separate golf course – if she can’t explain her riches. The court said her challenge to the UWO raised no arguable point of law. Mrs Hajieyva’s husband is in jail in Azerbaijan for embezzling millions of pounds from a state bank. Offshore companies connected to the family own Mrs Hajiyeva’s home on an exclusive street in Knightsbridge, as well…

National Risk Assessment of Money Laundering and Terrorist Financing 2020

Download, Money Laundering
The 2020 national risk assessment (NRA) is the third comprehensive assessment of money laundering and terrorist financing risk in the UK. National risk assessment of money laundering and terrorist financing 2020 – PDF, 1.24MB, 152 pages DetailsThe NRA sets out the key money laundering and terrorist financing risks for the UK, how these have changed since the UK’s second NRA was published in 2017, and the action taken since 2017 to address these risks. Article credit: https://www.gov.uk/government/publications/national-risk-assessment-of-money-laundering-and-terrorist-financing-2020

Congress has released the National Defense Authorization Act, which includes reforms that would effectively end fully anonymous shell companies.

Money Laundering
The United States looks set to overhaul the country’s anti-money-laundering legislation, after widely-supported provisions were officially included in a must-pass annual defense spending bill on Thursday. The reforms, based on proposals by bipartisan groups of lawmakers from both the Senate and the House of Representatives, would mandate that companies in the U.S. report their ultimate owners to the Treasury Department, effectively ending fully anonymous shell companies. The provisions will also see the U.S. strengthen its financial intelligence work, including bulking up the data collection of the Treasury’s Financial Crimes Enforcement Network, known as FinCEN, and increasing international cooperation between financial…

Norway’s DNB facing potential $45M AML fine

Money Laundering
DNB ASA, Norway’s largest financial services group, announced Monday it is facing a potential fine of NOK 400 million (U.S. $45.4 million) for inadequate compliance with the Norwegian Anti-Money Laundering Act. The penalty, which has been proposed as part of a preliminary report issued by the Financial Supervisory Authority of Norway (Finanstilsynet), derives from a routine inspection of DNB’s AML controls conducted in February. “The possible fine that DNB has been notified of is not related to any suspicions of money laundering or complicity in money laundering, but rather what Finanstilsynet considers to be inadequate compliance with the anti-money laundering…

Money laundering and terrorist financing indicators – Virtual currency transactions

Money Laundering
This guidance on suspicious transactions is applicable to all reporting entities (REs) that are subject to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and associated Regulations. It is recommended that this guidance be read in conjunction with other suspicious transaction report (STR) guidance, including: What is a suspicious transaction? Reporting suspicious transactions to FINTRAC Money laundering (ML) and terrorist financing (TF) indicators are potential red flags that could initiate suspicion or indicate that something may be unusual in the absence of a reasonable explanation. Red flags typically stem from one or more factual characteristics, behaviours, patterns…

Money laundering and financing of terrorism: Warsaw Convention report assesses the monitoring of banking operations

Money Laundering, Terrorism
The Conference of the Parties of the Warsaw Convention, responsible for monitoring the implementation of the treaty, has published a report assessing the way its states parties monitor banking operations to prevent money laundering and the financing of terrorism. The report concludes that the majority of states parties – although with significant differences – apply articles 7(2c) and 19(1) of the convention, which provide a specific tool to competent authorities to monitor, during a specified period, the banking operations that are being carried out through one or more identified accounts. The report also issues a number of general and country…

New EU sanctions regime is an important achievement but leaves the door open to dirty money

Sanctions
Global Witness, Transparency International EU, Open Society European Policy Institute and twelve other organisations welcome adoption of a new sanctions regime by the European Union to target human rights abusers worldwide. However, we urge the EU to adopt a complementary sanctions regime targeting non-EU nationals involved in corruption and align itself with other existing regimes in the US or Canada and in development in the UK. Today, the European Council announced adoption of the new Global Human RightsSanctions Regime. The regime tackles crimes against humanity, arbitrary arrests and extrajudicial killings. It also targets those responsible for human trafficking, sexual violence,…

U.S. investigation report hits SEB, Swedbank and Danske Bank shares

Money Laundering
STOCKHOLM (Reuters) – The Department of Justice (DOJ) and FBI are investigating SEB, Swedbank and Danske Bank over possible breaches of U.S. anti-money laundering regulations and fraud, Swedish newspaper Dagens Industri reported on Tuesday, sending the banks’ shares lower. Sweden had received requests for help from U.S. authorities investigating a Baltic money-laundering scandal that has already led to local fines for Swedbank, Danske and SEB, the newspaper reported. The banks were being investigated by the DOJ, the FBI and federal police and a federal prosecutor in New York over possible fraud and breaches of anti-money laundering regulations, it added. Although…

Switzerland charges Credit Suisse in Bulgarian money laundering probe

Money Laundering
ZURICH (Reuters) – Swiss prosecutors charged Credit Suisse on Thursday over alleged failings related to a Bulgarian crime ring involving top-level wrestlers accused of laundering cocaine trafficking proceeds more than a decade ago. Switzerland’s attorney general (OAG) said in a statement that an unnamed former Credit Suisse manager and two alleged members of the criminal organisation had also been indicted in the Swiss Federal Criminal Court. “(Credit Suisse) is accused of failing to take all the organisational measures that were reasonable and required to prevent the laundering of assets belonging to and under the control of the criminal organisation,” it…

UK Sanctions Statutory Instruments Review – Individual regime

Sanctions
The individual regime reviews are listed below. These documents are for the individual UK sanctions SI reviews and along with the numerical section review, they also separate the findings into high, medium and low impact sections.” AFGHANISTAN BOSNIA BURMA BURUNDI CENTRAL AFRICAN REPUBLIC CHEMICAL WEAPONS COUNTER TERRORISM (INTERNATIONAL) CYBER DEMOCRATIC REPUBLIC OF THE CONGO EGYPT GLOBAL HUMAN RIGHTS GUINEA HAITI IRAN (HUMAN RIGHTS) IRAN IRAQ ISIL (DA’ESH) AND AL-QAIDA LEBANON (ASSASSINATION OF RAFIQ HARIRI AND OTHERS) LEBANON MALI MOLDOVA NICARAGUA NORTH KOREA REPUBLIC OF BELARUS REPUBLIC OF GUINEA-BISSAU RUSSIA SERBIA AND MONTENEGRO SOMALIA SOUTH SUDAN SUDAN SYRIA (UN) SYRIA VENEZUELA…

Three arrests in money laundering, romance fraud and bounce back loan scam investigation

Fraud, Money Laundering
The National Crime Agency’s Complex Financial Crime Team has arrested three suspected members of an organised crime group involved in high level money laundering and fraud. The two men and one woman , aged 48, 43 and 45, were detained yesterday following raids at properties in the Bexleyheath and Dartford areas of London. They were questioned and have been released pending further investigation. This action is part of a wider operation targeting global fraud and the subsequent movement of money taken from victims. The alleged offending involves large scale identity theft, and the use of numerous false bank accounts to…

The Bank Fines 2020 report reveals the list of banks that faced the biggest fines in 2020

Regulatory Fines
The Bank Fines 2020 report reveals the list of banks that faced the biggest fines in 2020 on a Year-to-Date (YTD) basis. Fines were imposed by regulators for breaches of different protocols like Anti-Money Laundering (AML), violation of Know Your Customer (KYC) and operating guidelines, personal data leaks, among others. Key findings Total aggregated bank fines in 2020 = €11.87B The largest fine was issued to Goldman Sachs = €3.3B U.S. has the most separate banks fined = 8 The most common violation = Anti-money laundering breaches Bank Fines Ranked Rank Country Bank Fine Source 1 US Goldman Sachs €3.30B…

Quarterly report to Parliament: 1 April 2020 to 30 June 2020 (‘TAFA 2010’)

Sanctions
Written Ministerial StatementOperation of the UK’s Counter-Terrorist Asset Freezing Regime: 1 April 2020 to 30 June 2020 The Economic Secretary to the Treasury (John Glen): Under the Terrorist Asset-Freezing etc. Act 2010 (TAFA 2010), the Treasury is required to prepare a quarterly report regarding its exercise of the powers conferred on it by Part 1 of TAFA 2010. This written statement satisfies that requirement for the period 1 April 2020 to 30 June 2020. This report also covers the UK’s implementation of the UN’s ISIL (Da’esh) and Al-Qaida asset freezing regime (ISIL-AQ), and the operation of the EU’s asset freezing…

G20 Leaders Agree to Follow FATF’s Anti-Money Laundering Measures

Money Laundering
Leaders of the G20 reiterated their commitment to following anti-money laundering policy measures recommended by the Financial Action Task Force (FATF), which stressed their importance amidst the COVID-19 pandemic at a summit over the weekend hosted by the Saudi presidency. “We support the Anti-Money Laundering (AML)/Counter-Terrorist Financing (CFT) policy responses detailed in FATF’s paper on COVID-19, and reaffirm our support for the FATF, as the global standard-setting body for preventing and combating money laundering, terrorist financing and proliferation financing,” a G20 leaders’ declaration published on Sunday stated. The anti-money laundering authority reminded G20 leaders in a prepared written statement that…

2020 annual report on the SAR regime

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The 2020 Suspicious Activity Report (SARs) Annual Report has been published today (19 November). Read the report. The UK Financial Intelligence Unit (UKFIU) saw another record number of SARs, receiving and processing 573,085 (a 20% increase on the previous period of 478,437), with an 81% increase in requests for a defence against money laundering or terrorist finance (62,408). The UKFIU continued its efforts to provide law enforcement agencies with focused asset recovery opportunities as a result of Defence Against Money Laundering (DAML) requests. Over the year £172m was denied to suspected criminals as a result of DAML requests – up…

SWIFT: Focus on financial crime compliance

Compliance, Money Laundering
Tackling financial crime, and ensuring compliance with anti-money laundering (AML) and combating the financing of terrorism (CFT) regulations remains one of the biggest overall challenges for the financial services community. This year, this has been particularly apparent, as the quick shift to enable a remote working environment in the wake of the pandemic put additional pressure on the fraud defences financial institutions have spent time and money investing in. The ever more connected and instant digital world also poses questions for how banks and financial institutions can ensure they meet their compliance requirements in real-time. In one of two risk…

Apple’s Chief Security Officer charged with bribery

Corruption
Apple’s head of global security has been indicted on felony charges for allegedly offering bribes to California police officers in exchange for concealed firearms licenses, the Santa Clara district attorney’s office announced in a press release published on Monday. According to an indictment issued by a grand jury, Thomas Moyer, 50, is accused of offering to donate 200 iPads worth roughly US$70,000 to the local police force in exchange for four licenses that are required for individuals looking to carry a gun without revealing it. The deal was apparently “scuttled at the eleventh hour” last year, when police officers became…

Over US$427 billion is lost to tax havens every year

Tax Evasion
As governments around the globe face budgetary pressures due to the COVID-19 public health crisis, the urgency to crack down on tax havens – responsible for an estimated loss of over US$ 427 billion each year – has become even more crucial, experts said in response to new findings. A new annual report, published on Friday by the Tax Justice Network, reveals how much each country loses each year, totalling $245 billion directly lost through tax abuse by multinational corporations, and a remaining $182 billion from wealthy individuals that hide their money from local authorities through the use of secretive…

European authorities crack down on arms traffickers

Corruption, Money Laundering, Organised Crime
Police in Europe cracked down on the illegal arms trade across the continent in two separate operations that saw 18 arrests, dozens of objects raided, nearly 200 firearms and millions in assets seized across the continent. Spanish authorities arrested seven suspects, seized 18 properties worth about 10 million euro (US$11.8 million) and froze over 50 financial products from a large organised crime group that transported armaments as large as tanks across the Mediterranean, and even once managed to break a compatriot out of a Greek prison. “The criminal network, made up of Latvian, Spanish and Ukrainian members, illegally transported Russian…

UK seizes $1.58 million linked to flat bought with graft money

Money Laundering, Organised Crime
The U.K. Serious Fraud Office (SFO) said it has secured nearly £1.2 million (US$1.58 million) last week from the Brazilian owner of a luxury apartment in West London, which is believed to have been purchased with money stemming from Latin America’s biggest corruption scandal, Brazil’s Operation Car Wash. The amount was seized from Julio Faerman, “the owner of a £4.25 million ($5.6 million) luxury apartment in West London which the SFO suspected to have been partly purchased with the corrupt funds of its owner’s criminal conduct,” the anti-fraud agency said. Faerman was implicated in the corruption scandal that uncovered systematic…

Legal monitors tell Deutsche Bank to quit Russia

Money Laundering, Sanctions
NEW YORK STATE-appointed monitors want Deutsche Bank to pull out of business in Russia completely, according to new reports. The advice comes despite the bank’s ambitions for expansion in the country – although its relationship with Russia has not been void of scandal or allegations of wrongdoing in recent years. The monitors told senior executive leaders at Deutsche that efforts to minimise financial crime risks would not be enough to offset those that came with certain Russian clients, the Wall Street Journal reported Thursday after speaking to a source familiar with the communications. Both monitors are attorneys from Chicago-based law…

6 key takeouts from the FATF President’s address to the G20

Compliance
On Friday, FATF President Dr Marcus Pleyer spoke to G20 leaders and central bank governors on the threats of financial crime. He addressed colleagues from nations across the world, who are all nearing their first anniversary of COVID restrictions and lockdowns. His main message was simple: the fight against dirty money matters now more than ever. But here’s a more thorough run-down of what his comments mean for those efforts – and what their future looks like as the pandemic still rages. 1. FATF will not let COVID regulate their work to the back seat – and the G20 are…

Swiss private bank charged with money laundering

Money Laundering
MONEY LAUNDERING CHARGES are being brought against a private bank in Switzerland which is already in the process of winding down operations. Falcon Private Bank – based in Zurich but with a presence in Luxembourg, London and Dubai – has been charged with money laundering by the Swiss Attorney General. These charges are understood to relate to an instance of organisational deficiencies in relation to a corporate criminal case, Swiss media outlet Handelszeitung reported Thursday. Former Falcon Bank chief executive Eduardo Leemann has also been charged in connection with the case and will appear in court next year. His spokesperson…

Belgium looks to follow Netherlands as top banks push for money laundering information sharing

Compliance
Belgian banks have joined forces to push for a centralised platform for information-sharing to combat financial crime. The calls are coming directly from the CEOs of ING Belgium, KBC, Belfius and BNP Paribas Fortis – the four biggest banks in the country by market share, assets and branches. A central channel was vital to allow banks the opportunity to share information with each other, and with court officials, police and government financial watchdogs, the four chief executives told a parliamentary finance committee hearing. “We are asking to engage as a real partner in the fight against money laundering,” said Belfius…

Online payments company receives €370k fine for “significant shortcomings” in AML practices

Money Laundering
A fine of €370,000 has been handed down to Lithuanian online payment company Paysera LT for failing to comply with AML rules. The fine, issued by the Bank of Lithuania, was decided after a two-month inspection revealed “significant shortcomings related to compliance and anti-money laundering and terrorist financing requirements.” Paysera LT has challenged the scale of the fine. According to the Bank of Lithuania, the company had failed to properly assess money laundering and terrorism financing risks. It also failed to implement adequate standards in customer identification and due diligence, in line with current Lithuanian law. “The company has failed…

SFO secures £1.2m following investigation into West London property linked to Brazilian bribery scandal

Corruption
The SFO has today secured £1,198,424.78 from Julio Faerman, the owner of a £4.25m luxury apartment in West London which the SFO suspected to have been partly purchased with the corrupt funds of its owner’s criminal conduct. The Brazilian national was implicated in Brazil’s ‘Operation Car Wash’, which uncovered systematic bribery to win contracts from the Brazilian state oil company Petrobras. While under investigation by Brazilian prosecutors, Faerman admitted paying bribes to win contracts for the Dutch company SBM Offshore NV, for whom he acted as an agent. He is subject to a co-operation agreement with the Brazilian prosecuting authorities,…

FinCEN clarify BSA due diligence expectations for charities and non-profit customers

Compliance, Download
WASHINGTON—In coordination with the Federal Banking Agencies, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) today issued a joint fact sheet to provide clarity to banks on how to apply a risk-based approach to charities and other non-profit organizations (NPOs). The joint fact sheet highlights the importance of ensuring that legitimate charities have access to financial services and can transmit funds through legitimate and transparent channels, especially during the current COVID-19 pandemic. Also, the joint fact sheet reminds banks to apply a risk-based approach to customer due diligence (CDD) requirements when developing the risk profiles of charities…

Companies House Reform

Money Laundering
Having announced measures to verify the identity of individuals forming UK companies through the Companies House reform bill, it appears the government is now taking money laundering seriously, writes Michael Harris, director of financial crime compliance at LexisNexis Risk Solutions. There is no doubt that the proposed Companies House reform is a positive move, especially given that the National Crime Agency estimates that money laundering costs the UK economy £37bn ($48.2bm) a year – a huge sum that indicates there is still much to do in the fight against financial crime. The new Companies House rules come in amid proposals…

Gambling Commission fine of BoyleSports (£2.8m) for AML failings

Money Laundering
BoyleSports is the latest UK sportsbook operator to be issued a fine by the Gambling Commission over anti-money laundering (AML) failings. The UK Gambling Commission has fined BoyleSports £2.8m and imposed a set of tougher conditions on its licence after an investigation revealed a series of money laundering failures. BoyleSports’ £2.8m fine During an investigation carried out by the Gambling Commission, BoyleSports Enterprise was found to have breached Commission rules intended to prevent money laundering on its Boylesports.com and Boylecasino.com websites. The Gambling Commission said that the operator “failed to have an appropriate money laundering risk assessment in place” and…

EU to create new bloc-wide Financial Crime Compliance Sentinel (AML regulator)

Compliance
The European Union after approval from member state finance members will move forward in creating a bloc-wide financial crime compliance sentinel to directly oversee country regulators and financial institutions – with power to engage in direct reviews, request information and levy monetary penalties. The agreement at the EU Council will form the foundation for more formal legal edicts expected to take force early next year, a widely-watched initiative by global watchdog groups and partner world powers after embarrassing Baltic and Nordic banking scandals shattered the perception of strong union anti-money laundering and counter-financing of terrorism (AML/CFT) oversite with the estimated…

COVID increases fraud rate by 60%

Fraud
Top 3 Global Fraud Contributors in 2020: Card cloning, High-Speed Ordering/Spending, and High-Risk Merchant Category Code 34% increase in card cloning fraud rate across industries and regions 13% increase in sporting goods purchases compared to last holiday season due to social distancing and prohibited indoor gatherings 36% decrease in fuel purchases compared to Q1 and 89% Drop in Transportation Sector Transactions 75% of customers plan to maintain new digital banking habits SAN MATEO, Calif., Nov. 24, 2020 (GLOBE NEWSWIRE) — Feedzai, the world’s leading risk management platform, has announced its Quarterly Financial Crime Report which contains financial crime indicators and…

Dr Marcus Pleyer (FATF) addressing virtual G20

Money Laundering, Organised Crime
The Financial Action Task Force is committed to working with the G20 to ensure a strong, sustainable economic recovery from the COVID-19 crisis, FATF President Marcus Pleyer emphasised in remarks to the G20 Leaders’ Summit and G20 Finance Ministers and Central Bank Governors meeting. Addressing G20 leaders, the FATF President said that crime and money laundering undermines just competition, hampers growth, deepens inequality, and erodes confidence in the integrity of the global financial system. It remains critical that jurisdictions continue to actively identify, assess, and understand how criminals and terrorists can exploit the COVID-19 pandemic and stop money illicitly flowing…

Most of Europe’s largest banks declare profits in tax havens

Exploitation
A majority of Europe’s largest banks are relying on tax havens to stash their profits, despite the fact that in some cases, these firms don’t have a single employee working where these earnings are booked, a new report released on Tuesday by Transparency International EU revealed.  The report, which analyzed 39 of the biggest banks in the European Union, found that 31 of them declared profits in low or zero-tax jurisdictions, and that 29 did so through the use of “ghost operations,” meaning none of the firm’s personnel were working in the areas where large portions of their earnings were declared.   Since…

Almost half of UK bank specialists can’t spot signs of human trafficking among transactions

Exploitation, Organised Crime
Only one in five expert staff believe they can stop transactions or behaviour linked to trafficking It is one of the most prolific crimes on Earth, affecting almost 25 million men, women and children.   But human trafficking – the modern slave trade of living and breathing people for commercial gain – isn’t occurring on some distant, dusty and lawless shore.   From domestic servitude, forced labour and forced marriage to sexual exploitation and the commercial trade in human organs, such harrowing practices steal through every nation on Earth, the UK included.   The proceeds of these crimes are the subject of…

Former Unaoil executive sentenced for paying bribes to win $1.7bn worth of contracts

Corruption
Basil Al Jarah has today been sentenced to three years and four months’ imprisonment for paying in excess of $17m in bribes to dishonestly secure approximately $1.7bn worth of contracts in post-occupation Iraq. Al Jarah, Unaoil’s former Iraq partner, conspired with others to pay millions of dollars in bribes to public officials at the South Oil Company and Iraqi Ministry of Oil. These bribes secured contracts for Unaoil and its clients to construct oil pipelines, offshore mooring buoys in the Persian Gulf, and other infrastructure projects, collectively worth just over $1.7bn. These contracts formed part of the Iraqi Ministry of…

FATF Mutual Evaluation Report – People’s Republic of China

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The Financial Action Task Force (FATF) is an independent inter-governmental body that develops and promotes policies to protect the global financial system against money laundering, terrorist financing and the financing of proliferation of weapons of mass destruction. The FATF Recommendations are recognised as the global anti-money laundering (AML) and counter-terrorist financing (CTF) standard. For more information about the FATF, please visit the website: www.fatf-gafi.org. This document and/or any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.…