In Serbia, the inflow of money through foreign payment platforms to the accounts of domestic “boiler” companies is growing, which immediately forward these funds with a commission to tax havens around the world. These are transfers of several hundred million euros, whose share is increasing in domestic payment operations, and it is very difficult to distinguish “clean” from “dirty” money. The reason is that some countries do not want to provide detailed information on the origin of money, the purpose of the transfer and the business status of the principal, but such transfers are usually justified by computer and programming services.
The Directorate for the Prevention of Money Laundering received a total of 2,267 reports on suspicious financial transactions last year. The largest number of such reports came from persons dealing with postal traffic (891) and banks (819), followed by lawyers (353), followed by gambling organizers (67) and notaries public (58).
Slightly fewer reports came from insurance companies (17), accountants (6), while auditors, leasing companies and authorized exchange offices reported five each, and broker-dealer companies only one suspicious transaction.
Analyzes of such transactions show that the same typologies of money laundering and tax fraud as in previous years still prevail in Serbia, according to the report of the Administration for the Prevention of Money Laundering for 2019.
These are primarily transactions of re-export of unrelated legal entities in international payment operations without actually sold goods or real economic purpose. These are usually “transit transactions” originating from the organizer’s company abroad, which directs money to a Serbian company, usually on the basis of services, which is transferred on the same day, also on the basis of invoiced services to the accounts of other companies.
In such cases, it is difficult to recognize the real activity of the organizing company and it is assumed that their real purpose is to cover up and stratify “dirty money”, or tax fraud.
Withdrawal of funds from the account of a legal entity through an entrepreneur is frequent, usually on the basis of performing “fictitious services”, up to the legal limit, which are then withdrawn and handed over to the owner of the legal entity. On the other hand, through simulated legal transactions between a large numbers of related legal entities, the money is transferred to the accounts of natural persons under the pretext of purchasing secondary raw materials, which the natural person picks up immediately upon maturity.
The report states that last year, increased money laundering was noticed through investors who are natural persons, by investing in residential and business buildings with a construction permit, and even more in illegal construction, which is legalized only after the completion of works and sales, usually for cash. In that way, the money of the disputed origin is legalized, revenues are generated, mostly cash and capital profit that is beyond the reach of the tax authorities.
For the purpose of money laundering, games of chance are also abused, through simpler and more complex variants. For example, a citizen of Serbia opened an account in an online casino in another country to which he transferred money of unknown origin by e-mail from an account he opened on a payment platform in high amounts. After the transaction, he can spend a sum on the gamble, or withdraw funds from the sub-account without the cost of the game. He received a paycheck from the online casino, and the withdrawn money represents the profit made by playing games of chance.
Also, several players agree to open sub-accounts at online casinos and then play at the same virtual table, and the one who deposited the most money using a payment platform account, intentionally loses in favor of other players at the table. They later withdraw the winnings from the sub-account and, using the funds in the main account, withdraw cash in third countries, in addition to the payout with the actual winnings they made by gambling online.
The third variant of abuse is when a citizen who is not a citizen of Serbia but is registered to stay here temporarily, opens a sub-account in an online casino in another country with a false address, to which he deposits money through the main account he has open with payment platforms. He intentionally loses money in favor of other players at the virtual table with whom he previously made an agreement, or wins the game, and the lost or gained money is withdrawn with a payout on the realized loss or gain in third countries, BiF reports.
