Month: January 2021

DAC6, the EU’s New International Tax Reporting Mandate

Tax Evasion
INSIGHT: DAC6 Hallmark Interpretation—More Art Than Science DAC6, the EU’s new international tax reporting mandate, comes with many unknowns for taxpayers and their advisers. Among these unknowns are how different jurisdictions will interpret five categories of hallmarks subject to disclosure. Keith Brockman explains what a hallmark is and why the first two are particularly worrisome. Taxpayers are anxious about the EU’s new international tax transparency initiative: The rules can be subjective and the penalties are significant. As taxpayers have started to read the principles enumerated in the new reporting requirements, known as DAC6, they’re discovering that interpretation may be more…

FICO: 5 Fraud Predictions for 2021

Fraud
With 2020 seeing an increase in cybersecurity concerns due to the COVID-19 pandemic, partly due to the influx of people now working from home as well as an increase in the use of digital services, many are left wondering what 2021 will bring. Matt Cox is Managing Director, EMEA Fraud, Cyber and Compliance at FICO, a company that uses predictive analytics and data science to improve operational decisions. Matt has over 20 years of experience within the financial services industry, specialising in fraud and financial crime. Here Matt looks ahead with his fraud predictions for 2021. Predicting the future is…

FinCEN Announces $390,000,000 Enforcement Action Against Capital One

Money Laundering
FinCEN Announces $390,000,000 Enforcement Action Against Capital One, National Association for Violations of the Bank Secrecy Act WASHINGTON—The Financial Crimes Enforcement Network (FinCEN) today announced that Capital One, National Association (Capital One) has been assessed a $390,000,000 civil money penalty for engaging in both wilful and negligent violations of the Bank Secrecy Act (BSA) and its implementing regulations. Specifically, FinCEN determined and Capital One admitted to wilfully failing to implement and maintain an effective Anti-Money Laundering (AML) program to guard against money laundering. Capital One also admitted that it wilfully failed to file thousands of suspicious activity reports (SARs), and…

U.S. Anti-Money Laundering Law Set to Change Antiquities Trade

Money Laundering
U.S. Anti-Money Laundering Law Set to Change Antiquities Trade as Buyers’ Identities No Longer Concealed The U.S. Congress recently passed the Anti-Money Laundering Act (the “Act”) of 2020, in which art and antiquities dealers are bracing themselves for more stringent federal oversight. Under the bill, the antiquities sector will no longer be spared from the Bank Secrecy Act (BSA). The new regulations require antiquities dealers to report any suspicious activities and any cash transactions exceeding US$10,000 to the authorities, and to ensure that potential buyers are not among those being sanctioned by the U.S. government. The liability of extensive record-keeping…

Digitization of Financial Services has Opened the Doors for More Complex Financial Crime

Money Laundering
Digitization of financial services has opened the doors for more complex financial crime, says ACAMS’ McDonell The continuing modernization and digitization of the financial services industry made easier access to financial services more available to everyone, but it also has created the opportunity for illicit actors to concoct more complex, digitized crimes. In an interview with Thomson Reuters Regulatory Intelligence, Rick McDonell, executive director of the Association of Certified Anti-Money Laundering Specialists (ACAMS), discusses this crucial development and notes how important it is for financial institutions to ensure that their compliance departments and officers are properly trained to detect this…

2020 Corruption Perceptions Index Reveals Widespread Corruption is Weakening Covid-19 Response, Threatening Global Recovery

Corruption
Corruption and COVID-19 worsening democratic backsliding The 2020 Corruption Perceptions Index (CPI) released today by Transparency International reveals that persistent corruption is undermining health care systems and contributing to democratic backsliding amid the COVID-19 pandemic. Countries that perform well on the index invest more in health care, are better able to provide universal health coverage and are less likely to violate democratic norms and institutions or the rule of law. Read the report “COVID-19 is not just a health and economic crisis. It is a corruption crisis. And one that we are currently failing to manage,” Delia Ferreira Rubio, Chair of Transparency…

Deutsche Bank Reaches $100 Million Deferred-Prosecution Deal

Bribery
Deutsche Bank AG agreed to pay more than $130 million to settle criminal and civil charges that it bribed foreign officials and manipulated the market for precious-metals futures through a trading tactic known as spoofing. The Frankfurt-based bank agreed to a deal in which it won’t be prosecuted as long as it doesn’t engage in the practices again for more than three years, and wasn’t required to plead guilty to the charges. The case was brought by federal prosecutors in Brooklyn, New York, and Washington who secured a $920 million fine against JPMorgan Chase & Co. last year, the largest…

Goldman Sachs CEO David Solomon Loses $10 million over 1MDB Fines

Corruption
Goldman Sachs’ chief executive David Solomon will get a $10m (£7.3m) pay cut for the bank’s involvement in the 1MDB corruption scandal. 1MDB was an investment fund set up by the Malaysian government that lost billions due to fraudulent activity. The global web of fraud and corruption led to a 12-year jail term for Malaysia’s ex-prime minister Najib Razak which he is appealing. Goldman Sachs called its involvement in the scandal an “institutional failure”. Goldman Sachs helped raise $6.5bn for 1MDB by selling bonds to investors, the proceeds of which were largely stolen. Prosecutors alleged that senior Goldman executives ignored…

What does the Biden Administration mean for FinCrime?

Financial Crime
January 20, 2021. Inauguration Day. The end of an era. Following four years under President Donald Trump, the United States will have a new president. What should we expect under the administration of President Joe Biden and Vice President Kamala Harris? Your answer to this question will likely depend on your top priorities. At FINTRAIL, we have been working to help our clients understand and prepare for any and all financial crime-related changes that are anticipated under the new administration. While some specifics are up in the air, it is clear that tackling illicit finance will be a top priority.…

UK Gambling Regulator Fines White Hat Gaming over Anti-Money Laundering Failings

Money Laundering
UK gambling regulators have reached a £1.3m settlement with licensee White Hat Gaming after the company’s approach to social responsibility (SR) and anti-money laundering (AML) was found wanting. On Thursday, the UK Gambling Commission (UKGC) announced the regulatory settlement with White Hat Gaming regarding its “inadequate” policies and procedures for identifying and managing customers deemed to be at a higher risk for problem gambling and money laundering. The shortcomings involved seven customers’ accounts at four White Hat sites – Grandivy.com, 21Casino.com, Hellocasino.com and Dreamvegas.com – that emerged following a March 2019 UKGC compliance assessment. The following January, the UKGC notified…

Fraud Epidemic ‘is now National Security Threat’

Fraud
This paper explores the impact of fraud on the UK’s national security landscape, and sets out the case for adopting a fundamentally different pathway for responding to the problem. Download the paper here (PDF) Fraud against UK citizens, businesses and the UK public purse has reached epidemic levels – it is the ‘volume crime of our time’. Driven in part by growing public disquiet over the current response to fraud, 2020 saw increased political attention on the issue. The prevailing political narrative, however, fails to convey the full impact of fraud on the UK, beyond the perspective of financial losses…

HMRC Issues Record £23.8m Fine for Money Laundering Breaches

Money Laundering
Money services business fined for flouting money laundering regulations. Today (7 January 2021), HM Revenue and Customs (HMRC) published the latest list of businesses handed fines for breaching strict regulations aimed at preventing criminals from laundering illicit cash. The list includes money transfer company MT Global Limited, which has been handed the largest ever fine issued by HMRC, for significant breaches of the regulations between July 2017 and December 2019 relating to: risk assessments and associated record-keeping policies, controls and procedures fundamental customer due diligence measures Nick Sharp, Deputy Director of Economic Crime, Fraud Investigation Service, HMRC, said: “Businesses who…

Time for a Free Public Registry of Corporate Beneficial Ownership in the U.S.

Money Laundering
In the tumult of recent weeks, a major legislative milestone in the American fight against kleptocracy has sneaked by almost unnoticed. It demands our attention, especially because its work is only half done. On Jan. 1, the Corporate Transparency Act (CTA) was signed into law, when Congress overrode then-President Donald Trump’s veto of the National Defense Authorization Act, to which it was attached. The CTA mandates that the incorporators of new corporations or limited liability partnerships will have to file annually to the Financial Crimes Enforcement Network of the Department of the Treasury (FinCEN), listing the names, dates of birth,…

A Renewed Sanctions Strategy for the EU

Sanctions
Last week the European Commission released a communication on the future of Europe’s economic and financial system. This document, formally issued to European institutions including the Parliament, the Council and the Central Bank, places sanctions at the forefront as a key tool in the Commission’s strategy, especially when seen in contrast with previous publications of this type. The Commission’s ambition for the economic and financial system relies on a vision for “openness, strength and resilience”, based on three pillars: “Promoting a stronger international role of the Euro” “Further developing EU financial market infrastructures and improving their resilience, including towards the…