Month: February 2021

The Challenges of Combating Money Laundering in a Pandemic World

Money Laundering
By Adriana Babi – Compliance Researcher and member of OAB Compliance Commission In a pandemic scenario full of uncertainties, efforts are directed towards the pursuit of normality, and what we know is that for some time to come, we will live this “new normal”, but how to conceptualize the current reality in the perspective of combating Money Laundering and Financing of Terrorism (LD / FT)? In general terms, money laundering consists of transforming resources obtained illegally into lawful resources. In Brazil, the crime of money laundering is regulated by Law 9,613, of March 1998, whereas terrorism consists of the practice…

Implications of the Anti-Money Laundering Act (2020) for FinTechs

Money Laundering
By Jeff Horvath, Co-Founder and CEO, DigiPli The Anti-Money Laundering Act of 2020 (AMLA 2020) became law in early January, with major implications across institutional finance, including FinTechs. It introduced the biggest changes to the AML regime since the PATRIOT ACT of 2001 and was passed with strong bipartisan support. The Act remediates certain weaknesses in existing AML requirements, addresses new issues arising from advances in the financial markets and technology, and enhances regulatory coordination. FinTechs with US operations should closely analyze AMLA 2020, as it will require both changes to their AML programs and controls, and impact how they…

Anti-Slavery Commissioner publishes recommendations for the Financial Industry

Slavery
Written by Latham & Watkins LLP, co-author Sabina Aionesei The report’s recommendations cover a number of areas, including culture and strategy, monitoring and reporting, investor engagement, policy formation and employee training, and philanthropy. A new report from the UK Independent Anti-Slavery Commissioner draws attention to how the financial services industry can help address the issue of modern slavery. The report, “Preventing Modern Slavery & Human Trafficking: An Agenda for Action across the Financial Services Sector” (the Report), aims to sound “a call to action for the industry”. The Report, which was released on 18 January 2021, is the result of…

Capital One: What its US$390m fine tells us about AML Regulation

Money Laundering, Regulatory Fines
The Financial Crimes Enforcement Network, or FinCEN, announced in January 2021 that Capital One would be required to pay a hefty $390 million penalty for AML violations under the Bank Secrecy Act (BSA). The bank admitted to wilfully failing to implement and maintain effective AML procedures to guard against money laundering, also failing to file thousands of Suspicious Activity Reports (SARs) and Currency Transactions Reports (CTRs) with respect to its Cash Checking Group business unit. The violations occurred from (at least) 2008 – 2014, seeing millions of dollars in suspicious transactions go unreported and therefore laundered through the bank into…

Anti-money laundering rules to fight the culture of secrecy

Money Laundering
The new rules state that art and antique dealers in the United Kingdom and the European Union now have to notify the true recipients of their sales. Will the new anti-money laundering regulations improve the culture of secrecy deeply rooted in the art market? In society, it advocates ancient customs of commodity and body discretion that foster transactions. Collectors have long appreciated the secret wealthy, which is also part of the mysterious universe of auction houses. When a Botticelli bottle was auctioned last month for $ 92 million at Sotheby’s in New York, it was speculated that the buyer was…

Finance industry and police team up to stop over £45 million of fraud in 2020

Fraud
Staff working in bank, building society and post office branches stopped £45.3 million of fraud through the Banking Protocol in 2020. The scheme has prevented victims from losing £142 million of fraud and led to 843 arrests since its launch. Over 7,800 emergency calls were made last year, protecting customers from losing an average of £5,749 each to criminals. Branch staff at banks, building societies and Post Offices worked with the police to stop £45.3 million of fraud through the Banking Protocol rapid scam response last year, bringing the total amount of fraud prevented to £142 million since the beginning…

Crown Resorts chief Ken Barton resigns amid money laundering scandal

Money Laundering
The chief executive of Australian casino group Crown Resorts has quit amid a scandal over money laundering allegations within its casinos. Ken Barton’s departure follows that of several other company directors. Last week an inquiry found Crown was not fit to hold a gaming licence in New South Wales, meaning it cannot operate its newly built casino in Sydney. The report has also thrown doubt over Crown’s casinos in other cities. Crown, which is majority-owned by Australian billionaire James Packer, has been dogged by allegations of illegal activity for years at its casinos in Melbourne and Perth. Its operations overseas…

New U.S. Financial Crimes rules intensify risks for non U.S. banks

Money Laundering
Fitch Ratings-Stockholm/London/New York-24 February 2021: Significant revisions to US anti money-laundering (AML) rules intensify financial crime risks for non-US banks by increasing the scope of potential investigations by the US government and raising financial penalties, according to Fitch Ratings. Any weaknesses in governance could be ratings relevant but increased enforcement raises the potential for sanctions and fines that can have more meaningful consequences for ratings. Lower tolerance of governance failures from a wide range of stakeholders reinforces Fitch’s view that governance and financial crimes risks, along with associated penalties and indirect business costs, are becoming more punitive for banks globally.…

Biden in no rush to lift Venezuela sanctions

Sanctions
WASHINGTON (Reuters) – President Joe Biden’s administration is in “no rush” to lift U.S. sanctions on Venezuela but would consider easing them if President Nicolas Maduro takes confidence-building steps showing he is ready to negotiate seriously with the opposition, a White House official told Reuters. Signaling that the new U.S. president may be unlikely to loosen the screws on Venezuela anytime soon, the official emphasized that existing sanctions have enough special provisions to allow for humanitarian aid shipments to help Venezuelans cope with economic hardships and the COVID-19 pandemic. But the official, speaking on condition of anonymity, said Maduro’s Socialist…

Jersey firms fined for breaching financial crime measures

Money Laundering, Regulatory Fines
Three banking firms have been fined more than £700,000 for breaching anti-money laundering regulations. A Jersey Financial Services Commission (JFSC) investigation found the SGKH entities had failed to show “adequate risk management systems in place”. It included missing minutes from board meetings and a failure to notify the JFSC when rules were breached. The commission said it intended the fines to act as “a deterrent for all regulated businesses”. SGKH Bank, SGKH Trust and SGKH Corporate provide wealth management services from Jersey and form a sub-group of the UK regulated SG Kleinwort Hambros Bank. Between 1 January 2018 and May…

Frankenstein fraud, deepfakes & replay attacks

Fraud
Online fraud has accelerated during the coronavirus pandemic, meaning organisations must be more vigilant in the face of the seemingly ever-increasing threat and its impact on business The coronavirus pandemic has had a big impact on many areas of our lives, not least our relationship with the office. Organisations have had their hands forced when it comes to accelerating digital transformation, while digitally identifying and onboarding both customers and employees has pulled focus on the digital identity sector. It’s good news for digital ID specialists, but the flipside is it’s also a huge opportunity for cybercriminals engaging in identity fraud.…

Europe’s new AML rules will include provisions to report on crypto-to-crypto transactions for the first time

European Commission, Money Laundering
EUROPE’S new AML rules will include far closer scrutiny of crypto exchanges, we can reveal. Right now exchanges must only report currency to crypto transactions. Under new rules to be announced within weeks, the exchanges will also be obliged to report on crypto to crypto transactions, AML Intelligence has learned. The changes will be part of the European Commission’s announcement of the rollout its AML Action Plan. The move to demand reports of crypto to crypto transfers was welcomed today by Pawel Kuskowski CEO of crypto AML/KYC compliance company, Coinfirm. “I think this is critical to have crypto to crypto…

Universities are leaving themselves open to money laundering by accepting cash

Money Laundering
It is a sign of how narrowly we perceive the threat posed by money laundering that the problem is too often framed around taxi companies, car washes, and less than reputable property developers. But in reality, the conduits for this global scourge are increasingly complex, and we should not pretend that our lauded education system is somehow immune. A startling investigation by the Times newspaper found that at least 49 universities across the UK have accepted more £50 million in cash payments over the past five years for tuition, accommodation, and other course fees. Those who received the banknote payments…

UK’s SFO slapped down over attempts to flout jurisdiction rules

Serious Fraud Office
In another blow to the agency’s credibility, the U.K.’s Serious Fraud Office (SFO) cannot attempt to force foreign companies to hand over evidence held overseas, according to a recent court ruling. The U.K.’s Supreme Court ruled unanimously the SFO breached its authority when it attempted to compel U.S. engineering services company KBR—whose British subsidiary is under investigation for possible bribery and corruption offenses—to supply documents held outside the United Kingdom or face criminal sanction. Lawyers criticize what they see as another example of the SFO’s heavy-handedness to secure results—in this case by trying to use powers it never had in…

Dubai’s DFSA fines former DIFC employee US$165,000

Money Laundering, Regulatory Fines
The Dubai Financial Services Authority (DFSA) has levied a fine of $165,000 against Ashish Bhandari – a former relationship manager with a private bank in Dubai International Financial Centre (DIFC) – due to his involvement in breaches of anti-money laundering regulations. The authority has also restricted him from performing any function in connection with the provision of financial services in or from the DIFC. On September 17, 2020, the DFSA decided to take enforcement action against Bhandari for being knowingly involved in breaches of Anti-Money Laundering (AML) legislation from 2011 to 2013 and for obstructing the DFSA in 2017 and…

Four nations including Morocco and Cayman Islands added to FATF ‘grey list’

FATF, Money Laundering
Four nations have been added to the Financial Action Task Force ‘grey list’ following an extensive 3-day virtual summit. The first FATF plenary of 2021 wrapped up Thursday with the announcement that the Cayman Islands, Morocco, Burkina Faso and Senegal were now on the ‘list of jurisdictions under increased monitoring’ – joining fifteen other territories already there. While by no means a ‘do-not-approach’ list, it does highlight jurisdictions that have identified gaps in their AML frameworks and committed to working with FATF to resolve them. All four countries will now be subject to periodic assessment going forward as they work…

Malaysia’s AmBank agrees to $700m settlement for role in 1MDB scandal

Money Laundering, Regulatory Fines
Malaysian banking group AMMB Holdings Berhad (AmBank) said on Friday it will pay the government 2.83 billion ringgit ($699 million) to settle claims linked to a massive financial scandal at state fund 1MDB, a hefty payment that is expected to have a material impact on the group’s earnings. AmBank Group has been under scrutiny over its role in the alleged theft of $4.5 billion from 1Malaysia Development Berhad, a state fund former prime minister Najib Razak set up in 2009. Last year, Najib was found guilty of corruption and money laundering over the transfer of millions of dollars linked to…