Month: September 2022

Wined and Fined: OFSI Imposes Financial Penalty on UK Company for Publicising Sanctioned Crimean Winery

Regulatory Fines, Sanctions
The UK Office of Financial Sanctions Implementation (OFSI) announced on 27 September that it imposed a £30,000 penalty on UK company Hong Kong International Wine and Spirits Competition Ltd (HK Wine & Spirits) for breaching UK financial sanctions regulations.[1] This is the second monetary penalty OFSI imposed this year, following a £15,000 fine against Tracerco Limited in June. HK Wine & Spirits received three payments and 78 wine bottles from Massandra, a Crimean winery, for entry into its 2017, 2018, 2019 and 2020 competitions. Massandra is a designated entity subject to EU Regulation 269/2014 (the “Regulation”), which was introduced in…

AML efforts of European banks hampered by deficient on-boarding

KYC, Money Laundering
The anti-money laundering efforts of European banks is being hamstrung by failures to manage key customer data and perform proper due diligence, regulators say Banks’ failure to collect know-your-customer (KYC) data and their tendency to manage high-risk customer due diligence manually are hampering their anti-money laundering (AML) efforts, according to regulators in the United Kingdom. Further, many banks’ assessment of financial crime risk has also been found to be inadequate. Some UK banks, are failing to collect customer information such as income and occupation details. In some cases, customer risk assessment frameworks are underdeveloped or non-existent, which translates into poor…

Deutsche Bank in $26.3 million shareholder settlement over Epstein, Russian oligarch ties

Money Laundering, PEPs
Deutsche Bank AG agreed to pay $26.25 million to settle a U.S. shareholder lawsuit accusing the German bank of lax oversight while doing business with risky, ultra-rich clients like Jeffrey Epstein and Russian oligarchs. The preliminary all-cash settlement filed on Friday in federal court in Manhattan requires approval by U.S. District Judge Jed Rakoff, who in June allowed the proposed class action to proceed. Shareholders led by Yun Wang, who traded Deutsche Bank stock in 2018 and 2020, claimed that the bank had known its know-your-customer and anti-money laundering controls were ineffective, and that its share price fell as problems…

More questions than answers? The EU’s new anti-money laundering authority

Money Laundering, Regulation
The EU is set to establish a new Anti-Money Laundering Authority next year. Sebastian Diessner writes that while the new authority is a step in the right direction, there remain more questions than answers over how it will function and where it will be based. Until recently, the question of who is in charge of cracking down on money laundering in Europe should arguably have been answered with: ‘the US’. After all, it has been the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN) that has acted as the sheriff in terms of discovering and penalising major scandals among European…

London council could seize oligarchs’ homes for affordable housing

Asset Seizure, Sanctions
Homes acquired with “dirty money” in the richest parts of London could be seized and turned into affordable housing under plans to crack down on oligarchs using Belgravia, Knightsbridge and Mayfair “to rinse their money”. Labour-controlled Westminster city council is examining the use of compulsory purchase orders in extreme cases where it finds properties are not being used for their stated purpose, as part of a push to “combat the capital’s reputation as the European centre for money laundering”. The plan faces obstacles including a lack of transparency over property ownership and a shortage of checks on the registration of…

Russia to Legalise use of Cryptocurrency in International Trade

Digital Currencies, Regulation
The Bank of Russia and the country’s Ministry of Finance have reconsidered their positions toward cryptocurrency, acknowledging it to be necessary to legalize the use of cryptocurrencies in cross-border settlements, per a report by local news outlet TASS. According to TASS, the two government bodies have agreed that “it is impossible” to continue without enabling cryptocurrency as a legal payment method for international trade. The move comes as Russia dabbles on how to best regulate the Bitcoin and cryptocurrency markets. Swamped in Western sanctions, the world’s largest country has sought alternatives to the U.S. dollar so as to guarantee the…

Auditors Expose 9,800 Ghost Workers in Zambian Government Ministries

Corruption, Fraud
The audit of government payroll by Zambia’s Office of the Auditor General published this week reveals a series of grave misuse of public money including that in 2017-2021, ministries paid more than US$45 million in regular salaries to 9,800 apparently non-existent individuals. “As of July 31, the institutions had not accounted for the officers in that they were not known,” said the audit. “They are names included on a payroll who for one reason or another do not exist,” Laura Miti, Executive Director of Alliance for Community Action, Zambia’s public accountability NGO, told OCCRP. “It could be that they have…

Australia Police Form Digital Asset Unit Amid Rising Crypto Money Laundering Cases

Digital Currencies, Money Laundering
The Australian Federal Police (AFP) has set up a new unit dedicated to cracking down on digital asset-related crime. The AFP has been cracking down on digital asset money laundering and other related crimes for years now. However, these activities have not been coordinated by one unit, which would make them more efficient, AFP’s criminal asset confiscation command Stefan Jerga told the Australian Financial Review. “The environment was such that we felt a standalone team [was required], rather than a lot of officers picking up some of this skill set as part of their overall role. So we’ve now got…

Biden White House Just Put Out a Framework on Regulating Crypto

Digital Currencies, Regulation
The Biden White House has just released its first-ever framework on what crypto regulation in the U.S. should look like — including ways in which the financial services industry should evolve to make borderless transactions easier, and how to crack down on fraud in the digital asset space. The new directives tap the muscle of existing regulators such as the Securities and Exchange Commission and the Commodity Futures Trading Commission, but nobody’s mandating anything yet. The long-awaited direction from Washington has, however, captured the attention of both the crypto industry as a whole — and of investors in this nascent…

New crackdown on fraud and money laundering to protect UK economy

Fraud, Money Laundering
The Economic Crime and Corporate Transparency Bill will strengthen the UK’s reputation as a place where legitimate businesses can thrive while driving dirty money out of the UK. Through the reforms, anyone who registers a company in the UK will need to verify their identity, tackling the use of companies as a front for crime or foreign kleptocrats. The reforms to Companies House – its biggest upgrade in 170 years – will also see the organisation armed with new powers to check, challenge and decline incorrect or fraudulent information, making it a more active gatekeeper over company creation. The investigation…

Money laundering: new Bill to give SRA more power to fight economic crime

Money Laundering, Regulation
As the perpetual war on economic crime continues to be waged, a new Bill introduced into the House of Commons on 22nd September could be set to offer much needed reinforcements to solicitors’ regulators. The government’s Economic Crime and Corporate Transparency Bill 2022 – dubbed the “Economic Crime Bill 2.0 by the Law Society – aims to give the Solicitors Regulation Authority (SRA) greater powers on economic crime disciplinary matters. “We are pleased the UK government is introducing a second Economic Crime Bill, with the express provision of stopping money laundering in the UK,” said Law Society president I. Stephanie…

Betfred’s Owner Faces £2.87-Million UKGC Fine Due to Anti-Money Laundering and Social Responsibility Failings

Money Laundering, Regulatory Fines
The UK Gambling Commission (UKGC) announced that Petfre (Gibraltar) Limited is set to pay a monetary penalty worth £2.87 million as a result of violations of some anti-money laundering and social responsibility rules. The gambling company, which operates betfred.com and oddsking.com betting platforms is also set to receive an official warning for failures in its business. As a result of a review that the country’s gambling regulator carried out in the company’s operations, it was found there were several breaches of anti-money laundering and social responsibility regulations in the period from October 2019 and December 2020. The Gambling Commission revealed…

Oracle to Pay SEC $23 Million Over Foreign Bribery Allegations

Bribery, Regulatory Fines
Oracle Corp. has agreed to pay $23 million to resolve allegations that it used slush funds to bribe foreign officials in return for business, the U.S. Securities and Exchange Commission said Tuesday. The regulator claims Oracle subsidiaries in Turkey, the United Arab Emirates and India created the slush funds between 2016 and 2019. In addition to bribery, the Turkey and U.A.E. subsidiaries also used the slush funds to send foreign officials to tech conferences, and in some cases, have their families accompany them to conferences or take side trips to California, according to the agency’s order. Without admitting or denying…

EU to hit Russian steel, IT industry with sanctions, but spare diamonds

Sanctions
The European Union is aiming to ban imports of several steel products from Russia and outlaw the export of certain semiconductors to Russia, according to the European Commission’s latest sanctions proposal, seen by POLITICO. One item left off the list, however, is Russian diamonds — an omission that will make Belgium and its robust diamond industry happy. Instead, the Commission wants to bar the import of “certain elements used in the jewellery industry such as stones and precious metals.” It also wants to sanction Alrosa, Russia’s largest diamond mining firm. The draft text, which the Commission presented to EU ambassadors…

Danske Bank fined €1.82m for AML failures by the Central Bank of Ireland

Money Laundering, Regulatory Fines
On 13 September 2022, the Central Bank of Ireland (the Central Bank) reprimanded and fined Danske Bank A/S, trading in Ireland as Danske Bank, €1,820,000 pursuant to its Administrative Sanctions Procedure for three breaches of the Criminal Justice (Money Laundering & Terrorist Financing) Act 2010, as amended (the CJA). The three CJA breaches stem from the failure by Danske Bank A/S (Danske) to ensure that its automated transaction monitoring system monitored the transactions of certain categories of customers of its Irish branch1, for a period of almost nine years, between 2010 and 2019. The root cause of this failure was…

France initiates new Crypto bill to allow the seizure of assets

Asset Seizure, Digital Currencies
Authorities in France have proposed a new crypto bill that will allow the seizure of digital assets belonging to criminals. With this bill, any investor involved in illicit activities through their accounts is at risk of forfeiting their assets to the authorities. The bill has now been presented for deliberation at the house level. France President Emmanuel Macron’s decision to introduce this new bill is similar to the effort unfolding in the United Kingdom. UK newly elected prime minister Liz Truss has vowed to carry on with his predecessor’s plans to expand authority to seize and recover crypto assets. Recall…