Month: July 2023

Federal Reserve Board Announces Two Enforcement Actions Against Deutsche Bank AG

Money Laundering, Prosecutions, Sanctions
The Federal Reserve Board on Wednesday announced two enforcement actions against Deutsche Bank AG, its New York branch, and other U.S. affiliates. First, the Board issued a consent order and a $186 million fine based on unsafe and unsound practices and violations of the Board’s 2015 and 2017 consent orders with Deutsche Bank relating to sanctions compliance and anti-money laundering controls. The Board found that Deutsche Bank made insufficient remedial progress under the 2015 and 2017 consent orders and had deficient anti-money laundering internal controls and governance processes relating to its prior relationship with the Estonian branch of Danske Bank.…

Ukrainian Grain Exported Through Tax Avoiding Shell Firms

Tax Avoidance
Reporters looked into who imported millions of euros of Ukrainian “black grain” into the European Union. They found liquidated companies, proxies — and multinational agribusiness giants. Key FindingsUkraine is investigating hundreds of firms, many created since Russia’s full-scale invasion scrambled the grain market, for allegedly failing to properly document their trading in Ukrainian grain or to pay taxes on it.Some of the EU companies that imported this grain from Ukraine raise serious questions themselves.Several had been ordered shut down by Hungarian authorities but continued trading. Some of the men listed as their owners and directors were patients in psychiatric hospitals;…

Sri Lanka Passes Anti-Corruption Bill as Part of IMF Bailout Plan

Corruption, Legislation
Sri Lanka’s Parliament has approved an anti-corruption bill, aimed at improving governance in the crisis-hit country and meeting requirements linked to a $2.9bn bailout from the International Monetary Fund (IMF). The legislation was passed on Wednesday without a vote in the 225-member house. “The bill is passed with amendments,” Sri Lanka Parliament Speaker Mahinda Yapa Abeywardena told lawmakers after more than two dozen pages of amendments were included in the draft legislation during the morning session. Sri Lanka’s economy nosedived into the worst financial crisis in more than 70 years after a severe foreign exchange crunch last year forced the…

Barclays Wins U.K. Supreme Court Case Over Push Payment Fraud

Fraud
BARCLAYS today (Wednesday) won a UK Supreme Court appeal that turned on the extent of banks’ duties to protect customers from fraudsters, in a closely watched decision lawyers say could stem a flood of litigation. Fiona Philipp, a music teacher and long-time customer, sued the bank in 2020 after she was tricked into transferring 700,000 pounds ($906,000) to accounts in the United Arab Emirates (UAE) in an elaborate so-called authorised push payment (APP) fraud. Such scams have become Britain’s largest type of payment fraud and cost customers 583 million pounds ($752 million) in 2021, a rise of 39% on 2020,…

New UK Law Withholds Legal Services From Any Future Dealings with Russia

Sanctions
The U.K. government expanded Thursday the penalties imposed on individuals and entities linked to the Russian regime, declaring that they may no longer access legal expertise within Britain for economic benefit. In an effort to further deter Russia’s elite and powerful from contributing to President Vladimir Putin’s war chest, the U.K. declared that, going forward, wealthy Russian individuals and entities can no longer seek legal advice as a means to circumvent sanctions or otherwise conduct business.As Putin’s full-scale invasion of Ukraine has raged on for almost 18 months now, the British government has cracked down with 19 billion pounds (US$24…

Labour Will Back Global Anti-Corruption Court

Bribery, Corruption
Labour will restore the UK’s tarnished global reputation by backing a global anti-corruption court and by reinstating a requirement to follow international law in the ministerial code, the shadow foreign secretary will say in a speech on Monday. David Lammy says the measures will restore the country’s reputation for keeping its word, as well as going some way to undo the damage caused by Conservative party scandals in recent years. In a speech to the Bingham Centre, he will say international law is “the connective tissue which binds us to other nations”, but has been treated with a cavalier disrespect…

UK Gambling Operator Betfred Must Pay £3.25m for AML and Social Responsibility Failings

Money Laundering, Prosecutions
BRITISH gambling operator Betfred has been told to pay Stg£3.25M by the industry regulator after AML and social responsibility failures. The Gambling Commission said Betfred, registered as Done Bros (Cash Betting) Limited, breached licence conditions between January 2021 and December 2022. The firm runs 1,750 high street betting shops, as well as a website and an app. The Gambling Commission investigation found Betfred had insufficient controls in place to protect new customers, or to monitor “high velocity spend” and duration of play. Its AML failures included: poor record keeping and its financial alerts (thresholds) were set too highfailing to consistently…

German Regulator Extends Anti-Money Laundering Measures at N26 Amid Ongoing Compliance Concerns

Money Laundering, Prosecutions
N26, the German-based digital bank, is facing an extension of anti-money laundering (AML) measures imposed by the German regulator BaFin, as the watchdog continues to express concerns over the bank’s compliance controls. The extension comes after BaFin had fined N26 €4.25 million in 2021 for lax money laundering controls and had subsequently imposed a temporary cap on the number of new customers the bank could onboard each month. The temporary cap, initially set at 50,000 new customers a month, will remain in place, and BaFin has taken additional steps to closely monitor the bank’s progress. An audit presence has been…

U.S. Sanctions Four Kyrgyz Companies for Evading Russian Sanctions

Sanctions
Just hours after Kyrgyzstan’s head of national security declared on Thursday that no company in his country has violated U.S. sanctions against Russia, the U.S. Treasury announced sanctions against four Kyrgyz firms for doing exactly that. “Neither the Kyrgyz state itself, nor any state structures and companies are involved in the violation of the regime of compliance with the sanctions restrictions imposed by the United States and Western countries in relation to Russia,” said Kamchybek Tashiev, the deputy head of the Cabinet of Ministers and the head of the State Committee for National Security in the morning.“Entities based in the…

Colombian president’s son arrested in money laundering probe

Money Laundering
The son of Colombian President Gustavo Petro has been arrested for money laundering and illicit enrichment by the country’s attorney general.Nicolas Petro, a politician in Atlantico province, was detained over allegations he was paid by drug traffickers to fund his father’s peace efforts and election campaign.He has denied the claims and welcomed the inquiry when it was launched. The younger Mr Petro’s ex-wife has also been arrested as part of the probe. President Petro, the country’s first left-wing leader, has denied taking money from Colombia’s drug traffickers and ordered prosecutors to investigate his son in March. Writing on social media…

Reform of the UK’s AML and CTF supervision regime

Regulation
HM Treasury is consulting on reforms to the UK’s anti-money laundering (AML) and counter-terrorist financing (CTF) supervision regime. Find out what changes are being proposed. The proposalsA 2022 review by HM Treasury found structural inconsistencies and weaknesses with the UK’s AML and CTF supervision regime. The UK government aims to reform the regime to increase its effectiveness and improve coordination across the system. Under the current regime, there are: three statutory supervisors:HM Revenue and Customs (HMRC)the Financial Conduct Authority (FCA)the Gambling Commission (GC)22 professional body supervisors that supervise the legal and accountancy sectorsHM Treasury proposes the following four models: OPBAS+The…

More than £36m in UK property seized in Riad Salameh money laundering probe

Money Laundering
The UK has been the prime location for the Salameh family’s property empire in Europe, with European investigators uncovering £36.5 million of real estate assets acquired between 2012 and 2020, which they believe were purchased with misappropriated funds. European judicial documents reveal, for the first time, how investigators managed to directly trace the source of the funds back to Forry Associates. Forry, the governor’s brother’s company, is suspected of having syphoned off public funds through undisclosed commissions received from Lebanese banks for financial instrument purchases, without providing any corresponding services. Documents seen by The National reveal that all these real…

UK Government Proposes New Rule Requiring Bank Account Closure Transparency

Regulation
The UK government has proposed new rules for banks requiring more transparency with account closures. Under the proposal, banks would be required to delay account closures by 90 days and provide a notice to customers explaining why their account is being closed. Currently, banks are only required to provide a 30-day notice period for account closures. This is the latest in a recent string of actions focused on consumer rights and protection in the UK, following The Financial Conduct Authority (FCA) ‘Dear CEO’ letter for payment companies and the UK Payment Systems Regulator (PSR) APP fraud reimbursement requirements. Still, some…

Has the Government forgotten about Serious and Organised Crime

Financial Crime
The threat from serious and organised crime is increasing year on year, yet an up-to-date articulation of the government’s strategic approach is missing in action. Five years ago, in November 2018, the UK’s newly published Serious and Organised Crime Strategy pledged to leave ‘no safe space’ for serious and organised criminals to operate. Promising a whole-system approach, the strategy was the first to set out how the UK would ‘mobilise the full force of the state, aligning our collective efforts to … disrupt serious and organised criminals’ as ‘one cohesive system’. Launching the strategy at the top of The Shard,…

EBA publishes fourth opinion on money laundering and terrorist financing risks across the EU.

Risk Assessments
The European Banking Authority (EBA) today published its fourth biennial Opinion on the risks of money laundering and terrorist financing (ML/TF) affecting the European Union’s financial sector. It also sets out what competent authorities and EU co-legislators can do to mitigate those risks. The EBA issues this Opinion against the background of a changed risk landscape, which has an impact on institutions’ anti-money laundering and countering the financing of terrorism (AML/CFT) compliance and competent authorities’ approaches to supervision. Examples include geopolitical events like Russia’s invasion of Ukraine and legislative developments, such as the publication of a comprehensive ‘AML Package’ and…

Director General Graeme Biggar launches National Strategic Risk Assessment

Risk Assessments
I am delighted to be here for my first public speech as Director General of the National Crime Agency. Thank you all for joining me today in person and online. INTRODUCTION The mission of the National Crime Agency is to protect the public from serious and organised crime. I want to start by paying tribute to the 5,500 officers in the Agency, each of whom, every day, bring their expertise and passion to reducing serious and organised crime, arresting the criminals behind it, and, with our partners, making the UK safer, on our streets, in our communities and online. We…

SFO seizes Sheffield flat linked to £17 million bribery in China

Bribery, Corruption, Uncategorized
Today at the High Court, the Serious Fraud Office (SFO) successfully recovered a property worth £200,000 and over £8,000 in rental profits from Dr Guang Jiang, an agent who helped British technology company Sarclad Ltd to pay bribes to secure business in China. The SFO’s 2013 investigation into Sarclad exposed how the company paid bribes to secure £17 million worth of contracts to provide technology services to steel production companies between 2004 and 2012. The majority of these corrupt contracts were facilitated by Dr Jiang, who acted as Sarclad’s agent in China. The company paid £6.5 million in penalties for…

Money laundering cash couriers smuggled millions in suitcases

Money Laundering
Six members of a money laundering network which smuggled more than £100m out of the UK to the UAE have been sentenced following an investigation by the National Crime Agency. Sentencing 12 07 23 From left to right: Muhammad Ilyas, Nicola Esson, Beatrice Auty, Jo Emma Larvin and Jonathan Johnson The network transported the cash to Dubai during 83 separate trips between November 2019 and October 2020, overseen by ringleader Abdullah Alfalasi, 48, who was jailed for more than nine years in July last year. The couriers, who were paid around £3,000 for each trip and would be booked on…

Gambling business Star Racing Limited fined £594,000

Money Laundering, Regulatory Fines
Gambling operator Star Racing Limited will pay a £594,000 penalty for anti-money laundering and social responsibility failures. The operator – trading as Star Sports – will also receive an official warning and have conditions added to its licence. Anti-money laundering failures included having ineffective policies, procedures and controls in place at the time of the compliance assessment; allowing customers to deposit large amounts before obtaining source of funds information and failing to analyse source of funds information when it was obtained. Social responsibility failures included not demonstrating an understanding of the impact and effectiveness of customer interactions in terms of…

FCA fines Bastion Capital limited £2.5m for serious financial control failings

Regulatory Fines
The FCA has fined Bastion Capital London Limited (in liquidation) £2,452,700 for serious financial crime control failings in relation to cum-ex trading. They failed to manage the risk of being used to facilitate fraudulent trading and money laundering. Between January 2014 and September 2015 Bastion executed trading to the value of approximately £49bn in Danish equities and £22.5bn in Belgian equities on behalf of Solo Group clients. The purported trades were carried out in a way that was highly suggestive of financial crime. The trading appears to have been carried out to allow the arranging of withholding tax reclaims in…