Author: gracechurchfcp

Recent AML Enforcement Trends in the U.K.

IntroductionThe UK has stepped up its anti-money laundering (AML) enforcement approach in recent months, both issuing larger fines and looking to expand the scope of activities it regulates. Historically, the UK has consistently taken a robust approach to AML, and post-Brexit, we expect this trend to continue, as the government works with other regulators internationally in combating cross-border economic crime. BrexitPre-Brexit, the UK adopted the European Union’s extensive AML framework. However, as of 31 December 2020, the onus is now on the UK to ensure that it keeps up to date with the latest international AML regulations and developments. The… Read More

FATF’s Proposed Updated Guidance for Cryptocurrency Regulation

On March 19, 2021, the Financial Action Task Force (FATF) released proposed updates to its 2019 guidance for how member jurisdictions should regulate and supervise the cryptocurrency ecosystem. If adopted by FATF and implemented by member jurisdictions, the new guidance would expand the definition of Virtual Asset Service Providers (VASPs) to include many non-custodial cryptocurrency businesses, making them subject to AML/CFT regulations. While Chainalysis is in favor of regulations that effectively prevent financial crime, we believe parts of the proposed guidance overreach by placing an unreasonable regulatory burden on new and emerging cryptocurrency markets where no evidence of criminal activity… Read More

The failure of ABN Amro and other systemic banks to control money laundering

Following several fines imposed by national regulatory authorities on banks such as ING and ABN Amro, the systemic banks started a KYC-race (Know Your Customer) to investigate “suspicious” transactions by looking into the history of account holders and shareholders of companies, the private expenses and possessions of shareholders and even the backgrounds of company’s clients. In this race, the banks have hired hundreds of controllers, who are equipped with a very menacing weapon, namely that of being able to block a company’s corporate bank account or even terminate the relationship. These controllers, often with little to no experience from the… Read More

Biden-Harris administration: 100-day review of Sanctions policy

When the Biden administration took office on 20 January 2021 it had already announced that there would be reviews of how the US deals with international partnerships. Under the previous administration the US had left the Paris accord on climate change and the World Health Organisation (WHO). Within a day of taking office the new administration set in motion the reversal of both the withdrawal from the Paris agreement and WHO membership. US secretary of the treasury Janet Yellen has said that one of her top priorities is to review the US use of sanctions as well as those that… Read More

Terrorists still raise money through crypto but the impact is limited

Evidence suggests crypto’s role in terrorism remains relatively minor: “It has not yet become a primary means of terror financing.” We’re living today “amidst an explosion of risk related to fraud, money laundering, terrorist financing, and data privacy,” said United States Treasury Secretary Janet Yellen in February — and she specifically cited cryptocurrencies as a “tool to finance terrorism.” Yellen appeared to be flagging an important new turn in the war against terror, and it begged some questions: Is crypto in the hands of terrorists a real, present danger to governments and society? If so, should the cryptocurrency and blockchain… Read More

U.K. money laundering enforcement – the political race to the bottom

The last three years have seen some seismic changes in both EU and UK anti-money laundering legislation along with related enforcement reporting initiatives. Updated Money Laundering Regulations were enacted in 2017. In early 2018, the Treasury set up a new body; the Office for Professional Body Anti-Money Laundering Supervision (OPBAS), to act as a ‘supervisor’ of AML supervisors with the responsibility for monitoring money laundering activity. 2018 also saw the first ‘Unexplained Wealth Order’ (UWO’s). The EU Parliament brought into force the sixth AML Directive with some stark changes to both penalties and reporting and data sharing policies. At first,… Read More

Council of Europe calls for stronger financial intelligence units

THE PARLIAMENTARY ASSEMBLY of the Council of Europe has criticised recent efforts to combat money laundering and terrorism financing and has stressed that financial intelligence units must be strengthened. In a resolution adopted in last month and announced Tuesday, the Parliamentary Assembly has invited all member states of the Council of Europe to improve their national FIUs and bring them more in line with the standards of the Financial Action Task Force, and its own FinCrime watchdog – MONEYVAL. The Parliamentary Assembly is a CoE body composed representatives elected to the national parliaments of its member states. It is entirely… Read More

London used as ‘money-laundering base’, mafia trial prosecutor says

In Italy’s largest mafia trial in three decades, the UK’s capital has been roped in as a potential hotspot for organised crime, particularly post-Brexit. The trial will see around 900 witnesses testify against more than 350 ’Ndrangheta defendants, including politicians and officials charged with being members of Italy’s most powerful criminal group. Defendants are set to respond to charges of money laundering through companies set up in the UK, with the alleged purpose of mimicking lawful economic activity. “’Ndrangheta interests in the UK have figured prominently as clans have used the country as an investment and money-laundering base,” the prosecutor… Read More

Law profession has struggled with AML rules, says firm fined £10,000

A Surrey law firm has been fined £10,000 for breaches of the anti-money laundering rules in its training, approach to risk assessment and in a conveyancing transaction which produced £850 in fees. QualitySolicitors Brett Holt accepted the fine by reaching an agreement with the Solicitors Regulation Authority (SRA) but said that a “significant proportion” of law firms had “struggled to achieve compliance” with the 2017 Money Laundering Regulations. In the agreement, approved by the Solicitors Disciplinary Tribunal, Brett Holt accepted that in a property transaction in late 2017 it failed to undertake identity checks and retain copies of address verification… Read More

Former Netflix executive convicted of fraud after orchestrating more than $500,000 in bribes and kickbacks

Ex-Netflix IT chief Michael Kail on Friday was convicted of 28 counts of fraud and money laundering. Kail created a “pay-to-play” scheme, taking bribes and kickbacks from tech startups hoping to do business with Netflix. Kail, who was indicted in 2018, must also forfeit a Los Gatos home he purchased with the funds. Former Netflix vice president of IT Michael Kail was convicted by a federal jury on Friday of 28 counts of fraud and money laundering, the US Department of Justice announced in a press release. Kail, who was indicted in 2018, used his position to create a “pay-to-play”… Read More

Biden was tough on drugs for decades. Now he faces challenges in fighting money laundering

WASHINGTON — Decades ago, then-Sen. Joe Biden established himself as a sort of drug czar on Capitol Hill. In the 1980s, he helped launch the Office of National Drug Control Policy. And a decade later, Biden became one of the masterminds behind Plan Colombia, a $7.5 billion bilateral program focused on, among other things, fighting drug trafficking in the Americas. While running for president, he vowed to enforce “sanctions on international actors engaged in the trafficking of illicit drugs,” and Congress gave him a stronger anti-money laundering law that could help achieve that goal. But with the emergence of new… Read More

New Magnitsky style sanctions regime will strengthen Britain’s toolkit for tacking global corruption and dirty money

Transparency International UK welcomes the announcement of a new corruption sanctions regime by Foreign Secretary Dominic Raab. The new regime gives Britain the power to designate individuals and companies involved in serious corruption around the world, adding another option to the UK’s growing array of sanctions for corruption offences. The UK Government has published an initial list of 22 designated persons who are the first targets of the regime. Those that are designated will have their British assets frozen and be banned from travelling to the UK. The regime is international in scope, enabling the UK to align itself with… Read More

Fighting fraud during the pandemic

The City of London Police are the national policing lead for fraud and run Action Fraud and the National Fraud Intelligence Bureau. Action Fraud has received 6,073 reports of coronavirus related fraud and cyber crime since 01 March 2020, resulting in losses of £34.5m. Dedicated national fraud units have made over 150 arrests and taken down over 2,000 websites, phone numbers and email addresses linked to frauds since the pandemic began. The City of London Police has arrested 156 criminals believed to have been committing fraud during the national restrictions imposed as a result of the coronavirus pandemic. Data released… Read More

Ireland stops anonymity in trading of cryptocurrency

BUYERS and sellers of Bitcoin and other cryptocurrencies are no longer able to trade virtual assets anonymously in Ireland under an expanded anti-money laundering regime. As of today, cryptocurrency service providers in Ireland will have to comply with money laundering rules and other basic regulations for the first time. This means that they must register with the Central Bank and carry out due diligence on their customers, which entails accounting for the origin and destination of client assets. The Central Bank has warned all companies that exchange or transfer virtual assets like Bitcoin, as well as those that provide financial… Read More

FCA has increased surveillance over last 12 months

The Financial Conduct Authority (FCA) has highlighted the importance of anti-money laundering (AML) and said that it has increased its surveillance. Two of its biggest sanctions in the last 12 months related to failures to address financial crime and AML risks. Speaking at the AML & ABC Forum 2021, Mark Steward, executive director of enforcement and market oversight at the FCA, said that the City regulator currently has 42 AML investigations ongoing – 25 into firms and 17 against individuals. These involve, for example, systems and controls over politically exposed persons, customers with significant cash-intensive operations, correspondent banking and trade… Read More

The fight against offshore financial crime will be a long campaign

On the fifth anniversary of the Panama Papers’ launch, experts say there’s been progress in the fight against dirty money — but much more is needed. In May 2016, weeks after hundreds of journalists released the Panama Papers’ massive exposé of the secret financial dealings and hideaways of politicians, fraudsters and celebrities, a group of world leaders — embarrassed, outraged or knowing a good media opportunity when they saw one — met in London to denounce the global flood of dirty money. British Prime Minister David Cameron, Nigerian President Muhammadu Buhari, Emirati deputy foreign minister Anwar Gargash and others signed… Read More

What Is a Company Formation Agent?

Put simply, a formation agent is a company that creates other companies on behalf of clients around the world. The process is quick, easy, and remarkably cheap. Although many turn to formation agents for legitimate business reasons, illicit actors might seek out their services to dodge taxes, hide their ownership of high-value assets, or squirrel away dirty money. It’s no coincidence that these firms are exceptionally popular in tax havens and financial secrecy jurisdictions. Even a cursory internet search turns up an abundance of eager firms in Belize, Panama, Luxembourg, Liechtenstein, Cyprus, Seychelles, Malta, the Cayman Islands, and the British… Read More

UK Sanctions 22 Individuals for ‘Serious International Corruption’

The U.K. government has imposed asset freezes and travel bans against 22 individuals from six countries in its first set of measures under the nation’s new Global Anti-Corruption sanctions regime. The move, announced this week, seeks to “prevent those responsible from entering the U.K. or laundering their ill-gotten assets here,” and “ensure that the U.K. is not a safe haven for those involved in serious corruption, including those who profit from it,” Foreign Secretary Dominic Raab wrote in a statement delivered to Parliament on Monday. The first group of individuals sanctioned under the new regime hail from Russia, South Africa,… Read More

Concern over corruption red flags in 20% of U.K.’s PPE procurement

Full transparency over ‘vip’ lane and scrutiny of high-risk contracts essential to restore public trust April 22, 2021 – The way the UK Government handled bids for supplying personal protective equipment (PPE) and other COVID-19 response contracts appears partisan and systemically biased in favour of those with political access, new research from Transparency International UK finds. Read the report. Launched today, Track and Trace is the most comprehensive study to date of public procurement during the pandemic and involved a painstaking review of nearly 1,000 contracts worth a total of £18 billion. The report details how critical safeguards designed to… Read More

Explaining the U.K.’s “Unexplained Wealth Order”

Leaders of organized criminal groups, dictators who steal from their people, crooked officials, and other shady characters have become adept at hiding their millions in Western capitals. The convoluted corporate networks, hidden bank accounts, and sophisticated proxy schemes that underlie these financial flows are largely beyond the grasp of all but the most dedicated specialists. But there’s one sector where the corruption takes physical form, turning cities like London into virtual showcases of tainted foreign wealth: Real estate. Sherlock Holmes’ iconic address on Baker Street is owned by structures connected to the daughter of former Kazakhstani dictator Nursultan Nazarbayev. In… Read More

Ireland to enforce AML checks for digital currency firms from April in line with 5AMLD

Ireland will impose anti-money laundering (AML) and countering the financing of terrorism (CFT) requirements for digital currency firms starting April 2021. With the new regulations, the Irish central bank will have more oversight over the industry. Buyers and sellers of digital currencies will no longer be able to transact anonymously, local daily Irish Independent reports. Digital currency firms, also known as virtual asset service providers (VASPs), will now have to complete due diligence on their clients. This is after the European nation adopted the EU’s Fifth Anti Money Laundering Directive (5AMLD). 5AMLD is the EU’s latest legal framework for combating… Read More

Cyprus to lift veil of secrecy with register of company owners

NICOSIA (Reuters) – Cyprus plans to launch a register in coming months identifying the owners of thousands of companies on the island, lifting a veil of secrecy on opaque and complex corporate structures that campaigners say can help criminals seeking to hide their loot. Details of thousands of companies domiciled on the island, many thought to have Russian links, will be collected from March 16 to be entered in a so-called Ultimate Beneficial Owner (UBO) register. Supporters say the register, a requirement of European Union anti-money laundering (AML) regulations, could be a game changer for Cyprus, which activists say has… Read More

John McAfee charged with securities fraud for ‘pump and dump’ cryptocurrency scheme

John McAfee has been charged with securities fraud over a “pump and dump” cryptocurrency scheme. Federal prosecutors unsealed a case against McAfee and his executive advisor and bodyguard Jimmy Gale Watson Jr., claiming the pair earned nearly $2 million by urging Twitter followers to invest in cryptocurrencies like Reddcoin and Dogecoin, then selling off their own holdings as the price rose. “McAfee and Watson exploited a widely used social media platform and enthusiasm among investors in the emerging cryptocurrency market to make millions through lies and deception,” said US Attorney Audrey Strauss in a statement. “The defendants allegedly used McAfee’s… Read More

Wealthy countries that set global tax rules are biggest enablers of corporate tax abuse

Tax Justice Network ranks OECD members and British overseas territories highest in its 2021 corporate tax haven index, advocating for the UN to set standards instead. The world’s wealthiest countries that help set global tax standards are actually responsible for the majority of corporate tax abuses around the world, a new report has found. The Tax Justice Network’s 2021 Corporate Tax Haven Index, which ranks the countries “most complicit in helping multinational corporations pay less tax than they are expected to,” pegs six jurisdictions that are part of the Organisation for Economic Cooperation and Development — the British Virgin Islands,… Read More

Moscow Court Sentences Banker in ‘Russian Laundromat’ Case

A court in Russia sentenced banker Oleg Kuzmin on Monday to nine years in prison and ordered him to pay a one-million-ruble (US$13,574) fine for his part in a major money-laundering operation known as the “Russian Laundromat” or the “Moldovan Scheme,” Kommersant reported. The operation that lasted from 2010 until 2014 may have been the largest of this kind in Eastern Europe, with more than US$20 billion of illicit money transferred from Russia to Moldova and Latvia through a complex series of intermediaries, a 2014 OCCRP investigation revealed. Implicated in it were not just members of organized crime groups, but… Read More

Latest analysis exposes financial underbelly of global wildlife crime

The Case Digest- An Initial Analysis of the Financial Flows and Payment Mechanisms Behind Wildlife and Forest Crime, provides a thorough examination of the financial data from more than 40 wildlife crime cases from across the globe, including 11 detailed case studies. The report is a product of years of unprecedented collaboration between participating government agencies, financial intelligence units, non-governmental organisations and other sector experts. Download report (pdf) Key FindingsTRAFFIC, together with its key partner UNODC canvassed the globe for cases, with valuable contributions from leading financial crime partners, to identify examples where financial investigation was conducted to analyse and… Read More

FATF chief suggests criminals are ‘getting away with’ lucrative profits because AML industry doesn’t use its collective power

FINANCIAL CRIMINALS ARE getting away with the bulk of their profits, even though the FinCrime industry collectively has the power to stop it, the head of the Financial Action Task Force has said. President Dr Marcus Pleyer criticised the gap between theory and reality when it comes to AML, saying that this was a reason why so many criminals continued to succeed in the financial system. Banks, accountants, company formation agents, lawyers and others were all part of this problem, he said in a keynote address to the AMLintelligence Global Action on Money Laundering conference Thursday. “All of them need… Read More

Fourth oil executive sentenced for paying bribes to win a multi-million pound contract in post-occupation Iraq

Paul Bond has today been sentenced to three and half years’ imprisonment for conspiring with others to bribe Iraqi public officials to secure lucrative oil contracts in post-occupation Iraq. Earlier this week, Bond, a former senior sales manager at SBM Offshore (SBM), was found guilty on two counts of conspiracy to give corrupt payments following a retrial of his case at Southwark Crown Court. This was the fourth conviction the SFO secured in its wide-scale Unaoil bribery investigation, which uncovered the payment of over $17m worth of bribes to secure $1.7bn worth of contracts for Unaoil and its clients. In… Read More

HMRC Anti-Money Laundering Supervision annual assessment

1) Summary1.1 Certain types of legitimate business services can be attractive to criminals, who exploit them to launder money or finance terrorism. Life is made easier for criminals when insufficient controls are in place. It is therefore essential that businesses put in place adequate measures to prevent criminals from using their services to launder money and finance terrorism. 1.2 HMRC is one of 25 Anti-Money Laundering (AML) supervisors in the UK. HMRC delivers its supervisory responsibility through its Anti-Money Laundering Supervisory (AMLS) teams. HMRC helps ensure that businesses comply with the current Money Laundering, Terrorist Financing and Transfer of Funds… Read More

UK Art Dealers Are Misusing the Law to Avoid New Money-Laundering Regulations. Compliance Experts Say It Will Backfire

Art businesses should not be fooled into thinking they can use “reliance” as a loophole, experts say. The UK’s art market has been subject to stringent new regulations since an anti-money laundering directive came into force in January 2020. While the new requirements to conduct identity checks and other due diligence on art buyers initially came as a shock to an industry that has for centuries operated on handshakes, much of the market is now accustomed to these processes. But experts say that some art businesses may have misunderstood a key part of the regulations, and could be unwittingly breaking… Read More

EBA publishes guidelines on money laundering and terrorist financing risk factors

The EBA has published its final revised Guidelines on money laundering and terrorist financing risk factors.The revisions consider changes to the EU Anti Money Laundering and Counter Terrorism Financing (AML/CFT) legal framework and address new ML/TF risks, including those identified by the EBA’s implementation reviews. In addition to strengthening financial institutions’ risk-based approaches to AML/CFT, the revision supports the development of more effective and consistent supervisory approaches where evidence suggested that divergent approaches continue to exist. The Guidelines are central to the EBA’s work to lead, coordinate, and monitor the fight against money laundering and terrorist financing. The Guidelines are… Read More

Money launderers ‘prey on generation Covid’

Criminals are seizing on young people’s Covid-related financial troubles to hire them to unwittingly launder money, experts say. More than four in 10 cases of money mules involved victims aged 21 to 30, with the numbers rising last year, fraud prevention service Cifas said. Banks said criminals posted fake job adverts on social media, targeting “generation Covid” struggling for work. It is part of a wider trend of fraudsters exploiting the crisis. ‘Fake job adverts’ Criminals want to move money through accounts to make it look less suspicious to banks. Money mules are given a cut for allowing their account… Read More

Accountants are on the frontline in the war on economic crime

Why do we need to talk about global perspectives on economic crime right now? IFAC, the global organisation for the accountancy profession, explains.“The root of the problem is that the economic incentive is always going to drive criminals to innovate and take risks,” says Scott Hanson, Director, Public Policy & Regulation at IFAC. “They’re always got that motivation to stay two steps ahead.” Add to that the accelerated pace of technological change, and the challenge is augmented exponentially. “The unfortunate news is that for every door that policymakers, law enforcement, and their professional allies, like accountants, close, technology opens new… Read More

North Korea is the most isolated country on the planet, but it still finds ways to steal billions of dollars

The Department of Justice said last month that North Korea has used cyberattacks to steal over $1 billion since 2015 to fund its nuclear weapons program. Heavy sanctions, imposed by both the US and the UN, prevent North Korea from participating in the formal global economy. The regime often circumvents these sanctions, mostly through secretive ship-to-ship transfers of luxury goods, chemicals, and coal, which is North Korea’s primary export. North Korea’s nuclear program is essential to the Kim regime, and it devotes all the resources it can to increasing and improving its arsenal. The rise of digital currencies has created… Read More

AFME calls for regulatory certainty on the treatment of crypto assets

The Association for Financial Markets in Europe (AFME) has called for UK authorities to provide regulatory certainty on the treatment of crypto assets in its response to HM Treasury’s consultation on the UK approach to crypto assets and stable coins. AFME has also pushed for a review of existing financial services legislation to identify and address obstacles to distributed ledger technology (DLT) innovation. The association has recommended a more “granular crypto-asset taxonomy” to clarify the treatment of existing use cases that will support the UK approach to fulfil regulatory objectives and encourage innovation. This will support greater certainty on which… Read More

ING acknowledges decision by French financial regulator

ING has acknowledged the decision published today by the financial regulator in France, the Autorité de contrôle prudentiel et de résolution (ACPR), on ING in France, following its inspection in 2018, for shortcomings in its anti-money laundering (AML) and anti-terrorist financing framework. Based on the ACPR findings, ING in France has put in place all the necessary corrective measures to strengthen its processes and management of compliance risks. Based on the inspection, the ACPR has reprimanded ING in France and imposed a sanction of €3 million. In the context of significantly increased attention on the prevention of financial economic crime… Read More

Albanian Government Made No Significant Progress Against Money Laundering and Financial Crime in 2020

Albania is a source country of cannabis and a home base for organized crime groups moving narcotics from source countries into European markets. Albanian nationals are heavily involved in trafficking illicit narcotics throughout Europe but the government needs to do more, according to a new US State Department report. The International Narcotics Control Strategy Report provides a country-by-country analysis of crime including drug trafficking, money laundering, and the government’s response. It found that Albanian cannabis is sent to Turkey and exchanged for heroin and cocaine which is then smuggled across Europe by Albanian nationals. Furthermore, the illicit profits of these… Read More

Financial Crime Surges in 2020 Following Shift to Digital Banking and Commerce

A huge rise in financial crime was recorded last year, driven by the rapid shift to digital banking and commerce following COVID-19 lockdowns. This is according to Feedzai’s Financial Crime Report Q1 – 2021, which compared the volume of financial fraud and crime in Q4 and Q1 2020, with the latter quarter mainly unaffected by the pandemic. The study found there was a 650% surge in account takeover (ATO) in Q4 compared to Q1, with malicious actors taking advantage of the growth in online accounts during the crisis. The authors noted that the expansion of online banking and real-time payment… Read More

The Challenges of Combating Money Laundering in a Pandemic World

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… Read More

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

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… Read More