Author: gracechurchfcp

Legal monitors tell Deutsche Bank to quit Russia

Money Laundering, Sanctions
NEW YORK STATE-appointed monitors want Deutsche Bank to pull out of business in Russia completely, according to new reports. The advice comes despite the bank’s ambitions for expansion in the country – although its relationship with Russia has not been void of scandal or allegations of wrongdoing in recent years. The monitors told senior executive leaders at Deutsche that efforts to minimise financial crime risks would not be enough to offset those that came with certain Russian clients, the Wall Street Journal reported Thursday after speaking to a source familiar with the communications. Both monitors are attorneys from Chicago-based law…

6 key takeouts from the FATF President’s address to the G20

Compliance
On Friday, FATF President Dr Marcus Pleyer spoke to G20 leaders and central bank governors on the threats of financial crime. He addressed colleagues from nations across the world, who are all nearing their first anniversary of COVID restrictions and lockdowns. His main message was simple: the fight against dirty money matters now more than ever. But here’s a more thorough run-down of what his comments mean for those efforts – and what their future looks like as the pandemic still rages. 1. FATF will not let COVID regulate their work to the back seat – and the G20 are…

Swiss private bank charged with money laundering

Money Laundering
MONEY LAUNDERING CHARGES are being brought against a private bank in Switzerland which is already in the process of winding down operations. Falcon Private Bank – based in Zurich but with a presence in Luxembourg, London and Dubai – has been charged with money laundering by the Swiss Attorney General. These charges are understood to relate to an instance of organisational deficiencies in relation to a corporate criminal case, Swiss media outlet Handelszeitung reported Thursday. Former Falcon Bank chief executive Eduardo Leemann has also been charged in connection with the case and will appear in court next year. His spokesperson…

Belgium looks to follow Netherlands as top banks push for money laundering information sharing

Compliance
Belgian banks have joined forces to push for a centralised platform for information-sharing to combat financial crime. The calls are coming directly from the CEOs of ING Belgium, KBC, Belfius and BNP Paribas Fortis – the four biggest banks in the country by market share, assets and branches. A central channel was vital to allow banks the opportunity to share information with each other, and with court officials, police and government financial watchdogs, the four chief executives told a parliamentary finance committee hearing. “We are asking to engage as a real partner in the fight against money laundering,” said Belfius…

Online payments company receives €370k fine for “significant shortcomings” in AML practices

Money Laundering
A fine of €370,000 has been handed down to Lithuanian online payment company Paysera LT for failing to comply with AML rules. The fine, issued by the Bank of Lithuania, was decided after a two-month inspection revealed “significant shortcomings related to compliance and anti-money laundering and terrorist financing requirements.” Paysera LT has challenged the scale of the fine. According to the Bank of Lithuania, the company had failed to properly assess money laundering and terrorism financing risks. It also failed to implement adequate standards in customer identification and due diligence, in line with current Lithuanian law. “The company has failed…

SFO secures £1.2m following investigation into West London property linked to Brazilian bribery scandal

Corruption
The SFO has today secured £1,198,424.78 from Julio Faerman, the owner of a £4.25m luxury apartment in West London which the SFO suspected to have been partly purchased with the corrupt funds of its owner’s criminal conduct. The Brazilian national was implicated in Brazil’s ‘Operation Car Wash’, which uncovered systematic bribery to win contracts from the Brazilian state oil company Petrobras. While under investigation by Brazilian prosecutors, Faerman admitted paying bribes to win contracts for the Dutch company SBM Offshore NV, for whom he acted as an agent. He is subject to a co-operation agreement with the Brazilian prosecuting authorities,…

FinCEN clarify BSA due diligence expectations for charities and non-profit customers

Compliance, Download
WASHINGTON—In coordination with the Federal Banking Agencies, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) today issued a joint fact sheet to provide clarity to banks on how to apply a risk-based approach to charities and other non-profit organizations (NPOs). The joint fact sheet highlights the importance of ensuring that legitimate charities have access to financial services and can transmit funds through legitimate and transparent channels, especially during the current COVID-19 pandemic. Also, the joint fact sheet reminds banks to apply a risk-based approach to customer due diligence (CDD) requirements when developing the risk profiles of charities…

Companies House Reform

Money Laundering
Having announced measures to verify the identity of individuals forming UK companies through the Companies House reform bill, it appears the government is now taking money laundering seriously, writes Michael Harris, director of financial crime compliance at LexisNexis Risk Solutions. There is no doubt that the proposed Companies House reform is a positive move, especially given that the National Crime Agency estimates that money laundering costs the UK economy £37bn ($48.2bm) a year – a huge sum that indicates there is still much to do in the fight against financial crime. The new Companies House rules come in amid proposals…

Gambling Commission fine of BoyleSports (£2.8m) for AML failings

Money Laundering
BoyleSports is the latest UK sportsbook operator to be issued a fine by the Gambling Commission over anti-money laundering (AML) failings. The UK Gambling Commission has fined BoyleSports £2.8m and imposed a set of tougher conditions on its licence after an investigation revealed a series of money laundering failures. BoyleSports’ £2.8m fine During an investigation carried out by the Gambling Commission, BoyleSports Enterprise was found to have breached Commission rules intended to prevent money laundering on its Boylesports.com and Boylecasino.com websites. The Gambling Commission said that the operator “failed to have an appropriate money laundering risk assessment in place” and…

EU to create new bloc-wide Financial Crime Compliance Sentinel (AML regulator)

Compliance
The European Union after approval from member state finance members will move forward in creating a bloc-wide financial crime compliance sentinel to directly oversee country regulators and financial institutions – with power to engage in direct reviews, request information and levy monetary penalties. The agreement at the EU Council will form the foundation for more formal legal edicts expected to take force early next year, a widely-watched initiative by global watchdog groups and partner world powers after embarrassing Baltic and Nordic banking scandals shattered the perception of strong union anti-money laundering and counter-financing of terrorism (AML/CFT) oversite with the estimated…

COVID increases fraud rate by 60%

Fraud
Top 3 Global Fraud Contributors in 2020: Card cloning, High-Speed Ordering/Spending, and High-Risk Merchant Category Code 34% increase in card cloning fraud rate across industries and regions 13% increase in sporting goods purchases compared to last holiday season due to social distancing and prohibited indoor gatherings 36% decrease in fuel purchases compared to Q1 and 89% Drop in Transportation Sector Transactions 75% of customers plan to maintain new digital banking habits SAN MATEO, Calif., Nov. 24, 2020 (GLOBE NEWSWIRE) — Feedzai, the world’s leading risk management platform, has announced its Quarterly Financial Crime Report which contains financial crime indicators and…

Dr Marcus Pleyer (FATF) addressing virtual G20

Money Laundering, Organised Crime
The Financial Action Task Force is committed to working with the G20 to ensure a strong, sustainable economic recovery from the COVID-19 crisis, FATF President Marcus Pleyer emphasised in remarks to the G20 Leaders’ Summit and G20 Finance Ministers and Central Bank Governors meeting. Addressing G20 leaders, the FATF President said that crime and money laundering undermines just competition, hampers growth, deepens inequality, and erodes confidence in the integrity of the global financial system. It remains critical that jurisdictions continue to actively identify, assess, and understand how criminals and terrorists can exploit the COVID-19 pandemic and stop money illicitly flowing…

Most of Europe’s largest banks declare profits in tax havens

Exploitation
A majority of Europe’s largest banks are relying on tax havens to stash their profits, despite the fact that in some cases, these firms don’t have a single employee working where these earnings are booked, a new report released on Tuesday by Transparency International EU revealed.  The report, which analyzed 39 of the biggest banks in the European Union, found that 31 of them declared profits in low or zero-tax jurisdictions, and that 29 did so through the use of “ghost operations,” meaning none of the firm’s personnel were working in the areas where large portions of their earnings were declared.   Since…

Almost half of UK bank specialists can’t spot signs of human trafficking among transactions

Exploitation, Organised Crime
Only one in five expert staff believe they can stop transactions or behaviour linked to trafficking It is one of the most prolific crimes on Earth, affecting almost 25 million men, women and children.   But human trafficking – the modern slave trade of living and breathing people for commercial gain – isn’t occurring on some distant, dusty and lawless shore.   From domestic servitude, forced labour and forced marriage to sexual exploitation and the commercial trade in human organs, such harrowing practices steal through every nation on Earth, the UK included.   The proceeds of these crimes are the subject of…

Former Unaoil executive sentenced for paying bribes to win $1.7bn worth of contracts

Corruption
Basil Al Jarah has today been sentenced to three years and four months’ imprisonment for paying in excess of $17m in bribes to dishonestly secure approximately $1.7bn worth of contracts in post-occupation Iraq. Al Jarah, Unaoil’s former Iraq partner, conspired with others to pay millions of dollars in bribes to public officials at the South Oil Company and Iraqi Ministry of Oil. These bribes secured contracts for Unaoil and its clients to construct oil pipelines, offshore mooring buoys in the Persian Gulf, and other infrastructure projects, collectively worth just over $1.7bn. These contracts formed part of the Iraqi Ministry of…

FATF Mutual Evaluation Report – People’s Republic of China

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The Financial Action Task Force (FATF) is an independent inter-governmental body that develops and promotes policies to protect the global financial system against money laundering, terrorist financing and the financing of proliferation of weapons of mass destruction. The FATF Recommendations are recognised as the global anti-money laundering (AML) and counter-terrorist financing (CTF) standard. For more information about the FATF, please visit the website: www.fatf-gafi.org. This document and/or any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.…

British Virgin Islands joins UK overseas jurisdictions in public company ownership commitment

Compliance
September 30th 2020, London –  Transparency International UK welcome the announcement made last week by the Government of the British Virgin Islands that they would be opening their company ownership register to the public.  Andrew Fahie, the Premier of the British Virgin Islands, speaking to the House of Assembly stated the territory would adopt a publicly accessible register of beneficial ownership for companies, in line with international standards by 2023.The British Virgin Islands join the rest of the British Overseas Territories and Crown Dependencies in announcing their commitment to transparent company ownership.  The secrecy offered by companies registered in the British Virgin…

FinCEN Files sparks fresh UK inquiry into laundering of dirty billions

Money Laundering
The Treasury Committee says it will examine the effectiveness of anti-money laundering systems and sanctions, listing areas of concerns investigated by ICIJ. Image: Photo by Kirsty O’Connor/PA Images via Getty Images Prompted by the FinCEN Files, a powerful U.K. parliamentary committee has launched a fresh anti-money laundering inquiry 19 months after it outlined findings that the nation’s response to billions of pounds in money-laundering was “fragmented.” In light of the International Consortium of Investigative Journalists’ recent investigation, the U.K. Treasury Committee says it will examine the effectiveness of both anti-money laundering systems and sanctions. The Treasury Committee says the precise scale…

FinCEN wants to clamp down on small payments fueling crime

Compliance
Concerned that money transfers worth just a few hundred dollars are helping terrorists and fentanyl traffickers, the U.S. Treasury is pushing a new rule for banks, money transmitters and others. The top U.S. financial crime watchdog wants to slash the value of transactions that banks and other financial institutions must report as potentially suspicious, citing small payments used to plan terrorist attacks and to import deadly drugs. The Financial Crimes Enforcement Network, known as FinCEN, published a proposal with the Federal Reserve last week to require banks and others to collect and share with authorities information on potentially suspicious transactions…

Banks face financial crime headache over free trade zones

Exploitation
Banks are being urged to pay closer attention to the crime risks associated with free trade zones (FTZs), with fresh research warning of potential exposure to trade-based money laundering, as well drugs, weapons and counterfeit goods trafficking. Defined as areas where customs duties do not apply in the same way as in the rest of a country’s territory, there are now believed to be at least 3,500 free zones in operation around the world, up from just 79 in 1975. In some regions, FTZs are becoming more popular. In the UK, for example, government officials have this month announced plans…

Online agents are more attractive to money laundering criminals, warns HMRC

Money Laundering
Lack of face-to-face contact is a key reason why criminals graduate towards internet agents, its latest updated AML guidance says. HMRC has updated its AML guidance for sales and lettings agents including a warning that online-only operators are at higher risk than traditional high street firms. It claims that sales and lettings transaction made without face-to-face contact including online, over the phone or via an intermediary reduce an agent’s ability to spot whether money laundering is being attempted. “This is particularly true when dealing with customers in higher-risk overseas jurisdictions,” the guidance says. But leading AML software firm Smartsearch says…

Goldman Sachs fined by FCA and PRA over 1MDB in $2.9bn global resolution

Investigation
Firm to clawback $174m from executives Goldman Sachs International (GSI) has been fined £96.6m by the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) for risk management failures in connection with 1Malaysia Development Berhad (1MDB). In a statement, the FCA and PRA said GSI had “failed to assess and manage risk to the standard that was required given the high risk profile of the 1MDB transactions, and failed to assess risk factors on a sufficiently holistic basis”, and that GSI had also “failed to address allegations of bribery in 2013 and failed to manage allegations of misconduct in connection…

Bid to make gambling companies liable for stolen money

Compliance
Federal Independent MP Andrew Wilkie will introduce a bill to Parliament on Monday to make gambling companies liable if the person placing the bet is using stolen money. Under the legislation, if a bettor has paid for a gambling service using money they obtained illegally, the Federal Court could order the gambling company to compensate the victim of the original crime. The “Making Gambling Businesses Accountable” bill, which amends the Anti-Money Laundering and Counter-Terrorism Financing Act, uses the same definition of “stolen property” as the Criminal Code. Centre Alliance MP Rebekha Sharkie will second the bill and Mr Wilkie’s team…

MEPs call for creation of EU financial crimes authority in wake of FinCEN Files scandal

Consultation
European Commission pledges to step up fight against money laundering. European Commission Vice-President Dubravka Šuica has pledged to step up the fight against money laundering, saying that planned new legislation in the New Year aims to address “shortcomings” in existing legislation. Šuica, responsible for the democracy and demography portfolio in the Commission, told MEPs, “we aim to ensure that dirty money has no place to hide in the EU. We must close the door on dirty money.” She was speaking at the Parliament’s Plenary on Thursday in a debate with members on recent money laundering revelations about how the world’s…

Over £300,000 recovered from accounts suspected of use in money laundering

Money Laundering
Investigation by North Yorkshire Police after reports of investment scam. After receiving information about a company that was suspected of laundering money from investment scams, North Yorkshire Police identified two business bank accounts which they believed held monies obtained through fraud. Using powers introduced in the Criminal Finances Act 2017, Account Freezing Orders (AFO’s) were obtained on both bank accounts and a frozen funds investigation was commenced. One bank account contained £210,000 and the other £124,000. These AFO’s enabled North Yorkshire Police to investigate and obtain evidence into a large scale money laundering network involving two companies, whilst preventing this…

Unexplained Wealth Orders: Suspected money launderer gives up £10m of property

Money Laundering
Around £10m of property has been surrendered in a major victory against some of northern England’s most dangerous criminals. The apartments and homes were given up to the National Crime Agency by a Leeds businessman who investigators suspect of being a major money-launderer.  The NCA says Mansoor Mahmood Hussain acted for gangsters, including a murderer and drug trafficker. The agency believes he laundered their profits through a property empire.  Over two decades, Mr Hussain, known as Manni, developed his portfolio across West Yorkshire, Cheshire and London while posing as a legitimate businessman.  His social media accounts show him living a…

Leicester textile firms ‘involved in money laundering

Money Laundering
A network of clothing manufacturers in Leicester are involved in money laundering and VAT fraud, a BBC investigation has found. The companies are based in the city’s garment district where a local MP said such activity was “endemic”. Some of the firms involved have supplied fast fashion brands, including Boohoo. Boohoo told the BBC it would never knowingly conduct business with anyone acting outside of the law. It has now terminated its relationship with one of the firms highlighted by the investigation by BBC Radio 4’s File on 4. Leicester textile firms face enforcement action Clothes factories ‘doubled staff during pandemic’…

Crown chairman Helen Coonan admits casino ‘facilitated’ money laundering

Money Laundering
The former Howard government minister insists, however, that Crown didn’t turn a blind eye to illegal activity The Crown Resorts chairman, Helen Coonan, has admitted the company facilitated money laundering at its Melbourne casino but denied it was “turning a blind eye” to criminal activity instead blaming it on “ineptitude”. The concession was made at the New South Wales Independent Liquor and Gaming Authority’s inquiry into Crown’s suitability to hold a Sydney casino licence. Coonan was asked on Tuesday about Crown’s relationship with SunCity, a high-roller junket partner with alleged criminal links. She was challenged on why Crown did not shut down SunCity’s private…

UK financial regulator failed to prosecute half of money-laundering criminal probes

Money Laundering
The UK financial regulator has discontinued half of its criminal investigations into breaches of the money laundering rules since January, and is yet to bring a single prosecution — despite a pledge to make full use of its powers. Figures released under a freedom of information request show that, in the year to date, seven out of 14 criminal investigations into contraventions of the money launderingregulations have been shut down by the Financial Conduct Authority. Five of these were “single track”, or solely criminal, probes, while the other two were “dual track” investigations that could have resulted in either criminal or civil proceedings. As a…

Criminals exploit Covid-19 as fraud moves increasingly online

Fraud
Unauthorised fraud fell by eight per cent to £374.3 million in first half of 2020, as the banking industry prevented £853 million of losses. Criminals are exploiting and adapting to Covid-19 with a rise in online data harvesting and a fall in cheque and contactless card fraud. £207.8 million was lost to Authorised Push Payment (APP) fraud, in line with the same period last year. Finance providers were able to return £73.1 million of APP fraud losses to victims, up 86 per cent compared to last year. £47.9 million of losses were reimbursed to victims under APP voluntary Code in first…

COVID-19: Trends in money laundering and terrorism financing

Money Laundering
COMMITTEE OF EXPERTS ON THE EVALUATION OF ANTI-MONEY LAUNDERING MEASURES AND THE FINANCING OF TERRORISM (MONEYVAL) STRASBOURG The Council of Europe’s MONEYVAL Committee has issued a report aimed at helping the global community to counter new criminal activities which are exploiting the COVID-19 pandemic, including the sale of counterfeit medicines and cybercrime. The Committee, which specialises in measures to tackle money laundering and terrorist financing, focuses in its new report on threats, vulnerabilities and best practices. The aim is to assist policymakers, practitioners and the private sector in applying a more targeted and effective response to the money laundering and terrorist financing risks in Europe. The report found…

INSIGHT: U.K. Tax Authority Getting Ready to Bite on Evasion

Compliance, Corruption, Fraud, Investigation
The U.K. tax authority is indicating its intention to enforce legislation and investigate corporations for failure to prevent tax evasion. Mukul Chawla QC and Kate Ison of Bryan Cave Leighton Paisner LLP review the current status of inquiries and discuss what action organizations need to take to ensure their procedures are robust and compliant. The focus by HM Revenue & Customs (HMRC) on organizations, under the Criminal Finances Act 2017, for the corporate offense of failure to prevent tax evasion, appears to be making steady progress. The number of investigations and inquiries that HMRC is currently undertaking, and the wide…

What are the repercussions if a financial services firm is found guilty of facilitating tax evasion?

Corruption, Fraud, Investigation
The offence of failure to prevent the facilitation of tax evasion (also known as the Corporate Criminal Offence or CCO) was introduced with great fanfare following the government initiative; ‘No Safe Havens’, which was part of an international initiative to increase tax transparency. As of 31 July 2020, HMRC announced that they had 10 CCO investigations open and a further 22 ‘opportunities under review’, meaning that HMRC are considering whether to open an investigation. Within these 32 investigations or ‘opportunities’, HMRC have disclosed that over a third relate to businesses within the financial sector. Businesses in the financial sector are…

Danske Scandal Reveals Top-Down Culture That Silenced Staff

Corruption
The bank at the center of Europe’s worst ever money laundering scandal has yet to fully address the corporate culture issues that led it astray in the first place. That’s according to the watchdog that oversees Danske Bank A/S. Denmark’s biggest bank spent years locked in a top-down hierarchy that left its management cut off from people further down the organization, according to Jesper Berg, the director general of the Danish Financial Supervisory Authority. “You go from a very hierarchical institution to an institution where staff needs to flag mistakes and speak up more,” he said in a phone intervie “They…

Corporate transparency and register reform

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Detail of outcome The government response sets out a range of proposals to improve the reliability and accuracy of information on the Companies Register, including: identity verification: introducing compulsory identity verification for all directors, People with Significant Control and those filing information on behalf of a company reforms to Companies House powers: providing the Registrar of Companies stronger powers to query, seek evidence for, amend or remove information and to share it with law enforcement partners when certain conditions are met protecting personal information: improving the processes for removing personal information from the register company accounts: the response proposes further…

AUSTRAC and Westpac agree to proposed $1.3bn penalty

Corruption, Money Laundering
Westpac and AUSTRAC have today agreed to a 1.3 billion dollar proposed penalty over Westpac’s breaches of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act). Westpac and AUSTRAC have agreed that the proposed penalty reflects the seriousness and magnitude of compliance failings by Westpac. The Federal Court of Australia will now consider the proposed settlement and penalty. If the Federal Court determines the proposed penalty is appropriate, the penalty order made will represent the largest ever civil penalty in Australian history.  In reaching today’s agreement, Westpac has admitted to contravening the AML/CTF Act on over 23 million occasions, exposing Australia’s…

FATF Releases Updated Virtual Assets Red Flag Indicators of Money Laundering and Terrorist Financing Report

Money Laundering
The Financial Action Task Force(FATF), an intergovernmental organization that develops policies to combat money laundering and terrorism financing, has released an updated report, titled, Virtual Assets Red Flag Indicators of Money Laundering and Terrorist Financing. Published on September 14, 2020, the report notes that virtual or digital assets have been using innovative technology to quickly transfer value, globally, and may offer certain benefits, such as making digital payments faster and at more competitive rates. However, the FATF cautions that the anonymity associated with virtual assets can “attract criminals, who have used [them] to launder proceeds from a range of offenses such as…

The intensity of regulatory scrutiny of AML and crypto-assets

Compliance
As envisaged in its 2019/20 Business Plan, the Financial Conduct Authority (FCA) is consulting on proposals to extend its financial crime reporting obligation to additional firms irrespective of their total annual revenue. The proposed extension would cover all crypto-asset exchange and custodian wallet providers, as well as all electronic money institutions, Multilateral Trading Facilities (MTFs) and Organised Trading Facilities (OTFs). Under the proposed requirements each firm must provide information to the FCA on the location of its customers, the jurisdictions in which it has business and which of those jurisdictions it considers high risk. In addition, firms must disclose the resources it…

2020 Half year fraud report

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Whether it’s elaborate scams and attempts by criminals to con innocent victims into handing over their money or providing access to data which can then be used to gain illicit funds, stories of those impacted by fraud are becoming increasingly common. In particular, Covid-19 has seen criminal gangs focus on taking advantage of people’s fears and uncertainties around the virus, sometimes to devastating effect.  This is demonstrated by a sharp rise in the number of impersonation scams, which nearly doubled in the first six months of the year, with almost 15,000 cases reported. Such scams occur when the victim is…

How Anonymous Companies Are Used to Launder Money in U.S. Real Estate

Money Laundering
Alongside the world’s worst COVID-19 death rates, the United States is facing an impending economic recession following the first wave of the pandemic. But, while millions of Americans struggle to stay afloat amid record job losses, there is a sector that seems strangely unaffected by the post-pandemic economic fallout: Real estate purchases. Alarmingly, in the U.S., there are few regulations and checks of who is purchasing homes. As a result, housing remains a key vehicle for criminals looking to stash cash, launder money, and buy up homes in a tight market. In the wake of the 2008 recession, the U.S. real estate…