Category: Financial Crime

Brussels told Slovakia it risked doing “irreparable damage” to the rule of law, it has emerged, before the country’s MPs approved legal reforms that critics say are aimed at protecting the prime minister’s political and business allies. The Slovakian news outlet SME reported on Wednesday that the European commissioner for justice, Didier Reynders, had written last week to Robert Fico’s government urging it not to fast-track the legislative package through parliament. The request was ignored and the changes – including scrapping a special prosecutor’s office dealing with high-level corruption, lowering penalties for financial crimes and cutting the statute of limitations…

The world is getting smaller, as trade, communication and infrastructure on a global scale brings us closer together. However, there is another, darker, side to the coin: our interconnected world is being abused by criminals who have created an underground economy to sustain their illegal operations. Europol’s first ever threat assessment on the topic, ‘The other side of the coin: an analysis of financial and economic crime in the EU’, sheds a light on this system which, from the shadows, sustains the finances of criminals worldwide. The report is based on a combination of operational insights and strategic intelligence contributed…

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,…

Last year, the US published its 2022 National Illicit Finance Strategy, providing a roadmap to close the loopholes that criminals and illicit actors exploit. It outlines four main priorities and 14 supporting actions: Increase transparency and close legal and regulatory gaps in the US AML/CFT frameworkMake AML/CFT regulatory framework for financial institutions more efficient and effectiveEnhance operational effectiveness in combating illicit financeSupport technological innovation and harness technology to mitigate illicit finance risksIn this article, I’m going to look at the latest developments across the US AML/CFT regime which it can be argued remains a model of effectiveness and innovation. Treasury…

Huge swathes of Russian money are being diverted from Europe to Dubai as Western sanctions increase pressure on Russia over its invasion of Ukraine. Last week, the Financial Action Task Force (FATF) placed United Arab Emirates on a “grey list”, singling out the Gulf nation for greater scrutiny with regards to potential for money-laundering. A high-profile business hub, UAE has always attracted the world’s mega-rich. Its present reluctance to side with either the West or the Kremlin has sent out a message to Russians that their money will still be protected there. UAE has also failed to match sanctions imposed…

“It’s not like anyone sat down in London and said, ‘how do we attract all this money?’. There isn’t an ‘attract illicit finance to the UK’ strategy department in the Cabinet Office”. Yet over decades of experience monitoring the financial connections between the UK and Russia, Tom Keatinge has seen that whenever our government has had the opportunity to address international money laundering and tax avoidance, “it always seems to have gone in the direction of enabling this to occur. Doors have been left ajar.” Two and half weeks after Russian tanks rolled into Ukraine, the British government was scrambling…

Seven years ago, an anonymous source who went by the name “John Doe” provided us with the data that became the Panama Papers – 2.6 terabytes of leaked documents from the Panamanian law firm Mossack Fonseca. The leak turned out to have quite an impressive Russian component. We found shell companies connected to Vladimir Putin’s judo friends, Boris and Arkady Rotenberg, to the oligarch Alisher Usmanov and the wife of the Kremlin spokesman Dmitry Peskov. But, most significantly, we stumbled across Sergej Roldugin, a professional cellist and godfather of Putin’s eldest daughter, who had a central role in a network…

FRANKFURT, March 11 (Reuters) – Deutsche Bank (DBKGn.DE), which faced stinging criticism from some investors and politicians for its ongoing ties to Russia, said on Friday in a surprise move that it would wind down its business in the country. Deutsche joins the ranks of Goldman Sachs (GS.N) and JPMorgan Chase (JPM.N), which were the first major U.S. banks to exit after Moscow’s invasion of Ukraine. Those moves put pressure on rivals to follow. read more . Deutsche had resisted pressure to sever ties, arguing that it needed to support multinational firms doing business in Russia. But on Friday evening…

Fast Facts We reviewed how transnational criminal organizations and terrorist groups traffic goods such as illegal drugs, engage in human trafficking, and launder money. We also looked at the information sharing used to help detect these activities. Responsibility for combating trafficking is spread across multiple federal agencies. Agencies collaborate via task forces that share information and resources with each other, the private sector, and foreign counterparts. The U.S. Treasury Department, for example, shares information with more than 160 international financial intelligence agencies. Criminal groups move heroin and more from Afghanistan to western Europe via the Balkan route. Highlights What GAO…

Suspicious activity reports (SARs) are a vital part of the fight against money laundering and financial crime. They alert law enforcement to potential criminal activity, providing critical evidence in any investigation. The U.K. National Crime Agency (NCA) reported a record number of SARs received and processed (573,085—a 20 percent increase on the previous period) in 2019/20. The majority of reports were submitted by credit institutions, such as banks and building societies. Few SARs were submitted from the service sector, such as accountants, lawyers, and estate agents. Banks’ systems focus on the financial transactions they administer, highlighting those that either breach…

In the UK context when you think about white-collar crime over the last couple of decades, names like Barings Bank, the Bank of Credit and Commerce International (BCCI), and Polly Peck come to mind. While we haven’t seen bumper cases like these in more recent times, white-collar crime continues to make the front pages and statistics have revealed that corporate fraud has increased during the pandemic. From a legal point of view, it remains a thicket when it comes to the processes in place. The recent postponement of a trial against three former G4S executives accused of defrauding the taxpayer…

After the UK left the European Union, a range of payment providers reported so-called IBAN discrimination as a number of companies across Europe began to refuse Euro account bank details if they contained the country code ‘GB’. As a result of Brexit, sending a payment to Eurozone countries resulted in additional charges. Whilst the fee is nominal, it means that payments can be short of the required full amount being sent. In an exclusive interview with City A.M., rising City star Anastasia Demetriou, a former Howard Kennedy solicitor and currently general counsel at IFX Payments in London, warns that without…

Cultural property crime has continued unabated throughout the global COVID-19 pandemic and in some cases even surged to new heights, INTERPOL’s 2020 Assessing Crimes Against Cultural Property survey finds. The first such report compiled since the onset of the pandemic – and the first made publicly available – the survey leverages information supplied by 72 INTERPOL member countries on cultural property crimes, arrests and trafficking routes in 2020. The consolidated intelligence allows INTERPOL to analyze and compare emerging trends around the world. In total, 854,742 cultural property objects were seized globally in 2020, including numismatic items (coins, money or medals),…

This United Kingdom Threat Assessment by Financial Crime News for 2021 is now published. To download the UK Threat Assessment click here: UK Final July PBd 2021 The main Financial Crime threats are from fraud, drug trafficking, cybercrime, human smuggling, human trafficking, acquisitive crime, wildlife trafficking, tax offences and corruption (mostly from overseas). Based on an evaluation of all 43 FATF Member/Observer Countries by FCN (representing 87% of Global GDP), the UK faces significant threats ranked as equal 7th/43 (with Italy) behind Russia, India, Mexico, Brazil, Turkey & China. On Responses the UK is ranked 3rd best out of 43…

Many of us routinely use Companies House to check the legitimacy of a business, yet an investigation by The Sunday Times has shown it may not be a reliable source of information. Every UK business has to be registered with Companies House, but the investigation has revealed that the organisation carries out only basic checks on the information it is given and has no statutory power to verify the accuracy of the information it receives. As a result of the limited checks, UK companies registered with Companies House are involved in money laundering on an industrial scale. One example found…

Protecting media freedom and tackling corruption are intrinsically linked. The UK needs to address both to achieve either effectively This month, British newspapers reported that an Azerbaijani millionaire DJ, Mikaela Jav, and her husband, Suleyman Javadov, had been forced to forfeit £4 million to the National Crime Agency, after admitting the funds had entered the UK illegally through a complex money laundering system known as the ‘Azerbaijan Laundromat’. Pictures of the Javadovs’ lavish lifestyle, including four multi-million pound properties in London, ran alongside commentary pointing out that the NCA actually reclaimed £10 million less than was originally under question. The…

How can financial institutions and law enforcement better fight criminals in an increasing complex and borderless society? Modernizing FinCEN may be a way. The Financial Crimes Enforcement Network (FinCEN) is one of U.S. Treasury’s primary agencies that oversees and implements policies to prevent and detect money laundering. FinCEN’s role in stopping terrorist financing, drug traffickers, and international criminal organizations cannot be overstated, working on a global scale in anti-money laundering (AML) efforts. But how can financial institutions and law enforcement better work together to fight criminals in an increasing complex, technologically sophisticated, and borderless society? Some would argue modernizing FinCEN…

It has been confirmed that the EU’s smallest Member State, Malta, has been added to the Financial Action Task Force’s ‘grey list’, something which may cause detrimental effects to the Maltese economy. Following the FATF’s five-day plenary session, it has been announced that Haiti, Malta, the Philippines, and South Sudan, have been grey listed by the global financial watchdog. They join countries such as Albania, Myanmar, Nicaragua, Uganda and Syria under increased monitoring by the body, which has called for these jurisdictions to “complete their action plans expeditiously and within the agreed timeframes”, after “strategic deficiencies” were identified in their…

An “overwhelming majority” of countries expressed opposition to Malta being placed on a global watchdog’s financial crime greylist. Sources briefed on the confidential greylisting discussions in the past week said numerous FATF member countries were of the view that Malta had done enough to avoid being placed on the list of jurisdictions deemed untrustworthy in the fight against financial crime. Despite having majority support, Malta’s efforts to remain off the greylist were torpedoed by the US, UK and Germany. “The FATF does not take decisions by a vote. Decisions are taken by consensus which is neither based on unanimity nor…

Lexis Nexis Risk Solutions released its annual True Cost of Financial Crime Compliance Global Report. The results derived from the comprehensive survey of 1,015 financial crime compliance decision makers at financial institutions including banks as well as investment, asset management and insurance firms globally. The projected total cost of financial crime compliance across all financial institutions reached $213.9 billion in 2021, surpassing the $180.9 billion recorded in 2020. The majority of this sizeable year-over-year increase is represented by Western Europe and the United States. The decision makers who took part in the study oversee financial crime compliance processes such as…

The TRACE Foundation, a non-profit organization established to support projects that encourage greater commercial transparency, today announced the winners of the 2021 TRACE Prize for Investigative Reporting. The annual award recognizes journalism that uncovers business bribery or related financial crime. Zorayda Gallegos Valle, a freelance journalist writing for El País in Mexico, won the TRACE Prize for her investigation that uncovered the Mexican Army’s scheme to divert at least $156 million of public resources through hundreds of shell companies contracted to complete infrastructure projects. “I am grateful to the TRACE Foundation for supporting investigative journalism because it plays an important…