Category: Money Laundering

Britain’s Money Laundering Scandal Goes Back a Long Way

Money Laundering
The war in Ukraine has turned a lot of people’s attention to oligarchs in the UK. How did these guys all end up in London, seemingly owning half of Belgravia? In Butler to the World, Oliver Bullough offers an answer. I read his earlier work Moneyland slack-jawed at the blatant – and mundane – techniques employed to register UK Ltd companies through frontmen and use them to launder money. I thought the middle men would be glamorous and slick, not running a website from an office above a chip shop. In this work Bullough looks at the bigger picture: the…

Using AI to Fight Money Laundering

Money Laundering
The Fintech industry’s rapid growth and use of new technologies to meet the rise in demand for online services has brought with it increased levels of cyber crime. Criminals have taken advantage of the benefits digital banks offer to access money, launder illicit money and fund terrorism worldwide. The growth in technology for blockchain and digital payments provides new opportunities for criminals to launder funds at faster speeds and larger scales than they might have been able to previously. According to UK Finance, criminals stole a total of £753.9 million through fraud in the first half of 2021, an increase…

EU Anti Money Laundering Supervision Improving But Not Yet Always Effective

Money Laundering, Terrorism
The EBA published today the findings from its assessment of competent authorities’ approaches to the anti-money laundering and countering the financing of terrorism (AML/CFT) supervision of banks. Since the EBA started those reviews in 2019 and strengthened its AML/CFT guidance, national supervisors have started to adopt meaningful reforms to improve their AML/CFT supervision, but the EBA found that significant challenges remain in important areas such as the identification and assessment of money laundering and terrorist financing (ML/TF) risks. The EBA found that most competent authorities in its sample were committed to strengthening their approach to AML/CFT supervision. Several competent authorities…

Treasury Publishes National Risk Assessments for Money Laundering, Terrorist Financing, and Proliferation Financing

Money Laundering, Risk Assessments, Terrorism
WASHINGTON – The U.S. Department of the Treasury today issued the 2022 National Risk Assessments (NRAs) on Money Laundering (NMLRA), Terrorist Financing (NTFRA) and Proliferation Financing (NPFRA). These documents highlight the most significant illicit finance threats, vulnerabilities, and risks facing the United States. The United States is vulnerable to all three forms of illicit finance because of the size and sophistication of the U.S. financial system and centrality of the U.S. dollar in the payment infrastructure of global trade. These NRAs are the third iteration of the NMLRA and NTFRA since 2015 and second for NPFRA since 2018. They take…

Tencent Dives on Report of Record Fine for Money Laundering

Money Laundering, Regulatory Fines
Tencent Holdings Ltd. extended losses to close more than 10% lower after the Wall Street Journal reported it faces a record fine for violating Chinese anti-money laundering regulations. The People’s Bank of China found Tencent’s WeChat Pay had allowed the transfer of funds for illicit purposes such as gambling, the newspaper reported, citing unidentified people familiar with the matter. WeChat Pay was also judged non-compliant with other rules that required Tencent to identify users and merchants transacting on the platform, the Journal said. A probe into potential money-laundering would open a new front in Beijing’s sweeping crackdown on the internet…

Lack of System Tuning, Unsustainable Alert Backkigs Leads to $140 million USAA AML Penalty

Money Laundering, Regulatory Fines
Over the years, more and more attention has been drawn to banks and anti-money laundering failings, with news headlines hitting the mainstream, over the last decade hitting historic figures in the billions of dollars – just against one institution. Banks often include in their responses that such issues were “historic,” with the caveat they have since moved on and corrected the identified deficiencies, but from time to time, the failings have been found to be more recent – case in point, USAA Federal Savings Bank (USAA FSB). The U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) and the Office of the…

Entire Former Board of Swedbank Estonia Suspected of Money Laundering

Money Laundering
TALLINN – The Office of the Prosecutor General has brought suspicions against the banking unit of Swedbank Estonia and its former heads of participating in money laundering exceeding 100 million euros, the daily Postimees writes citing the weekly Eesti Ekspress. Robert Kitt, who was a member of the management board of Swedbank in the period 2011-2019, told Postimees that he had followed the law in force and the recommendations given by the supervisory body in his activities during his time on the management board of Swedbank. He confirmed that he is aware of the prosecutor’s office’s suspicion. “I have received…

US Regulators Slap National Bank of Pakistan With $55m Fine

Money Laundering, Regulatory Fines, Terrorism
The National Bank of Pakistan has agreed to pay $55m in fines imposed on its New York branch by three US regulators. According to Reuters, the Federal Reserve Board, the Federal Reserve Bank of New York and the New York State Department of Financial Services recently announced the NBP will be fined the amount due to non-compliance and anti-money laundering violations. The National Bank of Pakistan’s shares dropped by 7.2% following the announcement. However, the bank said there were no findings of improper transactions or wilful misconduct and that it has substantially enhanced its compliance programme. The NBP is one…

Weak Money Laundering Laws Put Australia at Risk of Becoming a Haven for Russian Cash

Money Laundering
Australia’s lax money laundering laws mean the nation is at risk of becoming a haven for Russian cash belonging to oligarchs who are seeking to avoid sanctions over the war in Ukraine, experts say. The country is one of only three – along with Haiti and Madagascar – yet to commit to bringing lawyers, accountants and real estate agents under the umbrella of anti-money laundering and counter-terrorism finance laws (AML-CTF). Having failed to act on a promise it made eight years ago to bring the professions into the AML-CTF system, the government now faces a race against time to take…

New Zealand Moves to Crack Down on Corporate Secrecy After Pandora Papers

Money Laundering, Regulation
New Zealand has pledged to end corporate secrecy by establishing a public beneficial ownership registry. The government announced a new transparency bill this week to stop the abuse of locally-based, secretive companies by criminals. The legislative crackdown came in response to revelations made in the International Consortium of Investigative Journalists’ Pandora Papers investigation, the government said. The proposed law, to be introduced later this year, will require companies and limited partnerships registered in New Zealand to disclose the identity of the person who owns or controls them. “The Pandora and Panama papers highlighted some key vulnerabilities which need to be…

Money Laundered Millions Seized in Jersey to be Sent to Kenya

Corruption, Money Laundering
Millions of pounds that was seized in Jersey from money laundering is being returned to Kenya in a world first. The £3million was confiscated in 2016 following the conviction of Jersey-registered company Windward Trading Ltd. for money laundering offences. The money originated in Kenya, and was being fed through the Jersey company. Despite the 2016 conviction of the company, two individuals from Kenya linked to the company are still awaiting trial. Now, Jersey has agreed to send the money back after Her Majesty’s Attorney General for Jersey signed an Asset Recovery Agreement (ARA) with the Kenyan government. The money will…

U.S. Officials Fear Russian Money is ‘Entrenched’ in London and Warn ‘Leverage Against Putin Could be Lost’

Money Laundering
As the Western world waits with bated breath on a potential Ukraine invasion by Russian military, American officials have revealed their fears of ineffective economic sanctions against Russia. US State Department officials are believed to have expressed “dismay and frustration” at the British government’s perceived failure to tackle dirty Russian money sloshing around London. “The fear is that Russian money is so entrenched in London now that the opportunity to use it as leverage against Putin could be lost,” one US diplomatic official was reported as telling The Times. “Biden is talking about sanctioning Putin himself but that can only…

Pressure Mounts for Action Against ‘Enablers’ of Russian Regime

Money Laundering
The role of English law firms acting for powerful Russian clients has come under growing political scrutiny as the government prepares to announce long-delayed legislation against the flow of ‘dirty money’ to the UK. Writing in today’s Financial Times, Cabinet Office minister Andrew Griffith called on law firms to ‘go further, faster, wherever they can’ to ensure that sanctions bite. His comments followed claims that the government has received threatening letters from City law firms acting for clients facing sanctions following the Russian invasion of Ukraine. Foreign secretary Liz Truss briefed MPs over the weekend that law firms were holding…

Charity Urges Crackdown on £1.5bn Worth of U.K. Property Linked to Kremlin and Financial Crimes

Money Laundering
A charity has urged the British Government to fast-track measures to crack down on dirty money following the Prime Minister’s announcement of new Russia sanctions. Their remarks come after the prime minister announced sanctions on five Russian banks and three Kremlin-linked individuals earlier today. Analysis from Transparency International UK has identified at least £1.5 billion worth of UK property owned by Russians accused of financial crime or with links to the Kremlin. Most of this property is held by secretive offshore companies. The true figure for illicit wealth invested in the UK is likely to be far higher, with almost…

Boris Johnson Promises U.K. Property Register to Expose Kleptocrat Money

Money Laundering, Regulation
As the government acts to squeeze Russian oligarchs in the wake of Vladimir Putin’s invasion of Ukraine, Boris Johnson has promised to rush forward plans for a new public register, revealing the ultimate owners of properties across the UK. The government had previously failed to act, despite the vast offshore leak known as the Pandora Papers revealing last year the details of 1,500 UK properties owned through secretive offshore companies, some of them connected to senior Russian figures. The data showed that the family of Russian oligarch Mikhail Gutseriev – who was placed under sanctions by the UK, EU and…

UK Second in Money Laundering Hall of Shame

Money Laundering
The second-highest amount of money is laundered each year in the UK, with an estimated £88bn worth of money cleaned by criminals annually. Only the US sees more, with £216.5bn laundered annually, while France (£54.5bn), Germany (£51.3bn) and Canada (£25.6bn) also rank among the top five countries in terms of value of money laundered. The figures, from identity verification software maker Credas Technologies, put together using OECD data, also revealed that about £1.8tn is laundered globally each year, some 3% of total GDP. Money laundering, and its links to organised crime, is a serious global problem that banks find themselves…

‘Credit Suisse Papers’ Leak Shows How Lender Banked Criminals and Tyrants with Little Due Diligence

Due Diligence, Money Laundering
TROUBLED Switzerland banking giant Credit Suisse was thrown into further crisis today as a massive data leak revealed a client list involved in money laundering, torture, drug trafficking and corruption. The data dump shows up massive failures of due diligence by Credit Suisse despite repeated promises by the bank that it would end relationships with dodgy clients and illicit funds. The Suisse Papers also shed light on one of the world’s largest and most secretive financial centres, based out of Geneva and Zurich, and grown used to operating in the shadows. Swiss financial institutions manage about 7.9tn CHF (€7.56tn) in…

Leak Exposes Credit Suisse’s Criminal Clients as AML Whistleblower Law Awaits Reform

Money Laundering, Whistleblowing
A whistleblower recently leaked data from Credit Suisse revealing that the bank opened accounts for and served numerous individuals with criminal ties, including sanctioned businessmen and human rights abusers. The leaked data includes information on more than 18,000 bank accounts, collectively holding more than $100 billion. It has increased scrutiny of the Swiss banking system and has renewed calls for stronger anti-money laundering laws. According to the New York Times, “among the biggest revelations is that Credit Suisse continued to do business with customers even after bank officials flagged suspicious activity involving their finances.” The Times reports that these customers…

‘Swiss Secrets’: What Would E.U. Blacklisting Mean for Switzerland?

Money Laundering
The Swiss Secrets scandal threatens to shift the country back to the European Union’s blacklist – but what does that mean for Switzerland? In view of a recent data leak showing that Credit Suisse bank accepted money from illicit sources, the European People’s Party (EPP) has called on the EU to “re-evaluate Switzerland as a high-risk money-laundering country” and add it to the list of nations at high risk for financial crime. Credit Suisse bank held tens of billions of euros of dirty money for decades, a new cross-border media investigation claimed Sunday. The investigation was coordinated by the Organised…

Credit Suisse Faces Money Laundering Charges in Bulgarian Cocaine Traffickers Trial

Drug Trafficking, Money Laundering
ZURICH, Feb 7 (Reuters) – Credit Suisse faced charges in a Swiss court on Monday of allowing an alleged Bulgarian cocaine trafficking gang to launder millions of euros, some of it stuffed into suitcases. In the first criminal trial of a major bank in Switzerland, Swiss prosecutors are seeking around 42.4 million Swiss francs ($45.86 million) in compensation from Credit Suisse (CSGN.S). They say the country’s second-biggest bank and one of its former relationship managers did not take all necessary steps to prevent the alleged drug traffickers from hiding and laundering cash between 2004 and 2008. “Credit Suisse unreservedly rejects…

Why the U.K. Needs to Accelerate its AML/CTF Efforts on Crypto Assets

Digital Currencies, Money Laundering, Terrorism
As money-laundering risks rise with the increased adoption of cryptocurrencies, the UK needs to accelerate its response to maintain its future as a centre for financial innovation. It’s been two years since the UK rolled out its anti-money laundering and countering the financing of terrorism (AML/CFT) regime for cryptoassets. And there’s been one clear lesson in that time: getting it right isn’t easy. As the Treasury Select Committee report on Economic Crime (TSC Report) launched on 2 February noted, ‘registration of crypto-asset firms for money laundering has been slow’, leading the Committee to urge quicker progress. However, UK progress should…

Estate Agents See 64% Rise in AML Registrations

Money Laundering, Terrorism
With the property market long being a target for money laundering, new data reveals that UK estate agents are stepping up to the challenge and have seen the largest annual increase in the number of newly AML registered businesses. The government’s latest risk assessment of money laundering and terrorist financing increased the risk score for money laundering within the UK property market to high, with the specific risk to both estate and letting agents also increasing. Despite this risk, HMRC revealed that estate agents had been slow out the blocks when it came to AML compliance, estimating back in 2019…

Court Approves £5.6m Seizure Over Money Laundering

Money Laundering
The National Crime Agency can seize £5.6m from a sophisticated global money laundering scheme involving UK companies, a court has ruled. Financial investigators can take the money from the London-based family of Javanshir Feyziyev, an MP in the Azerbaijan parliament. The NCA had hoped to seize over £15m but hailed Monday’s ruling a success. It comes as campaigners criticise the government for delaying new laws to target allegedly dirty money in the UK. The investigation was launched after the exposure of a corruption scandal dubbed the Azerbaijani laundromat. The NCA pored over thousands of leaked documents from Den Danske Bank,…

No 10 Pressured Me to Drop Anti-Money Laundering Measures, Says Ex-Minister

Money Laundering, Regulation
A former Conservative minister, once at the heart of efforts to clamp down on money laundering in London, has revealed that during Theresa May’s premiership, No 10 “leant on him” when he tabled amendments to introduce a public register of overseas property owners. Lord Faulks said he had first tried to put the register into the criminal finances bill in 2017 and then again into a government bill on money laundering in 2018. He had described the overseas ownership of “dirty money” in London as an obscenity. Faulks, a distinguished barrister and now an independent peer, told the Guardian he…

U.K. Seizes Millions from Lawmaker Linked to the Azerbaijani Laundromat

Money Laundering
The U.K. authorities have seized from an Azerbaijani lawmaker 5.6 million pounds (US$7.56 million) derived from a sophisticated international money laundering scheme that was revealed by the OCCRP and its partners in 2017, the National Crime Agency (NCA) said in a statement on Monday. Based on the results of an investigation conducted by the agency, a court ruled that the money can be seized from six bank accounts belonging to Javanshir Feyziyev, his wife, one of his children and a nephew. Feyziyev is a serving member of Azerbaijan’s Parliament, Chair of the UK-Azerbaijan All Parliamentary Cooperation Committee, and Co-chair of…

Towards a stronger AML/CTF framework in the EU

Money Laundering, Terrorism
The EU framework for the prevention of the use of the financial system for the purposes of money laundering and terrorist financing already has a long history. It is more than 30 years now since the first Anti-money Laundering Directive was published in June 1991. Since then, the framework has undergone many improvements, with the previous – fifth – AML Directive being published in May 2018. The framework grew both in terms of the number and the forms of the regulatory instruments involved, incorporating both regulations and directives, as well as regulatory technical standards and guidelines developed by the European…

Money Laundering via Cryptocurrencies up 30% in 2021

Digital Currencies, Money Laundering
Money laundering via cryptocurrencies increased in 2021 by 30% and is estimated to account for US$8.6 billion, claims a report recently published by blockchain analysis firm Chainalysis. Although only 0.05% of all cryptocurrency transactions worldwide are linked to the laundering of money, Europol says it could get much worse in the future. Criminals are becoming more sophisticated in their use of cryptocurrency transactions and their money laundering schemes are becoming increasingly complex, the European police agency said. The Chainalysis report indicates the origin of money being laundered to stem from darknet sales and potential ransomware attacks. Cryptocurrency transactions are supposed…

EBA Unveils New Central Database for AML and CFT

Money Laundering, Terrorism
The European Banking Authority (EBA) has launched EuReCA, a new central database for anti-money laundering and counter-terrorism financing. According to the EBA, EuReCA will be central to coordinating efforts by competent authorities and the EBA to prevent and counter money laundering and terrorist financing risks in the EU. EuReCA will hold information on material weaknesses in individual financial institutions in the EU that competent authorities have previously identified. Competent authorities will also be reporting the measures they have imposed on financial institutions to rectify those weaknesses. Such weaknesses include the lack of adequate AML/CFT policies and procedures including the absence…

The Contract Factory – Inside Danske Bank Estonia Money Laundering Machine

Money Laundering
Skype user Maxim.Canning was a veritable one-stop-shop for anyone looking to launder illicit funds. For a fee, he would not only sell you a company registered on an offshore paradise island, but also help you to disguise who really owned it. If you needed to transfer suspect money, he could make fake contracts to give it a semblance of legality, or rapidly funnel the cash through dozens of offshore accounts. “Maxim” could even find you proxy directors to add to company paperwork — for a price. “We have for 1000 euros per piece a Kazakh until 2022,” he wrote to…

Will 2022 be a Year of Action on Illicit Finance?

Bribery, Corruption, Fraud, Money Laundering
The US Strategy on Countering Corruption promises a step change in its response to illicit finance. Can the UK government step up too? There was a time in the not so distant past when the UK was genuinely a leader in the global response to illicit finance. Yes, the country has been a magnet for dirty money and its beneficiaries for decades as a result of policy decisions (for example, investor visas) and neglect (such as underinvestment in the policing response, the national Financial Intelligence Unit and suspicious activity reporting system). But awareness of the challenges posed by illicit finance…

How the Kazakh Elite Put its Wealth Into U.K. Property

Corruption, Money Laundering, Unexplained Wealth Orders
Ministers face claims they have allowed the ruling elite of Kazakhstan to secretly invest vast chunks of the country’s wealth in the London property market after failing to introduce promised new transparency laws. Former prime minister David Cameron pledged at an anti-corruption summit in London in 2016 that the UK would end the secret offshore ownership of property. More than five years later, a proposed register of foreign owners of UK property has still not been introduced. The uprisings in Kazakhstan last week reflected widespread anger at former president Nursultan Nazarbayev’s three decades of rule and the vast fortunes amassed…

Crypto Giant Binance Kept Weak Money Laundering Checks

Money Laundering
ATTARD, Malta – In the courtyard of a secluded limestone palace, Malta’s political elite welcomed a guest: Changpeng Zhao, chief executive of Binance, the world’s largest cryptocurrency exchange. It was October 2018. Zhao was in Malta to find Binance a new home, having quit mainland China the year before when regulators there began cracking down on cryptocurrencies. Zhao praised Malta for opening its doors to crypto firms. “Binance got really lucky,” Zhao told the audience, in filmed remarks. “Malta came at a time when regulatory clarity was very much needed.” That same month Binance notified Malta’s financial regulator it planned…

Top UK Law Firm Fined Record Sum for Breaching Money Laundering Rules

Money Laundering, Regulatory Fines
Mishcon de Reya, one of the UK’s most prestigious law firms, has been fined a record amount for committing “serious breaches” of money-laundering rules. The London-based firm has agreed to pay a fine of £232,500, plus a further £50,000 towards the costs of the investigation, which was carried out by the Solicitors Regulation Authority (SRA). In its decision, published on Wednesday, the regulator said Mishcon de Reya’s conduct had “potential to cause significant harm by facilitating transactions that gave rise to a risk of facilitating money laundering”. The SRA investigation concerned work the firm carried out for two unnamed individual…

EBA Alerts on the Detrimental Impact of Unwarranted De-Risking

Money Laundering, Terrorism
The European Banking Authority (EBA) published today its Opinion on the scale and impact of de-risking in the EU and the steps competent authorities should take to tackle unwarranted de-risking. Providing access to at least basic financial products and services is a prerequisite for the participation in modern economic and social life and de-risking, when unwarranted, can cause the financial exclusion of legitimate customers. It can also affect competition and financial stability. De-risking refers to decisions taken by financial institutions not to provide services to customers in certain risk categories. De-risking can be a legitimate risk management tool but it…

Swedbank ex Chief Charged Over Money Laundering Scandal

Fraud, Money Laundering, Prosecutions
The former chief executive of Swedbank has been charged with fraud, market manipulation and the unauthorised disclosure of inside information, after an investigation into a large-scale money laundering scandal in the Baltics. Birgitte Bonnesen, who was sacked as chief executive two years ago when the scandal came to light, “repeatedly spread misleading information” that the bank did not have any issues with its anti-money laundering (AML) processes in Estonia, according to Sweden’s Economic Crime Authority. Thomas Langrot, the chief prosecutor and head of the investigation, said Bonnesen either intentionally or through gross negligence disseminated misleading information about the state of…

Millions Seized in Gibraltar Money Laundering Operations

Money Laundering
Since 2016, the Gibraltar Money Laundering Investigation Unit has seized almost 2.4 million euros, as well as luxury yachts and apartments, from the proceeds of organised crime. Chief Inspector Tunbridge of the Economic Crimes Unit has attributed a collaborative relationship with Spain to its success, but admits that Brexit has made investigations all the more difficult. A huge amount of drugs is trafficked from Morocco to Spain, and foreign criminal organisations have money laundering through illegal activities in Gibraltar down to a fine art. Mr Tunbridge explained that criminals know very well that if they commit a crime in one…

Chinese Police Make First Arrest For CBDC Money Laundering

Money Laundering
Chinese officials have hunted down a gang suspected of laundering money using the digital yuan. Chinese officials have arrested members of a criminal group charged with alleged money laundering using the country’s CBDC, the digital yuan. The news implies the Chinese government and law enforcement will have greater control and oversight over financial activities in the country with its CBDC. China Records First Illegal Use Case of e-CNY The Xinmi Public Security Department arrested members of a gang, composed of 11 members, in the Fujian Province for allegedly scamming a person for 200,000 yuan ($32,000). Reportedly the victim, named Qu,…

U.K. Hands Down Largest Sentences for Money Laundering

Money Laundering, Prosecutions
A U.K. court sent two men behind bars for a total of 33 years for laundering the equivalent of nearly US$95 million and fraudulently claimed $13.44 million in COVID-19 Bounce Back Loans for their fake companies, the National Crime Agency reported. Artem Terzyan, 38, from Russia was sentenced to 17 and Deivis Grochiatskij, 44, from Lithuania to 16 years in prison after a seven-weeks-long trial in September. Their sentences are believed to be one of the largest ever handed down in the U.K. for money laundering, the NCA said. The investigation started in October 2017 when the police noticed another…

NatWest Fined £264.8 Million Over Anti-Money Laundering ‘Failures’

Money Laundering, Prosecutions
NatWest received a £264.8 million fine after failing to comply with account-monitoring requirements, becoming the first bank to be criminally convicted under the UK’s anti-money laundering regulations. The fine relates to NatWest’s failure to properly monitor its business relationship with jewellery firm Fowler Oldfield. Over a period of less than four years, the Fowler Oldfield deposited around £365 million—mostly in cash—despite having an estimated annual turnover of just £15 million In sentencing remarks published on Monday, Mrs Justice Cockerill accused NatWest of “failing to comply” with its legal obligations, but without “any deliberate flouting of the rules or any criminal…

FCA Fines HSBC £64m for Failings in its AML Processes

FCA, Money Laundering, Regulatory Fines
Banking giant HSBC has been fined £63.9 million by the UK’s Financial Conduct Authority (FCA) for failings in its anti-money laundering (AML) processes. The FCA claims HSBC’s transaction monitoring systems showed “serious weaknesses” over a period of eight years from March 2010 to March 2018. The regulator says HSBC did not dispute its findings and agreed to settle “at the earliest possible opportunity”. As a result, the bank’s total fine was discounted by 30% from £91,352,600 down to £63,946,800. In particular, the FCA says HSBC failed to “consider whether the scenarios used to identify indicators of money laundering or terrorist…