Category: Regulation

Financial watchdog puts banks on alert in fight against money laundering via the Post Office

Money Laundering, Regulation
A series of measures designed to reduce the risk of money laundering via the Post Office have today been set out by the FCA. The regulator brought together partners including the National Economic Crime Centre (NECC), industry and government to strengthen controls while seeking to ensure that legitimate customers can continue to use the Post Office for Everyday Banking. The measures set out for banks today include: Post Offices are an important part of protecting access to cash for people and small businesses. FCA research found 6% of adults in the UK used cash to pay for everything over the…

Factsheet: failure to prevent fraud offence

Fraud, Regulation
What is the government doing and why?The government is creating a new failure to prevent fraud offence to hold organisations to account if they profit from fraud committed by their employees. This will improve fraud prevention and protect victims. Whilst there are some existing powers to fine and prosecute organisations and their employees for fraud, the new offence will strengthen these, closing loopholes that have allowed organisations to avoid prosecution in the past. Under the new offence, an organisation will be liable where a specified fraud offence is committed by an employee or agent, for the organisation’s benefit, and the…

Britain Reviews Plans for ‘Edinburgh’ Light Touch Regulation Following SVB Collapse

Regulation
BRITAIN’S plans to re-introduce light touch regulation was being reviewed this week in light of the SVB collapse. UK prime minister Rishi Sunak and chancellor Jeremy Hunt have seeking regulation of the country’s financial services to make it more attractive post-Brexit. Known as the Edinburgh Reforms, these are now being re-considered. Vicky Saporta, executive director for prudential regulation at the BoE, said last month that the legislation was “a big deal” and would “make a big difference” to the way it regulated banks. However, the government was now being urged to be far more cautious. “The Treasury must be careful…

FATF Publishes its ‘Tougher’ New Beneficial Ownership Standards

KYC, Regulation
FATF today published its “tougher” global beneficial ownership standards to assist countries and financial institutions to prevent shell companies being safe havens for illicit proceeds. The task force’s Recommendation 24 requires countries to ensure that competent authorities have access to adequate, accurate and up-to-date information on the true owners of companies. The Paris-based body has also updated the guidance that will help countries implement the revised Recommendation 24. The guidance explains types and sources of relevant information, and mechanism and sources to obtain such information. This includes the multi-pronged approach, which consists of combining information from, among others, companies themselves,…

What does new anti-fraud regulation mean for UK plc?

Fraud, Regulation
Legal experts are expecting the enactment of a series of new anti-fraud measures this year, particularly via the economic crime and corporate transparency bill. What effect will this have on British businesses?Jonathan Weinberg14 Mar 2023Gettyimages 1366039494This year is set to be a significant one for the legislative side of the fight against financial crime in the UK. That means there’s plenty of debate about it – in the Houses of Parliament, around boardroom tables and within legal chambers. Matt Horne worked for the National Crime Agency for nearly a decade, latterly as deputy director of investigations, before becoming head of…

New EU Measures against Money Laundering and Terrorist Financing

Regulation
MEPs approved stricter rules to close existing gaps in combating money laundering, terrorist financing and evasion of sanctions in the EU.On Tuesday, MEPs from the Economic and Monetary Affairs and Civil Liberties, Justice and Home Affairs committees adopted their position on three pieces of draft legislation on the financing provisions of EU Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) policy. The package consists of: the EU “single rulebook” – regulation – with provisions on conducting due diligence on customers, transparency of beneficial owners and the use of anonymous instruments, such as crypto-assets, and new entities, such as crowdfunding…

The Financial Conduct Authority Is Investigating Suspected Money Laundering Failings At Barclays

Money Laundering, Regulation
Barclays Bank is being investigated by the Financial Conduct Authority (FCA) for suspected failings in its compliance and anti-money laundering (AML) systems. The UK regulator requested an independent review of Barclays’ internal systems under Section 166 of the Financial Services and Market Act 2000. This involves asking an independent firm of experts to review and report on Barclays’ systems and provide recommendations to improve practices in line with AML regulations. The Financial Times reported that there had been a number of incidents where the bank had failed to conduct thorough know your customer (KYC) and AML checks. Although the incidents…

Swiss regulator investigates 12 banks in Lebanese central banker corruption case

Bribery, Corruption, Regulation
ZURICH (Reuters) -Switzerland’s financial regulator has investigated 12 banks and launched enforcement proceedings against two of them in relation to corruption charges against longtime central banker Riad Salameh, it said on Monday. Lebanese authorities charged Salameh, his brother Raja and one of his assistants on Thursday with money laundering, embezzlement and illicit enrichment after months of delay in the high-profile case. The Salameh brothers have denied wrongdoing throughout the process. The governor insisted on his innocence to Reuters last Thursday, saying the charges were “not an indictment” and pledged to abide by judicial procedures. The charges are the product of…

Experts warn UK businesses of imminent changes to anti-money laundering regulations

Money Laundering, Regulation
Legal experts have urged UK businesses to pay close attention to upcoming changes to the 2017 Money Laundering Regulations (MLRs) that will impose further compliance requirements on in-scope firms. In line with the 2022 Money Laundering and Terrorist Financing (Amendment) (No.2) Regulations, from 1 April 2023, businesses subject to the MLRs will have to comply with checks of the register of overseas entities (ROE) at Companies House for dealings with corporate entities. For dealings with trust entities, businesses subject to the MLRs will have to comply with checks of the trust registration service (TRS) that is maintained by HM Revenue…

Britain Sets Out Plans to Regulate Crypto Industry in Wake of FTX Collapse

Digital Currencies, Regulation
The U.K. formally laid out plans to regulate the cryptocurrency industry, with the government looking to rein in some of the reckless business practices that emerged over the past year and contributed to the demise of FTX. In a widely-anticipated industry consultation launched Tuesday, the government proposed a number of measures aimed at bringing regulation of crypto asset businesses in line with that of traditional financial firms. Among the proposals unveiled Tuesday was a move that would strengthen rules targeting financial intermediaries and custodians that store crypto on behalf of clients. A big theme that emerged in 2022 was the…

Thailand’s SEC issues rules on management of digital wallets for custody of digital assets and keys

Digital Currencies, Regulation
The Securities and Exchange Commission (SEC) has issued regulations requiring digital asset business operators that provide custody of clients’ digital assets to establish a digital wallet management system to accommodate efficient custody of digital assets and keys* and ensure safety of clients’ assets. The regulations cover the following requirements: (1) Policy and guidelines for overseeing risk management and management of digital wallets and keys as well as communication to clarify such policy, action plans and procedures, work supervision and internal control to ensure compliance with the policy; (2) Policy and procedures for designing, developing and managing digital wallets as well…

New York’s Financial Regulator Takes Aim at Firms Co-Mingling Crypto Funds

Digital Currencies, Regulation
New York’s chief financial regulator is set to release new guidance on Monday dictating that companies separate customers’ crypto assets from their own, after alleged co-mingling of funds at collapsed crypto exchange FTX and its affiliated trading firm Alameda Research led to hefty losses for clients. The New York State Department of Financial Services (NYDFS), which leads one of the few state agencies with a regulatory system in place for cryptocurrency companies, will also stipulate that state-regulated companies disclose to customers how they account for clients’ digital currency. The guidance is the latest in a series of crypto-related directives NYDFS…

Elizabeth Warren’s Tough-On-Crypto Bill is Taking Shape

Digital Currencies, Regulation
Sen. Elizabeth Warren, D-Mass. is working on a sweeping cryptocurrency bill that would hand the Securities and Exchange Commission most regulatory authority over the market, according to two people familiar with her efforts. While discussions are still early and details could change, Warren’s office is looking at a range of crypto-related issues, including regulations, taxation, climate, and national security. The senator has recently stepped up her criticism for the industry and demanded “comprehensive” new rules to govern it following the massive collapse of the crypto exchange FTX. (FTX founder Sam-Bankman Fried is an investor in Semafor.) Ideas on the table…

UK Anti Money Laundering and Countering the financing of Terrorism – Supervision Report 2020-22

Regulation
This report provides information about the performance of AML/CTF supervisors between 6 April 2020 – 5 April 2022 and fulfils the Treasury’s obligation, under Section 51 of the MLRs, to publish an annual report on supervisory activity. The report includes supervisory and enforcement data on both the Statutory and Professional Body Supervisors, highlighting any notable changes in supervisory activity and any fines that supervisors have issued. This report provides supervisory and enforcement data for both the 2020-2021 period (6th April 2020 – 5th April 2021) and the 2021-2022 period (6th April 2021 – 5th April 2022). The two years have…

Hochul Signs Partial Cryptocurrency Mining Nan into New York Law

Digital Currencies, Regulation
New York’s nation-leading Climate Leadership and Community Protection Act, the most aggressive climate and clean energy law in the nation, while also continuing our steadfast efforts to support economic development and job creation in upstate New York.” The new law will also trigger a study by state Department of Environmental Conservation to study the impacts of the cryptocurrency mining industry on the environment. The measure was hotly debated in the halls of the state Capitol this year, with environmental groups pushing lawmakers and Hochul to support the bill and the industry urging Hochul to reject it. “Thank you, Governor Hochul,…

EU Court of Justice Rolls Back Anti-Money Laundering Rules

Money Laundering, Regulation
In a stunning reversal, the Court of Justice of the European Union weakened an existing anti-money laundering rule on Tuesday, limiting use of one of the most potent tools against financial secrecy – access to beneficial ownership information. “Beneficial ownership” is the term for who, in reality, benefits from (or owns) a given company or corporate structure. Wealthy individuals, criminals and tax cheats are among those who routinely disguise ownership of such entities, often to hide their wealth from authorities. Organizations fighting for tax equity and reform immediately denounced the ruling. “By requiring corporations and offshore entities to publicly disclose…

New Crackdown on Fraud and Money Laundering to Protect U.K. Economy

Financial Crime, Fraud, Regulation
The Economic Crime and Corporate Transparency Bill will strengthen the UK’s reputation as a place where legitimate businesses can thrive while driving dirty money out of the UK. Through the reforms, anyone who registers a company in the UK will need to verify their identity, tackling the use of companies as a front for crime or foreign kleptocrats. The reforms to Companies House – its biggest upgrade in 170 years – will also see the organisation armed with new powers to check, challenge and decline incorrect or fraudulent information, making it a more active gatekeeper over company creation. The investigation…

E.U. to Discuss Crypto Legislation With U.S. Officials

Digital Currencies, Regulation
EU representatives will reportedly broach the need for a more coordinated global crypto regulatory framework with US officials at next week’s IMF-World Bank annual meetings. The bloc’s Commissioner for Financial Services, Mairead McGuinness revealed there was a “crowded agenda” for the US next week. Speaking at a media roundtable hosted by Bloomberg, Commissioner McGuinness added: “One of the items that won’t be bottom of the list, it will be in there right around the top is crypto.” “I am sure they want to hear what we’ve done, how it went, what the problems were. I would be very happy to…

The UK has a new name for stablecoins

Digital Currencies, Regulation
The proposal is another ripple of recognition for the Bitcoin, crypto and digital assets industries in the United Kingdom. The United Kingdom moved forward on the Financial Services and Markets Bill on Oct. 25, hardening its vision for Bitcoin cryptocurrency and “digital settlement assets” in the country. The suggested bill proposes “a range of measures to maintain and enhance the U.K.’s position as a global leader in financial services, ensuring the sector continues to deliver for individuals and businesses across the country.” The bill reasserts the U.K.’s intention to become a global cryptocurrency hub, comments echoed by Lisa Cameron, member…

More questions than answers? The EU’s new anti-money laundering authority

Money Laundering, Regulation
The EU is set to establish a new Anti-Money Laundering Authority next year. Sebastian Diessner writes that while the new authority is a step in the right direction, there remain more questions than answers over how it will function and where it will be based. Until recently, the question of who is in charge of cracking down on money laundering in Europe should arguably have been answered with: ‘the US’. After all, it has been the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN) that has acted as the sheriff in terms of discovering and penalising major scandals among European…

Russia to Legalise use of Cryptocurrency in International Trade

Digital Currencies, Regulation
The Bank of Russia and the country’s Ministry of Finance have reconsidered their positions toward cryptocurrency, acknowledging it to be necessary to legalize the use of cryptocurrencies in cross-border settlements, per a report by local news outlet TASS. According to TASS, the two government bodies have agreed that “it is impossible” to continue without enabling cryptocurrency as a legal payment method for international trade. The move comes as Russia dabbles on how to best regulate the Bitcoin and cryptocurrency markets. Swamped in Western sanctions, the world’s largest country has sought alternatives to the U.S. dollar so as to guarantee the…

Biden White House Just Put Out a Framework on Regulating Crypto

Digital Currencies, Regulation
The Biden White House has just released its first-ever framework on what crypto regulation in the U.S. should look like — including ways in which the financial services industry should evolve to make borderless transactions easier, and how to crack down on fraud in the digital asset space. The new directives tap the muscle of existing regulators such as the Securities and Exchange Commission and the Commodity Futures Trading Commission, but nobody’s mandating anything yet. The long-awaited direction from Washington has, however, captured the attention of both the crypto industry as a whole — and of investors in this nascent…

Money laundering: new Bill to give SRA more power to fight economic crime

Money Laundering, Regulation
As the perpetual war on economic crime continues to be waged, a new Bill introduced into the House of Commons on 22nd September could be set to offer much needed reinforcements to solicitors’ regulators. The government’s Economic Crime and Corporate Transparency Bill 2022 – dubbed the “Economic Crime Bill 2.0 by the Law Society – aims to give the Solicitors Regulation Authority (SRA) greater powers on economic crime disciplinary matters. “We are pleased the UK government is introducing a second Economic Crime Bill, with the express provision of stopping money laundering in the UK,” said Law Society president I. Stephanie…

Wise hit with AML Fine in Dubai

Regulation, Regulatory Fines
London-listed fintech firm Wise has been slapped with $360,000 (£307,801) fine by Abu Dhabi regulators today after a series of failures in its anti-money laundering controls. The Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM) announced today it had fined the money-transfer firm after finding it did not “establish and maintain adequate AML systems and controls” to ensure full compliance with its AML obligations. In its charge sheet against Wise, the regulator said that it had failed to track and verify the source of funds on customers it had identified as high risk, as well as failing…

Germany Plans New Financial Crime Authority in Bid to Tackle Money Laundering

Money Laundering, Regulation
Germany wants to create a new financial crime authority that would bundle several fragmented competencies, including sanctions enforcement, said a finance ministry paper on Tuesday. There are currently more than 300 supervisory bodies across Germany, a figure the finance ministry would like to reduce. With the new authority, the finance ministry hopes to make it easier to tackle complex international money laundering cases, which have long been a weak spot for the country. “We need to do better in many areas,” said a government representative, referring to the fight against money laundering. The current FIU unit, which receives suspicious activity…

Canberra Lawyer Ben Aulich was Hoping to Reap Millions from Money Laundering Plan

Money Laundering, Regulation
Canberra lawyer Ben Aulich and accountant Michael Papandrea will continue to resist being put on trial on conspiracy to launder money after losing a bid to have their case heard in the ACT Magistrates Court. Both have been charged with conspiracy to launder money. Mr Aulich faces an alternative charge of recruiting others to engage in criminal activity. Efforts to keep the case in the lower court failed after prosecutor Mark Tedeschi told the court it didn’t have jurisdiction to hear the case, and the charges should be sent to the ACT Supreme Court for trial. “It would be hard…

Companies House plans digital ID verification

Regulation
Companies House is developing a new digital identity verification process to prevent people registering companies for illegal purposes. Chief executive Louise Smyth referred to the plan in a blogpost, published to coincide with the release of the agency’s corporate plan for 2022-23, saying that anyone setting up, running, owning or controlling a company in the UK will need to provide assurance they are who they claim to be. A spokesperson for Companies House said an individual will have to verify their identity, either directly or through an agent, by linking themselves with an authorised photo ID. They will take photographs…

FCA fines The TJM Partnership Limited (in liquidation) £2 million for serious financial crime control failings in relation to cum-ex trading

Financial Crime, Regulation
The FCA has fined The TJM Partnership Limited (in liquidation) £2,038,700 for failing to ensure it had effective systems and controls to identify and reduce the risk of financial crime and money laundering in its business. This is the third case brought by the FCA in relation to cum-ex trading and the largest fine so far. This reflects the multiple examples of serious misconduct over a lengthy period. TJM did not have adequate procedures, systems and controls to identify and mitigate the risk of being used to facilitate fraudulent trading and money laundering in relation to trading on behalf of…

Risk-based Approach Guidance for the Real Estate Sector

FATF, Money Laundering, Regulation
Real estate is a popular choice for investment, but it also attracts criminals who use real estate in their illicit activities or to launder their criminal profits. It allows criminals networks to thrive and grow using the profits of their illegal activities, which impacts society and undermines the rule of law. In some countries, these practices also contribute to driving up the prices of real estate, making housing inaccessible to many as well as further incentivizing the criminal activity. FATF assessments show that the real estate sector often has poor understanding of these risks and regularly fails to mitigate them.…

ESG is Becoming a Magnet for Financial Crime

Financial Crime, Regulation
In the words of Atilla the Hun, “The spirit of the law is greater than the letter.” How organizations adhere to principals, puts the organization ahead of the compliance curve. Ahead of rules there are movements and ideas, written laws follow closely thereafter. The principals of ESG are still being widely debated across the globe, the underlying principles of ESG are to do the right thing and elevate a consciousness of stakeholdership by organizations in the world in which they interact, naturally, such a broad mandate is going to be subject to rigorous debate, as creating policy around “impact” is…

Exploring the New Dawn for Crypto and Regulation

Digital Currencies, Regulation
In recent times there has arguably been a global shift in the regulatory attitudes and action towards cryptocurrency. What once was considered a fringe currency is gradually being brought into the mainstream and legitimised by regulation. In the past six months, the UK government has created a Crypto and Digital Assets Group, announced that it is “open” for crypto business, and launched a consultation into an insolvency regime for cryptocurrency, specifically stablecoins. A recent report by CUBE has explored global regulatory data to understand the shifting regulatory attitudes for crypto. It has found that in four years alone, there has…

Crypto Exchanges Should Lose Licenses for Laundering Breaches, EU Regulators Say

Digital Currencies, Money Laundering, Regulation
Crypto exchanges should lose their licenses if found to have seriously breached anti-money laundering rules, European Union financial supervisors said. The recommendation comes as lawmakers reach the closing stages of landmark legislation known as the Markets in Crypto Assets Regulation, or MiCA, introducing an authorization regime for virtual asset companies within the 27-nation bloc.Regulatory authorities responsible for authorizing or registering crypto exchanges and wallet providers should “be empowered to withdraw the authorisation/registration for serious breaches of AML/CFT [anti-money laundering and terrorist finance] rules,” said a report published Wednesday by the three European supervisory authorities responsible for overseeing banks, insurers and…

Defining Cryptocurrency Regulation Important for the Industry to Grow

Digital Currencies, Regulation
A united government may make it easier for new crypto laws to be agreed upon, and to “follow the spirit of Biden’s executive order” in keeping the U.S. at the vanguard of innovation, Morgan Stanley (MS) said in a report Wednesday looking at the implications of midterm elections for the cryptocurrency sector. According to the bank’s public policy analysts, legislation concerning tech regulation, cryptocurrency, pricing of prescription drugs, tax increases and China competition will have varying chances of passage by the end of 2023, depending on the outcome of the November elections. Defining regulation for digital assets is important for…

Global Crypto Regulatory Body Is Coming Soon

Digital Currencies, Regulation
A joint body tasked with coordinating crypto regulation globally is sorely needed and could become a reality within the next year, according to Ashley Alder, chair of the International Organization of Securities Commissions (IOSCO), an association of market regulators. Alder was speaking at an online conference organized by the think tank Official Monetary and Financial Institutions Forum (OMFIF). Alder, who is also the CEO of Hong Kong’s Securities and Futures Commission, said the growth of digital currency markets and their increasing connection to mainstream finance has made crypto a top focus area for regulators around the world. “Crypto has obviously…

Britain Must Do More to Tackle Corruption in Politics and Finance, Lawmaker Says

Corruption, Regulation
Britain has lost its moral compass and must act to tackle “dirty money” and protect the integrity of its democracy, a senior opposition lawmaker said in a report published on Monday by King’s College London. Margaret Hodge, a Labour lawmaker for 28 years and former head of parliament’s Public Accounts Committee, said a culture of deregulation and light-touch enforcement had allowed financial malpractice to flourish and this was seeping in to politics. “Unacceptable behaviour is in danger of becoming commonplace,” Hodge, who chairs a cross-party parliamentary group on anticorruption and responsible tax, said in the report for the Policy Institute.…

EU Crypto Firms Protest ‘Alarming’ Anti-Money Laundering Laws

Digital Currencies, Money Laundering, Regulation
The companies are joining forces to try to limit the impact of new proposals to identify crypto users and regulate stablecoins. The crypto sector has written to European Union finance ministers and lawmakers to urge a rethinking of anti-money laundering rules the industry regards as “burdensome” and “alarming.” The letter, seen by CoinDesk and signed by academics, lobby groups and senior executives from companies such as Ledger, Aave and Blockchain.com, says current proposals to identify crypto users, known as the travel rule, endanger privacy and innovation in the EU. “The proposals from the European Parliament, by leading to the public…

The Economic Crime Act – A Starting Point Not an End

Regulation
New economic crime legislation is welcome, but without bolder systemic reforms it will have little impact on the UK’s dirty money problem. ‘Just get with it. All money is good money, particularly if it helps build our schools and hospitals’. So went the argument from an unnamed UK government minister back in 2005, when questioned by a journalist about the flow of dubious Russian money into the UK. This view – while not express government policy – largely prevailed in the following 17 years, with successive governments failing to fully understand the implications of turning a blind eye to the…

Corporate Governance Snapshot: The Transformation Of Companies House

Companies House, Regulation
Following initial consultation in 2019, and follow-up consultations in 2020, the Government has now published its final position on the reform of Companies House ahead of introducing legislation to effect the changes. This snapshot summarises the key proposals. ENHANCED ROLE AND GREATER POWERS FOR THE REGISTRAR Registrar will have power to: query any filings (including company names) that appear erroneous, anomalous or suspicious, and which may impact integrity of the register/wider business environment. Additional power to reject filings where the Registrar has queried the information provided. Information already on the register in scope; remove material from the register more swiftly…

Russia Considers New Anti-Transparency Measure to Shield Civil Servants From Sanctions

Regulation, Sanctions
On Mar. 5, 2022, a veteran Russian parliamentarian introduced an amendment to shield Russian civil servants from sanctions “by unfriendly states,” the latest in a series of moves by the Russian government to limit transparency. Sanctioned Parliamentarian Introduces Anti-Transparency Amendment Vladislav Reznik, a deputy since 1999 in the Russian Federation’s State Duma, introduced the proposed amendment to Russia’s Federal Law No. 273-FZ of December 25, 2008, according to Russian news agency Interfax and state media outlet TASS. The proposed amendment would prohibit Russian government entities at all levels (federal, federal subjects, and local) as well as state companies and public…

U.S. Departments of Treasury and Justice Launch Oligarch Whistleblower Programme

Regulation, Sanctions
The US Department of Treasury’s Financial Crimes Enforcement Network has created a new whistleblower programme that will pay more than $5 million to any whistleblower with original information that helps them seize assets of Russian elites seeking to evade US sanctions. Titled the Kleptocracy Asset Recovery Rewards Program, the scheme is aimed at seizing stolen assets by elites and their associates and the proceeds of their corruption. The Treasury Secretary can authorise greater amounts than $5 million should a case merit it. Jeffrey Newman, a partner in the firm of Newman & Shapiro which represents whistleblowers worldwide, said:“This programme can…