Category: Regulation

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…

Anti Money Laundering Body Puts UAE on Global ‘Gray’ List

Regulation, Whistleblowing
DUBAI, United Arab Emirates — A global body focused on fighting money laundering has placed the United Arab Emirates on its so-called “gray list” over concerns that the global trade hub isn’t doing enough to stop criminals and militants from hiding wealth there. The decision late Friday night by the Paris-based Financial Action Task Force puts the UAE, home to Dubai and oil-rich Abu Dhabi, on a list of 23 countries including fellow Mideast nations Jordan, Syria and Yemen. While not expected to dent business in the Emirates, a federation of seven sheikhdoms on the Arabian Peninsula home to a…

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…

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…

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…

The U.S. Releases its First-Ever Strategy on Countering Corruption

Corruption, Regulation
Corruption is a cancer within the body of societies—a disease that eats at public trust and the ability of governments to deliver for their citizens. The deleterious effects of corruption impact nearly all aspects of society. It exacerbates social, political, and economic inequality and polarisation; impedes the ability of states to respond to public health crises or to deliver quality education; degrades the business environment and economic opportunity; drives conflict; and undermines faith in government. Those that abuse positions of power for private gain steal not just material wealth, but human dignity and welfare. Recognising corruption’s ability to corrode democracy,…

Cryptocurrency – Cardiff Terrorist Khuram Iqbal Jailed Over Trading

Corruption, Regulation
A convicted terrorist has been jailed for 16 months over his cryptocurrency trading on the dark web. Khuram Iqbal, 29, from Cardiff, was originally jailed in 2014 for three years and three months for disseminating terrorist publications and possessing terrorist information. He was released on licence in May 2015 but recalled to jail in 2016. Iqbal breached a 10-year notification order by failing to tell police about two cryptocurrency accounts. He pleaded guilty to four breaches between July 2019 and August this year and appeared at the Old Bailey to be sentenced by Mr Justice Sweeney. The defendant had originally…

FinCEN Launches Regulatory Process for New Real Estate Sector Reporting Requirements

FinCEN, Money Laundering, Regulation
WASHINGTON—The Financial Crimes Enforcement Network (FinCEN) announced today an Advance Notice of Proposed Rulemaking (ANPRM) to solicit public comment on a potential rule to address the vulnerability of the U.S. real estate market to money laundering and other illicit activity. The systemic money laundering vulnerabilities presented by the U.S. real estate sector, and consequently, the ability of illicit actors to launder criminal proceeds through the purchase of real estate, threatens U.S. national security and the integrity of the U.S. financial system. FinCEN has long been concerned with the potential for corrupt officials and illicit actors to launder the proceeds of…

FinCEN Seeks Comments on Modernization of U.S. AML/CFT Regulatory Regime

FinCEN, Money Laundering, Regulation
WASHINGTON— Today, FinCEN is issuing a request for information (RFI) seeking comments on ways to streamline, modernize, and update the anti-money laundering and countering the financing of terrorism (AML/CFT) regime of the United States. FinCEN is particularly interested in comments on ways to modernize risk-based AML/CFT regulations and guidance, issued pursuant to the Bank Secrecy Act (BSA) so that they, on a continuing basis, protect U.S. national security in a cost-effective and efficient manner. Today’s RFI also supports FinCEN’s efforts to conduct a formal review of BSA regulations and related guidance, which is required by Section 6216 of the Anti-Money…

Thailand to Define ‘Red Lines‘ for Crypto in Early 2022

Digital Currencies, Regulation
“Cryptocurrencies cannot become a means of payment,” Bank of Thailand governor Sethaput Suthiwartnarueput stated. The government of Thailand is preparing a new regulatory framework for cryptocurrencies like Bitcoin (BTC) to minimize risks and improve investor protection. The Bank of Thailand (BoT) will release a consultation paper in January that will define “red lines” for the crypto industry, governor Sethaput Suthiwartnarueput said in a Dec. 14 interview with The Bangkok Post. “We want to ensure that we strike the right balance between allowing financial innovation and managing risks,” the official stated. The new rules will provide adequate safeguards for consumers as…

Singapore: MAS Proposes Information Sharing to Prevent Money Laundering & Terrorism Financing

Money Laundering, Regulation
The Monetary Authority of Singapore (MAS) has released1 for consultation the proposals in its paper, FI-FI Information Sharing Platform for AML/CFT, which will require Financial Institutions (FIs) to share with each other information on customers or transactions, where they cross material risk thresholds, on a secured digital platform owned and operated by MAS to be named ‘Collaborative Sharing of ML/TF Information & Cases’ (COSMIC). Although the proposals are primarily addressed to the initial participant FIs that MAS has identified as major players in the commercial and small-medium enterprises banking segment comprising the three local banks and three qualifying full banks,…

FATF’s Updated Guidance Tells Regulators to Focus on Business Models Over Technology and Terminology

Digital Currencies, Regulation
On October 28, 2021, the Financial Action Task Force (FATF) released its updated guidance for how member jurisdictions should regulate cryptocurrency businesses. Back in March, FATF released a draft version of today’s guidance for industry review — you can read our comments on that release here. Today’s guidance largely mirrors the March proposal, with the key theme being FATF’s focus on regulating cryptocurrency businesses as VASPs based on their function and business model, rather than their underlying technology, self-described business category, or custodial status. Below, we’ll break down the most important provisions of FATF’s guidance and tell you how Chainalysis…

A Single AML Supervisor and Rulebook Might Just Be What’s Needed to Drive True Collaboration in Europe

Regulation
As European finance ministers agreed to progress plans for a major reform of anti-money laundering regulation in the European Union, Nina Kerkez outlines the likely benefits and challenges. Earlier in November, European finance ministers agreed draft proposals for establishing a single rulebook and centralised supervision within the European Union for anti-money laundering (AML) and terrorism financing (TF). The Economic and Financial Affairs (ECOFIN) council has backed up the Commissions approach to present legislative proposals in early 2021. It is expected that the reforms should be drawn up in a comprehensive way, and the Commission will have to ensure that legislation…

Is FATF Playing Politics With Pakistan

FATF, Regulation
When the Financial Action Task Force (FATF) disclosed in June that Pakistan would remain on its list of jurisdictions under increased monitoring, critics of the decision responded with a question: is the intergovernmental watchdog’s criticism of Pakistan largely political? Such an argument may seem, at least superficially, to be borne out by the facts. After all, critics noted, Pakistan completed 26 of the 27 steps required of it under a 2018 FATF action plan. After praising Pakistan’s efforts to date, FATF in June called on the nation to take six additional steps, including enhancing its international cooperation on financial-crime investigations,…