Category: Terrorism

France Puts Cement Giant on Trial for Allegedly Financing ISIS

Counter Terrorist Financing, Terrorism
A French court on Tuesday opened the trial of cement giant Lafarge over allegations the company paid millions of euros to jihadist groups in Syria between 2013 and 2014 to keep a local plant running during the country’s civil war. The Paris Criminal Court is hearing the case against the French company and eight other defendants accused of financing armed groups in war-torn Syria, including the Islamic State of Iraq and al-Sham (ISIS) and the al-Nusrah Front (ANF), to keep its local subsidiary operating. The trial is scheduled to run until December 16. Among the accused is former CEO Bruno…

CTED Trends Tracker | Evolving Trends in the Financing of Foreign Terrorist Fighters’ Activity: 2014 – 2024

Counter Terrorist Financing, Terrorism
In its resolution 2178 (2014), adopted unanimously on 24 September 2014, the Security Council expressed particular concern over the acute and growing threat posed by foreign terrorist fighters (FTFs), in particular those recruited by Islamic State in Iraq and the Levant (ISIL or Da’esh), the Nusrah Front and Al-Qaida. It also underlined the need to disrupt financial flows supporting FTFs, while respecting international human rights law, international refugee law, and international humanitarian law. In that resolution, the Council also directed CTED to identify issues, trends and developments related to FTFs. In this regard, the Trends Tracker offers a brief examination…

Inside Hamas’ Pocketbook : Financing Terrorism through online financial platforms

Counter Terrorist Financing, Terrorism
In the wake of the 7 October attack and the war that has followed, Hamas, the Palestinian Islamic resistance movement, has conducted much of its financial activity through established and emerging online financial platforms (OFPs) to support its rule in the Gaza Strip. Even though Hamas is designated as a terror organisation (and is therefore sanctioned) in the US, UK, EU and elsewhere, it has been able to take advantage of compliance-related loopholes and poor counter-terror financing (CTF) practices OFPs suffer from. Some of the OFPs Hamas uses and abuses include technologies such as online payment processors, virtual assets service…

Banana giant held liable for funding paramilitaries

Counter Terrorist Financing, Terrorism
A court in the United States has found multinational fruit company Chiquita Brands International liable for financing a Colombian paramilitary group. The group, the United Self-Defence Forces of Colombia (AUC), was designated by the US as a terrorist organisation at the time. Following a civil case brought by eight Colombian families whose relatives were killed by the AUC, Chiquita has been ordered to pay $38.3m (£30m) in damages to the families. Chiquita said in a statement that it intended to appeal against the jury’s verdict, arguing that there was “no legal basis for the claims”. The jury in the case,…

Treasury Unveils 2024 Strategy to Combat Illicit Finance Amid Evolving Threats

Terrorism
The U.S. Department of the Treasury today issued its 2024 National Strategy for Combating Terrorist and Other Illicit Financing, outlining the government’s priorities to disrupt money laundering, terrorist financing, and other financial crimes. The 2024 Strategy provides a comprehensive blueprint to address key illicit finance risks identified in recent national risk assessments, including large-scale fraud, ransomware attacks, the opioid crisis, terrorism, corruption, and exploitation of new financial technologies. “In this critical moment for our national and economic security, we need to continue to close the pathways that illicit actors seek to exploit for their schemes,” Under Secretary of the Treasury…

MAS – Strengthening Financial Institutions Countering the Financing of Terrorism Controls

Counter Terrorist Financing, Law, Regulation & Guidance, Terrorism
MAS conducted an industry-wide survey of CFT-related controls, and followed up with a series of thematic reviews to assess FIs’ TF risk understanding and examine the effectiveness of their CFT-related controls. This paper sets out MAS’ key observations, and highlights our supervisory expectations that FIs should review against their own controls. FIs should benchmark themselves against the practices and supervisory expectations set out in this paper in a risk-based and proportionate manner, and conduct a gap analysis. In doing so, FIs should give due regard to the risk profile of their business activities and customers. Where FIs observe any gaps…

Publication of the Effectiveness Through Collaboration Paper

Money Laundering, Terrorism, Wolfsberg
Today, the Wolfsberg Group is publishing its paper on Effectiveness through Collaboration. The document expands on a key element of the Wolfsberg Group’s views on developing an effective Anti-Money Laundering/Counter-Terrorism Financing (AML/CTF) programme (The Wolfsberg Factors), which is to engage with the public sector, including law enforcement. The paper specifically focuses on successful engagement through Public-Private Partnerships and is intended to be an introduction to the subject for those who may be less familiar with the principles underpinning these arrangements and the pivotal role that national authorities must play. The Wolfsberg Group urges the public sector to prioritise the establishment…

Report on the State of Effectiveness and the Compliance with the FATF Standards

FATF, Money Laundering, Terrorism
This landmark report gives a comprehensive overview of the state of global efforts to tackle money laundering, terrorist and proliferation financing. The report is based on data from FATF and FSRB mutual evaluation reports since 2013, which assessed the strengths and weaknesses of national frameworks to tackle these crimes. Overall, the report finds that countries have made huge progress in improving technical compliance by establishing and enacting a broad range of laws and regulations to better tackle money laundering, terrorist and proliferation financing. This has created a firm legislative basis for national authorities to ‘follow the money’ that fuels crime…

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…

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…

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…

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…

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…

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…

Anti-Money Laundering and Counter Terrorist Financing: Supervision Report 2019-20

Money Laundering, Terrorism
Annual report for 2019 to 2020 on anti-money laundering and counter-terrorist financing supervision. Downoad: Anti-money laundering and counter-terrorist financing: Supervision Report 2019-20 This report provides information about the performance of AML/CTF supervisors between 6 April 2019 – 5 April 2020 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. The report concludes that actions taken by supervisors have remained broadly consistent…

Crypto Crime Landscape Shifts to Bigger Threats Targeting Smaller Numbers

Digital Currencies, Money Laundering, Terrorism
The use of cryptocurrencies for illicit activities from ransom money, money laundering and funding for terrorist activities continues unabated. The tightening regulation does not appear to be making enough of a difference yet. Over the past eighteen months, the Covid crisis appears to have made matters worse as the authorities shifted their focus to fighting the pandemic. While the Financial Action Task Force (FATF) continues to warn about illicit use of virtual currencies, even the task force’s member nations – including some of the leading G20 economies – have failed to transpose the latest FATF Standards into their domestic regulation.…

‘Tick box’ AML Regime Isn’t Working, Society Tells Treasury

Money Laundering, Terrorism
Current money laundering regulations disproportionately affect small firms and promote ‘tick box compliance’, the Law Society has told the Treasury. Responding to a consultation about the effectiveness of the UK’s anti-money laundering regime, the Society warned that the current regime ‘undermines the effectiveness and proportionality of the measures’ and drives up costs for legal services consumers. Law Society president I.Stephanie Boyce said: ‘At its centre, the UK AML regime should be effective at reducing money laundering and terrorist financing. It must be built on an evidenced-based assessment of the risks and what works to mitigate those risks. ‘A risk-based approach…

Real Estate Developers and Used Car Dealerships Will Soon be Brought Under Jamaica’s Anti-Money Laundering Laws

Money Laundering, Terrorism
Signals are being sent that real estate developers and used car dealerships will soon be brought under Jamaica’s Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) framework given their high vulnerability to financial crimes. In fact, the authorities have detailed cases of crimes involving real estate transactions and drug dealers getting involved in real estate acquisitions in Jamaica’s AML/CFT National Risk Assessment report for 2021, which was recently released by the Bank of Jamaica. The report observes that the proceeds of crime have been used by criminals to finance real estate development projects as a means of laundering money in Jamaica.…

An Overview of the Use of Cryptocurrencies in Terrorist Financing

Digital Currencies, Terrorism
By Heidi Wilder, Senior Associate, Coinbase Special Investigations Team Following the fall of the elected Afghan government and rise of the Taliban in its place, many speculated that the group had or may turn to cryptocurrencies as a way to finance its operations. As part of our compliance program, Coinbase tracks these types of transactions and often works with law enforcement agencies around the world on interdiction and enforcement efforts. A quick step back With institutional and consumer interest in crypto at an all-time high, alongside the continued rise of DeFi, 2020 and 2021 have seen cryptocurrency achieve the mainstream…

Active Shipping Companies Linked to Oil Smuggling and Sanctioned Terror Financiers

Sanctions, Terrorism
On Jun. 10, 2021 the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) designated a group of individuals and companies as Specially Designated Global Terrorists (SDGT). The designation is due to the group’s role in smuggling petrochemicals for Iran’s Revolutionary Guard Corps – Qods Force (IRGC-QF) and using the proceeds to finance Houthi rebels in Yemen. Using public records, we found multiple active companies linked to this network in the Middle East, Europe, and Latin America. These general trading and shipping companies, which remain unsanctioned, pose a risk to individuals or companies that might unknowingly do business with them,…

FinCEN Announces New Acting Director

Sanctions, Terrorism
WASHINGTON—Financial Crimes Enforcement Network (FinCEN) Acting Director Michael Mosier today announced he will depart FinCEN at the end of the week for a new opportunity, after serving as the organization’s acting director. Himamauli “Him” Das, a national security expert with experience at the White House, National Security Council, National Economic Council, and Departments of State and the Treasury, will assume the role of acting director of FinCEN. Today, Treasury launched a public search for a permanent FinCEN director. “It is an honor to be returning to the Department of the Treasury as acting director of FinCEN to continue the important…

Terrorists still raise money through crypto but the impact is limited

Digital Currencies, Money Laundering, Terrorism
Evidence suggests crypto’s role in terrorism remains relatively minor: “It has not yet become a primary means of terror financing.” We’re living today “amidst an explosion of risk related to fraud, money laundering, terrorist financing, and data privacy,” said United States Treasury Secretary Janet Yellen in February — and she specifically cited cryptocurrencies as a “tool to finance terrorism.” Yellen appeared to be flagging an important new turn in the war against terror, and it begged some questions: Is crypto in the hands of terrorists a real, present danger to governments and society? If so, should the cryptocurrency and blockchain…

Ireland to enforce AML checks for digital currency firms from April in line with 5AMLD

Digital Currencies, Money Laundering, Terrorism
Ireland will impose anti-money laundering (AML) and countering the financing of terrorism (CFT) requirements for digital currency firms starting April 2021. With the new regulations, the Irish central bank will have more oversight over the industry. Buyers and sellers of digital currencies will no longer be able to transact anonymously, local daily Irish Independent reports. Digital currency firms, also known as virtual asset service providers (VASPs), will now have to complete due diligence on their clients. This is after the European nation adopted the EU’s Fifth Anti Money Laundering Directive (5AMLD). 5AMLD is the EU’s latest legal framework for combating…

EBA publishes guidelines on money laundering and terrorist financing risk factors

Money Laundering, Terrorism
The EBA has published its final revised Guidelines on money laundering and terrorist financing risk factors.The revisions consider changes to the EU Anti Money Laundering and Counter Terrorism Financing (AML/CFT) legal framework and address new ML/TF risks, including those identified by the EBA’s implementation reviews. In addition to strengthening financial institutions’ risk-based approaches to AML/CFT, the revision supports the development of more effective and consistent supervisory approaches where evidence suggested that divergent approaches continue to exist. The Guidelines are central to the EBA’s work to lead, coordinate, and monitor the fight against money laundering and terrorist financing. The Guidelines are…

AFME calls for regulatory certainty on the treatment of crypto assets

Digital Currencies, Money Laundering, Terrorism
The Association for Financial Markets in Europe (AFME) has called for UK authorities to provide regulatory certainty on the treatment of crypto assets in its response to HM Treasury’s consultation on the UK approach to crypto assets and stable coins. AFME has also pushed for a review of existing financial services legislation to identify and address obstacles to distributed ledger technology (DLT) innovation. The association has recommended a more “granular crypto-asset taxonomy” to clarify the treatment of existing use cases that will support the UK approach to fulfil regulatory objectives and encourage innovation. This will support greater certainty on which…

Money laundering and financing of terrorism: Warsaw Convention report assesses the monitoring of banking operations

Money Laundering, Terrorism
The Conference of the Parties of the Warsaw Convention, responsible for monitoring the implementation of the treaty, has published a report assessing the way its states parties monitor banking operations to prevent money laundering and the financing of terrorism. The report concludes that the majority of states parties – although with significant differences – apply articles 7(2c) and 19(1) of the convention, which provide a specific tool to competent authorities to monitor, during a specified period, the banking operations that are being carried out through one or more identified accounts. The report also issues a number of general and country…