i-law

Money Laundering Bulletin

FinCEN issues draft rule on US real estate transaction reporting

Non-financed, that is, 'all-cash' US residential real estate transactions, where the sale or transfer is made to a legal entity or trust, would, with some exemptions, be reportable to FinCEN under a proposed new rule, made public on 7 February.
Online Published Date:  09 February 2024
Appeared in issue:  311 - 01 March 2024

Fentanyl and war shake up USA's ML/TF/PF risk assessments

The scourge of the fentanyl trade and heightened international tensions caused by Russia's ongoing invasion of Ukraine, Hamas' attack on Israel and the resulting war in Gaza have shifted the USA's assessment of its money laundering (ML), terrorist financing (TF) and proliferation financing (PF) risks.
Online Published Date:  09 February 2024
Appeared in issue:  311 - 01 March 2024

City National Bank pays OCC US$65m, in part for AML control & risk assessment deficiencies

"Unsafe and unsound" practices in strategic and operational risk management, including around anti-money laundering, as well as in investment management, at City National Bank, California, a subsidiary of Royal Bank of Canada, have brought down a fine of UK$65 million from the US Office of the Comptroller of the Currency (OCC).
Online Published Date:  09 February 2024
Appeared in issue:  311 - 01 March 2024

What does a money launderer look like?

If the aim is to halt, or at least disrupt, criminal fund flows, and fast, pinpointing launderers in the customer portfolio will mean thinking creatively, maybe differently, as AML professionals did on a recent Institute of Money Laundering Prevention Officers webinar.
Online Published Date:  09 February 2024
Appeared in issue:  311 - 01 March 2024

SkyCity increases settlement provision for AML flaws after court hearing - Australia

Australasian casino operator SkyCity Entertainment Group Ltd notified the market on 1 February 2024 that it had increased the sum set aside to cover a civil settlement after informing the Federal Court in Australia that it had reached an agreement with the Australian Transaction Reports and Analysis Centre (AUSTRAC) over alleged contraventions of local anti-money laundering/counter terrorism financing law; proceedings were originally filed on 7 December 2022.
Online Published Date:  09 February 2024
Appeared in issue:  311 - 01 March 2024

Endgame - asset recovery in play

If the goal of anti-money laundering is to combat crime by interrupting the illicit flows that both fund it and reward those involved, internationally overall confiscation figures point to signal failure. Keith Nuthall looks at the reasons and finds some cause to believe in better.
Online Published Date:  09 February 2024
Appeared in issue:  311 - 01 March 2024

From victim support to systemic change - the impact of the PSR reimbursement scheme on financial crime prevention

In an era when the velocity of financial transactions increasingly defines the value of firms, the introduction of the UK's Payment Systems Regulator (PSR) Fraud Reimbursement Scheme has been subject to debate, with concerns raised over its effectiveness in reducing fraud. Mario Menz argues that the scheme will not only reduce fraud but strengthen the financial system's defences against financial crime.
Online Published Date:  09 February 2024
Appeared in issue:  311 - 01 March 2024

US AML officer fined US$100,000 by FinCEN & faces prison term

An experienced wholesale currency trader, whose work in a New York credit union, including as Bank Secrecy Act (BSA) officer, was a "major contributing factor" in its closure, has received a US$100,000 civil penalty from FinCEN and agreed to a five-year ban from employment by any 'financial institution' as defined in the BSA. Gyanendra Kumar Asre pleaded guilty in federal court, on 31 January [2024], to failing to maintain an AML programme in violation of the BSA while he directed the New York State Employees' Federal Credit Union (NYSEFCU) into international bulk cash and cheque clearing operations. He faces up to 10 years in prison.
Online Published Date:  09 February 2024
Appeared in issue:  311 - 01 March 2024

State of play - the gaming sector

Criminals have a positive bias to risk so it's only natural they should gravitate to casinos and other gambling venues for recreation but also as a way to disguise and layer their illicit gains. The money laundering typologies may be well known but huge demand and economic benefits, in terms of employment and tax revenue, also mean regulation is hard-won, finds Keith Nuthall.
Online Published Date:  09 February 2024
Appeared in issue:  311 - 01 March 2024

FINRA fines US broker-dealers for AML programme and testing breaches

Two US securities brokerages have each accepted a fine and censure from the US Financial Industry Regulatory Authority (FINRA) for anti-money laundering compliance failings.
Online Published Date:  09 February 2024
Appeared in issue:  311 - 01 March 2024

Financial crime prevention - an unexpected ESG ally

As financial services firms are increasingly seeking ways to show how they have integrated Environmental, Social, and Corporate Governance (ESG) into their strategies and objectives, Mario Menz explains how a strong financial crime function not only helps firms meet legal and regulatory obligations but also showcases a strong commitment to ESG goals.
Online Published Date:  13 February 2024
Appeared in issue:  311 - 01 March 2024

US investment advisors on notice of AML obligations as FinCEN issues draft rule

The risk that sanctioned individuals, corrupt officials, tax evaders, "foreign adversaries" - China and Russia are named - and other criminals might put money into US securities, real estate and other assets is FinCEN's rationale for issuing a notice of proposed rulemaking (NPRM) that would impose anti-money laundering/counter financing of terrorism (AML/CFT) requirements on certain investment advisors.
Online Published Date:  13 February 2024
Appeared in issue:  311 - 01 March 2024

Disentanglement - hard choices for Western companies still in Russia

Although the invasion of Ukraine two years ago prompted an exodus of foreign companies from Russia, some were less willing and/or found it hard to divest. The tightening mesh of Western sanctions together with exit charges and conditions imposed by Moscow make any further withdrawal from the market a complex proposition, as Rob Dalling and Karam Jardaneh of Jenner & Block explain.
Online Published Date:  14 February 2024
Appeared in issue:  311 - 01 March 2024

Take down - a low-down

Law enforcement is driven by intelligence, with the temptation to leave informants and laundering operations running to maximise knowledge, but eventually the cost of doing so will outweigh the benefit. Keith Nuthallwent in search of the tipping point.
Online Published Date:  15 February 2024
Appeared in issue:  311 - 01 March 2024

People power

AML, increasingly tech-heavy, is still, ultimately, about human bad actors and catching them (out), which demands skill and judgment in the good actors, qualities that can only properly be built through experience of working with other financial crime compliance professionals. Paul Cochrane and Keith Nuthallconsider knowledge needs and current gaps.
Online Published Date:  15 February 2024
Appeared in issue:  311 - 01 March 2024

Deutsche Bank still to fix transaction monitoring as BaFin extends monitor term

BaFin, the German financial services regulator, has rattled its sabre at Deutsche Bank again, threatening, on 15 February, to fine if long-standing transaction monitoring failings are not resolved.
Online Published Date:  16 February 2024
Appeared in issue:  311 - 01 March 2024

Triangulation - three states, one goal

Countries once part of Yugoslavia face a tough challenge in upgrading their anti-money laundering/counter financing of terrorism (AML/CFT) systems to meet international standards. The record of three countries - Serbia, North Macedonia and Bosnia & Herzegovina - shows how remaining outside the European Union, which leaves complete political responsibility for difficult AML/CFT reforms with their national governments, can mean slow progress, this despite all wanting to join the bloc, with AML reform a precondition of membership.Zlatko Čonkaš, in Novi Sad, Serbia and Keith Nuthall check on movement and momentum in the Balkans.
Online Published Date:  16 February 2024
Appeared in issue:  311 - 01 March 2024

Tricky tracery - sanctions

As war and conflict intensifies in different regions, so economic weapons - sanctions - are increasing in number, scope and complexity. Businesses are scrambling to keep up, while authorities are looking to clamp down on violations. Paul Cochrane reports on a dynamic frontline in compliance.
Online Published Date:  19 February 2024
Appeared in issue:  311 - 01 March 2024

Value add - the use of consultants

Short of competent staff, aiming to upgrade a monitoring system or compelled to overhaul the whole compliance framework by a regulator, there will be specialists for hire who can help. Laura Syrett looks up the contractors.
Online Published Date:  20 February 2024
Appeared in issue:  311 - 01 March 2024

EU AML reforms - a triumph of hope?

More than half the European Union's (EU) member states have at least one active infringement case open against them over their failure to implement the bloc's anti-money laundering legislation, Sara Lewis reports from Brussels, so there is reason to question how effective its radical revision will prove in practice.
Online Published Date:  20 February 2024
Appeared in issue:  311 - 01 March 2024

Resistance and reform - British Virgin Islands

Who ultimately owns or controls BVI-registered companies will be discoverable by those with a 'legitimate interest' in combating money laundering and terrorist financing but not, for now at least, by the general public. Keith Nuthallreviews a successful rearguard action fought against the UK government by one Overseas Territory even as London contemplated direct rule.
Online Published Date:  21 February 2024
Appeared in issue:  311 - 01 March 2024

Blue Ridge Bank ordered by OCC to overhaul AML and complete SAR look-back

Blue Ridge Bank of Virginia has escaped financial sanction for a US Bank Secrecy Act/Anti-Money Laundering programme characterised by "systemic internal controls breakdowns" in a consent order published by the Office of the Comptroller of the Currency (OCC) mid February.
Online Published Date:  21 February 2024
Appeared in issue:  312 - 21 February 2024

Kanon Gaming fined €67,874 in Malta over CDD failings

Online gambling operator Kanon Gaming Ltd did not check for source of wealth and/or funds in 90% of files sampled by the Maltese Financial Intelligence Analysis Unit (FIAU), according to an enforcement notice, dated 30 January 2024 but published in late February.
Online Published Date:  22 February 2024
Appeared in issue:  312 - 21 February 2024

Consent requests - official answers

The consent regime, in Part 7 of the UK Proceeds of Crime Act 2002, under which an AML-regulated entity can file an 'authorised' (defence against money laundering - DAML) disclosure and if it doesn't hear otherwise from law enforcement within a set period, go head with a transaction, is set to stay.
Online Published Date:  22 February 2024
Appeared in issue:  312 - 21 February 2024

Barclays and Lloyds reveal AML investigations in UK

UK high street banks Barclays and Lloyds have been under investigation by the UK Financial Conduct Authority (FCA) over compliance with the Money Laundering Regulations and its own rules, according to their 2023 annual reports.
Online Published Date:  22 February 2024
Appeared in issue:  312 - 21 February 2024

USA, EU, UK pile on Russia sanctions as war in Ukraine enters third year

The USA, the European Union (EU) and the UK have issued hundreds of new sanctions on Russians, Russian entities and associates overseas, one day ahead of the second anniversary of their country's major invasion of Ukraine on 24 February.
Online Published Date:  24 February 2024
Appeared in issue:  312 - 21 February 2024

FATF appoints new president; reforms guidance on trust transparency ahead of 5th mutual evaluation round

The Financial Action Task Force (FATF) has appointed a new president - Elisa de Anda Madrazo, of Mexico - as the global AML body faces the launch of its fifth mutual evaluation round later this year.
Online Published Date:  24 February 2024
Appeared in issue:  312 - 21 February 2024

Lineage Bank to review BaaS AML/CFT controls under US consent order

Tennessee-headquartered Lineage Bank has agreed with the US Federal Deposit Insurance Corporation (FDIC) to embark on a wholesale overhaul of its management and business practice under a consent order signed on 30 January 2024, but not published until late February.
Online Published Date:  26 February 2024
Appeared in issue:  312 - 21 February 2024

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