Money Laundering Bulletin

Risk appetite – a question of definition

Effective AML is predicated on a clearly defined risk appetite. A panel of leading practitioners at the AML & Financial Crime Conference in Miami delved into the mechanics of how to assess risk and then communicate it. Timon Molloy reports.

Risks and Controls, Customer Due Diligence, Monitoring, Training, Banks, Practice Findings, North America

Holt v Attorney General - professional fees and the money laundering offences

Jenny Holt’s prosecution for money laundering in the Isle of Man created quite a stir, writes Jonathan Fisher QC. The trial Judge (the Deemster) had described Ms Holt, a young English barrister and Manx advocate employed by a firm called Moroneys, as “of exemplary positive good character” and “the sort of daughter every parent would be proud of”. Yet following her conviction and suspended sentence of 12 months imprisonment the headline in IOM Today screamed out that “Baines advocate should have gone to prison” (2July 2011). In the event, Ms Holt’s conviction was subsequently quashed by the Privy Council (Holt v Attorney General [2014] UKPC 4). But in its wake the case has left some real anxieties about the application of the money laundering offences to fees paid to professional advisers, and particularly lawyers, for the services they are asked to render. The anxieties are exaggerated, though not entirely unfounded.

Lawyers, Cases, Practice Findings, Europe

Fourth EU ML Directive adopted after European Parliament vote

The Fourth EU Money Laundering Directive (4MLD) will come into force mid-2017 after a key vote today [20 May] in the European Parliament signalled the legislation’s adoption following EU Council of Ministers approval a month ago [20 April].

Legislation & Guidance, Europe

Nordea and Handelsbanken fined by Swedish regulator for AML breaches

Sweden’s two largest banks, Nordea and Handelsbanken, have been fined SKr50 million (€5.4 million) and SKr35 million (€3.8 million), respectively, for money laundering control breaches.

Cases, Practice Findings, Supervisors, Europe

Europol operation shuts down major counterfeiting-money laundering network

A two-year joint operation by Europol and the Spanish Civil Guard (Guardia Civil) has closed down a €300 million money laundering and counterfeit goods network focused on Spain.

Law Enforcement, Predicate Crimes, Banks, Asia-Pacific, Europe

European Parliament committees back Fourth ML Directive

The European Parliament’s economic and monetary affairs and civil liberties committees have backed the latest text of the proposed Fourth European Union (EU) Money Laundering Directive in a joint meeting today [6 May 2015].

Government and International Bodies, Legislation & Guidance, Europe

Russian FIU requires ‘all transaction’ reporting for 41 countries

The Russian Federal Financial Monitoring Service (Rosfinmonitoring), Moscow’s financial intelligence unit (FIU), has targeted individual and commercial customers using Russian banks from 41 countries for special transactions reports.

Monitoring, Reporting, Banks, Financial Intelligence Units, South Asia, Europe, Middle East, North America
Risks and Controls

Virtually here – Bitcoin, but the beginning

The virtual currency genie is out of the digital bottle and innovating his way across the internet at a furious pace, but not without cost. Brian Stoeckert of Stratis Advisory reviews the enforcement actions and criminality that have dogged his zigzag path.

Payments, Internet, Money Service Businesses, Cases, Practice Findings, Supervisors, Latin America and Caribbean, North America

Fast forward – next generation insight

High performance analytics is set to turbo-charge monitoring and detection, and it can work with existing AML tools, says Alexon Bell, Compliance Solution Director, SAS.

Customer Due Diligence, Monitoring, Technology
Money Laundering

Joint effort – reporters and FIUs

AML professionals are a primary source of intelligence for law enforcement via suspicious activity reports to the financial intelligence unit but higher conviction and asset recovery rates are contingent on closer collaboration to raise disclosure quality, finds Kitty So.

Industries, Reporting, Banks, Financial Intelligence Units

SARs extra – alternative reporting channels

Suspicious activity reports to the financial intelligence unit may be the recognised mechanism for alerting law enforcement to potential criminal fund flows but Alan Osborn finds there are other ways to flag concerns.

Reporting, Asia-Pacific, Europe, North America

Out on the edge – virtual banks

The provision of financial services outside the traditional sector, always an attractive prospect to some, becomes ever easier online as the necessary software is commoditised. Alan Osborn and Robert Stokes look at the rise and risk of alternative banking platforms.

Payments, Technology, Internet, Banks

Fallout – de-risking, the unintended consequences

The Financial Action Task Force is worried, and so are member governments: de-risking threatens to exclude swathes of business and consumers from banking services. Alan Osborn, in London, and Craig Howie, in Washington DC, examine the impact and response.

Customer Due Diligence, Banks, Money Service Businesses, Government and International Bodies, Practice Findings, Supervisors, Europe
Terrorist Financing

Dissent as Fourth EU ML Directive nears adoption

The Fourth EU Money Laundering Directive (4MLD) edged closer to adoption on Monday (20 April) after the EU Council of Ministers formally approved a three-way ‘trilogue’ deal that Council, European Parliament and European Commission negotiators clinched last December.

Terrorist Financing, Customer Due Diligence, Lawyers, Legislation & Guidance, Europe, Corporate Vehicles

Allah and mammon

Islamic State in Iraq and the Levant is a terrorist organisation with ambitions to carve out a caliphate that will last but to do this it needs to create a sustainable financial system that goes beyond the ‘tax, extract and threat’ model delineated in the latest research by the Financial Action Task Force. Sue Grossey examines ISIL’s sources of funds.

Terrorist Financing, Government and International Bodies, Practice Findings, Middle East
Legal / Regulatory

Central America – a regional tour

Collaboration by governments and pressure through mutual evaluation means that Central America’s capacity to combat money laundering and terrorist financing is starting to build, if unevenly. Pacifica Goddard reports.

Legislation & Guidance, Practice Findings, Latin America and Caribbean

Sanctions listing to lifting

The pariah status of sanctions list designation is prompting targeted parties to fight for removal, with some notable successes in the European Court of Justice. Katherine Buckle of QEB Hollis Whiteman and Lennart Poulsen of 9 Bedford Row examine possible lines of attack.

Sanctions, Cases, Europe

Russian dealings – a safe passage

Sanctions against Russia over its involvement in the Ukraine conflict are complex but navigable: Brian Zimbler and Vasilisa Strizh of the Moscow office of Morgan Lewis take the helm.

Sanctions, Banks, Practice Findings, Asia-Pacific, Europe, North America

Iran sanctions relief – on the near horizon

Iran may, finally, be coming in from the cold, edging towards a deal with the ‘P5+1’ powers over its nuclear programme. Covington lawyers analyse the parameters set for an agreement by the end of June 2015.

Sanctions, Europe, Middle East, North America