Money Laundering Bulletin

Risk and understanding

The UK’s first National ML/TF Risk Assessment is “in its final stages” – currently “with ministers” for review ­– so it will be touch and go on publication before the General Election in May, an HM Treasury senior policy advisor told a London audience in mid-March.

Risks and Controls, Customer Due Diligence, Legislation & Guidance, Supervisors, Europe, Corporate Vehicles

Commerzbank pays $1.45bn for US sanctions and AML breaches

Commerzbank, Germany’s second-biggest lender, has paid US$1.45bn to US authorities for violations of US sanctions and the Bank Secrecy Act (BSA). Under a consent order with the New York Department of Financial Services, the bank will engage a monitor for two years to oversee remediation of its BSA/AML and OFAC (Office of Foreign Assets Control) compliance programmes, policies and procedures.

Sanctions, Customer Due Diligence, Monitoring, Payments, Predicate Crimes, Banks, Cases, Supervisors, South Asia, North America

US targets Andorran bank for third-party laundering

Banca Privada d’Andorra (BPA), one of five banks in the tiny principality in the Pyrenees, has been designated a “foreign financial institution of primary money laundering concern” by the US Financial Crimes Enforcement Network (FinCEN).

Bribery and Corruption, Correspondent Banking, Payments, Trade Finance, Banks, Cases, Europe, North America

The proceeds of corruption in property:
time to unmask the offshore companies that own so much of the UK, says TI

UK property has long been a safe haven for overseas investors seeking a stable political and business climate, financial security or an attractive place to live. However, there is growing evidence, says Nick Maxwell, that it has also become a safe haven for corrupt capital stolen from around the world, facilitated by the laws which allow UK property to be owned by secret offshore companies.

Bribery and Corruption, Lawyers, Estate Agents, Assets Recovery, Practice Findings, Europe

Bank of Beirut & approved persons pay for remediation falsehoods

Bank of Beirut (UK) Ltd has been fined £2,100,000 by the UK Financial Conduct Authority (FCA) for failing to correct deficiencies in its financial crime controls within set deadlines and repeatedly lying to the regulator about progress on remediation.

Customer Due Diligence, PEPs, Banks, Cases, Supervisors, Europe

He’s watching for a sign: working effectively with a Corporate Compliance Monitor

The firm’s in trouble but can avoid criminal sanction by mending its ways under the watchful eye of a ‘corporate probation officer’. Nigel Coles of Exiger, which was formed to monitor HSBC’s compliance with its deferred prosecution agreement, looks at how to manage a highly nuanced relationship.

Training, Legislation & Guidance, Practice Findings, Supervisors
Risks and Controls

Cash-back and out - Macao

China is at once proud of the meteoric risk of Macao as the world’s number one gambling centre and worried that its special administrative region serves as an exit point for massive capital flight of both clean and corrupt funds. UnionPay, gold, gambling chips and real estate are all in play, reports Gao Fu Mao from Beijing.

Money Laundering, Typologies, Bribery and Corruption, Casinos, Precious Metal Dealers and Jewellers, Practice Findings, South Asia, Asia-Pacific, Corporate Vehicles

Updated customer onboarding – a win for financial institutions

Due diligence is undergoing a technological revolution that is set to make life in Compliance, and for the customer, a whole lot easier, says Micah Willbrand of NICE Actimize.

Customer Due Diligence, Technology
Money Laundering

Undue disclosure – legal risk in UK data-sharing initiative

In a recent interview with the Evening Standard, Keith Bristow, Director General of the National Crime Agency, revealed a new information-sharing agreement (ISA) between the NCA and 10 of Britain’s biggest banks. Lisa McKinnon-Lower of Byrne and Partners questions the erosion of confidentiality and privacy; she believes legal challenges are inevitable.

Reporting, Law Enforcement, Banks, Financial Intelligence Units

Undue disclosure – legal risk in UK data-sharing initiative

In a recent interview with the Evening Standard, Keith Bristow, Director General of the National Crime Agency, revealed a new information-sharing agreement (ISA) between the NCA and 10 of Britain’s biggest banks. Lisa McKinnon-Lower of Byrne and Partners questions the erosion of confidentiality and privacy; she believes legal challenges are inevitable.

Customer Due Diligence, Reporting, Law Enforcement, Banks, Financial Intelligence Units, Europe
Industries

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

New UK AML task force to link law enforcement and business

Government, banks and law enforcement agencies in the UK yesterday [25 February 2015] announced they would work together in forming a major new taskforce to combat money laundering.

Law Enforcement, Banks, Government and International Bodies
Terrorist Financing

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

FATF analyses ISIL finance

The Financial Action Task Force (FATF) released its report on the ‘Financing of the Terrorist Organisation Islamic State in Iraq and the Levant (ISIL)’ on Friday.

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

Mist on the Nile – an Egyptian record

Political turmoil in Egypt since the uprising that ousted President Hosni Mubarak four years ago has served anti-money laundering as both stimulus – through pursuit of embezzled state funds – and brake with delays in the introduction and implementation of new supervisory standards and good practice. Paul Cochrane reports from Cairo.

Practice Findings, Africa, Middle East

Serious Crime Act 2015 - welcome changes for prosecutors

Six months rather than 12 to comply with a confiscation order and longer default sentences for non-payment are among modifications to the UK Proceeds of Crime Act 2002 that may give even the most serious criminals pause. Frances Coulson of Moon Beever reviews the new powers.

Assets Recovery, Legislation & Guidance, Europe
Sanctions

EU sanctions update - Russia

On 16 February the European Union expanded the list of parties subject to sanctions over the conflict in Ukraine. Susannah Cogman of Herbert Smith Freehills reviews the additions and the recent High Court decision on Rosneft’s judicial review application challenging aspects of the UK’s implementation of the sanctions.

Sanctions, Legislation & Guidance, Europe

US law sets framework for future Russian sanctions

On 13 December 2014, the US Congress passed the Ukraine Freedom Support Act of 2014 (H.R. 5859) seeking to impose new sanctions against Russia and in support of Ukraine. On 18 December, President Obama signed the Act into law, while stating that at present the Administration does not intend to impose new sanctions pursuant to the Act. Scott Balber of Herbert Smith Freehills considers the scope of the new statute.

Sanctions, Legislation & Guidance, Europe, North America