Money Laundering Bulletin

“Goodness had nothing to do with it”- a quote, not a comment on the diamond trade

High and stable in value, durable, compact - diamonds hold a unique appeal, whether for the rich and famous, the young couple looking for an engagement ring or the criminal wanting to hide and move his funds. The stones may sparkle but the business has its flaws, according to Financial Action Task Force findings. Sue Grossey examines every facet of the AML/CFT standard setter’s report.

Typologies, Precious Metal Dealers and Jewellers, Government and International Bodies

Animal attraction – the illegal trade in wildlife

It may be the most profitable form of transnational crime - trafficking in endangered species cannot be ignored. David Carlisle examines the legislative controls and how criminals circumvent them

Customer Due Diligence, Typologies, Predicate Crimes, Cases

Criminal negligence – why AML isn’t working

Spending on anti-money laundering and combating terrorist financing is reaching levels even institutional shareholders may start to notice, but to what purpose? Convictions for money laundering and recovery of criminal proceeds remain de minimis. Tristram Hicks lays out the reasons and points a way forward.

Money Laundering, Law Enforcement, Assets Recovery, Government and International Bodies, Practice Findings

Policy matters

The young high-flyers in Whitehall, who deal with UK financial crime policy, in between winging along the corridors of power found time to talk to practitioners at the Anti-Money Laundering Professionals Forum annual financial crime seminar in the City of London. Timon Molloy reports.

Government and International Bodies, Supervisors, Europe

Call my bluff – Crimea

Sanctions, on the hard edge of international diplomacy, are presently ratcheting up over Crimea, with US and EU asset freezes and visa bans prompting retaliation in kind by Moscow, but there are good reasons to think they won't go much further, says Timon Molloy.

Sanctions, PEPs, Legislation & Guidance, Europe, North America

Two in enforcement, three in scope – UK regulator takes aim at AML

Findings on anti-money laundering practice in UK-regulated firms are “depressing”, Sharon Campbell, Head of Financial Crime & Intelligence, UK Financial Conduct Authority acknowledged yesterday [4 March].

Customer Due Diligence, PEPs, Practice Findings, Supervisors, Europe

Ukraine – EU & US move to freeze assets

Sanctions, the bloodless weapon of foreign policy, are trained on the ex-President of Ukraine and ousted members of the regime. Susannah Cogman and Rod Fletcher of Herbert Smith Freehills report on the West’s financial offensive.

Sanctions, PEPs, Legislation & Guidance, Europe, North America
Money Laundering

Banking secrecy – Switzerland contemplates life beyond

Numbered accounts and incuriosity as to source of funds – stereotypical Swiss banking secrecy is buckling before international efforts to combat tax evasion. Daniel Pruzin reports from Geneva on how this landlocked state at the heart of the European Union, yet not of it, is coping with the new transparency agenda.

Customer Due Diligence, Tracing and Recovery, Banks, Legislation & Guidance, Practice Findings, Europe

Court of Appeal considers mental element for criminal intent under POCA

In the case of R v Pace [2014] EWCA Crim 186 [1] the Court of Appeal ruled that proof of a mental element of suspicion only was insufficient for the purposes of a count of attempted money laundering.

Money Laundering, Training, Cases
Risks and Controls

Safe bet – the risk in online gambling

Odds are better, overheads low, customers plentiful – online gaming has struck lucky, but is the wise money on the criminal or AML compliance to win? Paul Cochrane checks the state of play.

Payments, Internet, Casinos

Control without constraint – EU’s e-money balance

Money flows constantly, always finding new, electronic channels. European legislators are hard at work on how to regulate rather than divert (much less stem) the tide of innovation. Robert Stokes reports on the current Fourth EU ML Directive proposals.

Payments, Banks, Money Service Businesses, Legislation & Guidance, Europe

Reformation - Pope Francis calls the Vatican Bank to account

The history of the Roman Catholic church is coloured by financial intrigue, which, of late, has attached to the provenance of deposits and obscure workings of the Istituto per le Opere di Religione, better known at the Vatican Bank. Mindful of the institution’s tarnished reputation, Pope Francis is seeking to affirm its probity through a radical review of structure, management and customer accounts. Brenda Dionisi reports on his mission, from Milan.

Banks, Financial Intelligence Units, Government and International Bodies, Practice Findings, Europe

EU takes next step to beneficial owner registers

Members of two European Parliament committees have backed the proposed Fourth European (EU) Money Laundering Directive, as long as a public register provision is included.

Tax Evasion, Accountants and Tax Advisers, Trust and Company Service Providers, Legislation & Guidance, Europe, Corporate Vehicles
Terrorist Financing

Banking in Lebanon – the ultimate balancing act

Lebanon’s hard-won, always precarious reputation as a comparatively clean banking location in the Levant was dealt a severe blow with the Lebanese Canadian Bank case in 2011 but it has restored confidence overseas, notably in Washington, in time to confront the financial fallout of war in neighbouring Syria. Paul Cochrane reports from Beirut.

Terrorist Financing, Sanctions, Banks, Money Service Businesses, Practice Findings, Supervisors, Middle East

Blood money in West Africa - FATF flags the risk

Inability to spot suspicious transactions, cash-based economies, porous borders and weak inter-state cooperation leave West Africa open to terrorist financiers, the Financial Action Task Force (FATF) warns in a typologies report published yesterday [12 November 2013].

Terrorist Financing, Typologies, Africa
Legal / Regulatory

Better late than out – Turkey tackles terrorist finance

Financial Action Task Force patience was running on empty when Ankara finally passed terrorist financing legislation. One crisis averted, perhaps, but Paul Cochrane, in Beirut, and Michael Kosmides, in Athens, find that other deficiencies persist.

Government and International Bodies, Practice Findings, Europe, Middle East

The green heart of Europe beats a little faster - Luxembourg

Half a dozen follow-up reports later, Sue Grossey assesses Luxembourg’s progress since its 2010 mutual evaluation by the Financial Action Task Force.

Government and International Bodies, Practice Findings, Supervisors, Europe

Policy and practice: from beneficial owners to bank charges

Parliamentarians in Brussels are busily amending the draft Fourth EU Money Laundering Directive before May’s election purdah; the British will be happy, certainly, that the latest compromise proposals on beneficial ownership data further last June’s G8 transparency agenda espoused by PM David Cameron. While the lawmakers debate, major banks - notably, recently, BNP Paribas and Credit Suisse - continue to weigh the known and potential cost of non-compliance with existing legislation. Timon Molloy reports.

Sanctions, Customer Due Diligence, Tax Evasion, Legislation & Guidance, Practice Findings, Europe, North America

Facts and figures – KPMG surveys the AML world

Annual worldwide expenditure on AML is set to pass $10bn in the next couple of years while compliance professionals continue to cite regulatory change, rather than challenges in combating financial crime, as their number one concern, reports KPMG’s 2014 Global AML survey.

Sanctions, Customer Due Diligence, Training, Practice Findings, Supervisors