Money Laundering Bulletin

Emerging terrorist financing risks

The horrific events in Paris will sharpen focus on how such attacks are funded. The Financial Action Task Force had already revisited the evolving threat in a report issued after its October 2015 plenary. Sue Grossey studies the latest terrorist financing methods and evidence.

Terrorist Financing, Typologies, Government and International Bodies, Practice Findings

Barclays fined £72m for neglecting due diligence on PEPs in “deal of the century”

Barclays Bank has incurred the biggest fine handed out by the UK Financial Conduct Authority (FCA) or its predecessor, the Financial Services Authority, for breaches of rules to minimise financial crime risk – £72,069,400.

Customer Due Diligence, PEPs, Banks, Cases, Europe

The supra-supervisor

It can surely be no accident that the offices of the European Banking Authority (EBA) – on floors 45 and 46 of One Canada Square – overlook the London headquarters of the global financial institutions on which their policy-making bears so heavily. Not that Carolin Gardner, the authority’s AML policy expert, will have had much time to enjoy the spectacular view.

Banks, Supervisors, Europe

Patchwork UK AML supervision needs overhaul – Transparency International report

The UK Government should look at replacing the 27 current sector supervisors under the Money Laundering Regulations with a “single, well-resourced ‘super’ supervisor”, says Transparency International.

Practice Findings, Supervisors, Europe

Who, where, how? – de-risking in practice

Not so long ago banks’ risk maps looked very different – regulatory and criminal enforcement barely featured, but lip-service AML compliance and blatant circumvention of US sanctions have come at a high price: seven to 10-digit dollar fines, and remediation scrutinised by external monitors, have prompted radical reassessment of the customer base in light of perceived financial crime exposure. Micah Willbrand of NICE Actimize, AML technology provider to global financial institutions, talks to MLB editor Timon Molloy about firms’ efforts to balance their commercial imperative with twin regulatory aims of rule adherence while not exiting classes of customer wholesale.

Legal / Regulatory, Correspondent Banking, PEPs, Money Service Businesses, Practice Findings, Non-Profit Organisations
Risks and Controls

UK property – how to stop corrupt public officials investing?

A public register of beneficial owners of UK companies is a good fresh start in tackling criminal ownership of land and property, say Laurence Harris and Jamie Humphreys of Cooley, but of itself is not enough.

Customer Due Diligence, Banks, Lawyers, Estate Agents, Corporate Vehicles

On the case: effective workflow management

Today it’s not enough to simply manage regulatory compliance and risk, writes Eric Sohn of Dow Jones. To be effective, especially as requirements evolve, is also an exercise in efficiency where the balancing act between providing sufficient organisational rigour and avoiding undue operational overhead can seem more art than science. An understanding, though, of how to configure case management systems and adherence to some basic common sense guidelines should enable a workflow design both effective and efficient.

Monitoring, Reporting, Technology
Money Laundering

In tension over terrorist finance – EU to US data transfer & privacy rights

US intelligence has access to European Union citizens’ banking transfer records by virtue of a controversial 2010 agreement. Paul Cochrane examines the Terrorist Financing Tracking Programme, currently set for renegotiation.

Terrorist Financing, Customer Due Diligence, Monitoring, Law Enforcement, Europe, North America

Dualism – Russian AML and sanctions

Annexation of Crimea comes at a high price: the sanctions against Russia hurt; they are, though, to be distinguished from AML by, if not bright lines, at least a continuing dialogue with international partners through the Financial Action Task Force, says Paul Cochrane. Some, though, question Moscow’s real compliance agenda.

Money Laundering, Sanctions, Financial Intelligence Units, Government and International Bodies, Practice Findings, Europe

Wire-cutting: money transmitters

Money services businesses vie for top position in many risk registers and turn up repeatedly in law enforcement case studies: little wonder they are struggling to keep lines open to their customers. Alan Osborn, in London and Bertha M Rinjeu, in Nairobi gauge how the sector, banks and national authorities are responding to the de-risking agenda.

Banks, Money Service Businesses, Government and International Bodies, Practice Findings, Supervisors, Europe, North America

De-risking and the increasing cost of banking

De-risking by banks attracts the scrutiny and, at times, condemnation of policymakers and regulators, writes Tom Keatinge of RUSI. Attracting less scrutiny is the impact that the actions of these same policymakers and regulators have on decision-making at banks.

Customer Due Diligence, Banks, Practice Findings
Terrorist Financing

Paris attacks prompt EU review of FIU operations

The Paris terror attacks have prompted an urgent meeting of the EU Council of Ministers (for justice and home affairs) on Friday (20 November) to back strengthening and improving the operation of member states’ financial intelligence units (FIU).

Terrorist Financing, Law Enforcement, Financial Intelligence Units, Government and International Bodies, Europe

“Us and Them” *

More than a battle of words, the AML community can greatly aid the ongoing response to terrorists, writes John Byrne.

Terrorist Financing, Payments, Internet, Banks, Government and International Bodies, Non-Profit Organisations
Legal / Regulatory

Sluggish G20 response to 2014 beneficial ownership promises, says TI

Transparency International has concluded in a detailed review [1] that G20 governments have largely reacted sluggishly to pledges made last November (2014) to insist on beneficial ownership declarations over assets within their jurisdictions.

Customer Due Diligence, Government and International Bodies, Practice Findings, Corporate Vehicles

Gatekeepers’ plea to be ethical, not merely rule-compliant

Companies should not only comply with the letter of the European Union’s (EU) Fourth Money Laundering Directive (4MLD), but introduce an ‘ethical approach’, the UK Consultative Committee of Accountancy Bodies’ (CCAB) conference in Brussels heard on 18 November 2015.

Training, Accountants and Tax Advisers, Practice Findings

Deutsche Bank pays $258m for wire-stripping breaches of US sanctions

Deutsche Bank’s use of “OFAC-safe” payment processing to circumvent US sanctions against Iran, Libya, Syria, Burma and Sudan between 1999, at the latest, and 2006 have bought it a $200m penalty from the New York Department of Financial Services (NYDFS), and a further $58m payment to the Federal Reserve. An independent monitor, appointed for one year, will review the bank’s compliance programmes around AML and sanctions and six employees implicated in the violations will be terminated.

Sanctions, Banks, Cases, Asia-Pacific, Middle East, North America

Crédit Agricole pays $787m for US sanctions violations

Crédit Agricole Corporate and Investment Bank (CACIB), part of the French banking group, is to pay $787m to US authorities for stripping identifiers of US-sanctioned entities from SWIFT wires between 2003 and 2008.

Sanctions, Banks, Cases, Europe, North America