Money Laundering Bulletin

Russia – on the offensive

Rosfinmonitoring, Russia’s financial intelligence unit, charged with development and direction of the country’s anti-money laundering and counter terrorist financing regime - and reporting straight to President Putin - is working on a raft of stricter controls and penalties. Eugene Vorotnikov spoke to Yuri Chikhanchin, head of Rosfinmonitoring; Additional reporting by Alan Osborn.

Customer Due Diligence, Tax Evasion, Financial Intelligence Units, Legislation & Guidance, Practice Findings, Europe

No let-up: UK regulator’s annual AML report

The Financial Conduct Authority’s second AML annual report arrives as the regulator meditates how it will oversee the financial crime controls of an additional 50,000 firms, which provide consumer credit. Charlotte Hill of Covington & Burling reviews progress in 2013/14 and the heavy agenda ahead.

Practice Findings, Supervisors, Europe

EU expands sanctions against Russia

On 25 July 2014 the European Union expanded its Ukraine-related targeted sanctions, which impose EU-wide asset freezes and travel bans. Maya Lester of Brick Court Chambers examines the lengthening list.

Sanctions, Europe

Bank of America pays $16.6m for narcotics trafficking sanctions failings

Bank of America is to pay $16,562,700 to settle 213 apparent violations of US sanctions programmes against narcotics traffickers.

Sanctions, Banks, Cases, North America

BNP Paribas pays $8.9bn, senior staff exit over US sanctions breaches

BNP Paribas has pleaded guilty to criminal conspiracy to violate US sanctions; the French bank will pay $8.9 billion to US authorities for systematically disguising more than $190 billion of transactions with clients from Iran, Sudan and Cuba. In addition, commencing 1 January 2015, BNP Paribas will be subject to a one-year suspension of its US dollar clearing services for selected business lines and offices. For two years it will also be prohibited from US dollar clearing as a correspondent bank for unaffiliated third-party institutions in New York and London.

Sanctions, Cases, North America

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
Money Laundering


Firms, and so their AML compliance teams, are under intense scrutiny by competent authorities as they seek to rebuild business and balance sheet after the financial crisis. Practitioners, a UK regulator and law enforcement candidly discussed areas of specific focus and how their organisations are responding at Tavistock Media’s London AML & Financial Crime conference. Timon Molloy took notes.

Law Enforcement, Practice Findings, Supervisors, Europe

Singapore slingshot

Acutely conscious of accusations that hitherto the AML regime has served as little more than window-dressing, Singapore, by its own calculation, the world’s fourth largest offshore financial centre, is tightening up its controls – and not just on paper, reports Mark Rowe.

Reporting, Tax Evasion, Practice Findings, Asia-Pacific
Risks and Controls

The false positive problem - advanced statistics weigh in

Financial institutions have to scrutinise money transfer messages for illicit activity, that’s a given, writes Jacob Novak of EFT Technologies, but conventional sanctions screening software tends to generate large volumes of false positives (legitimate transactions stopped by a trigger reference to an official list designation). The extracted transactions then have to be manually verified before the funds are released, which prevents timely processing, puts strains on staff resource, and raises the risk of inconsistencies in decision-making. But recent advances in machine learning are now pointing the way to more optimised straight through processing (STP).

Sanctions, Technology

More than meets the eye: the case of the Chong Chon Gang

In July 2013, Panamanian customs officials boarded and searched a North Korean- owned and-flagged vessel, the Chong Chon Gang, during its passage through the Panama Canal. Having sailed from Puerto Padre, Cuba, the Chong Chon Gang was carrying over 10,000 tons of sugar for delivery to North Korea as part of a trade agreement between those two countries. On boarding the ship, however, Panamanian authorities discovered trailers and containers full of military equipment hidden beneath the 200,000 bags of sugar in the vessel’s cargo hold. The shipment was part of an elaborate scheme to circumvent United Nations prohibitions on arms shipments to North Korea. David Carlisle picks up the trail and draws the lessons for deeper due diligence in trade finance if sanctions evasion is to be detected.

Sanctions, Customer Due Diligence, Trade Finance, Banks, Trust and Company Service Providers, Practice Findings, Asia-Pacific

Impossible to ignore – virtual currencies, the next challenge

Bitcoin, the best-known of the new cryptocurrencies, has already survived use by criminals to transact on the dark web and implosion of Mt. Gox, its largest exchange. Brian Stoeckert and Timothy O’Brien examine an innovative AML/CFT risk that isn’t set to go away.

Payments, Technology, Money Service Businesses

Credit Suisse pays over $2.6 billion for aiding and abetting US tax evasion

Credit Suisse will pay fines totalling more than $2.6 billion, broadly its net income for the 2013 financial year, to US authorities after it pled guilty on 19 May to criminal conspiracy to help American citizens evade US tax; it will, however, retain its US banking licence.

Tax Evasion, Banks, Cases, North America
Terrorist Financing

Holiday plans – after the FATF plenary

June’s Financial Action Task Force plenary yielded assorted updates, admonishments and typologies sure to spice the summer reading list of any AML/CFT professional.

Terrorist Financing, Government and International Bodies, Practice Findings

More fingers in more AML dykes

During its February 2014 plenary meeting, the Financial Action Task Force approved a bumper crop of follow-up evaluation reports, writes Sue Grossey. Last month, we looked at the fate of Luxembourg, now it is the turn of their lowland friends in the Netherlands.

Terrorist Financing, Customer Due Diligence, Financial Intelligence Units, Government and International Bodies, Practice Findings, Europe
Legal / Regulatory

Bank fines, Compliance dividends

Financial institutions may be paying the price of past neglect, if not, on occasion, downright disregard of AML and sanctions obligations, but it’s a good time to be in Compliance as they are having to pay more, much more for talent as well. Alan Osborn reports on a thriving market.

Practice Findings, Europe, North America

Technical gains – Argentina, only at the outset

A cash-intensive economy with a significant untaxed component, Argentina also has to contend with a thriving black market in its currency, the peso. Pacifica Goddard finds reasons, even so, for optimism in its recent approach to AML.

Reporting, Financial Intelligence Units, Legislation & Guidance, Practice Findings, Latin America and Caribbean

US adds new sanctions on Russian energy and finance

On 16 July 2014, the US Office of Foreign Assets Control (OFAC) imposed new Ukraine-related sanctions. Notably, the measures restrict specific types of dealings by US persons with named Russian energy, defence and financial services entities. The EU has also signalled that it will decide on significant expansion of its list of designated (asset-frozen) persons by the end of July. Scott Balber and Susannah Cogman of Herbert Smith Freehills draw out the detail in the latest constraints.

Sanctions, Europe, North America

EU and US step up sanctions against Russia

The EU and USA agreed yesterday [16 July] to expand their programmes of restrictive measures against Russia over its involvement in Ukraine. Maya Lester of Brick Court Chambers reviews the latest targets.

Sanctions, Europe, North America