Des Hellicar-Bowman

#aml #antimoneylaundering #moneylaundering #financialcrime #fincrime Speaking of cash, for those that haven’t been following the cash smuggling cases out of the UK, here’s some recent ones from the NCA (all links in comments), with the predominate one being the UK to UAE case: UK to UAE: 26 April 2024 - Cash couriers who smuggled millions in suitcases are sentenced 19 March 2024 - Money laundering network boss hit with multi-million pound confiscation order 12 January 2024 - Two more convictions in £100 million ‘cash in suitcases’ conspiracy 22 December 2023 - Woman charged as part of NCA cash smuggling investigation 02 December 2023 - Three more convictions after £100 million 'cash in suitcases' conspiracy UK to Albania: 15 April 2024 - Four arrested on suspicion of smuggling money from UK to Albania UK to ???: 11 January 2024 - Husband and wife arrested over alleged airline crew smuggling plot Additionally, when to comes to flying illicit cash, one of the books that always comes to mind is ‘The Cleaner’ by Bruce Aitken - link in comments. Check it out plus much on The Laundry® at: thelaundrynews.com

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Breaking news on Friday afternoon: AML/CFT Guidance for VASPs How the NZ AML/CFT regime applies to virtual asset service providers ("VASPs" - eg crypto issuers, wallet providers, payment networks and exchanges) has been a topic of debate for many years, and the ambiguity continued despite the recent VASP regulations. Today, the Department of Internal Affairs (DIA) released guidance (Guidance) for virtual asset service providers (VASPs) on the stage 2 amendment regulations under the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Act 2009 (Act). The Guidance gives direction to VASPs in understanding how to approach virtual assets, their quasi-money treatment, and the nature of transfers involving them. It also makes clear the consequences of virtual assets being pulled into the wire transfer regime – that short change of definitions actually represents what is likely the most substantive impact for VASPs, but may not have been understood by all from what is on the regulations’ pages. Many thanks to Sam Short and Darlene Hu for your help putting the note together! And to Jeremy Muir who is buried in the Reserve Bank's CBDC working group today - noting that digital representations of fiat are carved out from virtual assets!

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#aml #antimoneylaundering #moneylaundering #financialcrime #fincrime There’s a fair few posts about Monzo’s latest annual report announcing profitability BUT… There was other news that received less attention, the FCA will no longer be looking at criminal liability in their money laundering investigation of Monzo and will only be looking at it from a civil perspective. All links comments.

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So what do you have to do wrong nowadays to be held accountable for ‘shocking’ shortfalls, or is this now all about rapid revenue collection for the Treasury? Which part of the MLR’s and FCC rules were not understood and at what point were these ignored or waived when developing the business plan? Who made that decision and will they be held accountable? I’m afraid I just don’t believe that the FCA is concerned to combat crime anymore, and nor do I believe that things will improve until there is a material change in mindset. No one should be particularly surprised by these findings if you have been anywhere near new technology-based payment providers. There will be more to come I am sure….and lots more revenue!

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Banking Complaints Surge as Which? and Payments Association Lock Horns Over Fraud Rules Which? and The Payments Association are at odds over their approach to tackling payment fraud as new figures show soaring scam cases. We must consider the unintended consequences, focusing on providing a safety net for consumers, wouldn’t encourage consumers to be more careful; instead, it says, ‘Don’t worry if this turns out to be fraud; you’ll get the money back if so’. To ensure the best fight against fraud, there needs to be a balance of both customer awareness and responsibility, as well as better detection, prevention and reimbursement in certain circumstances.” Read More: https://lnkd.in/epCJRkjx

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Metro Bank’s recent £16.7 million fine highlights a serious lapse in monitoring systems that left millions of transactions unchecked for financial crime risks between 2016 and 2020. Watch as we break down what went wrong and the importance of robust AML/CFT controls in today’s financial landscape, in this week's Weekly Words of Wisdom. #AML #FinancialCrime #Compliance #MetroBank

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🔴 Metro Bank’s £16 Million Fine: A Wake-Up Call for AML Compliance 🔴 Metro Bank’s recent £16 million fine from the FCA for failing to meet Anti-Money Laundering (AML) obligations underscores a critical issue for all regulated firms. It’s not just about avoiding fines—it’s about maintaining the integrity of your business. Key takeaways from this case: - Due Diligence Must Be Tailored – Generic checks won’t suffice. AML efforts should reflect the specific risk associated with each customer. - Active Senior Management Engagement – AML is not just the responsibility of the compliance department. Senior management must take a leading role in ensuring compliance across the firm. - Timely and Accurate Reporting – Failure to report suspicious activity promptly can lead to severe financial and reputational damage. - Ongoing Monitoring Is Essential – Compliance isn’t a one-time task. Regular checks and continuous monitoring are necessary to stay ahead of potential risks. Firms must understand that AML compliance is about more than just ticking boxes—it’s an ongoing process of vigilance and responsibility. As the regulatory landscape continues to evolve, staying compliant can be challenging, but the consequences of failing to do so can be far worse. 💡 How are you ensuring your firm meets its AML obligations? #AMLCompliance #FCA #MoneyLaundering #MetroBank #FinancialCrime #RegulatoryCompliance #DueDiligence #ComplianceCulture

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This isn't really a new theme. Efficient controls are not the same as effective controls. Any decent Compliance Monitoring Plan worth the paper it is written on will demonstrate exactly that. FATF ratings are just a measure to use when constructing your own internal country risk assessments. Never go below their rating, but there is no problem to keep the likes of the Cayman UAE at high risk. #aml #compliance #monitoring #fatf #jurisdiction #mlro #mlco #risk #financialcrime #fincrime https://lnkd.in/ewVR4ruD

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“What has FCA ever done for us?” New government law in 2026 will let #FCA oblige #BNPL providers to: -       Give consumers clear information about risks involved -       Run repayment affordability checks on BNPL users -       Give Section 75 protection on purchases made via BNPL meaning -       Give BNPL consumers right to take complaints to #FINACIALOMBUDSMAN If you are an innovative, customer centric BNPL provider Elifinty can help you right now to run affordability checks, and give consumers information on risks plus the tools they need to sensibly budget for their next purchases. Check out Elifinty

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📢 Another AML-related "biggie" drops! Today, the Financial Conduct Authority announced that it has fined Starling Bank £29m (after a discount) for weaknesses related to financial crime prevention. The Financial Times reports that the regulatory found the bank's systems and controls to be "shockingly lax". Commercial growth was not accompanied by growth in the bank's defences. Furthermore, the FCA found that the bank had continued to onboard high-risk customers in breach of a voluntary requirement ("VREQ"). We've been here before... For more, see below 👇 #aml #compliance #regulation #financialcrime #sanctions https://lnkd.in/dFWi28Qn

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📢 Last week CB Payments Limited (CBPL), a UK-registered E-Money was fined £3.5m The Financial Conduct Authority issued a Final Notice to CBPL, highlighting areas for improvement in their financial crime compliance processes. This serves as a valuable case study for all #fincrime professionals. The key points: ❌ Penalty: CBPL received a £3.5m fine, reduced from £5m due to early settlement. ❌ Breach of Requirements: CBPL breached a Voluntary Requirement (VREQ), an FCA supervisory tool that restricts certain business activities to mitigate risk while the firm enhances its compliance framework. Over three years, CBPL onboarded 13,416 high-risk customers against VREQ restrictions, leading to $24.9m in prohibited deposits and $226m in crypto transactions. ❌ What Went Wrong: The FCA identified significant gaps in CBPL’s automated onboarding systems and financial crime controls. Key issues included inadequate pre-implementation testing, incomplete requirements given to the tech team, and ineffective ongoing monitoring, resulting in repeated non-compliance. Lessons Learned: ✅ Strengthen Controls: Ensure financial crime control frameworks are effective and regularly updated. ✅ Testing: Conduct thorough pre-implementation testing for new controls and continuously monitor their effectiveness. ✅ Record-Keeping: Maintain comprehensive records of all compliance efforts, including design, testing, and implementation steps. ✅ Continuous Monitoring: Implement effective monitoring systems to quickly detect and address any breaches. Utilise dashboards and other tools for real-time compliance tracking. ✅ Timely Remediation: Address any identified weaknesses promptly. For further details, review the full Notice here https://lnkd.in/e9ZMtc_2 #FinancialCrime #MLRO #Compliance #FCA #Crypto #AML #Regulation #effectiveness

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❌ You can't afford to have a backlog. In Financial Crime, some backlogs will push you dangerously close to the edge of non-compliance (if not over the edge). But it happens.   ℹ️ The team at DCM has put together a list of avoidance techniques to detect issues and promote a culture of vigilance. Are your controls holding up and are they effective? Reach out to our team if you need any support: [email protected] #FinancialCrime #KYC #Backlog #Remediation #ManagedService #DearCEO #AMLCompliance

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Ouch. #SanctionsScreening is not just a word. Don't get it wrong. Worth reading. https://lnkd.in/eyJcmajA #aml #regtech #fca #sanctionscompliance #dxcompliance

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Banks struggle on compliance with staff WhatsApp bans as regulators dish out heavy fines Investment banks are increasingly struggling to get workers to comply with bans on using WhatsApp for business communication, a new survey suggests, after a slew of heavy regulatory penalties. Nearly two-thirds (65.2 per cent) of compliance professionals found “getting staff to comply” was their biggest challenge with communication channels, according to an industry-wide survey of major financial companies in the UK, US and Europe by tech firm Global Relay. This figure is up from 61.5 per cent in 2023 and comes as regulators in the UK and US crack down on so-called off-channel communications. #regulation #compliance #whatsapp

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Many businesses check off AML compliance boxes but often skip a crucial step: name checking against global watchlists. Missing this could mean unknowingly dealing with sanctioned parties or bad actors. Protect your business with digital tools that make name screening simple, quick, and affordable. Read our latest article to learn more 🔍✅ #AMLCompliance #NameCheck https://lnkd.in/gAgRXzAw

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Which is preferable i.e. less bad – 100 people defrauded £170,000 (£1,700 each) or 112 people defrauded £150,000 (£1,350 each)? You can ask yourself this question when reading about authorised push payment (APP) fraud in the UK, where consumers are tricked into paying fraudsters and how it is changing. The PSR and UK Finance have published fraud reports this year. Both are comprehensive, detailed and thorough – well worth a read. And read my substack for detailed analysis and insight. https://lnkd.in/e5wYxuS4 APP fraud losses in the UK are declining, however, the number of cases, hence victims continue to increase, up 12% in 2023. Assuming each case means at least one victim, there were 410,000 people defrauded in 2023. This is close to 1% of the UK adult population. Although the declining value of APP fraud losses is encouraging, more needs to be done to stop the rise in scams and their victims. Purchase fraud, romance fraud and accomplice fraud are the greatest threats – there is a risk these may increase with imminent 100% reimbursement rules. Specific measures are needed to control these types of fraud. Much needs to be done outside the banking system, especially with online platforms where 75%+ of scams originate. Purchase fraud is the largest APP fraud type and it may impact open banking if it continues to escalate – however, may there also be opportunity to use open banking to prevent this type of fraud? Fraud on transactions within a bank are considerably lower, proportionately than that on Faster Payments transactions between accounts at different banks. There must be good reasons for this which should be investigated and articulated to strengthen fraud prevention – for example by sharing data between banks on suspicious accounts and activity. Paying through mobile and internet banking is growing – it is fast, easy and convenient for UK consumers and businesses, with most payments clearing in real-time. 3.7 bn payments were paid this way in 2023. The challenge for banks, PSPs and regulators is to keep a lid on APP fraud as Faster Payments and open banking volumes grow, reducing cases and losses without impacting the essential real-time experience and convenience enjoyed by users today, for the benefit of society and the economy. My question at the start reflects the change in UK APP fraud from 2022 to 2023. In answer to it, my view is reducing the number of fraud victims is more important than reducing the absolute value of fraud losses, crucial though this is. APP fraud losses may have declined but there is more work to do to reduce losses further and reduce the number of scams and their victims. Go to my substack to read more. https://lnkd.in/e5wYxuS4 #payments #fraud #APPfraud #fasterpayments

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The FCA fined Metro Bank more than £16M for AML/CFT failure. Reason is that the bank dit not have adequate TM tool in place to monitor the transaction of its client. 60m transactions for a total value of £51B were assessed in breach. A topic raising attention of all AML-CFT authorities worlwide, which must raise attention of all obliged entities when setting TM system. Questions to be raised: are all operations and clients covered? Are all scenarios adequetly implemented? are the thresholds in place are aligned with the risk based approach considered in the risk classification and the client scoring model ? What is the SAR conversion rate for each scenario ? Is an annual review and back testing performed to ensure scenarios are relevant ? In the present case, the FCA noted « Metro automated the monitoring of customer transactions for potential financial crime in June 2016. However, its system did not work as intended. An error in how data was fed into the system meant transactions taking place on the same day an account was opened, and any further transactions until the account record was updated, were not monitored. » Also the FCA noted that an employee raised in 2016 concerns on the efficiency and noted a potential breach on the TM tool, but it took four and a half years to fully fix the transaction monitoring issue. #monelaundering #AML

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Maximum reimbursement to fraud victims by bank and payment companies reduced from £415k to £85k by the UK regulator. In the EU, the proposed PSD3 and PSR do not explicity put a limit but following comments from the EBA the texts have been amended to consider additional measures and to also include electronic communication providers to bear liability to prevent "spoofing" or impersonation fraud. #payments #regulation #PSR #PSD3 #fraud #liability

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WOAH...The Financial Conduct Authority have fined Starling Bank £28,959,426 for financial crime failings related to financial sanctions screening 🤯 🏦 🔎 When the FCA reviewed financial crime controls at challenger banks in 2021 they identified serious concerns with the AML and sanctions framework in place at the digital bank - who then agreed to a requirement restricting it from opening new accounts for high-risk customers until this improved. 🚨 📜 Starling failed to comply and opened over 54,000 accounts for 49,000 high-risk customers between September 2021 and November 2023. And in January 2023, they became aware that its automated screening system had, since 2017, only been screening customers against a fraction of the full list of those subject to financial sanctions. A subsequent internal review identified systemic issues in its financial sanctions framework. Starling has since reported multiple potential breaches of financial sanctions to the relevant authorities. 👩‍💻 Therese Chambers, Joint Executive Director of Enforcement and Market Oversight, commented: “Starling’s financial sanction screening controls were shockingly lax. It left the financial system wide open to criminals and those subject to sanctions. It compounded this by failing to properly comply with FCA requirements it had agreed to, which were put in place to lower the risk of Starling facilitating financial crime.’ Read more on the link below! 👇 Robin Willard Sheldon Mills Clare ColeJane Moore Reuben Wales Andrew W. Ian Alderton #starlingbank #fca #sanctionsscreening #financialcrime #antimoneylaundering #fintech #fintechnews #digitalbank #fincrime

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