Anthony White’s Post

Last week, HM Treasury (HMT) published their 11th Annual Report of the UK’s anti-money laundering (AML) and counter-terrorist financing (CTF) supervisory regime in 2022-2023. Key statistics include: 🔸 5k+ remote reviews/onsite visits were held (5% of AML/CTF regulated firms) 🔸 10% of firms were identified as high risk (versus 11% in 2021-2022) The Financial Conduct Authority (FCA) 🔹 Conducted 231 remote reviews and 7 on-site visits 🔹 Retail banking (including payments), wholesale banking, wealth management and crypto-asset firms remain highly vulnerable to Financial Crime (FC) 🔹 4% of firms reviewed remotely, and 14% reviewed on-site, were rated as “non-compliant” (full MI is unavailable as many reviews were on-going) 🔹 The FCA also opened 375 cases for FC/Sanctions concerns + 95 for crypto-assets. Key findings: 🔴 Inadequate client and/or firm-wide risk assessments and poor enhanced due diligence (EDD) processes 🔴 Insufficient compliance monitoring/testing programmes 🔴 Inadequate resources/training UK Gambling Commission 🔸 Assessed 25 firms remotely, rating 48% of firms as non-compliant 🔸 8 out of 9 firms (89%) visited were rated as non-compliant Key findings: 🔴 AML risks are sometimes outweighed by commercial and/or reputational concerns 🔴 Firms rely on monetary thresholds, instead of a risk-based approach HM Revenue & Customs (HMRC) 🔹 Conducted 1741 remote/onsite reviews 🔹 28% of firms were found as non-compliant overall Key findings: 🔴 Money Service Businesses (MSBs), Art Market Participants and the Trust and Company Service Provider sectors remain as high risk for AML 🔴 MSBs also have the highest inherent risk of CTF 🔴 HMRC noted a trend of supervised activity occurring before registration Office for Professional Body Anti-Money Laundering Supervision (OPBAS) 🔸 3,220 remote and onsite visits took place across the 22 legal and accountancy supervisory bodies within OPBAS 🔸 17% of accountancy firms assessed remotely were non-compliant, versus 20% of those reviewed onsite 🔸 16% of legal firms assessed remotely were non-compliant, versus 25% of those reviewed onsite Key findings: 🔴 OPBAS identified a limited awareness of the AML/CTF regime and a strong industry view that the regime is “disproportionate”. What’s Next? 🔹 The UK supervisory ecosystem remains somewhat fragmented and its restructure has been deemed a priority by HMT (2022 annual review) and was highlighted by the Financial Action Task Force (in their 2018 Mutual Evaluation of the UK), thereby forming part of the UK’s second Economic Crime Plan for 2023-2026. 🔸 In the meantime, firms should be mindful of their supervisors increasing outreach, ahead of FATF’s 5th round of Mutual Evaluation Reports in 2027. K2 Integrity can support firms subject to regulatory scrutiny, please reach out for a confidential discussion.

Legal Consequences of Money Laundering: Money laundering has severe legal consequences worldwide, aimed at deterring and punishing financial crimes. These consequences vary by jurisdiction but typically include: 1. Criminal Penalties Imprisonment: Depending on the severity and jurisdiction, offenders can face significant prison terms, often ranging from 5 to 20 years or more. Fines: These can amount to millions of dollars, often proportionate to the laundered funds or greater as a punitive measure. 2. Asset Forfeiture Governments may seize any assets or properties linked to money laundering activities, including cash, real estate, vehicles, and investments. 3. Civil Penalties Civil suits may be brought against individuals or institutions involved in money laundering, leading to additional fines or restitution payments. 4. Reputational Damage Institutions implicated in money laundering face loss of trust, which can result in regulatory sanctions, loss of licenses, or being barred from financial systems. 5. Regulatory Actions Against Institutions: Sanctions: Banks or financial institutions may face heavy regulatory fines for non-compliance with anti-money laundering (AML) laws. License Revocation: Regulatory bodies may revoke licenses, effectively shutting down non-compliant businesses. 6. Travel and Employment Restrictions Convicted individuals may face restrictions on international travel, and their criminal record can disqualify them from certain jobs or business activities. 7. Third-Party Lawsuits Victims or affected entities may sue for damages, including businesses harmed by the concealment of illicit funds. 8. Increased Scrutiny and Monitoring Convicted entities or individuals may face ongoing surveillance or enhanced due diligence in future transactions. 9. International Consequences Money laundering is often treated as a transnational crime, leading to extradition, international arrest warrants, or coordinated investigations by multiple countries. Examples of Legislation Targeting Money Laundering: USA: Bank Secrecy Act (BSA) and Anti-Money Laundering Act of 2020. EU: 6th Anti-Money Laundering Directive (6AMLD). Global: Recommendations by the Financial Action Task Force (FATF). By addressing money laundering, authorities aim to curb organized crime, terrorism financing, and corruption, which heavily impact economic and societal stability.

AUSTRAC is proposing a range of reforms to simplify, clarify and modernise the AML/CTF regime, including updating obligations for gambling service providers. The reforms also present an opportunity to improve the effectiveness of the regime and ease regulatory burden by simplifying and clarifying the regime to make it easier for businesses to meet their obligations, and modernising the regime to reflect changing business structures and technologies across the economy. The proposals outlined in this paper have not been settled. The paper is designed to allow businesses the opportunity to provide feedback on the practical impact these proposed changes would have, and to inform Australian Government decisions on the proposed reforms to the regime. This paper also outlines reforms to simplify, clarify and update obligations relating to: • exceptions for assisting an investigation of a serious offence; • updated obligations for gambling service providers; • the tipping off offence; • exemptions; and • the repeal of the Financial Transactions Reports Act 1988 (Cth). Page 34 sets out the proposed model of reforms to simplify, clarify and modernise the regime. For any questions in relation to the proposed reforms and how these would affect your business, AML/CTF program or risk assessment or for any support to submit a response, please contact us at Senet. The link to submit a response is here - https://lnkd.in/gemXW_fy https://lnkd.in/gS7JkfvZ

Update for gambling service providers: AUSTRAC is proposing a range of reforms to simplify, clarify and modernise the AML/CTF regime, including updating obligations for gambling service providers. To find out more read the full post below.

Last week, HM Treasury (HMT) published their 11th Annual Report of the UK’s anti-money laundering (AML) and counter-terrorist financing (CTF) supervisory regime in 2022-2023. Gain valuable insights from K2 Integrity's Joanne M. on key findings and what's next 👇 #AML #CTF #FinancialCrime

🚨 News update: The Attorney-General's Department (AGD) has made a supplementary submission to the Legal and Constitutional Affairs Legislation Committee The AGD has made a supplementary submission to the inquiry on the provisions of the Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2024 (the Bill). The submission considers several topics, including: 💡 During consultation on the reforms, some stakeholders provided feedback that the timing requirements for conducting initial #CDD in section 28 of the Bill are difficult and inconsistent with existing business practices. However, the AGD stated that the requirement to undertake CDD before providing a designated service is a fundamental principle of AML/CTF regulation in Australia and worldwide. In certain circumstances, there is a recognised need to delay elements of CDD as an exception to this general principle (e.g., opening bank accounts, where delayed verification is permitted). 🔑 Barristers are only captured by the regime if they prepare for, or carry out, transactions for their clients. Barristers acting on a solicitor's instructions on a client's behalf are not intended to be captured. 🔍 The AGD clarified that legal professionals' fiduciary duties don’t override the obligation to report suspicious matters. Legal practitioners must report suspicions of money laundering or terrorism financing but can continue providing services based on the risk involved. A 5-day reporting window is provided when legal professional privilege applies, offering an additional 2 days to comply. ⚖️ Reporting entities must bear the legal burden of proof when relying on exemptions. One such exemption relates to subsection 26F(11) of the Bill which provides that a reporting entity does not have to develop policies in relation to proliferation financing if it assesses that the risk is low. Stakeholders considered requiring reporting entities to bear the legal burden of proof as too high a standard. The AGD considers that it is reasonable that the reporting entity bears the legal burden of proof.   💰 Penalties will not continue after non-compliance is rectified, ensuring that entities aren’t punished once corrective actions are taken. The AGD asserts that Australia faces a growing risk of being grey-listed by the Financial Action Task Force (FATF) due to its lack of regulation for certain sectors (including legal and accounting professionals). The Bill aims to address these deficiencies to avoid reputational and economic consequences associated with the grey listing. _____ To stay updated with more from the Financial Integrity Hub (#FIH), don't forget to click "+Follow" (top left) for future notifications on posts and events. #AML #CTF #CDD #FATF #Compliance #Australia 

Anti-Money Laundering Policy in Romania In contemporary society, the prevention and combating money laundering in Romania have become increasingly important. The legislative framework, specifically the Romanian Law No. 129/2019 on preventing and combating money laundering and terrorist financing, has instituted a series of obligations for companies. The rationale for imposing these obligations is to ensure transparency in business operations and good management of internal controls within a company. The Romanian Law Firm Pavel, Mărgărit, and Associates recommends that companies urgently implement an anti-money laundering policy in Romania to ensure internal control within a company. An anti-money laundering lawyer in Romania can provide specialized assistance in this regard, ensuring compliance with the provisions of the Romanian Law No. 129/2019 on preventing and combating money laundering and terrorist financing. #AntiMoneyLaundering #AMLRomania #RomaniaAML #AMLCompliance #AMLRegulations #FinancialCrime #MoneyLaunderingPrevention #AMLPolicy #AMLObligations #RomanianFinancialRegulations #AMLComplianceRomania #AMLLaw #KnowYourCustomer #KYC #AMLProcedures #antiMoneyLaunderingLawyerInRomania #antiMoneyLaunderingPolicyInRomania #antiMoneyLaunderingPolicyLawyerInRomania #combatingMoneyLaunderingInRomania #GDPRInRomania #GDPRLawyerInRomania #internalControlInACompanyInRomania #KnowYourClientProcedureKYCInRomania #MoneyLaunderingInRomania #TheRomanianLawFirmPavelMargaritAndAssociates #TheRomanianLawNo1292019OnPreventingAndCombatingMoneyLaunderingAndTerroristFinancing https://lnkd.in/dAVEENkh

Anti-Money Laundering Law in UAE: In November 2020, a significant move in the fight against money laundering was marked in the United Arab Emirates (UAE) with the issuance of ministerial resolutions by the Minister of Justice. These resolutions led the establishment of specialized courts dedicated to adjudicating money laundering crimes, firmly embedding the commitment to combat financial malfeasance within the federal judiciary. Sharjah, Ajman, UAQ, and Fujairah emerged as Vital jurisdictions, each equipped with minor, major, and appeals circuits poised to tackle the intricate web of money laundering offenses. Embarking on the journey toward regulatory compliance, entities seeking to register on the goAML platform are guided through a meticulous two-stage process. 1. The registration stage in the protection system (SACM) of the goAML portal. 2. The second stage is the registration stage in the goAML system. Before registering for the two stages, you have to prepare the following documents: • Authorization letter from the institution you represent. • A copy of the passport, resident VISA, Emirates ID. • A copy of the trade license. • Download the "Google Authenticator" application on the phone. The adoption of the "Google Authenticator" application underscores a commitment to fortified security protocols, elevating vigilance in safeguarding against illicit financial activities. Money Laundering Punishment In UAE: Underlining the gravity of non-compliance, the Ministry of Economy has wielded a formidable arsenal of penalties aimed at entities failing to adhere to Anti-Money Laundering (AML) and Combating Financing of Terrorism mandates. With fines ranging from Dh50,000 to a staggering Dh1 million, businesses find themselves standing at the precipice of substantial financial repercussions for any lapses in regulatory adherence. Moreover, the punitive landscape extends further, with penalties capable of escalating to Dh5 million, subject to the provisions of the law and the discerning assessment of the esteemed Supreme Committee for Combating Money Laundering, and Financing of Terrorism and Illegal Organizations. A reminder of the stakes involved, the imposition of AED 1 million penalties serves as a stark deterrent against the proliferation of fraudulent bank accounts and the failure to address clients within international or domestic sanctions frameworks. In this Legal and regulatory imperatives, the UAE demonstrates an unwavering commitment to fortifying its financial ecosystem against the pernicious threat of money laundering, safeguarding its integrity and fostering an environment conducive to sustainable economic growth.

⚖️ FATF Recommendations ⚖️ ➡️ Money laundering offence (3/40) 🌍 The Financial Action Task Force (FATF) is an inter-governmental organization that sets international standards to combat money laundering, terrorist financing, and other related threats to the integrity of the global financial system. Its 40 recommendations are a crucial framework for countries to adopt measures to combat these threats. This 3rd rec. focuses on the criminalisation of money laundering offenses. ⚖️ It requires countries to apply this crime to all serious offenses, including the widest range of predicate offenses. 🧑⚖️ The FATF recommends the criminalisation of ML on the basis of the Vienna Convention and the Palermo Convention. The Vienna Convention (1988), established the framework for international cooperation in combating drug trafficking, including provisions on asset forfeiture and mutual legal assistance. The Palermo Convention (2000), expanded the scope of the Vienna Convention to cover a wider range of transnational organized crime, including ML. Countries are also required to ensure that ML is an offense under their domestic law and that it is punishable by appropriate sanctions. 📉 ML is a serious crime that undermines the integrity of financial systems. By criminalizing it, countries can better disrupt the flow of illicit funds and deter criminals from engaging in illegal activities. It also enables law enforcement agencies to seize and confiscate the proceeds of crime, thereby depriving criminals of the financial benefits of their activities. 🏦 The responsibility for detecting and preventing ML falls on financial institutions such as banks, securities firms and insurance companies. They are required to implement AML programs to identify and report suspicious activities to the relevant authorities. These latter include customer due diligence, transaction monitoring and reporting of suspicious transactions. Law enforcement agencies also play a critical role in investigating and prosecuting ML offences. ⚙️ The FATF's third recommendation requires countries to have robust legal and regulatory frameworks in place to criminalize ML offences. This includes laws that define ML and prescribe criminal penalties for offenders. Additionally, regulations must require financial institutions to implement AML programs. The FATF also calls for international cooperation and information sharing among countries to combat ML on a global scale. Which is essential because it is often a cross-border activity that involves multiple jurisdictions. Are you passionate about an AML related topic? 🤔 Would you like to write about it and reach over 21k compliance professionals? 🔥 If so, you can check out my newsletter ⬇️ and send me a message to work out the details! 🙂 🗞️ Newsletter: https://lnkd.in/eAsvqEeK #compliance #financialcrime #moneylaundering #aml

Police Chiefs worldwide know that criminals love chaos… it covers up, distracts, and makes crimes so difficult to prove. And when a murder victim can’t be found, those Chiefs know to look in the municipal dump… where any forensic evidence around a missing body quickly becomes compromised. Canada is becoming analogous to that dump and our global status is quickly becoming compromised. When it takes US action to halt massive money laundering inside a Canadian Charter Bank, and our government only adds a slap on the wrist once it hears of this American action being taken, we can know there is something rotten in our house. TD Bank executives designed a bespoke laundering strategy for Cartel dirty money. Money that sustains and promotes the Vice Trades killing our people. And our Bank Regulators and Canada Revenue staff HAD TO BE INVOLVED… or are brain-dead. All of this activity is in support of Organized Crime & and their clients in unfriendly foreign governments. And yet, no banker or civil servant related to these involved billions is going to prison… or even personally paying any fine. Combine those bureaucratic actions (or lack thereof) with this. WayFare Identifiers Inc developed what US Homeland ranked as a leading edge Anti Money Laundering system. Both US Homeland & UK Port Authorities approved testing at border crossings & related ports; a high achievement for Canadian tech developed at the behest of Federal Ministers. And yet, CBSA refused to approve that test program, and then Canada Revenue followed up by falsely creating tax debts (on our pre-revenue R&D company) while refusing to run audits they had already guaranteed. More corruption that defends organized crime, more corruption where evidence is submerged in murky chaos. It is well past time for Canada to clean up its act: https://lnkd.in/gbWk4SwP