Richard Zann’s Post

BREAKING DOWN BARRIERS: TIM PARKMAN ON MASTERING ANTI-MONEY LAUNDERING AND COUNTER-TERRORIST FINANCING Mike interviews Tim Parkman. In a riveting episode, we sat down with Tim Parkman, the brilliant mind behind the book “Mastering Anti-Money Laundering and Counter-Terrorist Financing: A Compliance Guide for Proactive Practitioners.” Tim’s insights into the complex and often murky world of financial crime were nothing short of eye-opening. With a blend of expertise, passion, and a no-nonsense approach, Tim laid out the challenges and solutions in the fight against money laundering and terrorist financing. SUMMARY One of the standout points in our conversation was the emphasis on collaboration and cooperation between financial institutions. Tim highlighted the importance of the automatic exchange of information. Imagine this: You’re a compliance officer at a bank, and you notice that a business customer’s revenue is steadily increasing. Not suspiciously, but just enough to raise an eyebrow. Two of its biggest customers, let’s call them A Limited and B Limited, are vital contributors to this growth. Traditionally, getting more information about these customers would require involving the police and wading through a mountain of red tape. However, as Tim sees it, the future lies in banks being able to directly contact each other to share relevant information. This proactive communication can nip potential financial crimes before they spiral out of control. Tim didn’t hesitate to discuss the difficulties in police cooperation across borders. Law enforcement agencies often guard their investigations closely, fearing that sharing information could compromise years of work if it leaks, especially in countries known for corruption. This “turf war” mentality, as Tim described it, is a significant barrier to tackling international financial crime. The fear of leaks and the potential for corrupt practices in certain countries make it hard for law enforcement agencies to trust each other. Yet, the fight against financial crime remains stymied without overcoming these hurdles. @milliondollarbookman @thedreamstarter https://lnkd.in/dbKMkp8T

BREAKING DOWN BARRIERS: TIM PARKMAN ON MASTERING ANTI-MONEY LAUNDERING AND COUNTER-TERRORIST FINANCING Mike interviews Tim Parkman. In a riveting episode, we sat down with Tim Parkman, the brilliant mind behind the book “Mastering Anti-Money Laundering and Counter-Terrorist Financing: A Compliance Guide for Proactive Practitioners.” Tim’s insights into the complex and often murky world of financial crime were nothing short of eye-opening. With a blend of expertise, passion, and a no-nonsense approach, Tim laid out the challenges and solutions in the fight against money laundering and terrorist financing. SUMMARY One of the standout points in our conversation was the emphasis on collaboration and cooperation between financial institutions. Tim highlighted the importance of the automatic exchange of information. Imagine this: You’re a compliance officer at a bank, and you notice that a business customer’s revenue is steadily increasing. Not suspiciously, but just enough to raise an eyebrow. Two of its biggest customers, let’s call them A Limited and B Limited, are vital contributors to this growth. Traditionally, getting more information about these customers would require involving the police and wading through a mountain of red tape. However, as Tim sees it, the future lies in banks being able to directly contact each other to share relevant information. This proactive communication can nip potential financial crimes before they spiral out of control. Tim didn’t hesitate to discuss the difficulties in police cooperation across borders. Law enforcement agencies often guard their investigations closely, fearing that sharing information could compromise years of work if it leaks, especially in countries known for corruption. This “turf war” mentality, as Tim described it, is a significant barrier to tackling international financial crime. The fear of leaks and the potential for corrupt practices in certain countries make it hard for law enforcement agencies to trust each other. Yet, the fight against financial crime remains stymied without overcoming these hurdles. @milliondollarbookman @thedreamstarter https://lnkd.in/dG7ZCDim

Yesterday I pointed out that the deliberate cashflow forecasting error that was used to sabotage Murray Goulburn Dairy Cooperative as part of a campaign of activities to strip Australian dairy farming families of their water rights, including Coles Supermarkets' introduction of $1 per litre milk on Australia Day 2011, driving its price below its cost of production, are forms of terrorism finance when considered within the context of the wider campaign of activities to strip young Australians of their constitutional rights to freedom, dairy farmers of their assets, and to block Aboriginal rights to water following the Mabo decision of the High Court of Australia (see: https://lnkd.in/gAXEs4aY). Today, finally, on the anniversary of the 9/11 attack against the United States (https://lnkd.in/gss8wP8p), the Attorney General, Mark Dreyfus, is finally taking action to bring Australia's AML/Counter-terrorism Finance laws up to international standards. The Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Amendment Bill was introduced into Parliament on 11 September 2024. - See AG website: https://lnkd.in/gEhH7XRp . According to the Attorney General, the context of the proposed new AML/CTF law is as follows: "Australia is now one of only five jurisdictions out of more than 200 that do not regulate these tranche-two entities or ‘gatekeeper’ professions. It means Australia is at serious risk of being ‘grey-listed’ by the FATF, which would not only be damaging to our international reputation but could result in significant economic harm to Australians and businesses."

Finally fairness is implemented by including Accountants, lawyers and Real estate agents into the AML/CTF laws requirements. AAMC Training Group is also delivering these courses into the finance and mortgage broking industries in Australia and has recently launched courses in India to meet thier AML requirements. We will adapt educational courses to meet the needs of all professions that require the AML/CTF once the laws are tabled. #aamctraining #educationwithoutborders #carbonneutral #aml #ctf

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

🌱🥹 IT’S FINALLY HAPPENING 🎉🇦🇺 Excerpts from the Attorney-General's Department media release below: “Each year billions of dollars are generated from illegal activities such as drug trafficking, tax evasion, cybercrime, human trafficking and arms trafficking. The proceeds from these crimes are used to fund further serious crimes such as terrorism and child abuse. In 2015 the global financial watchdog FATF found that Australia had failed to comply with a number of critical standards. In particular, Australia had failed to extend our anti-money laundering and counter-terrorism financing regime to ‘tranche-two’ entities including lawyers, accountants and real estate agents. Despite these clear warnings that our economy was at risk of being exploited by criminal gangs and terrorists, the former government failed to do anything of substance for nearly a decade, leaving Australia dangerously vulnerable. The Albanese Government’s Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2024 introduces significant, long overdue reforms to Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) regime. The Bill will close a significant regulatory gap in Australia by expanding the regime to address vulnerabilities within ‘tranche-two’ entities, including lawyers, accountants, real estate professionals and dealers in precious stones and metals. AUSTRAC’s recent Money Laundering National Risk Assessment noted criminals are increasingly exploiting these sectors to conceal illicit wealth and launder money. The Bill will also help bring Australia into line with international standards set by the Financial Action Task Force (FATF). Australia is now one of only five jurisdictions out of more than 200 that do not regulate these tranche-two entities or ‘gatekeeper’ professions. It means Australia is at serious risk of being ‘grey-listed’ by the FATF, which would not only be damaging to our international reputation but could result in significant economic harm to Australians and businesses. The Government is taking the opportunity to simplify, clarify and streamline the AML/CTF regime. This will reduce the regulatory burden on businesses and make it easier to understand and implement effective measures to combat financial crime. The reforms will allow businesses to take a risk-based approach, allowing industry to prioritise their resources. The reforms will also lead to better quality financial data and make it easier for businesses to protect themselves from misuse by criminals. The Bill will modernise Australia’s AML/CTF system to ensure it keeps pace with our global financial system - closing the gaps that increasingly sophisticated and professional criminal organisations can exploit. This includes extending the current regulation of virtual asset service providers, that are exploited by serious and organised crime groups to launder the profits of their crimes and hide the origin of funds.“ And here we go ☺️👏🏼🚀

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.

🇦🇪 𝐔𝐀𝐄 𝐒𝐭𝐫𝐞𝐧𝐠𝐭𝐡𝐞𝐧𝐬 𝐀𝐧𝐭𝐢-𝐌𝐨𝐧𝐞𝐲 𝐋𝐚𝐮𝐧𝐝𝐞𝐫𝐢𝐧𝐠 𝐅𝐫𝐚𝐦𝐞𝐰𝐨𝐫𝐤: 𝐊𝐞𝐲 𝐔𝐩𝐝𝐚𝐭𝐞𝐬 𝐚𝐧𝐝 𝐀𝐦𝐞𝐧𝐝𝐦𝐞𝐧𝐭𝐬 * The UAE has updated its anti-money laundering (AML) framework through significant amendments to existing legislation, reinforcing its commitment to combat financial crime. * Federal Decree-Law No. 20/2018 laid the foundation for the UAE's AML efforts, which have been enhanced by Federal Decree-Law No. 26/2021 and the most recent Federal Decree-Law No. 7/2024. * Federal Decree-Law No. 7/2024 introduces critical changes aimed at improving the effectiveness of the UAE's efforts to combat financial crime. * A National Committee for Combating Money Laundering and the Financing of Terrorism has been established, chaired by the Governor, to oversee national AML efforts. * The Cabinet will form the National Committee based on proposals from the Minister of Finance, ensuring coordinated AML strategies. * The new Supreme Committee for Supervising the National Strategy to Combat Money Laundering and Terrorism Financing will operate under the Presidential Court, overseeing key functions related to AML efforts. * The Supreme Committee's Chairman may be authorized by the Cabinet to issue the committee's work system, enhancing the operational framework. * The General Secretariat of the National Committee has been established to support the National Committee, led by a Secretary General who will also serve as Deputy Chairman. * The amendments aim to create a structured and coordinated approach to address money laundering and terrorism financing more effectively. Overall, these measures align the UAE's AML practices with global standards, reinforcing its status as a secure and transparent financial hub. #aml #cft #compliance #financialcrime #moneylaundering #terrorismfinancing #uae

Thank you very much, Nick Maxwell, for your critical and very thought-provoking comments as validation of the AML/CFT regime will become even more crucial in the FATF fifth round of mutual evaluations, but as you have pointed out, it is highly likely that neither supervisors nor private sectors fully understand how validation should be carried out. Competent authorities and private FIs likely need to know how to validate thoroughly. For example, what are the specific methods for identifying and assessing risk, what KPIs should be used to evaluate effectiveness, should supervisors use more sanctions, to what extent should law enforcement agencies strip criminal proceeds or recover assets, and where should the line be drawn between information sharing and personal data protection, and like the "three-body problem," there are many variables and no easily derived association. We need to start by carefully reading the "core issues" of the Immediate Outcomes in the FATF methodology once again, increasing dialogue between the public and private sectors, and getting supervisors, law enforcement authorities, private FIs, and DNFBPs on the same page and facing the same direction. Time is running out, indeed.

When a bank decides to close the account of a company deemed "high-risk" without an adequate compliance program, several factors come into play. Banks don't take such decisions lightly, but they must protect themselves from significant legal, financial, and reputational risks. How Compliance-Edge can provide solutions ? Anti-Money Laundering and Counter-Terrorism Financing (AML/CFT) Risks Banks are required to comply with strict regulations around Anti-Money Laundering (AML) and Counter-Terrorism Financing (CFT). If a company lacks robust compliance measures, it becomes more vulnerable to being used for illegal purposes such as money laundering or the financing of terrorism. Without proper checks in place, banks can’t be certain that the company isn’t involved in dubious transactions. Banks are particularly sensitive to reputational risks. If they are seen to be facilitating questionable transactions or working with companies that lack proper compliance, their public image can suffer immensely. High-profile corruption or money-laundering scandals can lead to severe financial losses and government investigations. To prevent this, Compliance-Edge offers comprehensive services to design and implement compliance documentation that meet ethical standards. These programs provide companies with the transparency and integrity banks seek, which helps preserve both the company’s and the bank’s reputation. When companies refuse to cooperate with a bank’s Know Your Customer (KYC) process or fail to provide adequate information about their operations and partners, it raises red flags. A lack of transparency is often a warning sign for potential illegal activities or increased risk. Without the necessary cooperation, banks may feel they are exposed to unnecessary risks and choose to terminate the account.. Compliance-Edge provides companies with the documentation to be fully transparent and cooperative. Through organized record-keeping, risk assessments, and reporting, businesses can ensure that they meet the bank’s expectations, thus reducing the chances of an account closure.