White and Partners’ Post

🚩Europe to adopt a "single AML rulebook"🚩 🤝It seems that the Parliament and the Council, after 9 months, has reached an agreement for a AML/CFT regulation with the intention to harmonize all member states rules and strengthen those set out in the Directives. ⏳It is to remember that an action plan to fight against money laundering and counterfighting financing of terrorism was announced early in May 2020. Following this announcement, no more than a year later the Commission presented a package of 4 legislative proposals, being one of them a proposal for a regulation on the prevention of the use of the financial system for money laundering and financing of terrorism. Additionally this legislative package includes: 1️⃣ a Directive, 2️⃣ the creation of an EU Authority for AML/CFT, and 3️⃣ a recast of the regulation expanding traceability requirements to crypto-assets. 📑The objective of this regulation would be to replace the EU directives minimum standards with a single AML playbook which would reinforce member states efforts when fighting against ML and FT. Additionally, amongst others it is to highlight that this proposal seeks: ▶︎ to establish an EU single rulebook on AML/CFT, ▶︎ to ensure consistency and effectiveness across Member States, ▶︎ to mitigate risks, including emerging risks like crypto-assets, crowdfunding platforms, and migration operators, ▶︎ to strengthen due diligence measures, reporting of suspicious transactions, and enforcement of criminal law provisions. 🔍Which are the main provisions to consider (at least, IMO) of this proposal? 1️⃣ CASPs to be obligued entities, 2️⃣ streamline beneficial owners requirements across the EU member states, 3️⃣ transaction in cash would be restricted to EUR 10,000 4️⃣ it would set an a EU common approach to third countries with little to no provisions on AML/CFT 🔗 You can find the proposal here: https://lnkd.in/dZ9YBpxV 📚 Main references: ▶︎ https://lnkd.in/daFn3-ew ▶︎ https://lnkd.in/dMNBriQC

After more than two years of negotiations, the AML package was adopted by the European Parliament on 24 April 2024. The AML package consists of three legislative instruments : the sixth Anti-Money Laundering Directive (“AMLD 6”), the EU Single Rulebook Regulation (“AMLR”), and the Anti-Money Laundering Authority Regulation (“AMLAR”). Among the measures adopted by the Members of the European Parliament, the following key points are noteworthy: ➡️ Provides access to beneficial ownership information and empowers Financial Intelligence Units (“FIUs”) to analyse and detect money laundering and terrorist financing cases, as well as to suspend suspicious transactions; ➡️ Extends the entities subject to the AML framework to include football clubs involved in transactions. These clubs will be obliged to verify their customers’ identities, monitor transactions, and report any suspicious transactions to FIUs; ➡️ Enhances vigilance towards ultra-rich individuals, i.e., persons with a total wealth value of at least 50,000,000 euros, excluding their main residence; ➡️ Establishes a new Authority for Anti-Money Laundering and Countering the Financing of Terrorism (“AMLA”) in Frankfurt. This authority is tasked with directly supervising the riskiest financial entities, intervening in cases of supervisory failures, and acting as a central hub and mediator for supervisors." The legislation still needs to be formally adopted by the Council, after which it will be published in the Official Journal. The AMLA will enter into force seven days after publication and will apply from 1 July 2025, and the AMLR will enter into force 20 days after publication and will apply 36 months from the date of entry into force, with the exception of a few articles, AMLD6 will enter into force 20 days after publication and Member States will have two years from the date of entry into force to transpose the Directive. The TFR will enter into force in Member States from 30 December 2024.

Swiss AML/CFT Regulations - Post Ahoy 💡 Articles 305bis (Money laundering), 305ter (Insufficient diligence in financial transactions and right to report), 322ter (Bribery of Swiss public officials), 322quater (Acceptance of bribes), 322septies (Bribery of foreign public officials), 260quinquies (Financing terrorism) of the Swiss Criminal Code (SCC); 💡 AMLA (SR 955.0; Federal Act of 10 October 1997 on Combating Money Laundering and Terrorist Financing) ; 💡 AMLO-FINMA (SR 955.033.0; FINMA Ordinance of 3 June 2015); 💡 Swiss banks' code of conduct with regard to the exercise of due diligence (CDB 20); 💡(SR 955.01 - Federal Council Ordinance of 11 November 2015 on Combating Money and Laundering and Terrorist Financing). Have you ever stopped and wondered. ⁉ "Are periodic reviews meant to be every 1 year for High risk and medium to low 2 years, or is it 3 years?" ⁉ "Should we discontinue the business relationship with the corporate/retail client or not, is this even my decision to make?" ⁉ "This escalation looks only slightly suspicious, although it meets our minimum requirements to file a SAR I feel its lacking substance, should I file this with the MROS anyway. What if it returns back as a false positives/negative?" ⁉ "How long after the relationship has ended can we retain customer information?" ⁉ "I have filed a SAR and am waiting for a response by the respected authority - Should we allow the suspected account/user to continue transacting?" I believe we have asked these at some point in time, and even more people will soon ask these questions in their careers especially #mlro and #compliance folk. 🌍 From the perspective of Switzerland - Excl. UK for now. For those 5 specific questions here are my responses as per regulations in Switzerland: ✅ Periodic reviews are generally conducted annually for high-risk business relationships, while medium to low-risk relationships undergo reviews every three years. ✅ The decision to discontinue a business relationship should align with regulatory requirements. This is a complicated and delicate decision that has more than several factors to consider-Should I make a post on this? ✅ Even if a SAR escalation seems only slightly suspicious this is sufficient grounds to file. Firms (FIs must have guidelines aligned to the requirements of their respective jurisdictions such as a SAR form). ✅ In Switzerland, subject to AML, FIs must retain docs for 10 years post end of the business relationship. ✅ Post reporting to MROS, while their analysis takes place, you may continue to execute client orders for the reported assets until notified by MROS that the report was forwarded to the prosecution authority. Client orders involving significant assets in a form that allows traceable transactions are allowed. More info available... Found this insightful? Comment & Share. https://lnkd.in/eK4gURUj #risk #aml #complianceofficers #banking #payments #regulation #euregulations #

𝐔𝐧𝐝𝐞𝐫𝐬𝐭𝐚𝐧𝐝𝐢𝐧𝐠 𝐭𝐡𝐞 𝐄𝐔'𝐬 𝐀𝐌𝐋 𝐏𝐚𝐜𝐤𝐚𝐠𝐞 🔍 In July 2021, the European Commission launched the so called “AML package” to bolster the EU's defenses against money laundering and terrorist financing. At the core of the AML Package are four key legislative proposals: 𝟏) 𝐑𝐞𝐠𝐮𝐥𝐚𝐭𝐢𝐨𝐧 𝐞𝐬𝐭𝐚𝐛𝐥𝐢𝐬𝐡𝐢𝐧𝐠 𝐭𝐡𝐞 𝐀𝐮𝐭𝐡𝐨𝐫𝐢𝐭𝐲 𝐟𝐨𝐫 𝐀𝐧𝐭𝐢-𝐌𝐨𝐧𝐞𝐲 𝐋𝐚𝐮𝐧𝐝𝐞𝐫𝐢𝐧𝐠 𝐚𝐧𝐝 𝐂𝐨𝐮𝐧𝐭𝐞𝐫𝐢𝐧𝐠 𝐭𝐡𝐞 𝐅𝐢𝐧𝐚𝐧𝐜𝐢𝐧𝐠 𝐨𝐟 𝐓𝐞𝐫𝐫𝐨𝐫𝐢𝐬𝐦 (𝐀𝐌𝐋𝐀): - AMLA will coordinate national authorities to ensure consistent application of AML/CFT rules across Member States; - AMLA will have the authority to directly supervise certain high-risk financial entities, including those involved in crypto-assets; - AMLA will support the cooperation among Financial Intelligence Units (FIUs). 𝟐. 𝐑𝐞𝐠𝐮𝐥𝐚𝐭𝐢𝐨𝐧 𝐨𝐧 𝐭𝐡𝐞 𝐩𝐫𝐞𝐯𝐞𝐧𝐭𝐢𝐨𝐧 𝐨𝐟 𝐭𝐡𝐞 𝐮𝐬𝐞 𝐨𝐟 𝐭𝐡𝐞 𝐟𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 𝐬𝐲𝐬𝐭𝐞𝐦 𝐟𝐨𝐫 𝐭𝐡𝐞 𝐩𝐮𝐫𝐩𝐨𝐬𝐞𝐬 𝐨𝐟 𝐦𝐨𝐧𝐞𝐲 𝐥𝐚𝐮𝐧𝐝𝐞𝐫𝐢𝐧𝐠 𝐨𝐫 𝐭𝐞𝐫𝐫𝐨𝐫𝐢𝐬𝐭 𝐟𝐢𝐧𝐚𝐧𝐜𝐢𝐧𝐠 (𝐀𝐌𝐋𝐑): - Due diligence for CASPs in international partnerships, institutions with wealthy account holders, and transactions in high-risk areas; - €10,000 limit on cash transactions, with Member States able to set stricter caps; identification required for €3,000 to €10,000 cash deals. 𝟑. 𝐃𝐢𝐫𝐞𝐜𝐭𝐢𝐯𝐞 𝐨𝐧 𝐭𝐡𝐞 𝐩𝐫𝐞𝐯𝐞𝐧𝐭𝐢𝐨𝐧 𝐨𝐟 𝐭𝐡𝐞 𝐮𝐬𝐞 𝐨𝐟 𝐭𝐡𝐞 𝐟𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 𝐬𝐲𝐬𝐭𝐞𝐦 𝐟𝐨𝐫 𝐭𝐡𝐞 𝐩𝐮𝐫𝐩𝐨𝐬𝐞𝐬 𝐨𝐟 𝐦𝐨𝐧𝐞𝐲 𝐥𝐚𝐮𝐧𝐝𝐞𝐫𝐢𝐧𝐠 𝐨𝐫 𝐭𝐞𝐫𝐫𝐨𝐫𝐢𝐬𝐭 𝐟𝐢𝐧𝐚𝐧𝐜𝐢𝐧𝐠 (𝐀𝐌𝐋𝐃𝟔): - Strengthened beneficial ownership register rules; - Empowerment of Financial Intelligence Units (FIUs) with broader authorities, enhanced collaboration capabilities, and obligations to uphold fundamental rights; - Defined enhancement and clarification of the supervisory bodies' roles, including their powers and responsibilities; - Implementation of risk assessment protocols at EU and national levels, including targeted recommendations from the Commission to Member States. 𝟒. 𝐑𝐞𝐠𝐮𝐥𝐚𝐭𝐢𝐨𝐧 𝐨𝐧 𝐢𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧 𝐚𝐜𝐜𝐨𝐦𝐩𝐚𝐧𝐲𝐢𝐧𝐠 𝐭𝐫𝐚𝐧𝐬𝐟𝐞𝐫𝐬 𝐨𝐟 𝐟𝐮𝐧𝐝𝐬 𝐚𝐧𝐝 𝐜𝐞𝐫𝐭𝐚𝐢𝐧 𝐜𝐫𝐲𝐩𝐭𝐨-𝐚𝐬𝐬𝐞𝐭𝐬 (𝐑𝐞𝐜𝐚𝐬𝐭 𝐨𝐟 𝐑𝐞𝐠𝐮𝐥𝐚𝐭𝐢𝐨𝐧 𝟐𝟎𝟏𝟓/𝟖𝟒𝟕/𝐄𝐔): - Traceability rules for crypto-asset transfers, mandating that service providers gather and exchange information on transaction originators and beneficiaries; - Enhanced due diligence for transactions involving high-risk countries. 𝐂𝐮𝐫𝐫𝐞𝐧𝐭 𝐬𝐭𝐚𝐭𝐮𝐬 📅 On 17 January 2024, the EU Council and Parliament reached a political agreement on 3 of the 4 AML package acts, excluding the Recast of Regulation 2015/847/EU. If the Parliament adopts its first reading position as proposed, the Council will approve it, leading to the swift adoption of these acts. #amlpackage #amlcft #EUlaw #AMLA  

Australia has expanded its AML/CTF regime to include real estate agents, lawyers, accountants, and precious metals dealers. These reforms, part of the Tranche 2 legislation, aim to close loopholes exploited by criminals to launder illicit funds. The newly regulated sectors must now implement robust reporting and compliance measures and this extension aligns Australia with global AML standards.   The Australian Parliament passed AML & CTF Amendment Bill 2024 (Cth) (the Bill) on 29 November 2024. As well as simplifying the current AML/CTF regime, the Bill expands the regime’s application to services provided by certain high-risk businesses and professions (‘Tranche 2 entities’), including: real estate professionals and developers; professional services providers such as lawyers, accountants, insolvency and restructuring practitioners, consultants; and dealers in precious metals and stones. When the Tranche 2 entities’ provisions commence on 1 July 2026, the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) (AML/CTF Act) will apply to approximately 70,000 additional businesses, bringing the total reporting entities to 90,000. The Tranche 2 entities amendments to the AML/CTF Act aim to close regulatory gaps and bring Australian law in line with international standards set by the Financial Action Task Force. Currently, the absence of AML/CTF requirements for Tranche 2 entities is seen as a weakness in Australia’s AML/CTF framework, leaving these industries vulnerable to money laundering and terrorism financing risks. Under the new Law, i)- Businesses offering a designed service will need to enrol with AUSTRAC. ii)-AML/CTF policies must be in place before a business can provide designated services, and the business must conduct a risk assessment of its ML/TF/PF risk. iii)-Businesses providing a designated service must appoint an AML/CTF compliance officer to oversee the operation of the entity’s AML/CTF policies and updates. iv)- Tranche 2 entities will need to conduct initial customer due diligence, which includes the collection and verification of a customer’s identity as well as customer risk rating. v)-Tranche 2 entities will need to collect, review and update ‘Know Your Customer’ (KYC) information, as well as monitor their customers for unusual transactions and behaviours that may give rise to a suspicious matter reporting obligation. They will also be required to conduct enhanced customer due diligence for high risk customers (such as politically exposed persons). vi)- Tranche 2 entities will be required to report certain matters to AUSTRAC, including suspicious matter reports, threshold transaction reports and international value transfer services. vii)-Tranche 2 entities will need to keep certain records of the designated services provided to customers.

🛡️ 𝗛𝗠 𝗧𝗿𝗲𝗮𝘀𝘂𝗿𝘆 𝗵𝗮𝘀 𝗽𝘂𝗯𝗹𝗶𝘀𝗵𝗲𝗱 𝗶𝘁𝘀 𝗔𝗠𝗟/𝗖𝗧𝗙 𝗦𝘂𝗽𝗲𝗿𝘃𝗶𝘀𝗶𝗼𝗻 𝗥𝗲𝗽𝗼𝗿𝘁: 𝟮𝟬𝟮𝟮-𝟮𝟯, dated May 2024. The report provides an overview of the performance of AML/CTF supervisors in the financial year 2022-23, highlighting their supervisory activities, risk-based approaches and enforcement actions. It also outlines the UK's AML/CTF regulatory and supervisory regime. 📄 Some key takeaways from the report include: 1. 𝘾𝙧𝙞𝙩𝙞𝙘𝙖𝙡 𝙧𝙤𝙡𝙚 𝙤𝙛 𝘼𝙈𝙇/𝘾𝙏𝙁 𝙨𝙪𝙥𝙚𝙧𝙫𝙞𝙨𝙤𝙧𝙨: AML/CTF supervisors play a critical role in protecting the UK financial system from money laundering and terrorist financing. 2. 𝙎𝙩𝙧𝙪𝙘𝙩𝙪𝙧𝙚 𝙤𝙛 𝙩𝙝𝙚 𝙧𝙚𝙥𝙤𝙧𝙩: The report is divided into three chapters: Chapter 2 focuses on supervisory activities, Chapter 3 discusses promoting and ensuring compliance, and Annexes A and B provide additional information on supervisors and definitions of sanctions and penalties. 3. 𝙍𝙞𝙨𝙠-𝙗𝙖𝙨𝙚𝙙 𝙖𝙥𝙥𝙧𝙤𝙖𝙘𝙝: AML/CTF supervisors use a risk-based approach to supervise their population, outlining their supervisory activities and considering information sharing. 4. 𝙎𝙪𝙥𝙚𝙧𝙫𝙞𝙨𝙤𝙧𝙮 𝙖𝙘𝙩𝙞𝙫𝙞𝙩𝙞𝙚𝙨: Chapter 2 of the report details each supervisor's risk-based approach, supervisory activities and information sharing. 5. 𝙋𝙧𝙤𝙢𝙤𝙩𝙞𝙣𝙜 𝙘𝙤𝙢𝙥𝙡𝙞𝙖𝙣𝙘𝙚: Chapter 3 of the report examines the use of deterrent enforcement by supervisors to promote compliance with AML/CTF standards among their supervised population. 6. 𝙈𝙚𝙩𝙝𝙤𝙙𝙤𝙡𝙤𝙜𝙮: The report is based on an annual data return collected from all AML/CTF supervisors, which includes information on regulated entities, supervisory activities, MLR breaches, sanctions applied and case studies. 7. 𝘿𝙖𝙩𝙖 𝙘𝙤𝙡𝙡𝙚𝙘𝙩𝙞𝙤𝙣: HM Treasury collects data from supervisors, which may change in the future under the new effective framework, in preparation for the UK's next FATF evaluation. 8. 𝙏𝙝𝙚 𝙩𝙝𝙧𝙚𝙖𝙩 𝙤𝙛 𝙞𝙡𝙡𝙞𝙘𝙞𝙩 𝙛𝙞𝙣𝙖𝙣𝙘𝙚: illicit finance in the UK poses a significant threat to national security, economic prosperity and the integrity of the financial system. 9. 𝙄𝙢𝙥𝙤𝙧𝙩𝙖𝙣𝙘𝙚 𝙤𝙛 𝘼𝙈𝙇/𝘾𝙏𝙁 𝙚𝙛𝙛𝙤𝙧𝙩𝙨: The fight against money laundering and terrorist financing is vital to protecting the security and prosperity of UK citizens and communities, and the integrity of the financial system. However, it is important to note that the report does not draw explicit conclusions. 💸 These key points summarize main aspects of the 'Supervision Report: 2022-23' by HM Treasury, highlighting the importance of AML/CTF supervisors, the structure of the report and the key areas of focus in the fight against money laundering and terrorist financing.

Anti-money laundering (AML) regulations have evolved over several decades in response to the increasing complexity and globalization of financial transactions and the need to combat illicit financial activities. Here's a brief overview of the history of AML regulations: 1. 1970s-1980s: The initial focus on AML efforts began in the 1970s and 1980s with the passage of the Bank Secrecy Act (BSA) in the United States in 1970. This act required financial institutions to report cash transactions over $10,000 and to keep records of these transactions. Other countries also started implementing similar regulations during this time. 2. 1990s: The Financial Action Task Force (FATF) was established in 1989 by the G7 to combat money laundering. In the 1990s, FATF issued a series of recommendations known as the "40 Recommendations," providing an international standard for AML efforts. 3. 2000s: The terrorist attacks of September 11, 2001, prompted increased global attention on combating terrorist financing. This led to the USA PATRIOT Act in the United States, which expanded AML regulations and introduced measures to combat terrorist financing. 4. 2010s: The FATF continued to revise its recommendations, updating them in 2012 to include measures to combat the financing of proliferation of weapons of mass destruction (WMDs). The implementation of the Fourth EU Money Laundering Directive in 2015 strengthened AML regulations in the European Union. 5. 2020s: The FATF continued to refine its standards, focusing on emerging technologies such as virtual assets and cryptocurrencies. Countries around the world have been updating their AML laws and regulations to address these developments. Overall, the history of AML regulations reflects a continuous effort to adapt to changing financial landscapes and evolving methods of money laundering and terrorist financing. The goal is to create a robust framework to detect, prevent, and deter illicit financial activities globally. #compliance #AMLframework #regulations #fincrime

The fight against money laundering is picking up speed: Entry into force of the overall AML package in 3 to 6 months The EU Commission and Council have agreed on the final compromise texts for the new Anti-Money Laundering Regulation and published them on February 12, 2024. This marks a major milestone in the legislators' efforts to put together a pan-European money laundering package. The AML package (Anti Money Laundering Package) is intended to harmonize the regulations for combating money laundering and terrorist financing in Europe and is to be implemented in national regulations within 2 years of its entry into force. The EU Commission has been working on a legislative package to combat money laundering since 2021. The overall package originally contained the following 4 components - A regulation to re-establish a central EU authority, the Anti Money Laundering Agency (AMLA), which can impose sanctions and penalties across the EU. - A regulation to revise the money transfer regulations, which will make the transfer of crypto assets in particular more transparent and traceable. -A regulation on combating money laundering in the private sector. -A directive on the mechanisms used to combat money laundering. In the course of the lengthy legislative process, the individual components were split up. As a result, the Cash Transfer Regulation could already be adopted in June 2022, as there was broad agreement on its content in the EU bodies. The provisions of the AML package will enter into force when they are formally adopted by the European Council and the European Parliament and published in the Official Journal of the EU. This is expected to happen in the next 3 to 6 months. In any case, it is worth getting to grips with the regulations at an early stage, as the AML package will entail significant compliance requirements for obliged entities.

EU's AML Regulation: Impact of 6AMLD and 7AMLD. The EU’s Anti-Money Laundering (AML) regulations have undergone significant changes with the introduction of the 6th and 7th AML Directives (6AMLD and 7AMLD). Here’s a brief overview of their impact: 6AMLD : The 6th AML Directive (6AMLD) aims to strengthen the EU’s fight against money laundering by: Harmonizing Definitions: It provides a unified definition of money laundering across all EU member states, closing loopholes in domestic legislation. Expanding Predicate Offenses: It includes additional predicate offenses such as cybercrime and environmental crime. Increasing Penalties: It introduces harsher penalties for money laundering offenses, including a minimum of four years imprisonment. Holding Legal Entities Accountable: Companies can now be held liable for money laundering activities conducted by individuals acting on their behalf. 7AMLD The 7th AML Directive (7AMLD) builds on the foundations laid by 6AMLD and introduces further measures: Enhanced Cooperation: It strengthens cooperation between national Financial Intelligence Units (FIUs) and the newly established EU AML Authority (AMLA). Stricter Customer Due Diligence: It imposes more stringent customer due diligence requirements, particularly for high-risk sectors. Transparency on Beneficial Ownership: It increases transparency regarding the beneficial ownership of legal entities and trusts. Regulation of New Sectors: It extends AML obligations to new sectors, including crowdfunding platforms and investment migration operators. These directives aim to create a more robust and unified framework for combating money laundering and terrorist financing across the EU, enhancing the integrity and security of the financial system. https://lnkd.in/dNu39Gjw

Wealthy individuals will now automatically need to be considered high risk for AML purposes. The European Parliament has adopted a package of laws strengthening the EU’s toolkit to fight money-laundering and terrorist financing. The new laws provide people with a « legitimate interest » including journalists (!) media professionals (!) civil society organisations (!) competent authorities, and supervisory with immediate, unfiltered, direct and free access to beneficial ownership information held in national registries and interconnected at EU level. In addition to current information, the registries will also include data going back at least five years. I am not convinced that this is all compatible with individual rights to privacy (ref ECJ decision). The laws also give Financial Intelligence Units (FIUs) more powers to analyse and detect money laundering and terrorist financing cases as well as to suspend suspicious transactions. The new laws include enhanced due diligence measures and checks on customers’ identity, after which so-called obliged entities (e.g. banks, assets and crypto assets managers or real and virtual estate agents) have to report suspicious activities to FIUs and other competent authorities. From 2029, top-tier professional football clubs involved in high-value financial transactions with investors or sponsors, including advertisers and the transfer of players will also have to verify their customers’ identities, monitor transactions, and report any suspicious transaction to FIUs. The legislation for some reason also contains enhanced vigilance provisions regarding ultra-rich individuals (total wealth worth at least EUR 50 000 000, excluding their main residence). There will be an EU-wide limit of EUR 10 000 on cash payments, except between private individuals in a non-professional context, and measures to ensure compliance with targeted financial sanctions and avoid sanctions being circumvented. The Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) package consists of the sixth Anti-Money Laundering (AML) directive, the EU “single rulebook” regulation and the Anti-Money Laundering Authority (AMLA) regulation were adopted. The laws still need to be formally adopted by the Council, too, before publication in the EU’s Official Journal.