AML Roundup – 11 March 2022
11 Mar 2022

As the war in Ukraine continues to reverberate across the world, we have dedicated the first section of this week’s AML Roundup to updating you on the sanctions that have been introduced over the last 7 days. In addition, we highlight the key takeaways from FATF’s annual plenary, together with its members statement on the situation in Ukraine.

In other news, we report on the possibility of the EU blacklisting Switzerland over the Credit Swiss leak and how the UK government may have bought 3billion PPE gloves manufactured by forced labour. And to wrap up this week’s edition, we invite you to take a closer look at how Mauritius and the Bahamas are tackling the long-standing issue of money laundering.

Russia sanctions update

EU imposes new sanctions and restrictive measures against Russia and Belarus

A further 14 oligarchs and businesspeople together with 146 members of the Russian Federation Council are now subject to EU sanctions. The new measures are being enforced by all member countries of the European Economic Area (EEA) and Switzerland, taking the total to 862 individuals and 53 entities.

The West closes in on cutting Russia’s last economic lifeline

The EU is to cut imports of Russian natural gas by two thirds this year, with the aim of achieving energy independence. The UK is to phase out Russian oil imports by the end of 2022 and explore how it can end natural gas imports. While in the U.S., Biden has banned all Russian oil, natural gas and coal imports.

Roman Abramovich among seven oligarchs to be sanctioned by UK

Seven Russian oligarchs including Roman Abramovich have been hit with asset freezes and travels bans by the UK. As a direct result, Chelsea FC has been seized by the Government and the sale of the club has been put on hold.

What is the economic crime bill and what is it expected to achieve?

The bill has been passed to tackle “dirty money” hidden in the UK by setting up a register of the Ultimate Beneficial Owners (UBOs) of property or land bought by overseas individuals or companies. Failure to register will be a criminal offence with a punishment of up to five years in jail.

FinCEN issues alert on potential Russian sanctions evasion through crypto currencies or assets

The US Treasury’s Financial Crimes Enforcement Network (FinCEN) issued a warning that outlines the transactional indicators that can detect Russian sanctions evasion through the use of crypto currencies or assets.

Webinar | Meeting the challenge of the Russia sanctions compliance emergency

Watch the recording of this special RiskScreen webinar where Stephen Platt, RiskScreen’s CEO and Tom Devlin, Senior Director, Regulatory & Product, explored the unique challenges of complying with evolving sanctions against Russia.

FATF plenary 2022 

Last week FATF held its annual plenary with delegates representing the 206 members of the Global Network, together with observer organisations including the IMF, the UN, and the World Bank.

Following four days of meetings they released their findings; below are some of the key takeaways.

  • The introduction of new beneficial ownership rules that require member countries to collect information through a combination of different mechanisms.
  • Zimbabwe has been removed from the ‘grey list’ and will no longer be subject to increased monitoring.
  • The Middle East business hub the UAE has been added to the ‘grey list’ and is now subject to increased monitoring.
  • After conducting research into the AML and CTF risks of migrant smuggling, FATF is set to publish its findings on March 22nd, 2022.
  • Acknowledgement that the real estate sector has a poor understanding of the risks they are exposed to. As a result, new guidance is to be issued and FATF is planning to launch a public consultation this spring.
  • A new President has been elected, Mr. T. Raja Kumar, who will serve a two-year fixed term.

The FATF public statement on the situation in Ukraine

FATF members issued a statement expressing their “grave concern about the invasion’s impact on the money laundering, terrorist financing, and proliferation financing risk environment, as well as the integrity of the financial system, the broader economy, and safety and security”.

Other news

Credit Suisse leak places Switzerland at risk of EU blacklist

In the aftermath of the Credit Suisse leak and apparent due diligence failures, there were calls for the EU to review its relationship with Switzerland and even for it to be added to a money-laundering blacklist.

Toyota truck unit shares plummet after the company admits cheating on emissions data

Toyota’s truck-making subsidiary Hino’s emissions data scandal is the latest to hit Japan’s automotive industry. Previously, Mitsubishi Motors, Suzuki, Mazda, and Yamaha have all admitted to manipulating fuel economy data.

Mexico’s wildlife trafficking relationship with China

Mexican drug cartels are meeting China’s huge appetite for wildlife products in exchange for the precursor chemicals required to produce fentanyl and methamphetamine.

UK Ministers may have unwittingly purchased 3bn PPE gloves manufactured using forced labour

Following concerns about the quality and non-delivery of PPE equipment purchased during the pandemic, MPs have now been informed that some 3 billion protective gloves may have been manufactured using modern slavery.

Assessing the AML Framework in Mauritius

“In 2009, four Canadian nationals, also members of the biker’s gang Hell’s Angels, were arrested on charges of conspiracy, money laundering and gangsterism. The allegations were that they had created trusts and an offshore company in Mauritius for moving their illegal proceeds.”

Preetam Kaushik investigates Mauritius’ history with money laundering and their AML framework.

The Bahamas and AML: A Tale of Redemption

“The Bahamas also figures among the leading global tax havens. Its climate of political stability, negligible taxation and strict privacy laws, combined with its strong financial services sector make it a viable and attractive destination for investors. As with many other tax havens, this financial climate brings with it a vulnerability to money laundering risks.”

Preetam Kaushik tracks the nation’s journey to shed its reputation as a jurisdiction vulnerable to money laundering risks.

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