AML Roundup – 17 Dec, 2021
17 Dec 2021

In this week’s KYC360 AML roundup: NatWest fined £265m, Dev Odedra looks at luxury goods and sanctions, UBS fails to overturn tax evasion appeal, Bank of Cyprus gets fined, change could be coming for US/UK kleptocrats and the UK needs to secure a ‘backdoor’ against money launderers.

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NatWest fined £265m after bin bags of cash laundered

In a landmark case, NatWest has been fined £265 million after a Bradford jewellers laundered £264m in cash. The business’ predicted annual turnover was £15m when they were taken on as a client by the bank. However, in five years they deposited £365m, with daily deposits rates reaching up to £1.8m. Despite this, no concerns were raised by NatWest.

The High Life II: Luxury Goods and Sanctions

In the mid-80’s when famous music artist Madonna was topping the charts singing “we are living in a material world…” on one of her hit songs, the United States (US) was sanctioning Iran with a ban on the import of goods from the country.  In a material world, luxury goods find their way to, as well as from, sanctioned countries – both directly and through secondary markets. Today, whilst much focus is given to sanctioned countries, entities and individuals themselves, there seems to be little focus on sanctions risks related to luxury goods.

UK: Attorney general begins review of SFO

The attorney general has begun an independent investigation into the serious fraud office after criticisms from judges over fails that led to the unfair jailing of a businessman. During the original trial, the SFO failed to hand over key documents that impacted the man’s defence.

Central Bank fines Bank of Cyprus €790,007

Cyprus Central Bank (CBC) has fined the Bank of Cyprus €790,000 over violations of the country’s anti-money laundering laws. The CBC explained in a statement that the Bank of Cyprus failed to comply with the ‘Prevention and suppression of money laundering activities and financing of terrorism’ law.

UBS failed to overturn guilty tax evasion ruling in France

UBS has failed to overturn a 2019 ruling which found the bank had helped French client avoid taxes by hiding their money in Switzerland. Although the bank has failed to overturn the ruling, they have reduced the penalty that they will have to pay. The new charge is now €1.8 billion, less than half of the original penalty of €4.5b which had included a record fine of €3.7billion.

US & UK kleptocrats and oligarchs. Is change coming?

Last week Biden’s administration held the first Summit for Democracy – but are leaders really willing to tackle authoritarianism and corruption? An article from Open Democracy observes: “while the US and UK crowed about victory at the end of the Cold War, Washington and London have spent the decades since transforming into the world’s leading money-laundering services for the oligarchs, kleptocrats and illiberal forces who have crushed democratic reformers and gained power for themselves.”

The U.K. is a Fintech leader but needs to secure the ‘back door’ against money launderers

Despite the UK being a world leader in the fintech space, a Bloomberg/Washington Post article asks whether this is also creating a ‘back door’ for money launderers. Without enough resources committed to tackling financial crime, the country is especially attractive to money launderers as it has an open economy, a global hub for financial flows, has a big gambling sector and lax company creation rules. “Britain has the right regulations, but they aren’t applied rigorously enough, especially with the hundreds of electronic money institutions (EMIs), according to Transparency International.”

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