AML Roundup: Large AML settlements on the way in the US – EBA tests regulation with mystery shopping – KYC requirements for gaming and gambling companies – Money Laundering, Fraud, Corruption & Bribery – Regulation, Legislation and Sustainability – Gaming and Gambling – Crypto & Virtual Assets – Sanctions
11 Aug 2023

Welcome to this week’s AML Roundup. In our anti-money laundering news this week, an outgoing, high-ranking US DoJ official predicts some large corporate settlements in the pipeline from investigations he’s been working on. The Federal Financial Institutions Examination Council (FFIEC) has updated its AML/CTF manual and Pakistan passes key laws to improve its AML position.

We’ve an update on the European Banking Authority’s use of mystery shopping to test financial regulations and we have news on S&P Global’s decision to stop publishing ESG ratings as part of its debt ratings service.

In gaming and gambling news there are useful summaries on the KYC and legislative requirements for companies in the sector and in crypto news, a report has been published by organisations looking into the feasibility of a ‘digital dollar’. Their findings are largely positive.

To complete this week’s Roundup, we provide you with further money laundering, fraud, corruption and bribery updates from around the world. In addition, the latest sanctions news with UK regulations being extended to British overseas territories and Guernsey updating its AML/CFT sanctions guidance.

Money Laundering, Fraud & Corruption

Departing US Department of Justice’s Criminal Division official suggests big corporate settlements are imminent

Kenneth Polite has resigned from his job as Assistant Attorney General for the Criminal Division before taking up a private sector role. In a departing interview, he explains that there are a number of major corporate settlements in the pipeline. These could include large fines for companies to settle criminal charges relating to foreign bribery or money laundering.

US FFIEC updates its Bank Secrecy Act/Anti-Money Laundering Examination Manual

The Federal Financial Institutions Examination Council (FFIEC) has updated sections of its ‘manual’ that instructs examiners on how to assess a bank’s AML/CFT compliance with regulatory requirements. It’s citing transparency as the reason for the updates rather than specific new instructions or a focus on certain areas.

Pakistan passes AML bills to avoid future FATF greylisting

Pakistan’s national assembly has passed its National Anti-Money Laundering, Counter Financing of Terrorism Bill 2023 last Thursday. The country has been grey listed by the Financial Action Task Force (FATF) several times as is looking to improve its international standing.

Legislation, Regulation and Sustainability

European Banking Authority uses mystery shopping to help supervise national authorities

The EBA has published a report into its use of mystery shopping to check how national finance regulations are being administered in EU member states. Financial services providers were mystery shopped 340 times both in person and online.

S&P Global ceases publication of its ESG scores in its debt ratings

S&P Global has stopped publication of company ESG ratings when assessing their credit quality. It had published a 1-5 score to determine a company’s exposure to ESG risks. However, it’s now communicated that it will no longer do so.

Gaming and Gambling

KYC requirements for betting and gaming sites

Having robust KYC procedures is a requirement for UK online casinos and sportsbooks. Here’s a summary of the requirements.

Gambling legislation in the UK

Here’s a useful summary of the current position for gambling legislation in the UK.

Crypto & Virtual Assets

Digital Dollar Project concludes their pilot study and sees benefits in a US Central Bank Digital Currency (CDBC)

The nonprofit organisation created to research the potential advantages and challenges of a US Central Bank “digital dollar” have completed their pilot study and published a report with their findings. The study found that a CBDC could be faster and more accessible for consumers. They also suggested it could make for lower cost transactions, reduce risk for instant settlements and enhance trust from users.

US SEC Chair suggests AI is the next frontier for financial regulation

Gary Gensler, Chair of the US Securities and Exchange Commission, has extensive experience of technology and AI. In 2020, he wrote a paper titled “Deep Learning and Financial Stability” which details the risks of AI to the financial system devoid of regulation to cope with it. He now pushing for AI regulation and for transparency in how AI decisions are made.


UK sanctions amendments extended to overseas territories

The UK’s Russian sanctions amendments have been extended to British overseas territories (except for Bermuda and Gibraltar). Changes include modification of offences in relation to export of goods to non-government controlled Ukrainian territory, import of processed iron or steel from Russia and prohibitions on the provision of professional and business services.

Guernsey regulator publishes AML/CTF sanctions guidance

The Guernsey Financial Services Commission has published in final draft form, its AML/CTF sanctions guidance for registered directors including a list of “higher risk factors”.

RiskScreen AML spotlight report

AML Vulnerabilities in Gaming and Gambling

Gaming and gambling companies risk getting caught in a pincer movement. On the one hand, criminal groups are eyeing the potential opportunities afforded by the industry to launder the proceeds of wrongdoing, particularly as online gambling has boomed. On the other, regulators, alert to this danger, are increasingly cracking down on companies judged to have fallen short on anti-money laundering (AML) standards.

In this industry report, we look at:
– Where gambling and gaming companies face AML risks
– The regulatory environment
– How to ensure compliance with AML

Download this valuable compliance analysis here.

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