17 Nov 2023
Welcome to this week’s AML Roundup. In our anti-money laundering news this week, the Basel AML Index is reporting an increase in the global money laundering/terrorist financing risk level, citing concerns in the effectiveness of systems designed to fight organised crime and corruption. The EU Commission has published a list or roles whose holders are defined as political exposed persons (PEPs) and there’s also news of the first ever prosecution of a solicitor by the Serious Fraud Office (SFO) for tipping off a client about a money laundering investigation they were subject to.
The US Securities and Exchange Commission has announced it has raised almost $5bn in fines and penalties in the past year. Cyprus has been implicated in a major new report, on corruption and sanction-busting allegations with Russian oligarchs.
Crypto news covers the agreement by 48 countries to adopt the new CARF tax reporting standard and also includes an interesting piece on how a misunderstanding of crypto technology, could lead to poor or inadequate regulation.
To complete this week’s Roundup, we provide you with further money laundering, fraud, corruption and bribery updates from around the world. In addition, there is news on further sanctions by the US and UK on Hamas officials following the 7 October attack on Israel.
Money Laundering, Fraud & Corruption
Basel AML Index 2023 shows risks continue to rise
The Basel AML Index is an independent ranking that assesses countries’ money laundering/terrorist financing (ML/TF) risks and capacity to counter them. It draws on 18 indicators in five domains measuring different factors that contribute to high ML/TF risks. According to their 2023 Public Edition, the average global risk level increased from 5.25 in 2022 to 5.31 in 2023 (10 is the maximum risk). It highlights concerns in the effectiveness of financial crime systems globally as countries lose billions to organised crime and corruption.
EU Commission publishes list of roles that comprise PEPs
The EU Commission has published a single list of all public functions of each Member State that qualify as prominent public functions. A politically exposed person (PEP) is anyone holding one of these positions.
SFO prosecutes solicitor for ‘tipping off’ client about money laundering probe
The UK Serious Fraud Office (SFO) has for the first time, prosecuted a solicitor for notifying a client that they were being investigated for money laundering. Solicitors are legally obliged not to share details of money laundering investigations into their clients.
Global investigation claims Cyprus helped Russians shield their wealth
A major report entitled ‘Cyprus Confidential’ and compiled by the International Consortium of Investigative Journalists (ICIJ) and the Organised Crime and Corruption Reporting Project (OCCRP) has purported to uncover corruption, sanctions-busting and how Russian wealth was allegedly shielded. In response, the Cyprus government says it has a robust financial system with stringent frameworks.
US SEC collected almost $5bn in financial penalties in the past year
The US Securities and Exchange Commission (SEC) generated $4.95bn in penalties and other financial remedies in the past year. This included a $178.6-million civil penalty against Danske Bank to resolve charges of misleading investors over its efforts to combat money-laundering.
Luncheon & Lecture in House of Commons: Nuts & Bolts of the Transnational US AML Law
Earlier this year, RiskScreen held a webinar with Stephen Kohn, world-renowned expert on whistleblower law and international anti-corruption. On Thursday 30th of November at 1:30pm, Stephen will be presenting a lecture at the House of Commons on the United States’ new transnational AML law, which he helped draft. Interested participants may register to attend and find more information here. All registrations will be vetted prior to the extension of an official invitation. Register ASAP, as capacity is limited, and invitations will be extended on a first come first serve basis. Lunch will be provided.
Legislation, Regulation and Sustainability
The changing meaning of ESG
An article about how meaning of ESG has changed and how it’s become a political hot potato.
Gaming and Gambling
Gambling Commission chief dismisses fears that affordability check will drive customers to the black market
Andrew Rhodes addressed the largest ever gathering of industry leaders last Friday looking to re-iterate the Commission’s impartiality as an independent regulator. In it, he dismissed fears that newly required affordability checks will drive consumers to black market providers. The key he said, is finding the right balance between the growth of the industry and the sustainability of the customer.
Kenya set to overhaul gambling regulations
The Kenyan government has introduced its new Gambling Control Bill to establish a new regulator and overhaul its gambling rules.
Crypto & Virtual Assets
48 countries commit to CARF crypto tax reporting standard
The UK, US, Australia and 45 other countries have adopted the Crypto-Asset Reporting Framework (CARF) developed by the Organisation for Economic Co-operation and Development (OECD). The framework allows for the automatic exchange of information between tax authorities to address the challenges posed by the rapid growth of the crypto-asset market.
Misunderstanding of crypto could lead to inadequate regulation
There is much concern about crypto being used to fund terrorist activity. However, the latest US Treasury report on terrorism financing finds that’s often overblown. The public asset register for crypto transactions can reduce the danger. This article looks into the detail.
US House Subcommittee investigates crypto’s role in crime
The US House Financial Services Subcommittee on Digital Assets has convened a hearing titled “Crypto Crime in Context” that seeks to investigate the extent of crypto’s involvement in criminal activity.
UK & US impose additional sanctions on Hamas officials
The US Office of Foreign Assets Control (OFAC) in partnership with the UK government, has imposed its third round of sanctions targeting Hamas-affiliated individuals and entities since the October 7 attacks. This action designates Hamas officials and the mechanisms by which Iran allegedly provides support to Hamas and Palestinian Islamic Jihad.
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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