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AML Roundup – 19 Nov, 2021
19 Nov 2021

In this week’s round-up: RaboBank faces problems again for its compliance measures, the UK can’t pay Iran money owed, KMPG audited again and Tim Cooper investigates how trade finance firms are tackling crime risks.

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UK Can’t Pay Back Iran due to Sanctions

Usually when we read about Iran and sanctions, the topic often focuses on Iran attempting to evade their sanctions through cryptocurrency or calls to outright end them, referring to the 2015 Nuclear Deal. However, these sanctions have prevented Iran being able to access money owed to the country. Late last week, the United Kingdom told Iran it won’t be able to pay back a £400m debt. This is due to the restrictions placed on bank transactions.

KPMG Sued for Sloppy Auditing in Abraaj Scandal

One of the Big Four, KPMG has been sued for £445million for its involvement in the insolvency of Abraaj Group in Dubai. The claimants allege that the company “failed to maintain independence.”

But this is not the first time KPMG has been involved in a scandal like this. Back in July this year, the Malaysian Government and1MDB filed a lawsuit against KPMG partners that sought £3.4billion in damages.

EU To Hit Belarus with New Sanctions

The humanitarian crisis happening on Poland’s border with Belarus has only been getting worse over recent weeks. However, the EU is now set to able to action sanctions that will target individuals/entities involved in facilitating illegal migration into the EU.

Rabobank faces punishment over customer anti-money-laundering checks

Earlier this week, Rabobank announced it had been instructed by De Nederlandsche Bank to remedy its AML and KYC compliance practices. Apparently, the bank has multiple deficiencies against money laundering laws which caused DNB to inform Rabobank it is facing “punitive enforcement procedure”. However, this story is like one we have heard before. Back in 2018, ING admitted criminals were able to launder money through its accounts and ended up paying a hefty fine of €775m and then again earlier this year for €3m for similar reasons.

Are trade finance firms failing to tackle crime risks?

UK trade finance firms are failing to assess their financial crime risks adequately, according to regulators. These firms must fundamentally reassess their anti-crime regime, said the Financial Conduct Authority (FCA) as it promised to step up policing efforts. But experts say trade finance firms also lack the skills and technology necessary to achieve adequate compliance. Tim Cooper investigates.

“The FCA’s letter recognised the inherent risks in trade finance activity, given its complex, global nature with large trade volumes in multiple currencies. But the regulator’s recent assessments of individual firms highlighted significant issues around financial crime controls that exposed firms to unnecessary risks.”

Pandora Papers and the Future of Ultimate Beneficial Ownership

What is Ultimate Beneficial Ownership (UBO) and why does it matter for effective KYC compliance? We take a deep dive into the impact of the Pandora Papers and the subsequent FATF recommendations on favouring a risk-based approach to UBO compliance. Read more.

FATF shares update on Cayman Islands 

FATF recently released an update in regards to the Cayman Islands’ journey to enhance its AML compliance standards. The document states that the Cayman Islands has addressed “most of” the requirements of the revised Recommendation 15. As of October, they are now Compliant or Largely Compliant. Whilst their effectiveness still needs working on, their technical compliance has greatly improved. 

NCA EncroChat Crackdown Continues

The NCA have continued their crackdown of drug traffickers using the top secret communications system this week, with a suspect being extradited to Germany. The crackdown kicked off last year as messages were intercepted by the NCA and Europol along with the French and Dutch police, with an initial 746 UK arrests.

FINMA reprimands two more Swiss banks for money laundering links to Venezuela oil

The financial watchdog in Switzerland (FINMA) has found two more Swiss banks at fault as part of a five-year investigation into their dealings with Venezuela’s state oil company PDVSA. This brings the total banks reprimanded to five, with 30 Swiss banks being contacted since 2016 including Julius Baer and Credit Suisse. In the final case disclosed, the regulator criticized Banca Zarattini & Co SA and CBH Compagnie Bancaire Helvétique SA. Read more

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