Emma RadmoreOFSI has submitted its latest quarterly report to Parliament on the operation of the UK asset freezing regime under TAFA. The report covers the quarter to the end of 2019 and notes: only £9,000 of funds were frozen...
Category - Financial Crime Prevention
EP updates on MLD4 high-risk list
The European Parliament’s legislative observatory notes that the revised MLD4 high-risk third country list is now awaiting a committee decision. Meanwhile, the UK is among 9 jurisdictions from whom the Commission...
FCA updates on Innovation Hub help
FCA has updated its information on requesting Innovation Hub support in light of Covid-19. It wants to hear from firms who have creative and innovative solutions to the challenges the virus is posing, and is...
EBA addresses financial crime risks of dividend arbitrage
EBA has conducted an inquiry into dividend arbitrage trading schemes. It concluded that differences in domestic tax laws mean that national authorities do not share the same understanding of these schemes. As a result...
NCA updates guidance on better SARs
NCA has published an update to its guidance on how to submit better quality SARs, and a set of FAQs to accompany it. The guidance stresses that a properly made SAR will give the enforcement agencies a quick picture of...
Government agrees cross-border information sharing
The Government has endorsed cross-border information sharing within corporate groups as a weapon to combat financial crime. The Government says sharing can help both the private sector and government agencies, but where...
EU launches AML policy
The European Commission has adopted an action plan for an EU policy on preventing money laundering and terrorist financing. It wants to deliver, by early 2021: effective implementation of existing rules a single EU...
FCA speaks on response to Covid-19 and Brexit
Nausicaa Delfas has spoken on FCA’s national and international response to Covid-19 and Brexit. On Covid-19, she noted: FCA’s priority to keep markets open and orderly, help firms continue to operate...
FCA sets Covid-19 financial crime prevention expectations
FCA has set out the systems and controls it expects firms to have in place to continue to manage their financial crime risks during Covid-19. It appreciates firms will face operational challenges, but also notes that...
Regulator Covid-19 update 6 May: SMCR, financial crime systems and other updates
On 6 May: FCA published a modification by consent and a direction to enable all solo-regulated firms to arrange for an unapproved senior manager to cover SMFs in an emergency, from the normal 12 weeks to 36 weeks, as...
FATF updates on Covid-19 risks
FATF has considered the financial crime risks that Covid-19 has created, and is looking at how to address them. It is particularly concerned at, for example, how criminals may seek to bypass CDD measures, use online...
FCA publishes skilled person data
FCA has publicised the number of skilled persons reports commissioned in January to March 2020. It commissioned 24 in total, of which 9 related to retail banking and 6 to retail lending. 6 of the reports were on...
Regulator Covid-19 Update 27 April
On 27 April: FCA has clarified the relationship between its rules and the UK’s CBILS and Bounce Back Loan schemes. It notes that, pending the roll-out of the BBL scheme, which, from 4 May, will give small...
Jonny WilliamsWolfsberg Group updates CBDDQ
The Wolfsberg Group has updated its Correspondent Banking DDQ and supporting documents. The changes update the documents and focus on ease of use and readability.
FOS publishes help on avoiding scams and fraud
The Financial Ombudsman Service (“FOS“) recognises that the type of complaint it sees is constantly evolving, as fraudsters develop new methods or seek to exploit events, such as the current impact of Covid...
Amelia GreenTI disappointed at UWO overturning
Transparency International has expressed its disappointment at the High Court’s decision to dismiss UWOs that would have required family members of the former Kazakh President to explain how they acquired £80m of...
PSR publishes APP scam thoughts
The PSR has published a summary of a conference call between key players in the payments industry to discuss the progress being made in tackling APP scams. It decided to go ahead with the call, not least as Covid-19 has...
FCA Business Plan 20/21
The FCA published its business plan for the coming year this morning. The plan focuses around 5 key priorities for the year. It has been significantly reshaped because of coronavirus as it was intended to show the...
Caroline StevensonRegulator Covid-19 update 1 April
Further updates from the regulators, in addition to FCA’s Dear CEO letter to retail investment firms, include: PRA welcoming the agreement by the boards of large UK banks to suspend dividends and buybacks on...
OFSI fines Standard Chartered £20m for sanctions breaches
OFSI has published details of two monetary penalties totalling £20.47m on Standard Chartered Bank for breaches of sanctions against Ukraine, following a voluntary disclosure by the bank. OFSI levied two separate fines...
JMLSG consults on crypto guidance
JMLSG is consulting on a new part to its sectoral guidance, to cover cryptoasset exchange providers and custodian wallet providers. The new Part 22: defines crypto-assets, noting some examples which firms should...
Gambling Commission fines for AML failings
The Gambling Commission has fined Betway £11,6m for a series of “social responsibility” and money laundering failings linked to 7 VIP customers. The Gambling Commission found that: generally, because the...
Treasury Committee responds on IT failure and economic crime reports
The Treasury Committee has commented on the responses from Government and regulators on: its October report on failures in the IT industry. The report had concluded, among other things, that: regulators need to improve...
TI welcomes economic crime levy
Transparency International has welcomed the Government’s announcement of an economic crime levy on firms subject to the MLRs. The Government will consult on its plans later in the spring.
FCA publishes insights from the Cyber Coordination Groups
As cyber risk continues to be a complex challenge for the financial sector, in 2017 the FCA brought together over 175 firms to collaborate in groups on cyber security and operational resilience. These Cyber Coordination...
FCA compares bank fraud controls
FCA has published data on the fraud controls banks have in place, intended to help consumers compare what different banks do. UK Finance asked banks: what their approach to fraud prevention was; what controls the firm...
FATF publishes guidance on digital ID
FATF has published a report giving guidance to regulators and firms on how to determine whether a digital ID is an appropriate CDD tool. The report looks at how digital ID systems work, and what their key features are...
FCA speaks on digital assets
Therese Chambers has spoken on the financial crime risks presented by stablecoins and other digital assets. She spoke of: early attempts to launch non-state backed digital currency, and Bitcoin’s predecessors...
Up next from FCA
FCA plans the following publications: consultation on exit fees in investment platforms and comparable firms (March); consultation on listing of OEICs (Q1); consultation on changes to DEPP, EG and the financial crime...
FCA publishes 2019 data on STORs
The FCA has published its suspicious transaction and order reports (STORs) figures for the year ending December 2019. The number of STORs had increased consistently since 2016; however, the data for 2019 appears to buck...
Rachael PrestonCLLS views on TRS extension
CLLS has input its view on the extension to the TRS. As with other respondents, it notes several types of trust it thinks should be out of scope, including: trust arrangements that are incidental to a corporate...
Government “considering” corporate economic crime offence
In response to a question in Parliament, the Government said it is still considering its response on introducing a corporate offence for economic crime – on which consultation closed in 2017.
APP Scams Interim Funding Extension
UK Finance confirmed on 27 February that the payment service providers who have provided the interim funding arrangement since May last year, have agreed to extend their funding to the end of the year (31/12/20). This...
Treasury updates AML advisory
Treasury has updated its AML advisory in the light of the most recent FATF plenary. The notice confirms that counter measures and enhanced due diligence should be applied in respect of North Korea and Iran, and...
Barnier to be EU negotiator on post-Brexit issues
The Council of the EU has adopted a decision authorising negotiations between the EU and UK towards a new partnership and authorising the European Commission, in the person of Michel Barnier, as the EU negotiator. The...
Lawyers and industry call for more TRS exclusions
ICAEW has responded to the Treasury/HMRC consultation on the extension to the Trust Registration Service in the wake of MLD5. While it welcomes the efforts to narrow the scope of express trusts that will be required to...
ESRB reports on systemic cyber risk
The European Systemic Risk Board (the “ESRB“) has published a report on cyber risks and incidents, which, owing to the interconnectedness of various information systems, spread quickly and widely. The ESRB...
FATF blacklists Iran
At FATF’s February plenary meeting it: updated its list of high risk jurisdictions. Notably, it decided Iran has not met commitments to complete its action plan, or enact the Palermo and Terrorist Financing...
TI writes to SFO on DPA regime
In the light of the Airbus DPA, Transparency International and Spotlight on Corruption have written to Lisa Osofsky asking that SFO evaluates how DPAs are used to ensure the regime is fair and consistent and provides a...
HMRC investigating 30 for CFA breach
In response to several FOIA requests, HMRC has published statistics on what it is doing to police the CFA offence of failure to prevent facilitation of tax evasion. As at the end of 2019, it had 9 live investigations...
EU gets tough on AML
The European Commission has sent formal notice letters to 8 Member States for failing to tell it about their implementation measures for MLD5. It requires a response within 2 months, after which it may move to a...
Court dismisses UWO appeal
The Court of Appeal has dismissed an appeal against the first UWO imposed under the powers the CFA gave to the NCA. The UWO had been imposed in relation to the Azeri wife of an Azeri banker. A property had been...
EBA review shows AML supervisory improvement needed
EBA has published the results of its first review of AML/CFT supervision of banks in the EU. It says most of the authorities included in its study are taking significant steps to improve the quality of supervision and...
FCA updates on skilled persons figures
FCA has published its latest figures on the numbers of skilled persons reports it has commissioned. During Q3 of 2019/2020 it commissioned 10 – of which 5 related to wholesale financial markets, 2 each to retail...
JMLSG consults on guidance update
JMLSG is consulting on updates to its guidance to take account of implementation of MLD5 and also make various other clarifications. The changes (consulted on in marked up form) will affect chapters 4,5,7 and 8 and the...
UK AML post-Brexit
Emma Radmore was interviewed by Money Laundering Bulletin on what might happen to UK AML laws in a post-Brexit world.
SFO publishes Airbus DPA
On Friday, Dame Victoria Sharp, President of the Queen’s Bench Division, approved a Deferred Prosecution Agreement between the Serious Fraud Office and Airbus SE. Under the terms of the DPA, Airbus SE agreed to...
Audrey KohOFSI updates sanctions guidance
OFSI has updated its general sanctions guidance in respect of its application to UK financial sanctions regimes under SAMLA. Separate guidance still applies to the EU regimes. The guidance contains explanations of how...
Progress update on PSR’s work
Chris Hemsley, Managing Director of the Payment Systems Regulator (PSR) delivered a speech at last week’s Westminster Business Forum: Payments, policy and regulation – infrastructure, innovation and end-user...
Lucy HadrillGovernment consults on TRS
Treasury and HMRC are consulting on the technical measures needed to extend the Trust Registration Service. The consultation includes draft legislation and proposals on the types of express trusts that will need to...
Treasury responds on MLD5
Hot on the heels of Parliamentary criticism, Treasury has now published its response to the consultation on MLD5 implementation. The response confirms the Treasury’s position in: expanding the definition of...
Parliament criticises lack of MLD5 feedback
Hansard reports criticism of the way in which Treasury announced the measures implementing MLD5. In particular, it was disappointing that Treasury did not publish copies of the feedback on consultation and impact...
EU to prioritise green deal and MLD5 implementation
In his opening remarks to the ECOFIN conference, Valdis Dombrovskis, handing over to the new Croatian Presidency, singled out as key developments: the Green Deal or Sustainable Europe Investment Plan, the success of...
FCA updates on asset management supervisory strategies
FCA has: written a Dear CEO letter about its asset management supervision strategy. The letter outlines FCA’s view of the key causes of harm asset managers can post to their customers or the markets in which they...
EBA updates its guidelines on fraud reporting under PSD2
The European Banking Authority (EBA) has published amendments to its 2018 guidelines on fraud reporting under the revised Payment Services Directive (PSD2). The amendments: introduce two new data fields for reporting...
SFO updates compliance programme guidance
SFO has published an updated version of its internal guidance on how it evaluates a compliance programme. The guidance is part of SFO’s Operational Handbook. When SFO is investigating an organisation, it will use...
Companies House confirms BO reporting requirements
Companies House has confirmed the new requirements under the MLRs for firms to report PSC discrepancies to Companies House. Firms need to tell Companies House about any material differences between beneficial ownership...
HMRC updates on MLRs
HMRC has updated its website to reflect the changes the MLRs have brought and, in particular, the new classes of entities that fall within the regulated sector. It will issue further guidance shortly, but has confirmed...
FCA updates AML pages
FCA has updated its pages on AML to take account of the coming into force of the changes to the MLRs implementing MLD5 and the regime for registration of those in the cryptoasset sector. It also confirmed the...
FCA confirms crypto-AML requirements
FCA has formally confirmed that it has, as of 10 January, become the AML/CTF supervisor of businesses carrying on certain crypto-asset activities that now fall under the MLRs. It reminds market participants that no new...
FCA updates website on MLRs
FCA has updated its website to provide information for firms on the amended MLRs following MLD5 implementation. It stresses the changes the new MLRs bring in relation to: high-risk factors – the MLRs now specify...
Treasury makes MLR changes for MLD5
Treasury has made the Regulations amending the 2017 Money Laundering Regulations to implement MLD5. The changes also amend key primary legislation, not least to broaden the scope of the “regulated sector”...
Queen’s Speech highlights Brexit free trade hopes
The Queen’s Speech, as expected, highlighted Brexit, noting the priority to deliver it on 31 January, and thereafter to seek a free trade agreement with the EU and other leading global economies. The accompanying...
ECB looks at privacy in central bank digital currency
ECB has published a paper looking at what is the right balance between privacy in electronic payments and compliance with AML requirements. The paper explores how a central bank digital currency payment system based on...
EVENT: Retail Banking Mixer
Bringing together professionals in the insurance, banking and other financial services sectors, we will be hosting the first of our quarterly RETAIL BANKING MIXERS at our Edinburgh office on 9th January from 4pm –...
ESAs publish AML/CFT cooperation guidance
The ESAs have published guidelines for supervisors designed to ensure effective cooperation and information exchanges between supervisors to combat money laundering and terrorist finance. The guidelines include a...
ESMA publishes MAR review papers
ESMA has published a series of papers relating to the operation of MAR. The papers include: a peer review report on how regulators handle STORs. The review showed there had been a significant increase in market...
EPC notes key payment threats
The European Payments Council has published its third annual Payment Threats and Fraud Trends report. The report discusses the risks and trends, including those caused by: social engineering; malware; “advanced...
FATF speaks at AML conference
David Lewis, executive secretary of FATF, has spoken on the importance of stamping out a tick box culture in AML, and ensuring that industry and supervisors treat financial crime prevention as seriously as they should. ...
EU calls for halt on stablecoins
The European Council and Commission have called for a halt on any stablecoin arrangements in the EU, saying they should not start operating until the legal, regulatory and oversight challenges and risks have been...
European Council set out next AML actions
The European Council has adopted new priorities on AML and CFT measures, in which MLD5, CRD5 and the ESAs will be critical. The Council now wants the Commission to look at how it can further enhance the rules, in...
Effects of MLD5 on lenders to overseas entities
We have written an article on the effects of MLD5 and the Registration of Overseas Entities Bill (whenever it is now passed) on security over properties owned by overseas entities.
Joseph DeanFMLC responds on MAR review
The FMLC has responded to ESMA’s consultation on the MAR review. Its response makes 2 key points: although the current definition of market abuse is not perfect, it should not be changed now, given the efforts...
APP scams voluntary Code extended to March 2020
In May 2019 UK Finance launched a voluntary industry Code which set new standards for the prevention of authorised push payment (APP) scams, where victims are tricked into sending money to a fraudster. Victims who are...
FCA secures £291,070 confiscation order against convicted fraudster
The FCA has issued a press release confirming that a confiscation order of £291,070.36 has been obtained against a convicted fraudster. Barry Starling is already serving a 5 years’ prison sentence for defrauding...
FCA: New Form (cyber resilience questionnaire)
The FCA has published a new cyber resilience questionnaire. The questionnaire must be completed by competent parties and signed-off at board level as a “true and accurate reflection of the firm’s cyber...
NCA updates SAR guidance
NCA has published updated guidance and glossary codes for use when making SARs. The booklet includes a checklist, detail on codes, an alphabetical list, examples and an aide memoire.
OFSI confirms Turkey sanctions regime
OFSI has confirmed that the EU has introduced a sanctions regime relating to Turkey, with a view to designating those involved in unauthorised drilling activities in the Eastern Mediterranean. No names are on the list...
Basel Committee consults on AML cooperation
The Basel Committee on Banking Supervision is consulting on draft guidelines on interaction and cooperation between prudential and AML/CFT supervision. It wants to enhance the effectiveness of banks’ AML/CFT...
NCA publishes 2019 SARs report
The latest annual report on SARs from NCA highlights: a record number of SARs processed (over 475,000); an increase of over 50% in DAML SARs; and over £131m denied to criminals as a result of DAML requests. Average...
FSB holds Paris plenary
The FSB Plenary met in Paris to review vulnerabilities in the global financial system and to discuss advances in FinTech. The Plenary also agreed its work programme for 2020. Current vulnerabilities The Plenary...
FATF consults on digital identity
FATF is consulting on the use of digital ID systems for CDD. It has published some currently unapproved guidance and is asking for views on a number of key issues. It asks for comment by 29 November.
SRA calls for more AML action
The Solicitors’ Regulation Authority has updated its warning notice to solicitors, stressing the need to have in place appropriate AML measures. Despite previous warnings, it still found many firms did not have...
Treasury Committee calls for bank action on COP and financial crime prevention
The Treasury Committee has published its response to the second strand of the Economic Crime enquiry, looking at the effects of financial crime on consumers. The report focuses on authorised and unauthorised payment...
New AML and sanctions articles
We have written extended versions of FIN posts for Financial Regulation International and Money Laundering Bulletin:
Take care before you charge: acquiring criminal property; and
The third arm of US sanctions?
OFSI fines for sanctions breach by phone call facilitation
OFSI has fined a phone carrier company for indirectly facilitating phone calls to an entity designated under the Syrian sanctions regime. Telia Carrier UK Limited indirectly facilitated the calls to SyriaTel, which...
FATF publishes beneficial ownership best practice
FATF has published a report setting out examples of best practices to help jurisdictions establish a satisfactory measure of transparency regarding the identification of the beneficial ownership of legal persons. In...
Treasury updates high-risk jurisdictions
Treasury has updated its AML advisory notice, following the recent FATF meeting. There is no change to the advice on North Korea and Iran. The counties in relation to which Treasury recommends firms take appropriate...
Regulatory risks of Stablecoins in focus
The emergence of global stablecoins has been a focus point over the past few days, with the FSB, FATF and the G7 Working Group on Stablecoins all publishing statements on the impact and risks of the development of these...
Roseyna JahangirOFSI introduces Nicaragua sanctions regime
OFSI has set up a financial sanctions regime in relation to Nicaragua. The EU introduced the sanctions on 14 October and they will be in force in the UK from 6 November.
FCA writes to UK Finance on SARs and STORs
FCA has published a letter it wrote to UK Finance in September explaining its responsibilities in relation to SARs and STORs under MAR. The key point the letter makes is to stress that, while FCA works closely with the...
FCA consults on AML crypto supervision costs
FCA is consulting on how it will recover the costs it will incur when it becomes the AML/CTF supervisor for crypto-asset business from 10 January 2020. Treasury has not yet finalised the regulations that will implement...
OFSI publishes annual report
OFSI’s annual review for 2018-2019 highlights: the first imposition of monetary penalties; work to prepare for Brexit; the positive reaction to OFSI in the FATF evaluation; that during the year 32 regimes were...
Commission produces high-risk third countries “non-paper”
ECOFIN has provided the Permanent Representatives Committee with a Commission “non-paper” setting out how it proposes to refine its methodology for identifying high-risk third countries for AML purposes...
Treasury approves JMLSG Chapter 17 changes
Treasury has approved revisions to Chapter 17 of Part 2 of the JMLSG guidance. The chapter covers syndicated lending, and has been rewritten by the Loan Market Association. Among the changes are content that: explains...
ESAs publish AML risk opinion
The ESAs have published their second joint opinion on the ML/TF risks affecting the EU’s financial sector. Its key concerns are around monitoring and reporting of suspicious transactions, particularly for...
ESMA consults on MAR review
ESMA is consulting on its required review of MAR. Its paper looks at many issues including: whether to include spot FX within MAR; differing concepts of inside information and delayed disclosure of it; whether the...
EU Presidency notes AML way forward
The Presidency of the EU has noted the substantial enhancements to the AML/CFT framework over recent years but has nevertheless expressed concern on: differences in interpretation and wide national discretion in framing...
BoE reports on 2018 cyber simulation exercise
BoE has reported on the outcomes of its 2018 sector wide exercise (SIMEX), which tested how the UK finance sector would react to a prolonged and broad cyber attack. The exercise, which took place in real time, involved...
Not POCA “acquiring” to receive monies obtained by fraud
The Court of Appeal, in the case of R v Haque, has allowed an appeal on the point of whether a person commits the offence under POCA of acquiring criminal property when it arrives into his bank account as a result of a...
Treasury approves JMLSG updates
Treasury has approved updated chapters in Part II of the JMLSG Guidance. The chapters now approved are:
credit unions
asset finance
brokerage services to funds.
MEPs criticise poor AML compliance
MEPs say lack of co-operation and poor information sharing between authorities and FIUs are the main obstacles to preventing money laundering, but also say national authorities should have sufficient resource and power...
Borrower can withhold payment because of risk of US secondary sanctions
The High Court has held that a UK borrower was entitled to withhold payments under a loan from an entity that was a US Blocked Entity for fear of possible consequences from US secondary sanctions that would...