Emma RadmoreThe Wolfsberg Group has published FAQs on how Financial Institutions can identify, mitigate and manage money laundering risks by undertaking Source of Wealth and Source of Funds checks on relevant customers, when...
Category - Financial Crime Prevention
Amelia GreenUp next from FCA
FCA’s latest Policy Development Update heralds: consultation on financial crime reporting during Q3; PS on debt advice levy rates in Q4; CP on exit fees in investment platforms and comparable firms during 2021; PS...
OFSI updates guidance and issues maritime guidance
OFSI has updated various guidance and FAQs, including on monetary penalties. The update includes targeted FAQs for:
the charity sector;
the import and export sector; and
maritime.
Insurance Europe issues consultation response on EU plan for AML policy
Insurance Europe has published its response to a consultation by the European Commission (“the Commission“) on its action plan for a comprehensive EU policy on preventing money laundering (“ML“)...
JMLSG publishes new Guidance on pooled client accounts and cryptoasset exchange providers
The Joint Money Laundering Steering Group (“JMLSG“) has today published two new pieces of Guidance. The Board approved text includes a new annex within Part I: Annex 5-V on Pooled Client Accounts, and a new...
Treasury consults on economic crime levy
Treasury is consulting on the introduction of the economic crime levy, announced in the Budget, which aims to raise around £100m per year. It wants views on: the design principles of the levy how it can operate in...
Ireland and Romania fined for late implementation of MLD4
The Court of Justice of the EU has fined Ireland €2m and Romania €3m for failure to transpose MLD4. Both jurisdictions had neither transposed the Directive in full nor notified the Commission of the measures they had...
Overseas Terroritories agree beneficial ownership registers
Baroness Sugg has welcomed the statements of 8 Overseas Territories that they will establish publicly accessible registers of beneficial ownership of companies. Anguilla, Bermuda, the Cayman Islands, the Falkland...
HMRC feeds back on trust registration
HMRC has published a summary of the responses it received to its consultation on MLD5 and the Trust Registration Service. The consultation had over 100 responses, and the key messages were: most respondents agreed with...
MEPs approve ML action plan
MEPs have resoundingly backed the Commission’s action plan for fighting money laundering and terrorist financing. In a press release, the European Parliament said it “deplores” the incorrect and patchy...
FATF reports on stablecoins and virtual assets
FATF has published 2 reports: its report on “so-called Stablecoins” looks at the characteristics of stablecoins, their ML/TF risks and how FATF standards currently apply to them and businesses that are...
Treasury imposes Global Human Rights sanctions
Treasury has used its powers under SAMLA to make autonomous UK sanctions against those who violate global human rights. It has made the Global Human Rights Sanctions Regulations 2020, and the FCO has made statutory...
Commission confirms MLD4 enforcement actions
The European Commission has confirmed further actions against Member States for failure correctly to transpose MLD4. It has sent letters of formal notice to Luxembourg, Slovakia and Slovenia, reasoned opinions to...
Up next from FCA
Over the rest of 2020, FCA plans the following: consultations on mortgage borrowing and mortgage prisoners (now overdue), debt advice levy rates and exist fees in investment platforms (Summer 2020) and on financial...
Basel Committee finalises AML/CFT guidelines
The Basel Committee has published the updated version of its guidelines for supervisors on co-operation in relation to the sound management of risks related to money laundering and the financing of terrorism. Among the...
Court of Appeal upholds Cynergy judgement
The Court of Appeal has upheld the judgment that a borrower was justified in its refusal to make payments under a loan where the ultimate beneficial owner of the lender was an OFAC SDN. Cynergy Bank (a UK bank) had...
FCA makes new rules
FCA has published a Handbook Notice covering the rules it made at its May and June Board meetings. changes to COBs in relation to pension transfers, introducing a ban on contingent charging in respect of most advice on...
MLD4 high-risk list in OJEU
The revised list of high-risk third countries for AML purposes has been published in the OJEU. The new list applies from 1 October, and will comprise: Afghanistan Bahamas Barbados Botswana Cambodia Ghana Iraq Jamaica...
FCA reminds crypto businesses to register
FCA has reminded businesses that carry on cryptoasset activity in the UK to register with it for AML purposes, if they have not done so already. Firms that were carrying on the activities before 10 January 2020 must...
JMLSG upates on Covid-19 risks
JMLSG has reminded firms of FCA’s guidance on managing financial crime risks throughout Covid-19 and has also commented on the disruption the pandemic is causing to documents often relied on for CDD purposes. It...
FCA fines Commerzbank for AML failings
FCA has fined Commerzbank AG London Branch nearly £38m for AML systems and controls failings spanning a 5 year period to September 2017. The bank benefited from a 30% discount for early settlement. Many of the...
EBA looks to understand derisking
The EBA has issued a call for input better to understand the scale and drivers of derisking and its impact on customers. It wants to gain better insight into why finacnail institutions prefer to derisk instead of...
FCA updates market abuse pages
FCA has updated the guidance on its website on reporting suspected market abuse. The guidance includes FCA’s expectations in respect of how firms should make market observations in situations where they will not...
Pay.UK heralds COP launch
Pay.UK has heralded the introduction of Confirmation of Payee and has reminded users of the importance of using “first name surname” rather than a nickname on payment details. Its data shows that 34% of...
Natasha BrownleeEuropol launches economic crime centre
Europol has launched the European Financial and Economic Crime Centre to give better operational support to Member States and EU bodies fighting financial and economic crime. It has also published a report looking at...
FCA publishes quarterly CP
FCA is returning to some regular business and has published a short quarterly consultation, proposing changes to: clarify FSCS’s power to declare in default firms and successors subject to the proposed new...
EVENT: Retail Banking Mixer Webinar
Our next r=Retail Banking Mixer will be held by webinar on 18th June at 10am. We are delighted to be joined by Rosemary Ford and Amber Andrade from Deloitte this time. The webinar continues the focus on COVID-19. Our...
Caroline StevensonCommission updates on MLD transposition
The European Commission has updated its website to show the state of transposition and infringement actions in respect of the Money Laundering Directives. The UK is no longer mentioned. In respect of MLD4, all Member...
JMLSG updates guidance
JMLSG has published its final amendments to its guidance to take account of the implementation of MLD5, and which it consulted on in February. It has submitted the changes to Treasury for approval.
OFSI reports on TAFA
OFSI 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...
Market Watch Covid special
FCA’s latest edition of Market Watch looks at market conduct and discipline in the context of coronavirus. It stresses particularly the importance of complying with the standards of MAR. Given the likely need for...
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...
JMLSG consults on pooled client accounts
JMLSG is consulting on some new draft text for Chapter 5 of Part 1 of its guidance dealing with pooled client accounts. JMLSG considers the key risks of PCAs are where a customer’s clients misuse a PCA without the...
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...
TI 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...
Regulator 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 Dean