FinCrime News - July 2024

International

The Financial Action Task Force (FATF)

• Issued an updated version of the Consolidated Assessment Ratings. The Ratings provide an up-to-date overview of the ratings on both effectiveness and technical compliance for all countries assessed against the 2012 FATF Recommendations and using the 2013 Assessment Methodology.
• Published reports on progress in strengthening measures to tackle ML/TF for the following countries: New Zealand and Tajikistan.
• Released a report on the unintended consequences of measures to combat ML/TF. The report investigates whether AML/CFT measures are responsible for derisking, financial exclusion, and the suppression of NPOs and Human Rights.
• Released the following report: Virtual Assets: Targeted Update on Implementation of the FATF Standards on VAs and VASPs. This report provides the fifth update on jurisdictions’ compliance with FATF’s Recommendation 15 and its Interpretative Note (R.15/INR.15).
• Issued the publication Horizontal Review of Gatekeepers’ Technical Compliance Related to Corruption. It focuses on the role that non-financial professionals can play as gatekeepers to the financial system and the way they facilitate, unwittingly or wittingly, high-level corruption.
• Released a public consultation on draft updates to the FATF Money Laundering National Risk Assessment Guidance. The goal is to update the NRA guidance to make it more effective, comprehensive and useful for all stakeholders.

Wolfsberg Group

• Issued a statement on Effective Monitoring for Suspicious Activity. This paper aims to demonstrate how the implementation of the Wolfsberg Factors can provide a more effective approach to Monitoring for Suspicious Activity (MSA).

Australia

The Australian Transaction Reports and Analysis Centre (AUSTRAC)

• Released two National Risk Assessments, which show the scale, sophistication and threat of ML/TF in Australia. They offer an in-depth look at the extent of these crimes and the channels and sectors that are at the highest risk of exploitation. 
• Released a consultation on proposed amendments to the AML/CTF Rules. AUSTRAC is proposing these amendments to provide a definition of ‘nominee of a custodian’, which will apply the same relief from collecting and verifying trust-related information afforded to customers who are custodians to customers who are nominees of custodians. The submission deadline is 16 Aug 2024.

New Zealand

Department of Internal Affairs (DIA)

• Issued a risk summary on terrorism financing risk factors relating to sectors supervised by the DIA. The summary highlights how terrorism financiers may manipulate New Zealand structures using methods similar to money launderers.
• Published guidance on new AML/CFT regulations for Virtual Asset Service Providers (VASPs). This guidance is designed to inform and assist VASPs of the various changes to the requirements of the AML/CFT Act 2009 and associated regulations. The new regulations relate to VASP wire transfers, prescribed transaction reporting and occasional transaction requirements.  

United Kingdom

Financial Conduct Authority (FCA)

• Issued a statement calling on financial institutions to improve their treatment of politically exposed persons (PEPs). The FCA has told financial institutions – including banks, payment firms and lenders – to do more to ensure parliamentarians, senior public servants and their families are not treated unfairly when conducting additional due diligence.
• Released a consultation on changes to guidance on applying a proportionate and risk-based approach to UK Politically Exposed Persons (PEPs), their relatives and close associates. The proposed updates are based on a review conducted on how firms are currently implementing PEP requirements. Changes to the guidance reflect the new legal starting point that UK PEPs should be treated as lower risk.

Gambling Commission

• Published its Cross-System Professional Enablers Strategy. A professional enabler is an individual or organisation that provides professional services that enable criminality. This strategy establishes a new framework for the prevention and identification of professional enablers and sets out specific actions for UK regulators.   
• Published the 26th Edition of the SARS in Action Magazine. This edition focuses on the role of artificial intelligence in financial crime and updates from the UKFIU, including the latest episode of the UKFIU podcast, which focuses on the legal sector and discusses key money laundering threats and risk areas for the sector.

European Union

European Banking Authority (EBA)

• Issued ‘travel rule’ guidance to tackle ML/TF in transfers of funds and crypto assets. The Guidelines specify which information should accompany a transfer of funds or crypto assets and also list the steps that payment service providers (PSPs), intermediary PSPs (IPSPs), crypto-asset service providers (CASPs) and intermediary CASPs (ICASPs) should take to detect missing or incomplete information, and what they should do if a transfer of funds or a transfer of crypto-assets lacks the required information.

United States

Financial Crimes Enforcement Network (FinCEN)

• Issued a notice on Beneficial Ownership Information Requirements. The notice provides answers to key questions about (1) reporting beneficial ownership information to FinCEN under the Corporate Transparency Act, and (2) providing beneficial ownership information to financial institutions in connection with Federal customer due diligence requirements.
• Issued a request for comments on the collection of beneficial owner information. It is focused on comments concerning (1) the information to be collected from certain persons requesting beneficial ownership information from FinCEN, and (2) FinCEN’s estimate of the burden involved in the information collection. Comments must be submitted by 22 Aug 2024.
• Issued a Notice of Proposed Rulemaking (NPRM) that proposes amendments to the AML/CFT program requirements for financial institutions. The NPRM includes updates to risk assessment process requirements and a focus on fostering Innovative Approaches to BSA Compliance Obligations.
• Issued a Supplemental Alert on Israeli Extremist Violence in the West Bank. The supplemental alert builds upon FinCEN’s previous alert issued 1 Feb 2024, and provides additional red flags to assist U.S. financial institutions in identifying and reporting suspicious activity that finances West Bank violence.

Singapore

Money Authority of Singapore (MAS)

• Published updated Terrorism Financing National Risk Assessment and National Strategy for Countering the Financing of Terrorism. The updated Risk Assessment takes into account key developments since the last TF NRA in 2020, such as the evolving global and regional terrorism landscape, growth of the digital economy and financial services in Asia, and emerging TF risk typologies. 
• Published a Circular on Establishing the Sources of Wealth of Customers. It is for financial institutions (FIs) in the wealth management sector, providing guidance on establishing their customers' sources of wealth (SOW). It also includes the risk principles that FIs should consider in designing their policies and procedures to establish their customers' SOW in a risk-proportionate and reasonable manner.

South Africa

Financial Intelligence Centre (FIC)

• Released an article focused on designated non-financial businesses and professions (DNFBPs) that ignore Financial Intelligence Centre (FIC) directives aimed at helping South Africa exit the FATF's grey list.

• Published a statement from the National Treasury on progress towards the delisting of South Africa from FATF's grey list. Given the FATF process, the Treasury does not expect South Africa to exit greylisting before June 2025, as per the Action Plan deadlines.

Other Jurisdictions

No major updates this month.