International: Financial Action Task Force
The global AML/CTF standard-setter, the Financial Action Task Force ('FATF'), provided several updates. The organisation released:
- its annual report for the year 1 July 2017-30 June 2018;
- an update on the evolving financing strategies of ISIL, Al-Qaeda and affiliates since the publication of the FATF 2015 reports on those issues;
- its Public Statement which identifies jurisdictions with strategic deficiencies in their AML/CTF measures;
- its updated Recommendations to take into account emerging AML/CTF issues, such as regulation of virtual assets (including cryptocurrencies);
- guidance which aims to support the design and implementation of the risk-based approach to mitigating AML/CTF risk for the life insurance sector;
- guidance which aims to support the design and implementation of the risk-based approach to mitigating AML/CTF risk for securities products and services; and
- its methodology for assessing compliance of countries with the FATF Recommendations and the effectiveness of their AML/CTF systems.
No major updates this month.
The Department of Internal Affairs ('DIA') issued a formal legal warning to IE Money Limited ('IE'), an Auckland-based money services business which provides remittance and foreign exchange services. The DIA issued the warning in response to the business's failure to meet the basic AML/CTF obligations of conducting customer due diligence, monitoring customers' accounts and transactions, record keeping, and establishing, implementing or maintaining an AML/CTF program. It is important to note that IE was not alleged to have been involved in money laundering or terrorism financing. The business co-operated during the on-site inspection conducted by the DIA and has worked towards remediating the compliance deficiencies that the agency identified.
The Securities and Futures Commission of Hong Kong ('SFC') and Hong Kong Joint Financial Intelligence Unit ('JFIU') provided some education for reporting entities on AML/CTF issues and the filing of effective suspicious transaction reports. The SFC's seminar was wide-ranging. It provided an update on key AML/CTF regulatory requirements in the jurisdiction, findings from industry monitoring by the SFC and other supervisory observations from the agency on AML/CTF. The JFIU's presentation outlined the Hong Kong regime for suspicious transaction reporting, together with tips for reporting entities on filing good-quality reports.
The Hong Kong Monetary Authority ('HKMA') provided three regulatory updates. First, it released a new Supervisory Policy Manual which covers the agency's supervisory approach in relation to the AML/CTF policies, procedures and controls of reporting entities. Reporting entities are advised to review it in conjunction with the jurisdiction's 'Guideline on Anti-Money Laundering and Counter-Financing of Terrorism (For Authorized Institutions)'. Second, the HKMA amended its 'Guideline on Anti-Money Laundering and Counter-Financing of Terrorism (For Authorized Institutions)' ('The Guideline'). The changes included the creation of a new category of international organisation PEPs, greater flexibility for reporting entities entities when verifying the identity of customers, provision of further guidance on simplified due diligence and enhanced due diligence, and allowing the use of different methods to mitigate financial crime risk during non-face-to-face account opening. Third, the Hong Kong Association of Banks, with input from the HKMA, published a set of frequently asked questions in relation to AML/CTF. The document is to be read in conjunction with the Guideline and supersedes the former sets of FAQs (published in 2012 and 2017).
No major updates this month.
No major update this month.
The federal American AML/CTF regulator and Financial Intelligence Unit, the Financial Crimes Enforcement Network, issued an advisory for reporting entities in relation to the Islamic Republic of Iran. The advisory is designed to help reporting entities better detect and report potentially illicit transactions related to the Islamic Republic of Iran, non-US financial institutions better understand the obligations of their US correspondents and avoid exposure to US sanctions, and address the AML/CTF risks that Iranian activity poses to the international financial system.