April 2020

International

The Financial Action Task Force (FATF)

Encouraged governments to work with financial institutions and other businesses to use the flexibility built into the FATF’s risk-based approach to address the challenges posed by COVID-19 whilst remaining alert to new and emerging illicit finance risks. The FATF also encouraged the fullest use of responsible digital customer onboarding and delivery of digital financial services in light of social distancing measures.
Updated its consolidated assessment ratings which provides an up-to-date overview of the ratings that assessed countries obtained for effectiveness and technical compliance.

The Australian Transaction Reports and Analysis Centre (AUSTRAC)

Introduced a new AML/CTF Rule that will help to streamline the customer verification process for superannuation funds to make payments to their members made under the COVID-19 early release of superannuation initiative. The new Rule means that where the Australian Taxation Office (ATO) has approved the payment, superannuation funds will not have to carry out their customer identification procedure before making these payments to their members.
Encouraged reporting entities to monitor for new and emerging threats and submit suspicious matter reports (SMRs) to AUSTRAC. The following areas have been identified as areas of criminal exploitation where the financial system may be more vulnerable during the COVID-19 pandemic:
- Targeting of government assistance programs through fraudulent applications and phishing scams.
- Movement of large amounts of cash following the purchase or sale of illegal or stockpiled goods.
- Out of character purchases of precious metals and gold bullion.
- Exploitation of workers or trafficking of vulnerable persons in the community.
- An increase in the risk of online child exploitation following restrictions on travel.
- A rise in extremist views either against members of the community or the government.

The Department of Internal Affairs (DIA)

Confirmed that no adverse compliance action will be taken against any DNFBP not able to complete its first independent audit by the relevant deadline, providing they have acted in good faith. This applies to law firms, conveyancers, accounting practices, real estate agents and some trust and company service providers that have their first independent audit due in 2020. For reporting entities, where relevant staff and auditors are working remotely and have access to all required documents, should complete their audits by the current deadline.
Released the Regulatory Findings Webinar, which expands on their recently published Regulatory Findings Report. It highlights the Department’s regulatory findings and brings these findings to life with examples of good practice and unsatisfactory practice observed from their compliance assessments.

The Financial Markets Authority (FMA)

Advised that any reporting entity not able to meet their 2 year independent audit obligations for risk assessment and AML/CFT programme due to COVID-19 should contact FMA to discuss their position. It will be assessed on a case by case basis.
Issued a formal warning to NZX-accredited broker Tiger Brokers (NZ) Limited for failing to have several adequate anti-money laundering protections in place.
Confirmed that all Financial Markets Conduct Act reporting entities with balance dates up to and including 31 July will also have a further 2 months to provide audited financial statements, if their ability to produce financial statements is legitimately impacted by COVID19. This extends the current relief from balance dates up to 31 May.
In response to COVID-19 a number of Council of Financial Regulators (CoFR) regulatory initiatives are being deferred.

The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC)

Updated its suspicious transaction reporting guidance to align amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Suspicious Transaction Reporting Regulations coming into force on 1st June 2020. The change concerns the timeline to submit a Suspicious Transaction Report. Currently, businesses have 30 days from the day they detect a fact providing reasonable grounds to suspect a suspicious transaction to report it. As of June 1 2020, they will need to submit a report as soon as practicable after they have completed the measures that allow them to establish reasonable grounds to suspect a suspicious transaction. We’ll incorporate the update to our AML program on 1st June.

The Gambling Commission

Allowed operators an additional four weeks (28 days) to submit their regulatory returns, should they require it. The extended submission times will be applied to all returns due before 30 June 2020.
Announced that Caesars Entertainment UK Limited is to pay £13m and must implement a series of improvements following a catalogue of social responsibility, money laundering and customer interaction failures including those involving ‘VIPs’. As a result of this investigation three senior managers at the company surrendered their personal licences.
Published the reasons for suspending the licence of online gambling business Triplebet. The investigation found serious failings in Triplebet's approach to anti-money laundering, the monitoring of business relationships and due diligence checks into members of gambling syndicates.

The Law Society of Scotland

Emphasised AML registration requirements during the Covid-19 crisis. Each firm's MLRO or designated person must use the online portal to keep their firm’s beneficial owner, officer or manager registration records up-to-date. Firms must inform The Law Society of Scotland should any beneficial owner, officer or manager join or leave the firm, or move internally into or out of a relevant position.
The UK Legal Sector Affinity Group (LSAG) jointly published an advisory note, highlighting key AML risks and challenges for the legal profession associated with the Covid-19 crisis. The advisory note covers:
- Some of the particular AML risks to legal firms and vulnerabilities that criminals. may seek to exploit during this time of unprecedented economic pressure and upheaval.
- Challenges facing firms and factors to consider in respect of non face-to-face identification & verification, and associated digital identity services.
- Other issues to consider in respect of policies, controls and procedures, data protection and information security.

The Federal Financial Institutions Examination Council (FFIEC)

Released several updates to the Bank Secrecy Act/Anti-Money Laundering (BSA/AML) examination manual. The manual is used to evaluate compliance with the Bank Secrecy Act and anti-money laundering requirements.

The Hong Kong Monetary Authority (HKMA)

Released new measures for authorised institutions to (AI’s) and store value facilities (SVF) licensees to support COVID-19 impacts. These include remote on-boarding and simplified due diligence, vigilance to COVID-19 related financial crime risks and ongoing outreach and advice.

No major updates this month.

No major updates this month.

No major updates this month.