May 2020

International

The Financial Action Task Force (FATF)

• Published ‘COVID-19-related Money Laundering and Terrorist Financing Risks and Policy Responses’ which identifies challenges, good practices and policy responses to new ML/TF threats and vulnerabilities arising from the COVID-19 crisis. AML/CFT policy responses can help support the swift and effective implementation of measures to respond to COVID-19, while managing new risks and vulnerabilities. This paper provides examples of such responses, which include:
• Domestic coordination to assess the impact of COVID-19 on AML/CFT risks and systems;
• Strengthened communication with the private sector;
• Encouraging the full use of a risk-based approach to customer due diligence; 
• Supporting electronic and digital payment options. 

Australia

The Australian Transaction Reports and Analysis Centre (AUSTRAC)

• On 28th May, AUSTRAC announced a change to the AML/CTF customer ID and verification rule to help people experiencing family and domestic violence. Under the rule, if a customer cannot produce their driver’s license or birth certificate, or show a different address, banks and other regulated businesses can use alternative ways to verify their customer’s identity. The AUSTRAC guidance also highlights other circumstances in which alternative identification methods might be appropriate. 

We have incorporated the change by adding a new risk indicator under the Environmental Risk section and a new section in Australian CDD Standards template. We recommend you roll forward your risk assessment (create a new assessment by copying over from the previous one) and update the CDD Standards as soon as you can to align with the new AUSTRAC rule if you intend to apply the new rule to your procedures.

New Zealand

The Department of Internal Affairs (DIA)

• Summarised DIA’s regulatory findings for the accountancy sector from its desk-based reviews and on-site inspections undertaken from January 2019 to January 2020. The top 5 “non-compliant” areas are:
• Wire transfer provisions
• Examining and keeping written findings, and adopting additional measures, for dealing with countries with insufficient AML/CFT systems
• Annual Report
• Monitoring compliance AML/CFT programme
• Examining and keeping written findings for large, complex and unusual patterns of transactions

Canada

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

• The FINTRAC  suspicious transaction reporting guidance has come into force on 1st June 2020, businesses now 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 have incorporated the update to the Canada AML program template section ‘18.4 Unusual and suspicious transactions’. We recommend you update your AML program or roll forward the risk assessment (create a new assessment by copying over from the previous one) as soon as you can to align with the new FINTRAC guidance.

• FINTRAC's financial intelligence was recognized by The British Columbia Securities Commission (BCSC) in an investigation into an alleged U.S.-based Ponzi and pyramid scheme that raised about US$15 million from more than 1,400 investors around the world. With the financial transaction reports received from Canadian businesses across the country, FINTRAC is providing valuable assistance to law enforcement and national security investigations.

United Kingdom

The Gambling Commission

• Gambling businesses are being warned that they will face regulatory action if they do not carefully manage all the third party websites that they are responsible for. The warning follows regulatory action taken against FSB Technology (UK) who will have to change the way it operates with additional licence conditions and pay £600,000 for advertising, money laundering and social responsibility failings.
• Published the findings of an investigation into PT Entertainment Services (PTES). The investigation identified serious systemic failings in the way PTES managed its social responsibility and anti-money laundering processes.

European Union

The European Commission

• Adopted an action plan for a comprehensive Union policy on preventing money laundering and terrorism financing built on six pillars. To gather the views of citizens and stakeholder on these measures, the Commission launched a public consultation in parallel to the adoption of this action plan. Feedback is welcome until 29 July 2020.

The European Banking Authority (EBA)

• Published the results of its inquiry into dividend arbitrage schemes, which looked into the actions of prudential and AML/CFT supervisors in dealing with such schemes. The resulting Report sets out the EBA’s expectations of credit institutions and national authorities under the current regulatory framework. The EBA also decided on a 10-point action plan for 2020/21 to enhance the future framework of prudential and anti-money laundering requirements covering such schemes.
• Welcomed the EU Commission’s action plan on AML/CFT, and stands ready to support the Commission’s considerations through the consultation, whilst continuing to fulfil its recently strengthened mandate to prevent ML/TF and use new powers to lead, coordinate and monitor the EU financial sector’s fight against ML/TF.
• Issued AML/CFT Newsletter.

United States

No major updates this month.

Hong Kong

No major updates this month.

Singapore

No major updates this month.

Other Jurisdictions

No major updates this month.