August 2020

 International

No major updates this month.

Australia

The Australian Transaction Reports and Analysis Centre (AUSTRAC)

• Released the next suite of resources in the Insights series to help you identify, mitigate and manage risks to your business. The resources include a guidance document ‘Assessing ML/TF risk’, a video animation, and updated web content.

New Zealand

The Department of Internal Affairs (DIA)

• Created an independent audits webinar to help businesses understand their obligation, and how to get the most out of their AML/CFT audit. The webinar covers:
• An overview of the obligation
• What “independent” and “appropriately qualified” mean
• What you can expect the auditor to ask and assess
• An overview of the audit process and report
• The Suspicious Activity Report, July 2020, has been released by the NZ Police Financial Intelligence Unit. Reporting entities accepting large amounts of cash without undertaking effective customer due diligence is an issue the FIU has highlighted. In addition, the report highlights that many reporting entities are not selecting indicators when using the FIU platform goAML.
• Published the summary of the DIA’s findings for the real estate sector from its compliance assessments undertaken from 1 January 2019 to 31 July 2020. Top 5 "non-compliant" areas are:
• Examining and keeping written findings for large, complex and unusual patterns of transactions and any other activity you regard as being particularly likely by its nature to be related to money laundering or terrorism financing (ML/TF)
• Applying Enhanced Customer Due Diligence (Enhanced CDD)
• Amended Identity Verification Code of Practice 2013
• Monitoring compliance AML/CFT programme
• Politically Exposed Persons (PEPs)

Canada

No major updates this month.

United Kingdom

No major updates this month.

European Union

The European Banking Authority (EBA)

• Published its response to the European Commission’s Action Plan for a comprehensive Union policy on preventing money laundering and terrorism financing. In its response, the EBA sets out technical points that policy-makers should consider when deciding on the scope and powers of an EU-level supervisor for AML/CFT. Specifically, the EBA recommends that the Commission:
• harmonise the EU’s legal framework to reduce the risk of gaps created by divergent approaches to incorporating EU AML/CFT law into national law;
• combine an ongoing role for national AML/CFT authorities with an EU-level AML/CFT supervisor in a hub and spoke approach that builds on national AML/CFT authorities’ expertise and resources, and complement this with effective EU-level oversight for a consistent approach with comparable outcomes;
• leverage on the EU’s existing AML/CFT infrastructure, including the EBA’s policy, data and information technology resources as well as the EBA’s European and international supervisory cooperation networks.

United States

The Financial Crimes Enforcement Network (FinCEN)

• Issued a joint statement clarifying that Bank Secrecy Act (BSA) due diligence requirements for customers who may be considered “politically exposed persons” (PEPs) should be commensurate with the risks posed by the PEP relationship.   

The term PEP is commonly used to refer to foreign individuals who are or have been entrusted with a prominent public function, as well as their immediate family members and close associates.  By virtue of this public position or relationship, these individuals may present a higher risk that their funds may be the proceeds of corruption or other illicit activity.

The statement clarifies that, while banks must adopt appropriate risk-based procedures for conducting customer due diligence (CDD), the CDD rule does not create a regulatory requirement, and there is no supervisory expectation for banks to have unique, additional due diligence steps for customers who are considered PEPs.  This joint statement does not alter existing BSA and anti-money laundering (AML) legal or regulatory requirements and does not require banks to cease existing risk management practices.

Hong Kong

The Customs and Excise Department

• Mounted an operation codenamed "Seashine" in mid-August and successfully smashed a cross-boundary frozen meat smuggling and money laundering syndicate, with 13 persons arrested. The total value of the seized frozen meat as well as assets to be frozen and being considered for confiscation involved in the case was about $190 million, which is the highest amount among similar frozen meat smuggling and money laundering cases solved by Customs in the past five years.

Singapore

The Monetary Authority of Singapore (MAS)

• Conducted thematic inspections on enterprise-wide risk assessment on money laundering and terrorism financing (EWRA) in 2020. The paper highlights inspection observations and MAS’ supervisory expectations of effective EWRA frameworks and processes that financial institutions should benchmark themselves against.

Other Jurisdictions

No major updates this month.