October 2020

International

The Financial Action Task Force (FATF)

• Published an update on high-risk jurisdictions subject to a call for action on 23 October 2020 which identifies jurisdictions with strategic deficiencies in AML/CFT measures. On 2 August 2020, the FATF decided to pause the review process for this list. Therefore, please refer to the statement on these jurisdictions adopted in February 2020. While the statement may not necessarily reflect the most recent status in Iran and the Democratic People’s Republic of Korea’s AML/CFT regime, the FATF’s call for action on these high-risk jurisdictions remains in effect.
• Published an update on its list of jurisdictions under increased monitoring on 23 October 2020. The FATF gave the option for jurisdictions publicly identified to not report at this meeting given their focus on addressing the impact of the COVID-19 pandemic. Therefore, the list remained the same as the June 2020 issue. We will incorporate this into our country risk rating update in the coming weeks.
• Published China and Sweden’s progress in strengthening measures to tackle money laundering and terrorist financing. Both countries have worked to improve the effectiveness of its national framework to combat money laundering and terrorist financing.
• G20 supports the FATF’s work to address money laundering and terrorist financing risks arising from the COVID-19 pandemic and so-called stablecoins.

Australia

The Australian Transaction Reports and Analysis Centre (AUSTRAC)

• Released a new financial crime guide to help businesses to combat Australia’s illegal wildlife trafficking trade by identifying, targeting and reporting suspicious financial activity.
• Finalised external audit of Afterpay. On 12 June 2019, AUSTRAC ordered the appointment of an external auditor to Afterpay to examine its compliance with the AML/CTF Act. In response to the findings and recommendations identified in the external audit report, Afterpay has uplifted its AML/CTF compliance framework and financial crime function, and completed all remediation necessary to ensure compliance. After considering the report and the response by Afterpay, AUSTRAC has decided not to undertake further regulatory action.
• Ordered Westpac to pay a $1.3 billion penalty for its breaches of the AML/CTF Act. The penalty imposed is the highest civil penalty in Australian history, reflecting the seriousness of compliance failings by Westpac.
• Hosted a webinar on 10 November regarding how a RegTech can help your business, the webinar covered:
• What is a RegTech?
• How a RegTech can help you streamline processes and meet important AML/CTF obligations
• Case studies from RegTech Association members showing how a tailored solution for your business can improve compliance outcomes.

New Zealand

The Department of Internal Affairs (DIA)

• Published a new webinar on the enhanced customer due diligence obligation. This webinar covers:
• What is enhanced CDD and why you need to do it
• When to conduct enhanced CDD
• The different types of enhanced CDD and additional measures. In particular:
• Enhanced CDD for identity verification
• Source of wealth and source of funds
• Enhanced CDD for politically exposed persons or PEPs
• Enhanced CDD for wire transfers
• Enhanced CDD for new and developing technologies

Canada

No major updates this month.

United Kingdom

The Financial Conduct Authority (FCA)

• Secured £1.6m confiscation order against money-launderer Richard Baldwin. The confiscation order reflects his benefit from laundering the proceeds of a conspiracy to insider deal between October 2007 and November 2008 which also involved his co-defendants Martyn Dodgson and Andrew Hind. Mr Baldwin used off-shore companies, bank accounts and false invoices and during the earlier sentencing hearing HHJ Hehir remarked that Mr Baldwin had been convicted on ‘compelling evidence’ of ‘extremely sophisticated’ money laundering.
• The FCA and the Prudential Regulation Authority (PRA) have fined Goldman Sachs International (GSI) a total of £96.6 million (US$126 million) for risk management failures connected to 1Malaysia Development Berhad (1MDB) and its role in three fund raising transactions for 1MDB. The FCA and PRA fines are part of a US$2.9 billion globally coordinated resolution reached with the Goldman Sachs Group Inc. (GSG) and its subsidiaries.

The Gambling Commission

• Three online gambling operators have been investigated by the Gambling Commission for social responsibility and money laundering failures as part of the Commission’s ongoing drive to raise standards through its tough enforcement action. BGO Entertainment Limited, GAN PLC and NetBet Enterprises Limited were all subject to licence reviews following a number of failures which included not doing enough to keep consumers safe and failing to prevent money laundering and criminal spend.

The Law Society of Scotland

• Plans to introduce an anti-money laundering (AML) levy on solicitors has been opposed by the professional body for Scottish solicitors. The Law Society of Scotland has said a proposed new levy on the legal profession to fund UK Government anti-money laundering activity  is unnecessary, arguing that the profession already pays substantial sums toward regulatory costs, including AML regulation.

European Union

No major updates this month.

United States

The Financial Crimes Enforcement Network (FinCEN)

• Federal Banking Agencies and FinCEN announce exemption from customer identification program requirements for premium finance loans. Order granting an exemption from customer identification program requirements implementing section 326 of the USA PATRIOT Act, 31 U.S.C. § 5318(l), for loans extended by banks (and their subsidiaries) subject to the jurisdiction of the Federal Banking Agencies to all customers to facilitate purchases of property and casualty insurance policies.
• Assessed a $60 million civil money penalty against Larry Dean Harmon, the founder, administrator, and primary operator of Helix and Coin Ninja, convertible virtual currency “mixers,” or “tumblers,” for violations of the Anti-Money Laundering Laws. Mr. Harmon operated Helix as an unregistered money services business (MSB) from 2014 to 2017 and Coin Ninja from 2017 to 2020.  Mr. Harmon is currently being prosecuted in the U.S. District Court for the District of Columbia on charges of conspiracy to launder monetary instruments and the operation of an unlicensed money transmitting business in connection with his operation of Helix.
• Issued supplemental advisory on identifying and reporting human trafficking and related activity to help save lives, and to protect the most vulnerable in our society from predators and cowards who prey on the innocent and defenseless for money and greed. This advisory supplements the 2014 FinCEN Guidance on Recognizing Activity that May be Associated with Human Smuggling and Human Trafficking – Financial Red Flags (“2014 Advisory”).

Hong Kong

No major updates this month.

Singapore

No major updates this month.

Other Jurisdictions

No major updates this month.