The Financial Action Task Force (FATF)
- Removed The Bahamas from the list of jurisdictions under increased monitoring. The Bahamas has strengthened the effectiveness of its AML/CFT system and addressed related technical deficiencies to meet the commitments in its action plan and remedy the strategic deficiencies identified by the FATF in October 2018. We’ve reviewed The Bahamas country risk rating - the rating remains HIGH based on our methodology and other criteria.
- Published the report on Trade-Based Money Laundering which aims to help the public and private sector with the challenges of detecting trade-based money laundering.
It highlights recommendations to address the trade-based money laundering risks. Countries should use national risk assessments and other risk-focused material to raise awareness with the public and private sector entities involved in international trade. These include financial intelligence units, customs agencies, law enforcement, financial institutions, transport companies, importers and exporters, accountants and auditors.
The report also recommends improving information-sharing of financial and trade data, and improving co-operation between authorities and private sector, including through public-private partnerships.
- Updated the report on COVID-19-Related Money Laundering and Terrorist Financing Risks which highlights the latest developments. Using input from the FATF Global Network of over 200 countries and jurisdictions, and from private and public sector webinars in July and September, the paper details how criminals continue to exploit the crisis. The paper confirms the concerns expressed by the FATF in May, including:
- Changing financial behaviours - especially significant increases in online purchases due to widespread lockdowns and temporary closures of most physical bank branches, with services transitioning online.
- Increased financial volatility and economic contraction - largely caused by the losses of millions of jobs, closures of thousands of companies and a looming global economic crisis.
The Australian Transaction Reports and Analysis Centre (AUSTRAC)
- The 2020 compliance report submission is open from 1 January to 31 March 2021. You must submit your 2020 compliance report by 31 March 2021 to avoid penalties. The COVID-19 relief applied to the 2019 compliance report will not apply this year.
- Released new products and guidance for remittance service providers that make understanding and following AML/CTF obligations simpler, including a new video, a detailed guide to developing an AML/CTF program, as well as new fact sheets on risk management, reporting, customer identification and more.
- Launched its ML/TF risk assessment of the junket tour operations (JTOs) sector. The assessment concludes that the main criminal threat facing the JTOs sector is money laundering. The assessment also found that patronage by high risk customers from foreign jurisdictions is a key vulnerability associated with junkets.
- AUSTRAC’s Fintel Alliance celebrated some major operational results, which you can read about in the Fintel Alliance Performance Report 2019-20. Some of the highlights in this year’s report include:
- law enforcement arrests of offenders for serious crimes including importation of child-like sex dolls, money laundering, illicit tobacco, scams, and $22 million of tax liabilities raised
- 25 detections of child exploitation material, the arrest of ten individuals for child-related offending and the rescue of children from harm
- protecting Australians from criminal networks that are trying to take advantage of COVID-19 by fraudulently claiming superannuation, government payments, and other criminal activities
- releasing public reports to help combat child exploitation and illegal phoenixing activity
- more than 250 intelligence products provided to law enforcement and intelligence agencies, helping detect and investigate a range of crimes.
- Published new guide and resources to help you detect and report crime.
The Department of Internal Affairs (DIA)
- The Ministry of Justice has advised that the timeframes for amending on the AML/CFT (Exemptions) Regulations 2011 and the AML/CFT (Definitions) Regulations) 2011 has changed and the Ministry now aims to have new regulations in force by July 2021. Until new regulations come into force, reporting entities must comply with the requirements of the current regulations.
The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC)
- Released money laundering indicators associated with online child sexual exploitation in support of Project Shadow, which will assist businesses subject to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act in better identifying and reporting to FINTRAC financial transactions related to the laundering of funds associated with online child sexual exploitation.
The Financial Conduct Authority (FCA)
- Establishes Temporary Registration Regime for cryptoasset businesses. From 10 January 2020, the FCA became the anti-money laundering and counter terrorist financing (AML/CTF) supervisor for these types of firms, which includes firms that exchange money to and from cryptoassets and those that safeguard their customers’ cryptoassets. From this date, ‘existing cryptoasset businesses’ (ie firms operating immediately before 10 January 2020) have had to comply with the Money Laundering Regulations; such firms were required to be registered with the FCA by 10 January 2021. New businesses (who began operating after 10 January 2020), are required to obtain full registration with the FCA before conducting business.
The European Banking Authority (EBA)
- Issued the 3rd AML/CFT Newsletter.
- Published an opinion on the interplay between the AMLD and the Deposit Guarantee Schemes Directive. This Opinion follows on from advice they had given to the EU Commission in2020 on AML/CFT and deposit guarantee schemes, and their advice to the Commission on the future EU AML/CFT framework. It sets out how the EU’s legal framework should be strengthened to ensure effective cooperation between AML/CFT and Deposit Guarantee Scheme authorities in the run up to, and during, bank failures where there are ML/TF concerns. It also sets out what authorities should do to reduce the risk of ML/TF during payouts.
- Published the first report on the functioning of AML/CFT colleges. This report summarises examples of good and poor practice that the EBA observed, and makes recommendations to competent authorities to contribute to the effective operation of AML/CFT colleges going forward.
- Published the methodology they will use to carry out risk assessments. They will use risk assessments to understand how well equipped competent authorities are to tackle emerging ML/TF risks, and to ensure that those risks are managed in a timely, effective and coordinated manner across the single market.
The Financial Crimes Enforcement Network (FinCEN)
- Proposes rule aimed at closing anti-money laundering regulatory gaps for certain convertible virtual currency and digital asset transactions. Under the Notice of Proposed Rulemaking (NPRM) submitted to the Federal Register today, banks and money services businesses (MSBs) would be required to submit reports, keep records, and verify the identity of customers in relation to transactions above certain thresholds involving CVC/LTDA wallets not hosted by a financial institution (also known as “unhosted wallets”) or CVC/LTDA wallets hosted by a financial institution in certain jurisdictions identified by FinCEN.
The Securities and Futures Commission (SFC)
- Released AML/CFT findings from inspections of AML/CFT controls and compliance practices for licensed corporations and associated entities. The critical areas to which firms should pay priority attention are as follows:
- Failure to implement comprehensive and up-to-date policies and procedures, and maintain adequate oversight and internal controls for ensuring the proper and effective performance of AML/CFT functions by staff.
- Inadequate consideration of pertinent ML/TF risk factors when conducting institutional risk assessments1 and customer risk assessments2, as well as inadequate follow-up on the assessment results. Firms must address the assessed ML/TF risks by:
- (a) in the case of institutional risk assessments, evaluating whether the firm’s AML/CFT systems are adequate and appropriate, and making any necessary enhancements; and
- (b) in the case of customer risk assessments, reviewing whether the overall ML/TF risk level of any of their existing customers should be elevated when any risk factor with which they are associated is assessed to pose a higher risk than before.
- Failure to assess fund deposits by clients to ascertain whether they originate from third party payors in order to apply appropriate due diligence and transaction monitoring measures.
- Inadequate measures to establish source of wealth and source of funds for high-risk customers as required by the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO)3 and the Guideline on Anti-Money Laundering and Counter-Financing of Terrorism (For Licensed Corporations) (AML Guideline)4.
- Failure to perform screening of existing customers as soon as practicable whenever there are updates to sanctions lists; even when existing customers are screened promptly against updated sanctions lists, their beneficial owners and other relevant connected parties may be incorrectly omitted from screening.
- Released AML/CFT webinar materials for licensed corporations and associated entities.
The Customs and Excise Department
- Mounted an operation codenamed "Wind Catch 2020" on December 9 and smashed a suspected money laundering syndicate in which a money service operator (MSO) and an offshore company made suspicious remittance of $880 million.
The Monetary Authority of Singapore (MAS)
- Published the Terrorism Financing National Risk Assessment 2020 which is the culmination of experience and observations from all relevant competent authorities over the past few years, and includes inputs from the private sector and academia. It seeks to further deepen the understanding by law enforcement agencies, supervisors/regulators and the private sector of Singapore’s key TF threats and vulnerabilities, so that appropriate prevention and mitigation measures may be taken.
- Published guidelines for variable capital companies on Notice VCC-N01 for the prevention of money laundering and countering the financing of terrorism.
No major updates this month.