The Financial Action Task Force (FATF)
- Published guidance on risk-based supervision. FATF encourages countries to move beyond a tick-box approach in monitoring the private sector’s efforts to curb money laundering and terrorist financing. The guidance is composed of three parts:
- Part 1 – The high-level guidance on risk-based supervision, which explains how supervisors should assess the risks their supervised sectors face and prioritise their activities, in line with the FATF Standards’ risk-based approach.
- Part 2 – Strategies to address common challenges in risk-based supervision & jurisdictional examples, including examples of strategies for supervising non-financial businesses and professions and virtual asset service providers.
- Part 3 – Country examples from across the global network, of supervision of the financial sector, virtual asset service providers and other private sector entities.
- Published a report on trade-based money laundering risk indicators, which will help the public and private sector identify suspicious activity in international trade. The report includes risk indicators on:
- the structure of the business
- trade activity
- trade documents and commodities
- account and transaction activity
- Organised a webinar on 18 March 2021 to discuss the most recent trade-based money laundering trends and developments. During the webinar, experts with various professional backgrounds presented their experience and discussed challenges that public authorities and private sector face with countering this threat.
- Opened public consultation on FATF draft guidance on a risk-based approach to virtual assets and virtual asset service providers (closed 20 April 2021 (18:00 UTC)). Areas of focus including:
- Does the revised Guidance on the definition of VASP (paragraphs 47-79) provide more clarity on which businesses are undertaking VASP activities and are subject to the FATF Standards?
- What are the most effective ways to mitigate the money laundering and terrorist financing (ML/TF) risks relating to peer-to-peer transactions (i.e., VA transfers conducted without the use or involvement of a VASP or other obliged entity, such as VA transfers between two unhosted wallets) (see paragraphs 34-35 and 91-93)?
- Does the revised Guidance in relation to the travel rule need further clarity (paragraphs 152-180 and 256-267)?
- Does the revised Guidance provide clear instruction on how FATF Standards apply to so-called stablecoins and related entities (see Boxes 1 and 4 and paragraphs 72-73, 122 and 224)?
- Are there any further comments and specific proposals to make the revised Guidance more useful to promote the effective implementation of FATF Standards?
- Published the Cayman Islands' progress in strengthening measures to tackle money laundering and terrorist financing.
The Australian Transaction Reports and Analysis Centre (AUSTRAC)
- Developed five new regulatory guides to help reporting entities review and strengthen their AML/CTF program, systems and controls.
- Governance: board and senior management oversight
- Money laundering/terrorism financing risk assessments
- Ongoing customer due diligence
- International Funds Transfer Instructions (IFTIs) reporting
- Correspondent banking relationships
- Digital currency exchange (DCE) providers are required to renew registration every three years. Apr 2021 marks three years since the first digital currency exchanges started to register. Relevant businesses can renew the registration through AUSTRAC Online.
- Published new guidance resources including a video animation, fact sheet and frequently asked questions on how to submit more effective suspicious matter reports (SMRs).
- Updated the applicable customer identification procedures (ACIP) and ongoing customer due diligence resources, to help reporting entities strengthen these two important parts of their AML/CTF program.
- Released a financial crime guide to help reporting entities understand, identify and report suspicious financial activity to prevent fraud against the National Disability Insurance Scheme (NDIS). If you identify indicators of NDIS fraud, submit suspicious matter reports (SMRs) to AUSTRAC and consider your obligations, including reviewing your ongoing customer due diligence.
The Department of Internal Affairs (DIA)
- As of 15 March, Financial Service Providers (FSPs) registering or updating their annual report details on the FSPR are required to declare if they are captured under the AML/CFT Act as a reporting entity and who they are supervised by.
- Issued a formal warning to Property Brokers Limited for anti-money laundering non-compliance. This is the first formal warning issued to a real estate agent under this legislation. Property Brokers Limited have failed to meet several of their AML/CFT obligations relating to the establishment, implementation and maintenance of their AML/CFT programme and the hiring and training of compliance staff. They also failed to have adequate policies, procedures and controls for monitoring compliance or to follow guidance material from AML/CFT supervisors.
- Issues a formal warning to Kidd Legal for anti-money laundering non-compliance. This is the first formal warning issued to the legal sector under this legislation. Kidd Legal has failed to meet several of their AML/CFT obligations relating to the establishment, implementation and maintenance of their AML/CFT programme, and was unable to demonstrate how they would ensure compliance from staff. They also failed to adequately understand or assess the risk of money laundering and terrorism financing within the business.
The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC)
- Announced that a money services business (C&Z Holdings Ltd. operating as Golden Apple) in Vancouver, British Columbia, was imposed an administrative monetary penalty of $101,969 on December 29, 2020, for non-compliance with Part 1 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and its associated Regulations.
- Announced that a real estate broker (RE/MAX All-Stars Realty Inc.) in Unionville, Ontario, was imposed an administrative monetary penalty of $31,350 on January 5, 2021, for non-compliance with Part 1 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and its associated Regulations.
- Announced that a real estate broker (Park Georgia Realty Ltd.) in Vancouver, British Columbia was imposed an administrative monetary penalty of $66,742.50 on January 25, 2021 for non-compliance with Part 1 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and its associated regulations.
The Financial Conduct Authority (FCA)
- Published a policy statement summarises our proposal to increase the number of firms who need to submit the annual financial crime report (REP-CRIM). The number of firms that need to submit a REP-CRIM return have increased from approximately 2,500 to approximately 7,000. This is applied to firms they supervise under the Money Laundering Regulations (MLRs) such as banks, building societies, businesses undertaking MiFID related activities and cryptoasset businesses.
- Commenced criminal proceedings against National Westminster Bank Plc (NatWest) in respect of offences under the Money Laundering Regulations 2007. This is the first criminal prosecution under the MLR 2007 by the FCA and the first prosecution under the MLR against a bank.
The Gambling Commission
- A gambling business, In Touch Games Limited, is required to undergo extensive auditing after a Gambling Commission assessment revealed social responsibility, money laundering and marketing failures, and will also receive an official warning and pay a £3.4M fine for the failures.
The European Banking Authority (EBA)
- Published its biennial opinion on risks of money laundering and terrorist financing (ML/TF) affecting the European Union's financial sector.. The Opinion draws on information provided by competent authorities (CAs) and on information obtained in the context of the EBAs’ work, such as the attendance at AML/CFT colleges and the EBA’s AML/CFT implementation reviews.
- Publishes final revised Guidelines on money laundering and terrorist financing risk factors.
- These Guidelines are central to the EBA’s work to lead, coordinate and monitor the fight against money laundering and terrorist financing (ML/TF).
- The amendments to the revised Guidelines aim at strengthening the EU’s AML/CFT defences by aligning the requirements with recent changes in the legal framework in the EU, and addressing new ML/TF risks.
- They also support effective and consistent supervision by competent authorities of financial institutions’ risk-based approaches to AML/CFT.
- Launched a public consultation on changes to its Guidelines on Risk-Based Supervision of credit and financial institutions’ compliance with AML/CFT obligations. The proposed changes address the key obstacles to effective AML/CFT supervision that the EBA has identified during its review of the existing Guidelines, including the effective use of different supervisory tools to meet the supervisory objectives. The consultation runs until 17 June 2021.
- Published three regulatory instruments to address de-risking practices based on evidence gathered in its call for input. The instruments clarify that compliance with AML/CTF obligations in EU law does not require financial institutions to refuse, or terminate, business relationships with entire categories of customers that they consider to present a higher ML/TF risk. In these documents the EBA also set out steps that financial institutions and competent authorities should take to manage risks associated with individual business relationships in an effective manner.
The Financial Crimes Enforcement Network (FinCEN)
- Issued a notice to inform financial institutions about ongoing efforts with respect to the Anti-Money Laundering Act of 2020 requirements related to the antiquities and arts trades. The notice provides information about illicit finance risks, as well as specific instructions for filing suspicious activity reports related to trade in antiquities and art.
No major updates this month.
The Monetary Authority of Singapore (MAS)
- Published a supplementary document that provides an overview of MAS’ AML/CFT requirements and supervisory expectations for the Digital Payment Token (DPT) sector, and is intended to raise industry awareness among DPT service providers of sectoral money laundering and terrorism financing (ML/TF) risks, and provide additional information to support their implementation of effective controls.
No major updates this month.