FinCrime News - December 2021 – Arctic Intelligence

International

The Financial Action Task Force (FATF)

Published a summary of their high-level Conference on Environmental Crime on 07 Dec 2021. Financial Action Task Force (FATF) President Dr. Marcus Pleyer calls for a global push to take the illicit profits out of environmental crimes, at a high-level FATF conference involving the public, private, not-for-profit sectors and academia. Environmental crimes generate around USD 110 to USD 281 billion in criminal gains each year and include illegal logging, illegal mining, waste dumping and other crimes.

Regional

Asia / Pacific Group (APG)

Reported on the APG Typologies Workshop on 05 Dec 2021. The 2021 APG Typologies Workshop was co-hosted by the government of Malaysia from 9-11 November 2021 in virtual format and attended by approximately 190 delegates from APG members, observers and private sector organisations.
Announced on 06 Dec 2021 that it delivered Virtual APG Assessor Training. The APG successfully delivered its third virtual assessor training workshop for 2021, from 25 November to 3 December 2021.
Held the APG Training Series: ML/TF Risk Assessment and Risk-Based Approach on 07 Dec 2021. The second session of the virtual APG Training Series, 'ML/TF Risk Assessment and Risk-Based Approach', was attended by over 30 APG members and observers.
Published the APG Secretariat Mutual Evaluation Preparation Training for Nepal on 15 Dec 2021. On 14 December 2021, over 200 private sector attendees from Nepal joined an APG online seminar to discuss opportunities for the private sector to best support Nepal’s overall efforts to strengthen Nepal’s AML/CFT systems.

Australia

The Australian Transaction Reports and Analysis Centre (AUSTRAC)

Highlighted its induction program for new reporting entities on 13 Dec 2021. This program is for anyone recently enrolled with AUSTRAC and needing help understanding their AML/CTF compliance obligations.
Announced new Egmont Group resources for fighting financial crime on 13 Dec 2021. Access the resources to help improve your AML/CTF systems and processes.
Published insights and tips from the compliance report on 13 Dec 2021. See AUSTRAC’s top three compliance tips based on insights from 2020 reporting.
Announced partnership with Services Australia to target emergency and disaster payments fraud on 9 Dec 2021. A new financial crime guide will help financial services businesses detect and report suspicious transactions indicative of fraud and misuse of emergency and disaster payments administered through Services Australia.
Published new financial crime guides on 13 Dec 2021. Identify and report suspicious financial activity related to emergency and disaster support payments and misuse of payment text fields.
Announced on 13 Dec 2021 a $62 million money laundering syndicate was dismantled. Intelligence provided by AUSTRAC’s Fintel Alliance has led to the disruption of a $62 million money laundering syndicate in Melbourne and the seizure of illegal firearms, luxury motor vehicles and illicit cash and drugs.
Announced on 23 Dec 2021 that it’s time to submit 2021 compliance reports. 2021 compliance reports can be submitted from 1 January to 31 March 2022. The report covers important areas of anti-money laundering and counter-terrorism financing (AML/CTF) and helps us to understand how you have been complying with your obligations over the year, and where you may need additional support or guidance.
Proposed updates to guidance on reporting multiple cash transactions - threshold transaction reporting (TTR) obligations. AUSTRAC has released for consultation updated draft guidance on reporting threshold transaction reports (TTRs) when a customer makes multiple cash transactions.

Federal Register of Legislation

Amended the Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (No. 1) F2021C01190 on 01 Dec 2021. This instrument amends the Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (No. 1) to specify the conditions that must be met so an issue of an interest in a litigation funding scheme is exempt from the operation of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 and to define the term litigation funding scheme.
Made changes to the Anti-Money Laundering and Counter-Terrorism Financing Rules Amendment Instrument 2021 (No. 3) F2021L01759 on 13 Dec 2021. This instrument adds Chapters 79 and 80 to, and amends Chapter 48 of, the Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (No. 1).

New Zealand

Department of Internal Affairs (DIA)

Issued a reminder about outsourcing Customer Due Diligence (CDD) on 13 Dec 2021. The Department and the FMA have issued this reminder for reporting entities that outsource Customer Due Diligence (CDD) requirements to a specialist AML third-party provider. This outsourcing typically occurs during the onboarding process for a new customer.

Financial Market Authority (FMA)

Published its AML/CFT - Sector Risk Assessment on 07 Dec 2021. The FMA supervises reporting entities (REs) in ten sectors under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (the Act). The purpose of the Sector Risk Assessment (SRA) is to identify and communicate the money laundering/terrorism financing (ML/TF) risks faced by its REs.
Confirmed the AML/CFT risk ratings for sectors under FMA supervision on 07 Dec 2021. The AML sector risk assessment 2021 report by the Financial Markets Authority (FMA) - Te Mana Tātai Hokohoko - has found that derivatives issuers (DI’s) and cryptocurrency service providers are in the high risk category for meeting anti-money laundering and counter-terrorism financing obligations.

Canada

Financial Transactions and Reports Analysis Center of Canada (FINTRAC)

Announced on 23 Dec 2021 that it has imposed an administrative monetary penalty on the Industrial and Commercial Bank of China (Canada), also operating as ICBC (Canada), ICBK (Canada) and ICBK. Following a compliance examination in 2019, this bank in Toronto, Ontario, was imposed an administrative monetary penalty of $701,250 on October 4, 2021, for non-compliance with Part 1 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and its associated Regulations.

United Kingdom

Gambling Commission

Published its annual Compliance and Enforcement Report on 09 Dec 2021. The document features the findings of the regulator’s extensive casework against licence holders and details where the industry needs to raise standards and covers the financial year 2020 – 2021, a period during which Commission casework led to the suspension of five operator licences and the revocation of licences for one operator and nine personal management licence holders.
Announced regulatory action against Buzz Group Ltd on 16 Dec 2021. A gambling business must pay a £780,000 fine after a Commission investigation revealed social responsibility and money laundering failures.
Announced regulatory action against Greentube Alderney Limited on 02 Dec 2021. An online gambling business must pay £685,000 after a Commission investigation revealed social responsibility and money laundering failures.
Published the conclusion of an investigation into IMME Ltd on 22 Dec 2021. Following concerns raised about the way the business was conducted the Commission suspended IMME’s operating licence and launched an investigation. This revealed significant suitability, social responsibility and money laundering failures.

European Union

European Banking Authority (EBA)

Published final Guidelines on cooperation and exchange of information on 16 Dec 2021. The guidelines set out how prudential supervisors, anti-money laundering and countering the financing of terrorism (AML/CFT) supervisors and financial intelligence units (FIUs) should cooperate and exchange information in relation to AML/CFT, in line with provisions laid down in the Capital Requirements Directive (CRD).
Published the revised Guidelines on risk-based supervision of credit and financial institutions’ compliance with anti-money laundering and countering the financing of terrorism (AML/CFT) obligations on 16 Dec 2021. The Guidelines set out the steps supervisors should take to ensure adequate AML/CFT oversight of their sector and support the adoption, by credit and financial institutions, of effective ML/TF risk management policies and procedures. The EBA decided to update and strengthen these Guidelines in light of the findings from its ongoing work to review competent authorities’ approaches to AML/CFT supervision. These findings suggest that some competent authorities found the implementation of the risk-based approach to AML/CFT supervision challenging.
Published draft Regulatory Technical Standards (RTS) on a central database on anti-money laundering and countering the financing of terrorism (AML/CFT) in the EU on 20 Dec 2021. The European Reporting system for material CFT/AML weaknesses (EuReCA) will be a key tool for coordinating efforts to prevent and counter money laundering and terrorism financing (ML/TF) in the Union.

United States

Financial Crimes Enforcement Network (FinCEN)

Issued an Advance Notice of Proposed Rulemaking (ANPRM) on 06 Dec 2021 to solicit public comment on a potential rule to address the vulnerability of the U.S. real estate market to money laundering and other illicit activity. The systemic money laundering vulnerabilities presented by the U.S. real estate sector, and consequently, the ability of illicit actors to launder criminal proceeds through the purchase of real estate threatens U.S. national security and the integrity of the U.S. financial system.
Issued a Notice of Proposed Rulemaking (NPRM) to implement the beneficial ownership information reporting provisions of the Corporate Transparency Act (CTA) on 07 Dec 2021. The proposed rule is designed to protect the U.S. financial system from illicit use and impede malign actors from abusing legal entities, like shell companies, to conceal proceeds of corrupt and criminal acts.
Published Fact Sheet: Beneficial Ownership Information Reporting Notice of Proposed Rulemaking (NPRM) on 07 Dec 2021.
Announced on 14 Dec 2021 it is seeking comments on modernization of the U.S. AML/CFT Regulatory Regime. FinCEN is seeking comments on ways to streamline, modernize, and update the anti-money laundering and countering the financing of terrorism (AML/CFT) regime of the United States.
Released a Financial Threat Analysis on wildlife trafficking threat patterns and trend information identified in Bank Secrecy Act (BSA) data on 20 Dec 2021. The report aims to further inform efforts to combat wildlife trafficking and the associated movement of illicit proceeds, which are estimated to be between $7 and $23 billion per year and account for a quarter of all wildlife trade.

Department of the Treasury (OFAC)

Announced on 02 Dec 2021 expanded Sanctions against Belarusian regime with partners and allies. In response to the Lukashenka regime’s blatant disregard for international norms and the wellbeing of its own citizens, OFAC is designating 20 individuals and 12 entities and identifying three aircraft as blocked property.
Announced sanction of UPC Militia Leader in Central African Republic for serious human rights abuse on 17 Dec 2021. OFAC has designated Ali Darassa (Darassa) for serious human rights abuses stemming from his leadership of the Central African Republic (CAR) based militia group, Union for Peace in the Central African Republic (UPC). UPC’s militants have killed, tortured, raped, and displaced thousands of people since 2014.

Hong Kong

Hong Kong Monetary Authority (HKMA)

Announced on 20 Dec 2021 disciplinary action against ePaylinks Technology Co., Limited for contravention of the Payment Systems and Stored Value Facilities Ordinance. The Monetary Authority (MA) has reprimanded and ordered ePaylinks to pay a pecuniary penalty of HK$1,000,000.

Securities and Futures Commission (SFC)

Issued a circular on 30 Dec 2021 to licensed corporations and associated entities: United Nations Sanctions (ISIL and Al-Qaida) Regulation.
Issued a circular on 22 Dec 2021 to licensed corporations and associated entities: (1) Early Alert on United Nations Sanctions; (2) United Nations Sanctions (Central African Republic) Regulation 2020.

Customs and Excise Department

Announced on 28 Dec 2021 Hong Kong Customs arrested two persons suspected of engaging in money laundering activities involving about $384 million during an operation on 28 December.

Singapore

No major updates this month.

South Africa

Financial Intelligence Center (FIC)

Issued public compliance communication 51 (PCC 51) on 03 Dec 2021, which provides guidance on domestic prominent influential persons (DPIP), foreign prominent influential persons (FPPO), their immediate family members and known close associates. PCC 51 seeks to provide guidance on the scenario where a client or other persons no longer hold a position of a DPIP or FPPO, and to assist accountable institutions with potential indicators that may aid in the determination of money laundering (ML) risk that clients pose, who are DPIPs. In addition, PCC 51 provides updates regarding sources of information on DPIPs and FPPOs.

Other Jurisdictions