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FinCrime News - February 2022

Anthony Quinn
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International

The Financial Action Task Force (FATF)

  • Announced the FATF Plenary for March 2022 on 28 Feb. During the four days of meetings delegates will discuss key issues, including revisions to the FATF Recommendations to strengthen transparency of beneficial ownership information, a priority for the FATF and the international community.
  • Published consolidated assessment ratings on 22 Feb 2022. An up-to-date overview of the ratings on both effectiveness and technical compliance for all countries assessed against the 2012 FATF Recommendations and using the 2013 Assessment Methodology.
  • Published reports on measures to combat money laundering and terrorist financing for Vietnam, St Kitts and Nevis, Poland, and Croatia. These reports summarize the anti-money laundering (AML)/counter-terrorist financing (CTF) measures in place in each country and analyses the level of compliance with the FATF 40 Recommendations and the level of effectiveness of the country's AML/CFT system and provides recommendations on how the system could be strengthened.
  • Published a report on Ireland's progress in strengthening measures to tackle money laundering and terrorist financing on 10 Feb 2022. This follow-up report sets out the progress that Ireland has made in improving its level of compliance with the FATF standards, since their 2017 mutual evaluation and 2019 follow-up report.

United Nations

  • Announced on 28 Feb it is renewing the arms embargo on Yemen, as well as the travel ban and asset freeze against those threatening peace in Yemen. The Security Council decided to renew for one year the arms embargo on Yemen, as well as the travel ban and asset freeze against those threatening peace in that country. By the terms of resolution 2624 (2022), the 15-member Council extended, until 28 February 2023, the measures first imposed by its resolution 2140 (2014), relating to the travel ban and asset freeze, as well as the provisions in resolution 2216 (2015) relating to the targeted arms embargo, while noting that those are not intended to have adverse humanitarian consequences for Yemeni civilians.

Regional

Asia / Pacific Group (APG)

  • Published the Vietnam Mutual Evaluation Report on 01 Feb. In November 2021, the APG membership considered and adopted the APG Mutual Evaluation Report of Vietnam. The Mutual Evaluation Report of Vietnam is now available for download.

Australia

The Australian Transaction Reports and Analysis Centre (AUSTRAC)

  • Announced on 17 Feb it had ordered an audit of three Bell Financial Group entities’ compliance with financial crime laws. AUSTRAC has ordered the appointment of an external auditor to three entities within the Bell Financial Group, including Bell Potter Securities Limited, Bell Potter Capital Limited and Third Party Platform Pty Ltd.
  • Announced on 04 Feb it is working with businesses to stop forced sexual servitude. A new financial crime guide from AUSTRAC will help businesses identify and report suspicious activity related to forced sexual servitude. Forced sexual servitude is a form of slavery and represents around 30% of slavery cases in Australia.
  • Announced a consultation on guidance on source of funds and source of wealth. AUSTRAC has released new draft guidance for consultation to help reporting entities understand and undertake source of funds and source of wealth checks on relevant customers. AUSTRAC’s draft guidance is open for consultation from 9am (AEDT) Friday 18 February 2022 to 5pm (AEDT) Friday 1 April 2022. The guidance is relevant to all reporting entities and industry sectors regulated by AUSTRAC.

Federal Register of Legislation

  • Published AML/CTF Rules Amendment Instrument 2021 (No3) on 10 Feb. It contains changes to (i) applicable customer identification procedure - special circumstances - account opening and deposit; and (ii) Store value cards.
  • Published AML/CTF Amendment Bill (by 30 September 2022). The bill is proposing to (i) expand the rules to lawyers, conveyancers, accountants, high value dealers, real estate agents, trust and company service providers; and (ii) establish a central beneficial ownership register.

Australian Government

  • Announced economic measures against Russia and lethal military equipment for Ukraine on 28 Feb. Australian targeted financial sanctions and travel bans came into effect on the Russian President and remaining permanent members of Russia’s Security Council.
  • Issued a statement on 23 Feb describing Australia’s response to Russia’s aggression against Ukraine. Australia is taking immediate action to sanction Russian individuals, organisations and banks as part of the international effort to impose a sharp cost on Russia for its unprovoked and unacceptable aggression against Ukraine.

New Zealand

Department of Internal Affairs (DIA)

  • Published a review of the BDM Act (Births, Deaths, Marriages, and Relationships Registration Act 2021) on 22 Feb. Review of the access provisions under the BDM Act covering what information can be made available about registered births, deaths, marriages, civil unions, and name changes, who can access BDM information and where, how and when the information can be made available.

Reserve Bank of New Zealand

  • Published the Monetary Policy Statement February 2022 on 23 Feb. The Reserve Bank publishes its Monetary Policy Statement (MPS) quarterly.

Canada

Financial Transactions and Reports Analysis Center of Canada (FINTRAC)

  • Canada invoked the Emergencies Act to limit funding of illegal blockades and restore public order on 15 Feb. The Emergency Economic Measures Order implements the following measures, which went into force immediately and in effect for 30 days:
    • Extends the scope of Canada’s anti-money laundering and anti-terrorist financing rules to cover crowdfunding platforms and the payment processors they use.
    • Directs Canadian banks, property and casualty insurance companies, and other financial service providers to temporarily cease providing financial services where the institution suspects that an account – either personal or corporate – is being used to further the illegal blockades.
    • Directs Canadian financial institutions to review their relationships with anyone involved in the illegal blockades and report the assets and related transactions of those involved to the RCMP or CSIS.
    • Provides federal, provincial, and territorial government institutions with new authority to share relevant information with banks and other financial services providers, if the information will help put a stop to the funding of illegal blockades and illegal activities.
  • Published its 2020–21 Annual Report, Safe Canadians, Secure Economy on 18 Feb. The report highlights key activities and operations that FINTRAC carried out in 2020–21 to help protect Canadians and Canada's economy.

Canadian Government

  • Announced a ban on crude oil imports from Russia on 28 Feb. According to the Canada Energy Regulator, Canada does not currently import any crude oil from Russia, and has not since 2019. The new ban will ensure this remains the case going forward. Once approved, this ban will be effective until further notice.
  • Announced on 28 Feb, all Canadian financial institutions are prohibited from transacting with the Russian Central Bank. In addition, Canada is imposing an asset freeze and a dealings prohibition on Russian sovereign wealth funds. This follows the Prime Minister’s February 26, 2022, joint statement with the European Commission, France, Germany, Italy, the United Kingdom, and the United States to implement further restrictive economic measures on Russia.
  • Announced on 27 Feb it is closing Canada’s airspace to all Russian aircraft operators. The Government of Canada is prohibiting the operation of Russian-owned, chartered or operated aircraft in Canadian airspace, including in the airspace above Canada’s territorial waters. This airspace closure is effective immediately and will remain until further notice.

United Kingdom

Financial Conduct Authority (FCA)

  • Announced new financial sanctions measures in relation to Russia on 24 Feb. Following the Prime Minister’s statement to the House of Commons on 22 February 2022, the UK announced a tranche of sanctions on Russia. The Prime Minister announced further measures on 24 February 2022 which are available on the Foreign, Commonwealth & Development Office website.
  • Issued a Final Notice to Barclays Bank on 28 Feb. This Final Notice (Barlclays Bank plc) refers to breaches of PRIN 2 related to financial crime in the corporate banking sector. The FCA imposed a financial penalty.
  • Published Whistleblowing quarterly data for 2021 Q4 on 28 Feb. This data shows the number of new whistleblowing reports the FCA received in October to December 2021 and the allegations they featured.

Gambling Commission (GC)

Solicitors Regulation Authority (SRA)

UK Government

  • Announced on 28 Feb it brought forward new legislation to tackle economic crime following Russia’s invasion of Ukraine. Following commitments announced by the Prime Minister, the government brought forward the Economic Crime (Transparency and Enforcement) Bill in light of Russia’s invasion of Ukraine. The new legislation will help the National Crime Agency prevent foreign owners from laundering their money in UK property and ensure more corrupt oligarchs can be handed an Unexplained Wealth Order (UWO).
  • Issued a press release on 24 Feb outlining new sanctions to devastate Russia’s economy and target Vladimir Putin’s inner circle. Following its illegal invasion of Ukraine the sanctions will ban Russia’s economically vital industries and companies from raising finance on the UK’s money markets; and more.

European Union

European Banking Authority (EBA)

  • Published the findings of its assessment of responses to the 2020 Luanda leaks on 25 Feb. The EBA found that competent authorities across the EU adopted significantly different approaches for identifying and tackling money laundering (ML) and terrorist financing (TF) risks highlighted by the leaks. These approaches varied beyond what the EBA would have expected under a risk-based approach.
  • Published updated methodology for assessing third country equivalence of regulatory and supervisory frameworks on 21 Feb. The Capital Requirements Regulation (CRR) foresees that certain exposures to entities located in non-EU countries can be treated, in terms of risk-weights, as exposures in EU Member States, provided that the European Commission adopts an Implementing Decision determining that the country’s prudential requirements are equivalent to the EU ones.
  • The three European Supervisory Authorities (EBA, EIOPA and ESMA) published on 07 Feb, a joint report in response to the European Commission’s February 2021 Call for Advice on Digital Finance. The proposals that were put forward aim at maintaining a high level of consumer protection and addressing risks arising from the transformation of value chains, platformisation and the emergence of new ‘mixed-activity groups’ i.e. groups combining financial and non-financial activities.

United States

Financial Crimes Enforcement Network (FinCEN)

  • Released a statement regarding Beneficial Ownership Information Reporting on 08 Feb. FinCEN notes that the comment period to the December 8, 2021 notice of proposed rulemaking (NPRM) requiring the reporting of beneficial ownership information (BOI) (the “Reporting NPRM”) has closed. FinCEN received over 230 comments. The Reporting NPRM is the first in a series of rulemakings that FinCEN will issue to implement the Corporate Transparency Act (CTA). The next step in the CTA rulemaking series will be FinCEN’s publication of proposed rules on BOI access and disclosure requirements (the “Access NPRM”), which FinCEN anticipates publishing later this year.
  • Announced an extension of the comment period for its Real Estate Advance Notice of Proposed Rulemaking on 03 Feb. FinCEN announced that it would extend the comment period of its Real Estate Advance Notice of Proposed Rulemaking (ANPRM). On December 8, 2021, FinCEN issued the ANPRM to solicit public comment on a potential rulemaking to address the vulnerability of the U.S. real estate market to money laundering and other illicit activity.
  • Published the Rapid Response Program Fact Sheet on 11 Feb. FinCEN plays several key roles in preventing financial crime. Through the Rapid Response Program (RRP), FinCEN helps victims and their financial institutions recover funds stolen as the result of certain cyber-enabled financial crime schemes, including business e-mail compromise.

Department of the Treasury (OFAC)

  • Announced on 28 Feb it is prohibiting transactions with the Central Bank of Russia and imposing Sanctions on key sources of Russia’s wealth. OFAC has prohibited United States persons from engaging in transactions with the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation. This action effectively immobilizes any assets of the Central Bank of the Russian Federation held in the United States or by U.S. persons, wherever located.
  • Announced on 25 Feb Sanctions on Russian Federation President Vladimir Putin and Minister of Foreign Affairs Sergei Lavrov. The United States, in coordination with allies and partners, continued to forcefully respond to Russia’s invasion of Ukraine by imposing sanctions on President of the Russian Federation Vladimir Putin and the Minister of Foreign Affairs, Sergei Lavrov, as well as other members of Russia’s Security Council. This builds on other sweeping actions that the United States and partners took earlier that week targeting the core infrastructure of the Russian financial system, including sanctions against Russia’s largest financial institutions, restricting the ability of the Government of the Russian Federation to raise capital, and cutting it off from access to critical technologies.
  • Announced on 24 Feb Sanctions against Russia, imposing swift and severe economic costs. The United States responded to Russia’s further invasion of Ukraine by imposing severe economic costs that will have both immediate and long-term effects on the Russian economy and financial system. OFAC imposed expansive economic measures, in partnership with allies and partners, that target the core infrastructure of the Russian financial system — including all of Russia’s largest financial institutions and the ability of state-owned and private entities to raise capital — and further bars Russia from the global financial system. The actions also target nearly 80 percent of all banking assets in Russia.
  • Announced on 24 Feb it is targeting Belarusian support for the Russian invasion of Ukraine. As part of the United States’ serious and expansive response to Russia’s further invasion of Ukraine, the OFAC is sanctioning 24 Belarusian individuals and entities due to Belarus’s support for, and facilitation of, the invasion. This action focuses on Belarus’s defense sector and financial institutions, two areas in which Belarus has especially close ties to Russia.
  • Announced on 22 Feb it has imposed immediate economic costs in response to actions in the Donetsk and Luhansk Regions. The United States took action to respond to President Vladimir Putin’s decision to recognize the so-called Donetsk and Luhansk People’s Republics (DNR and LNR) as “independent” states and to deploy troops to these regions by sanctioning two major Russian state-owned financial institutions, imposing additional restrictions on Russian sovereign debt, and sanctioning five Kremlin-connected elites.
  • Announced Sanctions on major Ecuadorian and Mexican narcotics traffickers with ties to the Sinaloa Cartel and CJNG on 10 Feb. OFAC designated Wilder Emilio Sanchez Farfan and Miguel Angel Valdez Ruiz pursuant to Executive Order (E.O.) 14059 for materially contributing to the illicit activities of major Mexican cartels to traffic cocaine into the United States. This action is the result of collaboration between OFAC and the Drug Enforcement Administration.
  • Announced on 03 Feb it is sanctioning an organization supporting Majelis Mujahidin Indonesia. OFAC designated World Human Care, a non-governmental organization established by the Indonesia-based designated terrorist group Majelis Mujahidin Indonesia (MMI) to provide financial support for MMI extremists in Syria under the guise of humanitarian aid.
  • Released a Study on Illicit Finance in the High-Value Art Market on 04 Feb. OFAC published a study on the facilitation of money laundering and the financing of terrorism through the trade in works of high-value art. This study examined art market participants and sectors of the high-value art market that may present money laundering and terrorist financing risks to the U.S. financial system, and identified efforts that government agencies, regulators, and market participants could undertake to further mitigate the laundering of illicit proceeds through the high-value art market in the United States.

Hong Kong

Securities and Futures Commission (SFC)

Insurance Authority (IA)

Customs and Excise Department

  • Announced disciplinary actions against three licensed money service operators for breaching licensing requirements on 18 Feb. The Customs and Excise Department (C&ED) took disciplinary actions, including issuing public reprimands, imposing pecuniary penalties and ordering remedial actions, against three licensed money service operators (MSOs) for breaching the licensing requirements as stipulated in the Anti-Money Laundering and Counter-Terrorist Financing Ordinance.

Singapore

Money Authority of Singapore

  • Published its Lists of Designated Individuals and Entities on 24 Feb. Access regulations and UN lists of designated individuals and entities for countering money laundering and terrorist financing.
  • Published a Circular on Non-Face-to-Face Customer Due Diligence Measures on 08 Feb. This Circular sets out industry good practices observed by MAS and supervisory guidance on the measures to mitigate risks associated with the use of non-face-to-face technologies for customer due diligence. FIs should read this Circular in conjunction with the relevant AML/CFT Notices and Guidelines in relation to CDD Measures for Non-Face-to-Face Business Relations, as well as MAS’ Circular of 8 January 2018 (AMLD 01/2018) on the use of Myinfo and CDD measures for NFTF business relations.

South Africa

Financial Intelligence Center (FIC)

  • Announced on 01 Feb it has issued Sanctions against a Motor Vehicle Dealership for non-compliance with the requirements of the Financial Intelligence Centre Act, 2001 (Act 38 of 2001). The company, Truck World (Pty) Ltd (Truck World) has been penalized R2 664 812 for failing to report 204 transactions exceeding the threshold of R24 999.99.

Other Jurisdictions

No major updates this month.

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