FinCrime News - October 2022

International

The Financial Action Task Force (FATF)

• Released a Public Consultation on 25 Oct 2022 on the Revision of Recommendation 25 and its Interpretive Note (R.25/INR.25) on the transparency and beneficial ownership (BO) of legal arrangements. The FATF is also considering an amendment to the definition of beneficial ownership in the glossary, to provide more clarity regarding legal arrangements. Comments are due by 6 Dec 2022. 
• Released a Public Consultation on 25 Oct 2022 on a Guidance Paper to Recommendation 24 on the transparency and beneficial ownership of legal persons. Comments are due by 6 Dec 2022. 
• Issued the High-Risk Jurisdictions Subject to a Call for Action on 21 Oct 2022. This list continues to include the Democratic People's Republic of Korea (DPRK) and Iran. The FATF also released a call on its members and other jurisdictions to apply enhanced due diligence measures to Myanmar. 
• Issued the list of Jurisdictions Under Increased Monitoring, commonly referred to as the “grey list,” on 21 Oct 2022. New jurisdictions subject to increased monitoring are the Democratic Republic of Congo (DRC), Mozambique, and Tanzania. Nicaragua and Pakistan were removed from the list. 
• Released outcomes from the FATF Plenary which was held from 20-21 Oct 2022. Delegates from over 200 jurisdictions participated in these discussions at the FATF headquarters in Paris. Key issues discussed included the improvement of beneficial ownership transparency to prevent shell companies and other opaque structures from being used to launder illicit funds.
• Published the Consolidated Processes and Procedures for Mutual Evaluations and Follow-Up (Universal Procedures) on 7 Oct 2022. These documents set out the core elements that form the basis for all evaluations, and are based on the Procedures for the FATF 4th Round of AML/CFT evaluations.   
• Published Procedures for the FATF Fourth Round of AML/CFT Mutual Evaluations on 7 Oct 2022. This document sets out the procedures that are the basis for the fourth round of mutual evaluations.
• Published the Consolidated Assessment Ratings on 5 Oct 2022. The FATF and FATF-Style Regional Bodies (FSRBs) conduct peer reviews on an ongoing basis to assess how effectively their respective members' AML/CFT measures work in practice, and how well they have implemented the technical requirements of the FATF Recommendations. This document provides an up-to-date overview of the ratings that assessed countries obtained for effectiveness and technical compliance. 
• Published a report on The Republic of Gambia's measures to combat money laundering and terrorist financing on 5 Oct 2022. This evaluation was based on the 2012 FATF Recommendations and was prepared using the 2013 Methodology. The evaluation was based on information provided by the country, and information obtained by the evaluation team during its on-site visit to the country from 23 Aug 2021 to 3 Sep 2021.
• Published a report on Togo's measures to combat money laundering and terrorist financing on 5 Oct 2022. This evaluation is based on the 2012 FATF Recommendations and was prepared using the 2013 Methodology. The evaluation was based on information provided by the country and information obtained by the assessment team during its on-site visit from 25 Jan 2021 to 10 Feb 2021. 
• Published a report on Finland's progress in strengthening measures to tackle money laundering and terrorist financing on 4 Oct 2022. This follow-up report analyses Finland's progress in addressing the technical compliance deficiencies identified in its 2019 Mutual Evaluation.

Australia

The Australian Transaction Reports and Analysis Centre (AUSTRAC)

• Published a financial crime guide on 28 Oct 2022 to help financial service providers identify and report suspicious transactions indicative of criminals engaging in trade-based money laundering. This guide was developed by AUSTRAC’s Fintel Alliance in partnership with the Australian Border Force to help businesses identify criminals targeting their services for trade-based money laundering and understand when to submit a suspicious matter report to AUSTRAC.

NSW Crime Commission

• Published the Project Islington Inquiry into Money Laundering via EGMs (Electronic Gaming Machines) in Hotels and Clubs on 26 Oct 2022. The report outlines a multi-agency investigation that has found that criminals are funnelling billions of dollars of “dirty” cash through poker machines in pubs and clubs every year in NSW but there are no effective controls or data collection to identify or prosecute those involved.

New Zealand

Department of Internal Affairs (DIA)

• Issued an updated fact sheet on customer due diligence for companies and sole traders and partnerships as well as updated enhanced customer due diligence guidelines on 26 Oct 2022. This follows the new requirements introduced on 9 Jul 2021 to conduct customer due diligence for nominee directors, nominee shareholders and nominee general partners under Regulations 11 and 12 of the AML/CFT (Requirements and Compliance) Regulations 2011.
• Released examples of “What Good Looks Like” from a recent onsite inspection of a law firm in Auckland on 25 Oct 2022. 
• Released an article on common areas of non-compliance on 20 Oct 2022. The article is based on a review of independent audit reports from a group of 38 reporting entities to understand their level of compliance with the AML/CFT Act.

Financial Markets Authority (FMA)

• Released the AML/CFT Enhanced Customer Due Diligence Guideline 2022 on 25 Oct 2022. The guideline assists regulated entities in conducting enhanced customer due diligence on customers under the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Act 2009. 
• Released an updated AML/CFT Designated Business Group Scope Guideline on 12 Oct 2022. This guideline is designed to help reporting entities understand which obligations may be shared by members of a designated business group (DBG).
• Released an updated Designated Business Group – Formation and Change Guideline on 12 Oct 2022. This guideline is designed to help reporting entities forming a designated business group (DBG) understand the process for doing so. Entities may form a DBG if they are eligible to do so under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (the AML/CFT Act) and associated regulations.
• Issued a media release on 19 Oct 2022 concerning a formal warning to InvestNow Saving and Investment Service Limited for failing to comply with anti-money laundering requirements, including conducting customer due diligence, and having adequate and effective processes.

Canada

Financial Transactions and Reports Analysis Center of Canada (FINTRAC)

• Announced administrative monetary penalty on Cathay Pacific Realty Ltd. on 18 Oct 2022. This real estate broker in Vancouver, British Columbia received an administrative monetary penalty of $206,250 on July 25, 2022, for non-compliance with Part 1 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and its associated regulations.
• Announced an administrative monetary penalty on LaBoutique Realty Ltd. on 13 Oct 2022. This real estate brokerage in Vancouver, British Columbia received an administrative monetary penalty of $275,385 on July 21, 2022, for non-compliance with Part 1 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and its associated regulations.
• Announced an administrative monetary penalty on Pan Pacific Platinum Real Estate Services Inc. on 6 Oct 2022. This real estate brokerage in Vancouver, British Columbia received an administrative monetary penalty of $282,397 on March 28, 2022, for non-compliance with Part 1 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and its associated regulations. 

United Kingdom

Financial Conduct Authority (FCA)

• Issued a decision notice concerning Gatehouse Bank plc on 12 Oct 2022.  Serious shortcomings were found in Gatehouse’s AML policies and procedures in the period from 9 June 2014 to 5 July 2017, thereby breaching provisions of the Money Laundering Regulations 2007. A civil penalty of £1,584,100 has been imposed. 

Gambling Commission (GC)

• Announced on 12 Oct 2022 that gambling operator NSUS Limited will pay a £672,829 penalty for social responsibility and anti-money laundering failures.

UK Government

• Released updated factsheets on 24 Oct 2022 giving details of the different measures contained in the Economic Crime and Corporate Transparency Bill. Among other measures, the bill will strengthen anti-money laundering powers, enabling better information sharing on suspected money laundering, fraud and other economic crimes.
• Released guidance on how to add an overseas entity and its registrable beneficial owners or managing officers to the Register of Overseas Entities. The Register of Overseas Entities came into force in the UK on 1 August 2022 through the new Economic Crime (Transparency and Enforcement) Act 2022. 
• Released updated guidance for high value dealers on 21 Oct 2022. This guidance helps high value dealers meet their requirements for money laundering supervision. 

European Union

European Banking Authority (EBA)

• Released a Call for Input on the 2017 Joint Guidelines to Prevent the Abuse of Fund Transfers for ML/TF purposes 21 Oct 2022. The Call for Input seeks to identify practical issues that financial institutions experience when complying with the existing FTR Guidelines. Input is due by 15 November 2022.

United States

Financial Crimes Enforcement Network (FinCEN)

• Announced the renewal and expansion of its Geographic Targeting Orders (GTOs) that require U.S. title insurance companies to identify the natural persons behind shell companies used in non-financed purchases of residential real estate on 26 Oct 2022. 
• Announced $29 Million enforcement action against virtual asset service provider Bittrex on 11 Oct 2022. Bittrex failed to maintain an effective AML program including failure to appropriately address the risks associated with the products and services it offered, including anonymity-enhanced cryptocurrencies.

Hong Kong

Hong Kong Monetary Authority (HKMA)

• Released an update on joint efforts of the Hong Kong Monetary Authority (HKMA) and the Hong Kong Association of Banks (HKAB) in the launch of an anti-fraud search engine “Scameter" by the Hong Kong Police Force. In response to the release of the “Scameter,” HKAB has updated the Frequently Asked Questions (FAQs) in Relation to Anti-money Laundering and Counterfinancing of Terrorism (AML/CFT) with guidance for regulated entities on the "Scameter."

Singapore

Money Authority of Singapore

• Published the Terrorism Financing National Risk Assessment 2020 on 7 Oct 2022. In 2020, Singapore conducted the TF risk assessment which includes observations from all relevant competent authorities as well as input from the private sector and academia. 
• Published the National Strategy for Countering the Financing of Terrorism (CFT) on 7 Oct 2022 in response to the findings of the Terrorism Financing National Risk Assessment (TF NRA) 2020. The National CFT Strategy forms the blueprint that outlines Singapore’s national approach to address our TF risks and serves as the roadmap to guide the development of future action plans to effectively prevent, detect, investigate, and enforce against TF. 

South Africa

Financial Intelligence Centre

• Issued a consultation note on 31 Oct 2022 relating to the draft Guidance Note No. 102A which focuses on the requirements for processing electronic funds transfers as per Recommendation 16 of the Financial Action Task Force (FATF). Comments on the draft guidance are due on 18 Nov 2022. 
• Released a consultation feedback note on 21 Oct 2022 for the draft Guidance Note 5C on cash threshold reporting in terms of section 28 of the Financial Intelligence Centre Act, 2001 (Act 38 of 2001). The feedback on the consultation comments received indicates that in general, the industry welcomed the changes relating to cash threshold reporting.

Other Jurisdictions

No major updates this month.