FinCrime News - March 2023

International

The Financial Action Task Force (FATF)

• Published a report entitled Countering Ransomware Financing on 14 Mar 2023. This FATF report analyses the methods that criminals use to carry out their ransomware attacks and how payments are made and laundered.
• Published guidance on the beneficial ownership of legal persons on 10 Mar 2023. In March 2022, the FATF agreed on tougher global beneficial ownership standards in its Recommendation 24 by requiring countries to ensure that competent authorities have access to adequate, accurate and up-to-date information on the true owners of companies. The FATF has now updated the guidance that will help countries implement the revised Recommendation 24.
• Published an updated version of the FATF Recommendations on 10 Mar 2023. The FATF Recommendations are the basis on which all countries should meet the shared objective of tackling money laundering, terrorist financing and the financing of proliferation. This update includes a revision of recommendation 25 and the definitions of “beneficial owner”, “beneficiary”, and “legal arrangements” to strengthen the standards on beneficial ownership of legal arrangements.

Australia

The Australian Transaction Reports and Analysis Centre (AUSTRAC)

• Announced the acceptance of an Enforceable Undertaking (EU) from PayPal Australia Pty Ltd (PayPal) to ensure its compliance with Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) laws. The EU comes after AUSTRAC identified concerns with PayPal’s systems, controls and governance in relation to its international funds transfer instructions (IFTI) reporting.

Australian Government

• Announced on 31 Mar 2023, it is undertaking a legislative review of Australia’s Autonomous Sanctions Framework ahead of their automatic expiry on 1 Apr 2024.

New Zealand

Department of Internal Affairs (DIA)

• Announced draft updates to the Anti-Money Laundering and Countering Financing of Terrorism Act and released a request for public consultation on 2 Mar 2023. This regulatory package seeks to give relief to businesses and respond to immediate issues identified by a statutory review. Feedback is due on 14 Apr 2023.
• Released guidance for reporting under the Russia Sanctions Act on 3 Mar 2023. The guidance focuses on the threshold for reporting any dealings with designated people, assets or services and clarification about the need to report dealing with designated people and assets or services even when those activities are permitted.

Canada

Financial Transactions and Reports Analysis Center of Canada (FINTRAC)

• Announced an administrative monetary penalty on Vision Bank Ltd., also operating as Vision Bank (Canada), on 24 Mar 2023. This money services business was imposed an administrative monetary penalty of $33,000 on March 8, 2023, for non-compliance with Part 1 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and its associated Regulations. Vision Bank Ltd. failed to provide, in accordance with a notice, the requested compliance program documentation for purposes of a compliance examination.
• Released an updated schedule for the implementation of changes to its reporting forms on 16 Mar 2023.
• Announced an administrative monetary penalty on Wealth One Bank of Canada on 6 Mar 2023. This bank received an administrative monetary penalty of $676,500 on 15 Feb 2023 for non-compliance with Part 1 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and its associated Regulations. Wealth One Bank of Canada was found to have committed administrative violations, including failure to develop compliance policies and procedures.

United Kingdom

Financial Conduct Authority (FCA)

• Released a supervisory update from the Professional Body Anti-Money Laundering Supervision (OPBAS) on 22 Mar 2023. The supervisory update provides an assessment of the Nov 2022 reports published by Professional Body Supervisors (PBSs). Professional Body Supervisors (PBSs) are required to publish annual reports detailing their anti-money laundering/counter-terrorist financing (AML/CTF) supervisory activities.
• Issued a "Dear CEO" letter to payment and e-money firms warning of the "unacceptable risk of harm" posed by payment and e-money firms to customers and the financial system based on inadequate governance, controls and oversight. The letter highlights the need for all firms subject to UK’s Money Laundering Regulations to have systems and controls in place to identify, assess, monitor and manage money laundering risk. These must be comprehensive and proportionate to the nature, scale and complexity of a firm’s activities.

Government

• Released the Economic Crime Plan 2, which is intended to build on the first economic crime plan by delivering real-world outcomes to cut crime, protect national security, and support the UK’s legitimate economic growth and competitiveness. This three-year plan focuses on achieving tangible outcomes, reducing money laundering, recovering more criminal assets, combatting kleptocracy, and driving down sanctions evasion.
• Published updated financial sanctions guidance on 21 Mar 2023. The guidance includes information on the approach the Office of Financial Sanctions Implementation takes to financial sanctions, including sector and regime-specific guidance, as well as information on monetary penalties for breaches of financial sanctions.

Gambling Commission (GC)

• Announced fines against three gambling businesses owned by William Hill Group on 28 Mar 2023. William Hill Group will pay a total of £19.2 million for social responsibility and anti-money laundering failures. The AML failures included allowing customers to deposit large amounts without conducting appropriate due diligence.
• Announced that two online operators, 32Red Limited and Platinum Gaming Limited, will pay a £7.1 million penalty for social responsibility and anti-money laundering failures on 23 Mar 2023. The AML deficiencies included failure to ensure policies, procedures and controls were kept under review and revised appropriately to ensure that they remained effective.

European Union

European Parliament

• Announced new EU measures against money laundering and terrorist financing on 28 Mar 2023. The draft measures include the EU “single rulebook” regulation, the 6th Anti-Money Laundering Directive, and the regulation establishing the European Anti-Money Laundering Authority. The European Parliament will start negotiations on the AML/CFT package after a confirmation during a plenary session in April.

European Banking Authority (EBA)

• Released a public consultation on amendments to its guidelines on risk-based Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) supervision on 29 Mar 2023. The proposed changes extend the scope of these Guidelines to AML/CFT supervisors of crypto-asset service providers (CASPs). The consultation runs until 29 June 2023.
• Published guidelines on 31 Mar 2023 to ensure that customers have access to the financial services they need to fully participate in society and are not denied this access on unsubstantiated Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) grounds or without a valid reason.

European Gaming and Betting Association (EGBA)

• Published its first pan-European guidelines to support the online gambling sector’s contribution to Europe’s fight against money laundering on 6 Mar 2023. The guidelines reflect the latest technologies and laws and build upon EGBA’s commitment to promoting the highest level of industry responsibility in AML.

Ireland

Department of Finance

• Announced Ireland’s interest in hosting the new EU Anti-Money Laundering Authority (“AMLA”) on 28 Mar 2023. The AMLA will be a significant EU institution tasked with supervision – either directly or jointly with national supervisors – of entities in the financial services sector in the first instance, but eventually also in the non-financial sector.

United States

Financial Crimes Enforcement Network (FinCEN)

• Published the first set of guidance materials on 24 Mar 2023 to aid the public, and in particular the small business community, in understanding upcoming beneficial ownership information (BOI) reporting requirements taking effect on 1 Jan 2024. The new regulations require many corporations, limited liability companies, and other entities created in or registered to do business in the United States to report information about their beneficial owners to FinCEN.

Department of the Treasury (OFAC)

• Published a compliance note focused on third-party intermediaries used to evade Russia-related sanctions and export controls on 3 Mar 2023. This compliance note aims to assist the international community, the private sector, and the public in identifying attempts by malign actors to continue to try to evade sanctions and export controls to support Russia’s military-industrial complex in support of Russia’s illegal and unprovoked war against Ukraine.

Hong Kong

Hong Kong Monetary Authority (HKMA)

• Released a circular on "Smart tips for Private Banking" on 7 Mar 2023. The HKMA has issued the circular with the aim of helping the management as well as staff members of private banks’ AML compliance and customer-facing units to appropriately apply AML/CFT requirements.

Customs and Excise Department

• Announced that the Dealers in Precious Metals and Stones Regulatory Regime will come into effect on 1 Apr 2023, and applications for registration will be accepted. The regime requires any person seeking to carry on a business of dealing in precious metals and stones and engage in transactions with a total value of HK$120,000 or above to register with C&ED and fulfil the anti-money laundering and counter-terrorist financing statutory obligations as appropriate.

Singapore

Money Authority of Singapore (MAS)

• Published a circular on Money Laundering and Terrorism Financing Risks in the Wealth Management Sector on 3 Mar 2023. This circular reminds all financial institutions (FIs) to stay vigilant to the ML/TF risks in the wealth management sector. It sets out MAS’ expectations for FIs to review existing controls to ensure they remain adequate to mitigate the ML/TF risks from high-growth areas.

South Africa

Financial Intelligence Centre (FIC)

• Announced a research report compiled by the South African Anti-Money Laundering Integrated Task Force (SAMLIT) on modern slavery and human trafficking (MSHT), released on 10 March 2023. The report focuses on financial flows and key indicators in the detection of financial transactions and behaviours related to MSHT in South Africa, thereby helping the banking sector to assist in combating this crime.
• Released a consultation feedback note relating to Directive 6 and Directive 7 and an associated risk and compliance return questionnaire in terms of section 43A of the Financial Intelligence Centre Act, 2001 (Act 38 of 200) (FIC Act). All three have been finalised and are aimed at gathering relevant information which enables the FIC to better understand, assess, mitigate and monitor the money laundering, terrorist financing and proliferation financing risks.
• Issued Directive 8 and public compliance communication 55 (PCC 55) as guidance for accountable institutions. Directive 8 requires accountable institutions to screen their employees for competence and integrity on a risk-based approach, as well as scrutinise employee information against the targeted financial sanctions lists. Directive 8 is supported by PCC 55, which provides guidance on how to comply with the requirements found in Directive 8.
• Issued a press release urging new accountable institutions to register with the FIC even after the deadline of 20 Mar 2023 to avoid being in non-compliance with the registration requirements. New accountable institutions include company service providers, a wider category of credit providers, high-value goods dealers, and payment clearing service operators.

Other Jurisdictions

No major updates this month.