AML News - October 2023

International

The Financial Action Task Force (FATF)

• Published a report on Crowdfunding for Terrorism Financing. This report highlights challenges, good practices and risk indicators to help public and private sector entities identify potential attempts at terrorist financing using crowdfunding.
• Issued Public Consultation - FATF Risk-Based Guidance on Recommendation 25. The FATF is seeking feedback on this updated guidance to Recommendation 25 on Beneficial Ownership and Transparency of Legal Arrangements. Feedback is due on 8 Dec 2023.
• Published its list of High-Risk Jurisdictions subject to a Call for Action. The list remains unchanged and includes the Democratic People's Republic of Korea (DPRK) and Iran. It also lists Myanmar as a jurisdiction subject to a FATF call on its members and other jurisdictions to apply enhanced due diligence measures proportionate to the risks arising from the jurisdiction.
• Published an updated list of Jurisdictions under Increased Monitoring, also referred to as the "grey list." Bulgaria has been added to the list, and the following jurisdictions have been removed: Albania, Cayman Islands, Jordan and Panama.
• Released outcomes from the FATF Plenary held on 25-27 Oct 2023. During the three days of meetings, delegates worked through a full agenda on key money laundering, terrorism financing and proliferation financing issues. Indonesia was also welcomed during the session as the 40th member.
• Published a report on Finland's progress in strengthening measures to tackle ML/TF. Finland has made progress in addressing the technical compliance deficiencies identified in its Mutual Evaluation. The country has been re-rated on four Recommendations.
• Published a report on Japan's progress in strengthening measures to tackle ML/TF. As a result of Japan’s progress in strengthening its measures to fight money laundering and terrorist financing since the assessment of the country’s framework, the FATF has re-rated the country on five Recommendations.
• Published a report on Switzerland's progress in strengthening measures to tackle ML/TF. Switzerland has made progress in addressing the technical compliance deficiencies identified in the MER with respect to Recommendations 10 and 40.

World Bank

• Published the following report: Lessons Learned from the First Generation of Money Laundering and Terrorist Financing Risk Assessments. This report aims to guide the policymakers in World Bank client jurisdictions in continuously improving their assessments and understandings of money laundering and terrorist financing risks in their jurisdictions.

Wolfsberg Group

• Released an updated version of the Wolfsberg Group Payment Transparency Standards. The updated Standards focus on broadening coverage to include all types of payment service providers and expands the list of stakeholders to include payment market infrastructures and competent authorities.

Regional

Asia/Pacific Group (APG)

• Announced the Mutual Evaluation Onsite of Papua New Guinea. The onsite visit for Papua New Guinea’s 3rd Round APG Mutual Evaluation was conducted from 2 to 13 October 2023 in Port Moresby.
• Published a report on Protecting Non-Profit Organizations from Terrorism Financing Abuse. The report supports APG members and NPOs by providing context-specific analysis of areas where further guidance, support, and capacity development assistance may be beneficial in the Asia/Pacific region.
• Announced the Mutual Evaluation Onsite of Timor-Leste was held from 18-28 Sep 2023.
• Announced the Nauru Mutual Evaluation Onsite Visit was held from 9-16 Oct 2023. 

Australia

The Australian Transaction Reports and Analysis Centre (AUSTRAC)

• Issued a reminder that the AML/CFT Act 2006 has recently been amended to clarify the way penalty units accrue for unenrolled businesses. If your business has provided a designated service for at least 28 days but has failed to enrol with AUSTRAC, it can accrue daily penalties from 9 Nov 2023. These penalties continue to accrue until you enrol or stop providing designated services.

Canada

Financial Transactions and Reports Analysis Center of Canada (FINTRAC)

• Announced changes to the Large Cash Transaction Report form and guidance as part of its multi-year effort to update all of its reports.
• Announced that entities engaged in the business of transporting currency, money orders, traveller’s cheques or other similar negotiable instruments (except for cheques payable to a named person or entity) will be subject to the AML/CFT Act. The change is effective on 1 Jun 2024.
• Announced that entities in the mortgage sector will be subject to the AML/CFT Act. The mortgage sector includes: mortgage administrators, mortgage brokers and mortgage lenders. The change is effective from 11 Oct 2024. 

United Kingdom

Government

• Announced the passage of the Economic Crime and Corporate Transparency Act 2023 (ECCTA). The ECCTA includes measures focused on economic crime, including money laundering. Specific guidance and details on timing are expected to be released through secondary legislation.
• Published UK financial sanctions guidance. It outlines obligations under financial sanctions and its approach to licensing and compliance issues. It takes into account relevant case law and guidance.
  

Solicitors Regulation Authority (SRA)

• Issued a warning notice to firms stating that they need to do more to properly assess any money laundering risks posed by clients and the services they are seeking. A new report on client matter risk assessments found some solicitor firms visited by the SRA were not compliant with the Money Laundering Regulations.

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 companies used in non-financed purchases of residential real estate.
• Issued an alert to assist financial institutions in identifying funding streams for the terrorist organization Hamas in response to Hamas’s terrorist attack on the people of Israel. FinCEN is urging financial institutions to be vigilant in identifying suspicious activity relating to financing Hamas and reporting it to FinCEN. The alert contains red flags that FinCEN has identified to help detect, prevent, and report potential suspicious activity related to Hamas’ terrorist financing activity.
• Announced a Notice of Proposed Rule Making (NPRM) that identifies international Convertible Virtual Currency Mixing (CVC mixing) as a class of transactions of primary money laundering concern. This NPRM highlights the risks posed by the extensive use of CVC mixing services by a variety of illicit actors throughout the world and proposes a rule to increase transparency around CVC mixing.

Hong Kong

Hong Kong Monetary Authority (HKMA)

• Released a circular, in partnership with the SFC, on intermediaries’ virtual asset-related activities. The policy reflects market developments and enquiries from the industry seeking to further expand retail access through intermediaries and to allow investors to directly deposit and withdraw virtual assets to/from intermediaries with appropriate safeguards. 

Securities and Futures Commission (SFC)

• Announced it will be hosting two online sessions of AML/CFT webinars from 15-16 Nov 2023.

South Africa

Financial Intelligence Centre

• Issued guidance on reporting obligations and how to correctly register with the FIC. This includes guidance on the acquisition of login credentials by any business with a suspicious and unusual transaction reporting obligation in terms of the FIC Act. 
• Issued guidance on the definition of legal practitioners as listed in the FIC Act.

Other Jurisdictions

No major updates this month.