FinCrime News - March 2024

International

The Financial Action Task Force (FATF)

• Published a report on the implementation of Recommendation 15 by FATF members with materially important virtual asset service provider (VASP) activity. This report shows the steps FATF members have taken to implement the FATF Standards in relation to regulating and supervising VASPs.
• Issued guidance on Beneficial Ownership and Transparency of Legal Arrangements. The guidance aims to assist countries and the private sector to better understand how transparency requirements apply to legal arrangements.
• Published a report on Australia's progress in strengthening measures to tackle ML/TF. This is Australia's 4th follow-up report. It analyses Australia’s progress in addressing some of the technical compliance deficiencies identified in its mutual evaluation.
• Published a report on the United States' progress in strengthening measures to tackle ML/TF. The United States has made progress in addressing the technical compliance deficiencies identified in relation to Recommendation 24 - Transparency and beneficial ownership of legal persons.
• Published a report on Serbia's progress in strengthening measures to tackle ML/TF. Serbia has made progress in addressing the technical compliance shortcomings identified in its 2016 Mutual Evaluation Report.
• Published a report on the Slovak Republic's progress in strengthening measures to tackle ML/TF. The Slovak Republic has made progress in addressing the technical compliance deficiencies identified in its Mutual Evaluation Report.

Wolfsberg Group

• Published guidance that outlines the principles of auditing for effectiveness. The guidance focuses on how the internal audit function can assist in the fight against financial crime by measuring financial crime risk management outcomes using the principles outlined in the guidance. 
• Published updated guidance on countering terrorist financing. This document replaces all older versions and describes the role of financial institutions (FI) in CTF and the key controls that seek to mitigate and manage the risk of an FI being abused for the financing of terrorism as part of a risk-based financial crime compliance programme.
• Published an updated version of the Country Risk FAQs. The revised FAQs provide a comprehensive understanding of the implications of country risk in the context of AML/CTF measures, including customer due diligence requirements.

New Zealand

Department of Internal Affairs (DIA)

• Issued a reminder to file an annual report by 31 Aug 2024, which is a legal obligation under the AML/CFT Act for all reporting entities. Entities will be able to file via AMLOnline from 1 Jul 2024.

United Kingdom

Financial Conduct Authority (FCA)

• Issued a "Dear CEO" letter requesting immediate action in response to common control failings identified in AML frameworks, which include the following critical areas:
  • Business Model – discrepancies between firms’ registered and actual activities and lack of Financial Crime controls to keep pace with business growth.
  • Risk Assessment – weaknesses in business-wide risk assessments and customer risk assessments.
  • Due Diligence, Ongoing Monitoring and Policies and Procedures – lack of detail in policies creates ambiguity around the actions staff should take to comply with their obligations under the MLRs.
  • Governance, Management Information and Training – lack of resources for Financial Crime, inadequate Financial Crime training and absence of a clear audit trail for Financial Crime related
    decision-making.

Solicitors Regulation Authority (SRA)

• Issued an updated sectoral risk assessment for the legal industry on ML/TF. The assessment identifies new risks, such as vendor fraud, pooled client funds and irregular methods of transferring funds.

UK Government

• Issued a global advisory on Russian sanctions evasion issued jointly by the multilateral Russian Elites, Proxies, and Oligarchs (REPO) Task Force. The REPO Task Force is a multilateral effort that has used information sharing and coordination to isolate and exert unprecedented pressure on sanctioned Russian individuals and entities.
• Published a consultation on improving the effectiveness of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (the ‘MLRs’), which place requirements onto a range of businesses to identify and prevent ML/TF. The consultation closes on 9 Jun 2024.
• Published a policy paper on its Money Mule and Financial Exploitation Action Plan. This Action Plan sets out how the Government is leading an ambitious cross-sector response to disrupt money mule activity and protect victims of related financial exploitation.

United States

Financial Crimes Enforcement Network (FinCEN)

• Issued a request for information related to existing requirements for banks under the Customer Identification Program (CIP) Rule to collect a taxpayer identification number from a customer prior to opening an account. This RFI will inform FinCEN’s understanding in this area and evaluate the risks, benefits, and safeguards if banks were permitted to collect partial information from a customer and subsequently use reputable third-party sources to obtain information prior to account opening.

Department of the Treasury (OFAC)

• Announced new sanctions for financial facilitators and illicit drug traffickers supporting the Syrian Regime.
• Issued a compliance note on the obligations of foreign-based persons to comply with U.S. sanctions and export control laws. This note highlights the applicability of U.S. sanctions and export control laws to persons and entities located abroad. 

Singapore

Monetary Authority of Singapore (MAS)

• Issued an updated version of Notice 626 Prevention of Money Laundering and Countering the Financing of Terrorism for banks. This Notice takes effect from 1 April 2024.

South Africa

Financial Intelligence Centre (FIC)

• Published guidance on the interpretation of high value goods dealers.
• Published an updated risk assessment report for the legal practitioners sector. This sector risk assessment has now been updated, inter alia, to reflect the latest available statistics relating to the sector.
• Published an updated risk assessment report for the estate agency sector. This sector risk assessment has now been updated to reflect the latest available statistics relating to the sector.
• A draft sector risk assessment report for crypto asset service providers has been issued for consultation. The risk assessment provides information on the ML/TF risks facing crypto asset service providers when conducting business.

Ireland

Government

• Published guidelines to assist regulated entities in understanding and meeting their AML/CTF obligations under the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 as amended and related Statutory Instruments.

France

The Autorité des Marchés Financiers (AMF)

• Issued guidance to align with European Banking Authority guidelines on ML/TF. The guidance focuses on policies and controls for the effective management of ML/TF risks when providing access to financial services, aims, in particular, to limit risk-mitigating practices that exclude certain types of clients.

Other Jurisdictions

No major updates this month.