Top stories this week:
FATF Flags Hawala and Underground Banking as Major Money-Laundering Channels | OFSI Fines Citibank London £4.73m Over Sanctions Breaches
Welcome to this week's edition of the KYC Roundup, your gateway to the most impactful developments in the world of Anti-Money Laundering and financial crime. In the AML arena, FATF has highlighted the growing use of underground banking and hawala by professional money launderers, while US regulators have clarified SAR confidentiality rules.
In the fast-paced world of sanctions, OFSI has imposed a £4.73 million penalty on Citibank London, while the UK has issued its first nationwide alert targeting the A7 sanctions-evasion network.
In the corruption space, a US real estate developer has pleaded guilty over a scheme to bribe Newark city employees.
We round off this week's roundup with our guide to KYC trigger events.
KYC & AML
FATF flags hawala and underground banking as major money laundering channels
FATF has highlighted the growing role of underground banking, hawala and other similar service providers in professional money laundering. More than 80% of reporting jurisdictions identified these systems among the principal professional money-laundering channels or techniques, while some cases involved more than €500 million being laundered within a few months.
US regulators clarify SAR confidentiality rules for customer communications
FinCEN and four US federal banking regulators have clarified that SAR confidentiality requirements do not prevent banks and credit unions from discussing potentially fraudulent or suspicious transactions with customers, or informing them of intended account closures, provided the existence of a SAR is not revealed. The joint statement does not change existing Bank Secrecy Act requirements or establish new supervisory expectations.
AUSTRAC targets non-enrolled firms under expanded AML rules
AUSTRAC has begun issuing section 167 notices to businesses that appear to be providing regulated services without enrolling under Australia's AML/CTF regime. The notices require businesses including real estate agents, accountants, to provide information allowing the regulator to determine whether they are supplying designated services and meeting their obligations.
AUSTRAC opens AML investigation into Western Union
AUSTRAC has launched an investigation into Western Union Financial Services Australia and The Western Union Company over concerns about the management of high-risk payment channels, customers and affiliates. The investigation will examine the company's AML/CTF programme, transaction monitoring and governance arrangements and follows previous regulatory engagement and an external audit ordered by AUSTRAC in 2025.
Sanctions
OFSI fines Citibank London £4.73m over sanctions breaches involving 970 payments
The Office of Financial Sanctions Implementation has imposed a £4.73 million penalty on Citibank N.A.'s London branch after determining that the bank processed 970 payments worth around £19.72 million in breach of Russia and Global Anti-Corruption sanctions. OFSI said many of the breaches arose from systems and controls issues and staff errors, including delays in reviewing and escalating sanctions alerts.
UK issues first nationwide alert targeting A7 sanctions-evasion network
The UK Government and National Crime Agency have issued the first nationwide alert targeting the Kremlin-backed A7 network, outlining how it uses third-country financial institutions and cross-border structures to circumvent international financial and trade sanctions. The Government also announced that the maximum penalty available to OFSI will increase from 50% to 100% of the value of a sanctions breach.
Corruption
Newark property developer pleads guilty in city bribery scheme
US real estate developer Menashe Davidovitz has pleaded guilty to charges including conspiracy to commit honest services fraud and conspiracy to commit bribery over a scheme involving Newark city employees. US prosecutors said Davidovitz provided cash and other benefits in exchange for official action relating to properties he owned.
KYC360/Experian News
Article: KYC Trigger Events - What Should Prompt a Client Review?
KYC reviews should not depend on the calendar alone. Our latest guide looks at the changes that can prompt a client reassessment, from sanctions and ownership changes to adverse media and jurisdiction risk, and what firms need to evidence when they respond.
Read now:
Your latest weekly update from the worlds of money laundering, legislation and regulation, sustainability, gaming and gambling, crypto and sanctions.
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