Top stories this week:
FinCEN fines UBS $125m for repeat AML failures | OFAC amends Venezuela sanctions licence | FCA finalises streamlined UK transaction-reporting rules
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, FinCEN has imposed its largest penalty against a broker-dealer for Bank Secrecy Act violations, while a US Senate investigation has raised concerns about banks’ handling of suspicious transactions linked to Jeffrey Epstein. The FCA has also finalised reforms intended to simplify the UK transaction-reporting regime.
In the fast-paced world of sanctions, the US Treasury has amended a general licence concerning Venezuela’s state-owned oil company and updated its counter-terrorism sanctions listings. And OFAC’s removal of an Iraqi airline and associated aircraft from its sanctions list, alongside an update to the listing of an individual linked to the airline.
We round off this week's roundup with details of our upcoming webinar, "The PEP Screening Gaps Regulators Are Finding and How to Close Them".
KYC & AML
FinCEN fines UBS $125m over repeat anti-money laundering failures
The US Financial Crimes Enforcement Network has imposed a $125m civil penalty on UBS Financial Services for wilful Bank Secrecy Act violations, marking the largest penalty FinCEN has issued against a broker-dealer. The regulator found that UBS failed to correct weaknesses identified in a 2018 enforcement action and did not appropriately monitor more than 50,000 foreign-currency wire transfers worth over $10bn. FinCEN also identified deficiencies in customer due diligence involving high-risk clients with links to Russia and Latin America, as well as failures to report hundreds of suspicious transactions promptly. UBS must conduct a retrospective review of previously undetected transactions and commission an independent assessment of its AML programme.
Senate investigation alleges banks failed to escalate Epstein-linked transactions
A four-year investigation led by US Senate Finance Committee ranking member Ron Wyden has alleged that major banks failed to report suspicious financial activity connected to Jeffrey Epstein adequately or promptly. The investigation examined suspicious activity reports, court filings, litigation records and correspondence with financial institutions and the US Treasury. Its report alleges that Epstein was able to transfer hundreds of millions of dollars through the financial system while institutions delayed reporting potentially suspicious activity. The report also proposes changes to federal AML laws, including enhanced reviews of transactions involving ultra-high-net-worth customers and stronger penalties for repeated failures to report suspicious activity.
FCA finalises streamlined UK transaction-reporting rules
The Financial Conduct Authority has published final rules intended to simplify the UK transaction-reporting regime and reduce unnecessary reporting requirements. The reforms will reduce the number of reporting fields from 65 to 52, remove obligations covering seven million instruments traded only on EU venues, exclude foreign-exchange derivatives from the regime and shorten the standard retrospective reporting period from five years to three. The FCA expects the changes to reduce firms’ annual reporting costs by more than £100m. The new regime will take effect on 3 April 2028, with the regulator adopting a flexible supervisory approach in certain areas during the implementation period.
Sanctions
OFAC delays authorisation concerning Venezuela’s 2020 sovereign oil bond
The US Treasury’s Office of Foreign Assets Control has issued Venezuela General Licence 5Y, delaying the effective date of an authorisation covering certain transactions involving the Petróleos de Venezuela 2020 8.5 per cent bond until 17 September 2026. OFAC also amended its related frequently asked question to reflect the revised timetable. Until the licence becomes effective, the authorisation concerning transactions involving the bond remains unavailable under the relevant provision of Executive Order 13835.
OFAC removes Iraqi airline and aircraft from counter-terrorism sanctions list
OFAC has removed Fly Baghdad Airlines Company, also known as Iraq Express, and two Boeing 737 aircraft operated by the company from its Specially Designated Nationals list. The authority also amended the listing of Basheer Abdulkadhim Alwan Al-Shabbani, replacing his stated connection to Fly Baghdad with a link to Iran’s Islamic Revolutionary Guard Corps-Quds Force. The changes require sanctions-screening systems and associated customer and counterparty records to be updated to reflect the revised designations.
KYC360 News
Webinar - The PEP Screening Gaps Regulators Are Finding and How to Close Them
Join Shilo Grayson, Regulatory Strategy Specialist at KYC360, on the 12th August, for a practical guide to understanding PEP risk, evolving regulatory expectations and what effective PEP controls look like in 2026.
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Your latest weekly update from the worlds of money laundering, legislation and regulation, sustainability, gaming and gambling, crypto and sanctions.
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