AML Roundup - 23rd Jun 2023 - Speeding up digital KYC

Published on Jun 23, 2023

Money Laundering, Fraud & Corruption

Financial Services firms should invest more in digital KYC and model what good looks like

This article discusses the balance between speed and accuracy when onboarding customers and performing KYC checks. It’s urging a greater focus on accuracy and the importance of data and technology to get there.

Google Cloud launches AI-powered AML tools

Google are launching an ‘Anti-Money Laundering AI’ application programming interface (API) that does away with traditional rules-based programming, instead relying on machine learning to identify risks.

European Banking Authority (EBA) publishes its latest report on the money laundering and terrorist financing risks associated with EU payment institutions

The EBA’s latest findings suggest that risks in the sector may not be being assessed and managed effectively by institutions and that money laundering and terrorist financing controls are often insufficient. It goes on to discuss how the failure to manage risks effectively is impacting the integrity of the EU’s financial system.

India’s central bank, the Reserve Bank of India, amends its Master Direction on KYC

The Master Direction regulates the customer due diligence process undertaken by entities regulated by the RBI. Changes include lowering the thresholds to identify beneficial owners, enhancing customer due-diligence rules and introducing a clear definition for Politically Exposed Persons (PEPs).

Legislation, Regulation and Sustainability

EU Council reaches agreement on proposals for a nature restoration law

The proposals suggest the introduction of recovery measures for at least 20% of the EU’s land and sea areas by 2030. This will be extended to all ecosystems in need of restoration by 2050. Specifically, it sets legally binding targets for nature restoration from agricultural land and forest to marine, freshwater and urban ecosystems.

Bridgetown Initiative demands made at Paris Financial Summit

Here’s an explainer on the Bridgetown Initiative and what’s being asked for at this week’s financial summit being hosted by France’s President Macron in Paris.

Gaming and Gambling

NHS and GambleAware back statutory levy on gambling operators

Suggested in the recently published Gambling Act white paper, the NHS and charity GambleAware have called for a statutory levy on gambling operators to be introduced to fund programmes and treatment for gambling-related harm.

Malta’s parliament approves controversial gaming law

The law orders Maltese courts to refuse to recognise or enforce any foreign judgements against Malta-licensed operators active in the European market. The EU is contesting this citing previous precedent they say, does grant them the right to prevent Malta-based businesses from taking bets in their jurisdictions. This ambiguity comes at a time where there are a number of ongoing German and Austrian lawsuits regarding the legality of some operator’s activities in those countries.

Sweden considering higher penalties for gambling operators breaching the country’s money laundering regulations

Currently, the penalties for breaching money laundering regulations are lower than those for breaching gambling regulations. Given that the offences are often more serious, a memorandum published on Monday suggests raising money laundering penalties to be in line with those imposed for gambling breaches.

Crypto & Virtual Assets

UK may be edging closer to launch of a retail Central Bank Digital Currency (CBDC)

The Bank of England and the Bank for International Settlements (BIS) completed their latest round of testing for a CBDC on 16 June. They are experimenting with a digital version of the pound, that’s been coined (pardon the pun) ‘britcoin’. According to the BIS, the testing has provided valuable insights for the implementation of a retail CBDC.

US Securities Clarity Bill seen as helpful first-step for crypto regulation

Amongst the arguments going on in the US over how Crypto currencies should be regulated, this recently introduced bill designed to provide clarity to the regulatory classification of digital assets, is seen as a positive first step

Sanctions

UK to maintain sanctions until Russia agrees to pay compensation to Ukraine for rebuilding

The British government is to introduce legislation to keep Russian assets frozen until Moscow has agreed to pay rebuilding compensation to Ukraine. Britain has so far frozen more than £18bn worth of Russian assets through sanctions and current estimates put the rebuilding and recovery costs in Ukraine at more than $400bn (according to calculations by the World Bank, United Nations, European Commission and Ukraine).

The importance of financial integrity for Ukraine’s reconstruction

Here Tom Keatinge, the director of the Centre for Financial Crime and Security Studies at the Royal United Services Institute (RUSI), discusses the importance of financial integrity to drive the rebuilding of Ukraine after the war. Central to rebuilding confidence he argues, is the need to ensure that Ukraine’s financial system has integrity and resilience. This is needed to ensure that it’s protected against those who might seek to take advantage of the reconstruction process to enrich themselves and steal from the Ukrainian people.

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