KYC360 Weekly Roundup - 9th Sep 2022

Published on Sep 09, 2022

Spotlight on Environmental Crime

This week we lead on the growing menace of environmental crime. According to the FATF, it is one of the most profitable criminal enterprises, generating between £110 billion to $281 billion in criminal gains every year. This pernicious crime covers a broad range of unlawful activities such as illegal logging and mining, the illicit wildlife trade, and waste trafficking; activities that have far-reaching implications for public health, safety, the economy, and damages the very planet we live on.

Russia’s response to Western sanctions was put into sharp focus by the closure of the Nord Stream 1 pipeline. The Kremlin said that sanctions have created technological problems leading to the closure, a claim which the EU has dismissed.

Crypto made the headlines, with the first known case of a nonfungible token (NFT) being created and shared by a “terrorist sympathizer”, fuelling fears that terror groups may use blockchain technology to evade sanctions and raise funds for their terrorist campaigns.

To complete this week’s Roundup, we delve into the world of money laundering, fraud, bribery, and corruption, and deliver the latest news from around the world.


Financial_ServicesMoney Laundering, Fraud & Corruption

Book: Preventing money laundering and terrorist financing: A practical guide for bank supervisors

As gatekeepers to the international financial system and the first line of defence against criminal behaviour, it is crucial that every bank is aware of the risk it faces. This book from the World Bank is specifically designed for bank supervisors looking to devise a programme of anti-money laundering/combating the financing of terrorism (AML/CFT) supervision.

Event: Innovation & technology for anti-money laundering & financial crime prevention

Innovation and technology are not only the hallmarks of increasingly sophisticated criminals, but they are also some of our most important tools in the fight against organised crime. At this important 2-day event (Tues 11th Oct & Wed 12th Oct 1pm The Grand Hotel, Birmingham) experts will explore the innovation and technology themes to ensure you are equipped with the most up-to-date industry knowledge.

US ends 10-year probe into HSBC as ‘preferred financial institution’ for drug cartels

The US Federal Reserve has terminated a 2012 enforcement action with HSBC Holdings for willfully violating its anti-money-laundering obligations, for which it has paid over $2 billion in fines. HSBC’s lax controls enabled drug cartels to move hundreds of millions of dollars through the bank’s Mexican banking subsidiary and into the US.

FATF Webinar: Beneficial Ownership Transparency of Legal Persons

In this webinar, experts discuss: how to stop criminals from hiding their dirty money behind shell companies, how the private and public sectors can help, and how the FATF’s revised Standards can make a difference.

Video: How to navigate and search ICIJ’s Offshore Leaks Database

The Offshore Leaks Database is one of the world’s premiere sources of information on offshore companies, stripping away the secrecy that cloaks entities incorporated in tax havens and exposing the people behind them. This first video in a multi-part series walks you through the basics of how to search more than 800,000 companies, foundations and trusts from the Pandora Papers, Panama Papers, Offshore Leaks and more.

Wyden investigation uncovers major loophole in offshore account reporting

The Senate Finance Committee has released the findings of a year-long investigation into the largest alleged individual tax evasion scheme in US history. It uncovered the ‘shell bank’ loophole in the Foreign Account Tax Compliance Act (FATCA), that allows banks offshore to accept funds from US persons without reporting them to the IRS and was key in the Brockman $2 billion tax evasion scheme.

£1.1bn of COVID small business loans fraudulent

Of the £47bn of bounce back loans handed out to struggling small businesses hit by COVID-19 lockdowns, government sources reveal that £1.1bn has been identified as fraudulent. And while the figure is lower than the £5bn that The National Audit Office estimated to have been fraudulently claimed, this figure only accounts for cases identified to date.

Co-founder of London-based hedge fund charged with FX market manipulation and fraud

Neil Philips, the co-founder and chief investment officer of a hedge fund based in the UK, has been charged with conspiracy to commit commodities fraud, conspiracy to commit wire fraud, commodities fraud, and wire fraud.

UK government steps in to inspect council finances after ‘grave concerns’ over

The leader of Thurrock Council has resigned after the government announced it is sending in inspectors following an investment scandal uncovered by The Bureau of Investigative Journalism. A three-year investigation revealed that at least £138m of public money was unaccounted for following deals between the Conservative-run council and businessman Liam Kavanagh.

Opinion: American real estate is no longer the money launderer’s dream

A swathe of new anti-money laundering laws and regulations is aimed at the real estate industry which according to a report has attracted over $2 billion in illicit funds over a recent five-year period. But according to this opinion piece, many cities and small towns badly need investment and shadowy foreign money is often the only kind on offer.

Bolsonaro under fire over claims family paid for 51 properties in cash

Jair Bolsonaro’s family finances have come under renewed scrutiny after investigations suggest that the Brazilian president and close relatives repeatedly used large sums of cash to pay for 51 properties worth millions of dollars.


RequirementsEnvironmental Crime & Sustainability

FATF report: Money Laundering from Environmental Crime

This FATF Report aims to raise awareness about the link between environmental crime and money laundering. It identifies the methods that criminals use to launder proceeds from environmental crime, together with the tools that governments and the private sector can apply to disrupt and go after these illicit financial flows.

FATF report: Money Laundering and the Illegal Wildlife Trade

The illegal wildlife trade is a major transnational organised crime, which generates $billions in criminal proceeds every year. Wildlife traffickers exploit weaknesses in the financial and non-financial sectors, to move, hide, and launder their proceeds. This practical report provides guidance to countries on the measures they can take to combat money laundering from the illegal wildlife trade.

Video: Duke of Cambridge applauds the FATFs work

The Duke of Cambridge released a video in which he welcomed the FATF’s report on the connection between money laundering and the illegal wildlife trade, calling it a pivotal moment in the fight against the illegal wildlife trade.

“This report will help to improve and coordinate the public and private sectors to detect, disrupt and prevent this crime. Because it is only through prioritising this issue and following the money, that we will stop these criminals in their tracks”.
HRH The Duke of Cambridge

Ex-employees claim radioactive waste ‘everywhere’ at Ohio oilfield facility

Former employees of a radioactive oilfield waste facility in Ohio, covertly handed their work clothes for independent radiological analysis. The levels of the radioactive element radium found in the sludge on a worker’s boots was 15 times federal clean-up limits for the nation’s worst toxic waste sites.

How illegal gold from Indigenous lands gets laundered in Brazil

Coordinated raids on a mining company have revealed how gold mined illegally in Indigenous territories and other protected areas in the Brazilian Amazon makes its way into the legitimate trade. The raids also uncovered strong links between drug traffickers and illegal miners, who use the same trafficking routes.

Bipartisan US Senate Bill to tackle illegal fishing

US Democratic and Republican senators have joined forces to introduce a bill aimed at clamping down on illegal, unregulated and unlicensed fishing. Illegal fishing is said to account for as much of a fifth of the world’s catch, is heavily connected to organised crime, and causes untold ecological damage.

“Money laundering, labor exploitation, corruption and forgery are a small sample of serious crimes commonly committed during IUU fishing today,”
Interpol 2020 report on the extent of the crime

Notorious Kenyan wildlife trafficker extradited to US

Kenya extradited the last member of a prominent wildlife trafficking syndicate to the US, where he is wanted for trafficking at least 190 kilograms of rhino horn and 10 tonnes of ivory. These weights are estimated to result from the killing of 35 rhinos and 100 elephants, poached in Kenya, Uganda, DR Congo, Guinea, Mozambique, Senegal and Tanzania.

Environmental injustices of Coke plants in Alabama

Industrial plants in Birmingham, Alabama, have polluted the air and land across its historic Black communities for over a century. Amidst this environmental injustice, officials continue to fail to right the wrongs that plague the city’s north side.

White House warns US climate efforts threatened by crypto mining 

The White House Office of Science and Technology Policy stopped short of prescribing specific regulations, but a report concluded the US must act to mitigate pollution tied to crypto production. It also directed that the federal government should collect more data on power usage and work with states and the crypto industry to set standards.


Crypto-1Crypto & Virtual Assets

Terror groups turn to NFTs to raise funds and spread messages

The first known case of a nonfungible token (NFT) being created and shared by a “terrorist sympathizer” has come to light. Intelligence experts believe the NFT could be a sign that terror groups may be using blockchain technology to evade sanctions and raise funds for their terrorist campaigns.

Metaverse real estate scammers pose a danger to investors

Crypto investors are ploughing hundreds of millions of dollars into buying up virtual land and criminals are taking note of the trend. As a result, a financial regulator in Alabama is warning of the risks posed by scammers and is leading the fight to combat fraudulent activity.

OFSI orders crypto exchanges to report suspected sanctions breaches in new guidance

The UK’s Office of Financial Sanctions Implementation (OFSI) has informed cryptocurrency exchanges that they must now report suspected sanctions breaches to UK authorities. The decision comes amidst new regulations implemented in order to assuage concerns that Bitcoin and other crypto assets are being used to circumvent sanctions.

Revolut under pressure from regulator over risk of ‘material misstatement’ in auditing

Revolut, a digital bank that earns up to 10% of revenue from crypto trading, has been heavily criticised by the UK accountancy and auditing watchdog, the Financial Reporting Council (FRC). The crypto-friendly digital bank is now under pressure after an “unacceptably high” risk of “material misstatement” was highlighted in the recent auditing of its accounts.



Can the world cope without Russian oil and gas? 

Russia’s claims that the closing of a key gas pipeline is down to “technological problems” caused by Western sanctions have been rejected by the EU Commission. The effect of its closure has severely limited supplies and European countries are struggling with high energy prices as they try to cut their dependency on Russian oil and gas.

Webinar: UK Government Russia & Belarus sanctions

On 21 September 2022 at 11am GMT, officials from UK Government departments including the FCDO, OFSI, DIT and BEIS will host a webinar on Russia and Belarus sanctions. Topics for discussion will include: sanctions legislation overview, new sanctions measures: financial, trade including services, transport, designations of individuals & entities, and humanitarian issues. To register click here.

As Russia condemned the West, Putin’s daughter made dozens of trips to Europe

According to an archive of leaked emails, over 90 bookings for hundreds of hotel rooms for trips to Germany, Sweden, Italy, the UK, and Dubai were made between 2016 and 2020 for Vladimir Putin’s daughter Katerina Tikhonova.

Cybercrime investigators investigate oligarch’s use of crypto to circumvent sanctions

A cybercrime investigation firm has reported that blockchain analysts looking into the financial interests of Russian oligarchs have revealed the increased use of cryptocurrency to evade sanctions.

France’s foreign minister to visit Turkey to discuss threat of Russian sanctions evasion

Catherine Colonna will visit Turkey to stress the importance of its businesses not circumventing Western sanctions on Russia, after the US said Turkish businesses faced being sanctioned.

Sanctions risks increase Turkish bank vulnerability

With Turkey maintaining its ties with Russia, the risk of secondary sanctions against Turkish banks rises. But even if such sanctions are targeted, the central bank’s policies already risk a deeper crisis.

Beijing’s sanctions target Taiwanese farmers

While import bans have been imposed on Taiwanese produce, China has avoided blocking crucial goods such as semiconductors. While the mainland remains the island’s largest trading partner, Taipei wants to diversify and increase trade with the rest of Asia.

Russia sanctions 25 Americans including actors Sean Penn and Ben Stiller

Russia has imposed personal sanctions on 25 Americans. The new list includes actors Sean Penn and Ben Stiller, several US Senators, business leaders, academics and government officials, all of whom are banned permanently from entering Russia.

OFSI may loosen rules on legal fees from sanctioned clients

The head of the Office of Financial Sanctions Implementation (OFSI), the UK’s civil sanctions enforcement agency, is quoted as saying he is considering a step that would make it simpler for law firms to get paid by sanctioned clients.


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