KYC360 Weekly Roundup - 29th November 2024

Published on Nov 29, 2024

Top stories this week: 

U.S. Lawmakers Warn of Hong Kong’s Evolving Role in Global Financial Crime | FCA Sets Out Five-Year Strategy Amid Criticism from MPs

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, U.S. lawmakers warn of Hong Kong’s evolving role in global financial crime. Also, the FCA set out its five-year strategy amid criticism from MPs and UBS-acquired Credit Suisse was cleared of its 2022 money laundering conviction.  

In the fast-paced world of sanctions, an appeals court removed OFAC sanctions from cryptocurrency mixer Tornado Cash and it was revealed that the UK has only issued one fine so far for breaches of Russian sanctions.  

In the corruption space, China investigated a defence minister for corruption.  

We round off this week’s roundup with an opportunity to watch the full replay of our latest webinar, “Lessons from TD Bank and How to Avoid Billion Dollar Fines”.  

Financial_ServicesKYC & AML

FCA sets out five-year strategy amid criticism from MPs 
The UK Financial Conduct Authority (FCA) has set out its five-year strategy to support the competitiveness of the UK economy. Key priorities include improving market resilience, reducing financial crime and fostering competition. However, city lawyers have expressed scepticism, labelling the approach as overly familiar and questioning its effectiveness. Meanwhile, a report by the All-Party Parliamentary Group on Investment Fraud and Fairer Financial Services has criticised the FCA as "incompetent at best, dishonest at worst." They cited a lack of accountability and a failure to protect consumers after an examination of the regulator spanning nearly three years.  

U.S. lawmakers warn of Hong Kong’s evolving role in global financial crime 
U.S. lawmakers have raised alarms about Hong Kong’s evolving role in global financial crime, urging Treasury Secretary Janet Yellen to reassess its banking ties. They highlight Hong Kong’s involvement in sanctions evasion, illegal exports to Russia, and facilitation of oil sales for Iran. 

UBS-acquired Credit Suisse cleared of 2022 money laundering conviction
Switzerland's Federal Court overturned Credit Suisse’s 2022 money laundering conviction as a result of a legal technicality stemming from the death of a key ex-employee involved in the case. The initial ruling had fined the bank for failing to prevent a Bulgarian cocaine gang’s activities between 2004 and 2008. UBS, which acquired Credit Suisse after its collapse in 2023, welcomed the decision, while the Swiss attorney general’s office is considering further action.

Italy’s Bruna Szego selected as chair of new European AML authority 
Bruna Szego, who is the Head of AML Supervision at Banca d’Italia, has been selected to chair the EU's new Anti-Money Laundering Authority (AMLA) following a decisive European Parliament committee vote. Szego emphasised technological innovation, transparency and coordination to combat financial crime. Backed by Italy’s Prime Minister Giorgia Meloni and the EPP, her appointment awaits formal ratification in December.  

Court documents reveal how drug cartels exploit cryptocurrency Tether to launder funds 
New court documents have revealed how Mexican and Colombian drug cartels exploit Tether (USDT) for money laundering by moving millions through cryptocurrency transactions. U.S. authorities highlighted its role in cross-border schemes tied to cocaine seizures. 

UK banks see AML as one of the top use cases for AI  
A new report from the Bank of England and the FCA has revealed that banks see AML as an area with one of the highest expected benefits from AI. Specific areas expected to see benefits include operational efficiency, productivity and cost base.  

TD Bank set to appoint compliance monitors  
TD Bank is reportedly appointing compliance monitors to enhance AML controls and track its progress to regulators following a $3 billion settlement with U.S. authorities for serious AML violations. 

 

SanctionsSanctions

Appeals court removes OFAC sanctions from cryptocurrency mixer Tornado Cash
A U.S. appeals court has overturned the Treasury Department's 2022 sanctions against cryptocurrency mixer Tornado Cash, ruling that the Office of Foreign Assets Control (OFAC) exceeded its authority. The OFAC had accused Tornado Cash of laundering over $7 billion for entities like North Korea's Lazarus Group. The court determined that Tornado Cash's immutable smart contracts don't qualify as "property" under federal law and therefore fall outside OFAC's regulatory scope. 

UK has only issued one fine for breach of Russian sanctions
The UK's Office of Financial Sanctions Implementation (OFSI) has only issued one fine of £15,000 for violations of Russian sanctions since their implementation over two years ago. This penalty was directed at Integral Concierge Services Limited for providing property management services to a sanctioned individual. Giles Thomson, the Treasury's director of economic crime and sanctions, acknowledged the low number of fines and anticipates more enforcement actions in the future. 

U.S. imposes sanctions against Maduro-aligned senior Venezuelan officials 
The U.S. has sanctioned 21 senior Venezuelan officials for suppressing opposition in President Nicolás Maduro’s contested July 28 election victory. Maduro’s forces reportedly used repression, arrests and violence against dissenters.

 

CryptoCorruption

China investigates defence minister for corruption  
China’s Defence Minister Dong Jun is under investigation for alleged corruption according to reports. The alleged probe is part of President Xi Jinping’s ongoing anti-corruption campaign and it follows scrutiny of other top officials in China’s military. 

 

Resources

KYC360 News

Webinar Replay: Lessons from TD Bank and How to Avoid Billion Dollar Fines
Gain insights from Stephen Platt, founder of KYC360 and Tom Devlin, CCO at KYC360, in a deep dive into what went wrong at TD Bank and the key lessons that financial institutions can learn from its $3 billion fine. The full webinar is now available to watch on-demand. 

Watch webinar

 

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