KYC360 Weekly Roundup

Published on Oct 20, 2023

Top stories this week: 

Clearer rules on the European Commission’s AML package proposal | Just one in three law firms are compliant with the AML regime | Sanctions against the Palestinian militant organisation’s financial network and Hamas members

Welcome to this week’s AML Roundup. In our anti-money laundering news this week, there is a call for clearer rules on the European Commission’s AML package proposal. The RBI (Reserve Bank of India) has revised it’s KYC guidelines and a report from the Solicitors Regulation Authority show that just one in three law firms are compliant with the AML regime.

We have news on the exam priorities from the SEC which includes an AML program. As well as details on two reports that show that the UK authorities opened just 23 cases against bankers and financial insiders for failing to report suspicions of money laundering.

Crypto news includes recommendations from the European data protection watchdog for changes to draft legislation for a digital euro to boost privacy standards. In gambling news, Peru becomes the third South American country to regulate gambling, with rules coming into effect in Feb 2024.

To complete this week’s Roundup, we provide you with further money laundering, fraud, corruption and bribery updates from around the world. In addition, there is news on sanctions against the Palestinian militant organisation’s financial network and a group of 10 Hamas members.

 

Financial_ServicesMoney Laundering, Fraud & Corruption

Two separate reports have indicated UK authorities may have been failing to prosecute “wealthy” people for ignoring red flags

Two reports which include 10 years’ worth of data from 2012 and 2021, show that the UK authorities opened just 23 cases against bankers and financial insiders for failing to report suspicions of money laundering. Prosecutors are being accused of being too timid when it comes to opening cases against financiers for ignoring suspicious activity. And very few “wealthy” individuals faced consequences for tax fraud last year.

AML compliance is among one of the priorities in the SEC 2024 exam

The Securities and Exchange Commission’s Division of Examinations has released their exam priorities for 2024. This is to inform investors and registrants of the key topics and risks in the next 12 months. AML compliance was among one of these priorities. They want to check firms are appropriately adapting their AML program to their business model and associated risks. Therefore ensuring they have an adequate customer identification program, including understanding beneficial owners of legal entity customers.

Call for clear rules on European Commission’s Anti-Money Laundering (AML) package proposal

The European Parliament and Council are finalising views on the proposed AML package. The Parliament highlights in a recent paper that rules surrounding identifying UBOs “have to be calibrated correctly and fit well within customer due diligence processes”.

The RBI (Reserve Bank of India) has revised it’s KYC guidelines

On Wednesday the Reserve Bank of India announced changes to their KYC guidelines, stating that they now require banks and NBFCs (non-banking financial companies), to update customer data periodically on a risk-based approach.

 

RequirementsLegislation, Regulation and Sustainability

Just one in three law firms are compliant with AML regime according to the Solicitors Regulation Authority (SRA)

The Solicitors Regulation Authority (SRA) has released it’s latest Anti-Money Laundering (AML) annual report showing the regulator’s stance and approach to AML regulation for law firms. They have completed over 177 AML inspections in the last 12 month and found that only 1 in 3 firms were fully compliant and just over 51% were partially compliant.

SEBI, Securities and Exchange Board of India have issued an amendment to their AML guidelines

The changes have been made to the Anti-Money Laundering (AML) Standards and Combating the Financing of Terrorism (CFT) /Obligations of Securities Market Intermediaries under the Prevention of Money-laundering Act, 2002 and Rules framed there under.

 

Gambling_GamingGaming and Gambling

Gambling regulations approved in Peru

Coming into effect on 9 February 2024, Peru will be the third South American country to regulate gambling. The document formerly known as the Supreme Decree 005-2023-Mincetur, sets out the technical and regulatory requirements for gambling operators wanting to operate in Peru. The law is set to enter effect 120 days from the issuing of the regulations. Operators therefore have a tight schedule to comply with the new rules.

 

Crypto-1Crypto & Virtual Assets

The European data protection watchdog recommends changes to draft legislation for a digital euro to boost privacy standards

The European Central Bank has moved into the preparation phase of the digital euro. The European Data Protection Board and the European Data Protection Supervisor says the regulation should “further clarify” the data protection responsibilities of the bank and payment services providers. They also advised a “privacy threshold” for digital transactions so neither offline or low-value transactions are traced for AML purposes.

 

Sanctions-1Sanctions

The US has announced sanctions against the Palestinian militant organisation’s financial network and a group of 10 Hamas members

The Treasury Department’s Office of Foreign Assets Control have targeted members who manage a Hamas investment portfolio.  These include a Qatar based financial facilitator with ties to the Iranian regime, a key commander in Hamas and a Gaza based virtual currency exchange.

Russia Sanctions Regulations: UK Court of Appeal Expands Scope of ‘Control’

Earlier this month a UK Court of Appeal provided a judgement, expanding the scope of ‘control’ under Regulation 7(4) of the Russia (Sanctions) (EU Exit) Regulations 2019 (the Regulations). This week, the FCDO, who are responsible for the UK’s financial sanctions policy as well as the sanctions list, issued an alert. The OFSI who are responsible for sanctions enforcement supported the alert which indicates the UK government is considering its impact, in particular, that NBT is controlled by a DP by virtue of the DP’s political office.

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