KYC360 Weekly Roundup - 10th Feb 2023

Published on Feb 10, 2023

Protecting Whistleblowers

While whistleblowers are often heralded as unsung heroes who put their livelihoods and lives on the line in the pursuit of the truth, in the past little has been done to protect these courageous individuals. This week we reveal a range of new legislation and initiatives that are being introduced to protect whistleblowers and make it easier, and safer, for them to come forward and report wrongdoings. Yet, despite these advances, recently whistleblowers in both the UK and Switzerland have been dismissed from their jobs or are facing prosecution for their activities. 

The Crypto sector continues to feature in the news as it struggles with the fallout from recent bankruptcies, faces increasing scrutiny from the world’s regulators, while multiple nation states scramble to develop their own version of a Central Bank Digital Currency (CBDC). 

We also deliver updates on international sanctions, the latest legislation, reports, & trends, and complete this week’s Roundup with global news covering ESG, money laundering, and corruption. 

Dutch Senate passes Whistleblower Protection Act

The Netherlands Senate has approved the Whistleblower Protection Act (Wet bescherming klokkenluiders) (Wbk). This law replaces the Whistleblowers Authority Act (Wet Huis voor klokkenluiders) (Wet HvK) and involves some important consequences for employers. This article provides an overview of the most important changes.

Whistleblowers now protected by law in Belgium

As of 16 February 2023, a new law protecting whistleblowers will apply in Belgium. The law transposing the European Whistleblowing Directive aims to protect people who report breaches of EU or national law identified within a private legal entity. While the law stays close to the EU Whistleblowing Directive, it aims to improve and make more effective the application of EU rules, and now also of Belgian law, in several specific areas by protecting whistleblowers.

What do companies have to do to abide by the German Whistleblower Protection Act

On December 16, 2022, the Bundestag passed the Whistleblower Protection Act. The Bundesrat is expected to approve the law in spring of this year, and the law will immediately come into force. Under the Whistleblower Protection Act, within three months of it coming into force companies with 250 or more employees must set up channels so that whistleblowers can report grievances using a secure procedure. For small companies with 50 or more employees, there will be a transition period until December 2023.

US AML whistleblower provision expanded to cover economic sanctions violations and increase incentives for reporting

On Dec. 29, 2022, the Anti-Money Laundering Whistleblower Improvement Act, was enacted as part of the Consolidated Appropriations Act of 2023, amended the Bank Secrecy Act (BSA) in order to expand the scope of reportable violations to include violations of sanctions and bolster incentives for reporting violations. This brief guide outlines its implications, which experts describe as a game changer in enforcing Russia sanctions.

What you should know about EU whistleblowing procedures

Whistleblowing procedures are designed to provide safe channels for staff or other informants to report fraud, corruption or serious wrongdoings in organisations. EU institutions and bodies must have clear whistleblowing procedures in place, an obligation that is placed on them by the EU Staff Regulations which state that officials who become aware of a possible illegal activity should report it without delay.

UK whistleblowing: who to tell and what to expect

This UK government webpage provides all the information that an employee needs to know about whistleblowing procedures including how to make a claim anonymously and confidentially, what the employer or prescribed person will do, and what to do if you’re not satisfied with how your concern has been dealt with. In addition, the Financial Conduct Authority (FCA) provides detailed guidelines on how to make a report.

Cultural attitudes to whistleblowing in Turkey

Although there is no official translation for ‘whistleblowing’, this term has been generally translated into Turkish as ‘bilgi uçurma’, which means the conveyance of information. However, this term can also be understood by Turkish society as ‘spying’ or ‘snitching’. This report looks at how whistleblowing is regulated in Turkey, and how those who report on institutional failings are perceived.

Fall of Kabul whistleblower sues UK government following dismissal

Josie Stewart, who was head of illicit finance at the Foreign, Commonwealth and Development Office (FCDO), is challenging her dismissal with the Public Interest Disclosure Act after she was sacked for giving an anonymous interview about the government’s handling of the chaotic Afghan withdrawal. In her first interview since her dismissal, she said the government’s Afghan withdrawal strategy had been shaped by political concerns back home, with ministers more focused on media coverage and “the political fallout” than saving lives.

Swiss prosecutors investigate 2022 Credit Suisse whistleblower leak

Swiss prosecutors have launched criminal proceedings aimed at the whistleblowers behind the 2022 Credit Suisse data leak which exposed the details of accounts held by wealthy clients allegedly involved in a host of illegal activity. While the identity of the person or people responsible for the leak is unknown, federal prosecutors have now launched a case after receiving a formal complaint from Credit Suisse. Alleged offences include banking secrecy law violations, and making confidential business information available to foreign organisations or their agents.

“I believe that Swiss banking secrecy laws are immoral. The pretext of protecting financial privacy is merely a fig leaf covering the shameful role of Swiss banks as collaborators of tax evaders.”
Anonymous Credit Suisse Whistleblower


Financial_ServicesMoney Laundering, Fraud & Corruption

$10 billion money laundering operation smashed by the Australian Federal Police

AFT officers have dismantled an alleged Chinese-Australian money laundering organisation that moved an estimated $10 billion offshore while amassing a blue-chip property portfolio comprising Sydney mansions, a luxury city building and hundreds of acres of land near Sydney’s second airport. The operation seized properties and luxury assets worth at least $150 million and arrested and charged nine suspects in 13 raids across Sydney.

UAE Central Bank imposes Dh1.8 million fine on finance company for AML violations

The Central Bank of the UAE (CBUAE) imposed the financial penalty for failure to comply with anti-money laundering and anti-terror financing laws. In addition to requesting the company to remedy the violations, the bank also directed the board of directors to meet and rectify issues related to its composition.

“… an examination conducted by the CBUAE that revealed high risk and repeated AML/CFT violations by the finance company in addition to operational failings by the Board of Directors. The findings illustrate that the finance company engaged in high risk, repeated violations and had an overall weak compliance culture relating to policies and procedures designed for AML/CFT.” 
The UAE Central Bank

The IMF and the fight against money laundering and terrorism financing

This report explains why the International Monetary Fund (IMF) is so concerned about the consequences of money laundering, terrorism financing, and proliferation financing. Not only can these crimes make countries less stable, they weaken law and order, governance, regulatory effectiveness, foreign investments, and international capital flows.

Corruption Perception Index 2022 for Western Europe & EU shows a lack of progress

With an average score of 66 out of 100, Western Europe and the EU is once again the top-scoring region in the Corruption Perceptions Index (CPI). However, undue influence over decision-making, poor enforcement of integrity safeguards and threats to the rule of law are undermining governments’ effectiveness and the 2022 CPI reveals that out of 31 countries in the region, only six have improved their scores while seven have declined.

How development banks are collaborating to prevent corruption

Multilateral development banks (MDBs) are coordinating their actions to prevent, investigate, and sanction corruption. This article reveals the discussions that took place at the International Anti-Corruption Conference (IACC) between high-level representatives from the integrity offices of the African Development Bank, Asian Development Bank, European Bank for Reconstruction and Development, European Investment Bank, Inter-American Development Bank, and World Bank Group.

US senator reintroduces bill to crack down on US corruption in China

US Senator Marco Rubio has introduced legislation to modernise the Foreign Corrupt Practices Act (FCPA) by clarifying that the definition of corrupt intent includes actions that excuse the genocide in Xinjiang, advance the Chinese Communist Party’s (CCP) propaganda efforts, or “invest” in core CCP activities, among other actions.

“Name a major American company operating in China — Amazon, Apple, Microsoft, Tesla, Intel — and chances are that company has at some point carried water for the genocidal regime. Those actions are more valuable to the Chinese Communist Party than any monetary bribe. It is time to do something about this.”
Marco Rubio, US Republican Senator

US sanctions former Paraguayan president and bars ex Panama president from entering country citing corruption

Two former Latin American presidents whose links to offshore dealings were exposed in the Pandora Papers have been censured by different arms of the United States government over allegations of corruption. The US Treasury Department’s Office of Foreign Assets Control sanctioned Paraguay’s former president Horacio Cartes and four of his companies, for allegedly engaging in corruption before, during and after his term as president. Meanwhile, according to a designation by the Department of State, the US has barred former president of Panama Ricardo Martinell from entering the country “for his involvement in significant corruption.” Martinelli, who was in office from 2009 to 2014 is accused of accepting bribes in exchange for improperly awarding government contracts during his presidency.

Ukraine: Biggest anti-corruption cases and challenges

The start of 2023 turned out to be very eventful for Ukraine as far as anti-corruption exposures, suspicions, and shifts in cases against corrupt officials are concerned. This report from Transparency International explores what has happened and what conclusions can be drawn.

RequirementsLegislation, Regulation and Sustainability

European Commission establishes AMLA Task Force to pave way for new EU financial watchdog

The EU’s long-term goal of creating a pan-European anti-money laundering called the Anti-Money Laundering Authority (AMLA) has taken another step closer. The European Commission has set up its own task force to help with the setting up of the new authority and will be based within the Commission’s financial services directorate, DG FISMA in Brussels. Commissioner Mairead McGuiness will lead the financial services team, supported by Director General John Berrigan.

Criminal Investigations to watch for in the UK and EU in 2023

Developments to the UK criminal liability regime for corporates are expected to hit the statute books in 2023, with the introduction of new “failure to prevent” offences. As seen with the introduction of the “failure to prevent bribery” offence under section 7 of the Bribery Act 2010, any such expansion of the “failure to prevent” regime will likely have far-reaching, and potentially seismic, consequences.

Is financial crime the hottest trend in FCA enforcement?

The start of a new year is always a good time to look back and take stock of previous activity. This new report reveals the fines the UK’s Financial Conduct Authority (FCA) has imposed from 2019 to 2022 inclusive and the actions the FCA has taken during the first month of 2023. 

A loophole is enabling criminals, oligarchs and kleptocrats to continue owning large chunks of the UK

The clampdown on the use of shell companies to buy up London hasn’t worked. This article explores the huge loophole that still exists, which renders last year’s reform pretty much meaningless, and which almost no politicians have noticed.

“If the government thinks it’s solved the offshore ownership problem, these figures make clear that it hasn’t. In fact, they show that the problem is far larger than anyone appears to realise.”
Anna Powell-Smith, Director of non-partisan thinktank the Centre for Public Data

How UK freeports risk harbouring international crime

The UK government claims that freeports will boost international trade, innovation and economic growth in areas which need it most. Yet, as a briefing paper from the Royal United Services Institute think tank has warned, freeports can aid the illegal import of drugs, wildlife and counterfeit or stolen goods. 

SEC WhatsApp crackdown expands to hedge funds

According to Bloomberg, the Securities and Exchange Commission (SEC) is widening its probe into Wall Street’s use of WhatsApp for conducting business to include major hedge funds. In 2022, the SEC fined a group of top Wall Street banks more than $1 billion over traders and brokers’ use of personal messaging services to discuss investment terms, client meetings and other business. 

Spanish government assisting Morocco to come off the FATF ‘grey list 

Officials in Madrid have confirmed that Spain is discussing how to assist Morocco in its attempts to be removed from the ‘grey list’ of money laundering countries. The move follows a visit from the FATF (Financial Action Task Force) last month where for three days they evaluated the measures implemented by the Government of the Maghreb country.

EU launches green deal industrial plan

The European Commission has announced the launch of its Green Deal Industrial Plan, a series of strategies and initiatives aimed at enhancing the competitiveness of Europe’s net zero industries, and in support of the EU’s transition to climate neutrality. Key areas include creating a simpler regulatory framework, upskilling the European workforce for the green transition, accelerating access to investment and financing, and enhancing global trade cooperation for cleantech and raw materials.

The key drivers of change toward sustainability

Recent severe climate events have resulted in organisations’ Environmental, Social and Governance (ESG) credentials increasing in prominence, particularly as individuals are now looking to their employers to act on wider societal issues. However, environmental sustainability has also emerged as a growing factor in values clashes within the workplace, so this article examines the key drivers in the move toward sustainability.

ESG regulation monthly round-up

In what is certain to be another challenging year for ESG regulation, developments have continued apace throughout January with ESG remaining squarely on the financial services regulatory agenda in the UK and internationally. This latest edition of the ESG regulation monthly round-up, reveals the key focal points of 2023 to date.


Crypto-1Crypto & Virtual Assets

Silvergate’s FTX dealings face fraud investigation

According to Bloomberg, US fraud prosecutors are investigating crypto-focussed bank Silvergate’s dealings with FTX and Alameda Research. The Justice Department’s fraud unit has begun a criminal investigation into Silvergate’s hosting of accounts relating to the businesses, which collapsed late last year. The FTX bankruptcy hit Silvergate hard as the bank held deposits for FTX businesses and Almeda Research, so when the exchange collapsed the bank’s customers withdrew more than $8 billion in digital asset deposits.

FTX asks politicians to return money linked to Bankman-Fried donations

Sam Bankman-Fried paid politicians tens of millions of dollars in campaign contributions before FTX imploded late last year. Now, the bankrupt crypto exchange wants that money back and has said that it is sending “confidential letters” to politicians and other political beneficiaries of Bankman-Fried, his deputies and his companies, asking them to return the money by the end of the month. In a press release the debtors said they “reserve the right” to try and force repayments plus interest through court action.

US court dismisses class-action suit against Coinbase

US District Court Judge Paul Engelmayer has rejected claims made by the plaintiffs that Coinbase sold them unregistered securities and failed to register as a broker-dealer. The class-action suit sought damages from the sale of the digital assets, arguing that they were illegal contracts as Coinbase is not registered with the SEC. However, the judge ruled that regardless of whether the assets were securities, Coinbase’s user agreement “flatly contradicts” the suit’s claim that the firm holds title to the assets traded on its exchange.

Australia reveals plans for crypto regulation

Australia has taken a step toward regulating its crypto sector with a consultation paper to provide more clarity on the direction it will take. The government has steered away from an “exhaustive, bespoke taxonomy” for crypto. Instead, it is opting for a framework that groups crypto into intermediaries or service providers on the one hand and public networks or smart contracts on the other, in order to see if some existing financial regulations will suffice. The Office of the Treasurer of Australia is looking to receive feedback from stakeholders from now until March 3 2023.

South Korea issues guidelines for regulating security tokens as legislation looms

South Korea’s Financial Services Commission (FSC) has published guidelines on which blockchain-based iterations of traditional securities, known as security tokens, will qualify for regulation under the country’s capital markets rules. The guidance comes ahead of highly anticipated regulations that will institutionalise security tokens as the nation seeks a comprehensive way of regulating the crypto and blockchain sector.

Report: UK is ‘likely’ to need digital currency says BoE and Treasury

According to a report in the Daily Telegraph, the Bank of England (BoE) and His Majesty’s Treasury believe the United Kingdom is likely to need to create a central bank digital currency (CBDC) by 2030. It is believed that any new state-backed digital currency (dubbed the “Britcoin” by the press) would sit alongside cash, yet critics fear the move will lead to physical currency being phased out altogether.



US sanctions Iranian drone maker for supplying Russia

The US Department of the Treasury has announced new sanctions on an Iranian drone manufacturer that are being used by the Kremlin against Ukraine. The sanctions apply to eight executives who are members of the Paravar Pars Company’s board of directors and are intended to increase the financial pressure on the company’s leadership after previous sanctions imposed by the US and the EU failed to deter its transfer of Shahed drones to Russia.

“Iranian entities continue to produce UAVs for Iran’s IRGC and military. More broadly, Iran is supplying UAVs for Russia’s combat operations to target critical infrastructure in Ukraine. The United States will continue to aggressively target all elements of Iran’s UAV program.”
Brian E. Nelson, Under Secretary of the Treasury for Terrorism and Financial Intelligence

US charges associate of Russian oligarch with sanctions evasion and money laundering

US prosecutors have charged the fugitive Russian citizen Vladimir Voronchenko with facilitating a sanctions evasion and money-laundering scheme connected to the assets of Russian oligarch Viktor Vekselberg. Washington imposed sanctions on Vekselberg in 2018 over alleged Russian interference in the 2016 US presidential election and again in 2022 over his ties to Russian President Vladimir Putin following the invasion of Ukraine.

Canada’s Russia sanctions are hitting people with no connection to Putin’s war

Canada’s sanctions against Russia which are aimed at targeting the assets of wealthy oligarchs and government officials are hitting the personal finances of people with no ties to the Putin regime. As a result, some Canadian residents who have no connections to the Russian government and don’t support the war on Ukraine, have had their personal savings frozen because of how Global Affairs Canada administers its sanctions.

Ukraine imposes sanctions on Russian nuclear industry

Ukraine has introduced sanctions on the Russian nuclear industry as it continues to repel the Kremlin’s aggression. In a video address to the nation, president Volodymyr Zelensky declared the move by the National Security and Defence Council (NSDC) as another step by Ukraine against a ‘terrorist state’

“The point of our steps is also to bolster the efforts of our diplomats to extend global sanctions to this part of the Russian aggression machine. Russia is the only country in the world that allows its military to shell nuclear power plants and use NPPs as a cover for shelling.”
Ukraine President Volodymyr Zelensky


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