Canada has implemented FATF Recommendation 35 on sanctioning non-compliant financial institutions and businesses through its Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA). The PCMLTFA established FINTRAC to monitor compliance and impose administrative monetary penalties between $100,000-$2 million or imprisonment on violators. However, recent reports found dozens of non-compliant real estate firms in Vancouver, suggesting Canadian authorities need to increase monitoring, education, and enforcement to address potential gaps in compliance.
The Anti-Money Laundering Act of 2020 passed the Senate and House and aims to comprehensively reform and modernize the US anti-money laundering regime. If signed into law, it would codify a risk-based approach, modernize regulations through technology, and expand information sharing and beneficial ownership disclosure requirements. However, the President has indicated he may veto the bill and Congress would need to override the veto.
This document discusses the challenges that global companies face in understanding and complying with diverse anti-corruption and anti-money laundering laws around the world. It notes that many countries have enacted tougher anti-corruption standards based on international conventions. However, the laws vary significantly between countries in terms of what behaviors are prohibited, enforcement approaches, and liability standards. The document highlights differences between laws in the US, UK, and Brazil as an example. It emphasizes that companies must closely monitor changes in foreign laws and strengthen compliance programs given increasing international cooperation on corruption investigations.
OBJECTIVE
Financial Action Task Force (FATF) is the global money laundering and terrorist financing watchdog. Recently on 21st February, 2020, it released a publication titled "Jurisdictions under Increased Monitoring" which included countries in the "Grey List". Among others, Mauritius was one of the jurisdictions in the said list. In this webinar, we shall be discussing the reasons behind the inclusion of Mauritius in such list and analyse the consequence of such inclusion.
Customer Due Diligence: Improving Screening Processes for OFAC Entities and O...SHAUN HASSETT
Update on current OFAC Screening Requirements and How to Improve the Screening Processes as part of your overall Customer Due Diligence Program.
For more information about this topic, please contact SHAUN HASSETT at due_diligence@att.net
Updated FATF List - Jurisdictions with strategic AML-CFT deficienciesMaria García Aguado
The FATF (Financial Action Task Force, also known as GAFI, its French acronym) met in Brisbane (Australia) and held (on 24-26 June, 2015) its XXVI Plenary meeting.
In this meeting, the FATF has updated his public statement identifying jurisdictions with strategic deficiencies in anti-money laundering and countering the financing of terrorism measures (AML/CFT). Authorities and entities subject to AML/FT measures shall adapt their processes to the new changes.
Anti-money laundering and financial crime risks are very topical issues for banks, both large and small. Recent events show the impact these issues can have on banks ranging from HSBC to Banca Privada d’Andorra. In its 2015/16 business plan, the Financial Conduct Authority has said that financial crime is one of its top seven risks, replacing rapid house price growth. We can expect to see sustained regulatory attention in this area.
The FATF is an inter-governmental body that establishes standards for combating money laundering and terrorist financing. It comprises over 200 member countries that have committed to implementing the FATF Recommendations. The Recommendations establish global standards for anti-money laundering and counter-terrorist financing systems. Implementing the Recommendations effectively helps secure financial systems, build terrorism financing tracing capacity, and avoid sanctions.
This presentation by Márcio Issao Nakane, Professor at the Economics Department, University of São Paulo, was made during the discussion on "Addressing competition challenges in financial markets" held at the 2017 Latin American and Caribbean Competition Forum (4-5 April 2017 – Managua, Nicaragua). More papers and presentations can be found at oe.cd/laccf.
The Anti-Money Laundering Act of 2020 passed the Senate and House and aims to comprehensively reform and modernize the US anti-money laundering regime. If signed into law, it would codify a risk-based approach, modernize regulations through technology, and expand information sharing and beneficial ownership disclosure requirements. However, the President has indicated he may veto the bill and Congress would need to override the veto.
This document discusses the challenges that global companies face in understanding and complying with diverse anti-corruption and anti-money laundering laws around the world. It notes that many countries have enacted tougher anti-corruption standards based on international conventions. However, the laws vary significantly between countries in terms of what behaviors are prohibited, enforcement approaches, and liability standards. The document highlights differences between laws in the US, UK, and Brazil as an example. It emphasizes that companies must closely monitor changes in foreign laws and strengthen compliance programs given increasing international cooperation on corruption investigations.
OBJECTIVE
Financial Action Task Force (FATF) is the global money laundering and terrorist financing watchdog. Recently on 21st February, 2020, it released a publication titled "Jurisdictions under Increased Monitoring" which included countries in the "Grey List". Among others, Mauritius was one of the jurisdictions in the said list. In this webinar, we shall be discussing the reasons behind the inclusion of Mauritius in such list and analyse the consequence of such inclusion.
Customer Due Diligence: Improving Screening Processes for OFAC Entities and O...SHAUN HASSETT
Update on current OFAC Screening Requirements and How to Improve the Screening Processes as part of your overall Customer Due Diligence Program.
For more information about this topic, please contact SHAUN HASSETT at due_diligence@att.net
Updated FATF List - Jurisdictions with strategic AML-CFT deficienciesMaria García Aguado
The FATF (Financial Action Task Force, also known as GAFI, its French acronym) met in Brisbane (Australia) and held (on 24-26 June, 2015) its XXVI Plenary meeting.
In this meeting, the FATF has updated his public statement identifying jurisdictions with strategic deficiencies in anti-money laundering and countering the financing of terrorism measures (AML/CFT). Authorities and entities subject to AML/FT measures shall adapt their processes to the new changes.
Anti-money laundering and financial crime risks are very topical issues for banks, both large and small. Recent events show the impact these issues can have on banks ranging from HSBC to Banca Privada d’Andorra. In its 2015/16 business plan, the Financial Conduct Authority has said that financial crime is one of its top seven risks, replacing rapid house price growth. We can expect to see sustained regulatory attention in this area.
The FATF is an inter-governmental body that establishes standards for combating money laundering and terrorist financing. It comprises over 200 member countries that have committed to implementing the FATF Recommendations. The Recommendations establish global standards for anti-money laundering and counter-terrorist financing systems. Implementing the Recommendations effectively helps secure financial systems, build terrorism financing tracing capacity, and avoid sanctions.
This presentation by Márcio Issao Nakane, Professor at the Economics Department, University of São Paulo, was made during the discussion on "Addressing competition challenges in financial markets" held at the 2017 Latin American and Caribbean Competition Forum (4-5 April 2017 – Managua, Nicaragua). More papers and presentations can be found at oe.cd/laccf.
The document summarizes the UK government's Action Plan to combat money laundering and terrorist financing. The Action Plan proposes reforms to the suspicious activity reports (SARs) regime and introduces unexplained wealth orders (UWOs). Key proposals for SARs include prioritizing high-risk entities over low-risk transactions and removing the consent regime. UWOs would allow authorities to seize assets if individuals cannot explain the legitimate source of their wealth. However, some see UWOs as undermining civil liberties and being difficult to implement in practice.
The Financial Action Task Force (FATF) is an intergovernmental organization founded in 1989 that sets global standards and policies to combat money laundering and terrorist financing. The FATF monitors countries' compliance with its recommendations through a peer-review process. It maintains lists of countries, including a gray list for those that are non-compliant but committed to improvement and a black list for high-risk jurisdictions. Pakistan was placed on the gray list in 2018 due to deficiencies in its anti-money laundering/counter-terrorist financing regime and given a deadline of October 2019 to address issues like proscribed groups being able to raise funds.
FCPA Enforcement Tends and Their Impact on Corporate Compliance ProgramsPECB
This presentation was delivered at the ISO 37001 & Anti-Bribery PECB Insights Conference by William Marquardt, Director at Berkeley Research Group LLC in Florida
This document discusses illicit financial flows from developing countries and OECD responses to combat them. It analyzes OECD performance in combating money laundering, tax evasion, bribery, and recovering stolen assets. Key findings include weaknesses in OECD anti-money laundering regulations, beneficial ownership transparency, and developing country capacity for tax information exchange and transfer pricing oversight. The document recommends strengthening these areas and international cooperation to more effectively address illicit financial flows.
Patni wp data management implications of forthcoming systemic risk regulationsPhilip Filleul
Important new agencies established under the Dodd-Frank Act are Financial Stability Oversight Council (FSOC) and the Office of Financial Research (OFR). FSOC will be responsible for identifying risks to financial stability and has authority to designate systemically important financial institutions for heightened regulation. OFR will collect and analyze data to monitor systemic risk and support FSOC and other regulators. The document discusses how OFR may approach its responsibilities to analyze and report on systemic risk, and provides suggestions for how financial firms can prepare for new data reporting requirements.
The document discusses the increasing regulatory requirements placed on appraisal management companies (AMCs) and how carefully selecting an AMC partner can help lenders comply. It outlines the progression of appraiser and AMC regulation starting with the Home Valuation Code of Conduct in 2008 in response to the financial crisis. Key regulations discussed include the Dodd-Frank Act which established federal rules for AMCs in 2015. The document advises lenders to consider an AMC's experience, processes for ensuring quality work and regulatory compliance, and relationships with appraisers when selecting a partner.
The global view on offshore financial centres remains as volatile as ever. With a seemingly growing concern on the legitimacy of previously accepted tax avoidance measures/schemes across the EU and US, as well as the introduction of requirements to maintain directories of beneficial owners for corporate entities incorporated within the EU1 expected to come into force by the end of June 2017 (and the subsequent extension of such to the UK Overseas Territories and Crown Dependencies2), there is a renewed interest to see what the impact of these requirements will be in practice – particularly insofar as it relates to offshore financial centres.
The document discusses money laundering risks related to hedge funds and proposed regulations for anti-money laundering compliance programs. It notes that while hedge funds can be exploited for money laundering, there is little data on the actual amount laundered through them. It summarizes proposed regulations that would require investment advisors to hedge funds to establish anti-money laundering programs and report suspicious activity. The regulations are aimed at increasing oversight of private wealth funding sources that have grown in importance for hedge funds.
In this edition of Regulatory Focus, the experts in Duff & Phelps round up the latest news and publications issued by the Financial Conduct Authority. Read Duff & Phelps Regulatory Focus August 2018 edition here.
Metro Safety Commission and Outlook for State Transit FundingFairfax County
This document discusses the establishment of the Metro Safety Commission (MSC) and the outlook for state transit funding in Virginia. It provides details on the development and purpose of the MSC as an independent safety oversight body for Metro in response to regulations from the Federal Transit Administration. It also outlines declining state revenues for transit capital projects, which will lead to a $1 billion funding gap from 2018-2027 and reduced matching rates for local agencies. Key next steps include identifying replacement transit funding sources and prioritizing projects.
The document summarizes five ways the SEC Enforcement Division has strengthened enforcement efforts and how these changes may affect individuals and companies. The SEC has established specialized investigative units focused on areas like market abuse, structured products, and foreign corrupt practices. It has also streamlined management, improved intake of tips and complaints, and begun using cooperation agreements to encourage cooperation from individuals and companies under investigation.
As of January 1, 2018, lenders subject to the reporting requirements of the Home Mortgage Disclosure Act were required to begin reporting specific new information in accordance with the Consumer Financial Protection Bureau’s final rule issued in October 2015. Find out what you need to know in the areas of data collection, compliance tool and assistance, ethnicity and race data, Regulation B, privacy issues, and best practices
The document discusses anti-money laundering and counter-terrorist financing regulations. It provides definitions of money laundering and terrorist financing under Hong Kong law. It also outlines Hong Kong's anti-money laundering regulatory framework, including the key ordinance, regulatory authorities for financial institutions, and components of supervision and enforcement.
The Volcker Rule places limits on proprietary trading and investments in hedge funds and private equity funds by banking entities. It was approved in December 2013 and takes full effect in July 2015, though entities face various compliance requirements based on their size and activities. Larger entities must implement enhanced compliance programs involving metrics reporting, while smaller entities may only need to update existing policies. The rule presents a significant compliance challenge for banking entities as they prepare their implementation strategies.
This document summarizes discussions from three recent antitrust conferences:
1) The International Cartel Workshop focused on developments in international cartel investigations and leniency programs. Enforcers are increasingly cooperating across borders and emerging economies are strengthening penalties and leniency programs.
2) The Global Forum on Competition discussed the relationship between competition laws and corruption. Effective competition frameworks can increase competition and reduce corruption when they foster compliance and voluntary self-disclosure.
3) The ABA Antitrust Conference brought together practitioners to discuss recent developments in antitrust laws globally. Changes are happening rapidly in many jurisdictions, complicating compliance for multinational companies.
This document provides guidance to financial institutions and other reporting entities on identifying beneficial owners. It outlines a three-step process for identifying beneficial owners of legal persons: 1) Identify natural persons with controlling ownership interest, 2) Identify persons exercising control through other means, and 3) Identify senior management if no one is identified in the first two steps. It also provides guidance on identifying beneficial owners of legal arrangements like trusts. Reporting entities are advised to review source documents like corporate records, partnership agreements, and trust deeds to determine the ownership structure and identify beneficial owners.
This presentation by Prof. Hwang LEE from the Korean University School of Law was made during the discussion on "Sanctions in Anti-trust cases" held at the 15th Global Forum on Competition on 2 December 2016. More papers and presentations on the topic can be found out at www.oecd.org/competition/globalforum/competition-and-sanctions-in-antitrust-cases.htm
This document provides an overview of FCPA risks in mergers and acquisitions. It discusses how acquiring companies can face criminal liability for FCPA violations committed by target companies before and after closing due to successor liability. Thorough pre-acquisition due diligence is important to assess risks and avoid liability. Due diligence should identify potential FCPA violations and inform transaction structure, price, warranties, and integration plans. Recent cases demonstrate how violations can impact deals and result in fines, compliance monitors, and dismissed employees for the successor company.
The Competition Law was issued in Myanmar on February 24, 2015 after more than two years of negotiations between several ministries. The law aims to protect consumers from unfair prices and promote national economic growth by ensuring a competitive market and preventing anti-competitive behaviors like abuse of market dominance and unfair trade practices. However, more clarification is still needed on definitions and procedures for implementing the law. A Competition Commission will be established to investigate violations and enforce penalties, but rules and regulations are still forthcoming. While the law sets out important prohibitions, further details are needed for it to be effectively enforced.
This document provides an overview of key concepts in the United Arab Emirates' (UAE) anti-money laundering (AML) laws and regulations based on the Financial Action Task Force (FATF) standards. It summarizes definitions and requirements around predicate offenses, suspicious activity reporting, international cooperation, and the role of the Central Bank and independent Financial Intelligence Unit. Key articles of the UAE's Federal Decree Law Number (20) of 2018 on money laundering are also briefly explained.
OFAC Name Matching and False-Positive Reduction TechniquesCognizant
Exploration of Office of Foreign Asset Control (OFAC) compliance and strategies to avoid false positives (and negatives), covering watch lists such as specially designated nationals (SDN), customer due diligence,data mining, probabilistic techniques and anti-money-laundering (AML) software.
The document summarizes the UK government's Action Plan to combat money laundering and terrorist financing. The Action Plan proposes reforms to the suspicious activity reports (SARs) regime and introduces unexplained wealth orders (UWOs). Key proposals for SARs include prioritizing high-risk entities over low-risk transactions and removing the consent regime. UWOs would allow authorities to seize assets if individuals cannot explain the legitimate source of their wealth. However, some see UWOs as undermining civil liberties and being difficult to implement in practice.
The Financial Action Task Force (FATF) is an intergovernmental organization founded in 1989 that sets global standards and policies to combat money laundering and terrorist financing. The FATF monitors countries' compliance with its recommendations through a peer-review process. It maintains lists of countries, including a gray list for those that are non-compliant but committed to improvement and a black list for high-risk jurisdictions. Pakistan was placed on the gray list in 2018 due to deficiencies in its anti-money laundering/counter-terrorist financing regime and given a deadline of October 2019 to address issues like proscribed groups being able to raise funds.
FCPA Enforcement Tends and Their Impact on Corporate Compliance ProgramsPECB
This presentation was delivered at the ISO 37001 & Anti-Bribery PECB Insights Conference by William Marquardt, Director at Berkeley Research Group LLC in Florida
This document discusses illicit financial flows from developing countries and OECD responses to combat them. It analyzes OECD performance in combating money laundering, tax evasion, bribery, and recovering stolen assets. Key findings include weaknesses in OECD anti-money laundering regulations, beneficial ownership transparency, and developing country capacity for tax information exchange and transfer pricing oversight. The document recommends strengthening these areas and international cooperation to more effectively address illicit financial flows.
Patni wp data management implications of forthcoming systemic risk regulationsPhilip Filleul
Important new agencies established under the Dodd-Frank Act are Financial Stability Oversight Council (FSOC) and the Office of Financial Research (OFR). FSOC will be responsible for identifying risks to financial stability and has authority to designate systemically important financial institutions for heightened regulation. OFR will collect and analyze data to monitor systemic risk and support FSOC and other regulators. The document discusses how OFR may approach its responsibilities to analyze and report on systemic risk, and provides suggestions for how financial firms can prepare for new data reporting requirements.
The document discusses the increasing regulatory requirements placed on appraisal management companies (AMCs) and how carefully selecting an AMC partner can help lenders comply. It outlines the progression of appraiser and AMC regulation starting with the Home Valuation Code of Conduct in 2008 in response to the financial crisis. Key regulations discussed include the Dodd-Frank Act which established federal rules for AMCs in 2015. The document advises lenders to consider an AMC's experience, processes for ensuring quality work and regulatory compliance, and relationships with appraisers when selecting a partner.
The global view on offshore financial centres remains as volatile as ever. With a seemingly growing concern on the legitimacy of previously accepted tax avoidance measures/schemes across the EU and US, as well as the introduction of requirements to maintain directories of beneficial owners for corporate entities incorporated within the EU1 expected to come into force by the end of June 2017 (and the subsequent extension of such to the UK Overseas Territories and Crown Dependencies2), there is a renewed interest to see what the impact of these requirements will be in practice – particularly insofar as it relates to offshore financial centres.
The document discusses money laundering risks related to hedge funds and proposed regulations for anti-money laundering compliance programs. It notes that while hedge funds can be exploited for money laundering, there is little data on the actual amount laundered through them. It summarizes proposed regulations that would require investment advisors to hedge funds to establish anti-money laundering programs and report suspicious activity. The regulations are aimed at increasing oversight of private wealth funding sources that have grown in importance for hedge funds.
In this edition of Regulatory Focus, the experts in Duff & Phelps round up the latest news and publications issued by the Financial Conduct Authority. Read Duff & Phelps Regulatory Focus August 2018 edition here.
Metro Safety Commission and Outlook for State Transit FundingFairfax County
This document discusses the establishment of the Metro Safety Commission (MSC) and the outlook for state transit funding in Virginia. It provides details on the development and purpose of the MSC as an independent safety oversight body for Metro in response to regulations from the Federal Transit Administration. It also outlines declining state revenues for transit capital projects, which will lead to a $1 billion funding gap from 2018-2027 and reduced matching rates for local agencies. Key next steps include identifying replacement transit funding sources and prioritizing projects.
The document summarizes five ways the SEC Enforcement Division has strengthened enforcement efforts and how these changes may affect individuals and companies. The SEC has established specialized investigative units focused on areas like market abuse, structured products, and foreign corrupt practices. It has also streamlined management, improved intake of tips and complaints, and begun using cooperation agreements to encourage cooperation from individuals and companies under investigation.
As of January 1, 2018, lenders subject to the reporting requirements of the Home Mortgage Disclosure Act were required to begin reporting specific new information in accordance with the Consumer Financial Protection Bureau’s final rule issued in October 2015. Find out what you need to know in the areas of data collection, compliance tool and assistance, ethnicity and race data, Regulation B, privacy issues, and best practices
The document discusses anti-money laundering and counter-terrorist financing regulations. It provides definitions of money laundering and terrorist financing under Hong Kong law. It also outlines Hong Kong's anti-money laundering regulatory framework, including the key ordinance, regulatory authorities for financial institutions, and components of supervision and enforcement.
The Volcker Rule places limits on proprietary trading and investments in hedge funds and private equity funds by banking entities. It was approved in December 2013 and takes full effect in July 2015, though entities face various compliance requirements based on their size and activities. Larger entities must implement enhanced compliance programs involving metrics reporting, while smaller entities may only need to update existing policies. The rule presents a significant compliance challenge for banking entities as they prepare their implementation strategies.
This document summarizes discussions from three recent antitrust conferences:
1) The International Cartel Workshop focused on developments in international cartel investigations and leniency programs. Enforcers are increasingly cooperating across borders and emerging economies are strengthening penalties and leniency programs.
2) The Global Forum on Competition discussed the relationship between competition laws and corruption. Effective competition frameworks can increase competition and reduce corruption when they foster compliance and voluntary self-disclosure.
3) The ABA Antitrust Conference brought together practitioners to discuss recent developments in antitrust laws globally. Changes are happening rapidly in many jurisdictions, complicating compliance for multinational companies.
This document provides guidance to financial institutions and other reporting entities on identifying beneficial owners. It outlines a three-step process for identifying beneficial owners of legal persons: 1) Identify natural persons with controlling ownership interest, 2) Identify persons exercising control through other means, and 3) Identify senior management if no one is identified in the first two steps. It also provides guidance on identifying beneficial owners of legal arrangements like trusts. Reporting entities are advised to review source documents like corporate records, partnership agreements, and trust deeds to determine the ownership structure and identify beneficial owners.
This presentation by Prof. Hwang LEE from the Korean University School of Law was made during the discussion on "Sanctions in Anti-trust cases" held at the 15th Global Forum on Competition on 2 December 2016. More papers and presentations on the topic can be found out at www.oecd.org/competition/globalforum/competition-and-sanctions-in-antitrust-cases.htm
This document provides an overview of FCPA risks in mergers and acquisitions. It discusses how acquiring companies can face criminal liability for FCPA violations committed by target companies before and after closing due to successor liability. Thorough pre-acquisition due diligence is important to assess risks and avoid liability. Due diligence should identify potential FCPA violations and inform transaction structure, price, warranties, and integration plans. Recent cases demonstrate how violations can impact deals and result in fines, compliance monitors, and dismissed employees for the successor company.
The Competition Law was issued in Myanmar on February 24, 2015 after more than two years of negotiations between several ministries. The law aims to protect consumers from unfair prices and promote national economic growth by ensuring a competitive market and preventing anti-competitive behaviors like abuse of market dominance and unfair trade practices. However, more clarification is still needed on definitions and procedures for implementing the law. A Competition Commission will be established to investigate violations and enforce penalties, but rules and regulations are still forthcoming. While the law sets out important prohibitions, further details are needed for it to be effectively enforced.
This document provides an overview of key concepts in the United Arab Emirates' (UAE) anti-money laundering (AML) laws and regulations based on the Financial Action Task Force (FATF) standards. It summarizes definitions and requirements around predicate offenses, suspicious activity reporting, international cooperation, and the role of the Central Bank and independent Financial Intelligence Unit. Key articles of the UAE's Federal Decree Law Number (20) of 2018 on money laundering are also briefly explained.
OFAC Name Matching and False-Positive Reduction TechniquesCognizant
Exploration of Office of Foreign Asset Control (OFAC) compliance and strategies to avoid false positives (and negatives), covering watch lists such as specially designated nationals (SDN), customer due diligence,data mining, probabilistic techniques and anti-money-laundering (AML) software.
HSBC was fined $1.92 billion by US authorities in 2012 for allowing itself to be used to launder money from drug cartels. It failed to properly monitor hundreds of billions of dollars in transactions and had inadequate oversight, with only a few employees reviewing thousands of suspicious wire transfers. Regulators can impose civil fines to deter money laundering, as seen with penalties against HSBC by FINTRAC and FinCEN. These agencies also review financial institutions' anti-money laundering policies and procedures to ensure compliance.
Compliance Vision: 5 AML / CFT trends for 2024office96419
The AML/CFT landscape in 2024 will be shaped by five key trends: 1) FATF will focus on enhancing detection capabilities and effective regulations through a revised methodology. 2) Financial institutions will increasingly integrate advanced technologies like AI and blockchain to strengthen defenses. 3) Sanction screening systems will need continual upgrades to keep pace with changing global sanction lists. 4) A dynamic regulatory environment and push for international cooperation will be important for combating cross-border financial crimes. 5) Public-private partnerships will be crucial for information sharing and an industry-wide approach to preventing financial crimes.
Anti Money Laundering's regulation: current aspects and future forecastsclaudiotarulli3
Presentazione della Tesi "Anti Money Laundering's regulation: current aspects and future forecasts" presentata per il Master in "Antiriciclaggio e Compliance" presso la European School of Banking Management.
This document provides guidance for credit unions on anti-money laundering and countering the financing of terrorism requirements. It discusses the background and regulations credit unions must comply with, including customer due diligence, reporting suspicious transactions, and having appropriate internal controls and training. The deadline of March 31st, 2017 for credit unions to submit their first annual report on anti-money laundering measures is emphasized. Risks particular to credit unions, such as cash transactions, are also reviewed.
StubbsGazette Anti Money Laundering E BookJames Treacy
This document provides guidance to credit unions on anti-money laundering and countering the financing of terrorism requirements. It discusses the background and regulations credit unions must comply with, including customer due diligence, reporting suspicious transactions, and taking a risk-based approach. The deadline of March 31, 2017 for credit unions to submit their first statutory report on anti-money laundering measures is emphasized. Recent inspections found credit unions need significant improvements to comply with legal obligations in this area.
StubbsGazette AML/CFT EBook for Credit UnionsStubbsGazette
A comprehensive guide to Anti Money Laundering/Countering the Financing of Terrorism in the Irish Credit Union Sector (also highly relevant to other regulated sectors)
The document discusses AML/CFT compliance services in the UAE. It notes that governments are increasing scrutiny of AML/CFT processes to fight financial crimes. Firms must comply with minimum standards or face penalties. In 2020, the UAE formed an Executive Office of Anti-Money Laundering to follow international requirements. HLB HAMT provides AML/CFT compliance assessments and advisory services to help organizations develop, implement, and enhance their compliance regimes across multiple sectors. Key services include AML compliance advisory to help financial institutions and designated non-financial businesses comply with changing regulations.
The FATF updated its list of jurisdictions with strategic deficiencies in their anti-money laundering and counter-terrorism financing (AML/CFT) regimes on February 27, 2015. This affects U.S. financial institutions' risk-based approaches. The FATF identified jurisdictions subject to calls for countermeasures, like Iran and North Korea, and jurisdictions requiring enhanced due diligence, like Algeria, Ecuador, and Myanmar. The FATF also removed some jurisdictions from its lists and monitoring processes due to progress made. U.S. financial institutions should consider these changes when reviewing their AML/CFT policies and procedures regarding high-risk jurisdictions.
The real cost of KYC & AML compliance for the financial sector - OndatoOndato
In this report, Ondato explores:
Compliance cost
Budget allocation
Non-compliance penalties
How KYC affects banks’ customers
A solution that cuts costs while maintaining compliance
Source: https://ondato.com/reports/the-real-cost-of-kyc-aml-compliance-for-the-financial-sector/
The real cost of KYC & AML compliance for the financial sector - Ondato.pdfNehmeh Taouk elMeaaz
The document discusses the real costs of KYC (Know Your Customer) and AML (Anti-Money Laundering) compliance for financial institutions. It finds that major European banks spend on average €14,250,000 per year on AML-related costs, with 40% (€5.7 million) spent specifically on KYC compliance. Banks employ an average of 77 KYC officers and spend €17,008 per day on labor costs for these specialists. While technology could help automate and streamline compliance work, most banks only allocate 26% of their KYC budgets to technological solutions. The cost of non-compliance, through regulatory penalties, is estimated to be much higher at $14
Unsgsa strengthening financial integrity through financial inclusionDr Lendy Spires
The document discusses strengthening financial integrity through financial inclusion. It recognizes that financial inclusion, integrity, and stability are compatible and mutually reinforcing. FATF's new recommendations hold potential to bring more people into the formal financial system without compromising efforts against financial crime. However, these risk-based standards are not being widely applied, especially outside FATF jurisdictions. Continued outreach, technical assistance, and capacity building are needed to help countries apply the standards in ways suited to their contexts. National risk assessments should play an important role in balancing financial inclusion and prevention of money laundering. FATF's focus on emerging issues and coordination across sectors can further these goals.
The Anti-Money Laundering Act of 2020: Initial Catalysts, Current Implication...Aggregage
In this session with Elizabeth “Paige” Baumann, she'll cover the Anti-Money Laundering Act of 2020, which also includes the Corporate Transparency Act. She'll take a deep dive into the catalysts that brought on the act, current implications of the act, and what impacts the act has for the future of banking and finance.
Preventing Money Laundering and Combating the Financing of Terrorism (2006)Kalif Rahim
This document provides an overview of money laundering and efforts to combat it. It defines money laundering as disguising illegally obtained money to make it appear legitimate. Money laundering typically involves three stages: placement of money into the financial system, layering through many transactions to obscure origin, and integration back into the system as clean money. International organizations like the UN and FATF have led efforts since the 1980s to criminalize money laundering and strengthen cooperation against it. The economic impacts of money laundering include undermining public trust in the financial system, deterring foreign investment, and distorting asset prices.
Katz, Marshall & Banks partner Lisa Banks has published an updated edition of the CFTC Whistleblower Practice Guide. The guide provides an in-depth look at the legal protections afforded to commodity futures whistleblowers and best practices for CFTC whistleblowers to prepare effective tips, cooperate with a CFTC investigation and claim a whistleblower award. Established by the Dodd-Frank Act, the Commodity Futures Trading Commission's (CFTC) Whistleblower Program protects whistleblowers from retaliation and also provides them with incentives for reporting fraud among entities involved in commodity futures trading. Recently updated with the latest legal developments and information regarding the CFTC's FY2016 enforcement actions and awards, this guide provides readers with a comprehensive, up-to-date explanation of existing law and valuable insights for CFTC whistleblowers and their counsel.
Unsgsa plenary of the financial action task forceDr Lendy Spires
The speaker summarizes the key points from the document:
1. The document discusses the relationship between financial inclusion and combating money laundering and terrorist financing. It argues that financial inclusion and integrity are complementary goals that build stronger financial systems.
2. It notes that nearly half of the world's population lacks access to basic financial services and informal financial tools are hard to regulate, diminishing state revenues and public welfare. Bringing more people into the formal financial system helps with financial monitoring and law enforcement.
3. The speaker encourages the Financial Action Task Force to consider how their standards and assessment methodologies can further promote financial inclusion, such as recognizing its importance to their mission and compiling best practices that facilitate inclusive and
North American countries have implemented anti-corruption laws. Should other areas adopt such practices? What impact would such laws have on business in a region?
Anti-money laundering (AML) controls require financial institutions to monitor transactions and identify suspicious activity that could be related to money laundering. Most financial institutions must perform customer due diligence to verify identities and monitor transactions, using software and third-party services. United States law related to money laundering is implemented under the Bank Secrecy Act and subsequent amendments. Financial institutions must also have written AML procedures that include policies for customer acceptance, customer identification, and transaction monitoring.
1. 1
From the FATF to Canada:
Recommendation 35 (Sanctions) and its Application in Canada
Obrad Grkovic
March 21, 2016
Introduction
Twenty five years ago the newly formed Financial Actions Task Force
(hereafter FATF) has launched its first version of the now renowned 40
Recommendations that outline the international standards on combating money
laundering and the financing of terrorism (FATF on Money Laundering Report,
1990). A quarter of a century later, the FATF Recommendations have developed
extensively with the emerging relevance and importance of both Anti-Money
Laundering (AML) and Counter-Terrorist Financing (CTF) practices globally.
One of the noticeable developments relates to a state’s role in sanctioning,
punishing and penalizing non-compliant financial institutions and designated
non-financial businesses and professionals (DNFBP) that violate AML/CTF
regulations. Namely, in the first FATF 40 Recommendations Report, there are no
clear mentions that state authorities should sanction, punish or penalize financial
institutions and DNFBPs for non-compliance with local AML/CTF regulations.
Instead, the FATF highlighted that competent state authorities are to act as
mentors to financial institutions and DNFBPs and supply them with necessary
guidelines to tackle suspicious activities (FATF on Money Laundering Report,
1990, p.33). Without comprehensive and robust measures to mitigate non-
compliance, financial institutions and DNFBPs would not have reasons to report
suspicious activities to authorities and would not get punished or penalized for it,
which would result increased money laundering activity. This is precisely why the
FATF introduced a specific recommendation addressing this issue.
FATF’s Recommendation 35
In order to more effectively intercept money laundering practices, the FATF
created a recommendation encouraging competent state authorities to sanction,
punish and penalize financial institutions and DNFBPs that do not comply with
local AML regulations (The FATF Recommendations, 2012). The
recommendation reads:
“Countries should ensure that there is a range of effective, proportionate and
dissuasive sanctions, whether criminal, civil or administrative, available to deal
with natural or legal persons covered by Recommendations 6, and 8 to 23, that
fail to comply with AML/CFT requirements. Sanctions should be applicable not
only to financial institutions and DNFBPs, but also to their directors and senior
management.” (The FATF Recommendations, 2012, p.26)
From the above, it is clear that non-compliance of reporting entities, as well
as their directors and senior management, should not be tolerated. This
intolerance should be manifested through a range of mechanisms that do not
2. 2
only include administrative penalties such as financial retributions, but also
criminal sanctions.
Recommendation 27 ties into this point and adds that there should be
“disciplinary…sanctions, including the power to withdraw, restrict or suspend the
financial institution’s license, where applicable” (The FATF Recommendations,
2012, p.23). The power to restrict or suspend the work of financial institutions or
DNFBPs gives competent authorities and the policies they enforce teeth. Having
criminal, civil and administrative sanctions in place, reporting entities will make
an extra effort to maintain all their clients’ records, monitor their transactions
and file suspicious activity reports to authorities, among other things. In order to
put sanctions on a reporting entity, there has to be reasonable grounds for
competent authorities to believe that violations are being made. To do so,
recommendation 27 also suggests authorities to make policies that would give
them power to supervise, monitor, and conduct inspections on financials
institutions and DNFBGs in order to ensure that they all regularly meet the
compliance requirements. Even though states around the world apply the FATF
Recommendations to varying degrees, Canada has taken a serious step in
combatting non-compliance of local reporting entities through its Proceeds of
Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA).
Recommendation 35 and Canada
Canada has made significant strides in suppressing money laundering
activities through the PCMLTFA. In 2000, policymakers revised the act and
through it established the Financial Transactions and Reports Analysis Centre of
Canada (FINTRAC). FINTRAC is Canada’s Financial Intelligence Unit (FIU)
whose purpose is to “facilitate the detection, prevention and deterrence of money
laundering and the financing of terrorist activities” (FINTRAC website). Within
the 2006 amendments of the act, FINTRAC was granted the authority to
sanction, penalize and punish non-compliant reporting entities under Part 4.1
“Notices of Violation, Compliance Agreements and Penalties” and Part 5
“Offences and Punishment” (PCMLTFA, 2015). Both parts describe the
consequences of non-compliance and outline the punishment mechanisms. As
the FATF suggests, the PCMLTFA has put in place a range of criminal, civil and
administrative sanctions ranging from administrative monetary penalties (AMPs
from $100,000 -$2 million) to imprisonment. Classifying violations as minor
(summary conviction), serious (conviction on indictment) or very serious
(conviction of indictment) determines the severity of the sanctions imposed.
Furthermore, the nature of the violation, whether the reporting reporting entity
is an individual or a financial institution/DNFBG, and the compliance history
also impact the specifics of the punishment.
An interesting aspect of Part 4.1 is that instead of solely dissuasively
punishing violating reporting entities, it wants them to learn from their mistakes
in order to be better comply with regulations in the future. This can be seen in
paragraph 72.11 wherein “ […] penalties have as their purpose to encourage
compliance with this Act rather than to punish, the harm done by the violation
and any other criteria that may be prescribed by regulation” (PCMLTFA, 2015,
p.84). One such mechanism entails FINTRAC proposing to financial
3. 3
institutions/DNFBGs the opportunity to enter into a Compliance Agreement with
the purpose of “comply[ing] with the provision to which the violation relates
within the period, and be subject to the terms and conditions, specified in the
agreement” (PCMLTFA Paragraph 73.16 (1) (a), 2015, 86). By entering into such
an agreement, reporting entities not only learn from their mistakes and
incorporate a Risk Based Approach in their compliance framework, but also
receive the privilege to pay a “reduced penalty for the violation if the compliance
agreement is entered into” (PCMLTFA Paragraph 73.16 (1) (b), 2015, 86). Having
such a policy in place shows the commitment of competent authorities not only to
penalize and punish, but also to strengthen compliance measures within
reporting entity structures. Future revisions of the FATF Recommendations
should include this aspect so that reporting entities have the opportunity to learn
from their mistakes and improve their internal compliance policies.
In order to assess the effectiveness and application of Parts 4.1 and 5,
paragraph 73.22 highlights that FINTRAC has the right to publish all of the
information of a case once the proceedings of a violation have officially ended
(PCMLTFA, 2015, 88). Violations are made public on FINTRAC’s “Public notice
of administrative monetary penalties” webpage where descriptions of each case,
the perpetrators, the nature of the violation, and the amount of money paid are
presented. According to the statistics on the same webpage, 68 AMPs have been
imposed from 2008-2015 on non-compliant reporting entities, which resulted in
around $2.2 million of fines in total. FINTRAC’s 2015 Annual Report
alternatively published that it “has issued 73 notices of violation totalling
$5,117,710” (FINTRAC Annual Report 2015, p.10). In either case the numbers
may seem high, however when analyzing the statistics it is clear that each
reporting entity committed minor violations resulting in lower fines. Whether
these statistics indicate that Canadian reporting entities have generally been
complying with regulatory measures or not is still uncertain. Nevertheless,
according to the FATF’s latest Mutual Evaluation of Canada it has praised the
implementation of the AMPs and had no further recommendations or concerns
(FATF’s 6th Follow Up Report, Mutual Evaluation of Canada, 2014).
Gaps in Sanctioning Reporting Entities
Despite having a thorough framework on sanctioning, penalizing and
punishing non-compliant reporting entities, which is in full accordance with the
FATF’s Recommendations, the recent Vancouver real estate dilemma is raising a
lot of questions on the law’s effectiveness. Namely, as the Globe and Mail
reported “dozens of Vancouver-area real estate firms are failing to comply with
federal anti-money-laundering laws that require them to identify who their
clients are and where their money comes from” (18 March, 2016, online). Having
such a large amount of potentially non-compliant reporting entities in one
Canadian city begs the question: how many more potentially non-compliant
reporting entities are there in other Canadian cities? Even though laws against
non-compliance exist, if they are not enforced their purpose is useless. It is clear
that FINTRAC has to put significant resources into monitoring compliance and
sanctioning those that do not comply. Additionally, it has to invest more in
educating reporting entities seeing as many “don’t even understand the laws or
4. 4
what they are supposed to do” and how they can get punished (The Globe and
Mail, 18 March, 2016, online),
Overall, Canada has incorporated all aspects of FATF’s Recommendation
35. It has gone a step further with the Compliance Agreement option, which is
something the FATF ca suggest in future Recommendation updates. Nonetheless,
from the recent Globe and Mail story on the large amounts of non-compliant
reporting entities in Vancouver, it is clear that FINTRAC has to invest more in
monitoring and sanctioning practices so that violations do not go unpunished.
Works Cited
FATF. (2014, Feb.). 6th Follow-Up Report: Mutual Evaluation of Canada. Retrieved
from FATF’s website on 20 Mar. 2016: http://www.fatf-
gafi.org/media/fatf/documents/reports/mer/FUR-Canada-2014.pdf
FATF. (2012). INTERNATIONAL STANDARDS ON COMBATING MONEY
LAUNDERING AND THE FINANCING OF TERRORISM & PROLIFERATION:
The FATF Recommendations. Retrieved from FATF’s website on 20 Mar. 2016:
http://www.fatfgafi.org/media/fatf/documents/recommendations/pdfs/FATF_Reco
mmendations.pdf
FATF. (1990). Financial Action Task Force on Money Laundering: Report and Synopsis
of the Forty Recommendations. Retrieved from FATF’s website on 19 Mar. 2016:
http://www.fatf-gafi.org/media/fatf/documents/recommendations/pdfs/FATF
%20Recommendations%201990.pdf
FINTAC. (2015). Combatting Money Laundering and Terrorist Financing: FINTRAC
Annual Report 2015. Retrieved from FINTRAC’s website on 18 Mar. 2016:
http:/www.fintrac.gc.ca/publications/ar/2015/1-eng.asp
Proceeds of Crime (Money Laundering) and Terrorist Financing Act. Statues of Canada,
c.17. Canada. Department of Justice. 2000. Web. 18 Mar. 2016.
Tomlinson, Kathy. (2016, Mar. 18).Vancouver housing market ‘vulnerable’ to money
laundering. The Globe and Mail. Retrieved from:
http://www.theglobeandmail.com/news/national/vancouver-housing-market-
vulnerable-to-money-laundering/article29285770/