Article: View: Is Brussels taking dirty money seriously?

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View: Is Brussels taking dirty money seriously?

Andreas Dehio and Dr Kerstin Wilhelm, 22 July 2021

Preventing and combating money laundering and terrorist financing has been on the EU’s agenda for more than 30 years. The legal and regulatory framework has been strengthened steadily. But now the European Commission has taken an ambitious step towards beating financial crime by overhauling the current EU anti-money laundering and countering terrorism financing rules.

The legislative proposals that were presented on 20 July will allow the EU to close any loopholes in the current rules where member states apply them differently, and bolster enforcement of the existing framework. Continue reading “Article: View: Is Brussels taking dirty money seriously?”

Article: EU Wants To Ban Anonymous Crypto Wallets In An Effort To Counter Money Laundering And Terrorism

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EU Wants To Ban Anonymous Crypto Wallets In An Effort To Counter Money Laundering And Terrorism

Samyuktha Sriram, 21 July 2021

The European Union (EU) has proposed banning anonymous cryptocurrency wallets as part of a new set of amendments to counter money laundering and terrorism.

What Happened: One of the four legislative proposals introduced on Tuesday proposed a revision of the 2015 regulation on the transfer of funds to trace crypto assets.

“Today’s amendments will ensure full traceability of crypto-asset transfers, such as bitcoin, and will allow for prevention and detection of their possible use for money laundering or terrorism financing,” said the Commission in a statement. Continue reading “Article: EU Wants To Ban Anonymous Crypto Wallets In An Effort To Counter Money Laundering And Terrorism”

Article: fidomoney Launches in the UK

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fidomoney Launches in the UK

PRNewswire, 07 July 2021

YORK, England, July 7, 2021 /PRNewswire/ — fidomoney, an innovative fintech company offering bespoke business current accounts, has launched in the UK. The intelligent, tailor-made solutions fidomoney offer are based around the start-ups and small businesses it serves. fidomoney recognises the individuality of its customers and offers business current accounts with all the additional payment services businesses need – a business simply chooses what works for them and only pays for what it uses. Continue reading “Article: fidomoney Launches in the UK”

Article: AUSTRAC issues know-your-customer, cuckoo smurfing warning

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AUSTRAC issues know-your-customer, cuckoo smurfing warning

James Frost, 28 June 2021

The financial intelligence regulator has warned reporting entities to stay on top of their obligations, following recent changes to the AML-CTF Act that added clarity on know-your-customer requirements and banned certain types of correspondent banking.

AUSTRAC CEO Nicole Rose spoke of the growing awareness of the damage money laundering was doing to the community in a newsletter that reminded entities they needed to verify a customer before letting them make transactions and contained a guide on how to spot a form of money laundering known as “cuckoo smurfing”, which facilitates the transfer of funds overseas without alerting the authorities. Continue reading “Article: AUSTRAC issues know-your-customer, cuckoo smurfing warning”

Article: Money laundering cop AUSTRAC to face grilling under new financial crime inquiry

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Money laundering cop AUSTRAC to face grilling under new financial crime inquiry

Charlotte Grieve, 23 June 2021

The financial intelligence watchdog and big four banks will be probed under a new parliamentary inquiry designed to measure the efficiency and adequacy of the Australia’s anti-money laundering regime.

The Senate approved a motion brought by Labor Senator Deborah O’Neill on Wednesday to launch a formal inquiry into the effectiveness of the laws, regulators and companies tasked with stamping out illicit fund flows. Continue reading “Article: Money laundering cop AUSTRAC to face grilling under new financial crime inquiry”

Article: The real cost of money laundering is not only monetary

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The real cost of money laundering is not only monetary

David Lindsay, 18 June 2021

Money laundering can often be seen as a somewhat nebulous, victimless crime that doesn’t affect the everyday person. But Financial Intelligence Analysis Unit Guidance and Outreach Manager Dr Clara Borg Bonaci tells David Lindsay about how money laundering not only deprives government coffers of funds that could be used for the betterment of society, it also feeds serious predicate crimes such as the trafficking of drugs and arms, human smuggling and child sexual exploitation – ‘horribly destructive crimes that have an immense social cost’

Money laundering is often seen as a victimless crime that doesn’t necessarily affect the average person on the street. What are the ramifications of such practices on a wider scale? What are the hidden predicate crimes and what are their effects on the economy at large?

The truth is that the fight against money laundering and the funding of terrorism can be highly regulatory and involves the implementation of numerous laws, which makes it easier for us, and the entities we supervise, to sometimes forget or be disconnected from why we are actually doing it.

In its simplest form, money laundering is the process of placing funds that have been generated illegally into the financial system in such a way that they are disconnected from the criminal activity, so that even the identity of the person who conducted that crime is obfuscated and the funds cannot be immediately connected to the person or the crime.

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Article: How trade-based money laundering works and its impact on world finances

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How trade-based money laundering works and its impact on world finances

World Economic Forum , 15 June 2021

Trade-based money laundering and associated tax evasion is big business. Financial losses from these crimes in developing countries totalled $9 trillion between 2008 and 2017. Global trade complexities make tackling this type of money laundering difficult, but not impossible.

Money laundering is big business, so big, that to handle the movement of enormous sums of money, fraudsters are increasingly turning to Trade-Based Money Laundering (TBML). In developing countries, TBML and associated tax evasion contributed to almost $9 trillion in losses between 2008 and 2017. Tackling TBML is complicated by cross-jurisdiction trade, multinational companies, and globalized trade pathways. Continue reading “Article: How trade-based money laundering works and its impact on world finances”

Article: True Cost of Financial Crime Compliance Global Report Reveals that Costs Reached $213.9 Billion in 2021

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True Cost of Financial Crime Compliance Global Report Reveals that Costs Reached $213.9 Billion in 2021

Omar Faridi, 15 June 2021

LexisNexis Risk Solutions, a global data and analytics firm, has published its annual True Cost of Financial Crime Compliance Global Report.

The results shared in the new report have been prepared after conducting an extensive survey of 1,015 financial crime compliance decision-makers at established financial institutions such as banks, investment companies, funds managers, and insurers. Continue reading “Article: True Cost of Financial Crime Compliance Global Report Reveals that Costs Reached $213.9 Billion in 2021”

Article: United States: Biden: The Fight Against Foreign And Transnational Corruption Is A National Security Interest

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United States: Biden: The Fight Against Foreign And Transnational Corruption Is A National Security Interest

Wilmer Hale, 14 June 2021

On June 3, 2021, President Biden issued a National Security Memorandum establishing the fight against corruption both at home and abroad as a core United States national security interest and directing the development of a 200-day interagency review designed to culminate in a report and recommendations on how the United States government and its partners can better combat corruption, enhance transparency in the global financial system and promote good governance. When combined with the anti-money laundering (AML) legislation that entered into force with the January 2021 bipartisan passage of the National Defense Authorization Act for Fiscal Year 2021 (NDAA)1- the most significant reforms to US AML laws since the 2001 adoption of the USA PATRIOT Act-and a review of sanctions policy conducted by the Treasury Department, the Memorandum may lead to a heightened focus on illicit financial activity and corruption and may ultimately result in additional resources being allocated to anti-corruption and AML enforcement.

A. Overview of the Memorandum
Defining the need to “counter[] corruption” as a “core United States national security interest,” President Biden advances a multifaceted policy initiative that rests on three key pillars: promoting good governance, ensuring transparency in global financial systems, and combating and preventing corruption. We can expect more detail on President Biden’s anti-corruption strategy with the publication of the Interagency Report after 200 days. President Biden’s focus on promoting good governance, increasing transparency and reducing impunity centers on the following themes: Continue reading “Article: United States: Biden: The Fight Against Foreign And Transnational Corruption Is A National Security Interest”

Article: South Korea Changes Course and Begins Investigating CBDCs

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South Korea Changes Course and Begins Investigating CBDCs

John Anlyt, 13 June 2021

The central bank of South Korea (BOK) announced this week the launch of a second specialist team to supposedly develop a digital currency central bank (CBDC) a year after dissolving their first group of researchers.

The entity said it will rededicate itself to studying everything related to the creation and implementation of a CBDC, and the formation of the new research group appears to be a direct response to China’s plans to issue a digital yuan.

The announcement surprised the crypto ecosystem as it signifies a turnaround in South Korea . A little less than a year ago, the BOK stated that there was almost no possibility of a CBDC in the country, which is why the cryptocurrency and digital currency research task force was dissolved .

The beginning of 2020, with China’s firm decision to launch its own CBDC, caused the BOK to change its stance on the issue and claim that it is now ” in the process of investigating ” the possible issuance of its digital currency.

The BOK clarified that its team of researchers will be small, with an initial appointment of eight members specialized in areas as varied as IT, human resources, economics and management.

Popular exchange LocalBitcoins has been suspending user accounts in some countries in Africa, the Middle East and Asia without notice . As reported by Forbes these weeks, some users can no longer withdraw their bitcoins from the platform, who only communicated that it is due to a “process of improvements.”

The exchange made no further public comment on the matter. The first complaints began to be noticed last week , when LocalBitcoins users in countries such as Afghanistan, Iraq, Nigeria, Syria and Pakistan expressed that they could not withdraw their Bitcoins without deleting their accounts.

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Article: NorthRow: The Challenge of Beneficial Ownership – How to Unravel Complex Money Laundering Webs

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NorthRow: The Challenge of Beneficial Ownership – How to Unravel Complex Money Laundering Webs

Gina Clarke, 09 June 2021

Identifying Ultimate Beneficial Owners can be challenging for many regulated firms. Financial criminals are adept at obscuring the true identities of Beneficial Owners by using complex legal structures and shell companies to launder illicit funds. Cross border corruption and money laundering is happening on a much wider scale with fraudsters hiding behind complex corporate structures.

Greater transparency and public access for company registries is a key focus for both the UK and European Union (EU). However, the latest Transparency International report highlights the lack of availability and accessibility of beneficial ownership data in some EU countries. Continue reading “Article: NorthRow: The Challenge of Beneficial Ownership – How to Unravel Complex Money Laundering Webs”

Article: Lucinity: A Battle Cry for the War Against Money Laundering

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Lucinity: A Battle Cry for the War Against Money Laundering

Francis Bignell, 27 May 2021

AI has improved and developed at an unprecedented rate over the past decade. This has been necessary as fraudsters across the globe have also been keeping up with technology, enabling them to create new scams and commit crimes like money laundering: exploiting old means of protection like outdated AML systems. Evidence for this can be seen in the fact that banks in the US faced $10.4billion in fines due to money laundering violations in 2020.

Lucinity is an AML software company, founded in 2018, with offices in New York and Reykjavik. Using advanced AI systems, the company helps banks discover money laundering to stop the funding of serious crime across the world. Guðmundur Kristjánsson, CEO and founder, more commonly known as GK, is an experienced veteran in the compliance space. Before founding Lucinity, GK served as Director of Compliance Surveillance Technology at Citigroup. He was instrumental in charting Citi’s path to AI in surveillance and responsible for a number of successful products across the compliance space. Before joining Citi, GK served as Director of Product Management at Nice Systems, building and delivering compliance systems to top-tier banks all over the world. Continue reading “Article: Lucinity: A Battle Cry for the War Against Money Laundering”

Article: ThetaRay’s New SONAR Solution Unleashes $25 Trillion Cross-Border Payments Sector by Eliminating Money Laundering Risk

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ThetaRay’s New SONAR Solution Unleashes $25 Trillion Cross-Border Payments Sector by Eliminating Money Laundering Risk

PRNewswire, 24 May 2021

ThetaRay, a leading provider of AI-based Big Data analytics, today launched SONAR, the industry’s most advanced financial crime prevention solution for cross-border payments. By providing full visibility across complex, cross-border transaction paths, the SaaS solution enables banks, financial institutions and businesses to increase their volume of transfers without the risk of being exploited for money laundering, terrorist financing, human trafficking, and narco-trafficking. This announcement follows on the heels of ThetaRay’s recent $31M funding round.

Cross-border payments are crucial transactions that connect local economies throughout the world to the global financial system. However, they often involve a complicated sequence of banks operating across multiple currencies in different countries, making it nearly impossible for banks to have transparency into who the beneficiaries are. Banks and regulators are losing trust in industry AML controls and each other as they search for effective measures to confront the threats and reduce and remove risk from their ecosystem. This limits industry growth and prevents underserved economies from accessing global capital. Continue reading “Article: ThetaRay’s New SONAR Solution Unleashes $25 Trillion Cross-Border Payments Sector by Eliminating Money Laundering Risk”

Article: London startup fighting against financial crime with ML picks $70M from Goldman Sachs

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London startup fighting against financial crime with ML picks $70M from Goldman Sachs

UKTechNews, 21 May 2021

London-based global data technology company – ComplyAdvantage transforming financial crime detection has announced a fresh investment from Goldman Sachs Growth Equity (“Goldman Sachs”).

While the terms of transactions were not disclosed, the Machine Learning (ML) scaleup has extended its Series C investment to $70 million with this new Goldman Sachs investment. Pouring fresh investment into oversubscribed Series C funding. It is an extension to the company’s oversubscribed Series C funding announced in July 2020. With this, Goldman Sachs joins a growing list of the company’s world-class investors, including the Ontario Teachers’ Pension Plan Board, Index Ventures, and Balderton Capital. Continue reading “Article: London startup fighting against financial crime with ML picks $70M from Goldman Sachs”

Article: Fraud, money laundering and the COVID-19 Pandemic

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Fraud, money laundering and the COVID-19 Pandemic

Tracy Molino, Anthony Scalia, 19 May 2021

As discussed in our four-part series, the COVID-19 pandemic has accelerated a trend away from using cash and other “touch-based” payment methods. This acceleration has been coupled with an increase in digital and contactless payment methods. The ongoing lockdown measures and stay-at-home orders have directly impacted consumer habits, resulting in consumers conducting their shopping online and away from retail stores, ordering their meals via delivery apps instead of dining in restaurants, and banking online as opposed to stopping by the teller on their commute home from work.

While the continued shift toward digital and contactless payments has been a driving force behind economic recovery, it is not without its risks for consumers and businesses, potentially creating an online environment ideal for fraudsters and money-launderers. In this insight we examine recent developments in this space in the context of the COVID-19 pandemic. Continue reading “Article: Fraud, money laundering and the COVID-19 Pandemic”