On 31st May, a news release from the Government of Gibraltar advised the publication of the Financial Services Bill, described as the key part of the Legislative Reform Programme (LRP) that was launched in 2016, and is the single largest review and reform of the territory’s Financial Services legislation. The Bill will provide the legislative framework for all the financial services sectors in Gibraltar. The Bill consolidates and rationalises over 90 financial services legislative instruments into one Act and additional supporting, sector-specific regulations.
On 31st May, RUSI published an article saying that efforts to prevent fundraising for extremist organisations tend to overlook the characteristics of right-wing movements. It looks at how right-wing terrorist and extremist movements raise funds, and how this should be reflected in counter-extremism and counter-terrorism financing strategies.
On 28th May, Stephenson Harwood published a briefing saying that, despite fierce resistance from the art world, January 2020 is likely to see the 5th EU Money Laundering Directive take effect in the UK, requiring auction houses and art dealers to undertake AML checks on customers. It contrasts the current position with the likely position under the new Directive. EU Member States have until 10th January 2020 to give effect to its provisions. Even if the UK leaves the EU under a “no deal” situation, the article says that it is unlikely that the government would let UK AML standards fall behind those applicable elsewhere in Europe. This much was acknowledged by the Department for Business, Energy and Industrial Strategy. One item it highlights as being of particular relevance to the art market is the provision which requires verification checks to be undertaken in respect of any intermediary who is making a purchase on behalf of somebody else.
On 8th May, ENACT Africa published a report saying that there have been few studies of what may be the largest type of organised criminal activity in Africa: land allocation, real estate and property development, which includes infrastructure and the delivery of basic public services such as water and electricity, particularly in urban areas. It says that development in African urban areas occurs in an organised crime environment: and policy-makers, development agencies and practitioners need to rethink, revise and update their basic approaches and methodologies to recognise existing African realities. The report concludes that the involvement of organised crime, including international networks, in urban real estate in Africa makes it unlikely that responsible property development can readily be achieved; but improvements are possible. It makes a number of pragmatic policy and operational recommendations – including taking organised crime into account in all urban development initiatives.
On 28th May, Dentons published an article on using blockchain to improve KYC/AML compliance regimes. It says that, according to a 2016 Thomson Reuters report, financial institutions individually spend anywhere from $60 million to $500 million annually on KYC/AML compliance, but that, in many cases, current compliance programs are manual, fragmented and slow, all of which impedes the client’s business and can potentially damage the client relationship. The article says that it is increasingly clear that the private, permission-based model offered by distributed leger technology (DLT) – a type of blockchain – is best suited for handling KYC and AML compliance, and can solve inefficiencies in existing KYC/AML processes and reduce compliance costs.
Example of a Blockchain-Based KYC/AML Compliance System