Day: October 11, 2019

On 11^th October, an Occasional paper from RUSI examines the effectiveness of the current AML model, with particular reference to the financial services sector, and makes 8 relevant recommendations to enhance the model’s future effectiveness.  One of the comments made is about the growing attempt to transform reactive financial crime ‘compliance’ cultures into proactive ‘risk management’.  It says that there are early indications that such efforts, combined with initiatives to increase organisational agility, deploy new technology and improve partnerships with other financial institutions and the public sector, are improving the efficiency of the current AML model.  This helps, it argues, counter the “fragmentation” – between countries, private and public sectors, and individual institutions – that leads to financial institutions having a narrow view of who their clients are, and what their behaviour might signify – making potential criminality harder to detect.

https://www.rusi.org/sites/default/files/20191011_deep_impact_web.pdf

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An article from Appleby on 11^th October is concerned with the Incorporated Segregated Accounts Companies Act 2019, described as a companion to the Segregated Accounts Companies Act 2000.  It says that the use of SAC has been expanded to include areas such as the funds industry.  The article sets out to provide some leading examples of the application of the ISAC Act to the financial services and other sectors.  The SAC and ISAC appear akin to the PCC (protected cell companies) and ICC (integrated cell companies) available elsewhere and, like them, were originally seen as chiefly (or solely?) for the insurance sector.  The article says that a key feature of both an SAC and an ISAC is that the assets of each individual segregated account, or cell, will not be available to the creditors of any other cell.

https://www.applebyglobal.com/publications/purpose-built-isac-a-boon-for-bermuda/

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On 11^th October, OFAC advised that sanctions had been imposed on Kur AJING ATER, a citizen of Equatorial Guinea, and Ashraf Seed Ahmed AL-CARDINAL, a Sudanese national, together with 4 entities sharing the Al Cardinal name and 2 other entities.  Those designated included a UK company, ALCARDINAL GENERAL TRADING LIMITED, a Dubai and a Kenyan company.

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20191011.aspx

https://home.treasury.gov/news/press-releases/sm790

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On 10^th October, Dark Reading published an article on a report from security firm Webroot which found that 1 in 4 malicious URL employed a legitimate domain, making it more difficult for potential victims to spot possible dangers, and that attackers attempting to dodge more advanced security defences increasingly are adopting more sophisticated techniques to fool victims with their malicious e-mail messages and websites.  It is said that, in the vast majority of cases — 94% — the attacker used an URL shortener to mask a malicious domain in order for it to appear legitimate.

https://www.darkreading.com/threat-intelligence/attackers-hide-behind-trusted-domains-https/d/d-id/1336054

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On 11^th October, an article from Eversheds Sutherland reported on a proposed revised methodology to be used in the creation of a new EU blacklist of ‘high-risk third countries’ with strategic AML/CFT deficiencies.  It examines the proposed revisions to the methodology for a future EU blacklist, and considers whether these are likely to address the EU Council’s earlier criticisms of a previous draft list.

https://www.eversheds-sutherland.com/global/en/what/articles/index.page?ArticleID=en/Fraud_and_financial_crime/Back_to_Black_but_not_quite_yet-Revised_methodology_agreed_but_no_new_EU_blacklist_before_2020

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A news release from the EU Council on 10^th October advised that the EU Council had agreed to remove the UAE and the Marshall Islands from the EU’s list of non-cooperative jurisdictions for tax purposes.

The list now comprises –

• American Samoa
• Belize
• Fiji
• Guam
• Oman
• Samoa
• Trinidad and Tobago
• US Virgin Islands
• Vanuatu

It also found Albania, Costa Rica, Mauritius, Serbia and Switzerland to be compliant with all commitments on tax co-operation.  The UAE and the Marshall Islands have both passed the necessary reforms to implement the commitments they had made to improve by the end of 2018 their tax policy framework by introducing economic substance requirements.  Albania, Costa Rica, Mauritius, Serbia and Switzerland have implemented ahead of their deadline all necessary reforms to comply with EU tax good governance principles, and will be removed from the “grey” list.

https://www.consilium.europa.eu/en/press/press-releases/2019/10/10/taxation-2-countries-removed-from-list-of-non-cooperative-jurisdictions-5-meet-commitments

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On 10^th October, Irish law firm Matheson published an updated version of the Matheson AML Toolkit, a guide to AML in Ireland.  It includes a consolidated version of the 2010 Act, a document which details some of the key changes brought about by the 2018 Act, an overview of the Joint Committee Guidelines on Money Laundering and Risk Factors, an analysis of the finalised Anti-Money Laundering and Countering the Financing of Terrorism Guidelines for the Financial Sector, consideration of the 2019 Bill intended to transpose the 5^th EU Money Laundering Directive, and a timeline which highlights the key developments in the recent past as well as anticipated developments on the horizon in the AML space.

https://www.matheson.com/news-and-insights/article/the-matheson-aml-toolkit-october-2019

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On 9^th October, Holland & Hart LLP published an article saying that OFAC has implemented President Trump’s prior revision of the definition of “significant transnational criminal organization” by eliminating a key clause that restricted the definition’s scope to largescale criminal syndicate organisations such as The Brothers’ Circle, Camorra, Yakuza, and Los Zetas, and which may eventually prove to be a significant development.  The article says that OFAC appears to have vastly expanded the universe of entities that may fall within the definition’s reach to include legitimate companies and organisations accused of criminal wrongdoing involving multiple countries.  The article also notes that OFAC has expressed its intent to provide “additional interpretative and definitional guidance” on this subject.   The revised definition is –

“a group of persons that includes one or more foreign persons; that engages in or facilitates an ongoing pattern of serious criminal activity involving the jurisdictions of at least two foreign states, or one foreign state and the United States; and that threatens the national security, foreign policy, or economy of the United States”.

https://www.internationalcomplianceblog.com/ofac-redefines-the-term-significant-transnational-criminal-organization-broadening-its-reach/#page=1

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