Day: January 13, 2020

On 13 January, the Isle of Man advised of the publication of an updated NRA, which is a requirement of FATF.  As with the original NRA, it was carried out with cross-government participation and input from the private sector, but also builds upon the 2015 assessment and the findings and recommendations of the MONEYVAL Mutual Evaluation Report of 2016.  The NRA confirms the overall level of risk for the Island are that the money laundering risk remains “Medium-High” and the terrorism financing risk as “Medium-Low”.  Amongst the points mentioned is that –

• the Customs and Excise Division of Treasury is engaging with OFSI in the UK new ‘Virtual Sanctions Network’ which has the aim of promoting dialogue and cooperation between the UK, the Crown Dependencies and the Overseas Territories;
• reforms introduced by government, including increased investment, are taking effect. The reforms have been underpinned by strategy, policy and procedural development enabling the authorities to work together in a more collaborative and effective manner;
• effective use needs to be made of new powers, procedures and resources that have been allocated to the authorities;
• accuracy of the Beneficial Ownership database is tested by the FSA using a risk-based approach; however, the accuracy and completeness of identity and verification details on registration need to be reviewed;
• the impact of the UK exit from the EU is currently unknown;
• there has been a significant increase in casework for the Economic Crime Unit (ECU) from 34 cases in 2016/17 to 90 in 2018/19; the main predicate crimes for money laundering continue to be fraud, false accounting and deception. Two-thirds of the cases being investigated by the Economic Crime Unit arise from predicate offending outside the Island.

https://www.gov.im/news/2020/jan/13/isle-of-man-publishes-new-national-risk-assessment-of-money-laundering-and-terrorist-financing/

On 13 January, OFAC announced the addition of 7 corrupt National Assembly officials to its Venezuelan sanctions list.  Those designated are said to have led a failed attempt to illegitimately seize control of the National Assembly and block interim President Juan Guaidó and other deputies.

It also announced the amendment of the entry for the recently-designated Chinese company said to be linked to Iranian activities.

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20200113.aspx

https://home.treasury.gov/news/press-releases/sm871

On 13 January, KYC 360 reported on a report from the Henry Jackson Society which claimed that corrupt Russian oligarchs are bringing lawsuits in English courts to launder hundreds of millions of pounds in dirty money, with the “damages” paid over effectively becoming laundered funds.  It is said that oligarchs agree to sue each other in the English courts with the payment of damages being used to launder their funds, and they can also arrange to bring cases against themselves using sham companies.  In a foreword to the report, a prominent English QC says that the scale of Russian interference in the English judiciary is such that it now constitutes a “critical national security threat”.

https://www.riskscreen.com/kyc360/news/oligarchs-launder-dirty-cash-in-uk-courts/

https://henryjacksonsociety.org/publications/russian-kleptocracy-and-the-rule-of-law-how-the-kremlin-undermines-european-judicial-systems/

On 9 January, a briefing from HFW says that email payment frauds (aka business email compromise, or BEC, fraud) are becoming more elaborate and can have a heavy financial cost for those that fall victim to them.  In this briefing, the law firm examines what businesses can do to prevent themselves becoming a victim to these frauds and to recover money paid out if they do fall victim to such a fraud.  It says that the best protection against fraudulent emails is to identify them prior to making payment.  They will often appear genuine at first glance but there are measures, which are outlined in the briefing, which, if actioned, can increase your chances of identifying a fraudulent email.  However, if money is paid out into a fraudulent account, recovery is still possible in various jurisdictions, provided that you act promptly, the briefing says – and it looks at recovery in the UK and in Switzerland.

https://www.hfw.com/Email-payment-frauds-staying-one-step-ahead-Jan-20

https://www.interpol.int/en/Crimes/Financial-crime/Business-Email-Compromise-Fraud