On 3 June, ICIJ reported that former US Treasury official Natalie Mayflower Sours Edwards leaked financial intelligence documents to BuzzFeed News. This marks the end of a years-long saga for her, who worked as a Senior Advisor at FinCEN prior to her arrest in 2018.
On 3 June, a news release from US Treasury advised that –
President Biden had issued a new Executive Order addressing the threat from securities investments that finance certain companies of the People’s Republic of China;
Issued 8 new FAQ and updated 7 others; and
Added a number of Chinese companies to its Non-SDN Chinese Military-Industrial Complex Companies List.
The Executive Order says that the use of Chinese surveillance technology outside the PRC and the development or use of Chinese surveillance technology to facilitate repression or serious human rights abuse constitute unusual and extraordinary threats, which have their source in whole or substantial part outside the US, to the national security, foreign policy, and economy of the US. As a consequence, US persons are prohibited from buying, selling or being involved in trading of securities etc involving the named companies.
Addendum – The new order prevents Americans from investing in those companies, with a 60-day grace period, until 2 August, before sanctions begin and a 1-year period for Americans already invested in the businesses — either directly or via mutual and index or other funds — to divest themselves.
On 3 June, the Law Society of England & Wales reported that the Crown Prosecution Service had updated its guidance on prosecuting standalone ‘failure to disclose’ cases under section 330 of the Proceeds of Crime Act 2002 (POCA). It makes it possible to prosecute regardless of whether an offence of money laundering has been substantiated. It is said that the change is to encourage professionals working in the regulated sector to disclose any suspicion of money laundering to law enforcement.
On 1 June, AML Intelligence reported that the FIU may be shut down, after it emerged that the Bavarian Interior Minister will propose its dissolution to interior ministers this month. He will reportedly request the FIU powers be transferred back to the Federal Criminal Police Office (BKA) after years of problems and criticism, including in connection with the Wirecard scandal.
On 2 June, FATF issued a news release highlighting its work in this area, identifying 3 ongoing projects –
opportunities and challenges of new technology to help the private sector and supervisors implement AML/CFT measures more efficiently;
the role of data pooling, collaborative analytics and data protection, taking stock of technologies that facilitate advanced AML/CFT analytics within regulated entities or collaborative analytics between financial institutions, while respecting national and international data privacy and protection legal frameworks; and
making more efficient systems for operational agencies to detect and investigate money laundering and terrorist financing and understanding risks.
This study identifies the common methods used by wildlife traffickers to launder their money. It also highlights proposed actions that countries and the private sector can take to combat this trade. It explains that environmental crime is one of the most profitable criminal enterprises, generating around $110 to $281 billion in criminal gains each year. It covers a wide range of unlawful activities such as illegal logging, illegal wildlife trade and waste trafficking. FATF is focussing on the link between environmental crime and money laundering. This work aims to raise awareness about the financial flows that fuel environmental crime and how they are laundered.
On 3 June, the EU Sanctions blog referred to an Opinion of 27 May saying that the EU Commission had responded to queries from national competent authorities. It said that liquidating an investment fund was permitted provided that the proceeds of the liquidation are immediately frozen, the use of the designated person’s assets is prevented, and the continuity of the asset freeze is maintained. It also said assets could be transferred from an EU bank account to an account in the UK, so long as the asset freeze was maintained.
On 2 June, an article in FT Adviser says that cash-strapped businesses grappling with the cost of the pandemic are increasingly securing loans against the value of unpaid invoices, or ‘factoring’, but this has seen criminals keen to exploit the opportunities of this growing market. The article poses the question: what is factoring fraud and, more importantly, how can it be prevented? It says that the aim of the fraud is to obtain money from factoring fictitious debtors, by forwarding false invoices to the factoring company. The fraud can be perpetrated in several ways.