September 28, 2021 – raytodd.blog

MONEY LAUNDERING RISKS: ARE WE PAYING ENOUGH ATTENTION TO LAWYERS, ACCOUNTANTS AND OTHERS?

On 27 September, the Basel Institute of Governance posed this question following publication of the latest Basel AML Index. This, it says, reveals that lawyers, accountants, real estate agents, casinos, precious metal dealers, and other so-called designated non-financial businesses and professions (DNFBP) are significantly less protected against money laundering and terrorism financing risks than financial institutions. They also do less to contribute to AML/CFT efforts. They should be considered a serious vulnerability in most jurisdictions’ AML/CFT framework. It says that it believes more supervision is urgently needed to close that gap. It then reproduces a relevant extract from the Index. Reviewing 2021 data on jurisdictions’ performance in respect of the relevant FATF Recommendation 28, which sets standards for the regulation and supervision of DNFBP, reveals that far too little has changed:

compliance with R.28 remains very lowat 45% on average;
15 jurisdictions still score a radical 0%for compliance with R.28; and
only 8 jurisdictions are fully compliantwith R.28.

https://baselgovernance.org/blog/money-laundering-risks-are-we-paying-enough-attention-lawyers-accountants-and-others-beyond

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THE BUSINESS OF FRAUD: LAUNDERING FUNDS IN THE CRIMINAL UNDERGROUND

Recorded Future, on 28 September, released a report which contained the results of analysed current data from its own sources, dark web, and open-source intelligence (OSINT) sources to review money laundering services within underground sourcing and the methodology and operations used by threat actors. This report expands upon findings addressed in an earlier report. The new report finds that –

Dark web money laundering services facilitate a multitude of combinations through which threat actors can clean their money and can transfer cryptocurrency into virtual currency, have funds sent to a bank account or payment cards, or exchange to physical fiat currency;
Money laundering services referenced within underground sources over the past year have consistently relied on money mules, cash-out requests, exchangers, or mixers to succeed;
Despite a high volume of arrests and takedowns of money laundering services or services that support laundering activity over the past year, underground actors generally appear disinclined to cease laundering operations they likely continue to deem profitable;
Cybercriminals are likely to adopt new technologies such as NFT and other laundering techniques in response to law enforcement action and growing private sector awareness of their activities; and
Ransomware operators likely use the multitude of dark web money laundering services operated by threat actors on well-known cybercrime forums such as Verified. Bitcoin is likely to continue to be the most widely used cryptocurrency in ransomware and laundering operations.

https://www.recordedfuture.com/business-fraud-laundering-fund-criminal-underground/

The earlier report, from February, set out to provide an overview of how cybercrime gets monetised. This describes 11 types of fraud methods and services currently used by threat actors to facilitate their campaigns. For each, it provides a brief overview of some notable recent developments, list some of the top vendors of these services on the criminal underground, and provide suggested mitigations for defenders to implement.

https://www.recordedfuture.com/how-cybercrime-gets-monetized/

FATF: CONSOLIDATED AML/CFT ASSESSMENTS

Following publication of the MER for Benin, FATF issued an updated consolidated schedule of assessments to date. It provides an up-to-date overview of the ratings that assessed countries obtained for effectiveness and technical compliance. These should be read in conjunction with the detailed mutual evaluation reports, which are available on the FATF website.

https://www.fatf-gafi.org/media/fatf/documents/4th-Round-Ratings.pdf

BENIN: AML/CFT MUTUAL EVALUATION REPORT

On 28 September, FATF released the mutual evaluation report dated May 2021 and prepared by the FATF-style regional body GIABA. This evaluation was based on the 2012 FATF Recommendations, and was prepared using the 2013 Methodology. The evaluation was based on information provided by the country, and information obtained by the evaluation team during its on-site visit to the country. The findings of this assessment have been reviewed and endorsed by the FATF.

Benin had previously undergone a GIABA Mutual Evaluation in 2009, conducted in accordance with the 2004 FATF Methodology. This evaluation and the 8 subsequent follow-up reports have been published and are available at the GIABA website. Following the adoption of that MER in May 2010, Benin was placed under the Expedited Regular Follow-up process and only exited from that process in November 2018.

https://www.fatf-gafi.org/media/fatf/documents/reports/mer-fsrb/GIABA-Mutual-Evaluation-Report-Benin-2021.pdf

GLOBAL ORGANIZED CRIME INDEX

On 28 September, the Global Initiative Against Transnational Organised Crime released this report, the result of a 2-year endeavour to evaluate levels of crime and resilience in all 193 UN member states. Through this data, the organisation says that it is hoped that the Index will help inform a truly global response to the pervasive threat of transnational organised crime. It also says that, as a snapshot of 2020, the Index also highlights the adaptability of organised crime to the pandemic. In addition, by providing a consolidated hub of data and baseline evidence of the phenomenon in countries across the world, the Index aims to be a catalyst for further debate on transnational organised crime.

https://globalinitiative.net/analysis/ocindex-2021/

https://globalinitiative.net/wp-content/uploads/2021/09/GITOC-Global-Organized-Crime-Index-2021.pdf

MANAGED SEIZED AND FROZEN ASSETS – WHAT ARE INTERNATIONAL NORMS?

On 27 September, the Basel Institute on Governance posed the question: as countries improve their capacity to recover assets derived from criminal activity, they are faced with a challenge: how should these assets be managed while the judicial process is underway? It says that there is no set model for the managing of assets in criminal or non-conviction based forfeiture cases. The implementation of a system for asset management will be determined by each state according to their own law. It provides links to conventions, treaties and sources of guidance.

https://baselgovernance.org/blog/managing-seized-and-frozen-assets-what-are-international-norms

Mapping Afghanistan’s untapped natural resources

https://www.aljazeera.com/news/2021/9/24/mapping-afghanistans-untapped-natural-resources-interactive

UK FIU: INTRODUCTION TO SUSPICIOUS ACTIVITY REPORTS (SAR)

The UK FIU at the NCA has published Version 10 of this Guidance Notes intended to help fulfil the commitment to share perspectives on the SAR regime.

https://nationalcrimeagency.gov.uk/who-we-are/publications/570-introduction-to-sars/file

HOW SYRIA’S EMBASSIES IN EUROPE HELP FUND THE WAR BACK HOME

On 28 September, OCCRP reported that large fees to avoid military conscription have helped turn Syria’s diaspora into a major source of revenue for the cash-strapped government. Men who don’t pay face the threat of their family’s assets in Syria being seized. About a fifth of Syria’s population of 17 million are men of military age, according to data from the World Bank; with some 6.6 million Syrians having fled abroad since the protest movement of early 2011 slipped into civil war. It is said that Syrian embassies, which used to only process paperwork for the military exemptions, have recently begun collecting cash payments. Syria’s 2021 budget projection predicts revenues from the military exemption fees to reach 240 billion Syrian pounds — about $190 million at the official exchange rate — up from 70 billion pounds in 2020 – and estimated revenue makes up 3.2% of this year’s budget revenue, up from 1.75% in 2020.

https://www.occrp.org/en/37-ccblog/ccblog/15235-how-syria-s-embassies-in-europe-help-fund-the-war-back-home

UK: NEW 159 FRAUD HOTLINE LAUNCHED TO COUNTER THREAT

On 28 September, the BBC reported that a new emergency hotline has been launched for people to report and check financial scams as they happen. A potential victim who dials 159 will be automatically connected to their bank’s fraud prevention service.

https://www.bbc.com/news/business-58722201