REFERENCE GUIDE FOR PRACTITIONERS TO ASSIST IN IMPROVING AWARENESS OF TRADE-BASED FINANCIAL CRIME RISKS – TRADE-BASED FINANCIAL CRIME – MIDDLE EAST AND NORTH AFRICA

On 25 October, the Global Coalition to Fight Financial Crime advised that a new report had been published (in English and Arabic).  It has been put together by the Trade-Based Financial Crime Working Group of the Global Coalition to Fight Financial Crime MENA Chapter, a public-private coalition that aims to enhancing the fight against financial crime globally.

https://www.gcffc.org/global-coalition-to-fight-financial-crime-gcffc-middle-east-and-north-africa-mena-chapter-and-the-mena-financial-crime-compliance-group-mena-fccg-launch-the-trade-based-financial-crime-tbfc-reference/

https://www.gcffc.org/wp-content/uploads/2022/10/TRADE-1.pdf (English version)

 

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HOW SHAPE-SHIFTING ‘MONEY LAUNDERERS’ INFILTRATED SOUTH AFRICAN BANKS

On 25 October, the Daily Maverick published Part 1 of a report, saying that over the past decade South African banks have been fair game for a group of alleged money launderers tied to luminaries in the gold and tobacco sectors.  The cash flow was enough to transform a small bank’s balance sheet overnight, yet no one raised the alarm.  The article asks why it was so easy and where was the Reserve Bank?  The article claims that the “shape shifting” involved opening accounts for the same players in different guises after they had been previously rejected.  It says that the AmaBhungane Centre for Investigative Journalism has pulled on this and many other threads to piece together a picture of the alleged money laundering operations that seemingly revolve around Baker and his associates in the tobacco and gold businesses.  The newspaper says that it will share what was found in Part 2.

https://www.dailymaverick.co.za/article/2022-10-25-the-laundry-part-one-how-shape-shifting-money-launderers-infiltrated-sa-banks/

 

 

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FATF: REVISION OF R25 AND ITS INTERPRETIVE NOTE – PUBLIC CONSULTATION

On 25 October, FATF advised that it is conducting a review of Recommendation 25 and its Interpretive Note (R.25/INR.25) on the transparency and beneficial ownership (BO) of legal arrangements.  FATF is also considering amendment of the definition of beneficial ownership in the glossary to provide more clarity regarding legal arrangements.  The objective is to improve R.25 and its Interpretive Note to better meet its stated objective to prevent the misuse of legal arrangements for money laundering or terrorist financing.  In particular, FATF would welcome comments on the following:

  1. Are FATF proposals adequate to mitigate the risk of misuse of legal arrangements and to ensure access to BO information?
  2. Are proposals clear and are there any issues which need further clarification or that should be addressed in guidance?
  3. What is the expected impact of the proposals on legitimate activity? In particular, what are the challenges for implementation?

https://www.fatf-gafi.org/publications/fatfrecommendations/documents/r25-public-consultation-oct22.html

 

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FATF GUIDANCE ON BENEFICIAL OWNERSHIP (RECOMMENDATION 24) – PUBLIC CONSULTATION

On 25 October, FATF advised that, at the March 2022 Plenary, FATF adopted amendments to Recommendation 24, and agreed to immediately start the work to update guidance on beneficial ownership, with a view to help support the implementation of the new requirements.  FATF now welcomes comments to its updated Guidance paper to Recommendation 24 on the transparency and beneficial ownership of legal persons. The draft text of the Guidance is available online.  It seeks views from companies and other legal persons, financial institutions, designated non-financial businesses and professions (DNFBP), and non-profit organisations (NPO).  However, contributions from other interested stakeholders are also solicited. In particular, comments are welcome on the following specific issues:

  1. Whether the Guidance is clear or are there any issues which need further clarification.
  2. Are there case examples of registries and alternative mechanisms for holding of accurate, adequate and up-to-date beneficial ownership information?
  3. Are there case examples of mechanisms to verify beneficial ownership information in low-risk scenarios?
  4. Are there case examples of the use of information held by stock exchanges for listed companies to meet beneficial ownership information obligations?

https://www.fatf-gafi.org/media/fatf/documents/publicconsultation/R24%20Guidance%20for%20Public%20Consultation.pdf

https://www.fatf-gafi.org/publications/fatfrecommendations/documents/r24-public-consultation-oct-2022.html

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RUSSIAN OLIGARCHS OBSCURE THEIR WEALTH THROUGH SECRETIVE ISLE OF MAN NETWORK

On 25 October, the Wall Street Journal reported that a web of shell companies and middlemen managed by services firm Bridgewaters makes it hard for authorities to track assets and enforce sanctions.  It refers to a deal involving a Silicon Valley start-up, routed through a series of offshore companies and a venture fund, which let the oligarch, Alisher Usmanov, move more of his vast wealth into the West.  The fund’s stake at the IPO was valued at $175 million.

https://www.wsj.com/articles/russian-oligarch-bridgewaters-sanctions-offshore-network-11665767178

 

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A DEEP DIVE INTO CHINESE UNDERGROUND BANKING

On 17 October, an article from the Law Society Gazette in the UK says that modern Chinese underground banks are a new iteration of an age-old institution, rediscovering and re-purposing traditional informal value transfer techniques for the modern world.

https://communities.lawsociety.org.uk/october-2022/underground-banking/6002469.article

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CONFISCATING RUSSIAN SOVEREIGN ASSETS TO FUND UKRAINE’S RECONSTRUCTION: MISSION IMPOSSIBLE?

On 25 October, the EU Parliament Research Service published a briefing paper saying that the Russian invasion has caused huge destruction of life and property in Ukraine. Reconstruction will be a long and costly process, and the EU and others are already marshalling funds for this effort.  Some EU leaders have expressed support for using frozen Russian central bank (RCB) funds towards reconstruction, but it is unclear if this will actually happen.  There are recent examples of sovereign assets being confiscated and used to compensate victims of injustice, but the confiscation of Russia’s sovereign funds raises complex legal and political issues that are unlikely to be resolved quickly or easily.

https://www.europarl.europa.eu/RegData/etudes/ATAG/2022/738180/EPRS_ATA(2022)738180_EN.pdf

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EU: 3 PERSONS REMOVED FROM BURUNDI SANCTIONS LIST

EU Regulation 2022/2043/EU of 24 October removed Godefroid BIZIMANA; Gervais NDIRAKOBUCA (aka NDAKUGARIKA); and Léonard NGENDAKUMANA from the sanctions list.

https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32022R2043&from=EN

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GUIDEBOOK ON CYBER THREATS: IDENTIFYING AND COMBATTING RISKS TO PUBLIC AND PRIVATE SECTOR USERS AND CITIZENS

On 18 October, the Geneva Centre for Security Sector Governance (DCAF) said that, to help public and private users and citizens protect their data, in the face of the rising threats of breaches, this guide introduces various cyberthreats.  It covers, in particular: social engineering attacks, phishing attacks, drive by downloads, Man-in-the-Middle (MITM) attacks, USB drop attacks and malware.  It explains how cybersecurity threats that affect an individual can in turn affect an entire organisation or government, and in doing so helps the users protect themselves, their personal data and the systems in which they work.

https://dcaf.ch/guidebook-cyber-threats

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