Day: October 28, 2022

On 28 October, the Wolfsberg Group published its updated Financial Crime Principles for Correspondent Banking.  This updates the 2014 version and provides guidance and best practices for banks, draws a distinction between Correspondent Relationships and Correspondent Banking activity, addresses entities other than banks who have Correspondent Relationships, and incorporates revised FAQ that were previously a separate document.  The Principles detail risk-based due diligence measures that, when undertaken, allow the Correspondent Bank to assess the profile, customer base and Financial Crime Programme of its Respondent customers. 

https://www.wolfsberg-principles.com/sites/default/files/wb/Wolfsberg%20Correspondent%20Banking%20Principles%202022.pdf

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On 28 October, the EU announced that the Commission has published guidance on the use of public-private partnerships (PPP) to prevent and fight money laundering and terrorist financing.  The guidance aims to improve stakeholders’ general understanding of what PPPs are, and to encourage, where possible, their role in the effective fight against money laundering and terrorism financing.  The document provides guidance on the main features and the associated opportunities, specific legal considerations, as well as observed best practices of PPP. 

https://finance.ec.europa.eu/financial-crime/eu-context-anti-money-laundering-and-countering-financing-terrorism_en

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On 28 October, the EU advised that the Commission has adopted the Supranational Risk Assessment (SNRA) Report, a tool to help Member States identify and address money laundering and terrorist financing risks.  The report shows that while most recommendations of the previous assessments (the last such report dates from 2019) have already been implemented, it underlines the fact that weaknesses in identifying beneficial ownership continue to remain a considerable threat to the financial system, as anonymity remains a critical vulnerability for all sectors and activities.  The report also re-calculates the risk levels of certain areas where changes have been detected since 2019, e.g. crypto-assets and online gambling, where risks are now higher.

https://finance.ec.europa.eu/financial-crime/eu-context-anti-money-laundering-and-countering-financing-terrorism_en

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On 28 October, a blog port from OFSI says that, in acknowledging the importance of a person’s ability to be receive legal advice and representation, OFSI has long had a position of not prohibiting the provision of legal advice to a designated person under an asset freeze. Payment for legal services, including payment for legal services provided on credit, by contrast has required a licence.  However, OFSI has issued a general licence to permit the payment of legal fees owed by individuals and entities designated under either of these regimes.

https://ofsi.blog.gov.uk/2022/10/28/legal-fees-general-licence/

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On 28 October, OFAC announced that the 15 KHORDAD FOUNDATION (aks BONYAD-E PANZDAH-E KHORDAD) had been added to its SDN List.  This is an Iran-based foundation that has issued a multi-million-dollar bounty for the killing of prominent author Salman Rushdie.  Since Ayatollah Ruhollah Khomeini’s order pronouncing a death sentence on Rushdie in February 1989, 15 Khordad Foundation has committed millions of dollars to anyone willing to carry out this act.  Since putting its bounty on Rushdie, the 15 Khordad Foundation, which is affiliated with the Supreme Leader, has raised the reward for targeting the author.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221028

https://home.treasury.gov/news/press-releases/jy1059

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On 27 October, a report from Global Financial Integrity says that China is unique in that the government itself engages in certain types of criminal activity — specifically forced labour and intellectual property rights violations.  In addition, the country’s political, economic, and social policies have extensive repercussions on the presence and prevalence of these crimes, both domestically and internationally.  Furthermore, it says, the country’s willingness to cooperate and act on these crimes within the global context has been relatively limited.  The report scrutinises China’s role in 4 different transnational crimes — drug trafficking, counterfeiting and IP theft, human trafficking and wildlife trafficking — as well as the illicit financial flows (IFF) associated with these crimes.

https://gfintegrity.org/report/made-in-china/

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On 27 October, an article from White & Case said that 2 legal cases in the US in the past month suggest that regulators and prosecutors are becoming more determined to take personal action against directors and senior executives who fail to deal adequately with cyber security breaches.  Uber’s former chief security officer has been found guilty of criminal obstruction charges for failing to report a cyber breach to the authorities in what is believed to be the first time a US company executive has been criminally prosecuted over a cyber breach.  Earlier, the Federal Trade Commission (FTC) announced that it had taken action against the CEO of an online drinks delivery business over the company’s security failures which led to a cyber breach that exposed the personal information of 2.5 million customers.

https://www.whitecase.com/insight-alert/director-liability-cyber-breaches-transatlantic-warning-signs

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EU Regulation 2022/2073/EU of 27 October deleted 7 entries following a review.

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv%3AOJ.L_.2022.280.01.0001.01.ENG&toc=OJ%3AL%3A2022%3A280%3ATOC

https://eur-lex.europa.eu/legal-content/EN/AUTO/?uri=uriserv:OJ.L_.2022.280.01.0047.01.ENG&toc=OJ:L:2022:280:TOC

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On 28 October, Regulation Asia reported that the guidance describes the most common TBML methodologies and provides indicators and behaviours to help financial service providers detect and report suspicious activity.

https://www.regulationasia.com/austrac-issues-new-guidance-on-preventing-tbml/

https://www.miragenews.com/trade-based-money-laundering-on-radar-in-new-884003/

https://www.austrac.gov.au/business/how-comply-guidance-and-resources/guidance-resources/preventing-trade-based-money-laundering-australia

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On 28 October, OFSI issued 2 new General Licences.  Under one, persons may grant category 5 loans to Saving Energy For Europe GmBH, otherwise known as Gazprom Germania, and its subsidiaries, including SEFE Marketing & Trading Limited and SEFE Energy Limited.  This licence lasts until 29 October 2023.  The other is a 7-day wind-down licence, which will allow the granting of category 5 loans until 23:59 on 5 November.

https://www.gov.uk/government/collections/ofsi-general-licences

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