ISLE OF MAN TO REMAIN ON ‘ENHANCED FOLLOW-UP’ AS MONEYVAL AML/CFT REPORT FINDS CONTINUED DEFICIENCIES

On 29 November, AML Intelligence reported that the Isle of Man will remain under the group’s enhanced follow-up procedure and is expected to report back in 3 years’ time.  This comes after a fourth follow-up report on the Isle of Man, following an AML/CFT mutual evaluation report that was adopted in December 2016.  According to MONEYVAL, the Isle of Man retained moderate deficiencies implementing just 1 recommendation – FATF Recommendation 23 – with which the Isle of Man was only “partially compliant”.  The report also notes that the Isle of Man’s fifth round MER was adopted in December 2016 and, in line with the rules it was expected that the Isle of Man address most, if not all, of its technical compliance deficiencies by December 2019.  As it has done so, the length of follow-up reporting intervals was increased.

https://www.amlintelligence.com/2022/11/news-isle-of-man-to-remain-on-enhanced-follow-up-as-moneyval-report-finds-continued-deficiencies/

https://www.coe.int/en/web/moneyval/-/isle-of-man-required-to-take-further-steps-against-money-laundering-and-terrorist-financing

https://rm.coe.int/moneyval-2022-13-fur-iom/1680a93100

BANKS FAILING TO COMPLY WITH ANTI-CORRUPTION RULES AND SANCTIONS LISTS

On 1 December, the Guardian reported on a study by a US and a UK university which found that criminals including terrorists and tax evaders, as well as government officials subject to sanctions, can easily breach regulations meant to bar them from the international finance system.  Researchers emailed 5,000 banks and 7,000 other financial intermediaries in 273 countries and financial jurisdictions in 2020-21 to test compliance with rules meant to combat money laundering; the financing of terrorism; tax evasion; and Magnitsky Act legislation that allows sanctions to be imposed against specified Russian government officials.  They also set up 12 shell companies in countries recognised as a low risk for corruption including the UK and the US, and a high-risk including Papua New Guinea and Pakistan, as well as in offshore jurisdictions, such as the BVI.

https://www.theguardian.com/business/2022/dec/01/banks-failing-to-comply-with-anti-corruption-rules-and-sanctions-lists-magnitsky

FATF: MONEY LAUNDERING FROM FENTANYL AND SYNTHETIC OPIOIDS

On 30 November, FATF published this report, saying that organised crime groups are fuelling a synthetic opioid crisis that has contributed to hundreds of thousands of drug overdose deaths in the past decade.  This report looks at the way proceeds are laundered from synthetic opioids trafficking.  Organised crime groups use a range of methods including bulk cash smuggling, cash couriers, trade-based money laundering and virtual assets (crypto), as well as shell companies and the services of professional money launderers.  The report includes relevant risk indicators that will help identify potential trafficking of illicit synthetic opioids.  

https://www.fatf-gafi.org/publications/methodsandtrends/documents/money-laundering-fentanyl-synthetic-opioids.html