On 1st March, the OECD published this new report which examines governance frameworks to counter illicit trade. It looks at the adequacy and effectiveness of sanctions and penalties applicable, the steps parties engaged in illicit trade take to lower the risk of detection – for example through small (postal, courier and/or internet-enabled) shipments – and the use of free trade zones as hubs for managing trade in illicit products. I t also identifies gaps in enforcement that may need to be addressed. The report provides an overview of selected enforcement issues in BRICS economies (Brazil, China, India, the Russian Federation and South Africa). The report claims that effective governance frameworks, public institutions and international co-operation can improve the ability of countries to respond effectively in a co-ordinated way to counter the “growing scourge” of illicit trade.
In accordance with the recent decision of the EU in Regulation 2018/326/EU, on 6th March HM Treasury published a news release advising that Olena Leonidivna LUKASH and Serhii Petrovych KLIUIEV have now been removed from its Ukraine sanctions lists. The entry for Serhiy Vitalyovych KURCHENKO has been amended.
Reuters on 6th March reported that the EU is set to remove Bahrain, the Marshall Islands and Saint Lucia from a list of tax havens, leaving only 6 jurisdictions on it. The planned removals from the EU list drew criticism from the anti-corruption watchdog, Transparency International. The jurisdictions that remain on the blacklist are American Samoa, Guam, Namibia, Palau, Samoa and Trinidad and Tobago. Bahrain, the Marshall Islands and Saint Lucia are apparently to be delisted after they made “specific commitments” to adapt their tax rules and practices to EU standards.
On 6th March, HM Treasury published a news release advising that the entry for Francois Yangouv BOZIZE has been amended in line with changes made by the EU.
On 6th March, the Basel Committee on Banking Supervision (BCBS), the Committee on Payments and Market Infrastructures (CPMI), FATF and the Financial Stability Board (FSB) welcome the Correspondent Banking Due Diligence Questionnaire recently published by the Wolfsberg Group, as one of the industry initiatives that will help to address the decline in the number of correspondent banking relationships by facilitating due diligence processes. The questionnaire aims to standardise the collection of information that correspondent banks ask from other banks when opening and maintaining these relationships, such as their ownership, the products and services they offer and their programmes for AML/CFT as well as compliance with sanction regimes and anti-bribery and corruption (ABC) programmes. The questionnaire is also part of a co-operative effort by the public and private sectors to recognise KYC utilities as an effective and efficient tool to support due diligence processes.
The questionnaire is at –
FATF notes that it has taken initiatives to make sure that the application of AML/CFT measures does not contribute to de-risking. In order to clarify regulatory expectations, the FATF published guidance on correspondent banking services, and risk-based approach guidance for money and value transfer services, which emphasise that financial institutions should identify, assess and understand their ML/TF risks, and mitigate them, on a case-by-case basis. The FATF guidance on private sector information sharing also encourages greater collaboration and sharing of information within and among financial institutions.
On 5th March, the Centre for New American Security in Washington published a podcast in which Elizabeth Rosenberg, Senior Fellow and Director of the Energy, Economics, and Security Program leads a discussion on new strategies and tools to counter terrorist financing. Since 9/11, the nature of terrorist threat has changed, requiring a new approach by government authorities and the financial sector. She is joined by Tom Keatinge from the Royal United Services Institute (RUSI), Joshua Geltzer from Georgetown Law School, David Murray from the Financial Integrity Network, and Kris Doucette from Chainalysis.
On 6th March, EU Regulation 2018/326/EU had the effect of removing Olena Leonidivna and Serhii Petrovych Kliuiev from its sanctions lists and amended 3 other entries.
At the same time Council Decision 2018/333/CFSP extended the sanctions regime under Decision 2014/119/CFSP to 6th March 2019.