E.g., 03/09/2021
E.g., 03/09/2021

Territory’s banks will have to monitor transactions by politically connected mainlanders

Chinese mainland officials who stash ill-gotten wealth in Hong Kong will face fresh scrutiny over their financial affairs under a planned tightening of money laundering regulations in the territory. The Hong Kong government has proposed changes to the requirements on financial institutions and advisers that would introduce checks on the bank accounts and transactions of politically connected people from mainland China. Businesses in Hong Kong currently only need to apply stricter money laundering checks on politically exposed persons (PEPs) “outside of the People’s Republic of China”.

But Hong Kong’s Joint Financial Intelligence Unit, the money laundering watchdog, has proposed amending the rules to apply to everyone outside of the territory. “The amendment will make it crystal clear to banks, lawyers, accountants and others in Hong Kong that the enhanced due diligence requirements that apply to foreign PEPs must also be applied to PEPs from China,” said Alan Linning, a partner at law firm Mayer Brown. “Banks and law firms will have to treat all PEPs from China on their clients’ lists as high-risk customers.” The Chinese government has long been concerned about illicit capital outflows and has indicated it is keen to curb officials and other individuals using Hong Kong and other jurisdictions to hide their wealth. President Xi Jinping has said that tackling corruption is a hallmark of his leadership, vowing to catch both “tigers and flies” — meaning senior leaders as well as lower-ranking bureaucrats.

The effort has been extended to monitor Chinese officials in Hong Kong and the territory’s own leaders. Xi recently appointed an anti-corruption tsar to Hong Kong, Shi Kehui, who will scrutinise the affairs of local officials. The Hong Kong government closed consultations with the financial and legal services industries on the proposed money laundering changes at the end of last month. The plans will bring the territory in line with recommendations made by the Financial Action Task Force, a global body that co-ordinates policy on dirty money. In a review of Hong Kong’s money laundering controls in 2019, the FATF criticised the city’s compliance with standards to prevent the risk of breaches by PEPs and ordered it to “close the technical gap” in relation to the rules for PEPs from China. The changes will make it harder for any individual connected to the Chinese Communist party to move money into or around Hong Kong without checks on their identity, their public functions, associates and close family. PEPs are considered as presenting a higher risk of potential money laundering breaches because they are exposed to more opportunities to accept bribes or participate in corruption.



Paris, 25 February 2021 - The second Plenary of the FATF under the German Presidency of Dr Marcus Pleyer took place on 22, 24 and 25 February.

Delegates representing the 205 members of the Global Network and observer organisations, such as the IMF, the United Nations and the World Bank, worked through a full agenda to strengthen global safeguards to detect, prevent and disrupt the financial flows that fuel crime and terrorism.  Due to the ongoing COVID-19 pandemic, the Plenary met virtually for the third time. As the pandemic continues to impact families, healthcare services, communities and economies worldwide, criminals continue to exploit the crisis for financial gain. Delegates continue to work to stamp out the laundering of proceeds of crimes including those linked to the COVID-19 pandemic. As countries focus on recovering from this crisis, it is more important than ever to fully and effectively implement the FATF Standards and take a risk-based approach to mitigating money laundering and terrorist financing risks.

During their discussions, delegates finalised work in a number of important areas. These included guidance to help countries take an effective, risk-based approach to supervision, guidance on investigating and prosecuting terrorist financing and work on illicit arms trafficking and terrorist financing, the latter two available to competent authorities. Delegates also agreed to release for public consultation a draft guidance to assist countries, financial institutions and DNFBPs in identifying, assessing and mitigating the risks of the financing of the proliferation of weapons of mass destruction, and updated guidance on virtual assets and virtual asset service providers.

The FATF also advanced its work on ongoing key issues. These include digitalisation, which has the potential to make anti-money laundering and counter-terrorist financing (AML/CFT) action more effective and efficient. In particular, the FATF agreed to start new work on digital transformation of AML/CFT for operational agencies. The FATF also continued discussions on the strategic review, which will shape the next round of mutual evaluations and make them more timely and risk-based. Delegates explored potential amendments to further strengthen the FATF requirements on beneficial ownership. The FATF’s mutual evaluations, as well as high-profile examples of abuse, demonstrate that criminals are still able to hide their illicit assets behind anonymous or complex legal structures.  Delegates discussed how to improve transparency and ensure that up-to-date beneficial ownership information is available to authorities. The FATF also discussed the preliminary findings in its ongoing work to overcoming the challenges linked to the effective recovery of criminals’ assets, tackle money laundering from environmental crimes and the financing of ethnically and racially motivated terrorism.

1-Strategic Initiatives

-Improving risk-based supervision.

-Mitigating the money laundering and terrorist financing risks of virtual assets.

-Strengthening measures to prevent the financing of proliferation of weapons of mass destruction.

-Improving terrorist financing investigations and prosecutions.

-Tackling illicit arms trafficking and terrorist financing.

2- Country-specific processes

-Mutual Evaluation of New Zealand.

-Impact of COVID-19 on Mutual Evaluation processes.

-Jurisdictions under Increased Monitoring.

-Strengthening the Global Network.




Philippines 18th February 2021 - The new framework will use a four-point rating scale to grade FIs based on their inherent risks, risk management capabilities and self-assessment systems.


The BSP (Bangko Sentral ng Pilipinas) has introduced a new AML/CFT risk assessment framework for financial institutions, as part of efforts to protect the stability of the financial system.

The new system – the Money Laundering/Terrorist Financing Risk Assessment System, or MRAS – forms part of the BSP’s newly deployed compliance rating system for financial institutions, known as SAFr (Supervisory Assessment Framework).

BSP Governor Benjamin Diokno said the MRAS will be the central bank’s primary tool for AML/CFT supervision, allowing it to more closely monitor financial institutions for money laundering risks and ramp up supervisory measures for those institutions that present higher risk.

Under the current system, the AMLC (Anti-Money Laundering Council) monitors all players across the financial industry evenly, regardless of their risk profile or track record.

MRAS will use a four-point rating scale to grade financial institutions’ risk profiles as high, above average, moderate and low – based on their inherent risks, the quality of risk management and effectiveness of their self-assessment systems. The ratings will also account for financial institutions’ business models and operations.

Under MRAS, more supervisory resources will be allocated to financial institutions with higher net risk exposures and those that pose a heightened risk to the safety and soundness of the financial system, the BSP said.

Diokno said the new system will benefit financial institutions, keeping them better informed of their key  risks and vulnerabilities so that they can prepare appropriate measures to address them.

“MRAS can be integrated into the SAFR as it allows seamless evaluation of other risk areas vis-a-vis anti-money laundering, terrorist financing and proliferation financing risks,” he said, adding that MRAS, like SAFr, applies the principle of proportionality.

Diokno also noted that MRAS emphasises the integration of institutional risk assessments in financial institutions’ corporate governance frameworks and strategic planning, while also ensuring the implementation of targeted financial sanctions.

The Philippines is trying to avoid being placed on the FATF (Financial Action Task Force) grey list, a list of countries with significant strategic AML/CFT deficiencies. In October 2019, it was placed under a 12-month observation period, though this was extended to February 2021 due to the Covid-19 pandemic.

Earlier this month, the SEC (Securities and Exchange Commission) approved new guidelines aimed at promoting greater transparency in the ownership of corporations. This followed shortly after offshore gaming operators, their service providers, real estate developers and brokers were brought into scope as covered entities under AML laws. Last June, lawmakers also approved strict new anti-terrorism legislation.

The new measures will be included in a report due to be submitted to the FATF in the first week of April. The Philippines plans to seek a re-rating of its technical compliance with the FATF Recommendations.



The Maldives - The government has reassured that the Presidential Commission on Corruption and State Asset Recovery’s work is ongoing.

The commission was established on 17 November 2018 to investigate instances of corruption that resulted in the loss of state assets from 1st January 2012 till 17th November 2018.

Speaking at a press conference held by the President's Office on Wednesday, Spokesperson Mabrook Azeez said that one of the key pledges of the incumbent administration had been to fight against corruption, and that this was the specific purpose of establishing the asset recovery commission in the first place.

The spokesperson went on to assure that work of the commission was ongoing to investigate instances of corruption and grand corruption that resulted in losses to the state, such as the Maldives Marketing and Public Relations Corporation (MMPRC) corruption scandal. Mabrook added that details would be forthcoming for the outcomes as investigations progressed.

He added that the MMPRC grand corruption had been conducted in association by several top-level leaders of the government at the time, and that many efforts had been made to cover their tracks and maintain impunity, which are believed to be staunching investigation efforts by the asset recovery commission.

Spokesperson Mabrook went on to reassure firmly that the Solih administration would not hesitate to take action against any instance of corruption, no matter who or what groups were involved. He affirmed that the administration's stance on corruption remained unchanged, and that work would continue on behalf of the government to achieve that effect.

In the preliminary report submitted by the asset recovery commission to President Ibrahim Mohamed Solih in July last year, detailing progress on the Commission's investigation of the MMPRC grand corruption case. The President of the Commission, Ahmed As'ad revealed that 37 islands and 12 lagoons were fraudulently leased for tourism purposes, resulting in a massive financial loss to the State. He stated that the Commission is active pursuing 30 separate cases in relation to the MMPRC corruption scandal, in addition to investigating the island of Fushi Dhiggaru and the construction of Dharumavantha Hospital.

Former Vice-President Abdulla Jihad was charged by the Criminal Court in relation to the island of Fushi Dhiggaru of Kaafu atoll being developed as a special tourist zone. While the trial against him is still ongoing, the High Court repealed an order last month which prevented Jihad from leaving the country after identifying him as a flight-risk.



Cryptocurrencies used to launder profits of online drug traffickers, they’ve been a tool to finance terrorism, she says

11.02.2021- US Treasury Secretary Janet Yellen said the misuse of cryptocurrencies, like Bitcoin, for terrorism is a growing problem.

"I see the promise of these new technologies, but I also see the reality: cryptocurrencies have been used to launder the profits of online drug traffickers; they’ve been a tool to finance terrorism," she said Wednesday at the Treasury's inaugural US Financial Sector Innovation Policy Roundtable.

"We’re living amidst an explosion of risk related to fraud, money laundering, terrorist financing, and data privacy ... By working together, we can better stem the flow of dark money from organized crime and terrorist financiers," she added.

US Congress passed in December the Anti-Money Laundering Act and gave the Treasury a mandate to renovate combating illicit finance framework, which was initially designed during 1970s, and has not been updated since.

The Act is part of the National Defense Authorization Act that requires anti-money laundering and countering the financing of terrorism laws to be updated.

Yellen stressed that the update would be able to spot criminals who want to sell weapons of mass destruction in the black market.

While Yellen was the Federal Reserve Chair, she was skeptical of Bitcoin and other cryptocurrencies and said she was "not a fan" in 2017.

This has become the third time Yellen has spoken about cryptocurrencies this year. During her confirmation hearing for Treasury Secretary in January, she told the Senate Finance Committee that use of cryptos in terrorism was "a particular concern." She softened her stance later in written remarks saying cryptocurrencies could be beneficial to the existing financial system as well.

Although cryptocurrencies make it easier for users to move liquidity between countries, crypto markets and service providers have made it mandatory to record users' identities, and blockchain technology keeps massive information on money actions.




The top French financial markets regulator wants the European Union to change the way it oversees the digital currency and blockchain industry. It proposed a unified approach in the region, with one body in charge of formulating regulations for the rapidly growing industry.

In a recent speech, the chair of the Autorité des Marchés Financiers Robert Ophèle spoke on fintech and regulation, touching on the need to regulate blockchain and digital currencies. He believes that the EU region needs to begin regulating the industry soon as it’s growing at a parabolic rate.

Ophèle proposed that the European Securities and Markets Authority should be in charge of the digital currency industry. Speaking during the 5th Annual Fintech and Regulation conference, he stated:

“First, this would be the best way to guarantee a level playing field in the EU. Second, as this regulation is brand new, it is easier to provide ESMA with competence from the outset than if this is considered at a later stage. Moreover, it would make sense to gather all the expertise within the same authority, since the cost of entry in the crypto-world is quite high.”

The ESMA is a Paris-based financial regulatory agency. It strengthens investor protection in the EU, improves the functioning of financial markets and fosters cooperation between the member states.

Ophèle further called on the regulation of security tokens. The industry has been growing rapidly as investors seek more efficient ways to invest in traditional assets. Bitcoin SV has already established itself as the best blockchain network for tokenization.

The watchdog stated, “As already highlighted for security tokens, we need to ensure that all types of DLT can be used, private and public. Nor should we close the door on decentralized business models by prohibiting or overlooking them. In my opinion, we should favor an outcome-based approach, which means that business models capable of complying with the organisational rules, conduct rules and AML-CFT rules should be admitted.”

The Autorité des Marchés Financiers has been friendly to digital currencies, advocating for a moderate approach that promotes innovation. It has also cracked down on digital currency scammers that taint the industry’s image.



Business E-mail Compromise, ransomware and cryptojacking among key cyberthreats

SINGAPORE – An INTERPOL report has highlighted the key cybercrime trends and threats confronting the Association of Southeast Asian Nations (ASEAN) region.

INTERPOL’s ASEAN Cyberthreat Assessment 2021 report outlines how cybercrime’s upward trend is set to rise exponentially, with highly organized cybercriminals sharing resources and expertise to their advantage.

It provides strategies for tackling cyberthreats against the context of the pandemic which has seen more people going online using mostly unprotected mobile devices, creating a surge in cybercriminal activities profiting from the theft of personal information and credentials.

The report further describes the essential collaboration on intelligence sharing and expertise between law enforcement agencies and the private sector, facilitated by INTERPOL’s global network.

The INTERPOL’s ASEAN Cybercrime Operations Desk (ASEAN Desk) with the support from law enforcement agencies in the region and INTERPOL’s private sector cybersecurity partners identify the region’s top cyberthreats:

-Business E-mail Compromise campaigns continue to top the chart with businesses suffering major losses, as it is a high-return investment with low cost and risk.

-Phishing. Cybercriminals are exploiting the widespread use of global communications on information related to COVID-19 to deceive unsuspecting victims.

-Ransomware. Cybercrime targeting hospitals, medical centers and public institutions for ransomware attacks has increased rapidly as cybercriminals believe they have a higher chance of success given the medical crisis in many countries.

-E-commerce data interception poses an emerging and imminent threat to online shoppers, undermining trust in online payment systems.

-Crimeware-as-a-Service puts cybercriminal tools and services in the hands of a wider range of threat actors – even non-technical ones, to the extent that anyone can become a cybercriminal with minimal ‘investment’.

-Cyber Scams. With the increase of online transactions and more people working from home, cybercriminals have revised their online scams and phishing schemes, even impersonating government and health authorities to lure victims into providing their personal information and downloading malicious content.

-Cryptojacking continues to be on the radar of cybercriminals as the value of cryptocurrencies increases.

“Cybercrime is constantly evolving. The COVID-19 pandemic has accelerated digital transformation, which has opened new opportunities for cybercriminals,” said Craig Jones, INTERPOL’s Director of Cybercrime.

“Through this report, INTERPOL strives to support member countries in the ASEAN region to take a targeted response against ever-evolving cybercrime threats to protect their digital economies and communities,” added Mr Jones.

Under the mandate of reducing the global impact of cybercrime and protecting communities, the INTERPOL Regional Cybercrime Strategy for ASEAN sets out INTERPOL’s key priorities and principles against cybercrime in the region.

Delivered through INTERPOL’s ASEAN Desk and ASEAN Cyber Capacity Development Project, the strategy is underpinned by four pillars: enhancing cybercrime intelligence for effective responses to cybercrime; strengthening cooperation for joint operations against cybercrime; developing regional capacity and capabilities to combat cybercrime; and promoting good cyber hygiene for a safer cyberspace.



08-02-2021_ The State of Qatar took part in the 16th meeting of the GCC Anti-Money Laundering and Terrorist Financing Working Group, held virtually yesterday.The meeting discussed the topics listed on the agenda of the second general meeting of the 32nd session of the Financial Action Task Force (FATF), and the working group’s meetings which are scheduled to take place from February 11 to 25.

The meeting underlined the importance of the GCC countries adopting a unified technical vision towards the issues raised, and discussed the expected options for the mutual evaluation processes of the GCC countries by the FATF, in light of the outbreak of the coronavirus pandemic.

The team also reviewed the technical working papers prepared in the field of combating money laundering and terrorist financing, which would contribute to strengthening the GCC joint action and cooperation in the areas of combating money laundering and terrorist financing.

The meeting was attended by representatives of the GCC national committees for combating money laundering and financing terrorism, the financial investigation units, and the GCC General Secretariat.



12-member gang illegally transferred over 500m riyals to unknown accounts abroad

Abu Dhabi: A Saudi money laundering gang was jailed for more than 60 years and fined SR8 million for illegally transferring SR593 million, a Saudi court has ruled.

The court also ordered confiscation of the convicts’ funds in local banks and their money kept in their homes, as well as mobile phones, laptops, personal computers used in the crime, and a firearm found in the house of one of the convict, according to the court records.

“The gang, composed of a female citizen, her brother, two other citizens and eight expatriates, shared roles between them, as citizens created commercial records for commercial entities that did not exist on the ground, and then opened bank accounts, and handed them over to expatriates, who collected money illegally and deposited them in these accounts, and transferred more than 593 million riyals abroad, which constitutes a full-fledged money laundering crime,” a source at the Public Prosecution said.



New requirements for ownership disclosures, part of National Defense Authorization Act, will help prevent use of shell companies for illicit finance, proponents say

USA - New rules intended to combat money laundering and the financing of terrorism—including measures to make company ownership more transparent—will go into effect now that the National Defense Authorization Act has been approved, advancing a year’s long effort by anticorruption advocates.

Provisions in the annual defense-policy legislation would require many U.S. companies to register their true owners—an attempt to discourage the use of anonymous shell companies for illicit means. The law also would pave the way for a new whistleblower program aimed at encouraging people to report potential violations of anti-money-laundering laws.

The Senate voted 81-13 on Friday to override President Trump’s veto of the bill, which sets spending for defense operations and national-security programs for the 2021 fiscal year. The president’s objections were unrelated to the anti-money-laundering measures. The House had previously voted 322 to 87 to override the veto.

“Anonymous shell companies where the true beneficial owners are unknown is the biggest weakness in our anti-money-laundering safeguards,” said Clark Gascoigne, a senior policy adviser at the Financial Accountability and Corporate Transparency Coalition, a Washington-based group that has pushed for ownership disclosures.

Many companies aren’t currently under any federal obligation to identify the true beneficiaries of their operations. And many states’ rules have enabled owners to obscure their identities through shell companies or through agents who register companies on the owners’ behalf.

Required ownership disclosures will help prevent terror groups, drug cartels or other bad actors from using shell companies to move money to support their operations, experts say. “It’s the single most important step we could have taken to better protect our financial system from abuse,” Mr. Gascoigne said, referring to the passage of the legislation.

The Treasury Department has a year to issue regulations detailing how companies would comply. Once the regulations are in place, many companies created in the U.S. would have to disclose the name, birth date, address and a government-issued identification number—such a driver-license number or passport number—of the company’s beneficial owners. Existing companies are expected to have up to two years to comply after the regulations are in place.

The information, to be kept in a registry by the Treasury’s Financial Crimes Enforcement Network, wouldn’t be available to the public. But federal law enforcement would have access to the data. Financial institutions would too, but with customer consent.

Publicly listed companies and many firms regulated by the federal government wouldn’t have to report. Nor would companies with more than 20 full-time employees, $5 million in annual sales and a physical place of business.

The National Federation of Independent Business, which opposed the legislation, says the rules unfairly burden small, legitimate companies with added paperwork and the risk of penalties for noncompliance.

The Washington-based group estimates that complying would take most companies about 30 minutes. “But it is one more piece of paperwork on a pile that’s already pretty high from a small-business owner’s perspective,” said Kevin Kuhlman, the NFIB’s vice president of federal government relations.

Disclosing more information to more agencies could increase privacy risks for businesses, Mr. Kuhlman said. The Treasury suffered a recent leak of suspicious activity reports, he noted, and its email accounts were said to be breached as part of a recent hacking effort targeting several federal agencies.

A Treasury spokesman declined to comment.

To comply with the Bank Secrecy Act, financial institutions already seek this kind of information from customers opening new accounts. But the new rules could help crack down on the use of U.S. shell companies for the purposes of opening offshore accounts in countries where disclosure rules are more relaxed. The rules could also simplify international law-enforcement cooperation on investigations into money laundering, policy analysts said.

“Remarkably, the United States, while advanced in many other areas of anti-money-laundering, has really lagged the world in this area,” said Greg Baer, chief executive of the Bank Policy Institute, a Washington, D.C.-based industry group that supported the measure. “And this will end up as a safe haven for criminals and terrorists.”

The measure also creates a program that would offer monetary awards to tipsters who voluntarily provide original information to the Treasury or Justice Department about violations of the Bank Secrecy Act. Awards would be granted in cases where the tips lead to successful enforcement actions and the monetary sanctions exceed $1 million.

The rules would expand on existing incentives that proponents have said are overlooked and not strong enough. The program could close enforcement gaps left by existing whistleblower programs at agencies such as the Securities and Exchange Commission and the Commodity Futures Trading Commission, which may have limited jurisdiction over potential money-laundering violations, whistleblower lawyers have said.



The government of Singapore has published a document covering the risk of terrorism financing (TF) and financial services. The report was compiled by a consortium of agencies including the Monetary Authority of Singapore, Ministry of Home Affairs, and the Ministry of Finance.

To quote the document:

“Terrorist groups that posed the most significant terrorism threat to Singapore and the region were identified, and the primary ways these groups were financed were examined. The TF threats posed to the different sectors were outlined, substantiated by information from investigations and financial intelligence including Suspicious Transaction Reports (STRs), Requests for Assistance (RFAs), Mutual Legal Assistance (MLA) requests, and supported through participation in regional CFT projects and surveillance of regional and international typologies … Regulators/supervisors oversaw their respective sectors’ vulnerability assessments, taking into consideration their sector’s key TF threats, and how certain products, services, and activities within the sector might be exploited for TF purposes.”

So what sector of finance is at the highest risk of abuse by TF? According to the report, money remittances, or cross-border money transfers, hold the highest risk followed by banks. The use of unlicensed money remitters poses the biggest risk as they operate outside the regulatory regime. The document says these agents typically do not comply with  AML/KYC rules.

Banks hold a “medium-high” risk for abuse with Singapore’s status as an international financial center exposing it to such acts. While banks adhere to AML/KYC/CFT rules, abuses can occur as perpetrators move smaller amounts of funds that appear to be legitimate and do not trigger and warnings.

Jumping to digital payment tokens (DPTs), or virtual assets/currencies, the report says that there is no evidence of widespread abuse but terrorist may be looking at virtual currencies to back their nefarious acts.

“…we are cognisant of the higher inherent TF risk posed by the anonymity, speed and cross-border nature of transactions facilitated by DPT service providers, and we are watching this space closely,” states the document.

Tumblers and other anonymizing tools, such as privacy coins, may make crypto more appealing to bad guys over time.

MAS has boosted its supervisory efforts and robust AML/CFT-focused licensing checks have been instituted according to the report.



New Delhi (02 January 2021): Mumbai attack mastermind and Lashkar-e-Taiba (LeT) operations commander Zaki-ur-Rehman Lakhvi was arrested on Saturday in Pakistan, an official said. Lakhvi, who was on bail since 2015 in the Mumbai attack case, was arrested by the Counter-Terrorism Department (CTD) of Punjab province.

However, the CTD did not reveal the place of his arrest. "Following an intelligence-based operation conducted by the CTD Punjab, proscribed organisation LeT leader Zaki-ur-Rehman Lakhvi was arrested on charges of terrorism financing, it said.

It further said that Lakhvi, 61, was arrested in a case of terrorism financing registered in a police station of CTD Lahore. "Lakhvi is accused of running a dispensary, using funds collected for terrorism financing. He and others also collected funds from this dispensary and used these funds for further terrorism financing. He also used these funds for personal expenses," the CTD said.



Financial crime watchdog sees cases involving everything from soft fruit to luxury cars

UK - Onions, potatoes, soft fruit, luxury cars, expensive watches . . . it reads like a list of goods held up at the Channel crossing in the UK’s pre-Christmas travel chaos. But it is a sample of some of the exports that feature in a longer-term worry for global companies: trade-based money laundering. At the start of December, the Financial Action Task Force — the intergovernmental watchdog for financial crime and terrorist financing — issued a new report on TBML, citing cases involving all of those exports. Its president, Marcus Pleyer, declined to speculate whether this method of transmitting crime proceeds — distinct from interbank money laundering and physical cash couriering — was now in greater use. He referred only to the sums that can be laundered through sham trade deals: “One criminal network using TBML was able to move $400m over several years,” he said.

But days later, the UK Treasury and Home Office were a lot less cautious. In their third “national risk assessment”, they estimated that sums laundered in Britain alone, by all methods, were “in the hundreds of billions of pounds annually”. And they were in no doubt that TBML had become “a favoured . . . technique, which has increased since 2017”. In the FATF report, trade-based money laundering is said to take four principal forms: the over and under-invoicing of goods — where prices are misrepresented to transfer value; the over and under-shipment of goods — including “phantom shipments” where nothing moves at all; multiple invoicing for the same goods — where the trade documents are reused several times; and falsely described goods — where quality is understated to transfer value. Many of these practices were present in the examples that the Financial Action Task Force reported on. Potatoes and onions purchased conventionally in the Netherlands and Germany were exported to companies in north Africa, but the invoices directed large payments to accounts controlled by drug traffickers.

Fruit exports from New Zealand were paid for by shady third-party shell companies to be resold for “clean” funds — but the fake invoices shown to banks described the shipments as “ceramic tiles”. Damaged luxury cars were sold across borders by criminal gangs with low values declared at the shipment points, before they were repaired and resold at close to their undamaged prices. And watches purchased in Switzerland and Spain by supposed “import/export” companies were simply used to transfer value to drug traffickers in Morocco and the Netherlands.

The pandemic has only added to the opportunities. According to the UK’s risk assessment: “The increased demand for certain goods and services to combat the spread of COVID-19 presents additional TBML risks.” It warned that transactions purportedly for pharmaceuticals, textiles and personal protective equipment were increasingly likely to be exploited by criminals. Jonah Anderson, a partner in the white-collar crime practice of law firm White & Case, said trade-based money laundering was always likely to thrive as other methods became harder to employ. “We are using cash a lot less these days, and various national lockdowns have made it harder for criminals to move cash across borders,” he pointed out. “Brexit means supply chains have been disrupted so companies have to pivot to new and unfamiliar counterparties, increasing the risk of becoming a conduit in a TBML scheme,” he added.

For some companies, this can bring real risks. While most TBML is conducted via shell companies, some cases have involved legitimate businesses, or people working for them. Consequences can include criminal investigation and potential prosecution of senior managers, warned Rick McDonell of the Association of Certified Anti-Money Laundering Specialists. Legal liability may then rest with a company if it cannot show it had adequate controls. Anna Bradshaw, a partner at law firm Peters & Peters, said: “In most jurisdictions, you may be on the hook if you fail to take steps to resolve anything that strikes you as suspicious.” On top of that comes the reputational damage to a business, Ms Bradshaw added, and the “lesser-known consequence” of potentially being sanctioned by governments or shut out of the financial system.

The duty of businesses is to be vigilant, the FATF report concludes. It also calls on them to raise awareness of TBML among their customers and report suspicions to the authorities. However, its main recommendation is that they participate in partnerships with regulators and law enforcement. In this, the UK and Germany are considered pioneers. Back in 2015, British authorities invited companies to join the Joint Money Laundering Intelligence Taskforce, which was recently expanded to involve insurance and investment companies.

Similarly, last September, the German Anti-Financial Crime Alliance brought together the Federal Criminal Police Office, the Federal Financial Supervisory Authority, the Financial Intelligence Unit and 14 banks. However, as Mr Anderson pointed out, “JMLIT focuses on the regulated sector — currently banks — but not all TBML will involve trade finance and trying to spot TBML in the context of wider account activity can be like trying to find a yellow needle in a haystack.” For that reason, he advises non-financial companies to ensure they have in-house processes to comply with money laundering, bribery and other financial crime legislation.

“You can’t eliminate all risk, but you can mitigate it if you have a proper compliance framework in place and diligence in your supply chain.” To that, company finance teams should add some healthy scepticism over what is in the truck and on the paperwork, suggested Ms Bradshaw. “Be vigilant about interrogating shipping documents — invoices, packing lists, certificates, instructions, contracts, bills of lading. Step back and ask yourself: does this make commercial sense”.



MUSCAT, Dec 28 – The Capital Market Authority (CMA) has added to its administration structure a new department dedicated to combating money laundering and terror financing – a move designed to create a safer investment climate for institutions operating in the capital market and insurance sectors of the Sultanate. The new outfit will also complement other government departments and units focused on fighting money laundering and terror financing, the Authority said in a statement.
The establishment of this department is in line with the Authority’s continuous efforts to build national capabilities in dealing with the phenomenon of money laundering and terror financing. The CMA had previously issued regulations for combating money laundering and financing terrorism (30/2016) for companies operating in the securities, companies, brokers and insurance agency fields.
Mohammed bin Said al Abri, Vice-President of Capital Market Sector, said the new unit has been equipped to provide all necessary assistance to institutions and their clients operating in the capital market and insurance spaces.
“The establishment of this department is included in the preparation procedures to work on executing the national ‘Oman Vision 2040’ based on achieving the main national priorities to develop the national economic system by achieving the financial sustainability, create a conducive regulatory and legislative environment that attracts investment, enhance institutional performance, and align with the authority’s strategic objectives,” he said.
As part of its remit, the new department will review and develop legislation and measures to strengthen the fight against money laundering and terror financing. It will also enhance the effort to promote awareness of these phenomena, and build a culture of precaution and prevention in institutions operating in this arena.
With the establishment of a dedicated unit within the Authority, Oman will be further recognised internationally for its commitment to combating money laundering and terror financing, he said. The department will assist capital market institutions, companies, brokers and insurance agents and their clients in the Sultanate in keeping themselves safe from money laundering and terror financing risks.

“This will enhance the level of trust that international organisations, investors and clients have in Oman’s regulations and systems, which are based on international best practices,” he said.
Various tasks were assigned to this department like field and office examination and auditing.
The department also identifies which of the capital market institutions, companies, brokers and insurance agents are more exposed to money laundering and financing terrorism crime risks and working on raising its efficiency through putting adequate follow-up mechanisms and treatment programmes.
The department will study the capital market institutions, companies, brokers and insurance agents’ conditions that are having problems in complying with combating money laundering and financing terrorism requirements, following the execution of condition compromising plans, analysing the financial statements and reports and other reports received from these institutions to ensure the compliance level with the legislations and instructions related to money laundering and terror financing.



Pakistan - The government has now implemented the amended Anti-Money Laundering (AML) and Counter Financing of Terrorism (CFT) laws on the State Bank of Pakistan (SBP) and all branches of commercial banks, as per the requirements of the Financial Action Task Force (FATF) conditions, a Statutory Regulatory Order (SRO) issued by the Finance Division said on Wednesday.

Until now, AML/CFT regulations were only enforceable on the National Savings Scheme (NSS) centers and branches. However, the new regulations require the SBP and the commercial banks dealing with the NSS instruments to follow the same rules.

According to the SRO, “These regulations shall apply to the Central Directorate of National Savings (CDNS) and any other office of the issue dealing with the NSS as defined under regulations 2(1).”

A supervisory board was also formed under the Chairmanship of Additional Secretary Finance, including five members from SBP, Securities and Exchange Commission of Pakistan (SECP), Financial Monitoring Unit (FMU), DG FATF, and Joint Secretary Finance Division.

This board will establish the policies and procedures to ensure implementation of the AML/CFT laws and introduce a sanction regime to address the relevant violations by the CDNS.

It will also carry out necessary assessments concerning the AML/CFT regime, including regular and ad-hoc risk assessment through participation in any national risk assessment exercise. The board will also engage SBP’s approved external auditors to ensure compliance with the AML/CFT Act.



Basel Press Release - The Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of the Basel Committee on Banking Supervision, has today endorsed a coordinated approach to mitigating Covid-19 risks to the global banking system.

The global banking system entered the Covid-19 crisis with ample capital and liquidity, thanks to the Basel III reforms implemented after the Great Financial Crisis (GFC). A robust regulatory framework underpins confidence in banks' soundness and helps to maintain a level playing field internationally.

The timely measures pursued by the Committee at the start of the pandemic and the GHOS's agreement to revise the implementation timeline for outstanding Basel III standards added to the unprecedented range of fiscal and monetary support measures that have buttressed banks' resilience thus far.

The Basel III capital and liquidity buffers help banks to absorb shocks and keep lending to creditworthy households and businesses. Using capital and liquidity resources in this way should take priority at present. GHOS members strongly support the Committee's repeated guidance that a measured drawdown of these buffers is appropriate in the current period of stress and until the Covid-19 crisis is over. After the crisis, supervisors will provide banks with sufficient time to rebuild their buffers, taking account of economic, market and bank-specific conditions.

As the Covid-19 crisis continues to unfold, the vulnerabilities and risks to the global banking system will evolve. Against that backdrop, GHOS members tasked the Basel Committee with continuing to pursue a coordinated approach in responding to the crisis, to preserve a global level playing field and to avoid regulatory fragmentation. The approach comprises the following elements:

-an ongoing monitoring and assessment of vulnerabilities and risks to the global banking system from Covid-19, and information-sharing of supervisory insights during the crisis;

-encouraging the use of flexibility embedded in the Basel framework, where relevant;

-monitoring the implementation of temporary adjustments to mitigate current risks to the banking system, to ensure they are consistent with the objectives of the Basel framework and are unwound in a timely manner; and,

-where necessary and prudent, adopting additional global measures in a coordinated manner.

The GHOS members also unanimously reiterated their expectation for the full, timely and consistent implementation of all aspects of the Basel III framework. Doing so will help to lock in the benefits of these standards to ensure that banks can withstand future crises.

In this regard, the GHOS members agreed to mark, with the present agreement on the Basel III framework, a clear end to the post-GFC Basel III policy agenda. Any further potential adjustments to Basel III will be limited in nature and consistent with the Committee's evaluation work. Henceforth, the Committee's Basel III-related work will focus on (i) monitoring the implementation, timeliness and consistency of these standards through its Regulatory Consistency Assessment Programme; and (ii) completing an evidence-based evaluation of the effectiveness of these reforms, also taking into consideration the lessons from the Covid-19 crisis.

The GHOS also endorsed a series of recommendations from the Basel Committee to focus its policy and supervisory agenda on future risks to the global banking system and its vulnerabilities. The recommendations followed a strategic review conducted by the Committee over the past year. The Committee's future work will focus on new and emerging topics including structural trends in the banking sector, the ongoing digitalisation of finance and climate-related financial risk.

Note to editors: 

The Basel Committee is the primary global standard setter for the prudential regulation of banks and provides a forum for cooperation on banking supervisory matters. Its mandate is to strengthen the regulation, supervision and practices of banks worldwide with the purpose of enhancing financial stability. The Committee reports to the Group of Central Bank Governors and Heads of Supervision and seeks its endorsement for major decisions. The Committee has no formal supranational authority, and its decisions have no legal force. Rather, the Committee relies on its members' commitments to achieve its mandate. The Group of Central Bank Governors and Heads of Supervision is chaired by François Villeroy de Galhau, Governor of the Bank of France. The Basel Committee is chaired by Pablo Hernández de Cos, Governor of the Bank of Spain. 



Associated Press – December 15, 2020.


BERLIN (AP) — Police in the German capital have arrested one of two fugitive twins wanted in connection with the spectacular theft of 18th-century jewels from a Dresden museum last year, officials said Tuesday.

Dresden police said 21-year-old Mohamed Remmo was arrested by Berlin authorities in a car in the Neukoelln district of the city on Monday evening.

Remmo and his twin brother, Abdul Majed Remmo, were being sought internationally after evading police during a massive sweep last month.

During that operation, three others were arrested in connection with the Nov. 25, 2019, theft of a large diamond brooch, a diamond epaulette and other treasures from Dresden’s Green Vault Museum.

The suspects, aged 23 to 26, were charged with organized robbery and arson.

It was not immediately clear how police tracked down Mohamed Remmo, who was being taken to Dresden on Tuesday. They said they were still searching for his brother with “high intensity.”

Searches at more than a dozen locations have so far not yielded the missing treasures.

Members of the Remmo family were convicted earlier this year for a similarly spectacular heist, the theft of a 100-kilogram (220 pound) Canadian gold coin dubbed the “Big Maple Leaf” from Berlin’s Bode Museum in 2017.

The coin, with an estimated value of 3.75 million euros ($4.45 million) has not yet been recovered and authorities have posited that it was likely cut up into smaller pieces and sold off.

The Green Vault is one of the world’s oldest museums. It was established in 1723 and contains the treasury of Augustus the Strong of Saxony, comprising around 4,000 objects of gold, precious stones and other materials.

Shortly after the theft, authorities offered a 500,000-euro ($593,000) reward for information leading to the recovery of the jewels or the arrest of the thieves.



The trade is also amplifying the impact of COVID-19 on East African healthcare systems

LYON, France – An INTERPOL report has underlined how the COVID-19 pandemic has made illicit medication markets in Eastern Africa even more attractive to organized crime groups.

Produced in the framework of the ENACT (Enhancing Africa’s Response to Transnational Organised Crime) project, the INTERPOL report highlights how criminal networks are exploiting new vulnerabilities caused by the pandemic as a result of fear and misinformation and changes in the behaviour of communities.

“Challenges in regulatory authority autonomy combined with widespread adoption in East Africa of misinformation on COVID-19 create an ideal operating environment for organised crime groups,” says the report.

According to this assessment, the illicit medication market in East Africa has two main aspects: the increased importation of counterfeit and substandard medication, as well as the unlawful acquisition of legitimate medication sold through illegitimate means such as black markets.

Counterfeit and substandard medication in East Africa

The global counterfeit medication market is worth around USD 200 billion annually, according to the World Health Organization, most of which originates in Asia.

Although this illegal trade has long existed in East Africa, the reports finds that since the beginning of the pandemic, organised crime groups have adapted not only their way of importation or sale, moving from roll on roll shipping to container shipments or to online purchase and delivery, but also to the type of illicit medication produced and sold, such as chloroquine or codeine-based cough products.

The report further finds that the trade of illicit medication in East Africa has resulted in an increased level of addiction to powerful painkilling medications, overdoses and death from fake medication.

Crimes associated with black market medication

The demand for medication has further fuelled violence and corruption in attempts to compromise healthcare facilities and healthcare workers in order to access controlled medication.

This trade is also amplifying the impact of COVID-19 on East African healthcare systems.

“The trade in black market medication originally intended for hospitals has increased the difficulties for healthcare systems to cope with any subsequent second or third wave of COVID-19,” states the report.

It further concludes that it remains a prominent challenge for countries in East Africa to consider the impact of organised crime on the trade in illicit medication and to what extent that may further develop with further potential outbreaks of COVID-19.

Project ENACT

Through ENACT, INTERPOL assists police in Africa in adopting proactive strategies to combat organized crime threats, facilitate information exchange and enhance investigative skills.

The project is the first initiative of its kind to cover the entire African continent in analyzing the scale of organized crime and its impact on security, governance and development. This analysis serves to inform decision-makers and strengthen law enforcement cooperation at regional and continental levels.

Project ENACT is funded by the European Union and implemented by INTERPOL and the Institute for Security Studies, in partnership with the Global Initiative Against Transnational Organized Crime.



Targeting rising trends in telephone and online scams, Operation First Light intercepted over 150 million dollars in illicit funds.

LYON, France: A year-long investigative clampdown on criminal networks coordinated by INTERPOL has demonstrated the scale of phone and online frauds worldwide.

Codenamed First Light, the operation officially concluded in November with the following results:

-10,380 locations raided

-21,549 operators, fraudsters and money launderers arrested

-310 bank accounts frozen

-USD 153 973 709 worth of illicit funds intercepted.

This latest edition of Operation First Light marked the first time law enforcement has coordinated with INTERPOL on a global scale to combat telecoms fraud, with operations taking place on every continent.

Purple Notices

A three-month enforcement phase (1 September – 30 November 2019) saw 35 countries participate in a coordinated crackdown on organized crime groups engaged in various types of telecommunications and social engineering scams.

This was followed by a year of intensive information sharing among participating countries, analyzing the intelligence acquired in the operation in order to identify suspects and pursue investigative leads.

Based on the criminal techniques uncovered, INTERPOL also issued three Purple Notices on telephone scams, investment fraud and fraud schemes taking advantage of the COVID-19 pandemic.

Purple Notices provide information on objects, devices and concealment methods used by criminals – information that law enforcement organizations can access through INTERPOL’s secure I-24/7.

INTERPOL impersonation

Other types of fraud exposed in the operation include business e-mail compromise, romance scams and ‘smishing’, where standard messaging service (SMS) messages are sent to coerce a victim to divulge personal information that can subsequently be fraudulently used.

In Singapore, police arrested a man who presented false INTERPOL credentials when accompanying an elderly woman into a bank for a withdrawal. A further investigation found that the man appeared to be himself the victim of fraudsters who had called him pretending to be Chinese law enforcement agents, provided him with the fraudulent identification and directed him to seize the elderly woman’s funds.

A transnational threat

The results underscored the transnational nature of many telephone and online scams, where perpetrators often operate from a different country or even continent than their victims.

 Leveraging the borderless nature of the Internet, fraudsters rarely respect national jurisdictions in their scams. The money extracted from victims is also likely to involve multiple countries as criminals use overseas bank accounts or money mules to launder their funds.

 “It is important for member countries to remember that they are not alone in combatting these frauds,” said INTERPOL Secretary General Jürgen Stock.

“INTERPOL’s global network exists to support one another in precisely this situation, with the timely sharing of police information and intelligence, particularly when it crosses one or more jurisdictions,” added Secretary General Stock.

“The COVID-19 pandemic has seen telecommunications and social engineering frauds multiply. Operation First Light has achieved remarkable success in the past year yet, going forward, a much broader global coalition of law enforcement – facilitated by INTERPOL – will be needed to combat these threats,” said Duan Daqi, Head of the INTERPOL National Central Bureau in Beijing.

The latest phase of Operation First Light was supported by the Chinese Ministry of Public Security.



International conference focuses on cross-sector solutions against criminal finances and cryptocurrency-facilitated crime

LYON, France – Representatives from law enforcement and the judiciary, Financial Intelligence Units (FIUs), international organizations and the private sector have met virtually to shape international cross-sector solutions against the criminal use of cryptocurrencies.

Involving more than 2,000 participants from 132 countries across two days (18 and 19 November 2020), the 4th Global Conference on Criminal Finances and Cryptocurrencies was co-organized by INTERPOL, Europol and the Basel Institute on Governance. The annual conference is an initiative of the Working Group on cryptocurrencies and money laundering established in 2016 by the three organizations, and aims to strengthen knowledge, expertise and best practices for financial investigations and intelligence on virtual assets and cryptocurrencies.

Recent increases in the number and quality of investigations in the field of cryptocurrency-facilitated crime and subsequent money laundering means that law enforcement and other public entities are continuing to enhance their level of knowledge and expertise in this crime area. In this regard, the conference served as an opportunity to underline the need for countries and jurisdictions to increase the exchange of tactical information and best practices, so that lessons learnt by one entity can be useful to others.

With the conference underlining the need to extend capabilities on how to investigate virtual assets, and the necessity of applying rules to regulate virtual asset service providers to prevent money laundering, INTERPOL’s Director Organized and Emerging Crime Ilana de Wild said:

“A multi-agency and multi-disciplinary approach involving both the private and public sectors is key to tackling criminal finances and the misuse of cryptocurrencies. By combining the expertise and data on financial crime held by the private sector with the investigative capabilities of law enforcement, we can enhance our collective capabilities and scale up efforts against criminal finances.”

The conference agenda included trends and investigations on cryptocurrency crime, exploring criminal flows and operations in dark markets, ransomware and sextortion case studies, money laundering involving virtual assets, and the transfer of drug proceeds using cryptocurrencies.

In this respect, participants at the conference endorsed recommendations on capacity building initiatives to extend capabilities on how to investigate virtual assets, establishing clear regulatory framework to prevent money laundering, adopting ‘follow the money’ strategies against criminal proceeds, strengthening information exchange to dismantle criminal networks, and exploiting new technologies in criminal finances investigations.

The tripartite working group’s objectives include gathering, analyzing and exchanging non-operational information on the use of virtual assets, and creating a network of practitioners and experts in the field, so as to collectively establish best practices and provide assistance beyond the working group.

The Basel Institute on Governance will host the next edition of the conference in the second half of 2021.