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Financial Crime Wave – OFAC hits Singapore broker on North Korea, Latvian AML fine, and more

Friday, October 26, 2018   (0 Comments)
Posted by: Brian Monroe
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By Brian Monroe
bmonroe@acfcs.org
October 26, 2018

In this week’s Financial Crime Wave, U.S. government agencies designated and file criminal charges against a securities broker in Singapore for helping North Korea evade sanctions, a Latvian regulator, under pressure to clean up the financial sector, penalizes a bank nearly $2 million on anti-money laundering, and more.

Money laundering

How One Stubborn Banker Exposed a $200 Billion Russian Money-Laundering Scandal

Billions in illicit funds flowed through accounts held at Danske Bank’s branch in Estonia. One employee dug into the details and tried to alert his superiors. The resulting scandal cost the chief executive his job and prompted a new round of soul-searching about defenses against criminal money. A Wall Street Journal review of internal bank documents and interviews with dozens of officials and bankers involved with Danske’s Estonian operations reveal how a multibillion-dollar money-laundering pipeline remained open for years, and how Howard Wilkinson, a detail-oriented midlevel career banker, finally brought it down.

The money involved is equal to more than all the corporate profit in Russia in a year. The scandal has tarred the reputation of Denmark, a country ranked among the world’s most transparent, and it has wiped out nearly half the stock-market value of the Scandinavian country’s largest bank, which knew about the problems for years before they became public, (via the WSJ).

Browder accuses Nordea of processing $405 million in suspicious funds in sprawling money laundering scandal

British-based businessman Bill Browder has reportedly accused Nordea Bank of processing $405 million is suspicious funds, adding more details about the banks he alleges helped launder dirty money from Russia. Nordea is listed in a criminal complaint filed to Finish authorities, Bloomberg said, adding that Finland’s National Bureau of Investigation has confirmed the development.

Browder, who was at one time a leading investor in Russia, says hundreds of millions of dirty cash has been moved from Russia to various parts of the world. His firm highlighted a $230 million fraud while it was based in Russia, a case which was linked to the brutal death of lawyer and accountant Sergei Magnitsky. Browder’s accusations against Nordea follows a growing number of allegations that illicit cash was moved from Russia and processed by various banks in eastern and western Europe. Danske Bank has recently admitted that around 200 billion euros ($234 billion) of suspicious money was processed over an eight-year period, the issue has been deemed the ‘biggest scandal’ in Europe. A significant part of this money is believed to have originated from Russia, (via KYC360).

London: Money launderer used Facebook to recruit young teens as money mule 

A man who got teenagers as young as 13 to allow him to use their bank accounts to move cash has been jailed for money laundering. According to City of London Police, the Newham-based man had control of six Facebook accounts and an Instagram account that he used to recruit the money mules. A 13-year-old boy was told he would receive £1000 for giving his bank card and PIN.

In total, nearly £36,500 was moved through different bank accounts belonging to 15 teenagers aged 13 to 19 years-old between September 2015 and February 2017. Through social media, he would advertise for bank “card holders” aged “15+” and post videos showing large amounts of cash. When he had made contact with someone, he would often meet up with them in person. He told one 15-year-old boy that if he handed over control of his bank account and allowed between £800 and £1000 to be paid through it, he would receive £300, (via KYC 360).

Sanctions

DOJ levies sanctions evasion, money laundering charges against Singapore commodities broker for helping North Korea move funds

The U.S. Department of Justice (DOJ) this week charged Singapore-based commodities broker Tan Wee Beng for allegedly acting as a front to use the U.S. financial system to conduct millions of dollars’ worth of transactions to finance shipments of goods to North Korea. Beginning in 2011, according to charging documents, Beng conspired to use commodities businesses, including an unnamed Company-1, of which he was both an owner and director, and front companies in Singapore, Thailand, Hong Kong, and elsewhere to violate and evade both prohibitions against North Korea’s access to the U.S. financial system and prohibitions on dealings with certain North Korean entities identified by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), including Daedong Credit Bank (DCB), which was designated by OFAC in 2013. 

In particular, Beng conspired to deceive U.S. financial institutions into conducting financial transactions on behalf of and for the benefit of DCB and other North Korean entities and persons.  Those illicit transactions were used to launder money from DCB and other North Korean entities and persons to make payments to Company-1 for shipments to North Korea. Currently, Beng is on the run, (via DOJ). To read the OFAC releases, click here and here.

Currency Counterfeiting

One of the biggest and most modern Counterfeiting print shops in Europe dismantled

In an operation supported by Europol, the Bulgarian authorities with the collaboration of the US Secret Service have seized €11 million and $1.7 million in counterfeit 50, 100 and 500 euro banknotes, as well as 100 and 50 counterfeit US dollars. The fake banknotes were found in an illegal print shop concealed in the basement of a hotel in Sunny Beach (Slantchev Briag), a resort on the Black Sea. This is one of the biggest and the most modern counterfeiting print shops dismantled in Europe in recent years. The print shop used a highly sophisticated and modern printing press that produced high-quality banknotes.

On the same day, more than 30 addresses across Bulgaria were raided during the operation. As a result, four members of the organized criminal group were detained, including the hotel owner. Europol supported the investigation by providing analytical and operational support, including information-exchange and cross-checks against Europol’s databases, and by financing special police measures under the grant for the fight against euro counterfeiting, (via the EU Reporter).

Enforcement

OCC fines Capital One $100 Million on lax AML program, oversight of correspondent portals, RDC operations, SARs

The federal regulator of the nation’s largest and most complex banks has penalized a household name credit card company $100 million for failing to adequately correct a host of deficiencies cited in a prior enforcement action centered around the oversight of correspondent accounts, remote deposit capture facilities and not reporting instances of aberrant activity.   The penalty against Capital One is a rare foray for the U.S. Treasury’s Office of the Comptroller of the Currency (OCC) against a credit card company, with the regulator in recent months focusing its wrath chiefly against the domestic connections of large foreign banks in Asia, the Middle East and Eastern Europe with threadbare anti-money laundering (AML) programs.

At the same time, the OCC action continues a trend of federal and state regulators levying hefty fines after they felt prior non-monetary enforcement actions were not taken seriously enough. In this case, examiners brought the bulk of the AML issues to Capital One’s attention in a prescriptive, 31-page July 2015 consent order.

In tandem, the high-profile figure further echoes issues highlighted as fincrime focal points in prior federal AML skirmishes, including correspondent banking, the accuracy, depth and timeliness of risk assessments, transaction monitoring tangles and related decision-making and missed suspicious activity reports (SARs), (via the OCC).

Latvian regulator fines bank nearly $2 million on lax AML program, weak CDD, monitoring, failure to capture beneficial ownership details

A Latvian regulator has penalized a home country bank 2.2 million euros, or $1.9 million, for “serious” financial crime compliance deficiencies, including failing to query customers to determine risk or source of funds, poor transaction monitoring systems and not following up on large, suspicious, out-of-scope transactions.  The Board of the Financial and Capital Market Commission (FCMC) recently levied the fine on the joint stock company LPB Bank, which provides a range of banking products and services primarily for private and corporate clients in Latvia, the EU and internationally.

The regulator is requiring the bank to create and follow an action plan to improve the identified gaps and engage an independent third-party consultant to review the remediation and scour for missed controls or instances of suspicious activity that were never reported.  The penalty occurs as Latvia is under enormous pressure from internal and external anti-money laundering (AML) watchdogs for being linked to several high-profile investigations into illicit financial flows, many originating from Russia.

The Bank had failed to set up its internal control system appropriate to operational risks that would ensure efficient compliance with regulatory provisions, for example:

Ø  the Bank failed to document the manner how the beneficiary of customer exercised utmost control over the company and benefitted from the economic activities of the customer;

Ø  the Bank failed to timely obtain documents to verify the origin of the funds in the customer accounts, and whether the transaction volumes were proportionate to the amount of the funds received in the account, (via the FCMC).

Terror finance

Pakistan regulator directing banks to require staff sign anti-terror affidavit, pledge they, family, associates not tied to, supporting illicit groups

The State Bank of Pakistan (SBP) on Monday directed all banks and development financial institutions (DFIs) to provide an affidavit stating that anyone of their employees is not affiliated to a terrorist organisation. The SBP said considering the potential risk arising from money laundering, terrorism financing and proliferation financing, it is imperative that an individual linked to any criminal activities or affiliated to any terrorist organizations should not become part of banks/DFIs. “Accordingly, any sponsor shareholders/beneficial owners, directors, presidents and key executives, persons subject to fit and proper test (FP) shall become disqualified if they are designated/proscribed or associated directly or indirectly with designated/proscribed entities/persons under United Nations Security Council Resolution or Anti-Terrorism Act 1997,” the SBP said in a statement addressing banks/DFIs.

Pakistan is in a watch list of the Financial Action Task Force for its non-compliance with the international standards of anti-money laundering and counter-terrorist financing. The country has a certain time to remove the loopholes in its laws to avert being blacklisted by the global financial system watchdog from the existing grey list. All financial institutions were directed to submit revised fit and proper test questionnaire and undertaking as per Annexure-V to SBP confirming that the person subject to FPT has been verified through the National Database and Registration Authority (Nadra) and screened against the list(s) of designated/proscribed entities and persons as per the applicable laws, rules and regulations, (via the News).

Corruption

Indonesia arrests nine in bribery probe linked to $21 billion Lippo Group project

Indonesia's anti-corruption agency has arrested nine people, including a top district government official and a company director, in a bribery investigation linked to the Lippo Group's $21 billion Meikarta real estate project near Jakarta. In a sting operation on Sunday, the Corruption Eradication Commission (KPK) arrested two Lippo Group consultants and an employee accused of trying to pay off city officials to obtain property permits for Meikarta, KPK chairman Laode Muhammad Syarif told a news conference late on Monday.

Costing $21 billion and billed as the "Shenzhen of Indonesia", after the booming Chinese city, Meikarta is Lippo's largest project to date and is meant to be a center for the automotive and electronic industries, while including five-star hotels, shopping malls and universities, (via Reuters).

Corporate transparency

Fireflies and algorithms: The coming explosion of companies and the new challenges and technologies to try and capture, document ownership stakes

Company formation has, so far, been relatively unaltered by the data revolution. But change is coming, and will likely create a massive increase in the speed, number and complexity of companies, all powered by automation of company formation, and driven by demand from new technologies.

As with the shift from paper to electronic stock trading, the automation of companies will have profound and wide reaching effects for society as a whole, fundamentally disrupting how, when and why companies are formed… and the ways we hold them to account, (via Open Corporates).

TBML

Commerzbank pilots fintech tool to automate 80% of trade finance compliance checks

Commerzbank is piloting a fintech solution that will see it automate 80% of its “first line of defense” compliance checks of its trade finance processes by 2020. The bank has announced it is working with Conpend, a fintech firm that uses optical character recognition (OCR) and machine learning to digitize physical trade documents, recognize patterns and flag deviations. The firm also conducts automatic document checking and sanctions screening. Speaking to GTR, Marc Smith, Conpend founder and MD, says the two have been working together since May to integrate the system into Commerzbank’s back office. The bank, he says, is now live with the software in production in Hamburg, where it is carrying out the pilot.

At first, the pilot will see Conpend automate Commerzbank’s anti-money laundering processes, and, after an evaluation process, the bank plans to also implement further checks in trade finance next year. Commerzbank says in a statement that the planned 80% automation refers to business operations only – the so called “first line of defense” – and does not affect any downstream internal oversight, compliance and audit processes, (via GTR).

Fraud

Fed study finds rising noncash payments fraud, with criminals turning more aggressively to ACH for speedy, hefty hauls

The value of fraudulent noncash payments in the United States rose significantly between 2012 and 2015 -- outpacing growth in noncash payments overall, according to new Fed report. The study's survey of depository institutions found that the value of noncash payments fraud rose 37 percent from $6.1 billion in 2012 to $8.3 billion in 2015. Over the same period, the total value of noncash payments rose 12 percent from $161.2 trillion to $180.3 trillion. The report provides estimates of payments fraud totals and rates for payments processed over general-purpose credit and debit card networks, including non-prepaid and prepaid debit card networks, the automated clearinghouse (ACH) transfer system, and the check clearing system. These payment systems form the core of the noncash payment and settlement systems used to clear and settle everyday payments made by consumers and businesses in the United States.

The fraud data were collected as part of Federal Reserve surveys of depository institutions in 2012 and 2015 and payment card networks in 2015 and 2016. The types of fraudulent payments covered in the study are those made by an unauthorized third party. Some other findings:

·         There was an estimated 46 cents of payments fraud for every $10,000 of payments in 2015, compared to 38 cents of payments fraud for every $10,000 of payments in 2012.

·         The value of fraudulent card payments and automated teller machine (ATM) withdrawals rose from an estimated $4 billion in 2012 to $6.5 billion in 2015.

·         Card fraud, by value, accounted for more than three-fourths of noncash payments fraud in 2015, rising from less than two-thirds in 2012.

·         Check fraud, by value, declined to $710 million in 2015 from $1.1 billion in 2012.

·         The value of ACH fraud rose to $1.2 billion in 2015 from $1 billion in 2012, but the fraud rate was little changed,(via Finextra).

Virtual currencies

A look at why AML and KYC programs are so important for cryptocurrencies and related exchanges

Cryptocurrencies have become one of the most talked about subjects in the financial sector. But in spite of their advantages and revolutionary innovations, it does not come without its criminals and illicit activities. Since the beginning of 2017, governments from all across the world have been drawing up regulation for this market sector.

The majority of these efforts have been revolving around the implementation of KYC and AML regulations. As more and more countries are starting to implement a regulatory framework for cryptocurrency exchanges, wallet services, and other blockchain businesses, they will all have to comply to the KYC and AML standards if they want to operate legally, something many jurisdictions are still wrestling with, particularly how to classify the sector as currency, a security or some form of a prepaid product, (via Coindoo).

Japan’s FSA recognizes crypto self-regulatory body, JVCEA

The cryptocurrency regulatory authority in Japan, the Financial Services Agency (FSA) has announced support for the cryptocurrency-self regulatory body. The Japan Virtual Currency Exchange Association (JVCEA) has now been tasked with the mandate to oversee the operations of exchanges based in the country. The body encompasses 16 crypto exchanges and this license allows it to be a “certified fund settlement business association.” JVCEA has been given the mandate to come up with guidelines that will be used to oversee the operations of exchange companies in Japan. This will include anti-money laundering policies as well as setting the standards that will guarantee security of customer funds on the platforms.

The attack on Coincheck where at least $530 million in NEM cryptocurrency was stolen by hackers was devastating for the exchanges in the country calling for an action to be made. The exchanges came together to launch a body that will assist the regulator in overseeing the operations of exchange platforms. The JVCEA sent a formal application to the FSA in August this year asking for recognition. Following a review that has taken roughly a couple of months the body has been allowed to go ahead with its intensions, (via FX Street).

Compliance

Financial crime compliance: FFIEC launches new, redesigned BSA/AML InfoBase site to boost user engagement, access to critical procedures

The Federal Financial Institutions Examination Council (FFIEC), the group that crafts and releases the financial crime compliance industry bible on programs and procedures, launched a redesigned Bank Secrecy Act/Anti-Money Laundering (BSA/AML) InfoBase website last week, aimed at sharing financial institution examination procedure information with examiners, financial institutions, the public and other stakeholders. According to the FFIEC, InfoBase was redesigned to improve the overall experience for users. The redesign improves site navigation, enhances search capabilities, provides mobile-friendly capability and contains new functionality that allows users to download various sections of the FFIEC BSA/AML Examination Manual.

The BSA/AML InfoBase Home Page provides users with access to everything in one place. At the top of the screen, across the banner from left to right, users can get to the Infobase Home Page, the Online BSA/AML Manual, Examination Procedures, References, and the FFIEC Home Page. Quickly accessible sections of the manual include:

  • Introduction: An introduction to the FFIEC BSA/AML Examination Manual and related concepts;
  • Compliance Program: Guidance to examiners on examination scoping and planning, assessing the BSA risk assessment and compliance program, and developing conclusions and finalizing the exam;
  • Regulatory Requirements: Guidance to examiners on assessing compliance with other statutory and regulatory BSA requirements;
  • Program Structures: Guidance to examiners on assessing BSA/AML compliance program structures, management of foreign branches, and parallel banking; and more, (via CUNA).

A look at how to overhaul your bank's defenses against all financial crimes in months and with minimal outlay.

The shifting landscape of modern banking is anchored by a digital bedrock. And it’s from this core that new possibilities bubble up to the surface for banks. But this evolution represents both opportunity and threat for you. For all the positives, such as fostering a close relationship between banks and customers, the digital world creates fissures in your security, opening you up to the ever-evolving perils of fraud, money laundering and cyber compromise. 

These vulnerabilities are magnified by silos. Banks traditionally depend on internal borders for confidentiality, compliance and fraud prevention. And yet, conversely, by maintaining these divisions and silos, the financial sector is preventing the sharing of critical threat intelligence and security insights. In short, silos are being exploited by cyber criminals to turn what you might perceive to be your best defense against you. A just-released guide by BAE explores how to break down the silos and barriers standing in the way of modern, effective anti-fraud measures. And it lists the steps that must be at the front of the C-suite’s mind when addressing the challenge of silos, (via BAE).

Securities

Finra's Amended CAB Rule, which inculcates FinCEN’s new beneficial ownership duties, to be implemented in less than a month

The Financial Industry Regulatory Authority’s (Finra) rule to amend its Capital Acquisition Broker (CAB) rule, Rule 331, will kick in on Nov. 19. The rule was updated to reflect the Treasury Department’s Financial Crimes Enforcement Network’s adoption of a final rule on customer due diligence requirements for financial institutions. The broker-dealer self-regulator announced in its Regulatory Notice 18-36, issued Friday, that it has filed for “immediate effectiveness amendments” to CAB Rule 331 — its anti-money laundering compliance program.

FINRA adopted in 2016 a separate set of FINRA rules for firms that meet the definition of a “capital acquisition broker” and that elect to be governed under this rule set. “CABs are member firms that engage in a limited range of activities, essentially advising companies and private equity funds on capital raising and corporate restructuring, and acting as placement agents for sales of unregistered securities to institutional investors under limited conditions,” FINRA explained in its regulatory notice. This is the second rule amendment Finra has issued to conform with FinCEN’s rule, which became effective in May. The broker-dealer self-regulator amended Rule 3310, its Anti-Money Laundering Compliance Program rule, in May to reflect FinCEN’s adoption of its final CDD rule, (via Think Advisor).

Securities AML update: Financial Crime Compliance Principles for Securities Custody and Settlement

In recent years, financial crime compliance has risen to the top of both regulators' and banks' priorities. In the U.S., this has meant regulators like the Securities Exchange Commission (SEC) and Financial Industry Regulatory Authority (Finra), leveling more enforcement actions and penalties – including record fines for lax financial crime compliance programs. On a broader scale, at the end of August 2015, the International Securities Services Association (ISSA) released 17 Principles which are recommended to be implemented by the global community of securities custodians and intermediaries in order to address the critical challenges posed by financial crime. It is anticipated that a cross-market adoption of the Principles can be achieved by the end of 2019. In order to facilitate implementation, the ISSA Working Group has the mandate to:  

  • Complete, release and maintain supporting documents
  • Maintain and review the Principles annually
  • Engage with the regulatory, member and service provider communities
  • Publish list of screening and KYC providers

In this initiative, large domestic and international securities firms are mirroring their banking counterparts by more aggressively sharing information on clients and criminal tactics to both shield the sector from illicit entry and craft and share best practices for anti-money laundering (AML) program duties and how they weave into that, at-times, complicated, convoluted and intermediated securities sector. Some key recent or upcoming milestones:

  • 17 August 2018: Closing date for submission to the FATF consultation.
  • September 2018: Publication of a deep dive article on the ISSA FCCP in the Journal of Financial Crime Compliance
  • September 2018: Working Group Conference call to review progress against the Communication Plan
  • October 2018: SIBOS joint ISSA and SWIFT Community Session:  Financial Crime Compliance
  • Beginning of December 2018: Next Working Group Meeting, (via ISSA).

Cybersecurity

Africa, even as it improves digital, technological capacity, losses billions to cyber assasins

Africa, which is yet to develop a robust digital economy, has lost an estimated $3.5 billion dollars to cyber security attacks over the past few years, Henry Kerali, World Bank Country Director in Ghana, has said, (via GNA).

As criminals flock to a company selling hacking malware as a monthly subscription service, one expert wonders: Who is Agent Tesla?

A powerful, easy-to-use password stealing program known as Agent Tesla has been infecting computers since 2014, but recently this malware strain has seen a surge in popularity — attracting more than 6,300 customers who pay monthly fees to license the software. Although Agent Tesla includes a multitude of features designed to help it remain undetected on host computers, the malware’s apparent creator seems to have done little to hide his real-life identity. The proprietors of Agent Tesla market their product at agenttesla-dot-com, selling access to the software in monthly licenses paid for via bitcoin, for prices ranging from $15 to $69 per month depending on the desired features.

The Agent Tesla Web site emphasizes that the software is strictly “for monitoring your personel [sic] computer.” The site’s “about” page states that Agent Tesla “is not a malware. Please, don’t use for computers which is not access permission.” To backstop this disclaimer, the site warns that any users caught doing otherwise will have their software licenses revoked and subscriptions canceled. At the same time, the Agent Tesla Web site and its 24/7 technical support channel (offered via Discord) is replete with instances of support personnel instructing users on ways to evade antivirus software detection, use software vulnerabilities to deploy the product, and secretly bundle the program inside of other file types, such as images, text, audio and even Microsoft Office files, (via Krebs on Security).

Cross-selling

More penalties for Wells Fargo in continuing cross-selling debacle

Wells Fargo & Co will pay $65 million to settle claims that it misled investors about its “cross-selling” business strategy, the New York Attorney General’s office said on Monday.

A push by Wells Fargo to get existing customers to buy more of the bank’s products, known as “cross-selling,” was at the center of a fake customer accounts scandal that has dogged the bank for two years, (via Reuters).

Risk management

Compliance performance snapshot: How Do You Develop Key Risk Indicators (KRIs)? And How Do They Differ From KPIs?

As fincrime compliance professionals, AML officers are constantly juggling risks and attempting to improve performance and outcomes – all on typically tight budgets. This story looks at how to improve both simultaneously. Risk is part and parcel of business, and it’s rare to find a business where risk isn’t discussed and monitored on a regular basis. Key risk indicators (KRIs) should be an integral part of your risk framework and discussions. But what are KRIs and how do they differ from key performance indictors (KPIs)?  KRIs are indicators or metrics that are used to measure risks that the business is exposed to. Examples might include:

  • Financial KRIs: economic downturn, regulatory changes
  • People KPIs: high staff turnover, low staff satisfaction
  • Operational KPIs: system failure, IT security breach

However, it’s worth noting that the word “key” is important here. KRIs aren’t about monitoring every single risk facing the business. Instead, they focus on the most critical indicators for managing the highest risks – and these will vary from business to business in line with the company’s objectives and priorities.

KRIs and KPIs are closely linked – or they should be. In the average company, they’re often kept very separate. What I find in practice is that companies see performance management (KPIs) and risk management (KRIs) as two very different things. Think of it this way:

  • KPIs answer the question, “How are we doing against our goals?”
  • While KRIs answer the question, “What is the likelihood that we might not achieve our goals?” or, to put it another way, “What might prevent us from achieving our goals?”

It’s therefore important to integrate KRIs into your performance management framework by linking KRIs to KPIs. This way, by establishing the right risk indicators for your business and monitoring ongoing performance through related KPIs, you can track performance and risk at the same time in one streamlined process. Risk and performance become properly aligned, (via Bernard Marr).

Information sharing

DOJ, DOI team up to improve tribal access to criminal records database

The Department of Justice (DOJ) and the Department of the Interior (DOI) announced a dramatic expansion of the federal government’s key program that provides tribes with access to national crime information databases, the Justice Department’s Tribal Access Program for National Crime Information (TAP), that will allow tribal investigators access to more data about individuals with criminal records, who could be on native lands.

By the end of 2019, the Justice Department will expand the number of TAP participating tribes by more than 50 percent — from 47 tribes to 72. These new locations will provide crucial access to TAP for services delivered to more than 50 tribal communities that currently do not have any direct access, (via DOJ).

Identity theft

IRS warns on jump in suspected tax return fraud, hacking by identity thieves

The Internal Revenue Service today warned tax professionals of a new wave of attacks that allow identity thieves to file fraudulent tax returns by remotely taking over practitioners’ computers.

As part of the Security Summit effort, the IRS urged tax professionals to review their tax preparation software settings and immediately enact all security measures, especially those settings that require usernames and passwords to access the products.  The IRS is aware of approximately two dozen cases where tax professionals have been victimized in recent days, (via the IRS).

FATF

Global AML watchdog in first plenary under U.S. presidency, to prioritize regulations for virtual currency sector, updated fincrime risks in insurance, securities sectors, regtech, and more

The Paris-based Financial Action Task Force (FATF), which sets global financial crime standards, in its first action under a U.S. presidency has highlighted a bevy of major anti-money laundering (AML) risks and vulnerabilities.

The group is planning on tackling in the next year current hot button issues, including rules and regulations around virtual currency firms, stronger tactics to uncover and disrupt the financing of terror groups like ISIS and enhanced strategies to detect and deter the funding cycles related to weapons of mass destruction. Other core initiatives include:

  • Discussion of the mutual evaluation reports of Israel and the United Kingdom.
  • Discussion of follow-up reports for the mutual evaluations of Austria, Denmark and Malaysia in which all three countries achieved technical compliance re-ratings
  • Identifying jurisdictions with strategic AML/CFT deficiencies 
  • Adoption of a report to the G20 Leaders’ Summit
  • Adoption of two Risk-Based Approach Guidance papers, for insurance, securities sectors

·         Update on FinTech & RegTech Initiatives

·         Future work on Digital IDs, (via FATF).


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