Campion Willcocks Financial Crime Review
What's In This Edition
Industry Press and News
???FCA to review treatment of Politically Exposed Persons???
The FCA has launched a review into how regulated firms treat domestic PEPs. The review will consider how firms are:
The review report is expected to be available by June 2024.
Source: FCA
??Money Laundering and People Smuggling Network Criminals Jailed for more than 70 years??
Sixteen people have been given jail sentences totalling more than 70 years. The criminals were part of a West London-based organised crime group involved in money laundering and people smuggling, with the NCA estimating they smuggled around ￡70 million in cash out of the UK between 2017 and 2019. The cash is believed to have been the proceeds of the sale of class A drugs and organised immigration crime.
Source: NCA
??Deutsche Bank Subsidiary, DWS, Fined $25m for AML Violations and ESG Investments Misstatements??
The U.S. Securities and Exchange Commission have charged DWS with AML violations and ESG investment misstatements for which DWS agreed to pay a total of $25m to settle. The AML violations relate to DWS having caused mutual funds it advised to fail to develop and implement a reasonably designed AML program to comply with the Bank Secrecy Act and applicable Financial Crimes Enforcement Network regulations, along with causing such mutual funds' failure to adopt and implement policies and procedures reasonably designed to detect activities indicative of money laundering and to conduct AML training specific to the mutual funds’ business.
Source: SEC
??OCCRP Release New Podcast Series, Dirty Deeds: Tales of Global Crime & Corruption??
The Organized Crime and Corruption Reporting Project have released a new podcast series delving into their investigative journalism where they uncover and report on some of the world's most dangerous criminal networks.
Source: OCCRP
Regulatory Developments: Legal First with Unexplained Wealth Order
On 14 September, a High Court judge refused an application to vary an UWO against Yaqub Younis and his associated company, Regal Capital UK Limited. Mr Younis' son brought the application to replace Yaqub Younis as the respondent and to obtain a further six weeks to respond to the UWO.
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Mr Younis and his company did not comply with the requirements imposed by the UWO and this failure has given rise to a statutory presumption that the assets subject to the UWO may be recoverable property, the first such instance in British Legal history.
The judge granted a further Property Freezing Order over 14 properties valued at ￡1.25m belonging to Mr Younis, which were subject to an Interim Freezing Order in June.
Mr Younis is currently on the run, having been recalled to prison for breach of his licence in February 2023.
Source: NCA
Think-Piece: The Changing Crypto Landscape
Developments in the EU
On 9th of June 2023, the EU published the regulation on markets in crypto assets (MiCA) in the Official Journal of the European Union. The EU has introduced a harmonised regulatory framework for the crypto market encompassing crypto-assets, crypto-asset issuers and crypto-asset service providers (CASPs). The purpose of this regulation is to provide legal certainty in a market that has been viewed in the past, rightly or wrongly, as the ‘Wild West’ of financial markets. From an anti-money laundering (AML) perspective, a ‘recast’ or updated Transfer of Funds regulation (TFR) was also published by the EU on the same date. The TFR requires CASPs registered in the European Union to collect and share originator and beneficiary information (the ‘Travel Rule’) as detailed in Recommendation 15 of the Financial Action Task Force’s (FATF) 40 Recommendations. Both MiCA and the updated TFR will apply from the 30th December 2024.
The Regulatory Status of Crypto in the U.K.
The FCA provides oversight to ensure that cryptoasset firms have effective AML and terrorist financing procedures in place, however, security tokens are the only FCA regulated crypto asset. Not to be regarded as a laggard in this changing regulatory landscape, the FCA has introduced the ‘Travel Rule’ in the UK from the 1st of September.? This transactional transparency, already standard practice with established financial institutions, will make it harder for criminals to use cryptoassets for illicit activity. The Economic Crime and Corporate Transparency Bill, which is progressing through the UK Parliament, will be significant as it:
Where to next?
It is evident that both the EU and UK regulatory environments are such that a balance is being struck between encouraging innovation in the crypto market and protecting consumers. His Majesty’s Treasury (HMT) has issued a consultation paper on the future financial services regulatory regime for cryptoassets as of February 2023. No doubt, features of the regulatory certainty provided by MiCA will be reflected in any changes to the existing framework of the Financial Services and Markets Act 2000 (FSMA).? ?
How Campion Willcocks can help?
One of the biggest barriers to crypto firms obtaining FCA authorisation is having inadequate AML controls and a significant challenge to authorised crypto firms is implementing and maintaining their AML framework. Here’s how CW can help:
If you need help with any of your?#aml , #sanctions ,?#financialcrime ,?#compliance ?or?#terroristfinancing ?requirements, please contact Campion Willcocks directly or our newsletter editor?Caleb Hogg?and we'll be happy to help.