Companies House to get its own AML unit, UBS in scope over Credit Suisse migrations and Banque Havilland’s AML failings close the bank

From Paul O'Donoghue at AMLi

The UK has regularly been accused of being an illicit finance hub - it has even admitted as much itself, recently estimating that 40% of the world’s dirty money flows through either the City of London, British overseas territories and dependencies.

This makes its major AML initiatives, which can have far-reaching impacts internationally, all the more crucial.

Last week, the UK announced the world’s largest fincrime data sharing project, with seven banks supplying data to the National Crime Agency.

Now, it has been confirmed that new AML intelligence “cells” will be set up in both the Companies House and the Insolvency Service, two of the UK’s most prominent state corporate entities.

The move is made possible via ￡19 million of funding which will be delivered over “multiple years”, which will be sourced from the UK’s new Economic Crime Levy.

Coupled with new powers for the Companies House which includes a new sanctions regime, UK officials are hoping this marks another step in the right direction in the fight against illicit finance.

In the US Wells Fargo announced it is being investigated by government authorities over issues in its anti-money laundering and sanctions programs, the bank said on Thursday in a filing.

The company did not specify which government was inquiring about its practices, nor did it give details about the issues that were being probed.

Separately, Wells Fargo said it is in discussions with the U.S. Securities and Exchange Commission to resolve an investigation into the cash sweep options that the bank provides to investment advisory clients, according to the filing.

EUROPEAN BANKING

COMPANIES HOUSE: TWO of the UK’s most prominent state corporate entities will establish new AML investigative “cells” using ring-fenced funds from the state’s new Economic Crime Levy. In its annual report, the Companies House, the state agency which maintains the register of companies in the UK, said ￡19 million will be allocated to both it and the State Insolvency Service (INNS). Find the full story here: UK Companies House and Insolvency Service to set up new AML intelligence units

WELLS FARGO: Wells Fargo is being investigated by government authorities over issues in its anti-money laundering and sanctions programs, the bank said on Thursday in a filing. Read the full story here: Wells Fargo faces government probe on anti-money laundering, sanctions

UBS: When it first acquired the flailing Credit Suisse last year, UBS was viewed as something of a white knight, with many analysts referred to how it had “rescued” its Swiss rival.

How quickly the narrative can change.

Executives at UBS have since clashed with politicians and regulators over a variety of areas, including executive pay and capital requirements.

Now AML issues have been added to the growing list of problems.

Switzerland’s Financial Market Supervisory Authority (FINMA) is probing how #UBS is vetting risky wealthy clients being transferred from Credit Suisse, with a focus on the systems in place for over compliance and "know your customer" (KYC) rules.

After being harshly criticised in the wake of Credit Suisse’s near-collapse in 2023, the move is an indication of how closely #FINMA wants to be across the biggest global banking merger since the 2008 financial crisis.

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BANQUE HAVILLAND: At the other end of the banking scale, private lender Banque Havilland is set to close its operations in Switzerland and Liechtenstein.

The move came after news that the European Central Bank will revoke one of the company’s key banking licences, meaning it will no longer be allowed to operate in its home market of Luxembourg.

While the #ECB has not commented on the case, its decision are believed to relate to

its failure to implement required AML changes after it was fined €4 million by Luxembourg's financial supervisory authority.

The development represents a significant fall from grace for Banque Havilland, which is owned by the Rowlands, one of the UK’s wealthiest families.

The company is now looking to secure what value it can in its remaining operations, with reports that it is in advanced talks to sell its Monaco arm.

TECH HIT:

THETARAY: With the world of AML growing ever more complicated and costly for financial institutions, there is big money to be found in simplicity.

It’s an approach Israeli company #ThetaRay is betting on, aiming to effectively become a one-stop-shop for all of a bank’s fincrime detection needs.

It is one step closer to realising its vision after acquiring Luxembourg-based Screena, which provides a platform to screen individuals and companies against lists of sanctioned parties.

Significantly, the deal will give ThetaRay a major boost to its AI offering as it looks to maintain the momentum from a $57 million funding round last year.

MELIO: Yet another Israeli fintech firm making waves in the world of AML is #Melio.

The firm, which offers a business-to-business payments platform for small businesses, was valued at over $4 billion in 2021 after raising $250 million.

This week it announced the hire of Nick Passarelli , a 20 year industry veteran who has worked as chief compliance officer at a variety of prominent fintech companies.

It is a statement of intent from Melio, which said Mr Passarelli will now focus on securing Money Transmitter Licences for the company in key jurisdictions to help it expand its offering.

Certified Anti-Financial Crime Professional (CAFCP). Next 12-week programme begins on September 11th and is certified by one of Ireland's top Universities.

MOODY’S: Financial institutions are not just waiting for fintechs to make tech advancements for compliance - an increasing number are looking to do it themselves.

A new survey of financial professionals from #Moody’s found that 29% of respondents said their firm was trialling how to use AI for compliance and risk management - up from 21% the year before.

While just 11% of respondents said their company is currently using the technology, the rise in testing points to eagerness of many lenders have that #AI will be able to create significant efficiencies on the compliance side of their business.

LAW & DISORDER:

DUBLIN: One of Ireland’s most significant money laundering cases this year took a new turn after Mark Adams, formerly a police officer at Dublin Airport, was extradited to Northern Ireland.

The UK’s National Crime Agency (NCA) has estimated that Adams laundered “millions” of pounds for organised crime groups by “smuggling cash out of the country on flights”.

After being jailed in the Republic of Ireland for money laundering offences, Adams is now due to spend 20 months in jail in Northern Ireland after being discovered with over €180,000 at Belfast International Airport.

SANCTIONS: The UK’s National Crime Agency had a significant win this week after the estate of Russian billionaire Petr Aven’s agreed to forfeit ￡784,000.

It marked the culmination of a case which had run since May 2022, when the NCA obtained freezing orders relating to nine bank accounts connected to Mr Aven.

The investigation focused on approximately ￡3.7 million moved by a U.S. trust organisation to a UK entity just hours before European sanctions were imposed on Russia.

Mr Aven, who strongly denied the NCA’s accusations that he is a “pro-Kremlin oligarch, was added to the EU sanctions list in March 2022, but has since been removed from the register.

CASINOS: Finally, state-owned Holland Casinos has gotten a rap on the knuckles from the Dutch gaming regulator.

The organisation, which has 14 casinos in the Netherlands, was found to not have properly monitored the gaming behaviour of its players and the origin of their money.

The issues stemmed from an investigation by the Kansspelautoriteit regulator in 2019 - the organisation has said the failings have since been resolved, but said it hoped its findings around Holland Casinos would discourage AML breaches at other firms.

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Have a great Friday ??

Stephen and the team at AMlintelligence.