Danske’s new CCO on the bank’s AML past, Yellen on beneficial ownership and AMLA’s first board meeting

From Paul O'Donoghue at AMLi

LOOKING TO THE FUTURE

DANSKE: Finishing up this theme of peering ahead is Dorthe Tolborg , Danske Bank’s Chief Compliance Officer.

The Danish lender’s compliance arm has been trying to move on from a major AML scandal in 2017 and 2018 when it emerged that billions of euros in suspicious transactions had flowed through the Estonia-based bank branch of #Danske.

Ms Tolborg indicated that the company has put the controversy firmly in the rearview mirror, saying that its compliance department has since been significantly overhauled and upgraded.

“We will never forget it. We have it with us and we will never go back to that time. But we are in a different place today,” was how she summed it up.

BENEFICIAL OWNERSHIP: Yet another leading figure in the world of AML looking to push ahead is Janet Yellen.

The Secretary of the U.S. Department of the Treasury has said that there are no plans to extend the deadline by which small firms must file beneficial ownership information.

This is despite some stiff resistance to the idea, with many small business groups claiming they have fears they will be targeted with major fines for small filing infractions.

This has resulted in some, such as the National Federation of Independent Businesses, going as far as to mount legal challenges against the beneficial ownership legislation.

Ms Yellen has tried to reassure small firms that the new measures are targeted at catching major criminals channelling illicit funds.

But based on the pushback, many are yet to be convinced.

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TAX & AML: A new AML unit is being established within Luxembourg’s tax administration after lawmakers approved the unit in a vote in parliament Thursday. The new team will be set up in the Registration Duties, Estates and VAT Authority, one of the three tax authorities in Luxembourg. The move comes following an evaluation by FATF of Luxembourg’s AML measures and the resources available for the government agencies enforcing them.

AMLA’s FIRST BOARD MEETING: It’s an exciting time in the world of AML - we recently celebrated the three-week birthday of AMLA, our newest pan-European regulatory agency. But while AMLA was officially set up at the end of last month, it’s currently little more than a name on a sheet of paper, as the agency has no staff. That’s going to change soon - AMLi readers were the first to learn that the inaugural meeting of AMLA’s general board has been scheduled for September in Frankfurt, where the organisation will be based. The supervisory board consists of 27 national supervisors and the heads of the 27 FIUs of the EU member states.

With the application process for AMLA chair closing earlier this week and its offices set to open at the start of 2025, our little agency is growing up fast.

CITIGROUP: Also eager to look forward is Citigroup. Unfortunately, regulators feel the bank isn’t doing a good enough job of it.

In 2020, the lender was hit with a $400m charge due to “significant deficiencies” in its compliance and AML programs.

The company is meant to have cleaned up its act since. Which makes it all the more worrying that regulators imposed another $136m in penalties on it this week, citing a lack of progress in addressing various compliance issues.

The move is a major blow to CEO Jane Fraser , who joined the company in 2021 and has been one of those attempting to clean up and overhaul the company’s compliance arm.

She and the company’s other executives will have to act fast to avoid further problems.

LAW & ORDER

BOLSONARO: A major political controversy is brewing in Brazil, where police have claimed that a criminal group linked to Jair Bolsonaro tried to illegally sell off luxury items worth $1.2 million.

The former president, who was in office between 2019 and 2022, built a large part of his reputation as that of an incorruptible strong man.

However, investigators have claimed that many goods gifts to Bolsonaro by foreign leaders during his time in office were sold off by the criminal ring.

Mr Bolsonaro has always denied any wrongdoing, but it will be up to Brazil’s prosecutor-general if the claims are worth forcing the former president to trial over.

FRAUD

ARCHGEOS: Finally, Archegos Capital Management founder Sung Kook “Bill” Hwang was convicted of fraud and other charges relating to the 2021 collapse of his $36 billion private investment firm.

Prosecutors have said Hwang and Patrick Halligan, his Archegos deputy and co-defendant, lied to banks in order to obtain billions of dollars that they used to artificially pump up the stock prices of multiple publicly traded companies.

A jury in Manhattan federal court found Hwang guilty on 10 of 11 criminal counts and Halligan guilty on all three counts he faced.

Sentencing is set for the end of October.

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Have a great Friday ??

Stephen and the team at AMlintelligence.