Deutsche’s STR delay woes, big decisions for FATF, Russian ‘dark arts’ lead to Egmont suspension – and the ‘crooks’ who worked for Julius Baer

THERE WAS no doubt about the story which garnered the most interest amongst our social media followers this week. German financial watchdog BaFin’s €170,000 fine against Deutsche Bank for a delayed STR received more than 700 reactions and 70,000 impressions on social so far this week. That’s quite the reaction amongst our FCC community – particularly as the fine went pretty much unannounced by BaFin but was picked up by our editorial team. We have the story below for those of you who haven’t read it yet!

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FATF delegates were meeting in Paris all week where they were assessing Brazil’s AML/CFT measures along with other topics such as crowdfunding for terror financing and illicit flows from cyber-enabled fraud. There was also much discussion on how to prevent the misuse of NPOs (Non-Profit Organisations) and improve asset recovery. Ahead of the conflab, the Ukrainian government called for FATF to finally ‘blacklist’ Russia – which seems a reasonable request given the Kremlin’s growing alliance with blacklisted countries, North Korea and Iran. And of course there’s Putin’s own admission that Moscow bankrolled the Wagner mercenary group to the tune of at least €1BN. All of which break FATF’s rules. But will FATF President T Raja Kumar think this is something he can get thru the voting process? And what will #FATF say about Hamas, its terror funding model – and the whole war in the Middle East? We await the official announcements Friday.

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As expected, the #Egmont Group of FIUs suspended Rosfinmonitoring – the Kremlin’s puppet FIntel agency – from the group. In a Special Report for?AML Intelligence,?Ilze Znotina writes how behind the scenes Rosfin was using the group to gather intelligence on political enemies – and says Egmont was totally right to suspend the Russian FIU. We also report on how Rosfin’s chief is (surprise, surprise) an old KGB/FSB official.

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In the UK, in a further embarrassment for NatWest, it’s been revealed workers at the bank gloated about the closure of British politician Nigel Farage’s bank accounts and boasted they had “single-handedly driven him out of the country.”?According to internal messages handed to the #Brexit leader through a subject access request (SAR), one staff member reacted to news that he had been “debanked” by #Coutts, a #NatWest subsidiary, by saying: “Hope that knocked him down a peg or two.” Staff also suggested that he had “dodgy Russian connections” and described him as a “crackpot” and an “awful human being”, according to the messages. Furthermore, former ceo Alison Rose has been deemed to have breached data privacy rules with her fake news briefing to the BBC.

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Over in Germany the FIU has showcased its success in helping achieve jail terms of more than 14 years for managers and employees of a construction firm involved in social security fraud.?Customs officials in in Münster used information from the Financial Intelligence Unit (FIU) and to uncover the €3.3M swindle. The case was prompted by information from the FIU which led to extensive investigations by the main customs office in close cooperation with the public prosecutor’s office and the tax investigation department in Münster.

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#HERE:?

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It may come as a consolation to AFC and FCC staff but senior financial services executives believe Artificial Intelligence (AI) isn’t coming for the jobs of AML professionals at banks, according to a survey released this week.?The majority (93%) of respondents said they would use automation to support risk and the business rather than to eliminate people. The report from WorkFusion and Celent shows that staffing issues continue to plague the industry -with 74% unhappy with their current staffing levels. And when push comes to shove, senior personnel are filling the gaps of the understaffing. We have the full story, below.

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Meanwhile, #Capgemini this week formally completed its acquisition of the Financial Crime Compliance (FCC) division of #Exiger.?The French company – a sponsor of the Rugby World Cup – said the acquisition will strengthen its offerings in financial crime, risk management and regulatory compliance services. Founded in 2013, the FCC division of Exiger comprises a team of experts located in North America, EMEA and APAC. “The FCC division’s deep-domain capabilities and advisory board of ex-regulators, combined with Capgemini’s network of alliances, will enable the group to orchestrate an end-to-end ecosystem to drive advisory led transformation in financial crime compliance,” the company said.

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Interesting comments from former Julius Baer ceo, Boris Collardi who has spoken about the period when Switzerland’s regulator issued a damning assessment of the bank’s AML regime.?“Did we create our own set of issues? Absolutely, yes?.?.?. we had a few bankers who were crooks and a few clients that were crooks. Was it systematic? No,” the banker said in an interview. In 2021, regulator Finma found that the bank “fell significantly short in combating money laundering.”

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Also interesting his views on where the dirty money flow was now – Dubai and the Middle East, replied Collardi – and no longer Switzerland. What will the FATF delegates in Paris make of that?

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In our ‘Schuman’ European Notebook we report on how France is now tying its support for president of the European Investment Bank (EIB) candidates to its bid to host the EU AML Authority (AMLA).?Behind the scenes Germany has already said it is likely to vote for Spain’s candidate to be EIB president if Madrid supports Frankfurt to host AMLA. Similar moves by France to bring AMLA to Paris now complicate the arithmetic about how the two big EU powers will vote in the EIB presidency. The favourite to become EIB president is Spanish finance minister Nadia Calvi?o but European Competition & Digital Commissioner Margrethe Vestager is also in the race. Read the full, behind-the-scenes shenanigans in ‘Schuman’ European Notebook.

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In other news this week, highly respected US fincrime executive Lauren Kohr has joined IRS Criminal Investigation (IRS-CI) to build out the law enforcement’s PPPs programme. Lauren was sworn in by the agency’s Chief, Jim Lee. We report.

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Your news updates so far this week:

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ACQUISTION:?CAPGEMINI has formally completed its?acquisition?of the Financial Crime Compliance (FCC) division of Exiger.?The French company – a sponsor of the Rugby World Cup – said the acquisition will strengthen its offerings in financial crime, risk management and regulatory compliance services. Founded in 2013, the FCC division of Exiger comprises a team of experts located in North America, EMEA and APAC. Check out the story here:?Capgemini completes its acquistion of FCC division of Exiger

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BROKEN DATA RULES:?IT'S BEEN REVEALED that workers at NatWest?gloated?about the closure of British politician Nigel Farage’s bank accounts and boasted they had “single-handedly driven him out of the country." Separately, Britain's Information Commissioner’s has found ex ceo Alison Rose twice breached data protection laws when she spoke to a journalist about the closure of Nigel Farage’s bank account. The Information Commissioner's Office (ICO) found Ms Rose inappropriately shared Farage’s personal data in an inaccurate way.?Find this story here:?NatWest boss Alison Rose broke data rules over Farage – finding

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GERMAN FIU SHOWCASE:?GERMANY's FIU has showcased its success in helping achieve jail terms of more than 14 years for managers and employees of a construction firm involved in social security fraud.?Customs officials in in Münster used information from the Financial Intelligence Unit (FIU) and to uncover the €3.3M swindle. The case was prompted by information from the FIU which led to extensive investigations by the main customs office in close cooperation with the public prosecutor's office and the tax investigation department in Münster. Read the story here:?Germany’s FIU showcases how its intelligence led to prosecution of construction firm for €3.3M welfare fraud

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AI INSIGHT:?ARTIFICIAL INTELLIGENCE (AI) isn’t coming for the jobs of AML professionals at banks, according to a?survey released this week. The majority (93%) of respondents said they would use automation to support risk and the business rather than to eliminate people. The report from WorkFusion and Celent shows that staffing issues continue to plague the industry -with 74% unhappy with their current staffing levels. And when push comes to shove, senior personnel are filling the gaps of the understaffing. Find the story here:?AI is not coming for AML jobs, say bank fincrime staff; perennial staff shortage problems also highlighted

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UKRAINE CALLS ON FATF: UKRAINE called on FATF?delegates?meeting in Paris today (Monday) to blacklist Russia from the body.?It follows claims that the Kremlin is blackmailing some FATF members to stay in the organisation as well as deepening its relationship with already blacklisted countries. Kyiv’s FIU said that since the last plenary in June, Russia’s cooperation with Iran and North Korea has intensified. The unit also said that Russian president Putin has admitted the Kremlin financed the Wagner Group from the state budget – all of which are blatant violations of FATF’s rules and standards. Find the story here:?Russia blackmailing countries to stay on FATF, claims Ukraine as it calls for Moscow to be ‘blacklisted’ this week

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JULIUS BAER CHIEF: THE FORMER ceo of Julius Baer, Boris Collardi has?spoken?about the period when Switzerland's regulator issued a damning assessment of the bank's AML regime.?“Did we create our own set of issues? Absolutely, yes?.?.?. we had a few bankers who were crooks and a few clients that were crooks. Was it systematic? No," the banker said in an interview this week. In 2021, regulator Finma found that the bank “fell significantly short in combating money laundering”. Read the full story here:?‘We had a few bankers who were crooks’ ex-Julius Baer chief Collardi; claims all ‘dirty money’ now going to Dubai, Middle East

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EGMONT REACTIONS:?THIS WEEK'S decision made by the?Egmont Group of Financial Intelligence Units (FIUs) to suspend the membership of Rosfinmonitoring is to be warmly welcomed. The move underscores the paramount importance of upholding international law and the core principles of trust and cooperation within the global financial intelligence community. The invasion of Ukraine by Russia starkly illustrates its nihilistic disregard for international law, thus disrupting the long-established peaceful order. It's ironic that Russia, having breached international rules, would audaciously demand that others continue to adhere to them. Read the full piece here:?Right decision to suspend Russia from Egmont; Rosfin’s intelligence requests were ‘political,’ targeting opponents

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LAUREN KOHR JOINS IRS-CRIMINAL INVESTIGATIONS:?HIGHLY?respected?US fincrime executive Lauren Kohr this week joined the IRS - Criminal Investigation team.?Lauren is to lead out the IRS-CI's public private partnerships (PPPs) programme. IRS Criminal Investigation (CI), which is led by Chief Jim Lee, serves the American public by investigating potential criminal violations of the Internal Revenue Code and related financial crimes in a manner that fosters confidence in the tax system and compliance with the law. You can catch this breaking news-story here:?Fincrime executive Lauren Kohr joins IRS-Criminal Investigations to build out PPPs

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GLOBAL BILL:?THE GLOBAL cost to banks and?financial?services of financial crime compliance $206.1BN annually, according to a survey.?It's comparable to more than 12% of global research and development (R&D) expenditure and equates to $3.33 per month for each working-age individual on earth, according to LexisNexis Risk Solutions. The 'True Cost of Financial Crime Compliance Report' examines how financial institutions navigate the expenses and challenges tied to evolving financial crime compliance requirements. Find the full report here: Global bill for fincrime costs in financial institutions reaches $206BN

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FATF DELEGATION VISIT INDIA:?AN FATF delegation is set to visit?India?next month to probe the alleged misuse of the watchdog's recommendations to target NGOs who have raised concerns over human rights abuses. Amnesty International has complained the Indian government has exploited AML laws to suppress the work of civil society organizations and activists. Read the full story here:?FATF delegation to visit India over claims government is using AML laws to target NGOs which criticise policy

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Have a great Weekend ??

Stephen?and the team at AMlintelligence.