FATF upgrades US to “largely compliant” on beneficial ownership; SRA updates position on domestic PEPs; new corruption trial starts for Malaysian MP.

On March 26, the Financial Action Task Force (FATF) announced that the US was upgraded to “largely compliant” with Recommendation 24, which relates to beneficial ownership transparency for legal persons. In particular, the global watchdog recognized the country’s progress in addressing deficiencies in its anti-money laundering and combatting the financing of terrorism (AML/CFT) regime, including the ongoing implementation of the Corporate Transparency Act (CTA). As of March 2024, the US is compliant with nine out of the 40 Recommendations and largely compliant with 23. However, it remains partially compliant with five and noncompliant with three. The country will report back to the FATF on the progress achieved in improving the implementation of its AML/CFT measures in its fifth mutual evaluation round (expected in April 2026).

The Solicitors Regulation Authority (SRA) has updated its AML sectoral risk assessment to identify emerging risks, including vendor fraud, proliferation financing, new types of financial technology, and wider economic pressures. Additionally, the SRA’s position regarding domestic politically exposed persons (PEPs) has been updated following an assessment that smaller firms are taking an overly simplistic approach to risks associated with PEPs and higher-risk jurisdictions. The SRA notes that firms should have realistic policies, controls, and procedures in place for the proper identification of PEPs, though it is up to them to decide their risk appetite. The Financial Conduct Authority (FCA) is due to provide guidance on PEP risk management later in 2024.?

A corruption trial has begun concerning Malaysian MP Datuk Wan Saiful Wan Jan, who is facing charges of bribery and money laundering. Wan Saiful is accused of accepting bribes and laundering RM5.59 million by transferring illegal proceeds to purchase a vehicle, make payments to the Malaysian National Sports Council, and transfer money to various company accounts. The trial is expected to last for 22 days, with up to 50 witnesses called to testify.?

Until next week,

Andrew Davies, Global Head of Regulatory Affairs

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