Friday's Final Word | week 23
From Fourthline’s perspective, summer has begun splendidly with a promising Rabobank partnership, while around the world the fight against financial crime has seen both victories and difficulties. Happy reading!
?? British bank accused of terrorist financing
?? Rabobank & Fourthline partnership
??? Money laundering via media company
?? More banks to come under Western sanctions
?? Money mule networks under raid
?? Difficulties of AI regulations
Whistleblowers accuse Standard Chartered of terrorist financing
Standard Chartered, the prominent British bank that narrowly escaped prosecution for money laundering in 2012 through the intervention of the British government, is now accused of terrorist financing. The suspicious transactions in question date back to the period between 2008 and 2013 when the financial institution facilitated payments worth $9.6 billion with individuals and companies designated by the US government as funding “terror groups.” Standard Chartered disputes the whistleblowers’ claims, stating that these allegations were already discredited by US authorities during earlier investigations into money laundering.
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Rabobank and Fourthline enter promising partnership
Rabobank, a leading global financial institution, has announced a strategic partnership with KYC & AML firm Fourthline. Central to this partnership is Rabobank’s decision to integrate Fourthline’s digital identity verification solutions into its Rabo Identity Services platform, allowing clients to benefit from Fourthline’s modular services. Flexibility is paramount for Rabobank, and Fourthline's adaptable approach aligns perfectly with this philosophy. By integrating Fourthline’s product offerings, Rabobank will be able to cater to its clients’ diverse needs, providing customized solutions tailored to specific use cases.
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Epoch Times CFO Bill Guan is charged in alleged $67 million global money laundering scheme
The chief financial officer of a right-wing global news outlet known for its critique of the Chinese Communist Party and its reporting on popular conspiracies has been arrested and charged with money laundering. CFO Bill Guan managed the Epoch Times’ “Make Money Online” team, which carried out the scheme by purchasing “crime proceeds” and transferring them to fake bank accounts linked to the media outlet and related entities. As a result, the company’s revenue jumped from approximately $15 million to approximately $62 million between 2019 and 2020, casting doubt on the legal nature of the outlet’s finances. This case highlights the lengths to which criminals will go to launder their illicit gains.
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G-7 and EU consider tougher sanctions on banks helping Russia evade Ukraine war sanctions
G-7 nations and the European Union are dissatisfied with the limited effects their sanctions on Russia have achieved, prompting discussions about stricter measures against third-country banks that are enabling Russia to circumvent the West’s constraints. These deliberations are taking place ahead of a G-7 summit scheduled for next month in Italy. In recent months, new sanctions and export controls have already been unveiled, and this topic will remain a top priority in the coming weeks as the West is determined to reaffirm its support for Ukraine, which is suffering from Russian advances on the battlefield. As more financial institutions are added to sanctions lists, maintaining compliance will become increasingly challenging.
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Coordinated law enforcement action leads to successful operation against money mule networks
Italian and Portuguese authorities have successfully cracked down on two networks of money-mule recruiters who provided services to a criminal organization lacking the technical expertise to launder its illicit gains. The series of raids took place in the last weeks of May, following a years-long investigation involving the cooperation of several other European law enforcement agencies. The organized crime group at the center of the investigation was conducting classic "rip-deal" scams, with millionaires as their main victims. The two money-mule networks were hired as crime-as-a-service businesses to assist with the money laundering. The prevalence of money-mule activities in recent years has prompted Europol to develop the #DontBeaMule prevention campaign to raise public awareness about the case.
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Why AI regulation is so difficult
While there is much talk about the need to put guardrails in place to protect humanity against the potential dangers of AI technology, regulators have been slow to move forward with tangible regulations, except for the case of the EU’s AI bill. The lack of legislative progress stems from the rapid evolution of the technology, which limits regulators’ ability to determine the exact risks future developments might bring. This looming uncertainty poses a major challenge for regulation because it makes it impossible to identify specific use cases that lawmakers need to regulate. Apart from a few recognized dangers, such as deepfakes and embedded racism, AI development can still present many surprises, both positive and negative. Therefore, significant roadblocks remain for regulators to pass measures that are truly comprehensive.
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