Friday's Final Word | week 50

?? The crimes behind financial crime

??Football’s ‘thugs and oligarchs’ AML crackdown

???White collar crime year in review

???EU greenlights creation of anti-money laundering watchdog

???EU AI Act: deal-readiness and roadmap analysis by KPMG

?? Countries that moved forward with crypto regulation in 2023

Good morning everyone! We have reached another Friday, and with that, the last edition of the year. So here is our collection of stories that have made it onto our reading list. Enjoy the update, and then have a great break!

The crimes behind financial crime – why banks need to be effective

Why is financial crime pursued in the first place? It’s simple – because behind financial crime, there is crime itself – from drug trafficking to terrorist financing, so closing the lid on financial crime is depriving crime of its fuel and profits. In this “The Big Question” episode, Hannah Brown sits down with Philippe Vollot, the Chief Financial Economic Crime Officer of Rabobank, discussing everything dirty money, from modern slavery to the war in Ukraine. And the stats are staggering with 2,8 trillion euros laundered through the world just last year. The essence of an effective response is finding a balance where shady transactions are detected without bothering those customers who are not doing anything illicit. For more details, check out the full episode, it’s a great piece.

Read full article here

Football’s ‘thugs and oligarchs’ run risk of EU money-laundering crackdown

Criminals have always been creative, and one of the tricks for making dirty money look clean is inflating the price of player transfers and then passing on the proceeds. This makes the rather lucrative world of European football complicit in the criminal activity of money laundering. “Operation Zero”, back in 2018, was one successful operation in Belgium exposing this technique, and years later, the European Parliament is eager to follow up on the findings, trying to pass new regulations subjecting the industry to due diligence and other AML practices. Clubs are not pleased, citing the increased paperwork they will have to deal with, but the resolve of the European Parliament seems clear – football stinks and something needs to be done about it.

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EU greenlights creation of anti-money laundering watchdog

Suspicious financial activities account for around 1% of the EU’s GDP, making the issue of tackling money laundering a top priority. This gets reflected in the latest European Parliament agreement to create a new EU agency with the sole mission of combatting money laundering and terrorist financing. The new agency goes under the name AMLA, short for Anti-Money Laundering Authority, furnished with supervisory and sanctioning powers to ensure compliance in the European financial sphere. The one decision that is yet to be made is which city is going to host the agency, but once that has been tackled, then AMLA should become a “game changer to crack down on dirty money”.

Read full article here

White collar crime year in review

How did the UK perform this past year when it comes to combatting financial crime and other corporate wrongdoings? Well, this is exactly what this blogpost by Wilmerhale is trying to detail by discussing regulatory changes, enforcement failures and success stories, and the overall effectiveness of sanctions the EU imposed on Russia in the wake of its war on Ukraine. In general, 2023 has been a year of many changes, with the UK government passing a new will (ECCTA 2023), the Serious Fraud Office (SFO) receiving a new leadership, and the Financial Conduct Authority (FCA) continuing its relentless efforts to penalize financial firms who have been slacking on their AML practices.

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EU AI Act: deal-readiness and compliance roadmap analysis by KPMG

The EU AI Act, provisionally agreed upon by the Council presidency and the European Parliament negotiators on December 8, 2023, is set to become a global standard in regulating AI. The Act classifies AI systems into three categories: unacceptable risk, high risk, and low risk, each with specific compliance obligations. Fines for non-compliance have been increased, reaching up to 35 million euros or 7% of global turnover, and businesses are advised to conduct deal due diligence, develop an AI regulatory roadmap, and ensure ongoing compliance to avoid financial sanctions and reputational risks.

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These are the countries that moved forward with crypto regulation in 2023

In 2023, over 30 countries globally made significant progress in regulating cryptocurrencies, focusing on areas such as licensing for virtual asset businesses, strengthening anti-money laundering (AML) and counter-terror financing (CTF) rules, implementing "travel rule" policies, and creating frameworks for stablecoin payments. The EU's Markets in Crypto Assets (MiCA) regulation, passed in June, harmonizes crypto regulation across its member states, impacting businesses serving EU customers. The year also saw increased attention on systemic stablecoins, favoring those backed by fiat-based assets and imposing strict restrictions on crypto-backed and algorithmic stablecoins, with a focus on transparency for reserve holdings.

Read full article here

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