Here are the top Anti-Financial Crime and AML stories so far this week:
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THE HEAT is finally starting to come on the gambling industry and its role in facilitating financial crime. The sign that the gloves are off coming Tuesday when Britain’s Gambling Regulator fined betting giant, the William Hill group ￡19M for a series of failings including weak AML controls. It’s a record fine for gambling infringements.
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The betting group can count itself lucky it didn’t lose its licence – something the regulator said it considered such as the serious shortcomings in the high street and online chain. It also comes hot on the heels of another multi-million euro fine on Kindred Group plc last week.?
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No doubt EU regulators are watching closely and the AML/AFC departments of gambling companies throughout Europe are likely to be hearing from their regulators soon.
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As one AFC expert told?AML Intelligence: “Fines are all good as a signal but changing behaviour is the bigger challenge in the betting industry.” We agree.
Of course, the betting companies will soon come under the watchful eye of the new EU AML Authority (AMLA) which is coming closer to becoming real every day now.
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On Tuesday the European Parliament gave AMLA the green light, which paves the way for the difficult trialogue negotiations between the European Commission , Council of Europe and European Parliament over where the agency will be located and its rules of engagement. Interestingly, the parliament wants the proposed ban on cash transactions further reduced from €10,000 to €7,000. We’re not sure Berlin or Vienna will agree to that!?
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As first reported here in February, AMLA’s staff will double to 500 and its budget has ballooned to more than €400M as it will now directly supervise in the region of 40 banks and will also have oversight on cryptocurrency transactions. Both were demands by the European Parliament.?
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The new AML Task Force – we exclusively revealed its existence here last month - in Brussels meanwhile is helping Member States with information to prepare their bids and will then help the trilogue assess how suitable the various locations are.?
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One of the last Member States to cross the line in a bid to host AMLA was Ireland which Tuesday formally announced it was seeking the agency’s headquarters. Ireland’s bid is a serious one, given it does not already host a major EU agency and it narrowly lost out on the European Banking Authority (EBA) (EBA) and European Medicines Agency (EMA).
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?The EBA officials who thought they had said goodbye to Ireland when it moved from the sunny uplands of London to the bright lights of Paris may have to think again! It remains to be seen. In any event, only those who volunteer to move will have to move.
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Dublin of course is to play host to the ‘European Anti-Financial Crime Summit’ on May 25 next and places are booking fast. Eurogroup President Paschal Donohoe has confirmed he will officially open the conference, joining the stellar line up which includes Ireland’s finance minister Michael McGrath McGrath – who announced Ireland’s AMLA bid Tuesday – and German finance ministry Deputy DG Dr Marcus Pleyer , the ex-President of #FATF .
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One of the investigative journalists working for Germany’s biggest newspaper Süddeutsche Zeitung Zeitung (SZ) – which brought the world the Paradise, Panama and Pandora Papers along with the Credit Suisse Secrets is also speaking. SZ Investigations Editor Joerg Schmitt will speak to delegates about the new world of dirty money and where it is flowing. They are just some of the speakers, with more detail below. Don’t miss out!?
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In the US meanwhile, there is some pretty big news on beneficial ownership transparency. Treasury Secretary announced a commitment between the United States and more than 20 foreign governments to create a registry of beneficial ownership of legal entities to help them more effectively fight corruption.
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Yellen announced the new initiative, which includes steps to implement the Financial Action Task Force's standards on transparency and beneficial ownership of legal entities, at the U.S. State Department's Summit for Democracy.
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"This commitment is in line with the revised FATF standard, which requires countries to improve the transparency of legal persons, like shell companies, and to prevent their misuse," Yellen said in prepared remarks. "And it reaffirms the broad support that the United States and its democratic partners share for enhancing financial transparency, fighting corruption, and upholding the rule of law."
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This has been a long time coming and is no less welcome because of that. Well done US Treasury Secretary.
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The emperor has no clothes. Or should we say the crypto exchange king has no compliance? That’s what the US Commodity Futures Trading Commission (CFTC) said about #Binance ceo and founder Changpeng Zhao when it sued him and the company for operating an illegal exchange and ‘sham’ compliance programme. Moreover, the CFTC accused Binance’s Chief Compliance Officer of ‘aiding and abetting’ violations. Now that is serious in anyone’s language.
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Did we mention the AML and tax fraud raids of five leading banks in Paris by French and German prosecutors? Well, that’s the kind of week it’s been. Investigators from Cologne investing in the ‘CumCum’ scandal searched banks in the La Defence financial area and elsewhere in Paris. The operation involved 150 police and prosecutors.?
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Now here’s your update on what’s been happening this week:
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US INTERNATIONAL PACT:?US Treasury Secretary Janet Yellen on Tuesday said she was?launching ?a commitment between the United States and more than 20 foreign governments to create a registry of beneficial ownership of legal entities to help them more effectively fight corruption. Yellen announced the new initiative, which includes steps to implement the Financial Action Task Force's standards on transparency and beneficial ownership of legal entities, at the U.S. State Department's Summit for Democracy. The commitment requires signing countries to update legal and regulatory frameworks to ensure that law enforcement agencies and other authorities have efficient access to beneficial ownership information. Read the story here:?US Treasury’s Yellen unveils international pact with 20 countries to boost benefical ownership transparency in line with FATF
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CLEARING THE WAY:?The European Parliament Tuesday?effectively cleared the way for?final ?negotiations with the Council of Europe on the shaping of the bloc's new AML Authority (AMLA). In a rubber-stamping exercise, MEPs on the parliament's Committee on Economic and Monetary Affairs and Committee on Civil Liberties, Justice and Home Affairs gave their backing to the setting up of AMLA.They also voted in favour of proposals to develop the new AML Single Rule Book AML directive and regulation. Find the story here:?MEPs give their backing to AMLA but seek cash transaction limit lowered from €10K to €7K
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WHAT THE MEPs SAID:?Paul Tang (co-rapporteur for the Anti-Money Laundering directive - S&D, NL) said: “We are?losing ?the battle against money laundering, which costs society up to two trillion US dollars annually worldwide.?That is why parliament worked together on finding effective ways to fight money laundering, by demanding the registration of expensive cars, boats and planes and by obliging the disclosure of all goods stored in free zones. We have also restored access to beneficial ownership data for journalists and civil society organisations and introduced strong safeguards like a Fundamental Rights Officer in every Financial Intelligence Unit. I am hopeful the Council will join us in beefing up the EU’s fight against money laundering and terrorist financing.” Read what all the MEPs said in this special report here:?MEPs green light the AML Authority in a show of resounding support; allow Beneficial Owner registers to be opened for journalists, civil society
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FRENCH BANK RAIDS:?France’s financial prosecutor was?searching ?5 banks as part of a probe into tax fraud and money laundering, according to a statement Tuesday. The banks at the centre of the investigation include Societe Genereale, HSBC Holdings Plc, BNP Paribas SA, and Natixis which were searched Tuesday morning. The probe involved more than 150 investigators and 6 German prosecutors from Cologne. Read the story here:?Raids on five French banks in money laundering, tax fraud probe by financial prosecutor
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IRELAND LAUNCHES AMLA BID:?IRELAND is the latest country to?officially ?announce ?it wants the location of the new EU AML Authority (AMLA). Ireland's Minister for Finance Michael McGrath announced Tuesday he was seeking the approval of his Cabinet colleagues to apply to become the base for AMLA. Dublin is the most likely favoured location of the Irish government for the authority but a current housing and accommodation crisis in the capital city may be seen as a drawback by assessors.Find the story here:??Ireland officially announces it wants location of new EU AML Authority (AMLA)
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GAMBLING GIANT FALLS IN HOT WATER:?BRITAIN'S Gambling Commission has?fined ?William Hill betting group ￡19.2M ($23.7M) - the biggest penalty ever issued by the regulator - for failing to protect consumers and stop money laundering. The regulator said the issues at the three companies in the William Hill group - owned by online gaming and betting operator 888 - was so "widespread and alarming" that it seriously considered suspending the firm's licence. But Gambling Commission Chief Executive Andrew Rhodes said the company was only allowed to continue to operate after it recognised its failings and worked to implement improvements quickly. Read the story here:?British gambling giant William Hill fined record ￡19M for poor process including weak AML controls
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FALSE PROGRAMME:?The world's biggest crypto exchange Binance and its CEO and founder Changpeng Zhao were?sued ?by the U.S. Commodity Futures Trading Commission (CFTC) on Monday for operating an "illegal" exchange and "sham" compliance programme. The CFTC sued Binance, Zhao and its former top compliance executive with "willful evasion" of U.S. law, "while engaging in a calculated strategy of regulatory arbitrage to their commercial benefit." The regulator's lawsuit comes amid a broader and increasingly high-profile crackdown on crypto companies. For years, U.S. prosecutors and civil investigators have targeted crypto firms for illegal offerings and failures to comply with rules designed to prevent illicit activity. But the pace of such government activity has surged recently. Find the story here:?Binance and ceo running ‘sham’ compliance programme; CCO accused of ‘aiding and abetting’ violations as US CFTC sues crypto exchange
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FRAUD RING BUSTED:?Four suspects were?arrested ?in a customs fraud ring involving Chinese exporters at Liege Airport, in eastern Belgium, the European Public Prosecutor's Office (EPPO) said on Tuesday. The investigation, code-named "Silk Road," carried out 10 searches targeting Chinese exporters suspected of having put in place a system to evade value-added tax (VAT) payments on imported goods worth 303 million euros ($328 million) in estimated damages. The EPPO said in a statement it suspected the Chinese exporters of using three Belgian private customs agencies and fake companies in other member states in order to benefit from a VAT import exemption. Read the story here:?Chinese customs fraud ring dismantled in AML probe by EPPO at Belgian airport
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BINANCE HOLDS A HALT:?Cryptocurrency exchange Binance has?suspended ?deposits and withdrawals on its platform due to technical issues affecting its spot trading, Chief Executive Changpeng Zhao said in a tweet on Friday. "Initial analysis indicates matching engine encountered a bug on a trailing stop order," he said in a tweet, adding that the pause in deposits and withdrawals was a standard operating procedure. "Engine 1 is back online. Still need more time to do reconciliations, and for other engines to catch up," Zhao said in a subsequent tweet. Find the story here:?Binance halts deposits, withdrawals after technical glitches
The European Anti-Financial Crime Summit is taking place on May 25 next in-person at the Royal Dublin Society in Dublin, Ireland.
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EUROGROUP President Paschal Donohoe is to?deliver the opening address at the 'European Anti-Financial Crime Summit' in Dublin on May 25 next. It’s set to be the stand-out AFC event of 2023. This unmissable conference will feature regulators, policymakers, industry leaders and law enforcement chiefs. Germany’s Dr Marcus Pleyer who is deputy DG of the finance ministry and former President of FATF is also one of the keynote speakers.
?Other leading figures set to address the summer AFC summit, which is being held in person, are:
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Alisha and the team at AMlintelligence.
Chief Technology Officer at Complytek | Pioneering Advanced KYC, AML & Fraud Solutions | Driving Digital Transformation in Financial Compliance
1 年The gambling industry should definitely take a more proactive approach to prevent financial crime! It's a positive step that the UK's Gambling Regulator has fined the William Hill group ￡19M for their weak AML controls, but fines alone aren't enough to change behavior. With the EU's new AML Authority (AMLA) on the horizon, it's clear that regulators are stepping up their efforts to combat financial crime in the sector. It's time for the industry to do the same by establishing stricter regulations, implementing effective AML/AFC measures, and demonstrating a genuine commitment to preventing money laundering.