A Month in Review - February 2024:
What's In This Months Edition
?? ?? Industry Press and News
?????????? Dubai Cash Mules Sentenced
On the 3rd October 2020, a woman attempted to board a flight from London Heathrow to Dubai with more than ￡1.9 million in cash hidden in her luggage. The individual in question, Tara Hanlon, a Leeds resident, was arrested and subsequently plead guilty in court to money laundering offences woth over ￡5m.
Following her arrest, a National Crime Agency (NCA) investigation uncovered what is believed to be one of the biggest money laundering cases in Britain. A network of "cash mules", referred to as couriers ,were purported to have transported over ￡104m to Dubai, via Heathrow Airport, between November 2019 and October 2020.
The couriers communicated via a Whatsapp Group called "Sunshine and Lollipops". They were paid around ￡3,000 per trip and flown business class to take advantage of the extra luggage allowance. The laundered cash, believed to be from UK drug dealing networks, was vacuum-packed, with around ￡500,000 concealed per suitcase and sprayed with coffee aimed to elude detection from sniffer dogs. On arrival in Dubai, the couriers used a letter from a "front company" called Omnivest Gold Trading to declare the cash. Once cleared, the money would be converted into dirhams, with some used to buy gold in Africa or cryptocurrency, before being released back to the "customers" in the UK.
On 23rd February 2024, 3 previously convicted couriers were sentenced, receving suspended sentences ranging from 17 to 24 months. As of February 2024, the total number of convictions for this network is 16, with sentences ranging from suspended sentences, to imprisonment just short of 2 years up to 9 years. The 9 year sentence went to the "mastermind" of the operation, Abdulla Alfalasi, a 47 year old Dubai national and resident.
It is worth noting that the investigation is still ongoing. Notably, there are a number of British couriers currently under investigation in the UAE, who cannot leave until inquiries have been completed by UAE law enforcement.
?????? NCA - Largest Seizure of Class A Drugs in British History
The National Crime Agency (NCA) and Border Force have made what is believed to be the largest seizure of Class A drugs in the UK.
5.7 tonnes of cocaine concealed in a banana shipment from South America was uncovered at Southampton Port, on the 8th February.
Valued at over ￡450m, the drugs, destined for the Port of Hamburg, Germany, were identified through the NCA's Near Europe Task Force. Funded through the Home Office Drug Strategy, the Near Europe Task Force targets global drug supply. It focuses on identifying and disrupting offenders, and obstructing organised criminal groups, making it more difficult for them to transport drugs into the UK.
Investigations are underway to identify the international parties involved. The record-breaking operation signifies a major blow to organised crime groups, with the NCA emphasising collaborative efforts and disruption of drug supply chains.
?????????? North Korean Missile Parts Traced to US and Europe
Following a ballistic missile attack in the Ukranian city of Kharkiv, Conflict Armament Research (CAR), a UK-based organisation, has revealed that Russia has used missiles from North Korea in attacks on Ukraine. Furthermore, 75% of documented components found in the missile were linked to companies in the United States, followed by 16% in Europe.
CAR, founded in 2011, deploys field teams into armed conflict zones to investigate and document weapons, ammunition and related material used by armed groups, including terrorists actors. They have reported that over half the components documented from Kharkiv missle bore identifiable date codes, with more than 75% indicating production between 2021 and 2023. This is sufficient information to confirm that the missile could not have been assembled prior to March 2023 and further illustrates the short window of its transfer to Russia to enable the attack in January 2024.
The report highlights many issues, notably North Koreas ability to successfuly circumvent the sanctions regime in aquiring components from the West to manufacture advanced weapons and arms, and also their ability to supply arms and weapons to Russia after the Ukraine invasion. This adds further weight to the need to enforce more stringent regulations and controls in respect of sanctioned jurisdictions, as well as the need to strengthen the global sanctions framework itself.
??????? Regulatory Updates
?????The Fifth Plenary of the Financial Action Task Force (FATF)
The fifth Plenary of the Financial Action Task Force (FATF) was held from 21-23 February 2024 in Paris, under the Presidency of T. Raja Kumar of Singapore.
The key outcomes include the following:
? Issuance of new risk-based guidance for implementing Recommendation 25 on beneficial ownership and transparency of legal arrangements. This enhances global transparency to prevent criminals and terrorists from concealing activities behind complex structures and legal arrangements such as trusts.
? Options for potential changes to Recommendation 16 and its Interpretive Note on wire transfers, adapting to evolving payment systems.
? Modifications to the assessment methodology were made to protect non-profit organisations from potential abuse for terrorist financing.
? FATF identified jurisdictions with significant virtual asset activity, aiming to ensure compliance with FATF requirements.
? High-risk and monitored jurisdictions were updated, with four countries removed from increased monitoring and two added.
?? The below countries are no longer on the list:
???? Barbados
???? Gibraltar
领英推荐
???? Uganda
???? United Arab Emirates
?? The below countries have been added to the list:
???? Kenya
???? Namibia
? New appointments were made, including Elisa de Anda Madrazo of Mexico assuming the role of the next President of the FATF for 2024-2026.
For FATFs full breakdown, please see FATF website
???? ?? Anti-Money Laundering and Countering the Financing of Terrorism Authority (AMLA)
The EU Council and European Parliament have reached an agreement on the location of the European Authority for Anti-Money Laundering and Countering Terrorist Financing (AMLA).
Nine member states submitted applications to host AMLA: Belgium (Brussels), Germany (Frankfurt), Ireland (Dublin), Spain (Madrid), France (Paris), Italy (Rome), Latvia (Riga), Lithuania (Vilnius) and Austria (Vienna).
Following a vote by the Parliament’s and the Council’s representatives, it was decided that Frankfurt will serve as the host city, with operations commencing in mid-2025. Sittling at the center of the EU's anti-money laundering framework reform, AMLA will wield both direct and indirect supervisory powers over obliged entities, along with the authority to impose sanctions.
This decision will be formalised within the AMLA regulation.
See the official announcement here
? ?? AML Regulation and #6MLD Update
The Council of the European Union submitted the final compromise text for the AML Regulation and #6MLD.
The submittal, entitled "Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing" seeks to address areas of improvement identified following the implementation of Directive (EU) 2015/849.
As per the proposal, the objective is to "adequately mitigate risks and to effectively detect criminal attempts to misuse the Union financial system for criminal purposes and to further the integrity of the internal market."
For the full text, please visit here
????Think Piece
???? Name and Shame: FCA Shines a Light on Firms Under Investigation?
A necessary step for improved transparency, or an ethical minefield??
In a consultation paper published on 27th February 2024, The Financial Conduct Authority (FCA) announced its intention to improve pace and transparency around enforcement cases.??
The FCA plans to move from the current process, whereby investigations are only announced in very limited circumstances, to being more transparent when an enforcement investigation is opened and publicly naming firms under inquiry. The policy aims to expedite corrective measures within firms and bolster the deterrent effect of regulatory scrutiny. However, this could present a fine line between transparency for the public good and the potential for unjust reputational damage.?
The FCA’s initiative to improve pace and transparency could be a pivotal moment for enforcement transparency and carries with it several potential advantages:?
Conversely, the route to increased transparency is not without its pitfalls and the FCA's approach is not impervious to criticism:?
The FCA's endeavour to improve transparency by publicly naming firms under investigation may be viewed as a double-edged sword. Whilst the goal of heightened transparency is arguably positive and within public interest, the execution of such an approach must be carefully balanced against the risks of unwarranted harm to firms. Given the importance a firm’s reputation has on its success, the implementation of such an approach must consider the legal constraints and ethical boundaries. The consultation period concludes on 16th April 2024 and there will undoubtedly be a significant response from the industry, ranging from ardent support to concerns, which may yet impact the FCA’s final decision. Therefore, the FCA must proceed with caution, ensuring it strikes the right balance by improving transparency without causing undue harm to firms.????
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