New alert over gold use in sanctions evasion, FinCEN piles more pressure on banks and further evidence of ‘insider threat’ at FSIs

Amidst rising concerns, Britain's National Crime Agency (NCA) has sounded the alarm over Russia's intricate use of gold as a tool to skirt around the UK sanctions regime. The UK Foreign Office also sanctioned 29 individuals and entities linked to Russia's gold sector.

In the US,?FinCEN and the US Department of Commerce’s Bureau of Industry and Security (BIS) have issued a joint notice highlighting a new SAR key term (“FIN-2023-GLOBALEXPORT”) for financial institutions (FSIs).?FSIs must henceforth reference the key term when reporting suspected efforts by persons or companies trying to evade U.S. export controls not related to Russia’s invasion of Ukraine, the agencies said Monday.

Our columnist Sarah Beth Felix, chief executive at Palmera Consulting, said the notice was “a massive undertaking even for the largest banks. The nuanced and broad ‘red flags’ are bordering un-operationalizable.” The joint notice highlights global red flag indicators of export control evasion, with a focus on advanced and critical technologies, that also can be applicable to due diligence efforts of exporters in addition to financial institutions.?

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Meanwhile, FinCEN introduced a final rule allowing reporting companies to use a unique FinCEN identifier in lieu of individual beneficiary information, simplifying the reporting process and enhancing transparency.?

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In Britain a gang of bank insiders tied to an organised crime group faced the music, receiving prison sentences for orchestrating a sophisticated swindling scheme, highlighting the ever-present insider threat in FSIs.

In other news, Citigroup Inc. found itself in hot water, agreeing to a hefty settlement for discriminatory practices against credit card applicants of Armenian descent, emphasising the need for stringent anti-discrimination policies within the financial sector. Similarly, the first trial related to an alleged "cum-ex" tax fraud scheme kicked off in Denmark, setting the stage for a crucial legal battle.

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Singapore's DBS Group took centre stage, making substantial multi-million dollar allowances in light of the city-state's recent money laundering scandal, underscoring the pressing need for stringent anti-money laundering measures. Also this week the city-state’s regulator, the Monetary Authority of Singapore (MAS) set its sights on harnessing the power of artificial intelligence in the fight against money laundering, emphasising the growing significance of technological advancements in the battle for financial security.

Your news updates this week so far:

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FINCEN’S MASSIVE NEW UNDERTAKING FOR BANKS:?FinCEN and the US Department of Commerce’s Bureau of Industry and Security (BIS) have issued a joint notice?highlighting?a new SAR key term (“FIN-2023-GLOBALEXPORT”) for financial institutions (FSIs).?FSIs must henceforth reference the key term when reporting suspected efforts by persons or companies trying to evade U.S. export controls not related to Russia’s invasion of Ukraine, the agencies said Monday.Our columnist Sarah Beth Felix, chief executive at Palmera Consulting, said the notice was “a massive undertaking even for the largest banks. The nuanced and broad ‘red flags’ are bordering un-operationalizable.” Read the story here:?New US SAR key term issued by FinCEN over Russia exports; places ‘massive undertaking on even biggest banks,’ says our columnist

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USE OF GOLD TO EVADE SANCTIONS:?BRITAIN's National Crime Agency (NCA) today issued an?alert?to banks, high-value dealers and lawyers that Russia is using gold as a means to evade the UK sanctions regime."Gold is a significant income stream for Russia’s war effort – one of the highest by value after oil and gas, and worth ￡12.6 billion to the Russian economy in 2021," the NCA said. Today (Wednesday) Britain's Foreign Office also sanctioned a number of individuals and entities operating in and supporting Russia’s gold sector. Read the story here:?Britain’s NCA warns banks, dealers and lawyers on use of gold to avoid Russia sanctions

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USING FINCEN IDENTIFIERS:?FinCEN on Tuesday issued a?final?rule that specifies the circumstances in which a reporting company may report an entity’s FinCEN identifier in lieu of information about an individual beneficial owner. A FinCEN identifier is a unique number that FinCEN will issue upon request after receiving required information. Although there is no requirement to obtain a FinCEN identifier, doing so can simplify the reporting process and allows entities or individuals to provide the required identifying information directly to FinCEN. Find this story here:?Treasury finalises rule on use of FinCEN identifiers in Beneficial Ownership reporting

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BANK INSIDERS JAILED:?Bank insiders linked to an organised crime group in the UK have been?sentenced?to prison for swindling up to ￡1M from customers.? By posing as genuine customers, the criminal network unlawfully accessed customer accounts, made withdrawals, and transferred funds to bank accounts controlled by the group. Find the story here:?Bank insiders jailed for accessing customer accounts in ￡1M fraud

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***?The ’European Anti-Financial Crime Summit 2024’ is taking place in Dublin on May 16 2024. The leading AML and FCC conference attracts 450 decision-making executives from across the EU, UK and elsewhere. The 2024 will also feature the importance of the transatlantic FCC alliance. EAFCS2024 at the RDS convention centre in central Dublin next year will also have extended exhibition and networking opportunities. Have you booked your tickets yet? You can do so?HERE:?

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CITIGROUP TO PAY UP:?Citigroup Inc agreed to pay $25.9 million to?settle?U.S. Consumer Financial Protection Bureau charges it intentionally discriminated against credit card applicants who the bank identified as Armenian-American based on their last names. The regulator said that from 2015 to 2021, Citigroup managers trained employees to stereotype applicants suspected of being of Armenian descent, targeting those whose last names ended in "ian" and "yan," believing them likely to commit fraud. Read the story here:?Citigroup to pay $25.9M for targeting Armenian-American card applicants

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DANISH FRAUD CASE STARTS:?The first Danish trial?related?to an alleged "cum-ex" tax fraud scheme against a Briton charged with defrauding the Danish government of 320 million crowns ($45.3 million) started on Wednesday morning in a Copenhagen city court. Guenther Klar will be the first person to be tried out of nine from the United States and Britain charged by the Danish state prosecutor with defrauding Danish tax authorities in the "cum-ex" tax fraud scheme, involving dividend taxes. Find the story here:?First Danish court case in ‘cum-ex’ tax fraud scheme starts Wed

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SINGAPORE'S $75M EXPOSURE ALLOWANCE:?Singapore’s biggest bank DBS Group has made?allowances?of $74M (S$100M) in relation to the city-state’s $2BN money laundering scandal.?Specific allowances of S$197 million were higher than in recent quarters as the bank set aside contingencies for exposure linked to a suspected money laundering case in Singapore, one of the country’s largest ever. These allowances for expected credit losses are eight times the provision from this period 2022. Read the story here:?Singapore’s biggest bank makes $74M allowance to cover off exposure to money laundering scandal

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UKRAINE HOPEFUL FOR POSITIVE APPRAISAL: Ukraine expects the European Union's executive to deliver a "positive"?appraisal?of its membership bid this week, a senior government official in Kyiv said on Monday, adding it had carried out the reforms required of it. The European Commission is expected in a report on Wednesday to recommend taking Ukraine one step closer to becoming a member of the bloc, EU officials say, a coveted prize for Kyiv as weariness creeps in more than 20 months after Russia's invasion. Check out the story here:?Ukraine expects ‘positive’ EU report on membership bid as Russia war drags on

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ALISON ROSE APOLOGY:?Former NatWest CEO Alison Rose has been?apologised?to after the UK's privacy watchdog accused her of breaking the law when she discussed the closure of Nigel Farage's bank account with journalists. “Our investigation did not find that Ms Rose breached data protection law and we regret that our statement gave the impression that she did,” the Information Commissioner’s Office said on Monday. Find the story here:?UK watchdog apologises to Alison Rose for misleading impressions on Farage probe

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SINGAPORE AND AI:?Singapore's Monetary Authority (MAS) is "most keen" on?exploring?how artificial intelligence can be used to fight money laundering, said Ravi Menon, managing director. Mr Menon spoke about how AI is expected to dominate the annual Singapore FinTech Festival. It will be held at Singapore Expo from November 15 to 17.? Read the full story here:?Singapore banking chief seeks to use AI in the fight against money laundering

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Have a great Thursday ??

Stephen?and the team at AMLintelligence.