Risk Intelligence Roundup for April 2024

Welcome to our Risk Intelligence Roundup newsletter, where we focus on delivering curated compliance insights and solutions to empower your risk management strategy.

April passed us by, but we caught all the news and updates in the industry that you should be aware of. Let us start with:

Digital Operational Resilience Act (DORA)

Lately, one of the most frequently discussed topics among Risk Intelligence professionals is the Digital Operational Resilience Act (DORA) - an EU regulation that entered into force on 16 January 2023 and will apply as of 17 January 2025.?

Why is DORA important?

Well, the financial sector's reliance on technology exposes it to cyber-attacks, potentially disrupting cross-border financial services and impacting the wider economy. This reality highlights the necessity of digital operational resilience and this is addressed by DORA, which covers:

• ICT risk management
• ICT third-party risk management
• Digital operational resilience testing
• ICT-related incidents
• Information sharing
• Oversight of critical third-party providers

Learn more >>

Who does it impact?

DORA impacts more than 22,000 financial entities operating within the EU and ICT service providers that support them. This includes the ICT infrastructure that operates from outside the EU but serves these entities within the EU.

New AML package for the EU

You probably have heard by now that the European Union (EU) reached a provisional agreement on parts of the anti-money laundering (AML) package in Q1 2024. The agreement aims to harmonise rules throughout the EU and close possible loopholes used by criminals so it can protect EU citizens and the EU’s financial system against money laundering and terrorist financing.?

Who is impacted?

The AML package influences several key entities and sectors:

1. Crypto Sector: the list of obliged entities was expanded to include most of the crypto sector and crypto-asset service providers (CASPs) are now required to conduct due diligence on their customers. Measures are added to mitigate risks related to transactions with self-hosted wallets.
2. Traders of Luxury Goods: including those that trade precious metals, stones, and artworks, will become obliged entities who will need to conduct due diligence on their customers.
3. Football Sector: (including professional football clubs and agents) is recognised as high-risk. Due to the varying nature of the football sector's risk profile, member states can opt to exclude it from the list if it poses minimal risk.
4. National Anti-Money Laundering Systems:?

Learn more >>

The AML package sets a precedent for global AML standards and as such, it holds significant implications for the future because it means that there will be:?

• increased scrutiny to prevent money laundering, terrorist financing, and illicit financial activities,
• emphasis on beneficial ownership transparency so authorities can track down illicit funds and identify those behind suspicious transactions,
• need to adopt advanced KYC (Know Your Customer) technologies to verify customer identities and monitor transactions effectively, etc.

Sanctions

4 April

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) took action against Oceanlink Maritime DMCC for its role in facilitating the shipment of Iranian commodities on behalf of Iran’s Armed Forces General Staff (AFGS) and Ministry of Defense. This move was aimed at curbing Iranian military revenue generation.

15 April

The UK announced sanctions on businesses which support the Sudanese Armed Forces and the Rapid Support Forces, the military groups behind the conflict in Sudan. Strict measures include an asset freeze on companies linked to these armed forces, limiting their financial freedom. The new sanctions follow the UK’s commitment to nearly double aid for Sudan as the humanitarian crisis deepens.

Are you attending The Assembly Europe in May by ACAMS? Because we are!

Our Head of Risk and Compliance Business Services Siyana Vacheva will be attending The Assembly Europe in Amsterdam, the Netherlands, between May 7 - May 8, 2024.?

If you are not familiar with the event, The Assembly Europe, hosted by ACAMS , is a must-attend conference for AML/AFC practitioners in Europe. This event brings together like-minded industry colleagues, leading regulators, and major financial figures to address the challenges ahead and it will “present specialists with new tools and understanding to deal with the difficulties that lie ahead.”

Interested in how A Data Pro can help you respond to evolving and emerging threats?

Drop us a line!?

Did you know…

Third-party due diligence is very important for businesses and organisations as it is focused on assessing business partners, suppliers, vendors, and other external entities. The goal is to evaluate potential conflicts of interest, legal issues, ethical dilemmas, and compliance risks associated with third parties.

What is it exactly and how is it performed?

The easiest way to understand what third-party due diligence does is to think of it as a background check - we look into a subject's structure of operations, owners, history etc., with a focus on adverse media. For individuals, more specifically, we look into their general background information (date of birth, nationality etc.,), work history, ownership history, education, and adverse media. Part of the research covers financial performance and sources of wealth to ensure transparency.

The purpose

This type of due diligence informs your decision-making process so you can be fully aware of who you engage with and in what capacity. By understanding the risks associated with third parties, you can take steps to mitigate those risks. Moreover, organisations need to comply with anti-corruption laws and other relevant legislation, and due diligence helps you in this regard.

Due diligence is crucial because it helps companies avoid costly mistakes, legal issues, and reputational damage. Check out our Due Diligence Reports!

See you next month! ????