Anti Money Laundering Blog

The Jersey Financial Services Commission (JFSC) has published the results of an industry consultation on proposed revisions to the Money Laundering (Jersey) Order 2008.

The amendments to the legislation have been proposed to align the Jersey Order with certain revised recommendations from the Financial Action Task Force on Money Laundering (FATF), as well as to clarify the application in certain circumstances of simplified or, as the case may be, enhanced due diligence (EDD) measures.

Hong Kong’s anticorruption agency called the Independent Commission Against Corruption is launching a criminal investigation of its former chief. Tong spent tens of thousands of USD on gifts for mainland Chinese officials.

The Independent Commission Against Corruption and the Department of Justice said that there were significant reason to start this investigation into allegations of possible bribery and misconduct by Timothy Tong.

Tong was a commissioner of the Independent Commission Against Corruption from 2007 to 2012. He came under fire after reports emerged he spent about HK$ 218,500 on gifts ranging from pens to crystal models of the agency’s headquarters.

On May 7, Vatican took a step to make its finances more transparent, signing a deal with United States regulators. Under the signed document, each side will share information about financial transactions with a view to root out money laundering and other illicit dealings.

The deal announced by the Vatican marks the latest move by the world’s smallest state in response to international pressure to better police its finances. The efforts began in 2010 in the wake of an investigation by Italian prosecutors into whether the Vatican bank had violated Italy’s money-laundering laws.

Measures so far have included laws against money laundering and terrorist financing. This regulation helps bring to justice anyone who commits financial misdeeds on the territory of Vatican. Also, it suggests the creation of the watchdog called Financial Information Authority (FIA).

In accordance with the new agreement, the FIA and the US Treasury Department’s Financial Crimes Enforcement Network will be able to share information about financial transactions in their respective territories.

It should be noted that the FIA is discussing similar agreements with about 20 other countries.

HSBC will pay USD 1.9 billion to settle a US. money-laundering probe to avoid a protracted legal battle that would have further embarrassed the British banking giant.

The probe of Europe’s largest bank by market value focused on the transfer of funds through the US financial system from Mexican drug cartels and on behalf of nations such as Iran that are under international sanctions.

HSBC said in a statement that its anti-money laundering measures were inadequate and it had since made strides in beefing up its controls. The bank also said it has reached agreements over investigations by other United States’ government agencies. Also, it expects to sign an agreement with British regulators soon.

“We accept responsibility for our past mistakes. We have said we are profoundly sorry for them, and we do so again,” HSBC Chief Executive Stuart Gulliver said in a statement.

The Guernsey Financial Services Commission (GFSC) has announced preparing revisions to the regulations and rules governing anti-money laundering (AML) standards for financial services businesses and for prescribed businesses (firms of lawyers, accountants and estate agents) in the jurisdiction. This was done taking into consideration numerous on-site inspections and comments received from the industry.

Amendments are to include:

- The adoption of a more sophisticated approach for firms in risk profiling their customers to take into account international and local developments in best practices in the area.

- The removal of general insurance from the AML regulations and rules.

- Revisions to the “likely to benefit” rules so that, other than in high risk situations, there will be more flexibility for firms in the timing of verification of identity of beneficiaries of trusts falling within the rules.

- A new chapter providing guidance for firms in relation to bribery and corruption, which are of increasing international concern as crimes in their own right as well as motivations for money laundering.

The GFSC said that the revisions would be issued early in 2013. It confirmed that firms would be allowed a transitional period to amend their policies, procedures and controls before the changes come into effect. In some areas no transitional period is needed, such as the removal of general insurance from the detailed requirements for firms.

According to Richard Walker, Director of Policy and International Affairs, “It is crucial that Guernsey’s work in preventing the products and services we offer from being used by money launderers is focused as much as possible, and industry’s efforts put to the best effect possible. The current AML framework has been in place for several years. The experience of both the Commission and industry with it is enabling us to take the positive steps of revising the framework and enhancing its focus.”

As part of its recent drive to achieve operational efficiencies, the Guernsey Financial Services Commission (GFSC) has announced that it is to delegate its supervisory function to a newly-established department – an Anti-Money Laundering (AML) Division.

The creation of an AML Division will enable the GFSC to apply a Commission-wide risk-based approach to money laundering and financial crime surveillance, consistent with the revised international standards published by the Financial Action Task Force (FATF).

According to the Commission, licensees will benefit from more efficient on-site visits.

The cost-cutting exercise comes following a government-commissioned report from Ernst and Young, which presented recommendations on streamlining the regulator’s costly operations. There is to be no change in the Commission’s headcount as a result of the change, the Commission confirmed, only a restructuring.

On October 11, Mexico’s Congress approved a long-awaited law aimed at cracking down on money laundering in a bid to attack the finances of the country’s powerful drug cartels.

This legislation was proposed in 2010 years ago by outgoing President Felipe Calderon as part of his offensive against drug gangs. On October 11, 2012, it was passed by the Senate.

The new federal law puts restrictions on cash purchases of real estate, jewelry, armored cars and other assets that criminals use to launder illicit funds.

Companies will be required to report large cash purchases under the law. Car sales of more than 200,000 pesos (about USD 16,000) and real estate purchases of more than 500,000 pesos (about USD 39,000) must be reported.

The bill carries a minimum penalty of 5 years in prison.

One of the most secretive institutions in the secrecy-obsessed Vatican, the Vatican bank, opened its doors to journalists in order to show that it is serious about fighting money-laundering and being more financially transparent.

During a 3-hour PowerPoint presentation, the director of the Vatican bank Paolo Cipriani outlined the peculiar nature of the Institute for Religious Works, the bank’s official name, and sought to refute media allegations that it has been not enough cooperative with requests for financial information from Italian authorities.

On March 7, 2012, International Narcotics Control Strategy Report was published where Washington’s list of 190 countries was revealed. The list countries in 3 categories: of primary concern, of concern and monitored. The Vatican was included into the 2nd category, along with 67 other nations including Poland, Ireland, Hungary, Egypt and Chile. The Vatican was added to the list because it is vulnerable to money laundering.

It was announced by the Philippines that it had avoided an international blacklist on money laundering and terrorist financing after passing two 2 laws in June 2012.

The Financial Action Task Force (FATF) has upgraded the Philippines to its “grey list” of countries that make sufficient progress in their action plans. Previously, the Philippines was in the FATF’s “dark grey list” of jurisdictions deemed not to be making sufficient progress.

President Benigno Aquino’s spokeswoman Abigail Valte said in a statement: “These reforms prevented the Philippines from being classified and downgraded to the ‘black list’, which would have resulted in stricter inspections of financial transactions in the country”.

The Philippines’ Anti-Money Laundering Council said the FATF had urged Manila to include bribery, public funds misuse, human trafficking, tax evasion and environmental crimes as grounds for a financial investigation.

Brunei has introduced anti-money laundering laws that grant enforcement agencies extensive powers to seize businesses, freeze accounts and compel individuals to list their assets through “unexplained wealth declarations”.

The Criminal Asset Recovery Order and amendments to Anti-Terrorism Order will be created to provide authorities with stronger tools for addressing financial crime

The new legislation significantly strengthen the powers of the Financial Intelligence Unit (FIU), giving them the authority to suspend transactions, access and review information related to the government, financial institutions or non-financial businesses and professions (NFBP) such as realtors, lawyers, accountants and jewellers. All cash transactions above USD 15 000 made through these agents must be reported to FIU, failing which the individual could be jailed for up to five years and fined up to USD 50 000.

So, Know Your Customer (KYC) and Customer Due Diligence (CDD) guidelines used in banks currently become legally binding requirements.

The new rules aim to increase transparency as well as remove procedural complexities contained in previous laws. This legislation repeals the Anti-Money Laundering Act, the Drug Trafficking (Recovery of Proceeds) Act and the Criminal Conduct (Recovery of Proceeds Act) Order.