Archive for the ‘Anti-Money Laundering legislation’ Category

US to toughen Money Laundering Sanctions against North Korea

Saturday, May 31st, 2014

US lawmakers moved to toughen sanctions against North Korea by targeting money laundering and human rights violations, voicing impatience with the hardline regime.

The House Foreign Affairs Committee approved the bill hours. Previously, Japan, a US ally that has usually championed a hard line on North Korea, unexpectedly eased sanctions after talks.

The House bill would create a blacklist of officials judged to be involved in human rights abuses after a damning report by a UN commission likened abuses by Kim Jong-Un’s regime to those under Nazi Germany.

While the United States already maintains sweeping sanctions against North Korea, the proposed law would seek to make the totalitarian state radioactive for banks from third countries by asking the Treasury Department to consider designating Pyongyang a money-laundering concern.

This move is inspired by the freezing of USD 25 million in North Korean funds in 2005 on US money-laundering and counterfeiting charges at the Banco Delta Asia in the Chinese territory of Macau. Hard-up Pyongyang refused to comply with a denuclearization deal until it received the funds.

The sanctions bill would also re-impose strict restrictions on export licenses that were loosened in 2008 when the President Bush controversially took North Korea off a list of state sponsors of terrorism because he intended to sign a final denuclearization agreement.

Anti-tax Evasion Agreement reached by HK and US

Sunday, May 11th, 2014

On May 9, 2014, the U.S. Treasury Department announced that Hong Kong has reached an information-sharing agreement with the United States under a new law meant to combat offshore tax dodging by Americans.

Set to take effect on July 1, the Foreign Account Tax Compliance Act of 2010 (FATCA) will require foreign banks, investment funds and insurers to hand over information to the U.S. Internal Revenue Service about accounts with more than USD 50 000 held by Americans.

Foreign firms that do not comply face a 30% withholding tax on their U.S. investment income and could effectively be frozen out of U.S. capital markets.

This Hong Kong’s inter-governmental agreement (IGA) must be finalized by the end of the year.

Banks face new US Anti-Money Laundering Measures

Thursday, January 9th, 2014

The Justice Department has put Wall Street on notice that it intends to introduce additional enforcement actions against banks that have not done enough to fight the flow of illicit funds into the United States’ financial system.

A top Justice Department official said that banks have stepped up efforts to guard against money laundering in the wake of several high-profile federal enforcement actions, but the United States is still finding problems as it investigates banks.

Banks have come under increasing pressure from regulators and law enforcement to bolster their anti-money-laundering efforts as part of a broad attempt to eradicate money laundering by going after the financial institutions they say enable such activity.

In 2012, HSBC Holdings PLC paid $1.9 billion after admitting violations of the Bank Secrecy Act and other laws. Regulators also reached a smaller settlement with Standard Chartered PLC and cited Citigroup Inc. and J.P. Morgan Chase & Co. for deficient money-laundering controls. Citigroup and J.P. Morgan said they are working to fix the issues. Last year, the Federal Reserve cited problems with the anti-money-laundering program at M&T Bank Corp., delaying a proposed merger.

The increased focus on banks is a shift for law enforcement, which traditionally added money-laundering charges when prosecuting alleged drug dealers or mobsters for other crimes. It also went after specific individuals or institutions that allegedly helped them launder money in specific instances.

Republic Bank on Guyana and Belize blacklisting

Thursday, January 2nd, 2014

A regional anti-money laundering body has called on Caribbean countries to “consider implementing counter measures to protect their financial systems from the ongoing money laundering and terrorist financing risks emanating from Belize and Guyana.”

The counter measures amount to a financial blacklisting of the countries. These means that all financial transactions between T&T and Guyana and Belize will be placed under much greater scrutiny. Also, wire transfers and other payments could be delayed or denied.

Republic Bank executive director, Nigel Baptiste, answered the questions on the impact of the counter measures on trade and payments between T&T and the affected countries: “These measures will undoubtedly negatively affect trade and payments between the countries as the enhanced monitoring will result in longer turnaround time, higher costs and possibly the refusal of accepting payments where information requirements are not met.

He said: “Where correspondent and other banks or parties restrict the types of business being done, this will negatively affect trade income and payments and may lead to investors withdrawing from Guyana and Belize.”

The virtual blacklisting of Belize and Guyana is a directive of the Caribbean Financial Action Task Force (CFATF), an organisation comprising 29 jurisdictions in the Caribbean Basin region that have agreed to implement international standards on Anti-Money Laundering and Combating the Terrorist Financing.

Cayman joins OECD Convention on fighting Tax Evasion

Tuesday, December 10th, 2013

The Organization for Economic Cooperation and Development (OECD) /Council of Europe Convention on Mutual Assistance in Tax Matters has been extended to the Cayman Islands. This will be effective as of January 1, 2014.

The convention on tax assistance provides for all possible forms of administrative co-operation between jurisdictions in the assessment and collection of taxes, in particular with a view to combating tax avoidance and evasion. This co-operation ranges from exchange of information, including automatic exchanges, to the recovery of foreign tax claims.

Currently, more than 50 jurisdictions adhere to this convention.

New Zealand’s AML legislation takes effect

Tuesday, July 2nd, 2013

Legislation strengthening New Zealand’s financial system against money laundering is taking effect. However, this means more paperwork for some investors.

The Anti-Money Laundering and Countering Financing of Terrorism Act, which comes into force on July 7, makes it easier to recover money gained illegally and closes loopholes used by criminals to launder money.

According to Justice Minister Judith Collins, banks, financial institutions, some financial advisers and casinos will have to verify customers’ identities, assess risks, appoint compliance officers and report suspicious or unusual transactions. She said: “The new laws don’t just help fight crime and terrorism; they also reflect sound practices that reduce financial risks for businesses while also protecting the savings and interests of their customers and investors”.

According to business commentator Brian Gaynor, the new legislation will have a major impact on the way people interact with financial institutions.

The laws will not have a major impact on individuals who deposit or invest money in their own name, unless they undertake a large number of unusual transactions. However, they will have a much bigger impact on trusts and politically exposed persons as their disclosure requirements will significantly increase.

Jersey strengthens Money Laundering Legislation

Saturday, May 18th, 2013

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.

Vatican and US sign Anti-Money-Laundering Deal

Tuesday, May 7th, 2013

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.

Guernsey amends AML Legislation

Thursday, November 22nd, 2012

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.”

Mexico passes new AML legislation

Saturday, October 13th, 2012

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.