Archive for the ‘Anti-Money Laundering legislation’ Category

Swiss banks to harden AML measures

Tuesday, June 30th, 2015

According to the Swiss banking association, Switzerland’s banks will beef up anti-money laundering measures. This was announced weeks after a report by a government-appointed group found the Alpine nation was still vulnerable to financial crime.

More transparent rules are to come into force in 2016 to make it harder for criminals to hide their money in companies or schemes with obscure ownership structures.

The measures were announced as Switzerland investigates alleged corruption at Zurich-based FIFA, world soccer’s governing body, in connection with World Cup bids. United States’ prosecutors are also investigating alleged money laundering schemes by soccer officials.

The Swiss Bankers Association said in a statement that fighting against money laundering and terrorist financing are central issues for the Swiss financial centre. It announced that from 2016, bank would face a new requirement to identify the controlling owner of legal entities and private companies. This would mean any individual with a stake of more than 25% or exercising effective control. If no one who meets these criteria, banks must instead identify the highest-ranking employee.

The announcement follows a report this month from a Swiss interdepartmental group on combating money laundering and terrorism financing, in which it recommended measures to improve rules tackling financial crime.

EU adopts European Tax Compliance Activities

Sunday, June 1st, 2014

The European Commission has adopted the 1st annual program for its new anti-fraud regime Hercule III. Over the year 2014, EUR13.7 million will be made available to support EU member states in their enforcement activities that include fighting fraud and fiscal crime.

This program will allow member states to finance specific projects and purchase of technical equipment by national authorities, as well as to tackle smuggling and other activities affecting the EU’s financial interests. Under Hercule III, EU countries will be able to apply for more funding. They could receive funding of up to 80% of the overall costs for actions to strengthen the technical and operational capacity of customs and law enforcement agencies. In exceptional and duly justified cases, the funding could be increased to 90%.

Also, the European Commission will pay for access to specialized databases for use by member states’ customs and tax authorities. Funds will be allocated for training activities and seminars and conferences for customs and police staff.

According to Tax Commissioner Algirdas Šemeta, “Fighting fraud and corruption in the EU must really be a partnership. Hercule III means that member states will have significant financial support in catching fraudsters and protecting taxpayers’ money. Thanks to the work program adopted today, many useful anti-fraud projects can now be put into practice.”

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.