Archive for November, 2015

US regulator tells Scotiabank to fix AML Deficiencies

Saturday, November 14th, 2015

US regulators are compelling Bank of Nova Scotia, Canada’s third-largest bank by assets, to overhaul its anti-money- laundering (AML) controls to correct “deficiencies” in the lender’s compliance program.

Toronto-based Scotiabank has entered into a written agreement with the Federal Reserve Bank of New York and the New York State Department of Financial Services to fix problems ranging from oversight to the monitoring of suspicious activity.

The written agreement released by the New York Fed did not include any monetary penalties against the bank.

It should be noted that the enforcement action comes at a time when Canadian banks are facing increased pressure from global regulators to root out potential sources of money laundering and terrorist financing from their operations.

Scotiabank spokesman Andrew Chornenky said that the bank has a strong risk-management culture. He added: “Scotiabank is firmly committed to global Anti-Money-Laundering standards and serious about fixing the issues identified by the Federal Reserve Bank of New York.”

As part of its agreement with the New York Fed, Scotiabank has agreed to start a review of its New York agency’s wire- transfer activity over a period spanning July 1, 2014, to December 31, 2014. The purpose of the review is to “determine whether suspicious activity involving high risk customers and transactions at, by, or through the Agency was properly identified and reported in accordance with applicable suspicious activity reporting regulations,” the agreement stated.

Swiss Government Adopts New Anti-money Laundering Rules

Wednesday, November 11th, 2015

On November 11, 2015, the government of Switzerland adopted new rules aimed to clamp down on money laundering as the country seeks to cast off its reputation as a haven for hidden cash.

The new rules, which follow recommendations by the Financial Action Task Force (FATF) last year, establish fresh due diligence requirements for traders when they accept cash payments of more than 100,000 Swiss francs (USD 99,500).

According to the statement made by the Swiss government, they also change the way in which religious foundations are registered in Switzerland and will come into force at the start of the year 2016.

Switzerland was reminded of its reputation as a place for the wealthy to hide assets this year when media outlets published leaked documents suggesting HSBC’s Swiss private bank helped customers dodge taxes.

In June, the Swiss banking association had said that the country’s banks would beef up anti-money laundering measures through transparency rules due to come into force next year.

Money laundering to become difficult in next 1-2 years, Indian Finance Minister says

Thursday, November 5th, 2015

According to Arun Jaitley, Minister for Finance, Corporate Affairs, Information, and Broadcasting in the Government of India, tax evasion and money laundering will become extremely difficult in the future. He warned lawbreakers that real-time global automatic exchange of information system will come into effect.

Indian finance minister said: “I am quite certain that the activity is going on in that direction and the next 1-2 years are also going to bring significant results because with almost real-time exchange of information, lives are going to become extremely difficult as far as lawbreakers in that regard are concerned,” the minister said in his inaugural speech at international conference on ‘Networking the Networks’.

Jaitley noted that tax evasion and stashing away illegal money anywhere in the world is becoming increasingly difficult after a G20 initiative that is being taken up by various international institutions.

The initiative, firmed at the Australia summit of G20 last November, is a new global arrangement under which countries will begin automatic exchange of tax information in stages beginning April 1, 2017. India, one of the early adopters, will begin sharing from the first date. Also, the OECD has recently announced the rules for the Base Erosion and Profit Shifting (BEPS) framework, which seeks to ensure that trans-nationals pay tax at least at some place.