AML developments – You need to know
2023 is expected to be a busy year in relation to AML/CTF matters as the EU shall adopt the new AML/CTF package aimed at strengthening the fight against financial crime: creation of an ESA responsible for AML/CTF supervision-the AMLA, a new “Regulation” to harmonise rules and their implementation across the entire block, a new Directive to strengthen further NCAs & FIUs roles whilst fostering better cooperation and information exchange and finally the revision of the Regulation on transfer of funds to include crypto-assets.
30 January 2023
FATF has published its Annual Report 2021-2022. Whilst most of the information published would not be critical for AML/CTF practitioners, it is worth noting that the new mutual evaluation methodology has been reshaped and will focus on the effectiveness of the systems and controls and not merely on the existence of those controls.
14 December 2022
FATF organised a webinar to explore money laundering within the real-estate sector to further raise awareness of AML practitioners on how to identify and mitigate those risks. It follows on a July publication: Risk-based approach Guidance for the Real Estate Sector
30 November 2022
FATF publishes a report on Money laundering from Fentanyl and Synthetic Opioids. It provides useful tips on specific typologies used by criminals involved (case studies) as well as a list of relevant risk indicators
21 Octobre 2022
FATF published an updated list of the Jurisdictions under Increased Monitoring
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16 February 2023
EBA has released the December AML/CTF Newsletter. It summarises all regulatory initiatives and provides a comprehensive overview of AML/CFT actions taking place within EU on AML/CFT subject matters.
31 January 2023
EBA publishes three Q&As that, jointly with three other Q&As (4047, 4827, 6141) that the EBA had published previously, clarify comprehensively the application of strong customer authentication (SCA) to digital wallets under the revised Payment Service Directive (PSD2): Q&A 5622, Q&A 6145, Q&A 6464. They further clarify the need of implementing strong customer authentication (SCA. Art. 97 (1) (c) when:
- enrolling payment cards to digital wallets which for the purpose of the applicable rules leads to the creation of a token/digitised version of the payment card; and
- initiating electronic payment transactions with the digitized version of payment cards
They further clarify that:
- unlocking of a mobile phone with biometrics or with PIN/password cannot be considered a valid SCA element for the purpose of adding a payment card to a digital wallet, if the screen locking mechanism of the mobile device is not a process under the control of the issuer; and
- the issuance of a new token, replacing a previously existing one, and binding it to a device/user also requires the application of SCA.
7 December 2022
EU Council agrees its position on a strengthened rulebook which includes a new AML Regulation including an Annex listing AML/CTF risks and a new AML Directive (AMLD6). New activities are being brought in scope: CASPs, Third Parties financing intermediaries, Persons trading in precious metals, stones and cultural goods, Jewellers, Horologists and Goldsmiths above €10,000, investment migration operators permitted to represent or offer intermediation services to third country nationals seeking to obtain residence rights, creditors for mortgage and consumer credits, other than credit institutions and financial institutions. A limit for cash payments above €10,000 is introduced (option to set lower levels at member state level). Another relevant point is that the rules to ID Beneficial Ownership are finally clarified including in relation to multi-layered structures to ensure common approach and foster transparency. Others points class of beneficiaries, outsourcing, record keeping, reliance on third parties, high risk countries approach … etc.
22 November 2022
EBA publishes its Final Guidelines on the use of remote customer onboarding solutions. They clarify supervisory expectations in relation to (i) the development and implementation of sound, risk sensitive initial CDD processes in the remote customer onboarding context and (ii) set out the steps obliged entities should take when choosing remote customer onboarding tools. They also confirm that obliged entities should satisfy themselves that the chosen tool is adequate and reliable, that it remains adequate and reliable, and that it enables them to comply effectively with their initial CDD obligations which includes among other the requirement to set-out a relevant policy/procedure
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11 January 2023
FCA fines Al Rayan Bank Plc £4millions for AML failures. The FCA found that the Bank allowed money to pass through the Bank without carrying appropriate checks (e.g., source of wealth, source of funds), failed to appropriately train its staff on how to handle large deposits.
10 January 2023
FCA fines Guaranty Trust Bank (UK) Limited £7.6millions for serious weaknesses in its AML systems and controls. The FCA highlighted that the Bank failed to undertake adequate customer risk assessments (assessment & documentation) and did not adequately monitor transactions and business relationships.
09 January 2023
FCA Quaterly consultation paper 38 closed. It covered among other consequential changes (minor) to EG 19. The FCA proposes to apply the same type of approach to Annex 1 firms that it does currently to crypto-assets service providers (e.g., provision of information by firms, appointment of a skilled person, impose direction). Annex I financial institutions are businesses that perform activities, such as financial leasing, commercial lending, and safe custody services.
9 December 2022
FCA fines Santander £107millions for repeated anti-money laundering failures. The FCA found that the Bank failed to properly oversee and manage its AML systems which significantly impacted the account oversight of more than 560k customers (e.g.. inadequate information verifications: amounts tass through the accounts vs customer declarations).
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15 February 2023
ACPR announces its supervision priorities for 2023. They include among others: publication of a Thematic review on transactions monitoring using automation and a control campaign targeting DASPs (PSAN).
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30 January 2023
CSSF has hosted a Conference for Specialised Professional of the financial sector (e.g. Registrar agents, Depositaries, Operators of Regulated Markets, … full list: https://www.cssf.lu/en/specialised-pfs/) to clarify Regulators expectations. It covered ML/TF risk assessment and reporting to the Board, Insights from the FIU including SARs/STRs submission (e.g., content, format, expectations) as well as the regulatory framework applicable to Trustees and Fiduciaries:
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2 January 2023
FINMA publishes the partially revised FINMA Anti-Money Laundering Ordinance. It has adjusted the Ordinance to take into account the latest changes within the AML Act and AML Ordinance. The main changes relate to:
- Scope extension to cover negotiation systems using DLT
- Right for the FINMA to request obliged entities to implement automated transaction monitoring systems
- Threshold applicable to transactions to purchase or sell virtual currencies against cash or another anonymous means of payments (CHF1000)
- Requirement for obliged entities to design and adopt an internal policy/procedure to keep client data updated and verified
- Requirement for obliged entities to inform the FINMA or the relevant SRO when a SAR/STR has been filled with the FIU that may negatively impact the oblige entity and/or the Swiss financial marketplace (e.g., large/substantial funds and/or assets)
- Recognition of Self-Regulatory Organisation of the Swiss Insurance Association regulations as minimum standards.
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