Chatterbox10/11/2020

Edition 3, Volume 2

A note from the Editor Lee Byrne

Contents

“In Focus” – Bribery and Corruption

Part One:CRIME AWARENESS2. Banks Moved Suspect Funds2. Former VP Imprisoned3. CourtRulesAgainstTaxOffice3. President Faces Corruption Investigation4. UK – OFSI Annual Report

Part Two:REGULATORY RESPONSE5. UK Amends Regulations in Preparation for Brexit5. 5th EU AMLD Update 6. Covid-197. Europe – ESMA Report on MAR8. France Publishes New Notice on Whistleblower Directive9. FATF Publishes Guidance on Virtual Asset Red Flags9. Australia - Afterpay10. UK Trusts – Companies Face Increased AML Requirements10. Casino on Prosecutors Radar11. Latin America – FATF Crime Risk Update 11. Sweden – FATF MER Update12. Algeria - Inclusion Referendum Nears 12. Maldives – Theodorin Obiang in Five Star Resort

Part Three: ENFORCEMENT ACTION13. US Company Charged with $100m Fraud13. Swiss Finma Finds Bank Lacked Due Diligence

It seems that no matter how hard I try to keep abreast of

international regulatory change and emerging crime threats,

there is always something that I miss. I am also struggling with

having too many feeds so that my inbox has now become a

morass of news that I have not read because I have too many

messages to open. Am I alone?

In this issue we have focused on some of the more international

stories that we hope will add some global perspective to the

continuingrateofchangeinfinancialcrimeriskandcompliance.

Stories that we feel are interesting and may have slid under the

radar. There are some obvious news stories that we have not

featured, simply because I feel that these have been covered

sufficientlyelsewhere.

Going forward, we will be endeavouring to ensure that we

provide a short and succinct summary of key international

headlines, with stories from all four corners of the globe to

ensure that we maintain a truly international perspective in the

fightagainsttransnationalorganisedcrime.

Enjoy!

www.greatchatwellacademy.com Page 2 of 14

Chatterbox 10/11/2020Volume 3, Edition 2

Part One: Crime Awareness

Reports: ‘FinCEN’ Documents Show Banks Moved Suspect Funds

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Here is a list of some of the subjects we now cover:

1. Anti-Money Laundering & Combating The Finance of Terrorism Awareness

2. Opensource (Internet) Investigation Technique (OSINT)

3. Managing Bribery & Corruption Risks

4. Managing Sanctions Risks

5. Managing Fraud Risk

6. Introduction to Blockchain and Virtual Currency Risk Management

7. Managing Tax Evasion Risks Under The Criminal Finance Act2017

8. Advanced Financial Crime Compliance (AML)

9. Trade Based Money Laundering

10. Terrorist Financing Risks & Terrorist Group Analysis

For further information please contact us at:

info@greatchatwellacademy.com

© Great Chatwell Academy of Learning 2020 All Rights Reserved

The International Consortium of

Investigative Journalists, together

with BuzzFeed News, released in

September 2020 the results of another

investigation, the FinCEN Files. The

documents represent the leaks from the

so-called Suspicious Activity Reports

(SARs)filedbythefinancialinstitutions

to the US Financial Intelligence Unit,

FinCEN.

Several banks involved in processing

ofthesuspiciousfinancialflows

are mentioned in the leaks. When

questioned, the banks – Standard

Chartered, JP Morgan, Deutsche Bank

and BNY Mellon, among others, - only

acknowledged working closely with the

regulators and law enforcement and

investing to improve their compliance

frameworks.

https://www.voanews.com/usa/reports-

fincen-documents-show-banks-moved-

suspect-funds

Maldivian Former Vice-President Imprisoned again for Money Laundering

The Maldives Ex Vice President

Ahmed Adeeb has received a 20 year

imprisonment sentence and a USD

130,000fineforcorruptioncharges

related to leasing tropical islands for

hotel development. He pleaded guilty to

embezzlement and money laundering.

In 2019, Adeeb had been convicted

of being the main person behind the

explosion on the then-President Abdulla

Yameen’s yacht. However, he was later

cleared of all charges when an appeals

court overturned the sentences against

Adeeb and ordered retrials, citing

political interference in the convictions.

https://thediplomat.com/2020/10/

maldives-ex-vice-president-jailed-again-

for-money-laundering/

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© Great Chatwell Academy of Learning 2020 All Rights Reserved

In October, the Administrative Court

of Luxembourg issued a ruling against

theLuxembourgTaxOffice,which,

according to the judge, exceeded its

powers in relation to the Panama Papers

investigation.

Following the publication of the Panama

Papers in 2016, the Luxembourg Tax

Officelaunchedacampaigntargeting

the lawyers located in Luxembourg that

were mentioned in the leaks in order

to obtain data on their clients linked to

Mossack Fonseca, a Panamanian law

firmatthecoreofthescandal.

However, these lawyers opposed the

attorney-client privilege to the Tax

Officeandproceedingsstartedin2019.

TheTaxOfficeinvokedthatcooperation

with authorities might took precedence

over any privilege and professional

secrecy issues. Nevertheless, the court

wasinflexible.

Mostprobably,theTaxOfficewillappeal

the decision.

https://delano.lu/d/detail/news/

court-sides-laywers-panama-papers-

case/211802

The Luxembourg Court Upholds Luxembourgish Lawyers in Panama Papers Case

Murder of Daphne Caruana Galizia: a complaint filed in France against the financiers of Electrogas Malta

Limited

Maltese investigative journalist Daphne Caruana Galizia was

assassinated 3 years ago for having exposed the corrupt practices in her homeland.Acomplainthasbeenfiled

in France by Sherpa, a French NGO and the Foundation Daphne Caruana

Galizia, against 4 French banks and an investment fund. The complaint

for money laundering linked to aggravated corruption is related to a loan that was granted to Electrogas

Malta Limited, a company that belonged to a businessman involved

in multiple corrupt acts and to the assassination itself.

The complaint targets BNP Paribas, Societe Generale, CIC and Natixis, as well as Rivage Investment. The businessman, Yorgen Fenech, was

already on the French prosecutor’s radar, for potential corruption

affairs in France in relation to Keith Schembri, former Chief of staff to the Maltese Prime Minister, and

Konrad Mizzi, Maltese ex-Minister for Tourism. Prior to this, Daphne Galizia’s family and the Reporters WithoutBordersfiledacomplaint

against Fenech, Schembri and Mizzi for corruption and as co-offenders of

murder.

Electrogas reacted to the allegations with an internal review which,

according to the company, did not reveal any signs of corruption or any

other wrongdoing.

https://timesofmalta.com/articles/view/electrogas-found-no-sign-

of-corruption-in-delimara-power-station.817656

Chatterbox 10/11/2020Volume 3, Edition 2

Part One: Crime Awareness

Peruvian President Faces Corruption Investigation

Martin Vizcarra will face a corruption

investigation at the end of his mandate

in 2021. The Public Prosecutor has

launched the investigation due to

a report received from a regional

prosecutor’soffice.Allegedly,the

current Peruvian President is somehow

linked to the recruitment process of

a singer, Richard Cisneros, for the

Ministry of Culture. It seems that this

straw man was used to embezzle public

funds.

https://today.rtl.lu/news/

world/a/1593438.html

In Focus

Bribery And Corruption

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Chatterbox 10/11/2020Volume 3, Edition 2

© Great Chatwell Academy of Learning 2020 All Rights Reserved

Part One: Crime Awareness

This report will be the last published report before Brexit and the UK becoming independent. According to the publication, OFSI has frozen more than £11 billion funds related to Libya and more than £460 million linked to Iran as part of nuclear proliferation

sanctions. Several additional sanctions regimes have been introduced, such as targeting cyber criminals, Nicaragua (human rights violations) and Turkey (unauthorised drilling activities in the Mediterranean). International cooperation appears to be progressing well, OFSI having almost doubled its interactions with its foreign partners.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/925548/OFSI_Annual_Review_2019_to_2020.pdf

DOWNLOAD A COPY OF OUR NEW BROCHURE

READ OUR BROCHURE ONLINE

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In Focus

Bribery And CorruptionUK OFSI Annual Report 2019/2020

Goldman Sachs Unit Pleads Guilty in Malaysian Bribery Case

The Hong Kong subsidiary of the

American banking giant Goldman

Sachs has pleaded guilty to

conspiracy charges related to the

notorious 1MDB bribery scandal.

Theaffiliateadmittedviolatingthe

US FCPA which bars US companies

from paying bribes to government

officialsabroad.Thebankistrying

to close the 1MDB case with a

settlement with the US Justice

Department and a penalty of almost

USD 3 billion.

TheHongKongfinancialregulator

has already imposed a USD 350

millionfineonGoldmanforitsrole

in the 1MDB scandal.

https://uk.reuters.com/article/

uk-goldman-sachs-1mdb-hong-

kong/hong-kong-fines-goldman-

unit-350-million-over-1mdb-

idUKKBN27717Y

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Chatterbox 10/11/2020Volume 3, Edition 2

© Great Chatwell Academy of Learning 2020 All Rights Reserved

Part Two: Regulatory Response

Whistleblowers in the spotlight: from apps to the House of

Whistleblowers

A whistleblower was a rare bird however, it has become a common

foremployeestoreleaseconfidentialpapers to the public.

In 2019, France launched its unique ‘House of Whistleblowers’ aimed at

providing psychological, social, legal or evenfinancialassistancefortipsterswithqualifiedexpertstomanagethe

proceedings and claims.

Globally, there were a range of audacious projects to encourage the

reporting of wrongdoings with several African and Asian countries that

developing smartphone applications to promote the reporting of

corruption and bribery. In September 2020, the Zimbabwe Anti-Corruption

Commission, inaugurated a new whistleblowing app that ensures user anonymity and provides reassurance to the population afraid of reporting

consequences.

Whistleblower protection is rooted in the European legislation through the EU Directive 2019/1937 of 23

October 2019 and offers a minimum entry-level array of rights to a bona fidewhistleblower.Accordingtothe

EUWhistleblowingMeter only 14 countries out of 27 Member states

have made progress to transposition of the EU Whistleblowing Directive

while the other 13 have not even started.

Despite considerable progress in whistleblowing protection, a culture

shift is still needed to ensure all-inclusive whistleblower protection.

https://mlalerte.org/

In Focus

UK Amends its AML and TF Regulations in Preparation for the Final Brexit Phase

Majority of Regulated Firms Risk Fines for Non-Compliance with New Money Laundering Rules

In September, the UK regulators

updated the AML-TF legislation to roll

out the amendments in the EU AML

regulations, i.e. the 5AMLD that concern

changestothebeneficialownership

register, including that of all UK express

trusts. A list of exceptions and methods

of determination of the “express”

trust status were also provided. Non-

UK express trusts are also subject to

registration if they have a UK nexus.

The access to the register is guaranteed

for law enforcement and relevant

authorities, and starting March 2022, it

will be available to third parties capable

of proving their legitimate interest.

The reporting of discrepancies to the

House of Companies was amended to

specify that this step would only be

necessary at the inception of a new

relationship and requirements for

the quality assurance regarding the

electronic ID&V were also further

specified.Finally,theenhanceddue

diligence requirements related to the

correspondent relationships were

detailed to include the execution of

payments into the scope.

Find out more: https://www.

legislation.gov.uk/uksi/2020/991/pdfs/

uksiem_20200991_en.pdf

According to a study released by

LexisNexis Risk Solutions, only half of

UK companies are compliant with the

5AMLD (The Fifth Money Laundering

Directive) that came into effect in

January 2020. The UK has successfully

transposed the new EU directive into

AML regulations, despite the ongoing

Brexit negotiations. British companies,

includingthefinancialsector,arefinding

itdifficulttounderstandtherationale

behind the new legislation and have

identifiedthatthecurrentCovid-19

context does not enable progress in

effective internal implementation.

https://www.financialreporter.co.uk/

regulation/majority-of-regulated-firms-

risk-fines-for-non-compliance-with-

new-money-laundering-rules.html

UNITED KINGDOM

Bribery And Corruption

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Chatterbox 10/11/2020Volume 3, Edition 2

© Great Chatwell Academy of Learning 2020 All Rights Reserved

The FATF Plenary Meeting was held

in a virtual format on October 21-23

and was chaired by the FATF President,

Marcus Pleyer, of Germany. The

assembly covered a wide array of agenda

topics including strategic initiatives,

countryspecificprocessesandother

strategic initiatives,

The current Covid-19 pandemic was

at the heart of the discussions and

special attention was drawn to the

significantincreaseinnumberoffraud

cases, whether it be investment scams,

cyber-attacks, counterfeited goods

and medicines, or furlough fraud.

The FATF encouraged jurisdictions

to adopt a proactive approach, based

on risk assessment, to identifying and

understanding the opportunities that

criminals may see in the pandemic.

As the media has reported, there

has been an increase in the use of

remote or online banking and payment

serviceswhichposessignificantrisksof

processingillicitfinancialflows.

Special focus was also made on the

FATF network and cooperation

between the FATF regional bodies with

the conduction of mutual evaluation

reportsandsupporttotheiraffiliates,

being praised by the FATF Presidency.

Several jurisdictions have seen their

mutual evaluation dates postponed,

due to the outbreak of the pandemic

however, FATF is going to continue its

work and evaluations of the compliance

with its standards. Jurisdictions under

increased monitoring were granted an

additional 4-month delay to remediate

theidentifieddeficiencies.Iceland

and Mongolia who decided to submit

their reports, were particularly praised

by the FATF Presidency on their

significantprogressinimplementingthe

international AML-CTF standards.

Additionally, the FATF President

highlighted that some other strategic

initiatives were being deployed,

notably the enhancement of

measures for prevention of WMD

proliferation and the amendments to

the Recommendations #1 and 2 were

approved. A guidance will be elaborated

by FATF in order to assist jurisdictions

and corporates in the implementation

of appropriate measures for countering

WMD proliferation.

Finally, the Plenary participants agreed

to hold the Joint Experts’ Meeting on

November 23-25, again in a virtual

format with the agenda of the meeting

including items on environmental crime,

illicitarmstraffickingandthefinancing

of ethnically and radically motivated

terrorism.

The key highlights provided by Mr

Pleyer include the need for oversight

ofthenon-financialsector,enhanced

prosecution and forfeiture of ill-gotten

gains and reviewing access to and

availabilityof,thebeneficialownership

information.

http://www.fatf-gafi.org/publications/

fatfgeneral/documents/outcomes-fatf-

plenary-october-2020.html

Part Two: Regulatory Response

The French Transparency and Anti-Corruption Law (“Sapin II Law”): a

3-year itch?

The French Anti-Corruption Agency launched a survey across the French

private sector to get a view on the current implementation status of

the 2017 French Anti-corruption law commonly called ‘Sapin II Law’. Of the 22% of French companies that faced corruption over the last 5 years, only

50% took appropriate measures.

The September 2020 survey results were fairly positive with 85% of

respondentsdefiningcorruption,briberyand distinguishing active and passive

corruption with the most affected areas procurement,trade,M&Aandfinance.

After a 3-year period of adaptation and implementation of the Sapin II law, only 70% of the respondent companies had

introduced an anti-corruption mechanism into the internal framework. Most of

these mechanisms were put in place to comply with regulations, and only half of respondentsconfirmeditwasoneofthe

top management initiatives.

Thesurveyalsoidentifiedthatanti-corruption awareness only reached 53%

of the staff, with senior management only becomingawarewhenheavyfinesare

awarded. Only 60% of the companies had a fully operational whistleblowing hotline.

Oneoftheweakestpointswasidentifiedas being third party diligence along with theproblemoffindingacompetentComplianceOfficerandthelackof

appropriate, consistent and relevant risk assessments.

In conclusion, it would be fair to admit that there is still room for progress, especially

when compared to the extremely advanced UK Bribery Act and US Foreign Corrupt

Practices Act.

(in French only): https://www.agence-francaise-anticorruption.

gouv.fr/files/2020-09/Diagnostic%20national%20sur%20les%20dispositifs%20

anticorruption%20dans%20les%20entreprises.pdf

Exceptional Circumstances, Exceptional Measures.

EUROPE

In Focus

Bribery And Corruption

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Chatterbox 10/11/2020Volume 3, Edition 2

© Great Chatwell Academy of Learning 2020 All Rights Reserved

Part Two: Regulatory Response

ESMA Issues Final Report on MAROn September 23, the European

Securities and Markets Authority

published a report regarding several

provisions of the Market Abuse

Regulation (Regulation 596/2014 of

the European Parliament and of the

Council), following a public consultation

overayearago.Thefindingsareyet

to be examined by the European

Commission for any further action. A

shortsummaryofthefindingsare:

Short summary of the findings

Article Findings

11 Market Soundings Clarificationsrequestedforthefollowingprovisions:

“The requirement to cleanse contained in Article

11(6) of MAR could be waived wherever the

transaction is publicly announced;

Where recording facilities are not available, written

minutes of the sounding agreed and exchanged

viaemailorotherelectronicmeansshouldsuffice,

with no need to have a more formal exchange of

signatures;

The requirement to repeat reminders of the wall-

crossing requirements could be removed for follow

up calls after the initial one.”

17 Public Disclosure No changes requested.

ESMA will publish guidance on protracted processes,

financialstatementsandrumors.

18 Insider Lists The issuers should include into their insider lists only persons

who have, to the best of their knowledge, effectively had

access to the inside data.

In case of doubt, the registration on insider list is acceptable

under “potential access” criteria.

Only one effective contact person should be included in the

insider list (i.e. the one via which the inside information has

been obtained).

Additionaldefinitionsneededfor“performanceoftasksfor

the issuer” and “acting on behalf or on the account of the

issuer”(notdefinedinMAR).

CHECK

CHECK

CHECK

https://www.esma.europa.eu/press-news/esma-news/esma-publishes-outcomes-

mar-review

In Focus

Bribery And Corruption

Angola – dos Santos

Angolan prosecutors have seized

assets belonging to two of former

President Jose Eduardo dos Santos’s

closest aides, the latest step in a

crackdown on corruption in the

southern African country.

Assets including a brewery and

a vehicle assembly plant held by

general Manuel Helder Vieira Dias,

known as Kopelipa, and Leopoldino

do Nascimento, known as Dino, were

taken,Angola’sProsecutor’sOffice

said in an emailed statement on

Wednesday. Other assets that were

seized included shares in a sugar plant

and supermarket chain, a cement

factory and buildings and residences.

The Wall Street Journal this month

cited Angolan President Joao

Lourenco as saying the previous

regime and its associates siphoned

off $23.79 billion from the state,

mostly through fraudulent contracts

with government-owned companies.

Among the targets of the corruption

probe are Dos Santos’ children.

https://www.bloomberg.com/news/

articles/2020-10-14/angola-seizes-

assets-of-allies-of-former-president-

dos-santos?sref=ldCf194q

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Chatterbox 10/11/2020Volume 3, Edition 2

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Part Two: Regulatory Response

OECD issues a new report on corporate anti-corruption

compliance

OECD’s September 2020 report on anti-corruption compliance

highlights several topics:

The reasons for companies to adopt anti-corruption measures

86% of respondents admitted implementing an anti-corruption

programme due to concerns around possible prosecution and

enforcement and reputational damage. The report mentions the

so-called “bystander effect”, i.e. seeing other companies, probably

competitors, falling victims of weak anti-corruption frameworks.

The assessment of the corruption risk

The report reminds the readers that the OECD’s-UNODC-World

Bank joint guidelines “Anti-Corruption Ethics and Compliance Handbook for Business”, published

in 2013 is still up-to-date and provides the best practices for anefficientriskassessmentwith

70% of respondents acknowledge having assessed the risks prior to implementing an anticorruption

programme.

Continues overleaf...

France Publishes a Notice Regarding the Transposition of the EU Whistleblower Protection Directive

In 2016, France adopted a new

transparency and anti-corruption

law (the so-called “Sapin II law”) that

already comprised provisions for the

whistleblower protection. However,

for the purpose of transposition of

the EU Directive 2019/1937 by end

2021, the French National Consultative

Commission for Human Rights,

issued an opinion on the current state

of whistleblower protection and

recommended several enhancements.

Here is a summary of the most

outstanding recommendations:

Extensionofthedefinitionof

whistleblower to legal entities,

such as unions and associations,

and of the scope of offences to

include any serious threats to the

public order.

The Commission encourages the

government to adopt measures

thatwillallowfinancialand

psychological assistance for the

bonafidewhistleblowers.Foreign

whistleblowers must get the right

of asylum even if the EU Directive

does not mention it.

The Commission suggest

introducing into the law an

obligation for companies to

involve unions into the discussions

on the implementation of the

whistleblowing mechanism.

The personnel that receive and

process the tips will need to be

properlytrainedandqualified.

Their independence and

impartiality must be guaranteed

and they will only need to report to

the Management Board.

A separate independent

authority should be created to

ensure whistleblower rights and

protection.

Public disclosure should be

authorised in case of obvious and

illegal threat to the fundamental

freedoms and rights.

The burden of proof has to

bereversedforabonafide

whistleblower i.e the defendant

will need to prove innocence, and

not the whistleblower.

Aspecificprocedureshouldbe

implemented for alerts related

to national defence secrecy

provisions.

https://www.dataprotectionreport.

com/2020/02/the-french-data-

protection-authority-cnil-adopts-a-new-

standard-on-whistleblowing-systems/

CHECK

CHECK

CHECK

CHECK

CHECK

CHECK

CHECK

CHECK

In Focus

Bribery And Corruption

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Chatterbox 10/11/2020Volume 3, Edition 2

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Part Two: Regulatory Response

OECD issues a new report on corporate anti-corruption

compliance

...Continued

The most sensitive areas in anticorruption frameworks included

interactions with governments, geographical risks, compliance

with multiple global anticorruption regulations. The main risk concern

were agents and subcontractors.

The measures that companies adopt to mitigate the risks

Most of the companies follow the abovementioned 2013 handbook

and had established a code of conduct and an anticorruption

policy with 37% of respondents having these documents for over

5 years, and 28% more than 10 years. Companies also inform their employees of their anticorruption obligations, via intranet, hard copy

guides and training sessions.

The resources available to support anti-corruption programmes

A substantial number of respondents (70%) acknowledge

having received support from their governments regarding guidelines on anticorruption

measures. The most frequently cited anticorruption laws are those of the US, UK, France, Germany, Denmark, and surprisingly, Colombia. The US andUKarespecificallydistinguished

by the respondents as “model regulators”providingsufficientandsignificantguidanceonthesubject.

Continues Overleaf...

In September 2020, FATF released the

results of its analysis of over a hundred

case studies related to the virtual assets.

According to the publication, drug

traffickingremainsthemostfrequent

predicate offence to the money

laundering via cryptoassets, followed by

fraud, tax evasion, and cybercrime.

Interestingly, the guidance states that

“theuseofVAsforMLpurposesfirst

emerged over a decade ago”. Surprisingly

(ornot),nomeanstoefficientlycounter

it has been elaborated yet.

Generally,theredflagsfollowthe

patterns of a traditional money

laundering scheme:

• Transactions structuring

• Deposits followed by immediate withdrawal or transfer

• Transfers to jurisdictions with no obvious link to the customer

• Use of multiple accounts or wallets with no business logic

• Transactions executed at a loss

• Disregard for high fees

• Transfers from public transparent blockchain to a centralised exchange and immediate operations

• Previous known or suspected exposure to darknet marketplaces

• Multiple separate accounts under different names

• Suspicious IP addresses (sanctioned jurisdictions, suspicious domains)

• Customer’s refusals to provide KYC information, inaccurate information, forged documents

• Funds originating from or transferred to an exchange registered in a jurisdiction that has no obvious links to the customer’s geographical location, and/or lacks VA regulations

or KYC requirements

As usual, a risk-based approach is

recommended in order to target genuine

redflagsandweakareas.

http://www.fatf-gafi.org/publications/

methodsandtrends/documents/virtual-

assets-red-flag-indicators.html

The money laundering probe against

Afterpay,alistedAustralianfintech,has

been closed. The Australian regulator,

AUSTRAC, has decided to end the

investigation without any further

action,followingthepositivefindings

of an external audit it requested over a

yearago.Theauditorshaveconfirmed

that Afterpay do not have any serious

shortcomings in their AML framework,

and the company has stated that

additional measures have been taken

to enhance compliance. This decision

seems to be taken somewhat lightly

given the seriousness of AUSTRAC’s

investigation and that the decision was

based upon just one audit report.

https://www.afr.com/companies/

financial-services/afterpay-gets-aclean-

bill-of-health-from-austrac-20201014-

p564w6

FATF Publishes its Guidance on the Red Flags for Virtual Assets

Afterpay gets a clean bill of health from AUSTRAC

In Focus

Bribery And Corruption

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Chatterbox 10/11/2020Volume 3, Edition 2

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Trust Companies Face Increased Anti-Money Laundering Requirements

Part Two: Regulatory Response

...Continued

The key challenges and a glance to the future of anti-corruption

Management commitment is mentioned as one of the key challenges for a successful anticorruption programme

implementation (60%), followed bythelackoffinancialorother

resources (48%) and pressure for results.

Companies have formulated aneedformoreefficientand

stronger government commitment to enforcement of anticorruption

lawsandmoreefficientprocedures.

https://www.oecd.org/daf/anti-bribery/Corporate-anti-

corruption-compliance-drivers-mechanisms-and-ideas-for-

change.pdf

https://www.oecd.org/corruption/corporate-anti-corruption-

compliance.htm

In September 2020, FinCEN released

additionalguidance(finalrules)onAML

obligations applicable to banks, trust

companies and credit unions under the

Bank Secrecy Act (BSA) that do not

have a Federal functional regulator (the

so-called non-FFR institutions).

Additional New Requirements

Written AML programme approved by the Board of Directors

System of internal controls as per BSA

Periodic independent compliance testing

DesignationofaqualifiedAMLofficer

Training programme

Appropriate risk-based procedures (including ongoing due diligence, ongoing monitoring to identify and report suspicious transactions)

Prior Requirements

Currency transaction reports for transactions exceeding USD 10,000

Client due diligence as per CIP

UNITED STATES OF AMERICA

https://www.natlawreview.com/article/trust-companies-face-increased-anti-

money-laundering-requirements

Money Laundering Inquiry Hears Of $800,000 and More In Bags, Luggage and BackpacksOne of the largest casinos in the Canadian British Columbia is currently on the radar of prosecutors for money laundering. Since 2010, the gambling house has processed substantial amounts of cash that its clients often brought in bags and suitcases. The probe was launched after reports outlined the province as a place of vast money laundering operations via real estate and luxury cars purchases. A local anti money laundering specialist had suspicions regarding the origins of the money

but with limited information, he did not intervene.

By way of a summary, Canada was evaluated by the FATF during a mutual evaluation round in 2016, and no major concerns were reported and no issues were mentioned with regards to the gambling sector.

https://www.timescolonist.com/money-laundering-inquiry-hears-of-800-000-and-more-in-bags-luggage-backpacks-1.24227127

In Focus

Bribery And Corruption

www.greatchatwellacademy.com Page 11 of 14

Chatterbox 10/11/2020Volume 3, Edition 2

© Great Chatwell Academy of Learning 2020 All Rights Reserved

Part Two: Regulatory Response

The Financial Action Task Force of Latin America publishes Second Update to the Money Laundering Regional Threat ReportAccordingtothefindings,mostofthe

money laundering cases include tax

crimes as predicate offences (18%),

followed by corruption and bribery, illicit

traffickingindrugsandparticipationin

an organised criminal group. The report

has been adapted to include the current

Covid-19 context.

In a large majority of the cases, the means

to launder money involved the use of

front men, followed by the use of legal

structures to obscure the ownership.

Banking sector is still the most exposed

fieldintermsofmoneylaunderingthreat,

mostly due to the traditional attachment

to cash. Money transfers, national and

international, are also on the radar.

Smuggling of migrants and environmental

crimes are mentioned as emerging

threats.

https://www.gafilat.org/index.php/es/

biblioteca-virtual/gafilat/documentos-

de-interes-17/estudios-estrategicos-

17/3860-second-update-to-the-ml-

reginoal-threat-report-gafilat-1/file

OTHER INTERNATIONAL

FATF issues the 1st Regular Follow-up Report & Technical Compliance Re-Rating for Sweden

Recommendation Previous rating

Currentrating Comments

2 National

cooperation and

coordination

Compliant Compliant Sweden has established

a co-ordination body tasked with co-

operation and coordination of policies,

activities.

15 New technologies Compliant Largely

compliant

Sweden has taken numerous steps to

implement the new requirements of R.15,

including implementing a risk-based

approach and licencing requirements for

the

VASP sector.

26 Regulation and

supervision of

financial institutions

Partially

compliant

Largely

compliant

Sweden has amended sectoral laws and

ordinances to broaden both the

scopeandthecontentofthefitand

proper requirements.

Separately, the Swedish FSA has

developed and improved its risk

classificationtool.

SwedenwasfirstevaluatedbytheFATFin2017,withanenhancedfollow-upreport

published in 2018. report published in 2018.

Main features of the September 2020 report

https://www.fatf-gafi.org/publications/mutualevaluations/documents/fur-

sweden-2020.html

Transparency International Report - “EXPORTING CORRUPTION’

Transparency International have published an eagerly awaited

update on bribery and corruption, ‘Exporting Corruption, Progress

report 2020: Assessing enforcement of the OECD Anti-Bribery

Convention”

Transparency International’s 2020 report, Exporting Corruption, rates

the performance of 47 leading global exporters, including 43

countries that are signatories to the Organisation for Economic Co-

operation and Development (OECD) Anti-Bribery Convention, in cracking

down on bribery of foreign public officialsbycompaniesoperating

abroad.

The report shows how well – or poorly – countries are following the

rules.

More than 20 years after the Convention was adopted, most

countries still have a long way to go in meeting their obligations. In fact, activeenforcementhassignificantly

decreased since our last report in 2018

https://images.transparencycdn.org/images/2020_Report_

ExportingCorruptionFull_English.pdf

In Focus

Bribery And Corruption

www.greatchatwellacademy.com Page 12 of 14

Chatterbox 10/11/2020Volume 3, Edition 2

© Great Chatwell Academy of Learning 2020 All Rights Reserved

On the 1st of November, the Algerian

people will be able to cast a referendum

vote to support or reject the amendment

to the national constitution to include

transparency and anti-corruption,

seenasanofficialcommitmentofthe

government to move on from the past

practices.

Additionally,aspecificregulatorwillbe

created to supervise the implementation

of the principles of transparency and

monitor the anti-corruption efforts.

The same mechanism already exists in

several countries in Europe, especially in

France.

https://www.aljazeera.com/

news/2020/09/10/algerian-parliament-

adopts-draft-constitutional-reforms/

Exactly three years after the notorious

“ill-gotten gains” scandal and a

conviction for money laundering by a

Parisian court, Teodorin Obiang, the son

of the current President of Equatorial

Guinea, the princely wannabe is again in

the news. Obiang has been seen in the

Maldives enjoying his yacht and other

delights of billionaire’s life.

The French court decision does not

seem to bother him despite being

sentenced to 3-year sentence and a

EUR30millionfinebothofwhichwere

suspended. Several luxury items, notably

his collection of high-end supercars,

wereconfiscated.

The investigation was launched by

the US in 2014, as American law

enforcement alleged that Obiang had

used a US bank account to hold the

proceeds of corruption that syphoned

funds from the Equatoguinean

budget. U.S. Department of Justice

claimed that “he used his position and

influenceasagovernmentministerto

amass more than $300 million worth

of assets through corruption and

money laundering, in violation of both

Equatoguinean and U.S. law,”.

https://africatimes.com/2020/10/20/

report-egs-teodorin-obiang-spotted-at-

exclusive-maldives-resort/

Part Three: Enforcement Action

Algeria is Moving Towards the Inclusion of the Transparency and Anti-Corruption into the Country’s Constitution

EG’s Teodorin Obiang Spotted at Exclusive Maldives Resort

Part Two: Regulatory Response AND FINALLY...

Some reading for those dark autumn

evenings?

In the current context of FinCEN Files, aflashbackonpreviousleaksmay

fascinating.

(Re)-discover the Panama Papers investigation that unfolds the murky

secrets in the still waters of the banking world running deep.

“In this shocking, meticulously reportedworkofnarrativenonfiction,

an award-winning investigative journalist exposes “capitalism’s

monster”—global kleptocracy—and reveals how it is corrupting the world

around us.”

www.greatchatwellacademy.com Page 13 of 14

Chatterbox 10/11/2020Volume 3, Edition 2

© Great Chatwell Academy of Learning 2020 All Rights Reserved

AND FINALLY...

Anti-Money Laundering Transaction Monitoring

Systems Implementation: Finding Anomalies by Derek

ChauUS Oil Data Company Charged with $100m Fraud

Swiss Finma finds Private Bank Lacked Due Diligence on Venezuelan Clients

Part Three: Enforcement Action

SAExploration Holdings and its former

executives were charged with a

multimillion books and records fraud

dated 2015.

According to the Securities and

Exchange Commission, the company

inflateditsprofits.Itsexecutives

embezzled the funds. In 2015, the

company concluded several seismic

data acquisition contracts with a

company that de facto was controlled by

SAExploration’s CEO and CFO.

The SEC alleged that several round-trip

transactions had been performed to

transfertheembezzledfundstothefinal

beneficiaries.Thecompany’sCFOhad

seemingly misappropriated additional

USD 4 million via a false invoice scheme.

The defendants are charged with

violation of the books and records,

antifraud and accounting provisions

of the federal securities laws. Personal

charges were also introduced by the

USAttorney’sOfficefortheSouthern

District of New York against the

company’s CEO.

https://www.accountancydaily.co/us-oil-

data-company-charged-100m-fraud

According to the Swiss Financial Market

Supervisory Authority investigation

(started 2018), Banca Credinvest

breached the current anti-money

laundering regulations by failing to pay

sufficientattentiontotheduediligence

checksonitsclientsandtheirbeneficial

owners. The bank is also accused of

not having properly monitored the

transactions these clients were involved

in.

Above all, the internal processes were

not properly documented and the

Suspicious Activity reports were not

filedinatimelymanner.

Since the FINMA does not have power

toimposefines,thebankisonlyrequired

to upgrade its AML framework. Banca

Credinvest also took the decision to

exit all Venezuelan clients and to avoid

accepting any new risky clients for the

next three years or at least until the

implementation of an appropriate AML

framework.

https://uk.reuters.com/article/swiss-

credinvest-idUKFWN2GW0OI

A New Book That May be of Interest

…….

This book provides comprehensive guidance for bank compliance and IT personnel tasked with

implementing AML transaction monitoring. Written by an authority on data integration and anti-money

laundering technology, this book offers both high-level discussion of

transaction monitoring concepts anddirectclarificationofpractical

implementation techniques.

While all reasonable care has been taken in the preparation of this newsletter, neither the Academy nor the presenter accept responsibility for any error, or any loss sustained by any

person placing reliance upon its contents

To learn more about our risk and compliance products and services, please contact us at:www.greatchatwellacademy.com

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