News in Brief – July 2020

COVID-19 continues to take it’s toll on the global economy as the virus is spreading across different countries rapidly and continues to pave new avenues for financial criminals to take advantage of. Some countries have been able to manage the spread and are now enjoying the reprieve. There have also been recent financial crime breaches where by investigations have led to fines and an increased number of countries across Africa and the EU being grey listed. These unchartered territoties have increased the risks for organisations in many different ways as criminals are adapting to the new environment. Organisations should continue to stay vigilant to protect their business and their customers.

Australia

  • AUSTRAC proposed amendments to Chapter 46 of AML/CTF rules to include the insertion of two new general conditions that must be satisfied before a reporting entity can rely on section 33 is currently under consultation. These conditions require a reporting entity to:
    • make a determination that carrying out the ACIP in respect of a customer after commencing to provide a designated service is essential to avoid interrupting the ordinary course of business; and
    • implement appropriate risk management procedures and controls to effectively manage the ML/TF risks associated with providing designated services to a customer that has not completed the ACIP.

Canada

  • FINTRAC publishes a Special Bulletin on COVID-19: Trends in Money Laundering and Fraud.

EU

  • Members of the European Parliament (MEPs) welcome the Commission’s Action Plan to fight money laundering and terrorism financing to highlight the most effective ways to achieve an efficient EU framework.
  • FATF welcomes a new president and highlights his clear objectives for the next 24 months. Here is what is on the agenda for the two-year plenary period;
    • Digital Transformation of AML/CFT
    • Financing of ethnically or racially motivated terrorism
    • Money laundering and migrant smuggling
    • Environmental crime
    • Illicit arms trafficking

New Zealand

  • Two companies, OTT and MSI, who were part of a group providing money remittance and foreign exchange (FX) services in Australia and New Zeland (ANZ) have been fined by the Auckland High Court for breaching the Anti-money Launder and Counter Terrorist Financing Act. According to the Director of the Department of Internal Affairs, Mike Stone, the nature of these types of businesses are high-risk and yet they continued to avoid risk assessments and assurance checks resulting in hefty fines.
  • Findings of the January 2019 – January 2020 compliance assessments of the legal sector from the Department of Internal Affairs NZ (DIA) has been released. This includes findings for both law firms and sole practitioners.

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