FATF – Guidance on Anti-Money Laundering and Terrorist Financing Measures and Financial Inclusion

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On Thursday, 7 September 2017, the Financial Action Task Force (“FATF”) released a Mutual Valuation Report on anti-money laundering (“AML”) and counter-terrorist financing (“CTF”) measures in Ireland (the “Report”). This report comments on the AML / CTF measures in place in Ireland during the course of FATF’s on-site visits from 3 to 17 November 2016 and analyses the level of compliance with the FATF 40 Recommendations and the level of effectiveness of Ireland’s AML / CTF system. The report also provides recommendations on how the Irish AML / CTF system could be strengthened.

The Report notes that Ireland has a “generally sound legislative and institutional AML / CTF framework” and praised Ireland for putting measure in place to improve its understanding of risk and national coordination and cooperation. However, it notes that further measures and resources are required for a fully effective AML / CTF system.

The report recognised Ireland’s importance as a regional and international financial centre, as it is amongst the IMF’s 29 systematically important financial centres. In particular, FATF have noted that Ireland’s funds and insurance sectors are well developed with strong international links. However, the report also notes that Ireland faces money-laundering and terrorist financing threats from organised crime groups and former local paramilitary organisations.

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Residence and Luxury Vehicle Seized in Ottawa Area

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A joint forces police operation involving the Ottawa Police Service (OPS) and the Royal Canadian Mounted Police (RCMP) “O” Division Ottawa Detachment Financial Crime unit has resulted in one property being restrained, and a 2016 Chevrolet Corvette being seized. The property and the vehicle which belonged to Peter Pavlovich Jr., are valued at approximately $900,000.00. Peter Pavlolich Jr. was a subject of this investigation which resulted in charges being laid against him and eleven other individuals, and the dismantling of an Ottawa-based drug trafficking network in 2016. This media release is a follow up to a news release issued by Ottawa Police Service, December 14, 2016 at 4 pm titled “Project STEP results in 12 people charged with drug offences”. These matters are presently before the courts. Reports provided by FINTRAC (Financial Transactions and Reports Analysis Centre of Canada) assisted in this proceeds of crime investigation.

The RCMP plays an active role in the fight against proceeds of crime by identifying, assessing, seizing, restraining and dealing with the forfeiture of illicit wealth accumulated through criminal activities. Criminal network groups such as this one, seek to profit from their illegal activities. Illicit profits undermine the social and economic well-being of Canadians and increase the power and influence of organized criminals and their illegal enterprises.

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Money laundering watchdog scrutinizes Facebook, social media.

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MP calls for parliamentary committee to investigate threat to privacy

Canadians who make large cash transactions, international wire transfers or win big at the casino could end up with a federal agency scrutinizing their Facebook pages and other social media posts, CBC News has learned.

The Financial Transactions and Reports Analysis Centre (FINTRAC), the federal government body charged with monitoring financial transactions to detect money laundering and terrorist financing, has been quietly scrutinizing the social media posts of Canadians whose transactions attract its attention.

FINTRAC defends the practice, saying the rules that govern it allow it to collect a variety of information.

“FINTRAC’s mandate is to detect, deter and prevent money laundering and terrorist financing activity,” spokesperson Renée Bercier wrote in response to questions from CBC News.

“It is important to remember that the perpetrators of these crimes oftentimes have an online presence and actively use the web, including social media, to connect with associates, facilitate their activities and, in the case of terrorism financing, even raise funds.”

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FinCEN Seeks to Extend AML Requirements to All Banks

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The U.S. Treasury Department’s Financial Crimes Enforcement Network, or FinCEN, proposed a rule that would require banks lacking a federal regulator to establish an anti-money laundering compliance program.

The proposal would eliminate what FinCEN called a “gap” in anti-money laundering coverage between banks with and without a regulator. The rule would require unregulated banks to have essentially the same compliance programs as regulated financial institutions, and unregulated banks could use their existing policies and procedures to fulfill the new obligations, FinCEN said in a brief statement.

“Banks without a federal functional regulator may be as vulnerable to the risks of money laundering and terrorist financing as banks with one,” the proposal said.

FinCEN said Thursday it estimated the proposal would affect a total of 740 banks across the country, most of which are private banks, as well as certain trusts and credit unions. Although these banks haven’t historically haven’t been required to establish anti-money laundering programs, they are required to comply with many other aspects of the Bank Secrecy Act, including the filing to FinCEN of suspicious activity reports and currency transaction reports.

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US claims anti-money laundering policy is ‘not zero tolerance’

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The US Treasury has sought to soften the perception of its enforcement of an anti-money laundering (AML) regime against international banks, by emphasising that its policy is not one of “zero tolerance”.
US claims anti-money laundering policy is ‘not zero tolerance’

The regime it operated was “fair and effective”, the US department said in a statement and factsheet, with about 95% of anti-money laundering (AML), countering the finance of terrorism (CFT) and sanctions compliance problems getting corrected through cautionary letters or other guidance without the need for an enforcement action or penalty.

The statement is aimed at countering moves by international banks to withdraw correspondent banking services from jurisdictions or certain regions for de-risking reasons.

“The rare but highly visible cases of large monetary penalties or settlements for AML/CFT and sanctions violations have generally involved a sustained pattern of reckless or willful violations over a period of multiple years and a failure by the institutions’ senior management to respond to warning signs that their actions were illegal.  These large cases did not represent small or unintentional mistakes,” it said.

The fact sheet also dispelled “certain myths” about US supervisory expectations, “notably that there is no general expectation for banks to conduct due diligence on the individual customers of foreign financial institutions”.

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At least 85 real estate firms not complying with anti-money laundering rules

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At least 85 real estate companies have not implemented a plan showing how they are trying to detect money laundering and other suspicious transactions, nearly 15 years after they were required to do so, according to data obtained by The Canadian Press.

In Ontario, 19 real estate firms said they hadn’t fully implemented a compliance regime for anti-money laundering rules.

The federal anti-money laundering agency received 337 compliance reports from roughly 1,000 companies in the real estate sector it surveyed — including brokers, sales representatives and developers — between Jan. 1, 2013, and Feb. 8, 2016.

The data, which was obtained through an access-to-information request, represents only a small sampling of the real estate industry. There are about 20,000 companies in the real estate sector that are required to report to Fintrac.

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Tighter money laundering rules planned

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Wealthy people who fall under suspicion of criminal activity will have to explain before any charges how they came by their assets under a new anti-money laundering initiative announced by the British government on Thursday.

The plans will also increase the responsibility of businesses to report suspicious financial activity and introduce a criminal offense of illicit enrichment — targeting public officials who exploit their power.

Investigators will be able to designate a company as being “of concern in relation to money laundering”, a move that would force banks, law firms and accountants to use special measures when doing business with them.

The move is the latest in a series of steps the government has taken in the past year to beef up transparency and law enforcement powers in Britain’s financial system.

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Combating Money Laundering and Terrorism Financing

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March 8, 2016 – Ottawa – Financial Transactions and Reports Analysis Centre of Canada

Finance Minister Bill Morneau today tabled in Parliament the 2015 Annual Report of the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), Combating Money Laundering and Terrorism Financing. The report details the activities and operations that Canada’s financial intelligence unit carried out in 2014–15 to help protect Canadians and the integrity of Canada’s financial system.

Over this reporting period, FINTRAC provided a record 1,260 disclosures of actionable financial intelligence to its law enforcement and national security partners to assist their investigations of money laundering, terrorism financing and threats to the security of Canada. The Centre also developed indicators specific to individuals traveling abroad to assist terrorist organizations in order to facilitate the reporting by Canadian businesses of suspicious transactions related to the financing of terrorism. As well, FINTRAC worked with its counterparts on several international initiatives targeting the Islamic State of Iraq and the Levant’s funding sources.

The report also details the broad range of enabling and enforcement activities that the Centre undertook to ensure that businesses met their obligations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, including conducting compliance examinations, levying administrative monetary penalties, providing policy interpretations, hosting conferences and addressing thousands of inquiries from businesses. The compliance efforts of Canadian businesses and, in particular, the financial transaction reports they provide to FINTRAC are the foundation of its analysis and the intelligence that it is able to provide to its law enforcement and national security partners.

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FinCEN proposes anti-money laundering rule for investment advisers

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On September 1 2015 the US Treasury’s Financial Crimes Enforcement Network (FinCEN) published a notice of proposed rulemaking prescribing anti-money laundering (AML) requirements for investment advisers that are registered or required to be registered with the Securities and Exchange Commission (SEC).(1) The requirements include establishing an AML programme and reporting suspicious activity. In addition, FinCEN proposes to include investment advisers within the general definition of ‘financial institution’ in rules implementing the Bank Secrecy Act, which would require them to file currency transaction reports and maintain records relating to the transmittal of funds, among other things. The authority to examine investment advisers for compliance with these AML requirements would be delegated to the SEC.

The proposed rule addresses concerns that money launderers and other illicit actors seeking to access the US financial system may attempt to gain entry through an investment adviser because they are subject to fewer AML controls than other financial institutions, such as broker-dealers and banks. The proposed rule would subject investment advisers to rules similar to those affecting other financial institutions under the Bank Secrecy Act and would make it more difficult for criminals to evade scrutiny by operating through investment advisers.

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China: Regulator issues anti-money laundering guidelines to help insurers

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The China Insurance Regulatory Commission has issued guidelines focused on helping the country’s insurers assess money laundering and terrorist financing risks in their operations, reports Asia Insurance Review.

With the development of China’s insurance sector, the risk of money laundering has also increased.

CIRC’s guidelines distinguish between internal and external money laundering risk.

In order to deal with the illegal activity, insurers have been asked to set up a customer identification system and limit the amount of insurance that could be bought online, among other things.

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