1. Welcome to the ICA Hot Topic Event

2. International Regulatory & Advisory Updates
What’s Going On?
What’s new that is useful for you?
Hear it all in one place
Andrew Clarke FICA
AML/Financial Crime Prevention Course Director

3. Latest Hot Topics in AML: What’s happening in the world of Regulatory & Advisory?
Financial Action Task Force
Wolfsberg
Egmont Group
OFAC & EU Sanctions
Enforcement

4. Financial Action Task Force (20-22 Feb 2019)
Major Strategic Initiatives:
Evolution of terrorist financing strategies
Regulation of Virtual Assets
Other Initiatives:
Risk-Based Approach Guidance papers
New: Life insurance sector & Securities providers
Future: Lawyers, Accountants & Trust and Company Service Providers
since the FATF’s 2015 report.
Shifting risk landscape has had an effect on how funds are raised. Small-scale funding appears to be increasingly common
ISIL: bureaucratic expenses for the group decreased, shift of expenditure to promote recruitment and radicalisation, globally.
A-Q: moving from stable funding to one-time payments for specific terrorist acts
VCs: new definitions of “virtual assets” and “virtual asset service providers” 
Developing guidance on digital identity
Physical cash movement remains a key method
Other methods of moving funds include MVTS
Pre-paid cards (often non-bank account based)
Proliferation: Consider Recommendations & enhancing implementation. Developing best practices on combating

5. Financial Action Task Force
Mutual Evaluations and Follow-Up Reviews
Latest MERs:
China, Finland, Israel and United Kingdom
Update on High-risk and other monitored jurisdictions
DPRK: still apply counter-measures 
Iran: counter-measures suspension continues (until June 2019)
Bahamas, Botswana, Ghana & Cambodia; added to monitored list, each provided a written high-level political commitment
Finland’s measures to combat money laundering and terrorist financing are delivering good results, but that the country needs to improve supervision to ensure banks and others are properly implementing effective AML/CFT controls. 
DPRK: still apply counter-measures serious threats posed to the integrity of the international financial system
Iran: apply proportionate enhanced due diligence measures. Passed amendments, but FATF only consider fully enacted legislation. Disappointment that majority of Action Plan remains outstanding. Deadline set for February 2019 – 17th in Paris
Ethiopia, Pakistan, Serbia, Sri Lanka, Syria, Trinidad & Tobago, Tunisia and Yemen

6. Wolfsberg Group Toolkit for Tackling Human Trafficking
Set of "red flag" indicators tailored specifically to financial institutions
Case studies & resources that will help the detection, and reporting, of suspicious patterns in financial activity that may be linked to human trafficking
International Labour Organization (ILO)
Estimated 40.3 million victims trapped in modern-day slavery
developed by the United States Banks Alliance (USBA)
Forced labour
Domestic servitude
Sexual exploitation
Organ harvesting
Forced criminality

7. Human Trafficking – UK Case Study
Cash deposits
Property rental
Mobile phone purchase – 41 in one month
Travel purchases
Advertising costs
House security costs
UK case study, retail banking.

8. Egmont Group Set of Indicators for Corruption Related Cases
Distortions in Tenders and Purchasing
Contractors & subcontractors are linked: tel, IP-address, etc.
Unexplained Wealth or Income
PEPs receive ‘debt forgiveness’ or credit repayment waived
Concealment of Beneficial Ownership (Joint FATF-Egmont)
Methods criminals use to hide beneficial ownership
>100 case studies provided by 34 jurisdictions
focus on the involvement of professional intermediaries 
indicators is approved by the HoFIU during the Egmont Group plenary meeting in Sydney (September 2018)
financial intelligence plays a vital role in detecting and prosecuting corrupt activities.
Funds received by a contractor of public procurements, are not spent to fulfil the contract needs.
PEP, etc. have purchased cryptocurrency in total amount higher than their legally declared income.
OTHER
Close family members or associates of PEPs, are appointed as senior management officials in private companies without meeting the necessary requirements for taking up the position.
majority of the case studies involved professional intermediaries.
legal persons, principally shell companies, are a key feature in schemes designed to disguise beneficial ownership, while front companies and bearer shares are less frequently exploited.

9. OFAC – Sanctions update
Russia:
Nov18: Sanctions targeting Iran's oil sector, shipping, insurance and central bank re-imposed
Relist hundreds of individuals, entities, vessels, and aircraft
Decrease: 3 power & aluminium companies lifted
Iran Jan19
Iran-based cargo airline: transporting fighters & weapons to Syria on behalf of the Iranian military. Owned by Mahan Air
Germany banned Mahan Air from flying in or out of the country
Jan19: good example of action
companies have reduced sanctioned Russian oligarch Oleg Deripaska's "direct and indirect shareholding stake in these companies and severed his control." 
The largest private power company in Russia, EuroSibEnergo

10. Automotive Industry - Tesla
Tesla Inc. (U.S.-based company) source batteries from…
Panasonic Corporation (Japan-based company) who source cobalt from…
Sherritt International Corp (Canada-based company)…
which has JV with SOE in Cuba!
Global cobalt supply is dominated by the Democratic Republic of Congo
An anticipated electric vehicle revolution has sent demand and prices for cobalt - a crucial component in car batteries - surging over the past two years.
Companies are under pressure to prove that the minerals they consume are sourced from mines that do not employ children or cause major environmental damage. Global cobalt supply is dominated by the Democratic Republic of Congo, armed groups UN sanctions for child soldiers
Richest country in the world in terms of mineral wealth, at an estimated $24 trillion, and it is the country in which the highest number of people - estimates go as high as ten million -  have died due to war since World War II.

11. EU – Sanctions update The Maldives - Island paradise?
Framework for targeted sanctions against persons - rule of law & serious human rights violations. UK post-Brexit
UK post-Brexit to have autonomous sanctions regime
OFSI first fine £5k (baseline £10k) for a £200 single transaction – Egypt regime
EU financial sanctions (including where they implement UN sanctions) apply within the territory of the EU and to all EU persons, wherever they are in the world.
UK financial sanctions apply within the territory of the UK and to all UK persons, wherever they are in the world.
All individuals and legal entities who are within or undertake activities within the UK’s territory must comply with the EU and UK financial sanctions that are in force.
All UK nationals and UK legal entities established under UK law, including their branches, must also comply with UK financial sanctions that are in force, irrespective of where their activities take place.

12. AML Enforcement

13. Commonwealth Bank of Australia
‘Systemic non-compliance’
A$700M (€455M) fine. Admitted to >53k breaches of AML/CFT law
Weak RBA on intelligent deposit machines
Failed to report SARs $77M & TTRs $624.7M
Data security breach: 20 million customers
poor governance and risk management culture

14. ING Group Violating AML/CTF "structurally and for years"
€775 million fine
€100 million fine for not investing!
Staff impact
Board of directors renounce any bonus for 2018
Legal action against current and former staff for AML failings
CFO resigned

15. Danske Bank
Denmark: public prosecutor investigating serious economic and international crime under the country’s anti-money-laundering act
Estonia: 10 former employees arrested on suspicion of knowingly enabling money laundering
France: January 2019 investigation into organised money laundering of tax evasion proceeds
U.S.: considering investigation  
Net profit down 28 percent on 2017
NY pension fund suing Danske Bank and 4 former executives for concealing its money laundering scandal
Friction between Denmark (home) & Estonia regulator
And there’s Danske Bank €200BN largest ever money-laundering scandal in history
Some 200 billion euros ($227 billion) in payments flowed through the non-resident portfolio of Danske Bank’s tiny Estonian branch between 2007 and The bank eventually commissioned a report which concluded in September that many of these payments were suspicious.
(NCA) has said it is investigating the use of UK-registered companies.
Danske Bank does not experience a massive customer loss such as in , where around 100,000 customers left, partly due to the introduction of a fee for regular accounts.

16. FCC Financial Crime Compliance qualification framework
ICA Professional Postgraduate Diploma in Financial Crime Compliance
ICA Diploma in Financial Crime Prevention
ICA International Diploma in Anti Money Laundering
ICA Advanced Certificate
in Managing Fraud
ICA AdvCert
Managing Sanctions Risk
ICA International AdvCert
AML
Practical Customer Due Diligence
ICA Certificate
Financial Crime Prevention
ICA Cert
Anti Money Laundering
KYC and CDD
ICA Specialist Certificate Combating Financing of Terrorism
ICA SpecCert
Managing Financial Crime in Global Banking & Markets
ML Risk in Correspondent Banking
Trade Based Money Laundering
Managing Financial Crime in Mobile Financial Services
Anti-Corruption
ML Risk in Betting and Gaming
ML Risk in Private Banking
FCC
Talk about the different levels, hours of study at each level
AML has become a key professional discipline worldwide. From Policy Analysts, MLROs, KYC specialists to Sanctions officers there are huge range of specialisms.
The AML programmes cover the following areas:
Identifying Risks, including developing a Risk Assessment Methodology in a firm. Understanding how to understand the risks in your products, customers, geographic foot print and customer type.
New Technologies what are the risks with new payment methods and virtual currencies? How are firms assessing the risks of customers using these products? What are Regulators doing in response? For example recent moves in the UK and New York to regulate those buying selling and acting as depositories for virtual currencies.
The evolving regulatory landscape, is changing constantly. From EU Directives , to national legislation and regulatory pronouncements we provide the latest hot topics
The focus from regulators has turned to ensuring firms are undertaking meaningful and effective CDD, particularly for higher risk customers. What does Good enhanced Due diligence look like? How do firms deal with requirements to look beyond formal ownership structures and identify the true ownership and control structures of legal persons and arrangements?
Sanctions – the rapidly changing geopolitical landscape and complicate nature of sanctions regime means that technical experts are more sought after than ever in this field. Our programme looks the grey areas in sanctions compliance and how to manage the huge risks effectively.
The complex world of documentary trade finance has become a focus for law enforcement and regulators , we explore the risk and controls, as well as the wider risk of international trade (including open account trading where banks are only involved through payment of money through wire transfers. What is really inside those thousands of containers that pass through every big industrial port every day?
FCP
Understanding and Managing Financial Crime Risk
Fraud typologies
Anti Bribery and Corruption
Financial, Corporate & Business Frauds
Electronic Crime & Data Security
Investigation, Prosecution and Recovery
Risk Identification & Emerging Threats
New Technologies/Virtual Currencies
International Regulatory Updates
CDD and Beneficial Ownership
Sanctions
Trade Finance

17. Q&A
Over to you