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German financial watchdog hires a new president

Germany’s finance watchdog BaFin hires top Swiss regulator as their new president, London art galleries are issued an “amber alert” from the National Crime Authority and UBS appeal their £3.85 billion fine from 2019.

Antonis Melis
March 26, 2021

BaFin president Felix Hufeld is set to be replaced by the head of Switzerland's financial markets regulator Mark Bronson at the end of the month.

UBS hopes to reduce a fine imposed on them by 33% after allegedly helping their French clients hide money from the nations tax authorities.

And the National Crime Agency has issued London galleries an “amber alert” warning them to do more to combat money laundering in the art market.

Find out more on these stories below.

Top Swiss regulator to add “more bite” to Germany’s embattled finance watchdog

Current BaFin president Felix Hufeld will leave his post at the end of the month. This follows calls for his resignation after he had failed to spot wrongdoing amid the Wirecard scandal.

Hufeld will be replaced by the head of Switzerland’s financial markets regulator, Mark Branson, whom German Finance Minister, Olaf Scholz, believes will add "more bite" to the finance watchdog.

BaFin has been under fire since the implosion of Wirecard - once a blue chip company worth $28 billion - and, more recently, the collapse of Greensill Bank. Scholz hopes the well-regarded Branson will shore up trust in both the watchdog and the country’s finance centre.

Branson has been described as “the strictest boss of the regulator that we have seen in Switzerland” by Rudolf Strahm, an academic and former Swiss lawmaker.

Regulators across the globe need to be improving constantly, and we look forward to seeing the impact Branson has in Germany.

Read more on this story in Reuters.

UBS faces €3 billion bill even as French seek tax-fine cut

The French Government’s prosecutors and lawyers say that UBS Group AG should be ordered to pay €3 billion (£2.57 billion) for allegedly helping their French clients hide money from the country’s tax authorities.

The payment is 33% less than the original judgment of €4.5 billion (£3.85 billion) - a European record fine. The new amount requested by prosecutors follows an appeal by UBS against the original February 2019 judgement.

The bank's directors and executives are under considerable pressure, since investors voted not to spare them liability at their most recent AGM. This means legal action can still be taken against UBS management.

A ruling in this case is expected in several months.

Read more on this story from Bloomberg

London galleries issued with money laundering ‘amber alert’ on top artworks

The National Crime Agency (NCA) has issued an “amber alert” to London’s galleries, stating that they must be more proactive in preventing the trade in artwork being used to launder illicit funds.

The NCA fears many millions of pounds are being laundered through art sales. The market is traditionally accustomed to anonymous clients, third parties and large amounts of money changing hands with little scrutiny. The agency fears this environment of lax checks makes it easy for criminals to exploit.

Art dealers had previously been encouraged to be more vigilant and file suspicious activity reports (SARs) concerning potentially dubious buyers and sellers. However, the agency says uptake was poor, hence the amber alert.

Graeme Biggar, the director general of the NCA’s national economic crime centre said that "art is used for money laundering, we see that in our investigations, and we would expect art dealers to be looking a bit harder. We haven’t seen much of an uptick.”

With an estimated value of $12.7 billion (£9.11 billion), the UK art market is the second biggest in the world. With its high values and international customer base, it is a high-risk area for money laundering.

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