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Regulators are in the spotlight in this week’s headlines

AUSTRAC is buried in junk reports, whilst regulators in Paraguay and Singapore take steps towards upping the ante in the fight against financial crime.

Antonis Melis
November 13, 2020

The fear of massive fines is driving Australian organisations towards defensive reporting, burying AUSTRAC in junk reports.

Singapore’s regulatory body MAS has officially launched a new grant to drive technological change amongst smaller financial institutions

And Paraguayan regulators take steps towards enforcing anti-money laundering regulations in Latin America by imposing a record breaking fine on a Brazilian bank

More on these stories below.

Banks bury AUSTRAC in junk reports

Recent record-breaking fines imposed by AUSTRAC have driven Australian financial institutions to submit unnecessary SMRs (suspicious matter reports) of varying quality for fear of being handed billion-dollar fines.

Furthermore, the lack of clarity around the exact details a financial institution needs to provide the regulator, has spurred a wave of ‘defensive reporting’.

Regulatory laws and the consequences of breaching them are well defined, but banks still remain unclear on how to report suspicious activity effectively.

Does this problem stem from lazy communication from regulators, or lazy processes from institutions?

Monetary Authority of Singapore launches S$35 million Productivity Solutions Grant.

The Productivity Solutions Grant (PSG) is aimed at helping smaller financial institutions adopt digital solutions to streamline their data reporting processes to the Monetary Authority of Singapore (MAS).

This funding will allow smaller institutions to access technologies that create a more efficient process for preparing and submitting data that meets regulatory requirements. The PSG will co-fund up to 30% of qualifying expenses in adopting digital solutions from pre-approved manages service provides.

As this grant makes it easier for institutions to onboard change, will it motivate them to improve any internal processes that are also falling behind?

Brazilian Bank Slapped with Record Money Laundering Fine in Paraguay

The Central Bank of Paraguay (Banco Central del Paraguay - BCP) imposed a $9.64 million fine on Brazil’s Banco Itaú for breaking anti-money laundering regulations by failing to report suspicious transactions to Paraguayan regulator, Secretaría de Prevención de Lavado de Dinero o Bienes (SEPRELED).

This was the largest fine related to money laundering in Paraguayan history, and the General Director of SEPRELED’s legal department added that lack of adherence to anti-money laundering regulations was systemic.

Alessandro Ford, who authored the piece in InSight Crime, holds that in Latin America, big banks wilfully ignore anti-money laundering controls as to profit from illicit flows. This recent fine may begin to change the approach banks take towards their AML processes.

For more insights, read the full story on InSight Crime.

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