This week, while the rest of the world looked towards the end of the year, role-players in financial crime compliance kept their eyes firmly on the goal of combatting financial crime, as UK banks were reported to be making changes aimed at fulfilling the new regulatory challenges created by the technological transformation of the market. Meanwhile, the US justice system braced for a rare court challenge by a former Venezuelan treasurer charged with corruption; and the Financial Action Task Force published a report which found that tracking the illicit financial flows of global organised crime groups which trade in synthetic opioid and fentanyl is a key element in fighting the worldwide addiction to these drugs.
Find out more on these stories below.
UK banks make sweeping technology updates to keep pace with AML demands of the financial services market
The global technology research company, Information Services Group (ISG), announced findings that suggested UK banks were starting to embrace emerging technologies in a report released on 29 November 2022 which cited accelerating technological developments, greater consumer demand, and increasingly strenuous regulatory requirements as the core drivers of the trend among UK banks.
The ISG report found that rapidly evolving technological advances has resulted in UK banks shifting away from legacy banking processes and moving towards embracing artificial intelligence (AI), machine learning, and other automotive innovations.
ISG added that the banking behaviours of customers had increasingly moved online and towards digital platforms, a trend exacerbated by the Covid-19 pandemic-induced restrictions of lockdowns seen globally over several years, causing UK banks to adapt to new consumer demands and changes in behaviour.
The report stated that the ever-tightening regulatory framework in the UK, which includes compliance with legislation such as the Basel 3.1 and Payment Services Directive 2 (PSD2) standards, was also driving the trend.
ISG senior partner Owen Wheatley summed up the new direction which UK banks are taking as follows: “The ongoing wave of disruption in the banking industry, coupled with changing UK banking regulations, have set the stage for major modernization projects at both domestic and global banks in the UK."
Read more on this story at Yahoo Finance.
US criminal justice system faces a challenge from Venezuelan ex-treasurer charged with bribery and money laundering
A former treasurer of the ailing South American country, Claudia Guillen (Díaz), took to the court in south Florida last week in a bid to beat US Justice Department (DOJ) charges of bribery and money laundering which were laid against her and her husband, Adrian Figueroa (Velasquez), in December 2020.
At that time, the DOJ indictment included two charges of money laundering, and one of conspiracy to commit money laundering against Diaz and Velasquez. Prosecutors alleged that the couple, who were living in Spain when the charges were announced, received millions of dollars in bribes from Venezuelan billionaire Raul Gorrin Belisario (Gorrin), who sought their favour while Diaz was in office as treasurer to secure foreign currency exchange transaction rights with the national government.
Diaz is one of few Venezuelan ex-government ex-officials to fight DOJ charges in a U.S. court, as most such cases end with the accused making plea bargains to avoid long sentences. Even the star witness against her, Alejandro Cedeno (Andade), whom Diaz succeeded as treasurer in the then-Chavez government and was named in the 2020 indictment, made a deal with prosecutors to cut his 10 year prison sentence by over half.
The trial is ongoing.
Read more on this story at News Advance.
FATF report on synthetic opioids and fentanyl trade says AML practitioners can help combat the global crisis
The global financial crime watchdog, the Financial Action Task Force (FATF), published its report on the trade of narcotics amongst organised crime groups on 30 November 2022. Titled Money Laundering from Fentanyl and synthetic Opioids, the report explains how organised crime groups (OCGs) trading in these narcotics launder their criminal proceeds, and highlights how strong anti-money laundering (AML) frameworks can detect these illicit financial flows (IFFs).
The FATF report estimates that the OCGs trading in these pharmacy-grade narcotics have contributed to hundreds of thousands of deaths in the past decade, and around 80,000 deaths per year. In North America, illicit fentanyl abuse is the main driver of deaths and illness, while Tramadol addiction is causing health crises in parts of Africa, Asia, and the Middle East. The OCGs then conceal the illicit funds by both traditional and emerging money laundering methods.
Among the measures the FATF highlighted to combat the epidemic are:
• Strengthened legal regulatory frameworks.
• Training prosecutors, law enforcement officials, and AML authorities, to perform financial investigations.
• Getting the private sector to raise awareness of new risks and become better attuned to red flags and suspicious activities.
In conclusion, the report added that “anti-money laundering efforts need to be a central part of the discussion of how to tackle this sophisticated organised crime.”
Read more on this story at FATF-GAFI.
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