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The UK adds a financial crime levy, and Germany raids its own financial intelligence authority
Antonis Melis
July 24, 2020

A new levy is currently being planned by the UK to assist in fighting financial crime. This levy affects a multitude of businesses and is currently going through consultation.

In news from Europe, Germany raids its own financial intelligence authority over a backlog of suspicious activity reports. It is not every day we see a criminal law enforcement authority raid another.  

Whilst governments continue their fight against money laundering, banks and remittance companies are being forced to change their approaches with fines landing on two high risk entities.

Find out more on these stories below.

The UK opens their new economic crime levy consultation

This new levy aims to raise approximately £100 million every year from entities regulated for AML purposes and support reforms to the sustainable resourcing of economic crime.

Industries that will be impacted by this levy are not just big corporates. Estate agents, art dealerships and more will also be required to take part.

Currently, the levy is under consultation to seek views on what the levy will pay for, how it should be calculated and distributed across the anti-money laundering (AML) regulated sector, and how the levy should be collected.

Could this levy put too much pressure on smaller regulated businesses, more so after the effects of this pandemic?

Two remittance companies breach AML laws

The Auckland High Court has fined Auckland-based OTT Trading Group Ltd $3.1m and Christchurch-based MSI Group Ltd $4.4m respectively. The penalties resulted from civil proceedings by the Department of Internal Affairs taken under the Anti-Money Laundering and Countering Financing of Terrorism Act.

New Zealand’s Director of the Department of Internal Affairs said these businesses continually tried to avoid scrutiny and assurance, whilst knowing they were at a high risk of being used by criminals to disguise and conceal the proceeds of crime.

AML violations stretch beyond just banks, how many other industries will face fines similar to these for being unable to comply with evolving regulations?

Germany raids its own financial intelligence authority

In August 2019, Germany’s Financial Intelligence Unit (FIU) was said to have a backlog of more than 46,000 suspicious activity reports (SARs). Claims of backlogs and growing criticism for the FIU lead to state prosecutors entering their premises with a search warrant.

The effects of the raid will only be seen in the coming months, but there is expected to be a peak in German AML investigations as they try to work through the backlog.

Even though it is unusual to see one criminal law enforcement authority raid another, these actions by German authorities are setting a precedent.  

Danske ups anti-money laundering measures in Norway after FSA inspection

Following an inspection form Norway’s financial watchdogs, Danske Bank will have to strengthen its AML measures in the region.

A statement from the country director for Norway said “In recent years, we have taken many initiatives to improve our efforts against economic crime, but unfortunately we have not succeeded completely in adapting to the new legislation in Norway”

Danske will be implementing 35 measures in order to comply with Norwegian financial Supervisory Authorities findings from their recent inspection.

As AML regulations change, will these measures be enough to keep Danske Bank in the clear beyond this inspection?

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