World Money Laundering Report

Aside from giving Digital Currency Exchanges a TLA (three letter acronym) AUSTRAC has sidestepped all the "is it, isn't it?" fuss in so many countries and stated the obvious: because digital currency is "money" in the economists' sense of the word, anyone operating an exchange is subject to the same rules and regulations as anyone operating an exchange in fiat currencies. But here's the surprise: the requirement to register with AUSTRAC and to put in place money laundering, etc compliance and risk management systems comes into force today. And the notice was only published this morning. Moreover, there is an unexpected consequence for the mainstream financial sector.

When assets are frozen, seized, confiscated or, in the case of ships and aircraft, arrested, there is one major difficulty for the lawyers and state bodies obtaining those Orders. . Unlike state sanctions, those obtaining the Orders have no simple route to bring their Orders to the attention of persons, be they individuals or entities, that may be holding assets to which the Orders relate.

Today, with the launch of GlobalKYC by World Money Laundering Report, all that changes.

The days of Easy Rider are numbered. Around the world, gangs of criminals on motorbikes (colloquially but (usually) legally incorrectly called Outlaw Motorcycle Gangs) have, quite simply, gone too far and as they have become the face of organised crime, usually in large, sparsely populated countries, they are being targeted. While the Hell's Angels have been held up as a model, the gangs are rarely truly members. But while, these days, many Hells Angels groups are filled with ageing lawyers, bankers and wannabe bad boys, the current crop have taken over the worst traits - and business practices, investing in businesses, property and with a raft of professional advisers on retainer. One regulator has had enough and put metaphorical chains on the doors of a law firm.

When one looks at investigations into money laundering in Australia, there is a factor that crops up over and over and over again. The money came from, or has a connection to, Malaysia. And it's not the connection the rest of the world expects.

A Gambling Commission investigation revealed that between November 2014 and August 2016 the gambling business William Hill Group breached counter-money laundering and social responsibility regulations.

The cost of compliance and risk management in financial institutions is an eternal bone of contention. US regulators The Financial Crimes Enforcement Network (FinCEN) and The Office of the Comptroller of the Currency together with the criminal prosecutors at The U.S. Department of Justice have agreed a USD185 million civil money penalty against US Bank National Association, in essence for failing to apply sufficient resources to its counter-money laundering policies and systems.

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Andrew Janssen, a 37 year old man from Garland, Texas in the USA is hoping someone will stump up his USD50,000 bail. He can't do it himself after he was held on Wichita Falls on charges of money laundering and his stash of cash seized.

"The U.S. Department of the Treasurys (sic) Financial Crimes Enforcement Network (FinCEN) today issued a finding and notice of proposed rulemaking (NPRM), pursuant to Section 311 of the USA PATRIOT Act, seeking to prohibit the opening or maintaining of a correspondent account in the United States for, or on behalf of, ABLV Bank. FinCEN is proposing this action based on its finding set out in the NPRM that ABLV is a foreign bank of primary money laundering concern," says an e-mail from FinCEN. FinCEN says there are links to North Korea and the case is a warning to all banks that do business with NoKo or representatives of its regime. But the USA is mightily cross at links with several other countries with which relations are souring.

A report in the Vancouver Sun details the amazing failure of a project called "Statistical Analysis Software", currently in its fourth year and so far costing CND7.3 million, to design and implement money laundering risk identification and assessment software at the British Columbia Lottery Corporation's casino business which is deeply embroiled in money laundering investigations by the RCMP. It's a case study in how to stuff up = and now questions relating to the software and its failure are being added to the investigation.

There's much jargon flying around in the world of counter-money laundering. It starts with the mistaken name of "anti-money laundering," via the equally erroneous "red flags" to the current vogue terms of "artificial intelligence" and "machine learning." As FinTech and RegTech have passed their media bubble phases, the next wave is so-called "AI AML."

Think about this: when you install any form of AI, you are outsourcing to the software providers the function that the law requires that your staff perform.

Before you even meet the representatives of the start-ups that want to either bolt onto or supplant your existing technology provider, there are several questions you must ask. Here they are.

According to a report in Business Insider, Mark Hayward, CEO of National Association of Estate Agents told the newspaper that “Fines are not publicly being made known but, anecdotally, we know they are significant,” The Money Laundering Regulations 2017 are at the heart of the HM Revenue and Customs action but The Criminal Finances Act also comes into play. The report refers to "fines" of "millions."

India's Enforcement Directorate (ED) is involved in a rapidly increasing number of cases where money laundering is alleged and it is not afraid to go after high-profile, well connected, targets. But the latest case to gain publicity is even more sensitive than others. And the ED is finding itself the target of unwelcome attacks by some of India's most powerful people.

India's Directorate of Revenue Intelligence has had a string of successes of identifying cash couriers and confiscating large sums at borders. The methods used by the carriers are instructive.

One would think that when the New York Department of Financial Services, known for massive penalties against foreign, especially European banks, to say nothing of "perp walks" and heavy handed and highly prejudicial media statements, announces a penalty of USD60 million that it's for lightweight failures. Nothing could be further from the truth and the reality demonstrates why negotiated settlements are nearer to bribes than to justice, says Nigel Morris-Cotterill.