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KYC

The Solicitors' Regulatory Authority which regulates solicitors in England and Wales has begun proceedings against a partner of one of the bluest of blue chip firms in London alleging that he failed to undertake adequate due diligence for money laundering risk purposes when taking on two young women as clients. To be clear: this is a prosecution by the Solicitors' Regulatory Authority, not the police. It is a criminal prosecution for failing to comply with the Money Laundering Regulations. This is big stuff.

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.

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.

It's going to cost ANZ about AUD5 million to compensate victims of the scheme that operated through the bank's Esanda car finance business. That's just part of what ASIC describes as "a package of regulatory actions against Australia and New Zealand Banking Group Ltd (ANZ)" But there's an anomaly of the kind that excites our colleagues on the financial crime publications group of PleaseBeInformed. But we got to this one first! Even more, the story looks like a simple management failure but on closer inspection it demonstrates a fundamental lack of attention to the most basic money laundering / terrorist financing KYC/CDD requirements. ASIC may think it's over. AUSTRAC needs to take a look.

Nigel Morris-Cotterill
BIScom Subsection: 

When we launched PleaseBeInformed.com, one of our fundamental principles of design was that only those who we had taken reasonable steps to identify and verify would be permitted to post, even to comment. That decision was at the heart of our plan to charge a small annual membership fee, paid by credit card. While American-based social media networks spread across the world with more and more fraudulent accounts, China, it is reported, is taking steps to combat the use of social media for financial and "news" fraud, for that is what fake news and scurrilous social media comment is, at their heart.

Editorial Staff
Publication: 

The US Department of Justice has charged four men from a district of California known as "the Inland Empire" with a range of tax offences that, it is alleged, generated substantial revenue by making false tax claims in the names of innocent individuals. It's time governments started doing effective KYC.

There's a lot of talk about KYC when accounts are opened but a general lack of concern over accounts once they are established. The director of a company in liquidation has pleaded guilty to a fraud that could only have taken place because someone wasn't paying enough attention.

Editorial Staff
BIScom Subsection: 

Scenario: a prospective customer walks into your office, shakes hands with you and sits down. You look at his clothes, his bag, even his shoes. You check his haircut, his facial hair, if he has any. You even sniff to see if he smells and, if so, of what. You check out his shoes. You listen to his voice, the accent, inflection, the tone. You analyse the skin on his fingers and palm when you shake hands. You look at his fingernails and, even the way that he sits. And you form a view. But did you know that, subconsciously, there is something else that has influenced you, from the moment you looked at him when he walked through the door? New research says there was.

Reports that Australian banks are going to co-operate on KYC information are welcome but fall far short of the ideal. Also, conceptually, it's been tried before, and failed. We know: we covered one such attempt in WMLR Vol 5 No 3 in November 2003.

The stories of people using genuine documents with false details are legion. But this one has a twist, as they say in TV land.

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