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Written by Jackie Whiting
on May 31, 2022

With the months seemingly passing by at the speed of light, it can be difficult to keep up-to-date on the latest happenings in the world of anti-money laundering compliance, financial crime and RegTech. If you’re one of our dedicated followers then you will already know what we’ve been up to throughout May - this is especially true for newsletter subscribers.  

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In the meantime, It's not too late to join FinTech's biggest conversation, Money2020, which happens next month in Amsterdam. The European edition of this biannual event is bringing together some of the biggest names in tech to address topics like crypto payments, moving the regulatory market to DLT and the problem with data silos. Buy your ticket now and prepare for 3 full days of nonstop world-class talks and networking opportunities. You can also stop by Hall 7 and speak with our team of KYB experts from kompany, PassFort and Moody's Analytics. We'll be waiting for you!

And now without further delay, it’s get on to May’s selection of news. 

Cyprus launches online beneficial ownership register to combat money laundering - International Investment

Cyprus has debuted its beneficial ownership register, a resource required by all European Union member states as part of their obligations under the 4th and 5th Money Laundering Directives. As reported by International Investment, the Cyprus Securities and Exchange Commission (CYSEC) made its Register available to all trustees earlier this month with plans to open access to “all involved parties” from June 17th onwards. 

Involved parties include all supervisory authorities, such as the Customs Department, the Taxation Department, MOKAS (The Unit for Combating Money Laundering) and local police forces. These groups will reportedly have unrestricted access to the Register “within the framework of their responsibilities”.

The Cyprus Beneficial Ownership Register of Express Trusts and Similar Legal Arrangements, also known as CyTBOR, describes itself as providing “easy and immediate searches for up-to-date information and data about the beneficial owners,” on aforementioned Express Trusts and Similar Legal Arrangements. 

The Register makes it possible to search and identify key players in an entity’s ownership structure, including settlors, trustees, protectors, beneficiaries and any other natural persons who may be exercising final control over a trust. 

This marks a distinctive step forward for the traditionally obscure island nation, who is now beginning to lift its veil on company ownership after decades of secrecy. 

UK's defences against 'dirty money' overrun, say MPs - The Guardian

The United Kingdom continues to dominate the headlines for all the wrong reasons where financial crime is concerned. 

The Guardian reported earlier this month that a cross-party group of MPs are launching an economic crime manifesto that calls for transparency reforms on company records, a crackdown on tax avoidance in overseas territories and additional resources for enforcement. The manifesto includes additional suggestions for stronger crime controls, including making it an offense to fail to prevent crimes like money laundering and creating a dedicated office for economic whistleblowers. 

The Members of Parliament responsible for the Manifesto have also said that Russia’s invasion of Ukraine and the resulting sanctions have served as a “wake-up call as to the scale of the issue”.  

Margaret Hodge, the Labour MP who is one of the co-leads of this initiative has said that, “London is now the laundromat for washing dirty cash, and we can’t go on like this. Britain will not prosper economically on the back of dirty money. Our national security is under threat, our economy is suffering and our democratic values are being undermined.”

The manifesto’s other co-lead, Conservative MP Kevin Hollinrak, had stated that government action is needed, in particular, to overcome corporate reluctance to create offenses for failing to prevent money laundering. He has said, “There are huge vested interests…If you’re a chief executive of a big bank and you think there’s a prospect of having your collar felt if things go wrong in your bank, you’re going to go to the Treasury and say ‘don’t do that’.”

Finally, Guardian’s political correspondent Peter Walker, goes on to explain that the manifesto is also requesting the immediate allocation of an extra £300m to be spent on economic crime enforcement. Whether this passes is put into action remains to be seen. 

US Treasury highlights anti-money laundering priorities in 2022 Illicit Finance Strategy - JDSupra

The US Department of the Treasury recently published its 2022 National Illicit Finance Strategy which summarizes the agency’s priorities, goals and plans for protecting the country’s financial system against illicit activity and bad actors.

According to this report by JD Supra, the 2022 strategy doesn’t go quite as far as to break new ground but instead addresses previously identified risks and objectives from the Treasury. All in all, the strategy highlights four priorities and recommends 13 supporting actions to “enhance transparency in the US financial system, modernize and strengthen the existing AML/CFT framework and adapt regulatory and law enforcement tools to meet new and evolving challenges.” 

These four priorities are: 

  • Increasing Transparency and Closing Continuing Legal and Regulatory Gaps in the US AML/CFT Framework 
  • Making the Existing AML/CFT Framework for Financial Institutions More Effective and Efficient
  • Enhancing Operational Effectiveness of Regulatory and Law Enforcement Agencies
  • Support Technological Innovation and Harness technology to Mitigate Illicit Finance Risks 

Specific proposals of these priorities range from increasing transparency in real estate transactions, expanding and enhancing public/private information sharing and enhancing the use of artificial intelligence for government bodies to more effectively fight illicit finance. 

The 2022 strategy represents a renewed effort to modernize the United States’ AML/CFT regime and policies after 20 years of only incremental changes, according to JP Supra. We’ll be paying close attention through the second half of 2022 to see how such rules will evolve. 

That's it for this month! But before you go…

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