Keeping Up With the Regulators — September 2019 Week #1 and #2

Your weekly briefing on what’s new in KYC/AML for FinTechs

Photo by Harry cao on Unsplash

After our company retreat las week, Fractal is back to sharing our weekly briefings to help FinTechs stay up-to-date with the latest developments in the KYC/AML regulatory space. To make up for the lost time, we are giving you the updates for the last two weeks. In case you missed our last issue, here it is:

Keeping Up With the Regulators — August 2019 Week #5

Find the last two weeks’ briefing below:

Week 30.08.2019–13.09.2019

What’s cooking in the regulatory space?

• Canada: FINTRACT released interpretation of the term “harm done” — one of the factors that determine the penalties for violations of AML laws
• EU: 6th AMLD — harmonized definition of money laundering offences and harsher punishments coming
• Eritrea: Admitted as an observer of the Eastern and Southern Anti-Money Laundering Group (ESAAMLG)
• Hong Kong: Securities and Futures Commission publishes outcome of FATF’s mutual evaluation report
• Hong Kong: Lack of extradition mechanism to other parts of China flagged by FATF as an obstacle to tackle money laundering
• Ireland: Central Bank of Ireland publishes guidelines to help financial institutions preventing money laundering
• Marshall Islands: Despite scepticism, the plan to issue a cryptocurrency that will function as legal tender is being pushed forward
• Malasia: Revised AML guidelines and increased supervision and enforcement coming soon
• Malta: European Council’s Moneyval calls on Maltese authorities to strengthen their enforcement of AML/CTF measures
• Malta: AML Regulator wants to be one-step-ahead through the use of supervisory technology
• Netherlands: Cryptocurrency firms will have to register with local authorities by January 2020. The new legislation might prevent foreign entities from operating in the country
• Pakistan: FATF’s 125 questions on actions taken to strengthen AML controls were answered
• Qatar: The cabinet passed a new AML law that is said to be in line with FATF’s recommendations
• Thailand: Regulator intends to bring digital currency exchanges under the AML Act
• Trindade and Tobago: American Chamber of Commerce supports the amendments to the Companies Act, aiming at increasing transparency
• USA: Senator’s white paper proposes a public distributed ledger system to tackle trade-based money laundering
• USA: A recent decision by the Supreme Court says that courts do not need to refer to the FFIEC Manual to evaluate potential violations of the BSA

News

• FATF is keeping a close eye on Libra
• The Swiss regulator warns that Libra could be subject to strict rules that typically apply to banks
• A report by the UN claims that North Korea is using Russia to launder money stolen from crypto exchanges through cyberattacks
• Switzerland’s FINMA issues banking and securities dealers’ licenses to two crypto banks
• A consulting firm in DC suggests that BSA’s definition of a financial institution should include certain cryptocurrency service providers (including miners)
• Money laundering policies are challenging Pakistan’s banks' growth

The AML’s Watch

• £7.8m money-laundering fine imposed on Touma Foreign Exchange Ltd by UK’s HMRC
• Average jail sentences for money laundering in the UK have increased 8% in length over the past year
• State Bank of Pakistan fines 10 banks for deficiencies in money-laundering controls
• US probe found possible failures in Deutsche Bank’s money-laundering controls in its dealings with Russian oligarchs

Add this to your knowledge folder

• Risk assessments according to US regulators: why and how?
• Why virtual currencies service providers need to care about sanctions lists
• An overview of the amendments to India’s Prevention of Money Laundering Act, 2002, introduced by the Finance Act, 2019
• Everything about the Basel AML Index 2019
• An overview of AML in Brazil
• The impact of Brexit on UK’s AML regime

Good reads

• Money laundering as a ‘continuing offence’ and the retroactive application of criminal law — a discussion in the context of the INX Media case
• Questioning the assumptions behind the for-crypto regulation arguments
• Using AI to increase the efficiency of the fight against money laundering

About the Author:

Catarina Veloso is a legal counsel at Fractal and co-chair of INATBA’s identity working group — Catarina specialized in energy law and focused on how blockchain technology can contribute to the management of electricity grids; but an unexpected(-ly happy) turn of events lead her to work closely with Fractal’s product team to remove all the friction while keeping all the compliance in a global KYC/AML onboarding solution.