Doing the bare minimum is no longer acceptable when it comes to anti-money laundering/counter terrorist financing (AML/CTF) compliance. The global regulatory environment is evolving around governments implementing stricter AML laws, international regulators increasing enforcement actions and new innovative technology that open up opportunities for businesses, consumers and criminals. Let’s have a look at what has been happening over this week.
Global regulatory changes:
China passes new Personal Data Protection Law
The new law stresses how companies collect and handle their users’ information. A previous draft of the law said that data collectors must get user consent to collect data and users can withdraw that consent at any time. Companies that process data cannot refuse to provide services to users who don’t agree to have their data collected — unless that data is necessary for the provision of that product or service. There are also strict requirements for transferring Chinese citizens’ data outside the country. Companies that fail to comply with the rules could be fined, is this a step towards revolutionising personal data rights?
Fraud and corruption news:
Sweden Casino fined $3.6 million for breaching AML regulations
The Swedish gambling regulator has issued fines totaling $3.62million and warnings to the Casino, Mr. Green Limited, for KYC/AML failures. The Money Laundering Act is in place to make sure that gambling platforms are not being used for terrorism financing or money laundering purposes. Therefore, operators are responsible for properly verifying customers and making sure that everything is above board. Mr. Green Limited was deemed to have failed in its responsibilities regarding customer knowledge and did not have adequate measures in place to properly assess the business’s risk of being a vehicle for money laundering.
FinCEN and CFTC fined $100 million BitMEX for AML failure
The Financial Crimes Enforcement Network (“FinCEN”) and the Commodity Futures Trading Commission (“CFTC”) announced settlements with the operators of the BitMEX cryptocurrency trading platform for alleged AML violations under the Bank Secrecy Act (“BSA”), and for allegedly failing to register with the CFTC. According to the government’s allegations, BitMEX deliberately ignored for years the most basic AML requirements, resulting in multitudinous violations and inviting — and even encouraging — its customers to launder illicit funds.
KYC tech and trends:
H1 2021 has had a 50% fall in AML fines
According to reports, Global fines for AML and data privacy compliance breaches have fallen by nearly 50% year-on-year in the first half of 2021 but could bounce back quickly as financial crime continues apace. The US-led the way with $711m in fines, followed by Switzerland ($85m), Norway ($48m), and the UK ($33m). The scale of global money laundering is notoriously difficult to estimate given the failure of regulators, law enforcers, and financial institutions to detect and stop these fraudulent activities. However, the UN believes it could be between 2–5% of global GDP annually, which could mean as much as $4tn or more. Does this imply the global regulators are succeeding in mitigating fraud?
APG released 2021 Typology report
The report highlights the ML/TF techniques to assist governments and other stakeholders to better understand the nature of existing and emerging ML and TF threats and pursue effective strategies to address those threats. These studies assist APG members in implementing effective strategies to investigate and prosecute ML and TF and design and implement effective preventative measures.
This week at Data Zoo:
Stay tuned for our podcast, Data Insider
The Data Insider is your go-to for insights into the complex and current issues presented by raw digital information and its processing. One episode at a time, we will explore and discuss the value, opportunities and challenges that emerge from the new data economy.
Author Sara Singh Tak, Data Zoo Marketing Specialist
About Data Zoo:
Data Zoo is setting the new standard for identity verification. With over a decade of experience, we have helped top global organisations reduce risk and verify their customers. Our innovative global solutions utilise independent; government, credit, utility, and commercial data sources to provide clients with industry-leading match rates and unparalleled response times.