Doing the bare minimum is no longer acceptable when it comes to 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:
FATF’s fourth Plenary report opens up the market to tech and regulatory reforms
Dated: 25.06.21
Financial Action Task Force (FATF) finalised reports on technological innovation, virtual assets, environmental crime, ethically/racially motivated terrorism, proliferation financing risk, and asset recovery. These efforts are aligned to make AML/CTF regulations more effective and to explore the use of data pooling and collaborative analytics to understand better, assess, and mitigate AML/CFT risks. The new guidance will help countries, FIs, DNFBPs, and VASPs effectively implement the new mandatory FATF requirements.
South Africa plans to regulate the crypto industry in a phased manner
Dated: 01.07.21
South Africa has been whipped up by $4 million in just the first six months of 2021. These scams have put pressure on officials to integrate a regulated crypto environment within the next three to six months. The first move is likely to establish proper KYC norms for crypto exchanges and create systems to prevent money laundering. The second phase will involve coming out with investor-protection guidelines and rules for managing the risk facing banks. The upcoming regulations are a hope for Crypto investors to get relief from the ongoing crypto fraud attacks.
FinCEN announced the first government-wide list of AML/CFT priorities
Dated: 01.07.21
The Financial Crimes Enforcement Network (FinCEN) tipped its hand at significant global AML/CFT regime changes. The announcement of the priorities requires no immediate action. Still, FinCEN suggested financial institutions begin preparing for changes to the Bank Secrecy Act (BSA) expected to be announced by the end of this year. The officials are planning to address the BSA to incorporate the banking compliance requirements. The AML Act requires that FinCEN inform related regulations within 180 days of establishing the AML/CFT priorities. The AML Act requires that FinCEN update its priorities every four years to reflect new or evolving threats.
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Fraud and corruption news:
Pakistan left loopholes in accounts for terror financing to dodge FATF scrutiny
Dated: 25.06.21
Pakistan has deliberately left loopholes in small savings accounts to help finance terrorist groups, many of whom enjoy the state’s patronage to dodge the Financial Action Task Force (FATF) scrutiny. Small savings in Pakistan generate over Rs 4 trillion (USD $53 billion) in over seven million accounts held by individuals, equal to 28 percent of all bank deposits. These shortcomings were flagged by FATF, stating the missing AML rules and screening regulations. In addition, it allowed the banking sector to be lax in identifying suspicious accounts and transfers, reported The Times of Israel. Pakistan has been on the FATF’s grey list since June 2018.
Money Charger stripped of its license by Philippines for AML failure
Dated: 28.06.21
The billion-dollar crypto fraud left the investors in financial mayhem. It is doomed to be one of the biggest financial scandals and crypto scams in the country. After the billion-dollar fraud, South African regulators released ‘the crypto position paper’ implementing strict AML and KYC regulations on crypto transactions.
KYC tech and trends:
The US cryptocurrency market operates in a heavily regulated environment
Dated: 25.06.21
Blockchain analytics firm report stated the unregulated crypto industry is facing mandatory AML regulations with the growing illegal activities in the industry. Firms and individuals dealing with crypto fined $2.5 billion. Contrary to the widely held belief that the crypto-asset sector is unregulated, US regulators are increasingly imposing significant financial penalties on crypto businesses for fraud, breaches of AML regulations, offering unregistered securities, and sanctions violations.
Global Regulatory Technology Market Report, 2020–2026, highlighting risk management, AML/KYC, and other regulatory intelligence
Dated: 01.07.21
The report forecasts the global regulatory market to grow at an exponential CAGR of 19.5% in the forecasted period. The rising demand for risk management, regulatory intelligence solutions, and transaction and monitoring solution, among others, is a crucial factor contributing to the growth of the global regulatory technology market. The global regulatory technology market is segmented based on the solution and deployment model. Based on the solution, the market is segmented into risk management, transaction reporting & monitoring, customer identification, and AML/KYC, regulatory intelligence.
This week at Data Zoo:
Learn how to verify a Chinese citizen
Dated: 01.07.21
China is updating its Anti-Money Laundering regulations in compliance with the Financial Action Task Force (FATF) Recommendations, including broadening the regulatory scope to non-financial institutions from September 2021. The increased rules for personally identifiable information (PII) shape a strict legal structure for the Chinese market. Organisations are obligated to comply with these regulations to function legally. Learn more about the Chinese market.
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.
