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:
The growing crypto market has urged the Reserve Bank of India (RBI) to amend its crypto regulations
Dated: 31.05.21
RBI, in their recent circular urging to maintain the KYC, AML, counter financing of terrorism (CFT) and obligations of regulated entities under Prevention of Money Laundering Act, (PMLA), 2002 in addition to ensuring compliance with relevant provisions under Foreign Exchange Management Act (FEMA) for overseas remittances. It is high time for India to act on their crypto regulations with the industry on a fluctuating rise. The latest circular by the officials should boost the country’s crypto trade. This developing country must maintain customer due diligence, or digital currency will be an easy way to launder money.
China to probe non-financial institutions accountable in their revised AML laws
Dated: 03.06.21
The PBOC (People’s Bank of China) has issued a revised draft AML law for consultation, expanding the scope of the current law.
The law brings into scope non-bank payment firms and non-financial institutions. These firms would be required to establish risk management systems, conduct customer due diligence, implement AML controls, and monitor clients to prevent money laundering risk. Along with a rise in penalties for failure of compliance and report large or suspicious transactions. Any action by China has a global impact as they are the hub for international trade; this may lead to transparency in business.
Fraud and corruption news:
$80 million to be paid by Julius Bar over FIFA money laundering case
Dated: 28.05.21
The Swiss banking group found itself in trouble after accepting money from corrupt FIFA sources. The corruption is said to have involved officials and affiliates of FIFA as well as associated sports media and marketing firms. The firm had money-laundering conspiracy charges in the US. Following a deferred prosecution agreement, the authorities agreed to drop the charges against the firm in three years if it meets a specific condition. Julius Baer will pay $43.3m in fine and a $36.4m forfeiture to settle the probe. The privileged to get away with a few million dollars of fine and a warning to amend their regulations.
Geneva-based bank’s license canceled by Cayman official over the failure of AML regulations
Dated: 03.06.21
Hinduja Bank’s Caymanian subsidiary repeatedly failed to maintain a net worth of a minimum of 400,000 Cayman dollars (US$488,000) and was unable to release audited accounts for the last two consecutive years. They put themselves in a position where they had to face regulatory action. On investigating further on their audits, money laundering activities were relieved, leading to the cancelation of their license. Institutions have been taking smaller countries for granted, assuming their illegal activities might go unseen.
KYC tech and trends:
Hong Kong seizing the opportunity of social distancing to upscale its e-KYC
Dated: 01.06.21
Hong Kong’s King Leung, head of FinTech at InvestHK is embracing the covid restrictions for the betterment of HK. The social distancing regulations have brought in e-KYC as in-person KYC is not a possibility anymore. Additionally, it saves on operations costs by reducing manual labour in the process. The city is preparing to showcase its leadership in the FinTech industry post covid.
Reports estimate the FinTech Blockchain Market to value at $36.4 billion by 2028
Dated: 02.06.21
COVID had been an accelerator for many industries; one of them is undoubtedly blockchain. According to reports, the industry is growing at a CAGR of 59.9% from 2021 to 2028. A drastic jump in their growth, doubling itself in seven years. These estimations indicate blockchain will be taking over the market if conditions persist, as per the reports.
Is the crypto industry ready for regulatory change?
Dated: 29.05.21
Cryptocurrency’s inception was based on the freedom to operate without any regulations. In recent years, the currency association to scams and ransomware has called for a change. The United Kingdom’s financial watchdog, Financial Conduct Authority (FCA), has announced that crypto-involved companies in the UK are now obligated to submit financial crimes-related information in the form of yearly reports.
Implementing proper KYC/AML measures could demonstrate that the platform takes its clients seriously and helps build trust with the community. There is an increasing trend where more and more crypto companies are hastening the implementation of KYC/AML measures. At the same time, clients begin to show more patience for such matters and willingness to undergo proper KYC procedures.
This week at Data Zoo:
Cross border transfer regulations and mitigation
Dated: 02.06.21
Digital transformation has made transferring monetary funds across borders more accessible. As a result, digitisation has increased the risk of money laundering and illegal activities, and international sanctions were formed to regulate these risks. Yet another day we hear institutions being fined billions of dollars for breaching these regulations. We must understand what’s going around.
Learn about Cambodia, its regulations and how to verify a Cambodian
Dated: 27.05.21
Cambodia has taken steps towards improving its AML/CFT regime by introducing the 2020 AML/CFT Law, set to replace two outdated laws. Institutions are required to maintain their customer due diligence by verifying against the individual’s passport, national identity card, voter ID, or driver’s licence. Along with identity verification, there is a requirement to conduct an AML screening to identity if Cambodian citizens are high-risk individuals or entities.
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.
