Our monthly round up of news items relevant to AML regulated businesses.
Cyber Security
A North Korean espionage group known as, APT43, is undertaking widespread cryptocurrency theft to fund its operations. According to Google subsidiary, Mandiant, APT43 is a state sponsored entity which uses a variety of methods to conduct espionage and steal assets.
The group are suspected of creating an Android App to target Chinese users seeking loans in cryptocurrency.
Europol have reported a growth in the use of the increasingly popular AI chatbot (ChatGPT) to facilitate cybercrimes and other fraudulent activity. As an example, ChatGPT has the potential to exploited by even the most basic user to generate malicious code.
Due Diligence
The European Union Parliament has announced new measures to tackle money laundering and terrorist financing.
The measures include:
Single regulation of the EU with provisions on CDD (Customer Due Diligence), Beneficial Ownership, Crypto Assets and Crowdfunding.
There are also provisions on so called ‘golden’ passports.
Of particular interest is that obliged entities, banks, asset and crypto-asset managers, real and virtual real estate agents, or top professional football clubs, will now be required to verify the identity, ownership, and control structure of their clients. In other words, conduct due diligence.
On the 24th March the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated three entities and nine individuals, and identifying one presidential aircraft as blocked property, pursuant to an Executive Order.
The designated entities include Open Joint Stock Company Belarusian Automobile Plant (BelAZ) and Open Joint Stock Company Minsk Automobile Plant (MAZ).
The Belarusian President Alexander Lukashenko’s presidential aircraft is also targeted.
Regulatory
Five major banks located in and around Paris, including Societe Generale, BNP Paribas, HSBC, Natixis, and BNP’s Exane Bank, were raided by French authorities on the 28th of March over alleged charges of money laundering and fiscal fraud. According to France’s Financial Prosecutor’s Office (PNF), the investigation into four French banks and one international bank began at the end of 2021.
The investigation concerns “cum-cum” or “cum-ex” practices which involves splitting dividends temporarily to avoid taxes.
Amendments to the UK’s Economic Crime and Transparency Bill which is passing through Parliament could expand the range of corporate offences available to prosecutors. They include a ‘failure to prevent fraud’, false accounting, money laundering for corporates and neglect.
We predict significant challenges and conundrums for compliance officers if these changes are made.
