ECOVIS ProventuLaw welcomes you to its monthly newsletter on Anti-Money Laundering and Counter-Terrorist Financing. It is dedicated to everyone who wants to understand the latest trends and developments, get tips from our experts and deepen their knowledge.
Basel AML Index 2024: Myanmar Tops High-Risk Jurisdictions
The Basel Institute on Governance has unveiled its December 2024 AML Index, revealing Myanmar as the country with the highest risk for money laundering, with a score of 8.17. High-risk nations include Haiti, the Democratic Republic of Congo, Chad, and Venezuela. In contrast, San Marino, Iceland, Finland, Estonia, and Andorra are among the safest. The updated methodology incorporates new fraud indicators and improved weighting for accuracy, highlighting persistent risks in Asia, Africa, and South America, while European countries continue to set global standards for AML/CTF compliance.
Treasury Targets Digital Asset Network Aiding Sanctions Evasion
The U.S. Treasury’s OFAC has sanctioned five individuals and four entities linked to the TGR Group, an international money laundering network using digital assets like stablecoins to evade sanctions on behalf of Russian elites. Operating across Russia, Ukraine, the UK, UAE, Thailand, and the U.S., the network facilitated unregistered cryptocurrency exchanges, laundered funds for sanctioned entities, and enabled the purchase of UK real estate with obscured origins. Under Executive Order 14024, the designations underscore growing concerns about digital assets in global financial crimes.
FinCEN Warns of Fraud Schemes Misusing Its Name and Authority
The U.S. Treasury’s FinCEN has issued an alert on scams exploiting its name, insignia, and authority for financial gain. These schemes include abuse of Beneficial Ownership Information reporting, misuse of the Money Services Business Registration Tool, and impersonation of FinCEN employees. FinCEN clarified it never demands payments via email, call, or text. The alert provides red flags for financial institutions to identify suspicious activity and urges victims to report scams to the Treasury OIG, FTC, or FBI. Special support is available for seniors via the National Elder Fraud Hotline.
Jyske Bank Fined €3.2 Million for Customer Due Diligence Failings
Denmark’s Jyske Bank has agreed to pay a fine of nearly DKK 24 million (€3.2 million) for non-compliance with anti-money laundering laws. Between March 2010 and September 2021, the bank failed to meet customer due diligence and inspection requirements for 35 mortgage customers in Southern Europe, violating Denmark’s Act on Measures to Prevent Money Laundering and Financing of Terrorism.
Bank of Lithuania Calls for National Strategy Against Financial Fraud
The Bank of Lithuania has urged the creation of a comprehensive national system to combat financial fraud, advocating for a state-level strategy involving public and private sectors. Highlighting fragmented regulations, data-sharing barriers, and inconsistent market engagement, the proposal emphasises enhanced legal frameworks and unified efforts by law enforcement, regulators, and financial institutions to address escalating fraud threats effectively.
Resolutions of the Board of the Bank of Lithuania
Fixed Interest Rate Definition Aligned with EU Rules
The Bank of Lithuania approved draft amendments to redefine the “fixed interest rate of a credit” in line with EU legislation. Effective 1 May 2025, this change ensures consistency in credit agreements and enhances regulatory alignment across the EU.
Governance Revamp for UAB Lietuvos Coin Mint
The Articles of Association for UAB Lietuvos Coin Mint were updated to implement a one-tier corporate governance system, consolidating management and supervisory roles under the Management Board. This transition aligns with international best practices, promoting streamlined decision-making and accountability.
EBA Report: Progress in AML/CFT Colleges, but Challenges Remain
The European Banking Authority (EBA) has released its fourth report on the effectiveness of Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) colleges in 2023. While advancements in cooperation between competent authorities are evident, the report highlights two critical areas needing further improvement:
1. Risk-Based College Organisation
- Meetings and information exchange within AML/CFT colleges are not consistently tailored to supervised firms’ specific ML/TF risks.
- This limits the ability of authorities to allocate resources strategically and effectively address high-risk scenarios.
2. Systematic Common Approaches
- Discussions on shared ML/TF risks and coordinated actions remain inconsistent.
- A lack of systematic coordination reduces effectiveness in tackling cross-border and shared risks.
The EBA also raised concerns about emerging risks in technology-driven sectors like banking, payments, and e-money. It urges supervisors to adapt their strategies to address vulnerabilities unique to these industries.
EBA Concludes Final AML/CFT Supervisory Review Across 30 EU/EEA States
The European Banking Authority (EBA) has published findings from its fourth and final round of reviews on how competent authorities in 30 EU/EEA member states manage money laundering and terrorist financing (ML/TF) risks in the banking sector.
Key Findings:
- Progress in Risk-Based Supervision: Since the first review in 2018, supervisors have made significant strides in adopting risk-based approaches to addressing ML/TF risks.
- Good Practices: Enhanced cooperation, improved risk assessments, and more effective regulatory actions have been observed.
- Remaining Gaps: Methodologies for risk assessment and enforcement processes still show weaknesses, reducing overall deterrent effectiveness.
- Divergent Practices: Variability persists in how prudential supervisors assess ML/TF risks, and limited collaboration exists, especially with tax authorities.
Next Steps:
The EBA urges targeted improvements by each competent authority to close these gaps and harmonise approaches across jurisdictions, ensuring a more robust defence against ML/TF risks.
Summary of Draft Resolutions by the Bank of Lithuania
The Bank of Lithuania has launched a public consultation on proposed amendments to two critical resolutions:
1. Resolution No. 03-17 (2015): Guidelines for preventing money laundering and terrorist financing (AML/CFT).
2. Resolution No. 03-98 (2023): Guidelines for implementing international sanctions.
Key Proposed Amendments
AML/CFT Instructions
- Alignment with Legislation: Updates to reflect Lithuania’s amended AML laws and the EBA Guidelines on customer due diligence.
- Cryptocurrency Regulations: Expands AML/CFT measures to include cryptocurrency service providers under EU Regulation 2023/1114.
Sanctions Instructions
- Cryptocurrency Exceptions: Allows exceptions for entities trading non-asset-linked cryptocurrencies, provided they do not engage in other supervised activities.
- Record-Keeping: Financial institutions must retain documentation for international sanctions compliance for 8 years.
- Regulatory Updates: Aligns with Regulation (EU) 260/2012 for instant credit transfers and other relevant EU amendments.
Objective
These amendments aim to enhance Lithuania’s compliance with EU standards, strengthen AML/CFT frameworks, and ensure robust implementation of international sanctions. Public feedback is encouraged to refine these resolutions further.
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