ECOVIS ProventusLaw announces a new edition of a 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.
EBA and ECB Report: €4.3bn in Payment Fraud in 2022, Strong Customer Authentication Lowers Fraud
The European Banking Authority (EBA) and the European Central Bank (ECB) released a joint report highlighting payment fraud in the European Economic Area (EEA), totalling €4.3 billion in 2022 and €2.0 billion in the first half of 2023. The report underscores the positive impact of Strong Customer Authentication (SCA) on reducing fraud, particularly in card payments. Fraud rates for SCA-authenticated transactions were significantly lower than non-SCA transactions, with card payment fraud being 10 times higher outside the EEA where SCA is not mandated. The report also notes that liability for fraud losses varies by payment instrument—the EBA and ECB plan to monitor and publish annual fraud data moving forward.
SEC Fines Major Bank for AML Compliance Failures
The U.S. Securities and Exchange Commission (SEC) has levied a significant fine on a major bank for failing to comply with anti-money laundering (AML) regulations. The bank was penalised for insufficient monitoring and reporting of suspicious transactions, violating federal AML laws. This enforcement action underscores the SEC’s intensified focus on AML compliance and financial institutions’ need to maintain robust financial crime controls, including thorough customer due diligence and transaction monitoring. The SEC warned that it would continue closely monitoring banks and financial entities to ensure adherence to AML regulations.
FCA Fines PwC £15 Million for Failing to Report Suspected Fraud at LC&F
The UK Financial Conduct Authority (FCA) has imposed a record £15 million fine on PwC for failing to report suspected fraud at London Capital & Finance (LC&F), which collapsed in 2019, leaving over 11,000 investors nearly £240 million in losses. This marks the FCA’s first fine against an auditor. Despite encountering significant issues during its 2016 audit, including aggressive behaviour from LC&F staff and difficulties obtaining accurate information, PwC did not alert regulators. PwC has since settled with the FCA, attributing the lapse to an “unintentional reporting error.” Recovery efforts for affected investors are ongoing.
TD Bank Sets Aside $2.6 Billion for Potential U.S. AML Fines Amid Federal Probes
Canada’s TD Bank has allocated $2.6 billion to cover potential fines and penalties from ongoing U.S. federal investigations into its anti-money laundering (AML) practices. The bank is under scrutiny by U.S. regulators, including the Department of Justice (DOJ) and the Office of the Comptroller of the Currency (OCC), for its handling of suspicious transactions. The substantial provision underscores the financial risks of regulatory scrutiny and the bank’s efforts to resolve these issues. Despite concerns about the economic impact, TD Bank remains committed to compliance and improving its controls.
U.S. Named Top Hub for Global Corrupt Financial Transactions in New UK Report
A recent report from a UK university identifies the United States as the leading destination for corrupt financial transactions worldwide. The study attributes this to the U.S.’s advanced financial infrastructure and complex legal structures that enable the concealment of illicit funds. Additionally, Dubai and Hong Kong have emerged as critical centres for organized crime groups, surpassing Panama due to their lenient regulations and strategic locations. The report highlights a shift in global financial crime, with criminals relocating to jurisdictions with more relaxed oversight to evade stricter regulations elsewhere.
German Authorities Seize €250,000 in Nationwide Crackdown on Unlicensed Cryptocurrency ATMs
According to a statement from the financial regulator BaFin, German authorities have seized nearly €250,000 ($279,000) in cash during a nationwide operation targeting unlicensed cryptocurrency ATMs. The operation resulted in confiscating 13 ATMs operating without the required permits, which posed significant money-laundering risks. The machines, used for trading bitcoin and other cryptocurrencies, were located in 35 different sites across the country. BaFin collaborated with law enforcement and the German Bundesbank to carry out the crackdown.
New EU AML Package Introduces Major Overhaul to Anti-Money Laundering Framework
In July 2024, the European Union implemented a comprehensive AML package, marking significant changes to the existing anti-money laundering (AML) and counter-terrorist financing (CTF) framework. This new legal framework highlights the ongoing priority for legislators, regulators, and law enforcement agencies to combat financial crimes.
The AML package includes:
- Regulation (EU) 2024/1624: This regulation focuses on preventing the misuse of the financial system for money laundering or terrorist financing.
- Directive (EU) 2024/1640: Establishes mechanisms for EU Member States to prevent financial system misuse.
- Regulation (EU) 2024/1620: Establishes the Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA).
- Regulation (EU) 2023/1113: Governs information requirements for fund transfers and certain crypto-assets.
The complexity and detail of these regulations require financial institutions to adapt by updating internal processes and promoting a strong AML compliance culture.
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