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Welcome to the July 2024 summary of news you can use as your bank or other financial institution attempts to stay up to date on the world of BSA/AML compliance. Our monthly series of curated news about financial crime developments, resources and stories.
In this edition, four main stories emerge:
- FinCEN issues proposed rule to strengthen and modernize FIs’ AML/CFT programs
- OFAC sanctions nearly 50 entities and individuals of a shadow banking network used by Iran
- FATF removes Turkey from its money laundering grey list
- All defendants acquitted at conclusion of Panama Papers trial
FinCEN issues proposed rule to strengthen and modernize financial institutions’ AML/CFT programs
As of June 28, 2024, FinCEN is proposing a rule to strengthen and modernize financial institutions’ anti-money laundering and countering the financing of terrorism (AML/CFT) programs pursuant to a part of the Anti-Money Laundering Act of 2020 (AML Act). The proposed rule would require financial institutions to establish, implement, and maintain effective, risk-based, and reasonably designed AML/CFT programs with certain minimum components, including a mandatory risk assessment process.
The proposed rule would also require financial institutions to review government-wide AML/CFT priorities and incorporate them, as appropriate, into risk-based programs, and would provide for certain technical changes to program requirements. This proposal also further articulates certain broader considerations for an effective and risk-based AML/CFT framework as envisioned by the AML Act. In addition to these changes, FinCEN is proposing regulatory amendments to promote clarity and consistency across FinCEN’s program rules for different types of financial institutions.
Written comments may be submitted on or before September 3, 2024.
View the proposed rule here:
Federal Register :: Anti-Money Laundering and Countering the Financing of Terrorism Programs
OFAC sanctions nearly 50 entities and individuals of a shadow banking network used by Iran
The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is sanctioning nearly 50 entities and individuals that constitute multiple branches of a sprawling “shadow banking” network used by Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL) and Islamic Revolutionary Guard Corps (IRGC) to gain illicit access to the international financial system and process the equivalent of billions of dollars since 2020. MODAFL and the IRGC engage in several commercial revenue-generating activities, most notably the sale of Iranian oil and petrochemicals.
Networks of Iranian exchange houses and dozens of foreign cover companies under their control enable MODAFL and the IRGC to disguise the revenue they generate abroad that is then available to use for a range of MODAFL and IRGC activities, including the procurement and development of advanced weapons systems such as unmanned aerial vehicles. This revenue also supports the provision of weapons and funding to Iran’s regional proxy groups.
Previously, in March 2023, OFAC took action against several dozen entities that operated as part of an Iranian shadow banking network that moved billions of dollars’ worth of petrochemical sales proceeds for the Iranian regime, and the Financial Crime Enforcement Network (FinCEN) issued a related advisory in May 2024.
Read more details here:
FATF removes Turkey from its money laundering grey list
On June 28, 2024, FATF removed Turkey from its grey list of countries that require stricter monitoring around money laundering activity. Despite being a FATF member, Turkey was placed on the list in 2021 for failing to supervise banking, real estate and other sectors vulnerable to money laundering and to financing groups such as Islamic State and al Qaeda on the UN’s sanctions list.
Turkey has made “significant progress” in improving its regime of anti-money laundering and combating the financing of terrorism, FATF said in a statement after its plenary meeting in Singapore.
The move by FATF could ease the way for more investment into Turkey’s economy.
Read here for further details:
Turkey removed from FATF money laundering grey list in boost to standing | Reuters
All defendants acquitted at conclusion of the Panama Papers trial
On June 28, 2024, Panama’s courts closed out the high-profile Panama Papers trial, with the judge acquitting all 28 people who faced trial over their alleged role in setting up shell companies used in bribery and corruption scandals in Brazil and Germany.
The 85-hour-long trial took place in April, almost exactly eight years after the Panama Papers investigation was first published.
“While the court did not hold these defendants accountable, the enduring impact of our investigation persists,” Gerard Ryle, the executive director of the International Consortium of Investigative Journalists, said in a statement. “By revealing hidden truths, as we did in the Panama Papers, we empower the public with information they need to demand accountability and push for reforms.”
The Panama Papers investigation exposed the offshore financial secrets of world leaders and other powerful public figures, triggering protests, government probes and the resignation of Iceland’s prime minister.
Read here for further details:
Panama Papers trial concludes with all defendants acquitted of money laundering – ICIJ
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