AML Roundup – Q1 2023

Europe  

January

• The CSSF shared the findings of their thematic review of the AML/CFT controls applied by IFMs (Investment Fund Managers) in regard to their TCSP (Trust and Company Service Provider) activities, ancillary to their principal investment fund management activity. Key findings and best practices are included within their January Newsletter. 

February

• Tenth package of Russia related sanctions – In order to further increase the effectiveness of EU sanctions this latest package contains new listings plus trade and financial sanctions. It also steps up enforcement and anti-circumvention measures, including a new reporting obligation on Russian Central Bank assets. 
• Taxation: British Virgin Islands, Costa Rica, Marshall Islands and Russia added to EU list of non-cooperative jurisdictions for tax purposes.  With these additions, the EU list now consists of 16 jurisdictions:
  • • American Samoa
    • Anguilla
    • Bahamas
    • British Virgin Islands
    • Costa Rica
    • Fiji
    • Guam
    • Marshall Islands
    • Palau
    • Panama
    • Russia
    • Samoa
    • Trinidad and Tobago
    • Turks and Caicos Islands
    • US Virgin Islands
    • Vanuatu

March

• The European Parliament introduced new EU measures against money laundering and terrorist financing. MEPs approved stricter rules to close existing gaps in combating money laundering, terrorist financing and evasion of sanctions in the EU.

United Kingdom 

• In line with the 2022 Money Laundering and Terrorist Financing (Amendment) (No.2) Regulations, from 1 April 2023, businesses subject to the MLRs will have to comply with checks of the register of overseas entities (ROE) at Companies House for dealings with corporate entities. Overseas companies owning UK real estate are now required to register and provide information about their beneficial owners or managing officers. The transitional period for registering affected overseas entities ended on 31 January 2023.

Channel Islands 

Guernsey 

January

• End of year thematic review – The GFSC has issued its report on the thematic review of the money laundering and terrorist financing business risk assessments of more than 100 licensed and registered firms across all sectors. It was undertaken to assess how well firms identified and assessed these risks to their businesses. The results were positive, demonstrating that most Business Risk Assessments met the Bailiwick’s regulatory requirements.

March

• Consultation on Amendments to Schedule 3 to the Law regarding Independent Audit, Business Risk Assessments and VASPs. The consultation paper and associated draft legislation and Handbook changes can be found on the Commission’s Consultation Hub. 
• Country list updates – The GFSC has issued amendments to the country lists in Appendix C and Appendix I of the Handbook on Countering Financial Crime and Terrorist Financing reflecting the Financial Action Task Force’s updated list of jurisdictions under increased monitoring.

Jersey

January

• The scope of Jersey’s regime in relation to anti-money laundering, counter-terrorist financing, and counter-proliferation financing (the AML/CFT/CPF Regime) has been aligned to the International Standards on Combating Money Laundering and the Financing of Terrorism & Proliferation (FATF Recommendations) of the Financial Action Task Force (FATF). Subject to a transitional period for existing business, the changes took effect from 30 January 2023. The JFSC has published Guidelines on Interpretation –  JFSC Guidelines on Interpretation.

• Jersey is preparing for an assessment, due in 2023, by the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL).  The MONEYVAL assessment will evaluate the Island’s compliance with and effectiveness against the international standards set by the FATF Recommendations. Read more about the proposed amendments to meet these recommendations (DRAFT SANCTIONS AND ASSET FREEZING (AMENDMENT NO. 3) (JERSEY) LAW 202- (P.4/2023): COMMENTS) and how Jersey is preparing for the assessment (Jersey FIU Moneyval Preparations update). 

USA 

March

• The Financial Crimes Enforcement Network (FinCEN) published its first set of guidance materials to aid the public, and in particular the small business community, in understanding upcoming beneficial ownership information (BOI) reporting requirements taking effect on January 1, 2024. The new regulations require many corporations, limited liability companies, and other entities created in or registered to do business in the United States to report information about their beneficial owners—the persons who ultimately own or control the company—to FinCEN. More information is available on their website. 

Cayman Islands  

January

The Cayman Islands Monetary Authority has issued revised Anti Money-Laundering Regulations.

Key amendments within the 2023 Revision include: 

• Removal of the Anti-Money Laundering Steering Group (AMLSG) list of countries – Persons carrying on ‘relevant financial business’ as defined under the Proceeds of Crime Act (Revised) must conduct their own risk assessment of each country or geographic area in which their customers or applicants for business reside or operate. The effect of this is that persons carrying on RFB can no longer rely by default on the Equivalent Jurisdictions List for the purposes of carrying out simplified due diligence or other actions permitted (under the AMLR) in instances where a low risk of money laundering or terrorist financing exists. 
• Requirements for country risk assessments – credible sources related to money laundering, terrorist financing, proliferation financing, corruption, and any other criminal activity when assessing the risk of money laundering or terrorist financing in a particular country or geographic area must be taken in account. A determination that a low risk of money laundering or terrorist financing exists cannot be made where any specified risk factor is present (for example, where a country or geographic area in question has been identified by credible sources as not having effective systems to counter money laundering, terrorist financing, or proliferation financing). 
• Transfers of virtual assets – Identification and record-keeping requirements relating to transfers of virtual assets were also introduced and made effective as of 1 July 2022. These requirements impose, amongst other things, obligations to collect and record specified information in respect of virtual asset transfers, including certain details relating to originators and beneficiaries on such transfers. 
• Other – contains an amended definition of “family member” (in the context of Politically Exposed Persons (PEPs)) to include a civil partner, as well as a spouse, parent, sibling or child of a PEP. 

Singapore

March

• The Monetary Authority of Singapore has shared an Explanatory Brief for the Financial Services and Markets (Amendment) Bill outlining plans to establish and maintain a secure digital platform (named COSMIC (short for “Collaborative Sharing of ML/TF Information & Cases”)) for Financial Institutions to share information on customers that exhibit multiple red flags indicative of potential illicit activities with each other. The FSM(A) Bill sets out the provisions for the initial phase for COSMIC only, during which all sharing will be on a voluntary basis.

International

February

• The FATF updated the list of jurisdictions under increased monitoring, often referred to as the Grey List. Following this latest review, Nigeria and South Africa are now included on this list. Cambodia and Morocco are no longer subject to increased monitoring. 

More information

Please reach out to Louis Dodd or Askender Ouazzani with any questions.