FREEZING AND CONFISCATION OF PROCEEDS OF CRIME DIRECTIVE APPROVED BY PARLIAMENT
The European Parliament has voted in favour of the Freezing and confiscation of proceeds of crime Directive. The draft law, already informally agreed with national governments, is part of a broader EU strategy to fight fraud and corruption and extends confiscation powers available to authorities. The agreement should be formally approved by the Council in the coming weeks. Member states will have 30 months to transpose the Directive into their national laws. UK and Denmark will not be adopting this Directive.
FOURTH MONEY LAUNDERING DIRECTIVE: PROGRESS UPDATE
The European Parliament's Committee on Economic and Monetary Affairs (ECON) and Committee on Civil Liberties, Justice and Home Affairs (LIBE) have both voted to adopt a draft report proposing amendments to the proposed Fourth Money Laundering Directive (MLD4). The amendments approved include provision for public registers recording the beneficial ownership of various legal entities, including companies and trusts. The committees' amendments were voted on by Parliament at its 10-13 March 2014 plenary session. Transparency International has published a statement welcoming this vote. The European Parliament's Economic and Monetary Affairs Committee (ECON) updated a webpage with information about the progress of the proposed Fourth Money Laundering Directive (MLD4). The webpage states that after the Parliament's plenary vote on MLD4 in March 2014, "trilogue negotiations are likely to start in the new mandate under the Italian Presidency of the Council". The Italian Presidency of the Council will run from July to December 2014. As a result, it appears that the Parliament will not be in a position to adopt MLD4 until later in 2014 at the earliest.
EUROPEAN COMMISSION UNVEILS FIRST EU ANTI-CORRUPTION REPORT
The European Commission has published its first EU Anti-Corruption Report. The report details the anti-corruption measures in place for each Member State, as well as outstanding issues, policies that are working and areas that could be improved. Summaries of the national chapters can be found here along with FAQs, and a new webpage linking to related documents. The European Commission suggests that the UK should ensure transparency in out-of-court settlements in corruption cases. Accountability in the governance of banks can also be further strengthened. The Commission suggests capping donations to political parties, imposing limits on electoral campaign spending and ensuring proactive monitoring / prosecution of potential violations. Please click here for the UK national chapter along with statistical factsheet. Transparency International have published a press release on the Commission's report, urging Member States to address the "systematic failures to address conflicts of interest between politicians and business, particularly in party financing, public contracting and revolving doors between government and industry".
ECB THIRD REPORT ON CARD FRAUD
The European Central Bank (ECB) has published its third report on card fraud in the EU. The report shows that card fraud within the Single Euro Payments Area (SEPA) increased in 2012 for the first time since 2008, driven mainly by higher internet fraud. The report found that more efforts will be required to ensure the security of online card payments as internet purchases continue to grow. However, fraud as a share of the total value of transactions remained below the levels recorded between 2008 and 2010.
IRAN SANCTIONS AMENDED TO REFLECT GENEVA AGREEMENT
A Statutory Instrument and explanatory memorandum has been published to reflect the implementation of the Geneva Agreement, which temporarily relaxes certain US and EU sanctions against Iran in exchange for limits on Iran's nuclear programme. The agreement came into force on 20 January 2014. For more information on the Agreement please see our earlier briefing here. HMT has also published an updated sanctions notice and consolidated list of financial targets in the UK.
SANCTIONS MEASURES FOR UKRAINE
The EU and US have both recently taken steps to respond to recent events in Ukraine. On 5 March 2014, the EU introduced an asset freeze applying to former President Yanukovych and other former government officials and persons associated with the former government. The UK has introduced domestic legislation criminalising breaches of this asset freeze. The EU also held an emergency Heads of State meeting on 6 March. The conclusions from that meeting indicate that there is a possibility of EU sanctions being imposed on Russia in the absence of negotiations between Russia and Ukraine which produce results within a limited timeframe. Also on 6 March the US introduced an Executive Order which would permit the imposition of an asset freeze and visa bans although no companies or individuals have yet been designated. For more information on these sanctions, please see our briefing here.
BCBS GUIDELINES ON BANKS' AML AND CTF RISK MANAGEMENT
The Basel Committee on Banking Supervision has published a set of guidelines on how banks should include anti-money laundering (AML) and counter-terrorist financing (CTF) risks in their overall risk management programmes. The guidelines are consistent with the International Standards on Combating Money Laundering and the Financing of Terrorism and Proliferation issued by the Financial Action Task Force (FATF) in 2012 and supplement their goals and objectives.
NEW TI UK REPORT: HOW BRIBES WORK, AND HOW TO STOP THEM
The UK branch of Transparency International has published a new handbook for creating or enhancing an anti-bribery compliance program. The handbook is intended to assist businesses subject to the UK Bribery Act and U.S. Foreign Corrupt Practices Act, and to help them anticipate, avoid and resist bribery. The guide identifies bribery warning signs and prevention strategies.
FATF: MONEY LAUNDERING AND TERRORIST FINANCING THROUGH THE DIAMOND TRADE
The Financial Action Task Force (FATF) and the Egmont Group of Financial Intelligence Units, have published a joint report into the money laundering and terrorist financing (ML/TF) vulnerabilities and risks of the “diamond pipeline”, which covers all sectors in the diamond trade: production, rough diamond sale, cutting and polishing, jewellery manufacturing and jewellery retailers.
REVISED VERSION OF WOLFSBERG GROUP'S AML PRINCIPLES FOR CORRESPONDENT BANKING
The Wolfsberg Group published a revised version of its anti-money laundering (AML) principles for correspondent banking. The Wolfsberg Group is an association of eleven leading international financial institutions, aims to develop financial services industry standards and related products for AML, CTF and know your customer (KYC) policies. The principles have been revised in response to the increasing regulatory focus on the risks associated with correspondent banking. For the purpose of the principles, AML includes counter-terrorist financing (CTF) measures and evasion of sanctions. The principles constitute guidance on the establishment and maintenance of foreign (but not domestic) correspondent banking relationships. The Group believes that compliance with the principles will further effective risk management, and enable firms to exercise sound business judgments regarding their correspondent banking customers. In addition, compliance will support the aim of the Group's members to endeavour to prevent the use of their institutions for criminal purposes. Alongside the revised principles, the Group has published a frequently asked questions document (FAQs) on correspondent banking and an AML questionnaire. The questionnaire has been designed to provide an overview of a firm's AML policies and practices. Firms may use it when they are conducting customer due diligence (CDD), alongside their own policies and procedures.