Author Archives: Kathrin Katanoba

Why Anti-Money Laundering Should Be a Top Priority for Financial Institutions

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One issue that’s been in the headlines for many years is anti-money laundering (AML). When criminals are able to successfully hide the illicit origins of their cash, both the financial institution and society suffer.

Why AML Should be a Top Priority for Financial Institutions

The to-do list for any financial executive is surely daunting. From navigating technology changes to managing talent effectively, there’s many initiatives competing for attention.

One issue that’s been in the headlines for many years is anti-money laundering (AML). When criminals are able to successfully hide the illicit origins of their cash, both the financial institution and society suffer. So, what makes AML more important now than it has been in the past?

Rising up the Priority Ladder

Today’s infographic from McKinsey & Company explains the factors which have brought anti-money laundering urgently to the forefront in recent years.

1. Regulatory Action

Enforcement actions related to AML have been on the rise. Since 2009, regulators have levied approximately $32 billion in AML-related fines globally.

2. Threat Evolution
Criminals are using more sophisticated means to remain undetected, including globally-coordinated technology, insider information, and e-commerce schemes.

3. Reputational Risk

AML incidents put a financial institution’s reputation on the line. There’s a lot at stake: today, the average value of each of the top 10 bank brands is $45B.

4. Rising Costs

Most AML activities require significant manual effort, making them inefficient and difficult to scale. In 2018, it cost U.S. financial services firms about $25.3B to manage money laundering risk.

5. Poor Customer Experience

Compliance staff must have multiple touch points with a customer to gather and verify information. Perhaps not surprisingly, one in three financial institutions have lost potential customers due to inefficient or slow onboarding processes.

It’s no wonder anti-money laundering has now become a top priority for many CEOs in the financial industry.

A Wave of Innovation

In the last five years, there has been an explosion of “RegTech” startups—companies that address regulatory requirements using technology.

Jenna Ross reports:  Visualcapitalist.com

A number of factors in recent years have brought anti-money laundering to the forefront for banks and other financial institutions. In this infographic, we explore the various trends, and then look at how innovations in technology are offering new ways to address AML challenges in areas such as customer onboarding, transaction monitoring, and management oversight. In conclusion, we look at how investments in AML can create competitive advantages for financial institutions.
Why AML should be a top priority for financial institutions PDF/ Download

[click here to enlarge infographic]

Argentina Designates Hezbollah As Terrorist Organisation

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Argentina brands Hezbollah terrorist organization, freezes assets

Argentinian authorities designated Hezbollah, which it blames for two attacks on its soil, a terrorist organization on Thursday and ordered the freezing of the Lebanese Islamist group’s assets in the country.

The announcement coincided with a visit by U.S. Secretary of State Mike Pompeo as Argentina marks the 25th anniversary of the deadly bombing of a Jewish community center in Buenos Aires in which 85 people died. Argentina blames Iran and Hezbollah for the attack. Both deny any responsibility.

Argentina also blames Hezbollah for an attack on the Israeli embassy in Buenos Aires in 1992 that killed 29 people.

The Argentine government’s Financial Information Unit, ordered the freezing of assets of members of Hezbollah and the organization a day after the country created a new list for people and entities linked to terrorism. The designation of Hezbollah as a terrorist group was the first by any Latin American country.

“At present, Hezbollah continues to represent a current threat to security and the integrity of the economic and financial order of the Argentine Republic,” the unit said in a statement….Reuter

Arend van Dam
https://www.w-t-w.org/en/arend-van-dam/

 

Homicide Kills Far More People Than Armed Conflict

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says new the new UNODC’s Global Study on Homicide 2019.

Since the start of the twenty-first century, organized crime killed about as many people as all armed conflicts across the world combined. Moreover, just like armed conflicts, organized crime destabilizes countries, undermines socioeconomic development and erodes the rule of law.

The UNODC study found that organized crime is one of the biggest drivers of homicides around the world. Organized crime was responsible for up to 19% of deaths worldwide.

Most homicide victims are men, but women more often killed by family and intimate partners Globally, some 81 per cent of homicide victims recorded in 2017 were men and boys, and more than 90 per cent of suspects in homicide cases were men, according to the most recent estimates. However, the study shows that the gender disparity among victims changes with age. Girls and boys aged nine and under are killed at roughly equal rates, in marked contrast to all other age groups, in which males make up more than 50 per cent of the victims, according to data from 41 countries….Press/Release
Methodological Annex to The Global Study on Homicide 2019
GLOBAL STUDY ON HOMICIDE Executive Summary

Tackling Illicit Flows

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About the Transnational Security Report

The Transnational Security Report “Cooperating Across Borders: Tackling Illicit Flows” covers selected spotlights of transnational illicit flows – from the trafficking of goods, arms, and people, to illicit financial flows – which endanger global security by funding conflicts and perpetuating instability. The report illustrates regional and international security implications and provides ideas for cooperative solutions, building on ongoing efforts by many institutions across the world.

Modelled on the MSC’s flagship Munich Security Report, as well as thematic reports such as the European Defence Report, the data analysis and graphics – many of them previously unpublished or updated specifically for this report – were compiled in close cooperation with renowned institutions and experts dedicated to increasing the understanding of illicit flows and transnational organized crime in its different forms and countering its threat to stability and security….Securityconference
MSC Transnational Security Report

#münchnersicherheitskonferenz
Munich Security Report : “Lets Talk About Peace”

Senators Propose Radical Overhaul Of US Anti-Money Laundering Regime

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Authorities in the United States have more information about library card holders than the owners of registered companies, according to a bipartisan group of U.S. senators behind a bill that would overhaul the country’s dated anti-money-laundering laws.

The senators, members of the Committee on Banking, Housing, and Urban Affairs, are seeking to enact The Illicit Cash Act, which would empower regulators to force shell companies to disclose their true ownership for the first time.

The draft bill was introduced on June 10. Key proponent, Senator Doug Jones, a Democrat from Alabama, said that as a former U.S. Attorney he was “all too familiar with criminals hiding behind shell corporations to enable their illegal behavior.”

“Our anti-money laundering laws have not kept pace with the increasingly sophisticated means by which criminals and terrorist organizations use our financial system to move their money around the world,” he said in a joint press release. Lack of transparency….ICIJ.org/Investigation

by Andrzej Krauze

 

Women In Islamic State Propaganda

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Roles and incentives

IS is not the first jihadi movement to attract female followers. Many of its predecessors — including al-Qaeda — also had their share of female supporters. Yet the meteoric rise of IS appears to have brought about a leap in the nature and extent of women’s roles within jihadi groups. Alternatively, one could suggest that the increased assimilation of women into the organisation in itself contributed to IS’s swift ascent.

What is certain is that women have become indispensable to IS, both in conflict areas and in the West (including in the European Union). They play their role in the organisation’s state-building enterprise, produce and disseminate propaganda and have seemingly been granted more proactive roles on the ‘battlefield’. The worry is that this increase in the involvement of women could pave the way for potentially major changes in the role of jihadi women in the future.Women in Islamic State Propaganda

Why We Fail to Catch Money Launderer

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The fight against money laundering in Canada will require tougher measures that shine a light on the perpetrators who now operate in the shadows, says a new report from the C.D.

Howe Institute. In “Why We Fail to Catch Money Launderers 99.9 percent of the Time,” author Kevin Comeau supports the creation of a publicly accessible registry of beneficial ownership, and mandatory declarations of beneficial ownership with meaningful sanctions for false declarations.

Canada’s anti-money-laundering protections (particularly as they pertain to real estate) are among the weakest of those of the western liberal democracies, he writes, so Canada likely receives a significant amount of international dirty money. “While it is impossible to estimate the exact amount of money laundering, a realistic estimate of the magnitude of dirty money laundered in Canada each year likely lies in range of $100- $130 billion,” says Comeau.

Unfortunately, neither the House of Commons Standing Committee on Finance in its November 2018 report on money laundering, nor the December 2018 amendments to the Canada Business Corporations Act, included either of the two tougher measures.

Working from first principles, Comeau explains why those two measures are instrumental to combatting money laundering. He identifies three unique advantages money launderers enjoy over those tasked with investigating and prosecuting their crimes — the effective invisibility of the crime of money laundering, the anonymity of its perpetrators, and the legal obstacles to following their dirty money — from which he derives the objectives and legislative initiatives needed to reduce those advantages.

“Anonymity and invisibility could be reduced by implementing a publicly accessible registry of beneficial ownership of companies, trusts and real estate. Structured properly, a public registry would offer a two-way flow of information – communication of beneficial ownership information to the world and communication of foreign-based information to Canadian authorities – which would bring more bad guys into the light of day, “ he explains.

Comeau says that privacy concerns are critically important. That’s why he recommends that a public registry should divide filed information into publicly accessible and strictly confidential compartments. Basic information needed to connect perpetrators of crimes to their registered nominees would be publicly accessible. Sensitive information, such as passport numbers and full residential addresses, would be protected as strictly confidential and accessible only by the registrar to verify filed information and by law enforcement agencies on a need-to-know basis.

He also notes that the public registry would only require disclosure of beneficial ownership. It does not involve any disclosure of financial information or business operations, thereby minimizing intrusion on privacy.

“Obstacles to following the dirty money could be reduced by creating a new criminal offence: a false declaration of beneficial ownership, whether made on a public registry or submitted by a customer to a Reporting Entity. Not only would such an offence bring more integrity to the beneficial-ownership information being disclosed; it would also provide a solid base from which law enforcement agencies could conduct investigations of suspicious transactions,” explains Comeau.

Implementation of these two recommendations should fundamentally improve Canada’s ability to combat money laundering and reduce the harm it inflicts upon Canadians and other global citizens. Perhaps then Canada will no longer fail to catch money launderers 99.9 percent of the time…Full Report

Money Launderette
Bart

 

Federal Intelligence Service Presents Its Annual Report

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«Security Switzerland 2019»: Federal Intelligence Service presents its annual report.

The security environment is becoming increasingly fragmented and complex. The Federal Intelligence Service’s (FIS) anticipation and detection capabilities play a leading role in identifying and assessing threats in good time, thus ensuring that the required preventive measures are taken. Published in a new, simplified form, the FIS annual report presents the most important developments in the intelligence scene over the past year.

The crisis situations in Europe that the FIS has highlighted in its annual reports for several years now are characterised by the marked increase in non-State actors and the opportunities offered by hybrid warfare. The return of power politics, sometimes with pronounced unilateral features, increased tensions between western states and Russia, and political and economic challenges in European countries form part of a constantly changing picture. The old order is changing under pressure from new forces that are not only political, economic and military in nature, but also technological, social and cultural. It is not clear where this change is leading us. In this world of insecurity and growing uncertainty, the FIS makes a vital contribution: the overall picture compiled from intelligence findings is an essential element in the decision-making process for security policy makers……Admin.ch/gov/en

Increasing rivalry between the major powers.
Terrorism remains a threat despite the collapse of the Caliphate
The far-right on the rise

https://politiken.dk/newsinenglish/art5635633/Drawing-Europe

Cristina Kirchner Faces Corruption Charges

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Argentina’s ex-President Kirchner faces first corruption trialCristina Kirchner, who recently announced a surprise vice-presidential bid, faces multiple corruption charges

Natalie Alcoba reports: Buenos Aires – All eyes in Argentina will be on a courtroom in Buenos Aires on Tuesday as the first corruption trial begins against former President Cristina Fernandez de Kirchner, who remains one of the most polarising figures in the country.

Days after announcing that she will run as a vice-presidential candidate in the upcoming election, Kirchner will stare down allegations that she headed up an illicit association that awarded 51 public works projects at inflated prices to a friend and businessman, Lazaro Baez, in her home province of Santa Cruz.

It is the first of 11 court cases against Kirchner, which include allegations of bribery and coverup….Aljazeera.com

by Dragan

Money Transfers in Seconds

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A start-up that is trying to usurp Western Union and shake up the $689 billion money transfer market

Joel Dreyfuss reports: Like a lot of start-ups, TransferWise started with a simple idea, inspired by the frustrating personal experience of one of its founders.

Kristo Käärmann landed a job with Skype in London a decade ago but still had a savings account in his native Estonia. When he wired money home through his bank, he was surprised at the transfer cost. It was not just the bank fee that penalized him but the exchange rate the bank used to convert his pounds into euros. Käärmann’s fellow Estonian in London Taavet Hinrikus was paid in euros and needed to convert his pay into pounds, so they worked out a deal using mid-market foreign exchange rates. They soon had a network of friends exchanging money informally.

“We realized it was a problem not just for Estonians in London but for everyone who’s moving money internationally,” said Käärmann, now TransferWise CEO…cnbc.com
 
  • London-based TransferWise handles $5 billion a month in money remittances across 71 countries.
  • The flow of money between individuals across national boundaries totaled $689 billion last year and has benefited companies like Western Union and Moneygram.
  • TransferWise targets the cost of remittances, on average 7%, but as high as 10% to certain African countries.
  • In the last quarter, the money arrived in 19% of recipients’ bank accounts in less than 20 seconds.

    Retail Gazette