On 13 June 2019, the US Department of Justice, U.S. Attorney’s Office, Southern District of New York indicted four individuals, Moazu KROMAH, Amara CHERIF, Mansur Mohamed SURUR, and Abdi Hussein AHMED charged with participating in a conspiracy to traffic more than US$7 million in rhino horns and elephant ivory. In addition, KROMAH, CHERIF, and SURUR were charged with conspiracy to commit money laundering, and SURUR and AHMED were charged with participating in a conspiracy to distribute and possess with intent to distribute more than 10 kilograms of heroin. One of those charged is now in the US, another awaiting extradition in Senegal and two remaining Kenyans still at large, on the run.
This is not just important in terms of the action taken but how co operation across agencies and between public and private sectors and effective information sharing made a difference.
In February 2019, FATF issued its proposed recommendations for AML governance of the crypto industry. Under pressure from the international community, the FATF aimed to bring amendments to Recommendation 15 (New Technologies) into force at the June 2019 plenary. Within the proposals, one point was opened for consultation; colloquially known as 7(b) the proposal seeks to introduce wire transfer recommendations required of the traditional banking sector into the crypto industry. That is, originator and beneficiary information is collected, screened and transmitted between correspondent institutions with the objective to prevent criminals and terrorists having unfettered access to the financial system.
The crypto industry responded but not for the reason many thought; the response was not to fight against regulation or kick the can down the road for another day but to make sure that the regulation could be effective.
FCN Sub Saharan Africa Threat Assessment – Publication is now available: – see below
Recent FCN Publications
All countries are expected to generate a meaningful National AML Risk Assessment. These are useful for the authorities, and the other institutions that use them (eg FIs and DNFBPs), so that all relevant parties understand and mitigate material money laundering risks. ML is a fast moving and adaptive environment with criminals changing methodologies, routes and institutions used to perpetrate and benefit from their crimes. Dedicated TF and PF assessments are also increasingly the expectation.
According to FATF, “Understanding the money laundering and terrorist financing risks is an essential part of developing and implementing a national anti-money laundering / countering the financing of terrorism (AML/CFT) regime.”
“A risk assessment allows countries to identify, assess and understand its money laundering and terrorist financing risks.
As FATF President T Raja Kumar joins the G20 at its summit tomorrow in Bali under the Presidency of Indonesia his 3 key messages are on crypto regulation, transparency of beneficial ownership and seizing dirty cash. As far as taking action on illicit funds is concerned, he states that:
“Under Singapore’s presidency, the FATF also focuses on supporting national authorities to ramp up the seizure and return of stolen assets. In a joint drive to reinforce and mobilise the international community, the FATF is working closely with INTERPOL and other partners to promote national policies that prioritise asset recovery. This includes enhancing global cooperation and strengthening law enforcement and judicial networks to share information and evidence quickly.
The G20 can lead in this area by promoting policies that prioritise asset recovery and ensuring law enforcement and other agencies have the capabilities and training necessary to ‘follow the money’ that fuels crime and terrorism.
At the FATF INTERPOL ROUNDTABLE ENGAGEMENT (FIRE) EVENT held in September in Singapore 2022, the FATF President T. Raja Kumar & Interpol Secretary General Juergen Stock, hosted experts from law enforcement, asset recovery, FIU’s, prosecutors, policy makers, international organisations & private sector industry leaders to kick off a new initiative to drive forward global asset recovery.
According to the FATF President, T. Raja Kumar: “Asset Recovery needs to be ingrained in the mindset of all relevant agencies as a core aspect of criminal investigations. Not ancillary, not a “nice to do” but a must do to disempower criminals by seizing their illicit assets.”
According to Interpol’s Secretary General Juergen Stock: “The magnitude of illicit profits, and the velocity at which billions are moving across borders, is deeply worrying.
According to the annual US State Department Trafficking in Persons Reports global investigations were reported at just 10,572 (of which 1,379 were of forced Labour) with convictions at 5,260 (of which 374 were of forced Labour) for 2021. These 2021 figures represent just 55% of the total number of prosecutions in 2015, and 80% of the convictions in 2015. The ratio of convictions to prosecutions in 2021 was 50%. For more details see the data from the US TIP 2022 below
Human Trafficking Prosecutions & Convictions in FATF Member Countries
Whilst FATF Member Countries represent more than 90% of Global GDP, they were responsible for HT prosecutions of 2,637 in 2021, or just 25% of the total global HT prosecutions and HT convictions of 1,800 in 2021, or just 34% of the total global HT convictions.
Today FCN is publishing its 2022 UAE Financial Crime Dashboard a year after its first for the UAE. As threats continue to evolve those from fraud, drugs trafficking, professional money laundering, trade based financial crime and TF remain important inherent threats with inherent threats increasing from geo political events such as the Russian invasion of Ukraine.
Whilst threats exist as they do for all countries the major change in the UAE is with the nature and scale of the response, no doubt encouraged as a result of the FATF grey listing. Key indicators on Asset Seizures and Confiscations reflect real progress made. For example between 2013-2018 an average of US$25 million was reported as recovered whereas US$625 million seized in 2021 and US$600 million confiscated.
Today FCN is publishing a 2 page Financial Crime Country Dashboard on Singapore. A copy of the Dashboard can be downloaded click HERE: Singapore Dashboard Sept 2022 Final
The main threats are from fraud and scams which are aggressively on the rise with 90% carried out from overseas with investment, romance and jobs scams the most generative of crime proceeds and victim losses. Other threats include so called CBT (Criminal Beach of Trust) & Foreign Corruption.
The Singaporean response to scams is already impressive with an Anti Scam Centre (ASC) established so quick action can be taken to interdict funds, consumer awareness campaigns and technology solutions to help prevent and detect scam frauds.
Singapore’s strong stance on drug trafficking & health treatments make drug abuse much smaller than elsewhere.
The following is opinion and comment from Financial Crime News, relating to the US fight against financial crime, and is an extract from FCN’s comprehensive USA Threat Assessment 2022. The TA was produced to provide a digestible, condensed and thought-provoking summary of US ML/TF/FC and PF threats and responses for financial crime fighters to contemplate.
Before the fight against money laundering, came the war on drugs and then on organised crime. By targeting /disrupting and seizing the money (so the theory goes), the financial incentive behind these crimes should result in a material change in behaviour by criminal organisations………
To continue reading download here: Op&Ed2022PbdFINALJCSEPT 2
For the comprehensive USA Financial Crime Threat Assessment See: HERE.
For the FCN USA Financial Crime Summary Dashboard See: HERE.
The USA is faced with threats the size and scale of which very few other countries face.
Whether due to its economic size, population, wealth, levels and breadth of international trade and its importance as both a financial centre as well as the US dollar as a global currency, the US is a money laundering centre, with hundreds of billions of dollars in financial crimes generated domestically each year. Foreign illicit funds destined for the US to invest in its currency, its securities markets or real estate, or as a transit country, for example trade via correspondent banking, the US is most likely the most exposed country to illicit finance and money laundering.