This Post is an extract from the USA Financial Crime Threat Assessment 2022 by FCN which can be found HERE: A PDF of this post can be found HERE: FCN:US:HRC:PBD:08:2022
The following is a review of whether the US should be regarded as a high risk country, including the opinion of Financial Crime News, and includes extracts and information from its 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 use.
1.1 Introduction: Whether due to its economic size, population, wealth, levels & breadth of international trade or its importance as both a financial centre as well as the US dollar as a global currency, the US is considered to be a ML centre, with hundreds of billions of dollars in financial crimes generated domestically each year.
The highest threats (as per the NRA in 2019) were tax, social and customs fraud, drug trafficking as well as scams and theft. The terrorist financing threat was also considered high. These are followed by human trafficking, corruption and breaches of probity. According to the FATF Report published last month, France was described as having a “robust sophisticated framework to fight money laundering and terrorist financing,” and that efforts have “obtained very good results, depriving criminals of considerable amounts.” On both technical compliance and effectiveness, France is favourably rated (joint first place on effectiveness with the UK).
When looking through a balanced lens, the FATF’s propensity to overweighting the response and underweighting the threat results in France looking like it’s doing much better than it probably is.
The FCN Financial Crime Country Dashboard for Japan is now available. To download the Japan Financial Crime Country Dashboard click HERE: Japan dashboard May 22 Pbd
Japan is rated overall as “Moderate” risk, scoring 50/100 for financial crime by FCN. Threats are rated “Moderate” at 58/100 & Responses “Moderate” at 42 /100 & trend “Neutral”.
Japan has exceptionally low crime rates, regularly placed in the top 10 safest countries, with crime rates falling for the last 2 decades and corruption at very low levels. As such whilst applying the UNODC estimate of 3.6% of GDP would suggest around US$180 billion in criminal proceeds, other estimates for Japan even put the figure at just US$15.4 billion or 0.3% of GDP. With just 750,000 crimes registered in 2019, Japanese police managed to make an arrest in 40% of these cases.
The Financial Crime Country Dashboard for Saudi Arabia is now available. To download the Saudi Arabia Financial Crime Country Dashboard click HERE: Saudi Dashboard pbd 6 May 3
Saudi Arabia is rated overall as “Moderate” risk, scoring 50/100 for financial crime by FCN. Threats are rated “Moderate” at 50/100 & Responses “Moderate” at 50/100 & trend “Neutral”.
Overall proceeds of crime generated in KSA are estimated to be approx US$12 – US$32 billion, which is consistent with KSAs risk profile and the KSA NRAs for ML & TF in 2017. Main Proceeds-generating crimes in KSA are drug trafficking, corruption, piracy of products and customs smuggling. Between 70 – 80% of domestic proceeds of crime are estimated to flow out of the kingdom, with KSA neighbours being the most significant likely destinations.
The Threat Lens – Putting the FC Threat back into the AML/CTF Risk Assessment by FCN, MOX & Oliver Wyman
Financial Institutions risk-based AML/CTF programmes are designed around a comprehensive risk assessment, based on a decade old model focused on compliance risk which, in turn, acts as a proxy for financial crime risk. This model is becoming less fit for purpose as National Risk Assessments identify specific threats and National Priorities begin to direct enhanced action against these particular threats. It is also potentially ill suited for financial institutions (FIs) with smaller and less complex businesses who may lack dedicated risk assessment teams.
Today FIs find themselves exposed to a more diverse and complicated set of criminal threats, with the threat landscape continuing to evolve as criminal activities proliferate and money laundering techniques expand.
That’s why Financial Crime News partnered with Mox a Hong Kong based digital bank (part of the Stan Chart Family) and Oliver Wyman to pilot a new approach taking FCN’s comprehensive Country Threat Assessment on Hong Kong and applying it to MOX’s business and through OW and MOX’s FCC Teams generating inherent risk and controls effectiveness views that focus on specific financial crime risks.
Russia has gamed the anti financial crime system to pursue its own interests, despite being a mix of autocratic, corrupt and criminal enterprise – with action by the ineternational community slow on targeting financial crime, even now – which should change.
In this article, Russia’s actions and the international community’s inaction are summarised focussing on and hoping to learn the lessons on how to be more effective in future in fighting financial crime.
By John Cusack – The Editor Financial Crime News.
To Download as a PDF Click HERE: Russia and Financial Crime April 2022 PBD 6
In March 2000, Vladimir Putin was elected Russian President, just 7 months after becoming Prime Minister, and just a few months as interim President following the shock resignation of Boris Yeltsin Russia’s first post independent President, following the collapse of the Soviet Union (1) just a decade earlier.