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
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.
The Financial Crime Country Dashboard for Russia is now available. To download the Russia Financial Crime Country Dashboard click HERE: Russia Dashboard pbd
The main financial crime threats facing Russia are the embezzlement of public funds, crimes related to corruption and abuse of power, fraud in the financial sector and drug trafficking. These have been identified in the Russian National Risk Assessment 2018 which also highlighted that. a large proportion of criminal proceeds generated in Russia are laundered abroad.