KYC AML Guide

How #AntiMoneyLaundering solution providers are navigating the challenge of providing high-quality data to help with vigorous tech-powered #compliance to financial institutions? Creating a data solution to comply with #AML regulation is not as easy as pie. Just take the case of the PEPs #data and evaluation of associated #risk levels. A #PEP doesn’t always continue to have the same risk levels.  The Individuals  who serve in a particular position also change. The data needs to reflect changes in designations and names for particular designations Similar is the case with sanctioned entities. The volatility of the global geopolitical landscape evolves and so the requirements to comply with sanctions. A good Anti #moneylaundering and #sanctions compliance tool has to be agile enough. And then there are other problems like false positives which arise because there are not enough strategies in place to identify the true positive from thousands of common names or identify the true hit by resolving transliteration errors. So, how do anti-money laundering compliance solutions come up with fool-proof strategies to avoid these problems? And how financial institutes and innovative payment service providers are keeping up with stringent AML/CFT compliance requirements by implementing those solutions. The upcoming KYC AML Guide webinar “Mitigating False Positives: The Significance of Data Quality in AML Compliance Tools” will bring into the limelight the perspective of representatives of compliance and fintech industry on this issue. Hear from Alia M. Regulatory Affairs Practice Lead, ComplyAdvantage and Charlie Patterson, Group Head of Risk Revolut on how anti-money laundering data compliance tools are providing reliable and updated data on PEPs, #sanctions, global watchlists and adverse media and whether #FinTechs can use those tools optimally or not. Stay tuned to attend the insightful webinar on Wednesday, 5th June 13:00 to 14:00 GMT.

How Crypto Asset Service Providers Should Implement #TravelRule for #AML compliance? "European Banking Authority has issued guidelines on information requirements in relation to the transfer of funds and crypto-assets transfer under Regulation (EU) 2023/1113. As per guidelines a system's architecture should be sufficiently robust to enable transmission of information in a seamless and interoperable manner, enabling #CASPs to comply with #TravelRule For #selfhosted wallets, casps should ▪ Individually identify a transfer ▪ Identify a transfer from or to self-hosted addresses ▪Identify the originator and beneficiary;  ▪prove the ownership or controllership (when applicable); and e) put in place mitigating measures, where applicable. Use of Infrastructure Regarding Transfer of crypto-assets 18 a) transmit the information either as part of, or incorporated into, the transfer on the blockchain or on another distributed ledger technology (DLT) platform, or independently via different communication channels – including via direct communication between CASPs, application programming interfaces (APIs), code solution running on top of the blockchain and other third-party solutions; and The address should be provided, to the extent possible, in the following order of priority: ➡ 1. the full country name or the abbreviation in accordance with the International 2. Standard for country codes (ISO 3166) (alpha-2 or alpha-3), postal code, 3, city, state and province and municipality, 4. street name, building number or building name. 🔹 For transfers from a joint account, address or wallet, the information of all holders of the account, address or wallet should be provided. 🔹The payer’s PSP and the originator’s CASP should consider only those official identifiers as equivalent to an LEI that: a) are a single identification code that is unique to the legal entity; b) are published in public registries; c) are issued upon entity formation by a public authority in the jurisdiction in which the legal entity is based; d) allow for the identification of the name and address elements; and e) are accompanied by a description of the type of identifier used in the messaging system. Payees’ PSPs and IPSPs should ensure that in relation to their messaging or payment and settlement systems and understand the system’s validation rules. PSPs, IPSPs, CASPs and ICASPs should determine the risk factors based on EBA guidelines, sectoral risk assessment, and business-wide risk factors. CASPS should Consider Following Risk Factors Associated with Transfers: High-value transfers Transfers to/from high-risk countries or territories Transfers to/from countries with high ML/TF risk

On June 28, 2024, The U.S. Department of the Treasury Financial Crimes Enforcement Network announced a proposed rule to strengthen and modernize financial institutions' anti-money laundering and countering the financing of terrorism (AML/CFT) programs. Through its emphasis on risk-based AML/CFT programs, the proposed rule seeks to avoid onesize-fits-all approaches to customer risk that can lead to financial institutions declining to provide financial services to entire categories of customers. While financial institutions have long maintained #AML #CFT programs under existing regulations, this proposed rule would amend those regulations to explicitly require that such programs be effective, risk-based, and reasonably designed. This change would enable financial institutions to focus their resources and attention in a manner consistent with their risk profiles. The proposed amendments are based on changes to the Bank Secrecy Act enacted by the Anti-Money Laundering Act of 2020. They are key to the Treasury's objectives for a more effective and risk-based AML/CFT regulatory and supervisory regime. Deputy Secretary of the Treasury, Wally Adeyemo, highlighted the growing collaboration between financial institutions and government agencies to tackle law enforcement and national security issues related to illicit finance. "The proposed rule is an important step for the agency, as well as the broader Administration and U.S. government, in ensuring we are doing all we can to prevent the use of U.S. companies and the financial system more broadly from being utilized for these illicit purposes," said Director Gacki. Key elements of the proposed rule include: 🔹 Financial institutions must create, execute, and maintain effective AML/CFT programs, including risk assessments. 🔹Financial institutions must incorporate government-wide AML/CFT priorities into their risk-based programs. 🔹Introducing technical changes aims to enhance clarity and consistency in requirements for various financial institutions. 🔹The proposal emphasizes the need for risk-based AML/CFT programs, avoiding a one-size-fits-all approach, to promote financial inclusion and align with Treasury's De-risking Strategy. The proposal was prepared by FinCEN in consultation with the Boards of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the National Credit Union Administration. The purpose of the consultation was to collectively issue proposed amendments to their respective BSA compliance program rules for the institutions they supervise. Stakeholders must provide written comments on FinCEN's proposed rule within 60 days of its publication in the Federal Register.

📢 SRA Issues Update for All Regulated Firms The Solicitors Regulation Authority (SRA) has announced that all regulated firms will soon be required to provide essential information regarding: 🔍 Work conducted under the Money Laundering, Terrorist Financing, and Transfer of Funds (Information on the Payer) Regulations 2017. 🔍 Any contact or involvement with the sanctions regime and designated individuals. 🔍 Submission of suspicious activity reports to the National Crime Agency. The SRA recognizes that not all firms are engaged with these regimes. In such cases, firms will be able to submit a nil return to ensure that the SRA's records remain accurate and up to date. 𝐑𝐞𝐚𝐬𝐨𝐧 𝐟𝐨𝐫 𝐃𝐚𝐭𝐚 𝐂𝐨𝐥𝐥𝐞𝐜𝐭𝐢𝐨𝐧 This data collection is mandated by the Office for Professional Body Anti-Money Laundering Supervision, which requires the SRA to adopt a risk-based approach to supervision. Accurate data is essential for the SRA to effectively oversee the legal sector, identify risk distribution, guide inspections, and refine its guidance. By collecting this information, the SRA aims to identify where risks lie and allocate resources more efficiently. The SRA has assured firms that any published data will be anonymized to protect individual identities. SRA's information collection request from the firms working with Sanctions and AML regime is quite interesting. It may seem as an additional task for the relevant firms which may have to file information with regulators along with filing of SARs with FIU. However, it may ease the job of anti-money laundering inspectors working with Solicitors Regulatory Authority who have to go through a tedious process as Declan Brown elaborated in his LinkedIn article "Anti-Money Laundering- What to Expect When You Are Inspected." #KYC #AML #SRA #Compliance

Data Protection and Digital Information Bill Wash Out- Industry Leaders and TechUK urge UK Political Parties to Recommit #DigitalVerification in an Open Letter The statement highlights that #digitalidentity tech can boost the UK economy by £800M annually. However,  despite being an important lever of growth the development of the digital economy is impeded by the difficulty of transacting with trust, and by growth in fraud, money laundering, and misinformation in digital channels. Along with  urging the  UK political parties to recommit to the Digital Identity and Attributes Trust Framework, the letter has emphasized that 🔹 Public demands a verifiable identity for control over lives; accountability and transparency are essential.  🔹 DPDI Bill aimed to define 'digital identity' legally and enable secure data sharing. 🔹 Next government must urgently legislate DIATF and DPDI Bill proposals.  🔹 Call for an independent regulator to oversee digital ID services. Trust Framework ensures a competitive, innovative digital identity market without data silos. 🔹 Companies have invested significantly in developing and certifying against the Trust Framework. 🔹 Essential for UK to keep pace with international advancements in Digital ID. 🔹The UK must keep pace with international advancements, as the EU, India and Australia are investing in Digital ID to realize its economic growth potential. The letter has been signed by the identity verification industry members, consultancies, and organizations including CEO of techUK  Julian David, Author and Global Fintech 50 Influencer,  Dr. Ruth Wandhöfer Chairperson, Association of Document Validation Professionals (ADVP) David Crack FICA, Policy Chairman, City of London Corporation, Chris Hayward, Managing Director, Consult Hyperion Steve Pannifer CEO, Ctrl-Shift Liz Brandt Director, IDEMIA Smart Identity David Rennie, CEO, OneID® Ltd Paula Sussex Chief Identity Strategist, OIX - Open Identity Exchange Nick Mothershaw,   Director, Orchestrating Identity   Sage Simon M. and CEO, Yoti Robin Tombs, #DigitalIdentity #ReusableKYC #TrustFramework

Will the FATF consider Amnesty International's Claims Against Misuse of Anti-Terrorism Acts in India? Financial Action Task Force (FATF) has adopted India's joint mutual evaluation report in its recently concluded plenary. The report evaluated India's measures against #moneylaundering, #terroristfinancing, and #proliferationfinancing and their compliance with FATF Recommendations. Last year, in the first week of November, FATF team conducted evaluations in India to assess the effectiveness of the country's legal framework against money laundering and terrorist financing. Civil society organizations such as the Front Line Defenders and Amnesty International have raised concerns over the potential misuse of AML/CFT laws to curb dissent or launch a crackdown on the opponents. . Amnesty International and Front Line Defenders' joint public statement on 24 June consistently expressed grave concern over the increasing misuse of counterterrorism laws in India to target civil society actors. In their joint statement, the organizations mentioned that Delhi's Lieutenant Governor sanctioned Arundhati Roy and Sheikh Showkat Hussain's prosecution under India's UAPA for a 2010 speech under India's strict counter-terrorism law. Roy highlighted the human rights violations in Kashmir as well as the communication blackout and detention of activists, students, journalists, and opposition groups. The 14-year prosecution is seen as part of a troubling pattern of arbitrarily using harsh laws to silence government critics. The case is one of many examples of misuse of Terrorism Preventions Law. The statement further highlighted that the misuse of the UAPA as a weapon to target human rights defenders and suppress critical voices in India has increased in the last few years. The strict provisions under the UAPA, such as high thresholds for granting bail, long incarceration without charge, and reversal of the presumption of innocence, which result in a burden of innocence being placed on the accused persons, are often invoked to create a chilling effect within civil society. India’s counter-terrorism laws have expanded over time to become increasingly overbroad and have often overturned basic procedural safeguards for defendants Even last year, ahead of the India MER, civil society groups, including Amnesty International, submitted reports highlighting the misuse of counter-terrorism laws by Indian authorities to target civil society. The 2010 Mutual Evaluation Report rated India as partially compliant in criminalizing anti-money laundering and terrorist financing. The FATF will publish the report once the quality and consistency review is completed. It remains to be seen how the watchdog will assess Amnesty International's request to evaluate the potential misuse of terrorism prevention acts in India. #AML #CFT #FATF

Here are outcomes of Financial Action Task Force (FATF)'s sixth plenary under the sixth plenary of Singapore's President T Raja Kumar 𝐍𝐞𝐰 𝐄𝐧𝐭𝐫𝐢𝐞𝐬 𝐢𝐧 𝐉𝐮𝐫𝐢𝐬𝐝𝐢𝐜𝐭𝐢𝐨𝐧𝐬 𝐔𝐧𝐝𝐞𝐫 𝐈𝐧𝐜𝐫𝐞𝐚𝐬𝐞𝐝 𝐌𝐨𝐧𝐢𝐭𝐨𝐫𝐢𝐧𝐠: FATF has added Monaco and Venezuela to the list of jurisdictions subject to increased monitoring. 𝐉𝐮𝐫𝐢𝐬𝐝𝐢𝐜𝐭𝐢𝐨𝐧𝐬 𝐍𝐨 𝐋𝐨𝐧𝐠𝐞𝐫 𝐔𝐧𝐝𝐞𝐫 𝐈𝐧𝐜𝐫𝐞𝐚𝐬𝐞𝐝 𝐌𝐨𝐧𝐢𝐭𝐨𝐫𝐢𝐧𝐠 Jamaica and Türkiye have made significant progress in addressing their AML/CFT deficiencies and are no longer under increased monitoring. They will continue working with the FATF to strengthen their regimes. 𝐇𝐞𝐫𝐞 𝐚𝐫𝐞 𝐨𝐭𝐡𝐞𝐫 𝐤𝐞𝐲 𝐡𝐢𝐠𝐡𝐥𝐢𝐠𝐡𝐭𝐬: 🔹 Revised FATF standards now include new methods for asset recovery and international cooperation. 🔹Initiated the adoption of mutual evaluation reports for India and Kuwait. New Initiatives and Reviews 🔹Russia's FATF membership remains suspended. 🔹A review of measures to prevent the misuse of professionals for money laundering. 🔹Updated implementation status of FATF standards on virtual assets (expected in coming weeks) 🔹Prioritization of mutual evaluations within the Global Network and FSRBs. 🔹Focus on strengthening AML/CFT expertise and enhancing international cooperation. 🔹Mutual evaluation reports for India and Kuwait will be published following quality and consistency reviews. 🔹The FATF reviewed member measures to prevent gatekeepers (accountants, lawyers, real estate agents, and trust service providers) from facilitating money laundering and terrorist financing. Further Dialogue Ongoing discussions on payment transparency standards and virtual asset regulations. #FATF #Greylist #moneylaundering #CFT

FATF likely to Consider Dubai Unlocked Investigation in U.A.E's Mutual Evaluation Report to Comabt Money Laundering Financial Action Task Force will likely take into account findings from the "Dubai Unlocked" investigation by the Organized Crime and Corruption Reporting Project when assessing the UAE’s efforts to combat #moneylaundering. The investigation, published in May, has raised significant concerns about Dubai's regulatory framework and its adherence to global financial standards. Financial Action Task Force (FATF) President T Raja Kumar reportedly told in an interview with OCCRP’s partner E24 that the task force's experts would review the public information uncovered by the investigation. "They would look at the public information that is available," Kumar stated. "What you have done on the investigative front would all be public information that they would have." Key Findings of "Dubai Unlocked": 𝐂𝐨𝐧𝐭𝐞𝐱𝐭 𝐨𝐟 𝐃𝐮𝐛𝐚𝐢 𝐔𝐧𝐥𝐨𝐜𝐤𝐞𝐝: 𝐑𝐞𝐚𝐥 𝐄𝐬𝐭𝐚𝐭𝐞 𝐏𝐫𝐚𝐜𝐭𝐢𝐜𝐞𝐬: Journalists revealed that some real estate agents in Dubai encourage clients to pay in cash and do not inquire about the money's source, which contradicts FATF standards. This issue will also be considered in the upcoming evaluation. 𝐏𝐫𝐨𝐟𝐞𝐬𝐬𝐢𝐨𝐧𝐚𝐥 𝐀𝐜𝐜𝐨𝐮𝐧𝐭𝐚𝐛𝐢𝐥𝐢𝐭𝐲: Kumar emphasized the necessity for lawyers, accountants, corporate service providers, and real estate agents to fully comply with anti-money laundering and terrorism financing requirements. "We will hold the UAE to account for the actions they have taken or have failed to take," he stated. FATF removed the UAE from the gray list in February 2023, citing significant progress, including improved investigation and prosecution of violators. This decision faced criticism from various quarters. Critics, including European Union parliamentarians and anti-corruption organizations, argued that the UAE remains a hub for money laundering. Concerns were raised about the flow of smuggled gold from Africa into Dubai, allegedly used to finance conflicts in Sudan and other regions. The UAE has responded through its embassies, stating that it takes its role in protecting the global financial system seriously. However, certain questions have been raised on U.A.E's response. As Maíra Martini of Transparency International said, “Most of the cases uncovered by journalists are based on data available to the UAE authorities. “I hope they (FATF) ask questions about failures by the UAE authorities in these cases,” reported OCCRP. #FATF #MutualEvaluation #DubaiUnlocked

Financial Action Task Force June 2024 plenary- Monaco and Venezuela are likely to end up in #FATF grey-list, reports Bloomberg. 𝐂𝐨𝐧𝐜𝐞𝐫𝐧𝐬 𝐎𝐯𝐞𝐫 𝐈𝐥𝐥𝐢𝐜𝐢𝐭 𝐅𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 𝐅𝐥𝐨𝐰𝐬 𝐢𝐧 𝐌𝐨𝐧𝐚𝐜𝐨 Persistent concerns over Monaco's handling of illicit financial flows remain, despite recent efforts to address deficiencies highlighted by European inspectors in late 2022. 𝐏𝐨𝐭𝐞𝐧𝐭𝐢𝐚𝐥 𝐂𝐨𝐧𝐬𝐞𝐪𝐮𝐞𝐧𝐜𝐞𝐬 𝐨𝐟 𝐆𝐫𝐚𝐲-𝐋𝐢𝐬𝐭 𝐃𝐞𝐬𝐢𝐠𝐧𝐚𝐭𝐢𝐨𝐧 With financial institutions managing approximately €160 billion, vastly exceeding its GDP, Monaco's economy could suffer from increased monitoring requirements typically accompanying a gray-list designation. Such oversight could deter foreign investors, impacting capital inflows and the country's lucrative property market, known for its massive prices. While being on the gray list does not carry the same stigma as the blacklist, it signals ongoing challenges that Monaco must address to maintain its reputation as a financial hub. As global scrutiny intensifies, Monaco's response to these regulatory pressures will shape its economic future amidst broader geopolitical dynamics and internal governance reforms. 𝐑𝐞𝐠𝐢𝐨𝐧𝐚𝐥 𝐀𝐬𝐬𝐞𝐬𝐬𝐦𝐞𝐧𝐭𝐬 𝐚𝐧𝐝 𝐂𝐫𝐢𝐭𝐢𝐜𝐢𝐬𝐦𝐬 Monaco, not a member of FATF, hinges on assessments by regional bodies. The 2022 Moneyval Mutual Evaluation of Monaco highlighted significant money laundering risks originating mainly from external threats due to the proportion of internationally oriented financial activities. 𝐖𝐡𝐚𝐭 𝐭𝐨 𝐄𝐱𝐩𝐞𝐜𝐭 𝐟𝐫𝐨𝐦 𝐭𝐡𝐞 𝐔𝐩𝐜𝐨𝐦𝐢𝐧𝐠 𝐅𝐀𝐓𝐅 𝐏𝐥𝐞𝐧𝐚𝐫𝐲? The sixth FATF Plenary under the Presidency of T. Raja Kumar will take place in Singapore from June 26 to June 28. 𝐊𝐞𝐲 𝐢𝐬𝐬𝐮𝐞𝐬 𝐭𝐨 𝐛𝐞 𝐝𝐢𝐬𝐜𝐮𝐬𝐬𝐞𝐝 𝐰𝐢𝐥𝐥 𝐢𝐧𝐜𝐥𝐮𝐝𝐞: ▪ Modifications to the assessment methodology to align with revised FATF Standards, enhancing asset recovery and international cooperation. ▪Prioritization criteria for reviewing countries with strategic AML/CFT deficiencies (black or gray listing). ▪Progress reports on jurisdictions posing risks to the global financial system. Mutual evaluation reports for India and Kuwait. #FATF #Monaco #FinancialRegulation #AML #CFT #GlobalEconomy #FATFWeek #Singapore

Choosing, the right #KYC vendor for identity verification: Here are the Digital Identity and Trust Framework Certified digital identity vendors, as per the UK Department of Science and Innovation list updated on June 24. The list is certified against UK digital identity and attributes trust framework along with Right to Rent supplementary scheme, and Trust Framework (with Beta 03 and Alpha 02 certifications). What does it mean to be certified for Right to Rent Supplementary Framework, Right to Work Supplementary Framework, Disclosure and Barring Service, and Trust framework version? 𝐂𝐞𝐫𝐭𝐢𝐟𝐢𝐜𝐚𝐭𝐢𝐨𝐧 𝐚𝐠𝐚𝐢𝐧𝐬𝐭 𝐑𝐢𝐠𝐡𝐭 𝐭𝐨 𝐖𝐨𝐫𝐤: An application for which digital identities provided by this company can be used, specifically the checking of an individual’s right to work in the UK in accordance with “Employer right to work checks supporting guidance”, a document published by the Home Office on the gov (.) UK website. 𝐂𝐞𝐫𝐭𝐢𝐟𝐢𝐜𝐚𝐭𝐢𝐨𝐧 𝐀𝐠𝐚𝐢𝐧𝐬𝐭 𝐑𝐢𝐠𝐡𝐭 𝐭𝐨 𝐑𝐞𝐧𝐭 𝐒𝐮𝐩𝐩𝐥𝐞𝐦𝐧𝐚𝐭𝐫𝐲 𝐒𝐜𝐡𝐞𝐦𝐞: An application for which digital identities provided by this company can be used, specifically the checking of an individual’s right to rent property in the UK in accordance with “Landlord’s guide to right to rent checks”, a document published by the Home Office on the gov. uk website. 𝐂𝐞𝐫𝐭𝐢𝐟𝐢𝐜𝐚𝐭𝐢𝐨𝐧 𝐚𝐠𝐚𝐢𝐧𝐬𝐭 𝐃𝐢𝐬𝐜𝐥𝐨𝐬𝐮𝐫𝐞 𝐚𝐧𝐝 𝐁𝐚𝐫𝐫𝐢𝐧𝐠 𝐒𝐞𝐫𝐯𝐢𝐜𝐞: “An application for which digital identities provided by this company can be used, specifically the checking of an individual’s official identity for the Disclosure and Barring Service…” Vendors that have been certified against UK Digital Identity and Trust Framework include, Yoti, Certn, ComplyCube, Amani, Sumsub, Daon, IDnow, TECH5, 1Kosmos, Arissian Ltd, Data Zoo, iProov, Facephi, Jumio Corporation, Fragomen, iPassport Ltd, Due Diligence Checking Ltd (DDC), Veridas, mypensionID, Konfir, Nuggets, Experian, DataChecker, NorthRow, ID-Pal, Onfido, GBG Plc, uComply, IDVerse - An OCR Labs Company, Digidentity, Amiqus, Credas, OneID® Ltd. ⭕ 𝐍𝐨𝐭𝐞: 𝐍𝐨𝐭 𝐚𝐥𝐥 𝐨𝐟 𝐭𝐡𝐞 𝐚𝐛𝐨𝐯𝐞 𝐦𝐞𝐧𝐭𝐢𝐨𝐧𝐞𝐝, 𝐯𝐞𝐧𝐝𝐨𝐫𝐬 𝐚𝐫𝐞 𝐜𝐞𝐫𝐭𝐢𝐟𝐢𝐞𝐝 𝐚𝐠𝐚𝐢𝐧𝐬𝐭 𝐚𝐥𝐥 𝐭𝐡𝐞𝐬𝐞 𝐟𝐨𝐮𝐫 𝐜𝐚𝐭𝐞𝐠𝐨𝐫𝐢𝐞𝐬. UK Data Protection and Digital Information Bill is likely to add to the scope of digital identity services, As  Gareth Narinesingh  remarked while talking about Data Protection and Digital Information Bill. “The Digital Verification Services (DVS) aspect of the DPDI Bill (Part 2) calls for the creation of a register for trusted DVS providers and a information Gateway for sharing information with these providers. We will staunchly support continuation of these requirements with the new government, however we cannot presently speculate what form any new Bill will take.” #KYC #AML #IdentityVerification