BDO's AML Watch - June 13th, 2023

Caribbean AML/FCP

U.S. Removes Sanctions on Russia-Linked Yacht Roiling Caribbean Nation - Antigua and Barbuda

  • An abandoned yacht linked to Russian oligarch Andrey Grigoryevich Guryev has been taken off U.S. sanctions lists, clearing the Caribbean nation of Antigua and Barbuda to get the derelict vessel out of its waters. After he reportedly abandoned it, Antigua and Barbuda seized the vessel, which the Treasury says Guryev bought for $120 million in 2014. Guryev founded a leading Russian chemical company and, according to the Treasury, is a close associate of Russian President Vladimir Putin. The status of Alfa Nero, a 269-foot ship described by its builder, Oceanco, as “one of the world’s most iconic and highly awarded yachts,” has been a source of political contention at the highest levels of government in Antigua and Barbuda. Some opposition members had voiced concerns about proceeding with a sale if U.S. sanctions remained in place. Third parties have faced practical challenges in complying with the expansive sanctions the U.S. and its allies imposed on Russia after it invaded Ukraine.

Trinidad and Tobago Terror Scare

  • An international company specializing in online privacy issues has blamed hackers for invading its servers and sending terrorist threats to nearly 60 schools in Trinidad last week, forcing their closure and causing severe panic. Prime Minister Keith Rowley addressed the issue, appearing to directly link the disturbance in the education system to the main opposition United National Congress (UNC) and its stepped political activism of recent as parties prepare for general elections in 2025. 


Global AML/FCP

European AML Enforcement Plateaued Last Year

  • Enforcement of anti-money laundering rules trended slightly downward in Europe in 2022. Still, blockbuster, financial crime-related criminal penalties and settlements in France and the United Kingdom buoyed the overall drop in AML regulatory actions. “The FCA has been—and remains—under huge pressure to take action, against banks in particular,” said Gregory Brandman, a former enforcement attorney with the Financial Services Authority, the agency that preceded the FCA. “Failures at ongoing monitoring—ensuring that the activity on certain accounts is consistent with the bank’s understanding of the customer profile—has been a big part of outcomes against quite a few big banks.”

Australia: Major AML/CTF Regulatory Reform is Back on the Cards

  • As AUSTRAC continues taking enforcement action against non-compliance with Australia’s existing AML/CTF laws, there are strong indications that the Australian Government will press ahead with the long-anticipated expansion of the anti-money laundering/counter-terrorist financing regime over the next 12-18 months. The current round of reforms is driven by the age and current limitations of Australia’s existing regime, increasing international pressure for Australia to extend its regime to Gatekeeper Professionals, heightened scrutiny through parliamentary processes, and the reality of significant breaches having been identified and prosecuted by AUSTRAC against regulated entities in the gambling and banking sectors.

UK Tax Authority Fines Cos. £3.2M For Breaching AML Regs

  • The 240 supervised businesses named on June 8th were fined by HMRC between 1 July and 31 December 2022  for breaching Money Laundering Regulations to prevent criminals from exploiting illicit cash.  Xpress Money Services Ltd, based in London, was hit with a hefty fine of £1.4 million for failing to carry out risk assessments, not having appropriate anti-money laundering controls, and failing to conduct proper due diligence checks. HMRC’s work with other enforcement agencies and government departments to tackle economic crime and crack down on breaches is working to drive non-compliant firms out of business, which means that the number of money service businesses has fallen by around a third from 1,508 in 2020 to 1,049 in 2023. The number of money service business agents has reduced from 35,507 to 30,217 in the same period.

Industry Updates

Have Sanctions Against Russia Prompted Commodity Laundering?

  • The invasion of Ukraine and the sanctions on Russian energy exports have created fault lines in the political world where the economic interests of some nations are at odds with the political motivations of the EU and its partner nations in North America and Australia. Freezing Russian assets by foreign authorities was an unprecedented move that caused other developing countries to question the legitimacy of sanctions and the safety of using US dollars. Laundering of commodities and heightened risks of de-dollarisation are unforeseen consequences of sanctions on energy exports of the commodity giant Russia. It is clear that as real weapons, sanctions must be carefully considered and enforced because they can wind up hurting the wielder as much as the party in the cross hairs.

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