Hong Kong SFC voices its AML concerns

 

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SFC notifies the industry of anti-money laundering concerns 

21 Sep 2016

The Securities and Futures Commission’s (SFC) Enforcement Division is investigating a number of cases of SFC licensed brokerages with suspected inadequate anti-money laundering (AML) internal controls and it expects to bring a number of enforcement proceedings as a result. 

The SFC wants to draw the attention of licensees that they are expected to enhance their AML internal controls immediately as they have had ample time to develop their internal controls since the Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) Ordinance (AMLO) and the SFC Guideline on Anti-Money Laundering and Counter-Terrorist Financing (Guideline) came into force in 2012 (Note 1).

During its onsite inspections of licensees and AML investigations, the SFC identified the following areas of concern:

  • failure to scrutinise cash and third party deposits into customer accounts
  • ineffective monitoring of transactions in customer accounts
  • failure to take adequate measures to continuously monitor business relationships with customers which present a higher risk of money laundering
  • inadequate enquiries made to assess potentially suspicious transactions to determine whether or not it is necessary to make a report to the Joint Financial Intelligence Unit, and lack of documentation of the assessment results
  • failure to monitor and supervise the ongoing implementation of anti-money laundering and counter-terrorist financing policies and procedures

Since licensees are vulnerable to being used to launder the proceeds of crime and to finance terrorism, the SFC relies on them to implement effective AML measures to prevent and detect these criminal activities and expects them to take their AML responsibilities seriously.

End

Note:

  1. The AMLO and Guideline require SFC licensees to conduct due diligence on customers before the start of a business relationship and as it continues to ensure that licensees understand who their clients are and what business they do and to monitor for transactions that are inconsistent with their identity and business so as to be able to identify transactions that may be used to launder the proceeds of crime or finance terrorism.

Link:

HK SFC Notice

Hong Kong SFC voices its AML concerns

September 17, 2016: Finnish regulatory update

On Saturday, September 17th, Finnish regulators issued a summary of recent EU sanctions regulatory changes:

 

 

Link:

Finnish regulatory update

September 17, 2016: Finnish regulatory update

September 16, 2016: September OCC Enforcement Actions and Terminations

 

Office of the Comptroller of the Currency
Ensuring a safe and sound Federal Banking System for All Americans
 
NR 2016-114
FOR IMMEDIATE RELEASE
September 16, 2016
Contact: (202) 649-6870
 

OCC Enforcement Actions and Terminations for September 2016

WASHINGTON — The Office of the Comptroller of the Currency (OCC) today released new enforcement actions taken against national banks, federal savings associations, and individuals currently and formerly affiliated with national banks and federal savings associations.

All Cease and Desist Orders, Civil Money Penalty Orders, and Removal/Prohibition Orders are issued with the consent of the parties, unless otherwise indicated as a Decision and Order issued by the Comptroller of the Currency.

Copies of the final actions are available for download by viewing the searchable database of all public enforcement actions taken since August 1989 at http://apps.occ.gov/EASearch.

You may also submit a request electronically to obtain copies through the OCC’s online FOIA site, https://foia-pal.occ.gov/ or by writing to the Comptroller of the Currency, Communications Division, Suite 3E-218, Washington, DC 20219. When ordering, please specify the appropriate enforcement action number.

Cease and Desist Orders
No. Name/Bank/City Date
Nebraska
2016-075 First National Bank of Omaha, Omaha 8/18/2016
South Dakota
2016-077 Wells Fargo Bank, National Association, Sioux Falls 9/6/2016

 

Civil Money Penalty Orders
No. Name/Bank/City Date
Nebraska
2016-076 First National Bank of Omaha, Omaha 8/18/2016
Ohio
2016-078 Steven R. Lewis, First Place Bank, Warren 8/25/2016
South Dakota
2016-079 Wells Fargo Bank, National Association, Sioux Falls 9/6/2016

 

Personal Cease and Desist Orders
No. Name/Bank/City Date
Ohio
2016-078 Steven R. Lewis, First Place Bank, Warren 8/25/2016

 

Restitution Orders
No. Name/Bank/City Date
South Dakota
2016-077 Wells Fargo Bank, National Association, Sioux Falls 9/6/2016

 

Terminations of Existing Enforcement Actions
No. Type/Bank/City/Old EA# Date
Georgia
2016-080 C&D, North Georgia National Bank, Calhoun (EA# 091) 7/28/2016

 

Link:

OCC Notice

September 16, 2016: September OCC Enforcement Actions and Terminations

September 23, 2016: EU, HMT update Iraq sanctions listings

On Friday, Her Majesty’s Treasury (HMT) implemented Commission Implementing Regulation (EU) No 2016/1695 by removing the following 19 entities from the Iraq sanctions program:

 

  1. AL-HILAL INDUSTRIAL COMPANY
    Address:
    PO Box 2147, Alwiya, Al-Za’Faraniya, Baghdad, Iraq. Other Information: Funds or financial assets or economic resources received on or after 23 May 2003 are not to be regarded as frozen nor required to be transferred to the successor arrangements to the DFI Listed on: 05/05/2004 Last Updated: 21/02/2013 Group ID: 8056.

  2. GENERAL ESTABLISHMENT FOR TRANSPORT OF GENERAL CARGO
    a.k.a:
    State Enterprise for General Cargo Transport Address: (1) A H Al Baghdadi Building, Jumhouriya Street (near Khullani Square), PO Box 5745, Baghdad,
    Iraq. (2) PO Box 5745, Al Jumhurya, Building no 33, Baghdad, Iraq.
    Other Information: Funds or financial assets or economic resources received on or after 23 May 2003 are not to be regarded as frozen nor required to be transferred to the successor arrangements to the DFI Listed on: 05/05/2004 Last Updated: 21/02/2013 Group ID: 8100

  3. INDUSTRIAL COMPLEX – DIALA
    Address:
    PO Box 7, Baquba, Diala, Iraq. Other Information: Funds or financial assets or economic resources received on or after 23 May 2003 are not to be regarded as frozen nor required to be transferred to the successor arrangements to the DFI Listed on: 05/05/2004 Last Updated: 21/02/2013 Group ID: 8107.

  4. INDUSTRIAL COMPLEX IN BAQUBA
    Address:
    Khan Al Pasha Building, Samawal Street, PO Box 5819, Baghdad,
    Iraq.
    Other Information: Funds or financial assets or economic resources received on or after 23 May 2003 are not to be regarded as frozen nor required to be transferred to the successor arrangements to the DFI Listed on: 05/05/2004 Last Updated: 21/02/2013 Group ID: 8108.

  5. IRAQI BICYCLES AND METAL TUBINGS COMPANY
    Address:
    PO Box 1176 Al-Mahmoudya, Al-Mamoudya, Baghdad, Iraq. Other Information: Funds or financial assets or economic resources received on or after 23 May 2003 are not to be regarded as frozen nor required to be transferred to the successor arrangements to the DFI Listed on: 05/05/2004 Last Updated: 21/02/2013 Group ID: 8109.

    1. IRAQI CEMENT STATE ENTERPRISE
      Address:
      Muaskar Al Rashid Street, PO Box 2050, Alwiyah, Baghdad, Iraq. Other Information: Funds or financial assets or economic resources received on or after 23 May 2003 are not to be regarded as frozen nor required to be transferred to the successor arrangements to the DFI Listed on: 05/05/2004 Last Updated: 21/02/2013 Group ID: 8111.

    2. MODERN PAINT INDUSTRIES COMPANY
      Address:
      PO Box 2436, Alwiya, Baghdad, Iraq. Other Information: Funds or financial assets or economic resources received on or after 23 May 2003 are not to be regarded as frozen nor required to be transferred to the successor arrangements to the DFI Listed on: 05/05/2004 Last Updated: 21/02/2013 Group ID: 8133.

    3. NEW CONSTRUCTION MATERIALS INDUSTRIES COMPANY
      Address:
      PO Box 5603 Baghdad, Tahreer Square, Baghdad, Iraq. Other Information: Funds or financial assets or economic resources received on or after 23 May 2003 are not to be regarded as frozen nor required to be transferred to the successor arrangements to the DFI Listed on: 05/05/2004 Last Updated: 21/02/2013 Group ID: 8148

    4. NORTHERN CEMENT PUBLIC ENTERPRISE
      Address:
      PO Box 1, Sulaimaniya, Iraq. Other Information: Funds or financial assets or economic resources received on or after 23 May 2003 are not to be regarded as frozen nor required to be transferred to the successor arrangements to the DFI Listed on: 05/05/2004 Last Updated: 21/02/2013 Group ID: 8150.

    5. READY MADE CLOTHES CO. SA
      Address:
      PO Box 5769, Baghdad, Masbah – Arasat Al-Hindiya, Baghdad,
      Iraq.
      Other Information: Funds or financial assets or economic resources received on or after 23 May 2003 are not to be regarded as frozen nor required to be transferred to the successor arrangements to the DFI Listed on: 05/05/2004 Last Updated: 21/02/2013 Group ID: 8155.

    6. SOUTHERN CEMENT ENTERPRISE
      a.k.a:
      Southern Cement State Enterprise Address: PO Box 5, Samawah,
      Iraq.
      Other Information: Funds or financial assets or economic resources received on or after 23 May 2003 are not to be regarded as frozen nor required to be transferred to the successor arrangements to the DFI Listed on: 05/05/2004 Last Updated: 21/02/2013 Group ID: 8158.

    7. SPECIALISED INSTITUTE FOR ENGINEERING INDUSTRIES
      Address:
      PO Box 5798, South Gate, Al-Jumhuriyah St, Building no 192, Baghdad, Iraq. Other Information: Funds or financial assets or economic resources received on or after 23 May 2003 are not to be regarded as frozen nor required to be transferred to the successor arrangements to the DFI Listed on: 05/05/2004 Last Updated: 21/02/2013 Group ID: 8159.

      1. STATE ENGINEERING COMPANY FOR INDUSTRIAL DESIGN AND CONSTRUCTION Address: Nidhal Street, PO Box 5614, Baghdad, Iraq. Other Information: Funds or financial assets or economic resources received on or after 23 May 2003 are not to be regarded as frozen nor required to be transferred to the successor arrangements to the DFI Listed on: 05/05/2004 Last Updated: 21/02/2013 Group ID: 8172.

      2. STATE ENTERPRISE FOR ASBESTOS AND PLASTIC
        a.k.a:
        Asbestos And Plastic Industries State Enterprise Address: Zaafarania, Muasker Al-Rasheed, PO Box 2418, Baghdad, Iraq. Other Information: Funds or financial assets or economic resources received on or after 23 May 2003 are not to be regarded as frozen nor required to be transferred to the successor arrangements to the DFI Listed on: 05/05/2004 Last Updated: 21/02/2013 Group ID: 8061.

      3. STATE ENTERPRISE FOR BRICKS INDUSTRIES
        Address:
        (1) Khalid Bin Walid Street, Baghdad, Iraq. (2) PO Box 3007, St 52, The Unity Square, Baghdad, Iraq. Other Information: Funds or financial assets or economic resources received on or after 23 May 2003 are not to be regarded as frozen nor required to be transferred to the successor arrangements to the DFI Listed on: 05/05/2004 Last Updated: 21/02/2013 Group ID: 8175.

      4. STATE ENTERPRISE FOR CONCRETE INDUSTRIES
        Address:
        Abu Ghraib, PO Box 6188, Baghdad, Iraq. Other Information: Funds or financial assets or economic resources received on or after 23 May 2003 are not to be regarded as frozen nor required to be transferred to the successor arrangements to the DFI Listed on: 05/05/2004 Last Updated: 21/02/2013 Group ID: 8176.

      5. STATE ENTERPRISE FOR GYPSUM INDUSTRIES
        Address:
        (1) Nidhal Street, PO Box 3176, Baghdad, Iraq. (2) PO Box 3176, Sa’doon Street, Baghdad, Iraq. Other Information: Funds or financial assets or economic resources received on or after 23 May 2003 are not to be regarded as frozen nor required to be transferred to the successor arrangements to the DFI Listed on: 05/05/2004 Last Updated: 21/02/2013 Group ID: 8181.

      6. STATE ENTERPRISE FOR IRON AND STEEL INDUSTRIES
        Address:
        (1) Khor Al Zubair, PO Box 309, Basrah, Iraq. (2) PO Box 438, Khur Al- Zubair, Basrah, Iraq. Other Information: Funds or financial assets or economic resources received on or after 23 May 2003 are not to be regarded as frozen nor required to be transferred to the successor arrangements to the DFI Listed on: 05/05/2004 Last Updated: 21/02/2013 Group ID: 8183.

      7. STATE ENTERPRISE FOR LIGHT WEIGHT CONCRETE AND SAND LIME BRICKS INDUSTRIES

        Address: PO Box 416, Bashrah, Kerbala, Iraq. Other Information: Funds or financial assets or economic resources received on or after 23 May 2003 are not to be regarded as frozen nor required to be transferred to the successor arrangements to the DFI Listed on: 05/05/2004 Last Updated: 21/02/2013 Group ID: 8186.

Links:

HMT Notice

Commission Implementing Regulation (EU) No 2016/1695

September 23, 2016: EU, HMT update Iraq sanctions listings

It’s not just an American thing: HKMA issues guidance on de-risking

We all know about US regulator’s multiple attempts to discourage de-risking. Now, the Hong Kong Monetary Authority (HKMA) has issued its own guidance on de-risking and financial inclusion. The highlight is really in their first point:

 

The progressive tightening of international standards in combating money laundering (ML) and terrorist financing (TF) in the past few years has led to extensive enhancement of AIsanti-money laundering and counter-terrorist financing (AML/CFT) controls, including customer due diligence (CDD) processes for existing and new customers. Apart from the local requirements, some AIs, for a variety of reasons, need to also comply with requirements or standards mandated by their head offices or overseas authorities. While it is important to ensure that AML/CFT controls are sufficiently robust and comply with all the relevant regulatory requirements, the HKMA expects AIs to adopt a risk-based approach (RBA) and refrain from adopting practices that would result in financial exclusion, particularly in respect of the need for bona fide businesses to have access to basic banking services. 

And to reinforce the regulatory expectation:

 

Not a “Zero Failure” regime – RBA does not require or expect a “zero failure” outcome. While AIs should take all reasonable measures to identify ML/TF risks at the account opening stage and, for existing customers, on an ongoing basis, it is unrealistic to expect that no ML/TF activities would ever occur through the banking system. AIs are not required to implement overly stringent CDD processes with a view to eliminating, ex-ante, all risks. Otherwise, such an approach would result in a large number of bona fide businesses and individuals not being able to open or maintain accounts. CDD is only one part of an effective AML/CFT regime. AIs are also required to implement a system that can monitor and detect suspicious transactions in order to report them to the relevant authorities and take the necessary mitigating measures, such as enhanced CDD. The HKMA’s supervisory stance is aimed at the effective implementation of AML/CFT systems by AIs and to ensure that there are no material failings in those systems, rather than aiming for nil ML/TF activities in the banking system. 

Nuff said.

Link:

HKMA Advisory

It’s not just an American thing: HKMA issues guidance on de-risking

September 23, 2016: OFAC adds 4 new Kingpins!

On Friday, OFAC added the following persons: 

IMPERIAL CASTRO, Eliseo (a.k.a. “CHEYO ANTRAX”), Mexico; DOB 17 Jan 1984; POB Culiacan, Sinaloa, Mexico; citizen Mexico; Gender Male; R.F.C. IECE840117RCA (Mexico); C.U.R.P. IECE840117HSLMSL04 (Mexico) (individual) [SDNTK]. 
 
LIRA SOTELO, Alfonso (a.k.a. BAHENA MARTINEZ, Rogelio; a.k.a. “EL ATLANTE”), Mexico; DOB 24 May 1970; alt. DOB 02 Dec 1970; POB Mexico City, D.F., Mexico; alt. POB Ixtlahuatenco Pedro Ascencio Alquisiras, Guerrero, Mexico; citizen Mexico; Gender Male; Passport G02447186 (Mexico) issued 01 Apr 2010 expires 01 Apr 2016; R.F.C. LISA7005242Y8 (Mexico); National ID No. 25887069638(Mexico); C.U.R.P. LISA700524HDFRTL03 (Mexico) (individual) [SDNTK]. 
 
LIRA SOTELO, Alma Delia, Mexico; DOB 14 Apr 1972; POB Mexico City, D.F., Mexico; citizen Mexico; Gender Female; C.U.R.P. LISA720414MDFRTL08 (Mexico) (individual) [SDNTK]. 
 
LIRA SOTELO, Javier (a.k.a. “EL CARNICERO”; a.k.a. “EL HANNIBAL”), Mexico; DOB 16 Jul 1965; POB Mexico City, D.F., Mexico; citizen Mexico; Gender Male; C.U.R.P. LISJ650716HDFRTV04 (Mexico); RFC LISJ650716SD0 (Mexico) (individual) [SDNTK].

to the SDN List’s counter narcotics sanctions program.

Link:

OFAC Notice

September 23, 2016: OFAC adds 4 new Kingpins!

September 22, 2016: Colonel Taher Juwadi removed from EU, HMT Libya sanctions

Yesterday, Her Majesty’s Treasury (HMT) implemented Council Implementing Regulation (EU) No 2016/1687 by removing the following person:  

Colonel JUWADI Taher
Title:
Colonel Position: Fourth in Revolutionary Guard chain of command Other Information: EU listing. Not UN. Key member of the Qadhafi regime. As such, closely associated with the former regime of Muammar Qadhafi. Listed on: 24/05/2011 Last Updated: 22/09/2016 Group ID: 11988. 

from its sanctions on Libya. Note: the body of the HMT notice presents the name as Taher Juwadi, which is the correct name order, according to multiple other regulatory sources. So, not sure why EU and HMT had the name wrong all this time.

Links:

HMT Notice

Council Implementing Regulation (EU) No 2016/1687

September 22, 2016: Colonel Taher Juwadi removed from EU, HMT Libya sanctions