Global anti-money laundering body briefed on Korea's obligations on cryptocurrency

The Korean financial regulator informed a global organization against money laundering of its obligations related to cryptocurrency transactions to combat money laundering, officials said on Monday.

The Korean anti-money laundering guidelines for the cryptocurrency trade were the first to be drafted by the members of the Financial Action Task Force, the Financial Services Commission said in a statement.

At its regular meeting of 37 members in Paris last week, member states also urged the world body to improve its understanding of money laundering risks related to cryptocurrencies, the commission said.

Korea, home to one of the largest exchanges of bitcoins in the world, has banned the anonymous cryptocurrency trade and requires financial companies to adequately audit their clients.

Under these obligations, Korean financial companies are required to closely monitor financial transactions and to exercise greater vigilance if a virtual currency exchange is suspected of using employee accounts for financial transactions related to the virtual currency. .

Contrary to the government's previous stance to stop local virtual currency trading, the Korean financial regulator said last week that it would support "normal transactions" in cryptocurrency.

Cryptocurrencies such as bitcoin and ethereum have quickly gained popularity among Korean investors with the hope of making a quick comeback.

Despite a boom in cryptocurrency transactions, exchanges are not heavily regulated in Korea, as they are not recognized as financial products because the country does not have rules to protect investors in virtual currencies (Yonhap). .

US Bank to pay more than $600 million over federal charges it had lax anti-money laundering controls

US Bancorp failed to monitor suspicious transactions and other activities on money laundering issues were completed, and workers tried failures of regulators, federal prosecutors in New York, hiding Thursday.

In a particularly extreme example, say federal prosecutors that the bank's anti-money laundering watchdogs looked up from the other side as a customer named Scott Tucker used several accounts for money laundering. wrongly obtained a fraudulent payday loan system.

The government says the US bank "deliberately" failed to report the suspicious activity in time. Tucker was sentenced last year to the Federal Court of New York to administer the illegal payment system, and in January he was sentenced to more than 16 years in prison.

The Minneapolis-based bank, the country's fifth-largest bank, will pay a total of $ 613 million, including $ 528 million in a deferred prosecution agreement with the Manhattan prosecutor, who announced that two cases of corporate secret infringement banking

The agreement also includes the Office of the Comptroller of the Currency, the Federal Reserve Board and the Financial Crime Network of the Ministry of Finance.

The US bank will reform its compliance and monitoring program and has accepted responsibility for its behavior, said the US lawyer in a statement Thursday. The bank has moved staff and resources that banks would have to counteract suspicious activity, prosecutors said. The government said it would like to dismiss the charge in two years, assuming the bank would implement the reforms.

For about five years, starting in 2009, the US bank has not put in place or maintained adequate money laundering systems, the government said. The staff dedicated to this area was lengthened and the bank's practices lacked a "substantial" number of suspicious transactions. And the bank's staff tried to hide these raw material restrictions from the regulator, the OCC, lest it be disapproved.

The US bank also did not control the transactions made by non-clients in its offices through an external money transfer company, Western Union. The US bank stopped these transactions by non-customers in 2014.

Tucker, an operator of the payday loan system, has been convicted on several charges of fraud, money laundering and lending money after a five-week jury trial.

From 2008 to 2012, he used dummy accounts at the US bank, open under the names of several Native American tribes. Most of the income of more than $ 2 billion and hundreds of millions of dollars in profits from payday loans have flowed through these US bank accounts.

But bank employees have ignored the warning signs, including significant spending with tribal bank account money for personal items, such as a luxury vacation rental in Aspen, Colorado, and a Ferrari professional race team .

The bank closed the tribal accounts after press releases raised questions about Tucker companies in 2011, but did not file a suspicious activity report, officials said Thursday. Other Tucker accounts had been left open, allowing $ 176 million worth of payday loans to go through the bank.

The US bank had no suspicious activity report about Tucker until he received a subpoena in 2013 by the Manhattan attorney, although she knew that the Federal Trade Commission filed a lawsuit against Tucker .

Shares of the US bank, a former Warren Buffett Berkshire Hathaway stake, fell 0.2% during Thursday's session. This is the second of Berkshire's main banking positions, Wells Fargo is the other, to cope with regulatory heat in recent years.

The US bank said in 2015 that it had submitted an authorization decision to the money laundering controller. On Thursday, he said he had already reserved the money to pay for the case.

"We regret and have accepted responsibility for past deficiencies" in the anti-money laundering program, said Andy Cecere, chief executive and chief executive officer of the US bank, in a statement. "Our culture of ethics and integrity requires us to do better."

MEC organises seminar on anti-money laundering

The Ministry of Economy and Trade (MEC) held a seminar yesterday entitled 'Regulation against Money Laundering and Terrorist Financing', which brought together legal auditors who worked in Qatar and were registered with the MEC.

The seminar, which brought together representatives of the financial information unit at Qatar Central Bank (QCB), related to the role of the accounting profession in the fight against money laundering and the financing of terrorism. Participants were informed about the role of the unit and discussed the cooperation between the unit and the auditors to facilitate the work of the Anti-Money Laundering and Combating the Financing or Terrorism Committee with the support of accounting firms and companies operating in Qatar, said the MEC in a statement.

The participants also discussed preventive and punitive provisions laid down in Law No. 4 of 2010.
The seminar is part of the focus of the ministry to promote the accounting profession, which is regulated by the audit of Act No. 30 of 2004.

"The MEC also wants to contribute to the development of the accounting and auditing profession, which reflects economic performance and represents a safety valve," the statement adds.
During the seminar, participants were informed about the joint efforts of the financial information unit of the MEC and QCB to raise awareness about anti-money laundering and terrorist financing rules and the cooperation between the ministry and the auditors when reporting suspicions of money laundering and terrorist financing. The attendees also stressed the need to ensure that accountancy firms comply with laws that regulate anti-money laundering and terrorist financing.

At the end of the seminar, the teachers answered all the questions of accountants and accounting firms that are active in Qatar.

Chinese banks warned on anti-money laundering compliance

A seasoned financial advisor has warned the Chinese financial institutions of serious consequences if they stay behind with international partners in compliance with anti-money laundering legislation (AML).

A study recently published by AlixPartners, a global consultancy firm for companies, has shown that a significant number of financial institutions do not have adequate schemes to combat money laundering and compliance with sanctions and the training of their boards.

In the survey, 32% of respondents said they considered the AML and sanction compliance budgets at their companies as "inadequate" or "seriously inadequate", while 20% of respondents said their board did not receive AML and sanction training and regular briefings despite the fact that many new compliance standards have recently been implemented around the world. AlixPartners regards this as a sign that a good understanding of AML and sanctions risks is not fully permeated by the upper reaches of many financial institutions.

"Both AML compliance and sanctions remain a major challenge, not just for Chinese banks, but all banks operating internationally," Sven Stumbauer, New York-based managing director of the practice of financial advisory services at AlixPartners, told China Business Law Journal. . "Given the investigations and enforcement actions that have taken place in recent years, it appears that Chinese banks are still lagging behind and need to increase their focus on AML and sanction compliance."

The survey was based on answers from financial services executives and the managements of 361 financial institutions around the world. Among the respondents, six financial institutions came from the Chinese mainland (responses from the head office) and eight financial institutions were from Hong Kong.

In a growing trend, US and European financial institutions are de-risking and leaving relationships with financial institutions that may risk a high level of AML and sanctions.

Stumbauer said that a number of Chinese banks on the mainland had built up new relationships with these financial institutions. "Both boards of directors and senior management must pay close attention to these types of risky relationships and determine whether current risk management practices are sufficient to not only comply with local AML rules and regulations, but also with global standards," he said. .

"I think it's safe to say that Chinese banks on the Chinese mainland do not want to be known to give more priority to profit than to comply with AML rules and regulations." The resulting reputational damage, combined with possible enforcement actions would certainly affect the growth mainland that Chinese banks have experienced over the past decade.

"It is important that Chinese banks focus holistically on compliance with AML / sanctioning and that they have active involvement of the board of directors of the head office It is also crucial that Chinese banks apply policies and procedures for AML / sanctions that do not just follow the letter of the law, but also the spirit of the law and leading industrial practices. "

Stumbauer emphasized the leading role of the board of directors. "Without significant board involvement, Chinese banks in the US and worldwide will continue to be exposed to possible regulatory measures," he said. "While this is a challenge for most financial institutions operating globally, it seems like a big challenge for Chinese financial institutions to develop and expand globally.

"Once the board has provided an overall compliance strategy, it is up to senior management to apply a global standard in all jurisdictions that can meet strict legal requirements and regulatory expectations in different jurisdictions."

Stumbauer suggested that when Chinese banks operate in a global environment, they should consider reviewing and possibly improving:
(1) AML / sanctions risk assessment of its products and customers; (2) AML / sanctions risk assessment of its counterparties, in particular correspondent banking relationships; (3) customer research; (4) automated transaction monitoring systems to detect potentially suspicious activity; (5) automated transaction monitoring systems to detect potential sanction occurrences; and (6) reporting suspicious activities to authorities.

Stumbauer said that Chinese banks on the Chinese mainland have expanded their AML / sanctioning teams, but that "the robustness of a bank's AML / sanctions compliance structure is not only a matter of resources and personnel, but also of quality and effectiveness.