The Laundry Team

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Round Up: Lafarge Pleads Guilty to Providing Material Support to ISIS and Al-Nusrah Front, Fined $777 Million

Lafarge Pleads Guilty to Conspiring to Provide Material Support to Foreign Terrorist Organizations

Lafarge S.A. (Lafarge), a global building materials manufacturer headquartered in France, and Lafarge Cement Syria, S.A. (LCS), a Lafarge subsidiary headquartered in Syria, pleaded guilty to a one-count criminal information charging them with conspiring to provide material support and resources to the Islamic State of Iraq and al-Sham (ISIS) and the al-Nusrah Front (ANF), both U.S.-designated foreign terrorist organizations.  Immediately following the defendants’ guilty pleas this morning, United States District Judge William F. Kuntz, II sentenced the defendants to terms of probation and to pay financial penalties, including criminal fines of $90.78 million and forfeiture of $687 million, totaling $777.78 million.

The charges arose out of the defendants’ scheme to pay ISIS and ANF in exchange for permission to operate a cement plant in Syria from August 2013 to October 2014, which enabled LCS to obtain approximately $70.30 million in revenue… Read the full press release here: https://www.justice.gov/usao-edny/pr/lafarge-pleads-guilty-conspiring-provide-material-support-foreign-terrorist


Statement of Facts
In or about 2011, after a civil war began in Syria, LCS, with the knowledge and approval of LAFARGE, conspired to engage in transactions, through intermediaries, with numerous armed factions present in the region of the Jalabiyeh Cement Plant, ultimately including the U.S.-designated foreign terrorist organizations ISIS and ANF. While other multinational corporations withdrew from and ceased operations in Syria, LAFARGE and LCS executives, through intermediaries, negotiated agreements to pay these armed groups to protect LCS employees, to ensure continued operation of the Jalabiyeh Cement Plant, and to obtain economic advantage over their competitors in the Syrian cement market. LAFARGE and LCS executives conspired to make periodic security payments to armed groups, including ISIS and ANF, and to purchase raw materials from ISIS-controlled suppliers who paid ISIS based on the amount of their sales to LCS. Moreover, for the explicit purpose of incentivizing ISIS to act in a manner that would promote LAFARGE’s and LCS’s security and economic interests, LAFARGE and LCS conspired to make payments to ISIS based on the volume of cement that LCS sold—effectively a revenue-sharing agreement that LAFARGE and LCS executives likened to paying “taxes” to ISIS. In exchange, ISIS permitted access to raw materials sourced from territory under its control so that the Jalabiyeh Cement Plant could continue to produce cement, and further allowed LCS employees, suppliers and customer-distributors to safely pass through ISIS and ANF checkpoints on the roads leading to the Jalabiyeh Cement Plant. ISIS also agreed to impose costs on, and in some cases block the importation of, competing cement from Turkey… Read the full statement of facts here: https://www.justice.gov/usao-edny/press-release/file/1545016/download

Deputy Attorney General Lisa O. Monaco Delivers Remarks Announcing a Guilty Plea by Lafarge on Terrorism Charges

Thank you, Breon, and thank you all for being here.

Today’s guilty pleas to terrorism charges by multi-national construction conglomerate Lafarge SA and its Syrian subsidiary reflect corporate crime that reached a new low and a very dark place.

For the first time ever, the United States has charged these companies with providing material support to terrorist organizations — in this case, the Islamic State of Iraq and al-Sham (ISIS) and the al-Nusrah Front (ANF).

And for the first time, companies have pleaded guilty to supporting terrorist organizations, with Lafarge SA and its Syrian subsidiary facing criminal penalties of more than three-quarters of a billion dollars.

Protecting national security by fighting international terrorism is mission-critical for the Department of Justice.

Fighting corporate crime is also a top Department priority.

Today’s charges and guilty pleas should make clear: when companies and their executives engage in conduct that threatens our national security — in this case by fueling a violent terrorist organizations — the Department will respond with resolve.

And this case also makes clear – business with terrorists cannot be business as usual… Read the full remarks here: https://www.justice.gov/opa/speech/deputy-attorney-general-lisa-o-monaco-delivers-remarks-announcing-guilty-plea-lafarge


Assistant Attorney General for National Security Matthew G. Olsen Delivers Remarks on Lafarge Guilty Plea

As you’ve heard this morning, there is no question as to the seriousness of the conduct at the heart of today’s resolution. The defendants routed nearly six million dollars in illicit payments to ISIS and al-Nusrah Front in Syria – two of the world’s most notorious terrorist groups.

In my time as Director of the National Counterterrorism Center, I saw the horrific violence perpetrated by these terrorist organizations and the ways they exploited sectarian violence in Syria to seize territory, coerce the civil population and generate revenue streams to accelerate their attack plotting.

The defendants negotiated and made unlawful payments at a time when these groups were gaining territory and brutalizing innocent civilians in Syria and elsewhere and were actively plotting against Americans.

LaFarge and its Syrian subsidiary have admitted to engaging in criminal conduct that constitutes material support to terrorism in both legal and practical terms. There is no justification – none – for a multi-national corporation authorizing payments to a designated terrorist group. Such payments are egregious violations of our laws, justify maximum scrutiny by U.S. authorities, and warrant severe punishment… Read the full remarks here: https://www.justice.gov/opa/speech/assistant-attorney-general-national-security-matthew-g-olsen-delivers-remarks-lafarge

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Round Up: Treasury Announces Two Enforcement Actions for over $24M and $29M Against Virtual Currency Exchange Bittrex, Inc

Treasury Announces Two Enforcement Actions for over $24M and $29M Against Virtual Currency Exchange Bittrex, Inc.

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) and Financial Crimes Enforcement Network (FinCEN) announced settlements for over $24 million and $29 million, respectively, with Bittrex, Inc. (Bittrex), a virtual currency exchange based in Bellevue, Washington. This is OFAC’s largest virtual currency enforcement action to date.  It also represents the first parallel enforcement actions by FinCEN and OFAC in this space. Investigations by OFAC and FinCEN found apparent violations of multiple sanctions programs and willful violations of the Bank Secrecy Act’s (BSA’s) anti-money laundering (AML) and suspicious activity report (SAR) reporting requirements. These enforcement actions emphasize to the virtual currency industry the importance of implementing appropriate risk-based sanctions compliance controls and meeting obligations under the BSA… Read the full press release here: https://home.treasury.gov/news/press-releases/jy1006


Settlement Agreement between the U.S. Department of the Treasury’s Office of Foreign Assets Control and Bittrex, Inc.

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) today announced a settlement with Bittrex, Inc., a private company based in Bellevue, Washington that provides an online virtual currency exchange and hosted wallet services.  Bittrex agreed to remit $24,280,829.20 to settle its potential civil liability for apparent violations of sanctions against Cuba, Ukraine-related, Iran, Sudan, and Syria… Read the full press release here: https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221011


OFAC Settles with Bittrex, Inc. for $24,280,829.20 Related to Apparent Violations of Multiple Sanctions Programs

Bittrex, Inc. (“Bittrex”), a private company based in Bellevue, Washington, that provides an online virtual currency exchange and hosted wallet services, has agreed to remit $24,280,829.20 to settle its potential civil liability for 116,421 apparent violations of multiple sanctions programs. As a result of deficiencies related to Bittrex’s sanctions compliance procedures, Bittrex failed to prevent persons apparently located in the Crimea region of Ukraine, Cuba, Iran, Sudan, and Syria from using its platform to engage in approximately $263,451,600.13 worth of virtual currency-related transactions. The applicable sanctions programs generally prohibited U.S. persons from engaging in transactions with these jurisdictions. Based on internet protocol (“IP”) address information and physical address information collected about each customer at onboarding, Bittrex had reason to know that these users were in jurisdictions subject to sanctions. At the time of the transactions, however, Bittrex was not screening this customer information for terms associated with sanctioned jurisdictions… Read the full enforcement notice here: https://home.treasury.gov/system/files/126/20221011_bittrex.pdf


FinCEN Announces $29 Million Enforcement Action Against Virtual Asset Service Provider Bittrex for Willful Violations of the Bank Secrecy Act

The Financial Crimes Enforcement Network (FinCEN) has assessed a civil money penalty in the amount of $29,280,829.20 against Bittrex, for violations of the Bank Secrecy Act (BSA) and FinCEN’s implementing regulations.  FinCEN’s action is part of a global settlement with the Office of Foreign Assets Control (OFAC).

“For years, Bittrex’s AML program and SAR reporting failures unnecessarily exposed the U.S. financial system to threat actors,” said FinCEN Acting Director Himamauli Das. “Bittrex’s failures created exposure to high-risk counterparties including sanctioned jurisdictions, darknet markets, and ransomware attackers. Virtual asset service providers are on notice that they must implement robust risk-based compliance programs and meet their BSA reporting requirements. FinCEN will not hesitate to act when it identifies willful violations of the BSA.”

FinCEN’s investigation found that, from February 2014 through December 2018, Bittrex failed to maintain an effective AML program. Bittrex’s program failed to appropriately address the risks associated with the products and services it offered, including anonymity-enhanced cryptocurrencies.

Bittrex failed to implement effective transaction monitoring on its trading platform, relying on as few as two employees with minimal anti-money laundering training and experience to manually review all of the transactions for suspicious activity, which at times were over 20,000 per day… Read the full press release here: https://www.fincen.gov/news/news-releases/fincen-announces-29-million-enforcement-action-against-virtual-asset-service


FinCEN’s Consent Order Imposing Civil Money Penalty

The Financial Crimes Enforcement Network (FinCEN) has conducted a civil enforcement investigation and determined that grounds exist to impose a Civil Money Penalty against Bittrex, Inc. (Bittrex) for violations of the Bank Secrecy Act (BSA) and its implementing regulations. Bittrex admits to the Statement of Facts and Violations set forth below and consents to the issuance of this Consent Order… Throughout the Relevant Time Period, Bittrex owned and operated a convertible virtual currency (CVC) trading platform known as “Bittrex.” The platform was primarily operated from offices located in Bellevue, Washington, and included a hosted digital wallet service for storing and transferring CVCs. Bittrex also operated as an “exchanger” of over 250 different CVCs,4 including bitcoin, ether, monero, zcash, and dash.5 During the Relevant Time Period, Bittrex facilitated almost 546 million trades on its platform in the United States and at times averaged over 20,000 transactions (deposits and withdrawals) through its hosted wallets daily during the Relevant Time Period, including transactions involving over $17 billion worth of bitcoin during the Relevant Time Period… Read the full Consent Order here: https://www.fincen.gov/sites/default/files/enforcement_action/2022-10-11/Bittrex%20Consent%20Order%2010.11.2022.pdf

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Round Up: UK Aims to Crackdown on FinCrime with Economic Crime and Corporate Transparency Bill 2022

New crackdown on fraud and money laundering to protect UK economy

The Economic Crime and Corporate Transparency Bill will strengthen the UK’s reputation as a place where legitimate businesses can thrive while driving dirty money out of the UK. Through the reforms, anyone who registers a company in the UK will need to verify their identity, tackling the use of companies as a front for crime or foreign kleptocrats.

The reforms to Companies House – its biggest upgrade in 170 years – will also see the organisation armed with new powers to check, challenge and decline incorrect or fraudulent information, making it a more active gatekeeper over company creation. The investigation and enforcement powers of Companies House will also be upgraded, enabling the organisation to cross check data with public and private partners, as well as reporting suspicious activity to security agencies and law enforcement… Read the full press release here: https://www.gov.uk/government/news/new-crackdown-on-fraud-and-money-laundering-to-protect-uk-economy


Factsheets

Factsheets giving details of the different measures contained in the Economic Crime and Corporate Transparency Bill:

Fact sheet: Economic Crime and Corporate Transparency Bill overarching: https://www.gov.uk/government/publications/economic-crime-and-corporate-transparency-bill-2022-factsheets/fact-sheet-economic-crime-and-corporate-transparency-bill-overarching

Fact sheet: the role and powers of the Registrar of Companies: https://www.gov.uk/government/publications/economic-crime-and-corporate-transparency-bill-2022-factsheets/fact-sheet-the-role-and-powers-of-the-registrar-of-companies

Fact sheet: company names: https://www.gov.uk/government/publications/economic-crime-and-corporate-transparency-bill-2022-factsheets/fact-sheet-company-names

Fact sheet: identity verification and authorised corporate service providers: https://www.gov.uk/government/publications/economic-crime-and-corporate-transparency-bill-2022-factsheets/fact-sheet-identity-verification-and-authorised-corporate-service-providers

Fact sheet: preventing abuse of personal information on the Register: https://www.gov.uk/government/publications/economic-crime-and-corporate-transparency-bill-2022-factsheets/fact-sheet-preventing-abuse-of-personal-information-on-the-register

Fact sheet: improving transparency of company ownership: https://www.gov.uk/government/publications/economic-crime-and-corporate-transparency-bill-2022-factsheets/fact-sheet-improving-transparency-of-company-ownership

Fact sheet: Companies House fees: https://www.gov.uk/government/publications/economic-crime-and-corporate-transparency-bill-2022-factsheets/fact-sheet-companies-house-fees

Fact sheet: company accounts: https://www.gov.uk/government/publications/economic-crime-and-corporate-transparency-bill-2022-factsheets/fact-sheet-company-accounts

Fact sheet: limited partnerships: https://www.gov.uk/government/publications/economic-crime-and-corporate-transparency-bill-2022-factsheets/fact-sheet-limited-partnerships

Fact sheet: impact of corporate transparency reforms on limited liability partnerships: https://www.gov.uk/government/publications/economic-crime-and-corporate-transparency-bill-2022-impact-assessments

Fact sheet: Civil sanctions and offences relating to reform of Companies House and limited partnerships: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1105665/11._Civil_Sanctions_and_Offences_Relating_to_Reform_of_Companies_House_and_Limited_Partnerships.pdf

Factsheet: cryptoassets – key terms and definitions: https://www.gov.uk/government/publications/economic-crime-and-corporate-transparency-bill-2022-factsheets/factsheet-cryptoassets-key-terms-and-definitions

Fact sheet: cryptoassets technical: https://www.gov.uk/government/publications/economic-crime-and-corporate-transparency-bill-2022-factsheets/fact-sheet-cryptoassets-technical

Fact sheet: cryptoassets – legislation: https://www.gov.uk/government/publications/economic-crime-and-corporate-transparency-bill-2022-factsheets/fact-sheet-cryptoassets-legislation

Fact sheet: information sharing measures: https://www.gov.uk/government/publications/economic-crime-and-corporate-transparency-bill-2022-factsheets/fact-sheet-information-sharing-measures

Fact Sheet: the removal of the statutory cap on financial penalties for the Law Society, as delegated to the Solicitors Regulation Authority: https://www.gov.uk/government/publications/economic-crime-and-corporate-transparency-bill-2022-factsheets/fact-sheet-the-removal-of-the-statutory-cap-on-financial-penalties-for-the-law-society-as-delegated-to-the-solicitors-regulation-authority

Fact sheet: new regulatory objective in the Legal Services Act 2007: https://www.gov.uk/government/publications/economic-crime-and-corporate-transparency-bill-2022-factsheets/fact-sheet-new-regulatory-objective-in-the-legal-services-act-2007

Fact sheet: the extension of the Serious Fraud Office’s pre-investigation powers: https://www.gov.uk/government/publications/economic-crime-and-corporate-transparency-bill-2022-factsheets/fact-sheet-the-extension-of-the-serious-fraud-offices-pre-investigation-powers

Fact sheet: economic crime in the UK: https://www.gov.uk/government/publications/economic-crime-and-corporate-transparency-bill-2022-factsheets/fact-sheet-economic-crime-in-the-uk

Main page of fact sheets: https://www.gov.uk/government/publications/economic-crime-and-corporate-transparency-bill-2022-factsheets


Impact Assessments

Impact assessments relating to the Economic Crime and Corporate Transparency Bill:

Impact assessment for the Department for Business, Energy and Industrial Strategy: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1105777/1._Impact_Assessment_from_Department_for_Business__Energy_and_Industrial_Strategy.pdf

Regulatory Policy Committee opinion: corporate transparency and Companies House register reform: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1105781/2._RPC_Opinion_-_Corporate_Transparency_and_Companies_House_Register_Reform.pdf

Regulatory Policy Committee opinion: reform of limited partnership law: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1105789/3._RPC_Opinion_-_Reform_of_limited_partnership_law.pdf

Impact assessment: overarching economic crime measures (Home Office measures): https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1105797/4._Overarching_Economic_Crime_Measures_IA.pdf

Impact assessment: cryptoassets: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1105799/5._Cryptoassets_IA.pdf

Impact assessment: exemptions for handling mixed suspected criminal and legitimate property: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1105802/6._Exemptions_for_handling_mixed_suspected_criminal_and_legitimate_property_IA.pdf

Impact assessment: DAML: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1105806/7._DAML_Review_IA.pdf

Impact assessment: Information Orders: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1105810/8._Information_Order_IA.pdf

Impact assessment: information sharing: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1105814/9._Information_Sharing_IA.pdf

Regulatory Policy Committee opinion: Economic Crime and Corporate Transparency Bill 2022 (Home Office measures): https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1105819/10._2022-07-14-RPC-HO-5197_1_-Economic_Crime_Bill_.pdf

Impact assessment: enhanced due diligence: designation of high-risk countries (HM Treasury): https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1105823/11._-_EBC_DM_IA_-_HRTC_Measure_.pdf

Impact assessment: the removal of the statutory cap on financial penalties in relation to economic crime matters (Ministry of Justice): https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1105826/12._MoJ_Impact_Assessment_Fining_Measure.pdf

Impact assessment: regulators of legal services: objective relating to economic crime (Ministry of Justice): https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1105829/13._MoJ_Impact_Assessment_Regulatory_Objective_Measure.pdf

Main page of impact assessments: https://www.gov.uk/government/publications/economic-crime-and-corporate-transparency-bill-2022-impact-assessments


European Convention on Human Rights (ECHR) memoranda

European Convention on Human Rights (ECHR) memoranda relating to the Economic Crime and Corporate Transparency Bill:

ECHR memorandum: Parts 1-3 Economic Crime and Corporate Transparency Bill: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1105845/ECHR_Memorandum_for_Parts_1-3_Economic_Crime_and_Corporate_Transparency_Bill__BEIS_components_.pdf

ECHR memorandum: Parts 4-5 Economic Crime and Corporate Transparency Bill: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1105849/ECHR_Memorandum_for_Parts_4-5_ECCT_Bill__Home_Office_MoJ_SFO_.pdf

Main page to European Convention on Human Rights (ECHR): https://www.gov.uk/government/publications/economic-crime-and-corporate-transparency-bill-2022-echr-memoranda


Economic Crime and Corporate Transparency Bill 2022 – Document Collection

Main page for overarching documents (fact sheets, impact assessments and ECHR memoranda) that relate to the Economic Crime and Corporate Transparency Bill… See the links here: https://www.gov.uk/government/collections/economic-crime-and-corporate-transparency-bill-2022


Economic Crime and Corporate Transparency Bill – Volume 719: debated on Thursday 22 September 2022
The Secretary of State for the Home Department, Suella Braverman.

The Government are today introducing the Economic Crime and Corporate Transparency Bill, as committed to in the Queen’s Speech at the start of this parliamentary Session. Building on the recently enacted Economic Crime (Transparency and Enforcement) Act 2022, the measures in this new, significant Bill enable us to bear down further on kleptocrats, criminals and terrorists who abuse our open economy, strengthening the UK’s reputation as a place where legitimate business can thrive while driving dirty money out of the UK.

The UK is at the forefront of global efforts to tackle illicit finance and economic crime… Read the all the statement here: https://hansard.parliament.uk/Commons/2022-09-22/debates/22092219000013/EconomicCrimeAndCorporateTransparencyBill


Economic Crime and Corporate Transparency Bill – Main Parliament page

Main page for the Economic Crime and Corporate Transparency Bill, including details, news, stages and publications… Read the all the details here: https://bills.parliament.uk/bills/3339

Economic Crime and Corporate Transparency Bill, explanatory notes: https://publications.parliament.uk/pa/bills/cbill/58-03/0154/220154.pdf

 

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Round Up: U.S. Releases Comprehensive Framework for Responsible Development of Digital Assets

White House Releases First-Ever Comprehensive Framework for Responsible Development of Digital Assets

The digital assets market has grown significantly in recent years. Millions of people globally, including 16% of adult Americans, have purchased digital assets—which reached a market capitalization of $3 trillion globally last November. Digital assets present potential opportunities to reinforce U.S. leadership in the global financial system and remain at the technological frontier.  But they also pose real risks as evidenced by recent events in crypto markets. The May crash of a so-called stablecoin and the subsequent wave of insolvencies wiped out over $600 billion of investor and consumer funds.

President Biden’s March 9 Executive Order (EO) on Ensuring Responsible Development of Digital Assets outlined the first whole-of-government approach to addressing the risks and harnessing the potential benefits of digital assets and their underlying technology. Over the past six months, agencies across the government have worked together to develop frameworks and policy recommendations that advance the six key priorities identified in the EO: consumer and investor protection; promoting financial stability; countering illicit finance; U.S. leadership in the global financial system and economic competitiveness; financial inclusion; and responsible innovation… Read the full press release here: https://www.whitehouse.gov/briefing-room/statements-releases/2022/09/16/fact-sheet-white-house-releases-first-ever-comprehensive-framework-for-responsible-development-of-digital-assets/

Statement by NEC Director Brian Deese and National Security Advisor Jake Sullivan on Digital Assets Framework

At the direction of President Biden and after 180 days of determined work across the Biden-Harris administration, we are releasing the first-ever comprehensive federal digital assets framework– positioning us to keep playing a leading role in the innovation and governance of the digital assets ecosystem at home and abroad and in a way that protects consumers, is consistent with our democratic values, and advances U.S. global competitiveness.

First, consistent with the President’s directive to place the “highest urgency” on research and development of a U.S. central bank digital currency (CBDC), the Administration encourages the Federal Reserve to continue its research and experimentation. We will also launch an interagency working group to support Federal Reserve efforts by the considering policy implications of a potential CBDC, especially for our national security. The leadership of the Federal Reserve, the National Economic Council, the National Security Council, the Office of Science and Technology Policy, the Treasury Department, and other agencies as appropriate, will meet regularly to discuss updates and progress. Second, the Administration will execute a comprehensive action plan with priority steps to mitigate key risks of cryptocurrencies—among others, money laundering and financing for terrorism… Read the full statement here: https://www.whitehouse.gov/briefing-room/statements-releases/2022/09/16/statement-by-nec-director-brian-deese-and-national-security-advisor-jake-sullivan-on-digital-assets-framework/

Background Press Call by Senior Administration Officials on the First-Ever Comprehensive Framework for Responsible Development of Digital Assets

MODERATOR:  Thank you, everyone, and thanks for joining.  Today we’re doing a press call on the new Comprehensive Framework for Responsible Development of Digital Assets.

The first part of the call is on the record so we’re going to go ahead and get that started.  And I’m going to turn it over to Director of the National Economic Council Brian Deese.  Over to you.

MR. DEESE:  Thanks, and thank you all for joining here today.  I’ll be brief at the top and them I’m going to turn it over to my colleagues, Secretary Yellen and Director Nelson.

Just to start, the bottom line here is that the responsible development of digital assets is vital for American interests, from the well-being of consumers and investors to the safety and stability of our financial system, and for our financial and technological leadership around the world.

And we’ve seen in recent months substantial turmoil in cryptocurrency markets, and these events really highlight how, without proper oversight, cryptocurrencies risk harming everyday American’s financial stability and our national security.  And it is why this administration believes that now more than ever prudent regulation of cryptocurrencies is needed if digital assets are going to play a role that we believe they can in fostering innovation and supporting our economic and technological competitiveness… Read the full press briefing here: https://www.whitehouse.gov/briefing-room/press-briefings/2022/09/16/background-press-call-by-senior-administration-officials-on-the-first-ever-comprehensive-framework-for-responsible-development-of-digital-assets/

Statement from Secretary of the Treasury Janet L. Yellen on the Release of Reports on Digital Assets

The U.S. Department of the Treasury today published three reports pursuant to Sections 4, 5 and 7 of President Joe Biden’s Executive Order 14067 on “Ensuring Responsible Development of Digital Assets.” The reports address the future of money and payment systems, consumer and investor protection and illicit finance risks.

“Innovation is one of the hallmarks of a vibrant financial system and economy.  But as we have learned painfully from the past, innovation without appropriately addressing the impact of these developments can result in significant disruptions and harm to the financial system and individuals, especially our more vulnerable populations. The reports clearly identify the real challenges and risks of digital assets used for financial services.  At the same time, if these risks are mitigated, digital assets and other emerging technologies could offer significant opportunities. These reports and their recommendations provide a strong foundation for policymakers as we work to realize the potential benefits of digital assets and to mitigate and minimize the risks.”… Read the full statement here: https://home.treasury.gov/news/press-releases/jy0956

The reports and their recommendations can be viewed at the following links:

Section 4 – The Future of Money and Payments: https://home.treasury.gov/system/files/136/Future-of-Money-and-Payments.pdf

Section 5 – Implications for Consumers, Investors, and Businesses: https://home.treasury.gov/system/files/136/CryptoAsset_EO5.pdf

Section 7 – Action Plan to Address Illicit Financing Risks of Digital Assets: https://home.treasury.gov/system/files/136/Digital-Asset-Action-Plan.pdf

Justice Department Announces Report on Digital Assets and Launches Nationwide Network

The Department of Justice today announced significant actions regarding digital assets, including the public release of its report, pursuant to the President’s March 9 Executive Order on Ensuring Responsible Development of Digital Assets,  on The Role of Law Enforcement in Detecting, Investigating, and Prosecuting Criminal Activity Related to Digital Assets; and the establishment of the nationwide Digital Asset Coordinator (DAC) Network, in furtherance of the department’s efforts to combat the growing threat posed by the illicit use of digital assets to the American public.

“As digital assets play a growing role in our global financial system, we must work in tandem with departments and agencies across government to prevent and disrupt the exploitation of these technologies to facilitate crime and undermine our national security,” said Attorney General Merrick B. Garland. “The efforts announced today reflect the commitment of the Justice Department and our law enforcement and regulatory partners to advancing the responsible development of digital assets, protecting the public from criminal actors in this ecosystem, and meeting the unique challenges these technologies pose.”… Read the full press release here: https://www.justice.gov/opa/pr/justice-department-announces-report-digital-assets-and-launches-nationwide-network

A link to the report, The Role of Law Enforcement in Detecting, Investigating, And Prosecuting Criminal Activity Related to Digital Assets, is here: https://www.justice.gov/ag/page/file/1535236/download

Technical Possibilities for a U.S. Central Bank Digital Currency

President Biden often summarizes his vision for America in one word: Possibilities. A “digital dollar” may seem far-fetched, but modern technology could make it a real possibility.

A United States central bank digital currency (CBDC) would be a digital form of the U.S. dollar. While the U.S. has not yet decided whether it will pursue a CBDC, the U.S. has been closely examining the implications of, and options for, issuing a CBDC. If the U.S. pursued a CBDC, there could be many possible benefits, such as facilitating efficient and low-cost transactions, fostering greater access to the financial system, boosting economic growth, and supporting the continued centrality of the U.S. within the international financial system. However, a U.S. CBDC could also introduce a variety of risks, as it might affect everything ranging from the stability of the financial system to the protection of sensitive data.

Notably, these benefits and risks might vary significantly based on how the CBDC system is designed and deployed. That is why Executive Order 14067, Ensuring Responsible Development of Digital Assets, placed the highest urgency on research and development efforts into the potential design and deployment options of a U.S. CBDC. The Executive Order directed the Office of Science and Technology Policy (OSTP), in consultation with other Federal departments and agencies, to submit to the President a technical evaluation for a potential U.S. CBDC system.

Today, OSTP is publishing its report, Technical Evaluation for a U.S. Central Bank Digital Currency System, which lays out policy objectives for a potential U.S. CBDC system and analyzes key technical design choices for a U.S. CBDC system. The report also estimates the technical feasibility of building a CBDC minimum viable product and describes how a U.S. CBDC system might affect Federal operations. The report makes recommendations on how to prepare the Federal Government for a U.S. CBDC system. Importantly, the report does not make any assessments or recommendations about whether the U.S. should pursue a CBDC, nor does it make any decisions regarding particular design choices for a potential U.S. CBDC system… Read the full briefing here: https://www.whitehouse.gov/ostp/news-updates/2022/09/16/technical-possibilities-for-a-u-s-central-bank-digital-currency/

A link to the report, Technical Evaluation for a U.S. Central Bank Digital Currency System, is here: https://www.whitehouse.gov/wp-content/uploads/2022/09/09-2022-Technical-Evaluation-US-CBDC-System.pdf

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The Uber Files – Live Aggregated News

This is a live page. Last updated: 24 Jul 2022 – 5:34pm (UK Time)

Image credit: ICIJ

This is The Laundry’s ‘live’ aggregated news page for the Uber Files. The page is updated regularly with new links to content when it is published by various outlets.


THE GUARDIAN


ICIJ

(more…)

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Book Review: The Betrayal by Robert Mazur

Going after Pablo Escobar’s Medellín Cartel wasn’t enough for Robert Mazur, he went and done it again when he went after the Cali Cartel, headed up by the Orejuela brothers (Gilberto and Miguel) and their partners José Santacruz Londoño and Hélmer Herrera – only this time the stakes were even higher! 

After his first book The Infiltrator was turned into a movie of the same name, Robert Mazur or Bob (as he is known as) takes you on an even more unbelievable (but very true) journey as an undercover US agent, laundering money for some of the most dangerous people in the world. The Betrayal details that journey and it is one that those in law enforcement and anti-money laundering (AML) alike, along with the general public, need to know about – it affects everyone.

The epilogue of the book lets the reader know instantly that The Betrayal is definitely movie material but at the same time this is not make-believe and highlights the reality of the grave danger Bob put himself in more than once – those weren’t movie prop AK47s and MAC-10s loaded with blanks, those were real guns with bullets!

One of the standouts and recurring themes of the book is the focus on professional money launderers – for anyone in AML, this is something that should be of particular note.  Throughout the book Bob highlights some of the techniques used by the criminals to launder and move funds – one of the schemes described on pages 166-167 of the book was complex and (not to give the criminals credit but for lack of a better word) brilliant.

In between the information of the money laundering schemes, Bob also weaves in details of the characters that he had to deal with in his time undercover and these ranged from informants to people with political connections, not to mention some with access and ties to banks also – and these people were darted all around the world, highlighting that money laundering is truly a global affair.

Bob’s brilliance is not only in his quick thinking in difficult situations and in his dealing with criminals – ones that might get the average person killed for saying or doing the wrong thing if they sniffed something was out of place or character – but also his integrity.  With the amounts of money that Bob dealt with and the information he had access to, a lesser man may have ran off with the money a long time ago and lived out a comfortable life but Bob is somebody with the utmost of integrity and it really comes across not only in The Betrayal but The Infiltrator before it.

The Betrayal is a page turner for sure and you won’t want to put it down until it is finished – you will understand exactly why it was called The Betrayal and why that mattered.  What makes the book even more interesting is right at the end – Bob takes it to the next level but we might have to wait for a third instalment from Bob for that.  In the meantime The Betrayal is a ‘must read’ for all – if you haven’t bought it already go and buy The Betrayal now, you won’t be disappointed.

 

Links to buy The Betrayal are here: https://iconbooks.com/ib-title/the-betrayal/ 

Robert Mazur also offers speaking and consulting services.  More information is available on his official website here: https://www.robertmazur.com 

 

 

© 2022 The Laundry.  All Rights Reserved.

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The FinCEN and OCC fine USAA Federal Savings Bank for anti-money laundering failings

FinCEN Announces $140 Million Civil Money Penalty against USAA Federal Savings Bank for Violations of the Banking Secrecy Act

The Financial Crimes Enforcement Network (FinCEN) today announced that it has assessed a $140 million civil money penalty against USAA Federal Savings Bank (USAA FSB) for willful violations of the Bank Secrecy Act (BSA) and its implementing regulations.

Specifically, USAA FSB admitted that it willfully failed to implement and maintain an anti‑money laundering (AML) program that met the minimum requirements of the BSA from at least January 2016 through April 2021.  USAA FSB also admitted that it willfully failed to accurately and timely report thousands of suspicious transactions to FinCEN involving suspicious financial activity by its customers, including customers using personal accounts for apparent criminal activity.

“As its customer base and revenue grew in recent years, USAA FSB willfully failed to ensure that its compliance program kept pace, resulting in millions of dollars in suspicious transactions flowing through the U.S. financial system without appropriate reporting,” said FinCEN’s Acting Director Himamauli Das. “USAA FSB also received ample notice and opportunity to remediate its inadequate AML program, but repeatedly failed to do so. Today’s action signals that growth and compliance must be paired, and AML program deficiencies, especially deficiencies identified by federal regulators, must be promptly and effectively addressed”… Read the full press release here: https://www.fincen.gov/news/news-releases/fincen-announces-140-million-civil-money-penalty-against-usaa-federal-savings

The full FinCEN Consent Order imposing Civil Money Penalty can be found here: https://www.fincen.gov/sites/default/files/enforcement_action/2022-03-18/USAA%20Consent%20Order_Final%20508%20(2).pdf

OCC Assesses $60 Million Civil Money Penalty, Issues Cease and Desist Order Against USAA

The Office of the Comptroller of the Currency (OCC) today assessed a $60 million civil money penalty against USAA, Federal Savings Bank, for violations of the OCC’s Bank Secrecy Act regulations. The OCC also issued a Cease and Desist Order against the bank based on its failure to establish and maintain an effective Bank Secrecy Act/Anti Money Laundering (BSA/AML) program.

The OCC found that USAA, Federal Savings Bank, failed to adopt and implement a BSA/AML program that adequately covered the requirements of the Bank Secrecy Act and its implementing regulations. Such deficiencies resulted in the bank’s failure to file timely suspicious activity reports. The bank also failed to correct BSA/AML internal control problems that the OCC had previously identified and reported to it… Read the full press release here: https://occ.gov/news-issuances/news-releases/2022/nr-occ-2022-25.html

The full OCC Civil Money Penalty can be found here: https://www.occ.gov/static/enforcement-actions/ea2022-009.pdf

The full OCC Consent Order can be found here: https://www.occ.gov/static/enforcement-actions/ea2022-008.pdf

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Round Up: FinCEN Announces Actions to Support REPO Multilateral Task Force and Ongoing U.S. Government Efforts to Combat Foreign Government Corruption

FinCEN Takes Steps to Increase Information Sharing with Task Force Countries, Enhances Engagement with Financial Institutions, and Issues a New Alert on Russian Oligarchs, Elites, and Their Family Members

The Financial Crimes Enforcement Network (FinCEN) is announcing its efforts to support the multilateral Russian Elites, Proxies, and Oligarchs (REPO) Task Force, announced earlier today by the U.S. Department of the Treasury and the U.S. Department of Justice. The task force aims to deny and disrupt illicit actors’ ability to deceptively access the international financial system and conduct economic activity. FinCEN is supporting Treasury’s efforts to boost cooperation and intelligence sharing by agreeing to increase information sharing with relevant authorities in task force member countries. FinCEN is also issuing a FinCEN Alert, which highlights the importance of financial institutions identifying and quickly reporting suspicious transactions by sanctioned Russian elites and their proxies that involve real estate, luxury goods, and high-value assets.

“Financial intelligence is fundamental to U.S. bilateral and multilateral efforts to trace, freeze, and seize the corrupt gains of Russian elites and their enablers,” said FinCEN Acting Director Himamauli Das. “It is critical that financial institutions increase their awareness of indicators of potential Russian sanctions evasion and that governments work together to collect and share information in this rapidly evolving crisis. We appreciate the collaboration of our financial institution and government partners in this effort.”… Read the full press release here: https://www.fincen.gov/news/news-releases/fincen-announces-actions-support-repo-multilateral-task-force-and-ongoing-us

Russia-Related Illicit Finance and Sanctions Financial Intelligence Unit Working Group Statement of Intent

We, the Financial Intelligence Units of Australia, Canada, France, Germany, Italy, Japan, the Netherlands, New Zealand, the United Kingdom, and the United States, referred to herein as Working Group Members issue this statement of intent:

Recalling statements made by governments around the world, including Australia, Canada, France, Germany, Italy, Japan, New Zealand, the United Kingdom, the United States of America, and the High Representative of the European Union, condemning Russia’s unprovoked and unjustifiable war of choice against Ukraine, enabled by the Belarussian government (“the threat”);

Recognizing that the respective governments of the Working Group Members and the European Union have imposed several rounds of far-reaching economic and financial sanctions, and committed to imposing further sanctions in response to the threatRead the full statement here: https://www.fincen.gov/news/news-releases/russia-related-illicit-finance-and-sanctions-fiu-working-group-statement-intent

FinCEN Alert on Real Estate, Luxury Goods, and Other High- Value Assets Involving Russian Elites, Oligarchs, and their Family Members

The Financial Crimes Enforcement Network (FinCEN) is issuing a second alert on the importance of identifying and quickly reporting suspicious transactions involving real estate, luxury goods, and other high-value assets of sanctioned Russian elites and their family members and those through which they act (collectively, “sanctioned Russian elites and their proxies”). This alert provides select red flags4 to assist financial institutions in identifying suspicious transactions, and reminds financial institutions of their Bank Secrecy Act (BSA) reporting obligations. This alert also complements other recent coordinated U.S. Government actions related to luxury goods, and highlights the establishment of U.S. and international task forces and programs designed to freeze and seize the assets of sanctioned Russian actors… Read the full alert here: https://www.fincen.gov/sites/default/files/2022-03/FinCEN%20Alert%20Russian%20Elites%20High%20Value%20Assets_508%20FINAL.pdf

Additional Press Releases:
U.S. Departments of Treasury and Justice Launch Multilateral Russian Oligarch Task Force

Secretary of the Treasury Janet L. Yellen and Attorney General Merrick B. Garland today met virtually with representatives from Australia, Canada, Germany, France, Italy, Japan, the United Kingdom, and the European Commission, to launch the Russian Elites, Proxies, and Oligarchs (REPO) multilateral task force.  The task force was first announced by leaders on February 26.

The task force, consisting of Finance Ministry and Justice or Home Ministry in each member jurisdiction, each committed to using their respective authorities in concert with other appropriate ministries to collect and share information to take concrete actions, including sanctions, asset freezing, and civil and criminal asset seizure, and criminal prosecution.

Cooperation between the U.S. Government and foreign partners has already yielded notable successes.  In the last three weeks alone, information provided by U.S. law enforcement to foreign partners has contributed to the restraint of multiple vessels controlled by sanctioned individuals and entities.  Collectively, these vessels are estimated to be worth hundreds of millions of dollars.

“Our sanctions, trade restrictions, and other measures have already imposed significant costs on Russia, its leadership, and those who enabled Putin’s unprovoked invasion into Ukraine,” said Secretary Yellen. “This multilateral task force will raise those costs even more, by galvanizing coordinated efforts to freeze and seize assets of these individuals in jurisdictions around the world and deny safe haven for their ill-gotten gains.”… Read the press release here: https://home.treasury.gov/news/press-releases/jy0659

U.S. Departments of Justice and Treasury Launch Multilateral Russian Oligarch Task Force

…The REPO task force members discussed ways to ensure the effective, coordinated implementation of the group’s collective financial sanctions relating to Russia, as well as assistance to other nations to locate and freeze assets located within their jurisdictions. Participants also discussed the need to preserve evidence and determine whether these frozen assets, or other assets linked to these sanctioned individuals or entities, are subject to forfeiture. Finally, the task force discussed ways to bring to justice enablers and gatekeepers who have facilitated the movement of sanctioned assets or other illicit funds.

The Department of Justice’s newly launched Task Force KleptoCapture, which the Attorney General established on March 2, will help support this international effort. Task Force KleptoCapture is designed to help deploy U.S. prosecutorial and law enforcement resources to identify sanctions evasion and related criminal conduct… Read the press release here: https://www.justice.gov/opa/pr/us-departments-justice-and-treasury-launch-multilateral-russian-oligarch-task-force

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The FinCrime BookClub: Updated Regularly

Welcome to the ‘FinCrime BookClub’ – An initiative between FINTRAIL and The Laundry.

The FinCrime BookClub sessions are online and discuss a different FinCrime-related book each month.

Hosted by Maya Braine of FINTRAIL and The Laundry’s Dev Odedra, the FinCrime BookClub is not a webinar nor is it a podcast – the audience can get involved in the discussions too.


In the next session we will be discussing My Italians: True Stories of Crime and Courage by Roberto Saviano.

REGISTER AND JOIN THE NEXT SESSION FOR FREE ONLINE AT: https://app.livestorm.co/fintech-fincrime-exchange-fintrail/fintrail-and-the-laundry-april-fincrime-bookclub


Future FinCrime BookClub sessions:
  • May 2022 – TBA
  • June 2022 – TBA
  • July 2022 – TBA
  • August 2022 – TBA
  • September 2022 – TBA
  • October 2022 – TBA
  • November 2022 – TBA
  • December 2022 – TBA
Previous FinCrime BookClub sessions:
  • March 2022 – Putin’s People by Catherine Belton
  • February 2022 – Narconomics by Tom Wainwright

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Round up of FATF Plenary from 2-4 March 2022

Outcomes FATF Plenary, 2-4 March 2022

Delegates representing the 206 members of the Global Network and observer organisations, such as the IMF, the United Nations and the World Bank, met for four days of meetings. The event took place in a hybrid form with the majority of participants able to travel to meet in person in Paris due to gradual easing of COVID-19 related restrictions in many countries.

FATF Members discussed the tragic developments and the loss of life in Ukraine and issued a statement that expresses FATF’s grave concern about the invasion’s impact on the money laundering, terrorist financing and proliferation financing risk environment as well as the integrity of the financial system, the broader economy and safety and security… Read in full here: https://www.fatf-gafi.org/publications/fatfgeneral/documents/outcomes-fatf-plenary-march-2022.html

FATF Public Statement on the Situation in Ukraine

The FATF expresses deep sorrow due to the loss of people’s lives in connection with the tragic developments in Ukraine. 

At the heart of the work of the FATF are the principles of international cooperation, dialogue and mutual respect among countries. In light of the Russian Federation’s military invasion of Ukraine, the FATF, as the global standard setting body for combating money laundering, terrorist financing and proliferation financing, expresses its grave concern about the invasion’s impact on the money laundering, terrorist financing and proliferation financing risk environment as well as the integrity of the financial system, the broader economy and safety and security… Read in full here: https://www.fatf-gafi.org/publications/fatfgeneral/documents/ukraine-2022.html

Jurisdictions under Increased Monitoring – March 2022

Jurisdictions under increased monitoring are actively working with the FATF to address strategic deficiencies in their regimes to counter money laundering, terrorist financing, and proliferation financing. When the FATF places a jurisdiction under increased monitoring, it means the country has committed to resolve swiftly the identified strategic deficiencies within agreed timeframes and is subject to increased monitoring. This list is often externally referred to as the “grey list”… Read in full here: https://www.fatf-gafi.org/publications/high-risk-and-other-monitored-jurisdictions/documents/increased-monitoring-march-2022.html

Public Statement on revisions to R.24

The Financial Action Task Force today adopted amendments to Recommendation 24 and its Interpretive Note which require countries to prevent the misuse of legal persons for money laundering or terrorist financing and to ensure that there is adequate, accurate and up-to-date information on the beneficial ownership and control of legal persons.

These amendments represent the outcomes of the two years of work in reviewing the standards. They strengthen the international standards on beneficial ownership of legal persons, to ensure greater transparency about the ultimate ownership and control of legal persons and to mitigate the risks of their misuse. This will significantly strengthen the requirements for beneficial ownership transparency globally, while retaining a degree of flexibility for individual countries to go further in refining individual regimes… Read in full here: https://www.fatf-gafi.org/publications/fatfrecommendations/documents/r24-statement-march-2022.html

Public Consultation on the FATF Risk-Based Guidance to the Real Estate Sector

The Financial Action Task Force (FATF) is considering proposals for the update of the FATF Risk Based Guidance to the Real Estate Sector.

In June 2021, the FATF Plenary agreed to review the guidance and set out a Project Team of FATF delegations and private sector representatives to consider the necessary changes and gather relevant information.

The Guidance paper proposed for public consultation reflects the work and discussion of the Project Team, as well as members’ input of relevant case studies and data on the real estate sector’s AML/CFT supervision and practice.

The FATF is consulting all interested stakeholders in advance of finalising the Guidance… Read in full here: https://www.fatf-gafi.org/publications/fatfrecommendations/documents/public-consultation-guidance-real-estate.html

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The Ericsson List – Live Aggregated News

This is a live page. Last updated: 21 Apr 2022 – 7:23pm (UK Time)

Image Credit: ICIJ

This is The Laundry’s ‘live’ aggregated news page for the Ericsson List. The page is updated regularly with new links to content when it is published by various outlets.


ICIJ


OTHER MEDIA RELEASES


This webpage features regular updates when new stories are published.

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Suisse Secrets – Live Aggregated News

This is a live page. Last updated: 14 Mar 2022 – 8:27pm (UK Time)

Image Credit: OCCRP

This is The Laundry’s ‘live’ aggregated news page for Suisse Secrets. The page is updated regularly with new links to content when it is published by various outlets.


OCCRP


THE GUARDIAN


OTHER MEDIA RELEASES


This webpage features regular updates when new stories are published.

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The FinCrime BookClub: 25 Feb 2022 (12.30pm to 1.30pm UK time) – Narconomics: How to Run a Drug Cartel

FINTRAIL and The Laundry are excited to announce the launch of the ‘FinCrime BookClub’.  Hosted by Maya Braine of FINTRAIL and The Laundry’s Dev Odedra, the club is open to everybody, where we will be talking about different FinCrime books.

In the first meeting we will be looking at Narconomics: How to Run a Drug Cartel by Tom Wainwright.


REGISTER AND JOIN THE SESSION FOR FREE ONLINE AT: https://us02web.zoom.us/meeting/register/tZYkcuyoqzgrGdNaN-lnDStZHObcjDp9wI0x


 

 

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European Commission proposes to end the misuse of shell entities for tax purposes within the EU

Commission proposes to end the misuse of shell entities for tax purposes within the EU

The proposal should ensure that entities in the European Union that have no or minimal economic activity are unable to benefit from any tax advantages and do not place any financial burden on taxpayers.  This will also protect the level playing field for the vast majority of European businesses, who are key to the EU’s recovery, and will ensure that ordinary taxpayers do not suffer additional financial burden due to those that try to avoid paying their fair share.

While shell, or letterbox, entities can serve useful commercial and business functions, some international groups and even individuals abuse them for aggressive tax planning or tax evasion purposes… Read the full press release here: https://ec.europa.eu/taxation_customs/news/commission-proposes-end-misuse-shell-entities-tax-purposes-within-eu-2021-12-22_en


Questions and Answers on the Commission’s proposal to end the misuse of shell entities

What did the European Commission propose? Why are shell companies a problem? What will the new rules do? What are the standards and indicators used to determine if a company has real economic activity?  The question and answers page includes responses to these questions plus much more… Read the full Questions and Answers here: https://ec.europa.eu/commission/presscorner/detail/en/qanda_21_6968


Factsheet

The factsheet is a short one-pager with a couple of quick questions to consider… Read the Factsheet here: https://ec.europa.eu/taxation_customs/system/files/2021-12/Factsheet%20Unshell.pdf


Full text of proposal for shell companies

The full text of the proposal for a Council Directive laying down rules to prevent the misuse of shell entities for tax purposes and amending Directive 2011/16/EU can be found here: https://ec.europa.eu/taxation_customs/system/files/2021-12/COM_2021_565_1_EN_ACT_part1_v7.pdf


Impact assessment report

The impact assessment report to accompany the proposal for a Council Directive laying down rules to prevent the misuse of shell entities for tax purposes and amending Directive 2011/16/EU can be found here: https://ec.europa.eu/taxation_customs/system/files/2021-12/Impact%20Assessment%20-%20Council%20Directive%20laying%20down%20rules%20to%20prevent%20the%20misuse%20of%20shell%20entities%20for%20tax%20purposes%20%28UNSHELL%29.pdf


Unshell

On 22 December 2021, the European Commission presented a key initiative to fight against the misuse of shell entities for improper tax purposes. The Unshell proposal should ensure that entities in the European Union that have no or minimal economic activity are unable to benefit from any tax advantages and do not place any financial burden on taxpayers. This will also protect the level playing field for the vast majority of European businesses, who are key to the EU’s recovery, and will ensure that ordinary taxpayers do not suffer additional financial burden due to those that try to avoid paying their fair share…Read the full text here: https://ec.europa.eu/taxation_customs/taxation-1/unshell_en


Minimum corporate taxation

On 22 December 2021, the European Commission has proposed a Directive ensuring a minimum effective tax rate for the global activities of large multinational groups. The proposal delivers on the EU’s pledge to move extremely swiftly and be among the first to implement the recent historic global tax reform agreement, which aims to bring fairness, transparency and stability to the international corporate tax framework.

The proposal follows closely the international agreement and sets out how the principles of the 15% effective tax rate – agreed by 137 countries – will be applied in practice within the EU. It includes a common set of rules on how to calculate this effective tax rate, so that it is properly and consistently applied across the EU…Read the full text here: https://ec.europa.eu/taxation_customs/taxation-1/minimum-corporate-taxation_en

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Round up of NatWest’s fine of £264.8 million for anti-money laundering failures

FCA Press Release: NatWest Fined £264.8 million for Anti-Money Laundering Failures

National Westminster Bank Plc (NatWest) was today fined £264,772,619.95 following convictions for three offences of failing to comply with money laundering regulations… The charges covered NatWest’s failure to properly monitor the activity of a commercial customer, Fowler Oldfield, a jewellery business based in Bradford, between 8 November 2012 to 23 June 2016. When taking on the customer, NatWest initially understood it would not handle cash from the Fowler Oldfield business. However, over the course of the customer relationship approximately £365m was deposited with the bank, of which around £264m was in cash…. Read the full press release here: https://www.fca.org.uk/news/press-releases/natwest-fined-264.8million-anti-money-laundering-failures


Southwark Crown Court: Sentencing Remarks of Mrs Justice Cockerill

For the offences of:

    1. Failing to comply with the requirement to conduct ongoing monitoring of a business relationship contrary to regulations 8(1) and 45(1) of the Money Laundering Regulations 2007.
    2. Failing to comply with the requirement to determine the extent of ongoing monitoring on a risk-sensitive basis and be able to demonstrate to its supervisory authority that the extent of the ongoing monitoring is appropriate in view of the risks of money laundering and terrorist financing contrary to regulations 8(3) and 45(1) of the Money Laundering Regulations 2007.
    3. Failing to apply enhanced ongoing monitoring to its business relationship with Fowler Oldfield, in a situation which by its nature presented a higher risk of money laundering and terrorist financing contrary to regulations 14(1) and 45(1) of the Money Laundering Regulations 2007.

I sentence NatWest as follows:

    1. A confiscation Order in the amount of £460,047.04
    2. A fine in the amount of £264,772,619.95;
    3. Payment of the costs of the FCA in the amount of £4,297,466.27.

Read the full sentencing remarks here: https://www.judiciary.uk/wp-content/uploads/2021/12/FCA-v-Natwest-Sentencing-remarks-131221.pdf


Statement of Facts

This is a Statement of Facts, agreed between the Financial Conduct Authority (“FCA”) and National Westminster Bank Plc (“NatWest”, “the Bank”) about the commission by NatWest of offences of failing to comply with the Money Laundering Regulations 2007 (“MLR 2007”). It relates to the draft indictment accompanying it.

During the period 8 November 2012 to 23 June 2016 (the “Indictment Period”), NatWest was a ‘credit institution’ under the MLR 2007. As such, the Bank was a ‘relevant person’ required to adhere to certain requirements designed to prevent it from being used for money laundering purposes. The MLR 2007 included requirements to carry out ongoing monitoring of business relationships (Regulation 8(1)), to do so on a risk-sensitive basis (Regulation 8(3)) and to carry out enhanced monitoring in high-risk cases (Regulation 14). Failing to comply with each of those requirements constituted a criminal offence by virtue of Regulation 45(1). Whether or not a relevant person has committed an offence is to be considered in light of their compliance with relevant approved guidance, namely that issued by the Joint Money Laundering Steering Group (the “JMLSG”)… Read the full statement of facts here: https://www.fca.org.uk/publication/corporate/agreed-statement-facts-fca-national-westminster-bank.pdf


Previous FCA Press Releases

07/10/2021 – ‘NatWest Plc pleads guilty in criminal proceedings’: https://www.fca.org.uk/news/press-releases/natwest-plc-pleads-guilty-criminal-proceedings

16/03/2021 – ‘FCA starts criminal proceedings against NatWest Plc’: https://www.fca.org.uk/news/press-releases/fca-starts-criminal-proceedings-against-natwest-plc

 

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Breakdown of First-ever Global Report on Corruption in Sport: Illegal bets add up to 1.7 trillion dollars each year

 

Illegal Bets Add Up To 1.7 Trillion Dollars Each Year: New UN Report

The publication, the first-ever Global Report on Corruption in Sport, asks for an urgent, unified and international response to fight malpractice and fraud across the sector. The ground-breaking new report was issued to coincide with International Anti-Corruption Day, marked each 9 December.

According to the UN Agency, it reveals a staggering scale, manifestation, and complexity of corruption and organized crime in sport at the global, regional, and national levels.”Read the full release here: https://news.un.org/en/story/2021/12/1107472

UNODC Global Report on Corruption in Sport

Offering for the first time a truly comprehensive look at corruption in sport, the Global Report on Corruption in Sport reveals the staggering scale, manifestation, and complexity of corruption and criminal networks in sport at international and national levels…See overview of report here: https://www.unodc.org/unodc/en/safeguardingsport/grcs/index.html

 

Full Report and Breakdown

Full Global Report on Corruption in Sport – Download the full report here: https://www.unodc.org/res/safeguardingsport/grcs/index_html/SPORTS_CORRUPTION_2021_FULL_REPORT.pdf


Executive summary – Download here: https://www.unodc.org/res/safeguardingsport/grcs/executive-summary_html/SPORTS_CORRUPTION_2021_EXSUM.pdf

Section 1: Evolutions in sport related to corruption – Download here: https://www.unodc.org/res/safeguardingsport/grcs/section-1_html/SPORTS_CORRUPTION_2021_S1.pdf

Section 2: Applying the United Nations Convention against Corruption to sport – Download here: https://www.unodc.org/res/safeguardingsport/grcs/section-2_html/SPORTS_CORRUPTION_2021_S2.pdf

Section 3: Overview of international initiatives to tackle corruption in sport – Download here: https://www.unodc.org/res/safeguardingsport/grcs/section-3_html/SPORTS_CORRUPTION_2021_S3.pdf

Section 4: Detection and reporting corruption in sport – Download here: https://www.unodc.org/res/safeguardingsport/grcs/section-4_html/SPORTS_CORRUPTION_2021_S4.pdf

Section 5: Gender and corruption in sport – Download here: https://www.unodc.org/res/safeguardingsport/grcs/section-5_html/SPORTS_CORRUPTION_2021_S5.pdf

Section 6: Organized crime and sport – Download here: https://www.unodc.org/res/safeguardingsport/grcs/section-6_html/SPORTS_CORRUPTION_2021_S6.pdf

Section 7: Corruption and abuse in sport – Download here: https://www.unodc.org/res/safeguardingsport/grcs/section-7_html/SPORTS_CORRUPTION_2021_S7.pdf

Section 8: Understanding the manipulation of sports competition – Download here: https://www.unodc.org/res/safeguardingsport/grcs/section-8_html/SPORTS_CORRUPTION_2021_S8.pdf

Section 9: Illegal betting and sport – Download here: https://www.unodc.org/res/safeguardingsport/grcs/section-9_html/SPORTS_CORRUPTION_2021_S9.pdf

Section 10: Major sport events and corruption – Download here: https://www.unodc.org/res/safeguardingsport/grcs/section-10_html/SPORTS_CORRUPTION_2021_S10.pdf

 

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Round Up: FinCEN Issues Proposed Rule for Beneficial Ownership Reporting to Counter Illicit Finance and Increase Transparency

Press Release: FinCEN Issues Proposed Rule for Beneficial Ownership Reporting to Counter Illicit Finance and Increase Transparency

The Financial Crimes Enforcement Network (FinCEN) today issued a Notice of Proposed Rulemaking (NPRM) to implement the beneficial ownership information reporting provisions of the Corporate Transparency Act (CTA). The proposed rule is designed to protect the U.S. financial system from illicit use and impede malign actors from abusing legal entities, like shell companies, to conceal proceeds of corrupt and criminal acts. Such abuses undermine U.S. national security, economic fairness, and the integrity of the U.S. financial system.

The proposed rule addresses, among other things, who must report beneficial ownership information, when they must report, and what information they must provide. Collecting this information and providing access to law enforcement, financial institutions, and other authorized users will diminish the ability of malign actors to hide, move, and enjoy the proceeds of illicit activities… Read the full press release here: https://www.fincen.gov/news/news-releases/fincen-issues-proposed-rule-beneficial-ownership-reporting-counter-illicit

Fact Sheet: Beneficial Ownership Information Reporting Notice of Proposed Rulemaking (NPRM)

Millions of corporations, limited liability companies, and other entities are formed within the United States each year. While such entities play an essential and legitimate role in the U.S. and global economies, they can also be used to facilitate illicit activity, such as corruption, and enable those who threaten U.S. national security to access and transact in the U.S. economy. Few jurisdictions in the United States require legal entities to disclose information about their beneficial owners—that is, the people who actually own or control a company—or the persons forming them. This creates opportunities for corrupt actors, criminals, and terrorists to remain anonymous while facilitating illicit activity through legal entities in the United States… Read the full fact sheet here: https://www.fincen.gov/news/news-releases/fact-sheet-beneficial-ownership-information-reporting-notice-proposed-rulemaking

Federal Register Entry: Beneficial Ownership Information Reporting Requirements

The document is scheduled to be published on 12/08/2021…. It will available at the following webpage: https://www.federalregister.gov/public-inspection/2021-26548/beneficial-ownership-information-reporting-requirements

A draft version is available for download here: https://public-inspection.federalregister.gov/2021-26548.pdf

 

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The Laundry Library

Welcome To The Laundry Library

Whether you want to increase your reading of financial crime books or just don’t know which book to read next, take a look at the book suggestions here. It’s simple:

  • -No clicking required – The Laundry doesn’t sell books nor refer you to outlets
  • -The book covers are in random order on purpose – you may come across an interesting book you hadn’t thought about reading before
  • -Bookmark the page and keep checking back – it is updated regularly with more books

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Round up of Major Dark Web Drug Bust – 150 arrests made and €26 Million ($31 Million) in cash seized

Image credit: Europol

EUROPOL: 150 Arrested In Dark Web Drug Bust As Police Seize €26 Million

Police forces across the world have arrested 150 alleged suspects involved in buying or selling illicit goods on the dark web as part of a coordinated international operation involving nine countries.

More than €26.7 million (USD 31 million) in cash and virtual currencies have been seized in this operation, as well as 234 kg of drugs and 45 firearms. The seized drugs include 152 kg of amphetamine, 27 kg of opioids and over 25 000 ecstasy pills…Read in full here: https://www.europol.europa.eu/newsroom/news/150-arrested-in-dark-web-drug-bust-police-seize-€26-million

EUROJUST: 150 arrested in dark web drug bust as police seize EUR 26 million

Police forces across the world have arrested 150 alleged suspects involved in buying or selling illicit goods on the dark web as part of a coordinated international operation involving nine countries. More than EUR 26.7 million (USD 31 million) in cash and virtual currencies have been seized in this operation, as well as 234 kg of drugs and 45 firearms. The seized drugs include 152 kg of amphetamine, 27 kg of opioids and over 25 000 ecstasy pills.

This operation, known as Dark HunTOR was composed of a series of separate but complementary actions in Australia, Bulgaria, France, Germany, Italy, the Netherlands, Switzerland, the United Kingdom and the United States, with coordination efforts led by Europol and Eurojust…Read in full here: https://www.eurojust.europa.eu/150-arrested-dark-web-drug-bust-police-seize-eur-26-million

NATIONAL CRIME AGENCY (NCA): International operation targets dark web drugs marketplace

Twenty-four people have been arrested in the UK in one of the largest ever international operations targeting a criminal dark web marketplace.

Operational activity over the last six months – coordinated by the National Crime Agency in collaboration with UK policing partners – also resulted in the seizure of over £220,000 in suspected criminal cash and bitcoin, and more than 50 kilos of cocaine, MDMA, cannabis, methamphetamine and ketamine.

The operation, known as Dark HunTOR, began when German authorities arrested the marketplace’s alleged operator earlier this year and gained access to the wider criminal infrastructure. This enabled officers to share intelligence packages with law enforcement agencies around the world on the site’s vendors and buyers…Read in full here: https://www.nationalcrimeagency.gov.uk/news/international-operation-targets-dark-web-drugs-marketplace

FEDERAL BUREAU OF INVESTIGATION (FBI): With Overdose Deaths at a Historic High, FBI and Partners Target Online Drug Markets

In a conference room space used by the partner agencies that form the Joint Criminal Opioid and Darknet Enforcement (JCODE) team, an FBI analyst is examining the online marketplaces that have made it possible for users to get potentially deadly drugs delivered to their doors.

These sites exist on the dark web or darknet, an area of the internet accessed through a specialized browser called Tor. Tor offers additional levels of privacy by obscuring the user’s IP address and encrypting information. But the markets themselves look like standard e-commerce sites, complete with pictures, customer reviews, and listings for not only drugs like cocaine and methamphetamine but what sellers claim are brand name prescription medications…Read in full here: https://www.fbi.gov/news/stories/fbi-and-partners-target-online-drug-markets-102621

DEPARTMENT OF JUSTICE (DOJ): International Law Enforcement Operation Targeting Opioid Traffickers on the Darknet Results in 150 Arrests Worldwide and the Seizure of Weapons, Drugs, and over $31 Million

Today, the Department of Justice, through the Joint Criminal Opioid and Darknet Enforcement (JCODE) team joined Europol to announce the results of Operation Dark HunTor, a coordinated international effort on three continents to disrupt opioid trafficking on the Darknet. The operation, which was conducted across the United States, Australia, and Europe, was a result of the continued partnership between JCODE and foreign law enforcement against the illegal sale of drugs and other illicit goods and services. Operation Dark HunTor builds on the success of last year’s Operation DisrupTor and the coordinated law enforcement takedown earlier this year of DarkMarket, the world’s then-largest illegal marketplace on the Darknet. At the time, German authorities arrested the marketplace’s alleged operator and seized the site’s infrastructure, providing investigators across the world with a trove of evidence…Read in full here: https://www.justice.gov/opa/pr/international-law-enforcement-operation-targeting-opioid-traffickers-darknet-results-150

DEPARTMENT OF JUSTICE (DOJ): Assistant Attorney General Kenneth A. Polite Jr. of the Criminal Division Delivers Remarks on Operation Dark HunTor

Operation Dark HunTor stands as our most recent victory in the global fight against cyber-enabled drug trafficking.  The online trafficking of opioids, particularly fentanyl, poses a lethal threat to not only the United States, but also to our European and Australian counterparts, and beyond. This is a global threat that requires a global response. Our communities now face the constant threat of relatively easy access to dangerous illicit drugs now being peddled not on a street corner but in cyber space. Operation Dark HunTor highlights both the magnitude of this lethal threat, and the significant efforts we are taking at the Department of Justice to address it…Read in full here: https://www.justice.gov/opa/speech/assistant-attorney-general-kenneth-polite-jr-criminal-division-delivers-remarks-operation

DEPARTMENT OF JUSTICE (DOJ): Deputy Attorney General Lisa O. Monaco Delivers Remarks on Operation Dark HunTor

We are here today to expose those who seek the shadows of the internet to peddle killer pills worldwide. Thanks to unprecedented international law enforcement collaboration — 150 Darknet drug traffickers have been arrested around the world — including 65 here in the Untied States.

Led by the Joint Criminal Opioid and Darknet Enforcement team, an international law enforcement partnership — also known as JCODE — Operation Dark HunTor spanned 10 months, three continents, and more than 12 international law enforcement agencies. The graphic you see on screen reflects what can be achieved through global cooperation — including the recovery of more than 500 pounds of illegal drugs, which contained enough fentanyl for more than four million lethal doses. This operation seized nearly $32 million in cash and virtual currencies — the largest JCODE seizure to date…Read in full here: https://www.justice.gov/opa/speech/deputy-attorney-general-lisa-o-monaco-delivers-remarks-operation-dark-huntor

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Round up of FATF Plenary from 19-21 October 2021

Outcomes FATF Plenary, 19-21 October 2021

Delegates representing the 206 members of the Global Network and observer organisations, such as the IMF, the United Nations and the World Bank met for three days of meetings.  After five completely virtual Plenary events due to the COVID-19 pandemic, this Plenary meeting took place in a hybrid format, allowing the limited number of delegates who could travel to meet face-to-face, while the remaining delegations connected virtually. Around the world, many countries are re-opening and focusing on rebuilding economies that have strained under the pressure of this unprecedented health crisis… Read in full here: https://www.fatf-gafi.org/publications/fatfgeneral/documents/outcomes-fatf-plenary-october-2021.html

FATF Public Statement on the Situation in Afghanistan

In light of recent events in Afghanistan, the FATF, as the global standard setting body for anti-money laundering and counter-terrorist financing, expresses its concern about the current and evolving money laundering and terrorist financing risk environment in the country.

The FATF affirms recent UN Security Council Resolutions on the situation in Afghanistan. In particular, UNSCR 2593 (2021) demands that Afghan territory not be used to threaten or attack any country or to shelter or train terrorists, or to plan or to finance terrorist acts… Read in full here: https://www.fatf-gafi.org/publications/fatfgeneral/documents/afghanistan-2021.html

FATF Public Statement on the Financing of ISIL, Al Qaeda and Affiliates

The threat of terrorism remains serious in many regions of the world. The FATF notes with grave concern a series of terrorist attacks recently in Afghanistan, Iraq and many other regions, including Africa and South Asia. These attacks, either claimed by ISIL (Da’esh) and its affiliated groups, or conducted by lone attackers inspired by them, have killed or injured hundreds, many of them innocent civilians. Meanwhile, Al Qaeda and other terrorist organisations continue to pose a serious threat to international stability, security and peace.

The territorial defeat of ISIL in 2019 has significantly impacted its ability to generate revenue. However, the group is still able to raise and receive funds, through legal and illegal sources, and maintains roughly USD 25-50 million in reserves… Read in full here: https://www.fatf-gafi.org/publications/fatfgeneral/documents/statement-isil-al-qaeda.html

Revisions to Recommendation 24 and its Interpretive Note – Public Consultation

The Financial Action Task Force (FATF) is considering proposals for amendments to Recommendation 24 and its Interpretive Note on the transparency and beneficial ownership of legal persons. Following a White Paper consultation in June-August 2021 on a number of key policy areas, the FATF has analysed the views received from various stakeholders in considering the potential amendments. These amendments seek to reinforce the Recommendation to ensure greater transparency about the beneficial ownership of legal persons, and take action to mitigate the risks… Read in full here: https://www.fatf-gafi.org/publications/fatfrecommendations/documents/public-consultation-r24.html and see the draft text of proposals for amendments here: https://www.fatf-gafi.org/media/fatf/documents/recommendations/pdfs/Pdf-file_R24-Beneficial-Ownership-Public-Consultation.pdf

Cross Border Payments – Survey Results on Implementation of the FATF Standards

Faster, cheaper, more transparent, and more inclusive cross-border payment services, that are safe and secure can facilitate economic growth, international trade, global development and financial inclusion.

Enhancing cross-border payments is a key priority of the G20. In October 2020, G20 Finance Ministers and Central Bank Governors endorsed the Roadmap for Enhancing Cross-border Payments, which comprises 19 Building Blocks… Read in full here: https://www.fatf-gafi.org/publications/fatfrecommendations/documents/cross-border-payments.html and see survey here: https://www.fatf-gafi.org/media/fatf/documents/recommendations/pdfs/Cross-Border-Payments-Survey-Results.pdf

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The Pandora Papers – Live Aggregated News

This is a live page. Last updated: 21 Jan 2022 – 7:23pm (UK Time)

Image credit: ICIJ

 

This is The Laundry’s ‘live’ aggregated news page for the Pandora Papers. The page is updated regularly with new links to content when it is published by various outlets.


ICIJ


OCCRP


THE GUARDIAN


BBC


OTHER MEDIA RELEASES

This webpage features regular updates when new stories are published.

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British American Tobacco – Live Aggregated News

This is a live page. Last updated: 03 Oct 2021 – 1:56pm (UK Time)

Image Credit: The Bureau of Investigative Journalism

 

This is The Laundry’s ‘live’ aggregated news page for recent media stories related British American Tobacco and bribery. The page is updated regularly with new links to content when it is published by various outlets.


The Bureau of Investigative Journalism


Podcast


STOP (Stopping Tobacco Organizations and Products)


OTHER MEDIA RELEASES:

 


This webpage features regular updates when new stories are published.

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OpenLux – Live Aggregated News

This is a live page. Last updated: 14 Feb 2021 – 23:40 (UK Time)

Image credit: OCCRP

This is The Laundry’s ‘live’ aggregated news page for OpenLux news articles and reports. The page continuously updates with new links to content when it is published by various outlets.


OCCRP


LE MONDE


TRANSPARENCY INTERNATIONAL


OTHER MEDIA


Please continue to check back, more articles will be added as news becomes available.

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The FinCEN Files – Live Aggregated News

This is a live page. Last updated: 02 Mar 2022 – 21:41 (UK Time)

Image credit: ICIJ

 

This is The Laundry’s ‘live’ aggregated news page for the FinCEN Files. The page was continuously updated with new links to content when it was published by various outlets.


BBC


Buzzfeed

Podcast:


ICIJ


OCCRP



OTHER MEDIA RELEASES:

 


This features live updates when new stories related to the FinCEN Files are published.

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