Double click the center to select or change the cover image FINANCIAL CRIME DIGEST JULY 2021 Diligent analysis. Powering business. TM ISSN: 2632-8364 About Us Founded in 2014, Aperio Intelligence is a specialist, independent corporate intelligence rm, headquartered in London. Collectively our team has decades of experience in undertaking complex investigations and intelligence analysis. We speak over twenty languages inhouse, including all major European languages, as well as Russian, Arabic, Farsi, Mandarin and Cantonese. We have completed more than 3,000 assignments over the last three years, involving some 150 territories. Our client base includes a broad range of leading international nancial institutions, law rms and multinationals. Our role is to help identify and understand nancial who support us regularly in undertaking local enquiries crime, integrity and reputational risks, which can arise on a condential and discreet basis. As a specialist from a lack of knowledge of counterparties or local provider of corporate intelligence, we source jurisdictions, enabling our clients to make better information and undertake research to the highest informed decisions. legal and ethical standards. Our independence means we avoid potential conicts of interest that can affect Our due diligence practice helps clients comply with larger organisations. anti-bribery and corruption, anti-money laundering and other relevant nancial crime legislation, such as We work on a “Client First” basis, founded on a strong sanctions compliance, or the evaluation of tax evasion commitment to quality control, condentiality and or sanctions risks. Our services support the on- respect for time constraints. We offer robust, cost- boarding, periodic or retrospective review of clients or effective solutions, providing our clients with work of third parties. the highest quality at favourable rates. Our investigations practice advises clients in a wide Please do not hesitate to get in touch with us if you range of complex disputes and other contentious would like to know more about Aperio’s services or matters, including complex cross-border asset tracing discuss how we might be able to help you: claims, litigation support, internal investigations, market intelligence, supply chain analysis and country risk assessments. Email [email protected] or nd out more at: aperio-intelligence.com Our team has specialist knowledge of and access to a very broad range of public and proprietary data sources, as well as a longstanding network of reliable, © Aperio Intelligence Limited, 2020 - All Rights Reserved. informed local contacts, cultivated over decades, CONTENTS REPORTS 4 ENFORCEMENT AND LITIGATION 25 SPECIAL FEATURE 36 LEGISLATION 42 GUIDANCE 59 ANNOUNCEMENTS 66 SPEECHES 79 CONSULTATIONS 80 PRESS AND MEDIA 83 ESG 91 COMPANY UPDATE 96 INTRODUCTION Welcome to the July issue of the Financial Crime Digest. To receive the publication direct to your inbox every month, please sign up here. We are currently developing an online platform, which provides more comprehensive coverage of nancial crime developments. If you would like more information please email [email protected] EDITOR'S PICKS LEGISLATION page 42 REPORTS page 4 EU proposes creation of central AML UK NCA annual report nds 2020-2021 was authority the “most successful” year operationally GUIDANCE page 59 SPECIAL FEATURE page 36 US issues Hong Kong business advisory, Cracked: the rise of police operations OFAC designates seven individuals against encrypted organised crime communications DATES FOR THE DIARY August UK FCA consultation on a technical note setting August EBA consultation on new guidelines on out guidance for companies applying for listing cooperation and information exchange in the 12 which have cannabis related businesses closes 27 area of AML/CFT closes August August UK Law Commission consultation on its UK government consultation on a power to block corporate criminal liability discussion paper listings on national security grounds closes 27 31 closes aperio-intelligence.com FINANCIAL CRIME DIGEST | JULY 2021 REPORTS UK NCA annual report nds 2020-2021 was the “most successful” year operationally individuals, the UK economy and – an increase of 29 percent institutions, with an emphasis on compared to the previous year, and fraud, money laundering (ML) and over 105,000 Defence Against cybercrime as key threats. Money Laundering applications – an increase of 69 percent on the Four major disruptions were previous year. delivered in 2020-2021 against international controller networks According to the report, in 2020- and professional enablers of ML. 2021, the NCA: (1) secured over The UK’s National Crime Agency The report mentions the example 4,000 disruptions; (2) coordinated (NCA) published on 16 July its of the rst unexplained wealth 490 “prevent” interventions against 2020-21 annual report and order (UWO) secured solely on the individuals at risk of becoming accounts, which details the basis of an individual’s suspected future cyber offenders; (3) took agency’s performance over the links to SOC, where a key provider down or suspended over 270 course of the past year. of ML services to organised crime criminally controlled websites; (4) groups (OCG) in West Yorkshire safeguarded over 1,600 children, UK Home Secretary Priti Patel MP agreed to surrender nearly £10 over 1 million victims of highlighted the agency’s major million in assets held across the cybercrime, and rescued more than successes over the past year, UK. With respect to fraud, the 700 potential victims of tracking; which include a 40 percent NCA’s increased intelligence and (5) arrested over 1,200 individuals increase in recorded disruptions investigative capabilities led to 14 in the UK and secured sentences and securing the freezing or high priority operations, which are totalling 1,300 years; and (6) seizure of over £150 million of anticipated to yield dividends the restrained, froze or seized more criminal assets. NCA Director following year. In addition, the than £150 million. The report General Dame Lynne Owens report notes that the NCA’s highlights the successes of emphasises the agency’s leading operational activity against Operation Venetic, which has role in ghting the transnational cybercrime contributed to an resulted in the arrest of over 1,550 threat of serious and organised increase in the “pursue” response, individuals across the UK, following crime (SOC) in the UK, describing which accounted for 34 percent of cooperation with international the past year as “the most all disruption in 2020-2021. partners in extracting data from successful for the NCA to date”. the encrypted communications Furthermore, in the past year, the platform EncroChat. One of the strategic priorities set NCA’s Financial Intelligence Unit for the NCA by the Home Secretary (UKFIU) received over 742,000 NCA annual report and accoun… in 2020-2021 involved reducing the suspicious activity reports (SARs) harm caused by economic crime to 4 aperio-intelligence.com FINANCIAL CRIME DIGEST | JULY 2021 FATF report on new technologies for AML/CFT The Financial Action Task Force (FATF) published on Despite the wide potential for AML/CFT-related 1 July a report examining the opportunities and changes in the nancial sector, manual review and challenges posed by new technologies for anti- human input “remains very important”, the report money laundering and countering the nancing of nds. “Human actors must be relied upon to identity terrorism (AML/CFT). and assess any residual risks presented by new technologies and put in place appropriate mitigation measures”, according to FATF. The agency also found Despite the wide potential for that innovation can help public and private sectors AML/CFT-related changes in the improve the effectiveness of their risk-based implementation of FATF standards. FATF states that nancial sector, manual review companies and member states “must also ensure that and human input “remains very the use of innovative tools is compatible with important”, the report nds international standards of data protection, privacy, and cybersecurity”. The ndings led to FATF’s adoption of a set New technologies “can improve the speed, quality and eciency of measures to combat money laundering of suggested actions for authorities and terrorist nancing”, FATF states. The report exploring new technologies for AML/CFT identies existing and potential technologies, examining conditions, policies and practices to The creation of an enabling environment by both maximise eciency. It also explores obstacles to government and the private sector for responsible successful implementation. innovation to enhance AML/CFT effectiveness The increased use of articial intelligence solutions for Ensure privacy and data protection when implementing new technologies AML/CFT can “potentially help to better identify risks and respond to, communicate, and monitor Promote AML/CFT innovation which supports suspicious activity”, states the report. This includes nancial inclusion by design improved live monitoring and information exchange which enable improved supervision of regulated Develop and communicate policies and regulatory entities. Technology can also improve private sector approaches to innovation that are exible, risk assessments, onboarding practices, regulator technology-neutral, outcomes based and in line relationships and accountability, whilst cutting costs. with the risk-based approach Explaining digital solutions is “another key challenge”