Summer Updates From the ACAMS EMEA Team

As we write this whilst working from home, like so many of you in the global ACAMS community, we look forward with hope to a gradual emergence into the next phase of our socially distanced norm following the COVID-19 pandemic.

In the last few weeks, as individuals and organisations have strived to overcome disruption to business practice on many levels, there have also been shifts across the fraud, money laundering, sanctions and human trafficking landscapes, requiring anti-financial crime (AFC) professionals to share knowledge, work closely together and adapt in order to stay one-step ahead of the bad actors.

ACAMS EMEA—Team Update

ACAMS to Increase Local Support and Launch More Chapters in the Region

As ACAMS membership increases across the EMEA region, several colleagues have joined us this year. In London, we welcomed both Shilpa Arora and Dr Justine Walker to our global team of subject-matter experts (SMEs). We were also pleased to be joined by Paolo Munari in Milan and Michel Nassif in Beirut to lead our membership development activities across the AFC community in Europe, the Middle East and Africa, respectively. Plus, there were several new appointments that expanded our footprint across London, Frankfurt, Paris, Johannesburg and Warsaw.

We now offer the Certified Anti-Money Laundering Specialist (CAMS), Certified Global Sanctions Specialist (CGSS) and our AML Foundations, Know Your Customer/Customer Due Diligence, Sanctions Foundations and Anti-Bribery and Corruption Certificates in an increasingly wide range of languages. As a result, we have further enhanced our London-based operations’ capability to offer support in Arabic as well as English, French, German, Polish and Spanish.

We would of course have liked to meet many of you in person at the 16th Annual AML & Anti-Financial Crime Conference—Europe in June, but with large-scale meetings sadly out of the question for the moment, we look forward to connecting with you online in many varied forums as we further expand our digital programming.

In January, we were delighted to celebrate the relaunch of the ACAMS Luxembourg chapter, followed in April by the launch of the ACAMS Malta Chapter, our 13th chapter in Europe and ACAMS’ first digital chapter launch. The launch was attended by 100 guests and featured a live online panel discussion on the evolution of compliance in Malta. Moderator Koos Couvée, senior reporter at ACAMS moneylaundering.com, and fellow panellists examined issues intrinsic to Malta such as anti-money laundering (AML) reform, external pressures from the Financial Action Task Force and the EU to improve AML supervision and enforcement, and internal demand from the private financial sector to step up the fight against financial crime on the island.

Subject-Matter Experts

ACAMS EMEA-based SMEs work closely with our teams in Asia-Pacific and the Americas to support our professional community through sharing knowledge and thought leadership. In the last few weeks, under the banner ‘AFC Under the Microscope: COVID-19,’ ACAMS SMEs responded to the crisis by conducting a series of interviews with industry leaders, all of which were made available on YouTube to enable sharing insights and lessons learned in dealing with COVID-19 restrictions. Shilpa Arora, AML director for ACAMS EMEA, focussed on creating the right compliance culture in testing times, how financial intelligence units in the region are adjusting, as well as changes to human trafficking. Dr Justine Walker, ACAMS senior director global sanctions & risk, talked to several experts about the changing sanctions landscape and the response to humanitarian needs.

Webinars and Online Training

The coming months will see the introduction of a series of webinars looking at the new face of the compliance officer. Being technology-savvy and having a deep understanding of enterprise technology are now quintessential to succeeding in the fight against financial crime. Look out for this webinar series that provides a great starting point for risk, control and compliance professionals across all three lines of defence wanting to understand technology more deeply. Dr Justine Walker will also announce an ACAMS Sanctions Taskforce and a series of specialist webinars and online masterclasses that will take a deep dive into the practical challenges facing sanctions professionals.

Being technology-savvy and having a deep understanding of enterprise technology are now quintessential to succeeding in the fight against financial crime

Europe

Financial institutions (FIs) across Europe have had their business continuity plans tested and stretched, with call centres and other critical staff all logging in simultaneously from home and staff numbers substantially reduced due to illness and self-isolation. FIs, supervisors and regulators have kept a watchful eye as the UK’s National Crime Agency (NCA) has issued warnings regarding an increase in frauds and scams, including computer service fraud targeting populations working from home.1

Despite the nail bars and sex industry being shut down across Europe, victims of trafficking were rapidly being redeployed to produce counterfeit goods

The face of human trafficking has also changed. Stop the Traffik, an intelligence-led research agency, told ACAMS that despite the nail bars and sex industry being shut down across Europe, victims of trafficking were rapidly being redeployed to produce counterfeit goods. Recognising such trends helps FIs report their suspicions promptly.

European countries continue to transpose the Fifth AML Directive (5AMLD) into their national law. Although there is progress, there is also growing concern at the pace of implementation. Under 5AMLD, European member states must implement public registers to reveal the beneficial ownership of all companies operating in their countries. An analysis of the 27 member states conducted by Global Witness, a non-governmental organisation focused on corruption issues, showed that only five countries have implemented a public register that is free to access, with five others having presented changes in their law that will permit free access to public registers. Currently, 17 countries have yet to implement these changes.2

There has also been an increased focus on unexplained wealth orders (UWOs) in the UK. UWOs are legal instruments that place the burden of proof on suspected criminals and politically connected individuals from outside the EU to demonstrate that their property, funds and other assets targeted for seizure by UK authorities were derived from legitimate sources. As we write this, the ACAMS EMEA AML team is partnering with Eversheds Sutherland to produce a white paper that will address the use of UWOs in the UK and Europe, together with the impact on FIs who have clients directly or indirectly affected by them. Look out for the publication of the white paper this summer.

Middle East

FIs based in the Middle East have been increasingly on the regulatory radar with new enforcement actions. In Qatar, the QFC Regulatory Authority (QFCRA) announced in April 2020 that it had taken action against Horizon Crescent Wealth LLC (HCW) and imposed a fine of 30,000,000 QR for serious legal and regulatory breaches. The action taken by the QFCRA followed an investigation of HCW identifying significant failings by the firm in its compliance with the Anti-Money Laundering and Combating Terrorist Financing Rules 2010.3

Increased enforcement actions and stricter enforcement of regulations coupled with the pace of regulatory change have led institutions in the Middle East to take action.

The fintech world in the region is booming and there is a generally progressive and ambitious trend around fintech innovation in the United Arab Emirates (UAE). From a financial services’ regulatory perspective, the UAE is comprised of three separate and independent jurisdictions:

  • The Dubai International Financial Centre (DIFC)
  • The Abu Dhabi Global Market (ADGM)
  • The remainder of UAE (often referred to as ‘onshore’ or ‘onshore UAE’)

Federal-level financial services regulators have jurisdiction over onshore UAE; however, the DIFC and the ADGM each have their own regulatory bodies, and all the various regulators across all three jurisdictions have identified fintech innovation as a key priority.4

Africa

In Africa, the AFC community is paying particular attention to ‘green crime.’ In addition to environmental crime and wildlife trafficking, green crime also includes flouting regulations designed to prevent harm to the environment. As such, green crime is closely linked to corruption, organised crime and money laundering. It impacts supply chains, poses a danger to security around the world and threatens the ability to meet the sustainability goals set by the UN.

Another interesting typology in Africa involves tracing ransom payments for kidnapping. Kidnappers, in a case in South Africa a couple of years ago and another case in Nigeria last year, created waves when payment was demanded in bitcoin, raising questions about traceability.5

Innovation is no longer a buzzword, but a practical reality in Africa. Following the launch of Africa’s own virtual currency in 2019, SAFCOIN has also launched a bitcoin trading pair on their exchange. Bitcoin traders in Africa have been able to trade on SAFCOIN’s ZAR and USD exchanges since March 2020.6

In April 2020, South Africa’s financial regulators launched the Intergovernmental Fintech Working Group Innovation Hub in response to changes in the financial sector driven by fintechs. The hub also includes a regulatory sandbox, allowing innovators to test new products and services that push the boundaries of existing regulation all under the responsible supervision of relevant regulators.7

New Developments in AFC

We await with interest the impact of a number of exciting innovations that look set to revolutionise AFC efforts.

Central Bank Digital Currencies

In March 2020, the Bank of England (BoE) published a discussion paper on central bank digital currency (CBDC). If CBDC were to be introduced in the UK, the BoE emphasised that it would be denominated in pounds sterling. This means that £10 of CBDC would be worth the same as a £10 banknote. Most importantly, the BoE was keen to stress that any CBDC would be introduced alongside, instead of replacing, cash and commercial bank deposits. The BoE noted that CBDC may facilitate safer payment services than new forms of privately issued stablecoins, support a more resilient payments landscape and enable more efficient cross-border payments. The discussion paper follows developments in January 2020 where, in order to explore potential use cases for CBDCs, the BoE and five other central banks including the Bank of Canada, the Bank of Japan, the European Central Bank, the Sveriges Riksbank (Sweden) and the Swiss National Bank, formed a group to share knowledge and expertise. While no final decisions have yet been made, watch this space for more details as feedback to the discussion paper is expected in June 2020.8

Digital Identity

Verifying and vetting customers is now widely understood by most EMEA-based FIs. 5AMLD acknowledges the digitalisation of ID and the fact that accurate identification as well as verification of data of natural and legal persons are essential for fighting money laundering or terrorist financing.

Gemalto, a digital security organisation, predicts trends in digital identity including domination of mobile communications, greater demand for security and trust (ie private data on a public framework), an accelerating shift toward ‘smart’ cities, more calls for public supervision of digital identification systems, national ID initiatives such as more national ID cards and e-ID programmes. These will remain essential considerations for authorities that want to make digital identity and online services, particularly mobile services, defining features of their modernisation processes in the years to come.9

Aside from the Nordic countries, other governments’ digital identity schemes have not been broadly accepted or widely taken up by their citizens. This is starting to change because governments are recognising that digital identity is not just a technology issue, but a governance and user experience issue as well.10

For fraudsters and money launderers, identity theft will have a completely different meaning in this new world of digital identity. Getting it right will be essential for governments and citizens.

Conclusion

As we head toward summer and, we hope, a measured but safe and continued relaxation of our current restrictions, we look forward to connecting with our Nordics members in October, our Middle East conference in Abu Dhabi on 6 December 2020, and our Africa conference in Johannesburg in January 2021. For those of you already planning to get away this time next year, we will shortly be announcing the date of our Europe 2021 conference in Dublin.

Digitally or in person, we look forward to staying connected.

Angela Salter, head of EMEA, ACAMS, London, U.K., europe@acams.org

Shilpa Arora, CAMS, AML director – EMEA, ACAMS, London, U.K.

Reviewer: Penny Newton, EMEA events manager, ACAMS, London, U.K.

  1. “Beware fraud and scams during Covid-19 pandemic fraud,” National Crime Agency, 26 March 2020, https://nationalcrimeagency.gov.uk/news/fraud-scams-covid19
  2. Rúben Castro, “Only five member states meet key money laundering deadline,” Euractiv, 20 March 2020,https://www.euractiv.com/section/economy-jobs/news/only-five-member-states-meet-key-money-laundering-deadline/
  3. “QFCRA fines Horizon Crescent Wealth QR30mn for violations,” Gulf Times, 1 April 2020, https://www.gulf-times.com/story/659826/QFCRA-fines-Horizon-Crescent-Wealth-QR30mn-for-vio
  4. “Money Laundering Typologies & Indicators,” Financial Intelligence Centre, https://www.fic.gov.za/Documents/Money%20Laundering%20Typologies%20and%20Indicators.PDF
  5. Andrew Christian, “Kidnappers In Nigeria Wanted NGN 5.4 Mn Ransom In Bitcoin To Protect Identity – But Is Crypto Really Untraceable?” WeeTracker, 17 September 2019,https://weetracker.com/2019/09/17/bitcoin-treaceability/
  6. “SAFCOIN launches zero-fee Bitcoin trading exchange,” Pan African Visions, 19 March 2020, https://panafricanvisions.com/2020/03/safcoin-launches-zero-fee-bitcoin-trading-exchange
  7. “Media Statement on the Launch of the Intergovernmental Fintech Working Group (IFWG) Innovation Hub,” Intergovernmental Fintech Working Group, 7 April 2020, https://www.fic.gov.za/Documents/Press%20release_Innovation%20Hub%20Launch_FINAL.pdf#search=ifwg%20media%20statement
  8. “Central Bank Digital Currency: opportunities, challenges and design,” Bank of England, 12 March 2020, https://www.bankofengland.co.uk/paper/2020/central-bank-digital-currency-opportunities-challenges-and-design-discussion-paper
  9. “Digital identity trends – 5 forces that are shaping 2020,” Thales, https://www.gemalto.com/govt/identity/digital-identity-services/trends
  10. Arthur Mickoleit, “Why have governments struggled to get it right on digital identity?” PublicTechnology.net, 25 February 2020, https://www.publictechnology.net/articles/opinion/why-have-governments-struggled- get-it-right-digital-identity

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