| Issue #9 |
| We are pleased to share with you our latest updates on Anti-Money Laundering / Counter Financing of Terrorism (“AML/CFT”) and sanctions. |
Insights from KPMG
The effects of the current pandemic are still deeply felt as we progress in 2021. As most financial institutions have been adversely affected by the disruption brought about by pandemic, there have been extensive adoption of alternative and combined solutions to further leverage digital transformation. For instance, with electronic Know Your Customer (“e-KYC”) and remote Transaction Monitoring, AML compliance team can adapt quickly to onboard customers, identify positive suspicious transactions and instantly investigate unusual activities within a short period of time. This will result in continued compliance with AML/CFT obligations even with a skeleton crew on-site at the institution.
We further expect an increased focus on virtual currencies globally. Regulators and financial institutions (“FI”) should remain active and vigilant in developing guidelines and implementing AML compliance programmes that includes controls to curb financial crime risks of virtual assets such as cryptocurrencies, due to the non-face-face nature of the delivery channels which may permit anonymous funding and illicit money transfer.
Malaysia
Bank Negara Malaysia (“BNM”) has issued the Policy Document on Licensing Framework for Digital Banks (“Policy Document”) following a six-month public consultation. BNM may issue up to 5 licenses to qualified applicants which is expected to be announced by first quarter of 2022.
Our Insights
The issuance of BNM Licensing Framework for Digital Banks is paving the way for players across different industries and FinTech companies to join the race in providing financial services to all levels of society, including those currently underserved. We should be seeing a shift in the way retail customers transact and a change in the playing field to the way AML/CFT control measures are implemented with more focus on technologies for advanced profile-based monitoring. The question for all financial institutions remains whether resources are upskilled to meet these new demands. We expect more non-bank entities to express their interests in applying for a licence, however they will need to be cognisant of AML/CFT obligations and controls, such as e-KYC to stay in the race. More here
Global
FATF removes Bahamas from ‘increased monitoring’ list
The Financial Action Task Force (“FATF”) has removed the Bahamas from its list of jurisdictions under increased monitoring for ML risks. FATF said the Bahamas will continue to work with Caribbean Financial Action Task Force (“CFATF”) to further improve its AML regime. More here
FATF/Egmont Trade - Based ML: Trends and Developments
A new FATF-Egmont Group report aims to help public and private sector with the challenges of detecting trade-based ML (“TBML”). The report also recommends improving information-sharing of financial and trade data, and improving co-operation between authorities and private sector, including through public-private partnerships.
FIs offering trade products need to assess their level of controls and maturity in view of increased attention by FATF and regulatory bodies. TBML specific controls such as customer’s trade specific profile and details need to be obtained during onboarding and to be updated on periodic basis throughout the business relationship. In addition, FIs may also put in place a well-defined screening requirements, transaction monitoring system and documentary fraud checks. More here
Fines and Enforcement Actions
Malaysia
Two Immigration officers claim trial to ML charges
Syndicate behind cryptocurrency scam busted
Switzerland
Credit Suisse charged over ML in cocaine ring
Credit Suisse cuts ties with some wealthy clients in Venezuela
United Kingdom
Luxurious home in UK used for ML
Dirty money from West Africa used to pay UK tuition fees
United States
U.S. investigating Baltic banks over AML compliance
U.S. closes key ML, tax, evasion channel
Hong Kong
Hong Kong bank staff arrested in USD810 million ML syndicate
Pakistan
Pakistan unlikely to exit ‘grey’ list of FATF until June
Tan Kim Chuan
Kyran McCarthy
Jeremy Allan
Australia
Yong Soo Park
Korea
Chin Kok Lem
Singapore
Khurram Pirzada
Executive Director, AML & Sanctions Services, Malaysia
Rani Kamaruddin
Partner
Hong Kong
Suveer Khanna
Partner
India
Stephen Bell
Partner
New Zealand
Christopher Saunders
Partner
Thailand
Dayana Abdul Rahman
Associate Director, AML & Sanctions Services, Malaysia
Cathy Zhou
Partner
China
Chiharu Yamazaki
Managing Director
Japan
Jeffree M Tapia
Partner
Philippines
Ross Macallister
Managing Partner
Vietnam
What would you like to read about?
Visit www.kpmg.com.my/forensic/AML for more information about KPMG in Malaysia’s AML & Sanctions Services.
