UK Chancellor of the Exchequer, Philip Hammond, delivered another highly anticipated budget this week, with offshore tax evasion featuring prominently. A new compliance strategy and wider data sharing powers “will build on the substantial progress the U.K. has made in tackling offshore tax evasion.”
Charged with regulating and supporting crypto technologies, the UK’s Cryptoassets Taskforce released a report earlier this week outlining proposed changes to regulation. While highlighting key risks of cryptoassets, including high volatility, the report concludes that:
cryptoasset deployment can allow more efficient and cheaper transactions thanks the elimination of intermediaries in the future.
The proposals, aimed at improving consumer protection and mitigating money laundering risk, have received a chilly response from UK business and analysts, concerned that rigid regulation could be the downfall of the country’s crypto sector. According to a report co-authored by the British Business Federation Authority, law firm Baker Botts, crypto analytics company Novum Insights and crypto expert Hazem Danny, having “bad regulation is worse than no regulation at all.”
Also in the UK, Security Minister, Ben Wallace, takes aim at public schools for failing to report suspicions that the proceeds of crime are being used to pay for fees. This comes as part of a stern message to a range of sectors taking a lax approach to reporting suspicious activity:
We’re going to make sure that people who are proactively being facilitators are at the front of our queue as much as the actual nominals of the organised crime groups and we’re going to do everything we can to prosecute them.
Those in the sights of the regulator should remember that the reputational damage caused by a money laundering scandal can far outweigh the damage of financial penalties. Danske Bank interim CEO admitted the bank had lost customers following revelations of the Danish lender’s facilitation of financial crime. Jesper Neilsen told The Local newspaper:
We are sad to lose each individual customer. We are doing as much as we can to reach out to the customers, but there is no doubt that when there are questions hanging over us there are likely to be negative customer numbers.
Deutsche Bank faces a similar reputational challenge. The bank is in the midst of ongoing investigations for anti-money laundering (AML) failings that include significant weaknesses in client identification, establishing source of wealth and AML controls. Dutch bank ING is suffering its own woes too.
A multi-million-dollar bribery court case in Argentina involves a number of Scottish shell companies, or Scottish Limited Partnerships (SLPs) , reports The Herald. The same article references the use of SLPs in facilitating “foreign” investment into Uzbekistan’s dirty cotton industry. Regulation aimed at improving the transparency of SLPs came into force last year requiring the disclosure of beneficial owners.
Brazil’s new justice and public security minister, Sérgio Moro, said in a statement issued upon his accepting his new post:
The prospect of implementing strong policies against corruption and organised crime, while respecting the constitution, the law and rights, brought me to this decision.
His appointment has led to outcry that his role in the country’s wide-ranging corruption crackdown that led to the election of this new administration was politically motivated.
Business Today reports on a survey by EY focused on bribery and corruption in emerging markets. The survey found that more than 42% of emerging markets respondents felt that bribery and corruption posed one of the greatest threats to businesses.
Should traditional insurers be looking over their shoulders for new, nimble InsureTech offerings? After a slow start, potentially due to a lack of regulatory understanding, the InsureTech sector could be limbering up for its turn in the spotlight. An article in Bobsguide cites a number of reasons for the slow growth of this technology in the UK, including a lack of understanding of the sector regulators leading to a confused regulatory environment.
intelligent process automation (IPA) is usually an organisation’s first step towards digital transformation, according to a new report by APQC and covered by Forbes. The number of IPA projects per organisation has doubled from 2017 to 2018 and according to APQC’s Holly Lyke-Ho-Gland, who led the project:
Organisations spent the last two years getting smart and testing IPA through proof of concepts or pilot programs. Now they’re scaling up.
Another article in Forbes claims that Artificial Intelligence is not a technology, but a science.
In a two-part blog series, encompass KYC Specialist, Alex Street focuses on the compliance challenges facing the private equity sector, including bribery and corruption and money laundering, and the importance of fully understanding the ownership and control of investors, portfolio companies and potential acquisitions. Learn more about how encompass benefits Private Equity firms here.
Simon Lemos, Head of Sales at encompass, looks at the current approaches to KYC processing and how it can be improved using automation not just at the initial onboarding stage but throughout the client lifecycle.
anti-money laundering compliance: source of wealth and source of funds
Thursday 8 November, 1500 GMT | 1600 CET
In this webinar, Amy Bell, legal industry advisor to encompass, summarises the key regulatory drivers behind the need to identify and verify source of wealth and source of funds, and provides some practical guidance on how to approach this challenge. Book your place here.
Global Wealthtech Summit takes place in London on Wednesday 7 November. The team will be attending and are available to discuss your needs around technology and automation in wealth management and private banking.
From 12 – 16 November the world’s largest platform for the global FinTech Community will be taking place in Singapore and we’ll be there! Singapore Fintech Festival features dozens of events including workshops, awards, demonstrations and an exhibition. If you’re heading along, get in touch today, we’d love to meet up!
The world of Know Your Customer (KYC), compliance and financial crime never sleeps, and if your challenges are keeping you up at night let us help. encompass robotically automates information and news discovery for KYC requirements for onboarding, event-driven refresh and remediation.
Driven by your internal policies, our platform automatically constructs corporate ownership structures, discovers beneficial owners, and in minutes screens all relevant entities and persons for regulatory, reputational and financial risk.