Take-Aways – ACAMS Conference – Berlin 2019

Berlin Risk joined ACAMS 15th Annual Anti-Financial Crime Conference as an exhibitor, sponsor and speaker at the Berlin conference in June 2019. Berlin Risk’s Managing Director, Jennifer Hanley-Giersch, took part as a panelist focusing on the management of high-risk customers. She discussed adequate approaches to customer risk rating and what levels of investigations are necessary to also address reputational risk. With high-risk clients it is not sufficient to simply identify the UBO. “It is important to have an in-depth understanding of who the customer is, the countries of operations, wider business interest and political associations,” Jennifer said.

Risky Business: 5AMLD and EDD

The fifth EU Anti-Money Laundering Directive (AMLD) carries significant regulatory developments particularly in relation to high-risk customers and relevant enhanced due diligence requirements. Innovations concern EDD in view of high-risk third countries, ultimate ownership information, transparency of funds, and scrutiny of political exposed persons. Essentially, the 5AMLD further raises the benchmarks for the practice of EDD on high-risk customers.

Status of the European AML Framework

Large-scale money laundering investigations have been the drivers to improving the safeguards for the overall stability of the EU’s financial sector. Beyond the implementation of the Fifth AML Directive (5AMLD), additional significant developments include the proposed EU regulation strengthening the role of the European Banking Authority (EBA) in supervising the financial institutions, the European Council’s action plan for non-legislative AML measures, and the passing of the EU Directive on combating money laundering by criminal law.

Terrorism and the tech-industry

Internet and social media services have been used by terrorist and extremist groups globally to disseminate hate and funds, says the Counter Extremism Project and advocates effective national and European regulation to counter the threats – including new challenges posed by crypto-currencies for terrorist purposes.

Scenarios for Regime Change in Venezuela

The domestic power-struggle in Venezuela between the acting regime leader, Nicolás Maduro, and opposition leader, Juan Guaidó, claiming presidency and calling for a free elections, is exacerbated by the geopolitical rivalry between Russia, supporting Maduro, and the US, supporting Guaidó, over the country’s fate.

The Controversial EU List of High-Risk Third Countries

The list of High-Risk Third Countries with strategic AML deficiencies presented by the EU Commission in February 2019 was rejected by the EU Council shortly after. It appears that the country risk assessment has been affected by political considerations.

EU Methodology for Identifying High-Risk Third Countries

The 5th EU Anti-Money Laundering Directive, in force as of 11 July 2018, includes amendments to the 4th AML Directive, among them improvements in the assessment of high-risk third countries. Moreover, the EU Commission has recently published a relevant methodology for identifying such countries with strategic deficiencies in combating money laundering and terrorist financing.