It’s a strong start to 2020 for Sudan, 2019 gives you 8 billion reasons to comply this year and Isabel dos Santos is feeling the chill.

We share our financial regulatory highlights from the week of 13 January 2020.

Strong Start for Sudan

The UNODC has lauded Sudan for making material efforts in tackling human trafficking, corruption and money laundering.

Not bad work for a country that 172/180 in Transparency International’s Corruption Perception Index in 2018.

The comments from the UNODC are a strong indicator of how hard Sudan has worked to improve its reputation since 2018. UNODC advisor for the Middle East and North Africa, David Izadifar, made the comments following a meeting with the embattled nation’s Attorney General.

Izadifar added: “Sudan will benefit from the Office’s training programs until it makes sure of applying criminal justice and preventing crime.” Suggesting that the UNODC and Sudan will have a positive continuing working relationship.

Sudan’s efforts in cleaning up its financial system and reputation as a human trafficking hub – it’s considered the passageway between the Horn of Africa and Europe – is a strong sign that the nation is working to join the greater global financial system.

However, official figures on the number of trafficking gangs and the number of victims in Sudan are still unavailable due to how weak the region’s government is. Perhaps by working more strongly with the UNODC and other international bodies, Sudan will be able to more efficiently provide workable statistics so FIs can more appropriately understand the risk involved.

8 Billion Reasons to Comply

2019 saw over $8 billion in AML fines issued, making it the highest year for AML fines since 2014 which hit $10.89 billion.

Even then, 2014 only tops the list due to an immense fine of $8.9 billion taken on by BNP Paribas. Multi-million and even multi-billion dollar fines have been on the rise since 2015, with regulators in the US and UK especially making it clear that tolerance for non-compliance is falling rapidly.

But it’s not just the US and UK who are actively handing out fines. 14 countries issued monetary penalties in 2019 compared to just three in 2009 – of the 58 AML fines handed out across the world in 2019, the biggest was $5.1 billion and came from France.

A significant change to fines across 2019 is that they’re no longer focused solely on banks. Now regulators have expanded their focus, issuing fines to DNFBPs and other businesses with banks now representing less than half of all fines.

The gambling sector was hit hard, five fines handed down were over the million-dollar mark and four of those were in the UK.

Regulators appear to have taken the gloves off in their approach to AML non-compliance and there’s no sign that failure to comply efficiently will be forgiven any time soon.

It’s Chilly in Portugal

Eurobic, a small Portuguese lender and unlisted bank, is under intense scrutiny from Portugal’s central bank with regards to its anti-money laundering procedures.

The lender has a strong relationship with Angolan billionaire and former first daughter, Isabel dos Santos who is its main shareholder.

Eurobic asserts that it is complying with all requirements to prevent illegal transactions and drew attention to the inspection occurring prior to dos Santos’ assets being frozen by Angolan authorities in December.

Isabel dos Santos and her husband have been accused of redirecting payments totaling over $1 billion from Angolian state companies, Sonangol and Sodiam, to companies where they had stakes.

The inspection reportedly has no end-date and Eurobic is keen to play down any association between the inspection and the dos Santos asset freeze, stating to Reuters: “In September 2019, well before the referred asset freeze, the Bank of Portugal told us it was going to carry out an inspection of mechanisms of prevention and control of money-laundering and financing of terrorism, which began in late November”.

This isn’t the first time that Eurobic has come under scrutiny, in 2015 the Portuguese central bank determined that the lender’s clientele comprised mainly Angolan PEPs and its clients tended to make transactions using large sums of cash.

It remains to be seen if Eurobic’s inspection will yield any information on Isabel dos Santos or the bank itself but if nothing else it shows that red-flag behavior doesn’t go unnoticed.

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