Here we go again – US sanctions on Iran
On August 6th it will be 90 days since President Trump pulled out of the Joint Comprehensive Plan of Action (JCPOA) with Iran. This means that the first set of Iran sanctions will be put back in place. The sanctions will ban Iran from buying US dollars, from trading in gold, precious gems and some metals and from exporting food and carpets to the US. They will also prohibit the issuing of debt to Iran and holding accounts with considerable amounts of rials. It won’t be until November 4th that the finance, petroleum, energy, insurance and shipping sectors will be targeted when the second tranche of sanctions are introduced.
With tensions between the two countries escalating to CAPs LOCK levels and then de-escalating to possible talks, the reintroduction of sanctions come at a difficult time. Compliance departments should expect a volatile and potentially confusing period. Which has not been helped by the European Union who has failed to provide clarity on whether or not European companies can continue to trade as if the JCPOA was still in place. Then there are rumors that Iran’s Central Bank is designing a Petro-esque cryptocurrency to help evade the sanctions. Companies with a global presence will have to tread carefully to ensure they are not breaking someone’s rules.
Did you miss it? – AML/CFT changes in the UK
In the last month authorities in the UK responsible for anti-money laundering controls have been busy. To make sure you haven’t missed anything here is a rundown of some of their recent work:
- The Register of Overseas Entities Bill – a world first, this bill designed to fight corruption will create a register of ultimate beneficial ownership of overseas entities that own property in the UK.
- The Law Commission Consultation on Anti-Money Laundering: The SARs Regime – this consultation will review the effectiveness of and suggest improvements to a number of UK AML/CFT laws and tools – with first findings to be published by the end of the year. This could set the groundwork for big changes to the UK’s regime.
- The FCA Anti-Money Laundering Annual report 2017/18 – get the latest facts and figures from last year’s financial crime returns and SAMPL data as well as confirmation that financial crime will remain a priority for the FCA.
- Global Witness investigation into Corporate Ownership – although not released by the government this important report confirms the suspicions that despite increased transparency around ownership, bad actors are still able to subvert controls and open companies in the UK to launder money.
What is driving all of this change? Firstly, Brexit means that the UK needs to create a robust framework to prevent crime and has the chance to create new laws without EU constraints. Secondly, and probably more important here, the UK will receive the results of its FATF Mutual Evaluation this October. Being judged “less than compliant” in any area will have a negative effect on the reputation of the UK’s financial integrity. Consulting on laws now may soften this blow.
Are you up to date with all the recent work by the UK Government on anti-money laundering controls? Here’s what you need to know #ComplyAnalysis
40.3 million reasons to get to work
Monday was World Day Against the Trafficking of Persons. The UN Director General said “trafficking in persons is a vile crime that feeds on inequalities, instability and conflict…[traffickers] prey on the vulnerable and rob them of their fundamental rights.” Today, 40.3 million people are victims of human trafficking, they are forced into marriages or labor, sexually exploited, sold as children, turned into child soldiers or particularly horrifically, have their organs harvested. For traffickers these people earn them over $150 billion a year, making human trafficking the world’s third most profitable crime.
The private sector has an important role to play in identifying the illicit financial behaviors associated with trafficking, such as salaries of seasonal workers being withdrawn immediately in cash as they are deposited into accounts. In a crime where the main piece of evidence is a human being who can be intimidated or silenced, financial intelligence provides a strong source of evidence in investigations and prosecutions. Bringing an end to human trafficking will never be easy but financial services can make it a lot more difficult for the traffickers who profit from it.