If it takes place, the summit between President Trump and Kim-Jong Un is only two weeks away. Sanctions, as previously discussed by ComplyAnalysis, are likely to be a key talking point for both parties. But what about other economic crime issues? A high priority for the Americans will undoubtedly be the future of Lazarus group. Made famous by their hack of Sony in 2014 and then their subsequent attacks on critical banking infrastructure such as SWIFT, Trump will want to know what the future of this state-backed hacking group will be.
Lazarus group has been a significant revenue generator for the North Korean regime. Their most famous hack attempted to steal $1 billion dollars from the central bank of Bangladesh, although they only got away with $100 million. What is especially interesting about this case is that when the group tried to move the stolen money, AML controls at international banks were able to stop most of the payments. Misspellings in payment orders and keywords that caused payments to trip sanctions checks stopped over $850 million from disappearing forever. As America comes to the negotiating table, the need to protect the robustness of international financial systems should make Lazarus group a topic high up on the agenda.
Last week, the UK’s Financial Conduct Authority (FCA) held its fifth-ever TechSprint. A TechSprint is effectively a hackathon which aims to find solutions to cross-sector problems by getting key stakeholders in a room to work through them together. The topic of last week’s Sprint was how best to apply technology to anti-money laundering processes to make them more effective. Chris Woolard, Executive Director of Strategy and Competition at the FCA summed up the purpose, “it is only by working together, pooling our resources and sharing our expertise, that we will achieve the real and tangible change we’re all seeking.”
But what does this mean in practice? Over 200 people from 60 companies, including ComplyAdvantage, worked in 15 teams to tackle various problems over three days. One of the main outcomes was the recognition by nearly all of the teams of the vital role that network analytics will play in future AML systems. Another was the critical need to find a way of sharing information between actors without compromising data privacy requirements. One of the most important outcomes however, is the amount of momentum that the event has generated to accelerate collaborative problem solving across the compliance industry. Something that the number of visiting regulators who were at the event may hope to emulate in their own countries.
When three luxury properties were searched by the Malaysian Anti-Corruption Commission (MACC) last week, $28.6 million dollars in 26 different currencies were found stuffed into 35 bags. Thirty seven other bags were also found containing high value goods such as diamonds, all with a total worth that is yet to be estimated. It was hardly surprising that the bags and the apartments they were found in were owned by the recently deposed Malaysian Prime Minister, Najib Razark. Razark, who then spent hours in questioning, seems to finally be facing the consequences for his involvement in one of the largest corruption scandals in history.
Now that Razark is out of office the investigation into him and the truth behind what happened to the $4.5 billion 1MDB development fund can really get going. While he was in power, an investigation in 2015 failed to make any progress after witnesses and investigative authorities were intimidated and ultimately shut down. This new investigation has received full international support, as well as further strength from the US where the Justice Department is carrying out its own investigation into 1MDB funds that allegedly passed through US bank accounts. Hopefully now, after three years of inaction the Malaysian people will finally get some justice for the $4.5 billion that was stolen from them.
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