Regulatory Roundup: February 2024

Welcome to the February edition of FinScan’s Regulatory Roundup. This month spotlights AML compliance updates from the EU, the Middle East, and the US plus the commencement of new beneficial ownership reporting in the UK and sanctions guidance from the UK.

Anti-money laundering

EU Reaches Deal on a Single Rulebook Against Money Laundering and Terrorist Financing

The EU Parliament and Council negotiators reached a provisional agreement on the sixth Anti-Money Laundering (AML) directive and the EU “single rulebook” regulation. The agreed provisions, part of the AML/CFT package, will have to be applied by banks and other obliged entities to protect the EU internal market from money laundering and terrorist financing. In addition, transparency rules will apply to football clubs from 2029.

ADGM Contributes to UAE’s Commitment to Combat Financial Crimes

Abu Dhabi Global Market (ADGM) has published five ‘Quick Guides’ specifically designed for Designated Non-Financial Businesses and Professions (DNFBPs), in support of the UAE’s vision and commitment to combat financial crime. The guides provide easy-to-read overviews of key AML/CFT requirements covering Know Your Customer, Customer Due Diligence, Customer Risk Assessment, AML/CFT Governance Frameworks, and Targeted Financial Sanctions.

DFSA Updates Rulebook Focused on AML, CTF, and Sanctions

The Dubai Financial Services Authority (DFSA) has updated the Anti-Money Laundering (AML), Counter-Terrorist Financing (CTF), and Sanctions modules of its rulebook. The most significant updates focus on revised rules for dealers of precious metals and stones; relevant person responsibilities for policies, procedures, systems, and controls; ongoing sanctions screening; and MLRO competencies.

FINRA’s Annual Report Highlights Key Findings on AML, Fraud, and Sanctions

FINRA’s 2024 Regulatory Oversight Report underscores key considerations for member firms’ compliance programs including AML program scope, suspicious activity reporting, and customer onboarding. Firms are encouraged to reasonably address AML risks associated with transactions in low-priced securities, and use information gathered during CIP and CDD processes to ensure compliance with OFAC including geolocation information. Firms must also have procedures reasonably designed to account for FinCEN guidance on filing SARs in addition to OFAC blocking reports, and reasonable determination to use manual transaction monitoring processes.

Beneficial ownership

FinCEN’s Beneficial Ownership Information Registry Now Accepting Reports

The US Treasury’s Financial Crime Enforcement Network (FinCEN) is now accepting beneficial owner reports as of January 1, 2024. Reporting companies created or registered to do business in the US before January 1, 2024 must file by January 1, 2025. Reporting companies created or registered to do business in the US in 2024 have 90 calendar days to file after receiving actual or public notice that their company’s creation or registration is effective.

Sanctions guidance

UK Publishes Two New Russia Sanctions Regulations

The UK Government has published two new regulations amending its 2019 Russia (Sanctions) (EU Exit) Regulations to impose further restrictions on goods, technology, and sources of funding that the UK Government considers could support Russia’s war against Ukraine. The majority of the amendments came into force on 15 December 2023 while others came into force on 26 December 2023 and 1 January 2024.

UK Warns of Criminal Sanctions Evasion Through Artwork Storage Facilities

The UK’s National Crime Agency has issued an alert to artwork storage facilities, warning of potential criminal exploitation of the sector by individuals subject to Russia sanctions. With new individuals and entities being added to the sanctions list at frequent intervals, the alert highlights the need for the sector to conduct regular due diligence checks to understand any change in a client’s circumstances, or those of elites they may represent.

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We’ll continue to monitor regulatory developments and provide updates in future editions of Regulatory Roundup. In the meantime, reach out to us if you need help navigating the evolving landscape of regulations and enforcement actions.

FinScan offers Advisory Services to assist with model risk management, data governance, policies and procedures, and assessing your organization’s data quality, sanctions compliance program, customer and compliance risk, and AI framework, to name a few. Contact us to learn more.