Monthly AML News and Updates Newsletter - December 2024
Welcome to our AML News and Updates Newsletter December 2024 edition. 👏
Stay up to date with main AML news and updates in less than 10 minutes per month!
Let's see an outline of the topics to be covered in this edition:
Discussion of the month: How Compliance Officers Can be Great Leaders
Regulatory Developments:
FinCEN Issues Alert on Fraud Schemes Involving Deepfake Media Targeting Financial Institutions.
EBA Guidance on Internal Policies, Procedures and Controls to Ensure the Implementation of Union and National Sanctions
The Office of Foreign Assets Control (OFAC) has issued an alert to warn foreign jurisdictions
The Wolfsberg Group Issued a Frequently Asked Questions (FAQs) Document on Defining Digital Assets
The Office of Financial Sanctions in the UK has issued a general guidance on the obligations under UK sanctions
3. Other News:
Former Peruvian President Alejandro Toledo was sentenced to 20 years in prison
Bitfinex Hacker sentenced to five years in prison
Europol - 25 Arrests in EU-Wide Operation Against Syrian Migrant Smuggling Network
The Basel AML Index for 2024
How Compliance Officers Can be Great Leaders
Let’s be honest: the life of a compliance officer can be challenging. You spend your days deciphering regulations, translating complex legalese into actionable steps for your colleagues, and often playing the “bad cop” when policies aren’t followed. It’s a demanding role that doesn’t always come with the recognition it deserves.
The toughest part? Getting others to not only listen to you but genuinely care about compliance. Compliance isn’t just about rules—it’s about creating a culture of integrity. And that’s where the power of leadership comes in.
How Leadership Transforms Compliance
Leadership isn’t just a bonus for compliance professionals—it’s a game-changer. Here’s how leadership can transform compliance:
From Enforcer to Trusted Advisor
Picture this: you step into a meeting, not just armed with “we cannot do this”, but with solutions if possible. You show how compliance strategies mitigate risks and align with business goals. Leadership enables you to present compliance as a competitive advantage, rather than a bureaucratic burden.
Building Connections, Not Walls
Let’s face it: compliance can sometimes feel like the “department of no.” Strong leaders, however, bridge those gaps. They communicate the “why” behind rules, collaborate to find practical solutions, and position compliance as a partner rather than an obstacle.
Inspiring a Culture of Integrity
Compliance isn’t only about ticking boxes—it’s about fostering ethical behavior as the organizational norm. Leaders advocate for integrity, inspiring colleagues to not just follow rules but embrace ethical principles as part of their professional identity.
Empowering Others to Take Ownership
Effective leaders don’t dictate—they inspire. They empower team members and colleagues across the organization to take ownership of their ethical decisions, not out of fear of repercussions, but because they recognize its value to the organization and its mission.
The Challenges of Leading in Compliance
Being a leader in compliance isn’t without hurdles. Tight deadlines, hefty workloads, limited resources, constant regulatory updates, and occasional resistance from colleagues can make it hard to focus on leadership.
Yet, compliance professionals are uniquely positioned to lead. Why?
Deep Knowledge of Risks and Regulations: This expertise enables strategic thinking and problem-solving—essential leadership qualities.
Cross-Organizational Influence: Compliance professionals interact with both executive leaders and front-line employees, allowing them to bridge communication gaps and foster collaboration.
Proven Problem-Solving Skills: Decoding complex regulations and responding to high-pressure situations equips compliance officers with invaluable leadership experience.
Practical Steps to Become a Compliance Leader
Even with the challenges, you can develop and showcase your leadership potential. Here are actionable ways to get started:
Recognize and Leverage Individual Strengths
Every team member brings unique skills to the table. Take the time to understand what each person excels at, and assign tasks that play to their strengths. This not only boosts morale but also increases efficiency.
Delegate with Purpose
Delegation isn’t about offloading work—it’s about strategically distributing responsibilities. Empower your team by entrusting them with meaningful tasks that challenge them and contribute to their growth.
Show Appreciation
A simple “thank you” can go a long way. Celebrate successes—big and small—publicly in team meetings or through company communications. Consider implementing formal recognition programs to reinforce the value of exceptional work.
Foster a Safe Learning Environment
Mistakes happen. What matters is how you address them. Encourage open discussions about errors and focus on understanding their root cause. Offer constructive feedback that promotes growth and continuous improvement.
Final Thoughts
Leadership in compliance isn’t just about enforcing policies—it’s about creating a culture of ethical excellence and empowering others to uphold it. By developing leadership skills, compliance professionals can drive meaningful change, inspire integrity across the organization, and transform the way compliance is often perceived.
FinCEN Issues Alert on Fraud Schemes Involving Deepfake Media Targeting Financial Institutions
FinCEN has observed an increase in suspicious activity reports involving deepfake-based fraud, considering the popularity of identity theft and authentication bypass. The alert aims to warn financial institutions about the growing threat of deepfake-related fraud which can be used to create highly convincing fake identities and deceive individuals and institutions.
EBA Issued Guidance on Internal Policies, Procedures and Controls to Ensure the Implementation of Union and National Sanctions
The European Banking Authority (EBA) issued guidelines aim to establish common EU standards for governance arrangements, policies, procedures, and internal controls of financial institutions exposed to legal and reputational risks associated with sanctions circumvention. The guidance is divided into two sets: General Guidelines and Specific Guidelines.
The Wolfsberg Group Issued a Frequently Asked Questions (FAQs) Document on Defining Digital Assets
The Wolfsberg Group issued a FAQ document which aims to provide a clear and consistent understanding of digital assets and their associated risks. The FAQs are designed to assist financial institutions, policymakers, supervisors, and regulators in assessing, mitigating, and managing the risks associated with these emerging technologies.
The Office of Foreign Assets Control (OFAC) has issued an alert
The alert aims to warn foreign jurisdictions and financial institutions about the sanctions risks of joining the Russian financial messaging “System for Transfer of Financial Messages” (SPFS). Specifically, the alert warns that any foreign financial institution that joins or has already joined SPFS may be subject to sanctions under Executive Order 14024, which authorizes the U.S. government to impose sanctions on individuals and entities involved in harmful foreign activities of the Russian Federation.
The Office of Financial Sanctions in the UK has issued a general guidance on the obligations under UK sanctions
The guidance outlines the obligations of companies under UK financial sanctions. It explains the types of sanctions, who they apply to, and how to identify designated individuals and entities. The guidance details the restrictions imposed by asset freezes and other financial prohibitions. It also highlights reporting obligations for relevant firms and institutions, emphasizing the importance of compliance to avoid legal consequences.
Former Peruvian President Alejandro Toledo was sentenced to 20 years in prison
The former president was convicted for accepting $35 million in bribes from Brazilian construction giant Odebrecht - Peru’s first high-profile conviction linked to Latin America’s sweeping “Operation Car Wash” corruption probe. Toledo, who governed from 2001 to 2006, was found guilty of exploiting his office to secure contracts for Odebrecht in exchange for bribes, notably for a highway connecting Peru and Brazil.
Bitfinex Hacker sentenced to five years in prison
Ilya Lichtenstein was sentenced to five years in prison for the hack and theft of approximately 120,000 bitcoin from Bitfinex back in 2016. His wife, Heather Morgan, is scheduled to be sentenced later this year for her involvement in the scheme. The couple employed a complex web of techniques to steal and then conceal the illicit funds, including using fictitious identities to set up online accounts, darknet markets and cryptocurrency exchanges.
Europol - 25 Arrests in EU-Wide Operation Against Syrian Migrant Smuggling Network
The network, spanning 20 countries, is estimated to have generated €3.4 million in criminal profits. It provided services such as transportation and accommodation for its migrant smuggling operations. Primarily composed of Syrian nationals, the network facilitated the movement of migrants from Syria to the EU, with final destinations in Germany, the Netherlands, and the UK.
The Basel AML Index for 2024
The Basel AML Index is an independent ranking and risk assessment tool for money laundering and related financial crime risks. It provides a holistic picture of money laundering risks of various countries around the world. You can access the Basel AML Index for 2024 here.
That’s all for this month!
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Have a nice rest of the month!
Regards
Anna Stylianou