Welcome to our AML round-up for Q1 2024. This edition includes the launch of the COSMIC platform in Singapore. As the first centralised digital platform to facilitate the sharing of customer information among financial institutions, its launch is an important step forward in combatting money laundering, terrorism financing and proliferation financing globally. It also includes the latest Russian Sanctions introduced in the US, EU and UK, the agreement of the AML/CFT Package in Europe, exhaustively harmonising rules throughout the EU for the first time, and upcoming AML reporting deadlines in Luxembourg.
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Political agreements have been reached on the AML/CFT Package comprising the new AML/CTF directive (“AMLD”), AML/CFT regulation (“AMLR”) and the anti-money laundering authority regulation (“AMLAR”). The EU Parliament is expected to adopt the aforementioned three texts of the AML/CFT Package in late April of this year, followed by subsequent adoption by the Council and publication in the Official Journal of the European Union shortly thereafter. The application of the new AMLR is anticipated by mid-2027, coinciding with EU Member States’ commencement of applying AMLD 6. The AML/CFT Authority is expected to assume most of its tasks and powers by mid-2025 and commence direct supervision of selected obliged entities as of 2028. The AML/CFT Package will, for the first time, exhaustively harmonise rules throughout the EU, closing possible loopholes used by criminals to launder illicit proceeds or finance terrorist activities through the financial system. It will notably require obliged entities to review and adapt their current policies, procedures, internal processes, and controls.
The EU adopted its 13th package of sanctions against Russia, adding 106 individuals and 88 entities to the sanctions list, bringing total listings to in excess of 2000.
In March, the European Commission adopted a Delegated Regulation amending Delegated Regulation 2016/1675 concerning the deletion of Gibraltar (as well as other countries) from the list of high-risk countries identified under the Regulation.
Switzerland implements OECD Minimum Tax (Pillar 2) – During its meeting on 22 December 2023, the Federal Council decided to begin levying the supplementary tax in Switzerland from 1 January 2024. The minimum tax rate will be implemented in the form of a national supplementary tax. With this supplementary tax, Switzerland will ensure a minimum domestic tax rate of 15% for large multinational enterprises whose turnover exceeds EUR 750 million. This will prevent erosion of the Swiss tax base in favour of other countries.
Swiss-UK Agreement on the mutual recognition of professional qualifications: The agreement enables citizens of both countries to take up employment in regulated professional activities.
The Administration de l’enregistrement (AED) has launched the AML Questionnaire 2023. The deadline for the submission of the “RAIF AML/CFT Questionnaire 2023” is close of business on 31 May 2024. Submissions are to be made online via the Indirect Tax Portal – Luxembourg.
The “RC report for year 2023 on AML/CFT purposes” is to be submitted by 31 May 2024. The report of the RC is a synthesis report of their AML /CFT activities and operations pertaining to the RAIF (“RC report”). Guidance on how to prepare and submit the report is available here.
In February, the UK added over 50 new sanctions targeting individuals and businesses bringing the total number of individuals, companies and groups under the UK’s Russia sanctions regime to 2000.
Guernsey has separated the requirement to counter proliferation financing into its own category alongside AML & CFT. This has been reflected in an update to the POI Law and an update to the Handbook on Countering Financial Crime (AML/CFT/CPF) supporting the extension of the existing obligations upon specified businesses to countering proliferation financing. Firms are being asked to consider CPF risks and mitigations in their own right. This will be reflected in their Business Risk Assessments when these are next prepared. The rules and guidance in the Handbook relating to CPF, including setting a date for specified businesses to have undertaken a CPF business risk assessment, should be implemented before 31 December 2024.
Guernsey’s 5th Round evaluation onsite visit from MoneyVal is taking place between 15-26 April.
JFSC Thematic Examination Programme 2024: The Jersey Financial Services Commission’s thematic review for Q1 and Q2 of 2024 is underway. The area of focus for this first thematic examination of the year is Politically Exposed Persons (PEPs). The remaining two themes for the 2024 Supervision Examination Unit’s Thematic Examination Programme are compliance monitoring and conflicts of interest.
In March, the JFSC published updated versions of Appendices D1 and D2 of the AML/CFT/CPF Handbook, to take into account the latest Financial Action Task Force (FATF) statements of 23 February 2024. Effective immediately, countries and territories listed under Sources 1 and 2 of Appendix D2 should be treated as not compliant with FATF Recommendations for the purpose of Article 17A of the Money Laundering Order. Read more.
Additional Russian Sanctions: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned nearly 300 additional individuals and entities. Together with actions from the US Department of State this is the largest number of sanctions imposed since the start of the invasion bringing the total to over 4000.
FinCEN issued a Notice of Proposed Rulemaking (NPRM) to keep criminals and foreign adversaries from exploiting the US financial system and assets through investment advisors. The proposed rule would require certain investment advisers to apply Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) requirements pursuant to the Bank Secrecy Act (BSA), including implementing risk-based AML/CFT programs, reporting suspicious activity to FinCEN, and fulfilling recordkeeping requirements.
The Cayman Islands were removed from the EU list of third-country jurisdictions which have strategic deficiencies in their anti-money laundering / countering financing of terrorism regimes on 7 February 2024. The EU’s Delegated Act states the European Commission’s assessment that the Cayman Islands have strengthened the effectiveness of their AML/CFT regime and addressed technical deficiencies to meet the FATF’s action plans.
Under Section 10L of the Income Tax Act of 1947, Singapore has made changes to how it treats gains from the sale or disposal of foreign assets. “Foreign-sourced disposal gains” received in Singapore by an entity of a relevant group from the sale or disposal of a foreign asset will be treated as income chargeable to tax under specific circumstances. This change came into effect on 1 January 2024. Previously such gains were not taxable. This new legislation is intended to address international tax avoidance risks and is in line with Singapore’s focus on anchoring substantive economic activities in Singapore and its longstanding policy to align key areas of its tax regime with international norms.
On 1 April, The Monetary Authority of Singapore (MAS) launched COSMIC, the first centralised digital platform to facilitate sharing of customer information among financial institutions to combat money laundering, terrorism financing and proliferation financing globally. The Financial Services and Markets (Amendment) Act 2023 and accompanying subsidiary legislation, which sets out the legal basis and safeguards for such sharing, commenced on the same day.
FATF Amendments to Grey List – The Financial Action task Force (“FATF”) has removed Gibraltar, Uganda, Barbados and the UAE from their list of countries under increased monitoring (Grey List). Kenya and Namibia have been added to the list.
FATF Guidance on Beneficial Ownership and Legal Arrangements: Following the February 2023 revisions to FATF Recommendation 25 on Beneficial ownership and transparency of legal arrangements, the FATF has updated its risk-based guidance for this Recommendation.
