EU’s 15th Sanctions Package
Russia’s persistent efforts to bypass the oil price cap have prompted the European Union to take decisive action in its 15th sanctions package. This new set of measures targets loopholes that have enabled Russia to continue exporting oil and sustaining its revenues. By blacklisting 52 additional vessels—bringing the total to 79—the EU is focusing on Russia’s shadow fleet, a network of aging, underregulated ships central to its evasion strategies. This initiative has the potential to increase the cost and complexity of sanctions evasion while addressing the significant safety and environmental concerns associated with these high-risk vessels.
Risk-Based Approach Adoption
The Risk-Based Approach (RBA) is a foundational principle in modern anti-money laundering (AML) frameworks. It is about understanding the risks of money laundering and terrorist financing (ML/TF) within a business. By identifying and assessing these risks, the RBA supports an effective but also efficient allocation of resources to combat ML/TF effectively.
Suspicious Activities Detection
Identifying suspicious activities is a cornerstone of combating money laundering, helping Obliged Entities (OEs) detect and deter fraud and other illicit activities. To this end, OEs must closely monitor high-risk criteria to flag transactions or behaviours that deviate from standard patterns. All red flags should be investigated to determine whether they represent legitimate transactions or warrant further scrutiny.
The Risks of Using AI in Compliance
Artificial Intelligence (AI) offers transformative potential for enhancing compliance processes, from automating routine tasks to identifying patterns in data that could indicate regulatory risks. However, the adoption of AI in compliance is not without its challenges. While the technology brings significant advantages, it also introduces risks that businesses must be mindful of to avoid regulatory and legal pitfalls.
Challenges in AML Compliance
The threat of money laundering has become a major problem for financial institutions worldwide. Both banks and non-bank financial institutions, such as insurance or investment companies, are under increasing regulatory pressure to implement effective and efficient anti-money laundering (AML) solutions to prevent illicit financial activities. These institutions must not only protect their business and reputation, but also ensure that they do not become unwitting accomplices of criminal individuals or organisations.
Implementing Effective AML Solutions
The threat of money laundering has become a major problem for financial institutions worldwide. Both banks and non-bank financial institutions, such as insurance or investment companies, are under increasing regulatory pressure to implement effective and efficient anti-money laundering (AML) solutions to prevent illicit financial activities. These institutions must not only protect their business and reputation, but also ensure that they do not become unwitting accomplices of criminal individuals or organisations.
Overcompliance in Sanctions Compliance
The proliferation of unilateral and secondary sanctions has led to a concerning trend of overcompliance by businesses, particularly banks and financial institutions. Overcompliance refers to excessively restrictive practices that go beyond the requirements of sanctions regulations.
Money laundering through shell companies
A shell company is a registered legal entity that exists only on paper and has no significant assets or business activities. The shell company pretends to provide real business services in order to conceal illegal funds and its beneficial owner, launder money or avoid tax payments.
ESG in the crisis
The term “ESG” (Environment, Social, Governance) is currently on everyone’s lips. Sustainability or sustainable action, which places companies in particular under an obligation as important drivers for a more sustainable future, is nothing new.
Step-by-Step Guide to ESG Leadership
ESG Leadership entails companies having a clear vision towards sustainability and actively implementing it in their corporate actions. It involves integrating environmental, social, and governance aspects firmly into the corporate culture rather than treating them as peripheral issues.