The Week Of: November 4, 2019

This week’s news and stories of interest to the AML community. If you prefer a news roundup sent to you, subscribe to our weekly newsletter.

Member-owned banks in Australia vulnerable to financial crimes

An Australian watchdog published a risk assessment of the country’s member-owned financial institutions last week and found that a wave of mergers was leaving the industry more susceptible to criminal activity.

The Australian Transaction Reports Centre, or Austrac, said that member-owned firms have become a popular alternative to major banks, noting the 88% increase in assets held in the sector over the last decade. This newfound popularity has also left it vulnerable to money laundering, which Austrac said was the key industry threat.

Another reason for this vulnerability, according to Austrac: high levels of outsourcing of anti-money laundering compliance processes.

Read more at the Sydney Morning Herald.

AML laws prove costly for New Zealand real estate industry

The Real Estate Institute of New Zealand (REINZ), which represents more than 14,000 New Zealand real estate professionals, said that anti-money laundering compliance implementation has cost the industry more than $NZ20 million in 2019.

New laws came into effect at the beginning of the year requiring agencies, now considered reporting entities, to collect identifying documentation; report suspicious transactions; have written risk assessments; train agents in AML policy; file annual reports; and be independently audited every two years.

REINZ chief executive Bindi Norwell said that maintaining AML compliance will cost the industry in excess of $NZ 25 million each year, according to Australia’s Real Estate Business.

Crypto regulation

Two major global financial regulators have recently updated their cryptocurrency guidelines.

Hong Kong’s Securities and Futures Commission (SFC) published new rules allowing cryptocurrency exchanges to obtain an operating license. Some exchanges are in favor of the regulation because it allows them to differentiate themselves from unlicensed competitors.

According to the rules, an exchange wishing to be licensed “must provide services to professional investors only, have an insurance policy to protect clients in case assets are lost or stolen, and use an external surveillance mechanism.”

Exchanges not selling products defined as securities do not need a license to operate. The New York Times has more.

In the U.K., Her Majesty’s Revenue and Customs (HMRC) released guidance that clarifies how businesses and individuals involved with cryptocurrency will be taxed. Companies could face paying one or more taxes depending on the types and number of crypto-related services they provide, including income tax, corporation tax, capital gains tax, stamp taxes, and National Insurance contributions. Read about it at Coin Telegraph.