The Week Of: June 15, 2020
This week’s news and stories of interest to the AML community. If you prefer a news roundup plus other AML/KYC content sent to you, subscribe to our weekly newsletter.
Illegal ivory trafficking shifts after crackdown in China
Ivory traffickers have shifted their focus to Cambodia after China and its neighboring countries imposed stronger law enforcement and policy developments against the illegal trade, according to a report by the Wildlife Justice Commission.
The report is based on a ten-month investigation the group conducted called Operation Jeopardy which found evidence of the geographical shift away from China to Cambodia as a new hotspot for ivory carving and manufacturing.
The WJC investigation gathered video evidence of the illegal production and open sale of ivory in Cambodia at stores in Phnom Penh and Sihanoukville, operated by Chinese traffickers, offering carved ivory and other wildlife products.
Using a wood manufacturing business as a cover story, one factory was mass-producing carved ivory jewellery using computer-operated machinery. Tiger teeth and claws were also being sold on the premises.
Despite the ban on ivory by China in 2017, demand there remains high and open illegal markets in Cambodia are driven by Chinese traders and clientele.
Financial Conduct Authority reflects on COVID-19 response and expectations for 2020
The UK Financial Conduct Authority (FCA) recently highlighted its response to the COVID-19 pandemic and its expectations for 2020.
Megan Butler, the FCA’s Executive Director of Supervision – Investment, Wholesale and Specialists, delivered a speech that pointed out the overall positive response by advisors and wealth managers to the onset of the pandemic and the need to transition from immediate “incident response” towards focusing on longer-term impacts as an adaptation to the virus.
Butler also identified key areas of focus for the FCA that include “operational resilience in light of coronavirus, financial resilience (and within that the preservation of client assets and money) and acting with integrity”, noting that some firms tried to avoid liabilities to customers by closing down companies and setting up new ones.
Cyber fraud surges as COVID-19 changes banking, e-commerce
Cyber attacks against the financial sector rose by 238% between February and April, a period of the COVID-19 pandemic when governments were imposing stay-at-home orders and scrambling to distribute financial assistance to workers who lost jobs because of the virus.
“Criminals are increasingly sharing resources and information and reinvesting their illicit profits for the development of new, even more destructive capabilities,” said Tom Kellerman, head of cybersecurity strategy at VMware, during testimony before the U.S. House Subcommittee on National Security, International Development and Monetary Policy.
Kellerman testified that readily available malware makes it easy even for inexperienced criminals to launch their own illicit operations. As banking becomes more mobile and online, it also becomes much more vulnerable to hacks and scams.