MANAGING ANTI-MONEY LAUNDERING AND COUNTER-TERRORISM FINANCING REQUIREMENTS
R&C: How would you characterise recent money laundering and terrorism financing activity? Are there clear indications that such crimes are increasing in frequency and sophistication?
Parfitt: Instability in Syria and Yemen, and the recent US policy change on Iran, are likely to increase sympathy and funding for the likes of ISIL and al-Qaeda from foreign-based terrorist groups throughout Europe and Asia. There seem to be a limited number of actual detected cases, however this may be due to the lack of public disclosure for intelligence reasons. A 2016 Commonwealth of Australia Regional Risk Assessment report recommended several priority actions to underpin counter-terrorism financing efforts, which included better understanding of high-risk terrorism financing channels, deeper intelligence cooperation, and strengthening domestic and regional frameworks. In our opinion, this indicates an increase in the sophistication of these crimes but it is hard to comment on frequency.
Wong: Recent money laundering and terrorism financing activities have become increasingly complex as criminals continue to find new ways and technologies to circumvent detection. As an example, we see money launderers use cryptocurrencies to hide their true identity while banks are still trying to assess how they would adopt this new technology or find means to detect occurrences of it. While there is no clear indication that such activities have increased in frequency, we do know that money laundering schemes have become more sophisticated through digital channels. Because information is made readily available, criminals need to mask their identity and origin of funds in a more sophisticated manner.
Jul-Sep 2018 Issue
C6 Intelligence
Dechert LLP
Royal Bank of Canada